AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1998
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. 21 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 25 |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, 1998, 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.
The index to attached exhibits is found following the signature pages.
================================================================================
<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>
Ultra Series Fund
PROSPECTUS
MAY 1, 1998
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. There can be no assurance
that the investment objective of any Fund will be achieved. Investment
experience of each Fund will vary. The separate funds are as follows:
CAPITAL APPRECIATION STOCK FUND
GROWTH AND INCOME STOCK FUND
BALANCED FUND
BOND FUND
MONEY MARKET FUND
TREASURY 2000 FUND
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. In it
you will find information that you should know before investing. The Statement
of Additional Information, which has been filed with the Securities and Exchange
Commission and is incorporated herein by reference, contains additional
information about the Ultra Series Fund. You may obtain a copy of the Statement
of Additional Information (dated May 1, 1998, as supplemented from time to time)
free of charge by either using the address or telephone number shown below, or
from the Securities and Exchange Commission's web site on the Internet
(http://www.sec.gov).
- --------------------------------------------------------------------------------
The Funds are available to the public only through the purchase of:
(1) certain individual variable life insurance contracts or variable
annuity contracts;
(2) certain group variable annuity contracts by qualified pension and
retirement plans; or
(3) Class C shares of the Ultra Series Fund directly by qualified pension
and retirement plans.
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.
- --------------------------------------------------------------------------------
Unlike credit union and bank accounts, the value of an investment in the Ultra
Series Fund 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 Fund is neither insured nor guaranteed by the
U.S. Government. There is no assurance that the Money Market Fund will be able
to maintain a stable net asset value of $1.00 per share.
Neither the Securities and Exchange Commission nor any state securities
commissions has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
Distributed by:
CUNA BROKERAGE SERVICES, INC. ULTRA SERIES FUND
2000 Heritage Way 2000 Heritage Way
Waverly, IA 50677 Waverly, IA 50677
(319) 352-4090 (319) 352-4090
(800) 798-5500 (800) 798-5500
<PAGE>
TABLE OF CONTENTS
PAGE
EXPENSE TABLE..................................................................1
FINANCIAL HIGHLIGHTS...........................................................1
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.........................................................12
SPECIAL INVESTMENT TECHNIQUES.................................................12
Investment Techniques and Instruments Authorized But Not Used..............12
Repurchase Agreements......................................................12
Borrowing..................................................................13
Foreign Securities.........................................................13
Lower-rated Debt Securities................................................14
MANAGEMENT OF THE ULTRA SERIES FUND...........................................14
The Trustees...............................................................14
CUNA Mutual Life Insurance Company.........................................14
The Investment Adviser.....................................................14
The Management Agreement...................................................14
OFFER, PURCHASE AND REDEMPTION OF SHARES......................................15
GENERAL INFORMATION...........................................................16
Shareholder Rights.........................................................16
Inquiries..................................................................16
Dividends..................................................................17
The Ultra Series Fund Performance..........................................17
Tax Status.................................................................18
Net Asset Value............................................................18
PREPARING FOR YEAR 2000.......................................................18
APPENDIX A....................................................................19
<PAGE>
<TABLE>
<CAPTION>
EXPENSE TABLE
Fund investors pay various expenses, either directly or indirectly. The Expenses shown are provided to assist you in understanding
the expenses you may pay.
<S> <C> <C>
Shareholder Transaction Expenses Class C Class Z
- -------------------------------- ------- -------
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 Dividends (and other Distributions).....................None None
Redemption Fees (as a percentage of amount redeemed, if applicable)..............................None None
Exchange Fees....................................................................................None None
Annual Fund Operating Expenses (as a percentage of average net assets)
- ------------------------------
Management Fees
Money Market Fund.......................................................................0.45% 0.45%
Bond Fund...............................................................................0.55% 0.55%
Balanced Fund...........................................................................0.70% 0.70%
Growth and Income Stock Fund............................................................0.60% 0.60%
Capital Appreciation Stock Fund.........................................................0.80% 0.80%
Treasury 2000 Fund......................................................................0.45% 0.45%
12b-1 Fees.......................................................................................0.25% 0.00%
Other Expenses
Money Market Fund.......................................................................0.01% 0.01%
Bond Fund...............................................................................0.01% 0.01%
Balanced Fund...........................................................................0.01% 0.01%
Growth and Income Stock Fund............................................................0.01% 0.01%
Capital Appreciation Stock Fund.........................................................0.01% 0.01%
Treasury 2000 Fund......................................................................None None
Total Fund Operating Expenses
Money Market Fund.......................................................................0.71% 0.46%
Bond Fund...............................................................................0.81% 0.56%
Balanced Fund...........................................................................0.96% 0.71%
Growth and Income Stock Fund............................................................0.86% 0.61%
Capital Appreciation Stock Fund.........................................................1.06% 0.81%
Treasury 2000 Fund......................................................................0.70% 0.45%
</TABLE>
Example
<TABLE>
<CAPTION>
You 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 years 5 years 10 years
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>
Money Market Fund 7 5 23 15 40 26 88 58
Bond Fund 8 6 26 18 45 31 100 70
Balanced Fund 10 7 31 23 53 40 118 88
Growth and Income Stock Fund 9 6 27 20 48 34 106 76
Capital Appreciation Stock Fund $11 $8 $34 $26 $58 $45 $129 $100
Treasury 2000 Fund 7 5 22 14 39 25 87 57
</TABLE>
You should not consider these Expenses as a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
FINANCIAL HIGHLIGHTS
The financial highlights provided on the following pages for the years 1988
through 1997 have been audited by KPMG Peat Marwick, LLP, independent auditors.
You should read these highlights along 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): 1997 1996 1995 1994*
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.60 $12.51 $9.97 $10.00
Income from Investment Operations
Net Investment Income .07 .13 .14 0.16
Net Realized and Unrealized Gain (Loss) 4.52
on Investments 2.55 2.91 0.37
Total from Investment Operations 4.59 2.68 3.05 0.53
Distributions
Distributions from Net Investment Income (.07) (.13) (.14) (0.15)
Distributions from Realized Capital Gains (.27) (.46) (.37) (0.41)
Total Distributions (.34) (.59) (.51) (0.56)
Net Asset Value, End of Period $18.85 $14.60 $12.51 $9.97
Total Return** 31.57% 21.44% 30.75% 5.44%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $456,194 $98,674 $38,117 $9,449
Ratio of Expenses to Average Net Assets*** .82% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets .70% 0.96% 1.37% 1.55%
Portfolio Turnover Rate 17.06% 49.77% 61.32% 65.81%
Average Commission Rate $0.06 $0.06 $0.06
<FN>
*The Fund began operations January 3, 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, prior to May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.83%, 0.66%, 0.75%, and 0.85%, for 1997, 1996, 1995, and 1994,
respectively.
</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): 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of $21.32 $18.20 $15.06 $15.51 $15.49 $15.21 $12.75 $14.13 $12.15 $10.74
Period
Income from Investment Operations
Net Investment Income .31 .34 .37 .32 .29 .32 .33 .44 .33 .31
Net Realized and Unrealized Gain
(Loss) on Investments 6.36 3.93 4.37 (.04) 1.87 .90 2.95 (.73) 2.61 1.47
Total from Investment Operations 6.67 4.27 4.74 .28 2.16 1.22 3.29 (.29) 2.94 1.77
Distributions
Distributions from Net Investment
Income (.32) (.34) (.37) (.32) (.29) (.32) (.34) (.44) (.38) (.33)
Distributions from Realized
Capital Gains (.47) (.81) (1.23) (.40) (1.85) (.62) (.49) (.66) (.58) (.03)
Total Distributions (.79) (1.15) (1.60) (.73) (2.14) (.94) (.83) (1.10) (.96) (.36)
Net Asset Value, End of Period $27.20 $21.32 $18.20 $15.06 $15.51 $15.49 $15.21 $12.75 $14.13 $12.15
Total Return* 31.42% 22.02% 31.75% 1.42% 13.77% 7.66% 25.66% -1.98% 24.37% 16.62%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $590,135 $232,841 $102,138 $48,913 $32,468 $24,382 $17,101 $9,258 $7,932 $5,337
Ratio of Expenses to Average
Net Assets** .61% .65% .65% .65% .65% .65% .65% .65% .65% .65%
Ratio of Net Investment Income to
Average Net Assets 1.39% 1.78% 2.28% 2.19% 1.84% 2.11% 2.58% 3.33% 2.83% 2.75%
Portfolio Turnover Rate 20.39% 40.55% 57.80% 45.36% 56.79% 29.67% 27.90% 32.02% 35.55% 26.22%
Average Commission Rate $0.06 $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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.61%, 0.65%, 0.69%, 0.70%, and 0.73%, for 1997, 1996, 1995, 1994, and
1993, respectively.
</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): ....................... 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> ................ <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.29 $14.63 $12.90 $13.70 $13.54 $13.44 $12.11 $12.59 $11.47 $10.98
Income from Investment Operations
Net Investment Income ........... .62 .58 .55 .52 .50 .55 .62 .74 .61 .60
Net Realized and Unrealized Gain
(Loss)on Investments ........... 1.93 .98 2.29 (.56) .95 .40 1.56 (.29) 1.42 .57
Total from Investment Operations . 2.55 1.56 2.84 (.04) 1.45 .95 2.18 .46 2.03 1.18
Distributions
Distributions from Net Investment
Income ....................... (.63) (.58) (.55) (.51) (.50) (.55) (.63) (.74) (.71) (.68)
Distributions from Realized
Capital Gains ................ (.19) (.32) (.56) (.25) (.79) (.30) (.22) (.20) (.20) 0.00
Total Distributions .............. (.82) (.90) (1.11) (.76) (1.29) (.85) (.85) (.94) (.91) (.68)
Net Asset Value, End of Period ... $17.02 $15.29 $14.63 $12.90 $13.70 $13.54 $13.44 $12.11 $12.59 $11.47
Total Return* .................... 16.87% 10.79% 22.27% -0.46% 10.47% 6.85% 18.53% 3.75% 18.03% 10.87%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) ................. $309,804 $194,725$110,969 $67,468 $54,363 $41,604 $29,539 $19,964 $15,416 $10,271
Ratio of Expenses to Average Net
Assets** ....................... .68% .65% .65% .65% .65% .65% .65% .65% .65% .65%
Ratio of Net Investment Income to
Average Net Assets ........... 3.81% 3.91% 4.03% 4.00% 3.62% 4.10% 4.98% 6.23% 5.97% 6.02%
Portfolio Turnover Rate .......... 21.15% 33.48% 36.68% 28.53% 28.71% 19.23% 13.26% 27.07% 30.64% 11.35%
Average Commission Rate .......... $0.06 $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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.69%, 0.65%, 0.68%, 0.70%, and 0.74%, for 1997, 1996, 1995, 1994, and
1993, respectively.
</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): 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.33 $10.63 $9.67 $10.58 $10.32 $10.37 $9.75 $9.93 $9.70 $9.79
Income from Investment Operations
Net Investment Income .29 .65 .60 .59 .64 .69 .77 .89 .87 .80
Net Realized and Unrealized Gain
(Loss)on Investments .45 (.28) .96 (.90) .28 (.03) .62 (.18) .23 (.03)
Total from Investment Operations .74 .37 1.56 (.31) .92 .66 1.39 .71 1.11 .77
Distributions
Distributions from Net Investment
Income (.51) (.64) (.59) (.59) (.65) (.70) (.77) (.89) (.88) (.86)
Distributions from Realized
Capital Gains (.02) (.03) (.01) (.01) (.01) (.01) 0.00 0.00 0.00 0.00
Total Distributions (.53) (.67) (.60) (.60) (.66) (.71) (.77) (.89) (.88) (.86)
Net Asset Value, End of Period $10.54 $10.33 $10.63 $9.67 $10.58 $10.32 $10.37 $9.75 $9.93 $9.70
Total Return* 7.45% 2.86% 16.37% -3.06% 8.87% 6.47% 14.70% 7.41% 11.74% 8.05%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $188,840 $26,572 $13,725 $7,867 $6,297 $5,244 $3,975 $3,399 $3,315 $3,401
Ratio of Expenses to Average
Net Assets** .56% .65% .65% .65% .65% .65% .65% .65% .65% .65%
Ratio of Net Investment Income to
Average Net Assets 6.50% 6.25% 6.08% 6.03% 5.99% 6.83% 7.74% 8.87% 8.63% 8.50%
Portfolio Turnover Rate 30.71% 25.67% 14.74% 11.97% 12.23% 13.58% 8.74% 46.09% 24.47% 4.31%
<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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.57%, 0.67%, 0.68%, 0.70%, and 0.75%, for 1997, 1996, 1995, 1994, and
1993, respectively.
</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): 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Period
Income from Investment Operations
Net Investment Income .05 .05 .05 .03 .03 .03 .05 .08 .08 .07
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 .05 .05 .05 .03 .03 .03 .05 .08 .08 .07
Distributions
Distributions from Net Investment
Income (.05) (.05) (.05) (.03) (.03) (.03) (.05) (.08) (.08) (.07)
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 (.05) (.05) (.05) (.03) (.03) (.03) (.05) (.08) (.08) (.07)
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* 4.75% 5.17% 5.21% 3.34% 2.86% 3.05% 5.36% 7.53% 8.39% 6.91%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $41,170 $21,011 $11,374 $7,799 $4,749 $5,097 $5,082 $4,794 $4,420 $2,541
Ratio of Expenses to Average
Net Assets** .50% .65% .65% .65% .65% .65% .65% .65% .65% .65%
Ratio of Net Investment Income to
Average Net Assets 5.05% 4.74% 5.17% 3.66% 2.43% 3.05% 5.36% 7.53% 8.39% 6.91%
Portfolio Turnover Rate -- -- -- -- -- -- -- -- -- --
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1997, was 4.96% and the "effective" yield for that period was
5.09%.
<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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.51%, 0.67%, 0.73%, 0.78%, and 0.77% for 1997, 1996, 1995, 1994, and
1993, respectively.
</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) 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.64 $8.47 $7.00 $7.53 $6.53 $6.04 $5.02 $4.69 $3.85
Income from Investment Operations
Net Investment Income .58 .58 .58 .53 .48 .45 .41 .38 .34
Net Realized and Unrealized Gain
(Loss) on Investments .02 (.41) .89 (1.06) .52 .04 .61 (.05) .50
Total from Investment Operations .60 .17 1.47 (.53) 1.00 .49 1.02 .33 .84
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 $9.24 $8.64 $8.47 $7.00 $7.53 $6.53 $6.04 $5.02 $4.69
Total Return* 6.85% 2.10% 20.99% -7.12% 15.43% 8.01% 20.37% 7.12% 21.79%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,701 $1,585 $1,545 $1,272 $1,363 $1,176 $1,084 $987 $834
Ratio of Expenses to Average Net Assets .45% .45% .45% .45% .45% .45% .45% .45% .45%
Ratio of Net Investment Income to Average
Net Assets 6.56% 7.03% 7.40% 7.50% 6.69% 7.26% 7.76% 8.25% 8.02%
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 EXPENSE TABLE.)
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.
<PAGE>
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 total 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 total 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 total
assets, bonds will constitute 40% to 60% of Fund's total assets and money market
instruments may constitute up to 20% of Fund's total 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.)
<PAGE>
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 total 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.
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 and payable in U.S.
dollars.
Other Issuer Debt Securities: Issued or guaranteed by corporations,
banking institutions, and others.
Lower Rated Debt Securities: Issued or guaranteed by domestic and
foreign corporations and governments not rated within the four highest
categories (up to 20% of assets and subject to the 10% limit on
foreign securities).
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 invests in debt instruments of the foregoing types that are rated
in the four highest categories by Standard & Poor's Corporation ("S&P") and/or
Moody's Investors Service, Inc. ("Moody's) (i.e., investment grade securities)
as well as instruments that, although not rated by S&P or Moody's, are
considered by the Investment Adviser to be of equivalent investment quality.
Notwithstanding this, the Bond Fund may invest up to 20% of its total 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.
<PAGE>
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, 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
Each of the Funds other than the Treasury 2000 Fund may invest up to 10% of its
total assets in foreign securities. In addition, the Capital Appreciation Stock
Fund and Growth and Income Stock Fund may each invest up to 25% of their total
assets in ADRs while the Balanced Fund may invest up to 15% of its total assets
in ADRs. For the purposes of these restrictions, ADRs are not considered 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.
Investing in foreign government debt securities involves risks not present when
investing in securities of foreign corporate issuers. The issuer of the debt or
the government authority that controls the repayment of the debt may be unable
or unwilling to repay principal or pay interest when due and holders of the debt
may have limited recourse in the event of such a default. A sovereign debtor's
ability or willingness to repay principal or pay interest in a timely manner may
be affected by, among other factors, its cash flow, the extent of its foreign
currency reserves, the availability of sufficient foreign exchange on the date
repayment is due, the relative size of the debt service burden to the economy as
whole, its policy towards principal international lenders and the political
constraints to which a sovereign debtor may be subject.
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.
Lower-Rated Debt Securities
The Bond Fund may invest in debt securities rated lower than the four highest
rating categories by S&P and/or Moody's. Such lower-rated securities generally
carry greater risk of default and are generally subject to greater market value
fluctuation than debt securities rated in the highest four rating categories. If
held by the Bond Fund in significant amounts, such securities would increase
financial risk and income fluctuation. Lower-rated debt securities have
speculative characteristics and changes in economic conditions and other
circumstances are more likely to weaken the capacity of issuers of such
securities to make principal and interest payments than is the case with issuers
of higher rated debt securities. In some cases, lower-rated debt securities may
be highly speculative, have poor prospects of reaching investment grade standing
or even be in default. See the Statement of Additional Information for more
information about lower-rated debt securities.
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.
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:
<PAGE>
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 1998
fiscal year.
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 EXPENSE TABLE.) 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 agreed upon 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.
<PAGE>
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, 3, 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 for Company holidays, including Thanksgiving, Christmas, the final
scheduled workday preceding Christmas, New Year's Day and Independence Day. The
holiday will be observed on the day itself for those days which fall Monday
through Friday, the day immediately preceding for those days which fall on a
Saturday, and the day immediately following for those days which fall on a
Sunday. 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.
PREPARING FOR YEAR 2000
Like all financial service providers, the Company and its affiliates utilize
systems that may be affected by Year 2000 transition issues, and they rely on
service providers, including administrators and investment managers, that also
may be affected. The Company and its affiliates have developed, and are in the
process of implementing, a Year 2000 transition plan, and are confirming that
its service providers are also so engaged. The resources that are being devoted
to this effort are substantial. It is difficult to predict with precision
whether the negative impact on the Company or its affiliates. However, as of the
date of this prospectus, it is not anticipated that Owners will experience
negative effects on their investment, or on their services provided in
connection therewith, as a result of Year 2000 transition implementation. The
Company and its affiliates currently anticipate that their systems will be Year
2000 compliant on or about December 31, 1998, but there can be no assurance that
the Company will be successful, or that interaction with other service providers
will not impair the Company's or its affiliates' services at that time.
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 1997. 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.
Used with permission. (C) 1998 Ibbotson Associates, Inc. Al rights reserved.
[Certain portions of this work were derived from copyrighted works of Roger G.
Ibbotson and Rex Sinquefield.]
<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, 1998,
CALL OR WRITE CUNA BROKERAGE SERVICES, INC., 2000 HERITAGE WAY, WAVERLY, IOWA
50677, (319) 352-4090, (800) 798-5500.
MAY 1, 1998
<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.......................................4
Bond Fund Practices...........................................................4
INVESTMENT LIMITATIONS........................................................5
PORTFOLIO TURNOVER............................................................6
LOWER-RATED DEBT SECURITIES...................................................6
MANAGEMENT OF THE FUND........................................................7
Officers and Trustees.........................................................7
Trustees Compensation.........................................................8
Substantial Shareholders......................................................8
Beneficial Owners.............................................................8
THE INVESTMENT ADVISER........................................................9
EXPENSES OF THE FUND.........................................................11
DISTRIBUTION PLAN AND AGREEMENT..............................................10
CUSTODIAN....................................................................11
INDEPENDENT AUDITORS.........................................................11
BROKERAGE....................................................................11
HOW SECURITIES ARE OFFERED...................................................12
Distributor..................................................................12
Transfer Agent...............................................................12
NET ASSET VALUE OF SHARES....................................................12
Money Market Fund............................................................12
Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond,
and Treasury 2000 Funds....................................................13
DIVIDENDS, DISTRIBUTIONS AND TAXES...........................................13
Options and Futures Transactions.............................................15
Straddles....................................................................15
CALCULATION OF YIELDS AND TOTAL RETURNS......................................16
Money Market Fund Yields.....................................................15
Other Fund Yields............................................................16
Average Annual Total Returns.................................................17
Other Total Returns..........................................................17
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.........................................................19
<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, 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 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 up to 10%
of their total assets in restricted securities. Securities regulations limit the
resale 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 often 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. 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.
<PAGE>
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 its total assets in foreign securities. ADRs
are not considered foreign securities for this purpose. However, the Capital
Appreciation Stock Fund and Growth and Income Stock Fund may invest up to 25% of
assets, and the Balanced Fund may invest up to 10% of assets in American
Depository Receipts.
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.
<PAGE>
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.
<PAGE>
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
twenty percent (20%) of net 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
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. The Fund may invest more than twenty
percent (20%) of total 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. 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, 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%. The portfolio turnover rate for the fiscal year ended
December 31, 1997, for each Fund was as follows: Capital Appreciation Stock,
17.06%; Growth and Income Stock, 20.39%; Balanced, 21.15% (Stocks, 8.67%; Bonds,
12.48%); Bond, 30.71%; and Treasury 2000, 0.0%.
LOWER-RATED DEBT SECURITIES
Corporate debt securities which are not within the four highest ratings by
Standard & Poor's Corporation or Moody's Investors Service, Inc. ("lower-rated
debt securities") 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, lower-rated debt securities 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 lower-rated
debt securities 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 rating categories, 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 Trustee 1982 - Present
1997 - 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
Trustee 1987 - 1996
1997 - Present Secretary
1992 - Present
CUNA Brokerage Services, Inc.
President
1996 - 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
<PAGE>
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 Manager - Business Initiatives
1997 - Present
MidAmerican Energy Company
Waterloo, Iowa 50704
District Manager
1995 - 1997
Midwest Power Systems, Inc.
Waterloo, Iowa 50704
Division Manager
1992 - 1995
*An interested person within the meaning of the Act.
</TABLE>
Trustees Compensation
Names of Trustees Aggregate Compensation For All Investment
Companies Managed by CIMCO
Gwendolyn M.Boeke $4,500
Michael S. Daubs* $ 0
Alfred L. Disrud $4,500
Lawrence R. Halverson* $ 0
Keith S. Noah $4,500
Thomas C. Watt $4,500
* 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. All Trustees and officers of the
Ultra Series Fund also serve as trustees or officers of the MEMBERS Mutual
Funds, an open-end management investment company 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, 1998, 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, 1998, 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, 1998, the following persons had a beneficial interest exceeding five
percent (5%):
Percentage of
Fund Beneficial Owner Holdings Net Assets
Treasury 2000 CUNA Mutual Life Insurance Company
2000 Heritage Way $546,036.73 31.64%
Waverly, IA 50677
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 %
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,
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 total fee paid to the Investment Adviser during the year ended
December 31, 1997, was $5,320,543. The fees were allocated to the Funds as
follows: $1,194,672 to Capital Appreciation Stock, $2,108,616 to Growth and
Income Stock, $1,627,496 to Balanced, $248,008 to Bond, $134,513 to Money
Market, and $7,238 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.
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 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. Daniel E. Julie, CPA, CFA, is
co-manager of the Capital Appreciation Stock Fund, Growth and Income Stock Fund,
and Balanced Fund. He has been employed by the Investment Adviser since June 1,
1993. Jeffrey B. Pantages, CFA, is co-manager of the Balanced Fund, Bond Fund,
and Treasury 2000 Fund. He has been employed by the Investment Adviser since
March 23, 1998, prior to which he was Chief Investments Officer of the Security
Benefit Group since 1992. In addition to work on behalf of the Ultra Series
Fund, each manager performs advisory services for other clients 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 1995, the Adviser paid $217,034 for
those services. In 1996, the Adviser paid $447,362 for those services. In 1997,
the Adviser paid $223,220 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 1995, the Adviser paid $9,487
for those services. In 1996, the Adviser paid $19,711 for those services. In
1997, the Adviser paid $16,404 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
Daniel J. Larson Vice President
Thomas J. Merfeld Vice President
Janice C. Doyle Assistant Secretary
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
State Street Bank and Trust Company is the current custodian for the securities
and cash of the Ultra Series Fund. 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, 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. For
the year ended December 31, 1997, Capital Appreciation Stock Fund paid $186,338,
Growth and Income Fund paid $352,096 and Balanced Fund paid $92,415 in brokerage
fees. There were no brokerage fees paid by Bond, Money Market, or Treasury 2000
Funds in 1997.
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.
<PAGE>
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.
<PAGE>
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 12/31/97 12/31/97 12/31/97
Capital Appreciation 31.57% N/A 21.83%*
Growth and Income 31.42% 19.51% 16.71%
Balanced 16.87% 11.73% 11.58%
Bond 7.45% 6.30% 7.95%
Treasury 2000 6.86% 7.19% 10.36%
* 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, 1997
Capital Growth and Money Treasury
Appreciation Income Balanced Bond Market 2000
Assets: Stock Fund Stock Fund Fund Fund Fund Fund
---------- ---------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Investments in securities, at value,
(note 2)-see accompanying schedule
(cost $404,240,049) $458,255,162 $ -- $ -- $ -- $ -- $ --
(cost $461,510,749) -- 584,882,177 -- -- -- --
(cost $269,135,520) -- -- 310,239,939 -- -- --
(cost $185,177,448) -- -- -- 185,599,118 -- --
(cost $41,192,527) -- -- -- -- 41,192,527 --
(cost $1,502,323) -- -- -- -- -- 1,701,374
Receivable for securities sold 304,594 7,556,707 812,914 -- -- --
Accrued interest receivable 240 328 2,152,172 3,302,397 8 --
Accrued dividends receivable 393,843 1,152,046 237,397 -- -- --
----------- ----------- ----------- ---------- ---------- ----------
Total assets 458,953,839 593,591,258 313,442,422 188,901,515 41,192,535 1,701,374
----------- ----------- ----------- ---------- ---------- ----------
Liabilities:
Payable for securities purchased 2,526,385 3,154,136 3,450,718 -- -- --
Dividends payable -- -- -- -- 5,562 --
Accrued expenses 233,219 301,689 187,992 61,947 16,821 697
----------- ----------- ----------- ----------- ---------- ----------
Total liabilities 2,759,604 3,455,825 3,638,710 61,947 22,383 697
----------- ----------- ----------- ----------- ---------- ----------
Net assets applicable to outstanding
capital stock $456,194,235 $590,135,433 $309,803,712 $188,839,568 $41,170,152 $1,700,677
=========== =========== =========== =========== ========== ==========
Represented by:
Capital stock, par value $.01 $242,004 $216,928 $181,994 $179,093 $411,702 $1,841
Additional paid-in capital 401,977,352 466,547,077 268,464,496 188,176,466 40,758,450 1,499,785
Undistributed net investment income -- -- 49,986 62,339 -- --
Undistributed net realized gain (loss)
on investments (40,234) -- 2,817 -- -- --
Unrealized appreciation (depreciation)
on investments 54,015,113 123,371,428 41,104,419 421,670 -- 199,051
----------- ----------- ----------- ----------- ---------- ----------
Total net assets - representing net assets
applicable to outstanding capital stock $456,194,235 $590,135,433 $309,803,712 $188,839,568 $41,170,152 $1,700,677
=========== =========== =========== =========== ========== ==========
Number of Class Z Shares issued and
outstanding (note 5) 24,200,359 21,692,803 18,199,350 17,909,312 41,170,152 184,138
=========== =========== =========== =========== ========== ==========
Net asset value per share of outstanding
capital stock (note 2) $18.85 $27.20 $17.02 $10.54 $1.00 $9.24
=========== =========== =========== =========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities
December 31, 1997
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: 5.1%
Anheuser Busch Companies A-1/P-1 5.85% Jan 08, 1998 $3,000,000 $2,996,646
Coca-Cola Company A-1+/P-1 5.83% Jan 13, 1998 3,000,000 2,994,280
Consolidated Natural Gas A-1+/P-1 6.30% Jan 07, 1998 2,000,000 1,997,933
Ford Motor Credit Corporation A-1/P-1 5.73% Jan 05, 1998 2,000,000 1,998,758
Ford Motor Credit Corporation A-1/P-1 6.06% Jan 06, 1998 3,500,000 3,497,098
General Electric Capital Corporation A-1+/P-1 5.98% Jan 15, 1998 2,000,000 1,995,434
Merrily Lynch Capital Markets A-1+/P-1 5.97% Jan 20, 1998 3,000,000 2,990,737
Merrily Lynch Capital Markets A-1+/P-1 5.97% Jan 12, 1998 1,000,000 998,106
Merrily Lynch Capital Markets A-1+/P-1 5.68% Jan 02, 1998 2,000,000 1,999,667
State Street Bank & Trust 5.25% 1,644,775 1,644,775
----------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $23,113,434
----------
% Net
Long-Term Investments: Assets Shares Value
Common Stocks: 95.4%
Foreign Issues: 3.2%
Glaxo Wellcome PLC - ADR 101,800 $4,873,675
Telefonos deMexico SP ADR - Cl L 174,000 9,754,875
---------
Foreign Issues total 14,628,550
Building Materials: 1.9%
Raychem Corporation 195,500 8,418,719
Forest Products/Paper: 2.3%
Georgia-Pacific Corporation 72,100 4,380,075
Georgia-Pacific (Timber Grp)*** 55,500 1,259,156
Willamette Industries Inc. 155,900 5,018,031
---------
Forest Products/Paper total 10,657,262
Insurance: 6.9%
Aetna Inc. 137,400 9,695,288
Allstate Corporation 85,882 7,804,526
Travelers Group, Inc. 258,999 13,953,571
---------
Insurance total 31,453,385
Banks: 2.3%
Banc One Corporation 101,200 5,496,425
Bankers Trust New York Corporation 45,200 5,082,175
---------
Banks total 10,578,600
Investment Banking/Brokerage: 7.1%
A. G. Edwards, Inc. 214,300 8,518,425
Everest Reinsurance Holdings, Inc. 179,650 7,410,563
Morgan Stanley, Dean Witter, Discover and Co. 91,200 5,392,200
Mutual Risk Management Ltd. 366,464 10,971,016
---------
Investment Banking/Brokerage total 32,292,204
Drugs/Health Care: 6.8%
ALZA Corporaton 153,900 4,895,944
Biogen, Inc.*** 72,200 2,626,275
Bristol-Myers Squibb Company 54,800 5,185,450
Centocor, Inc.*** 114,400 3,803,800
Crescendo Pharmaceuticals Corporation*** 6,260 72,381
MedPartners, Inc.*** 175,659 3,930,370
Pharmacia & Upjohn, Inc. 152,000 5,567,000
United Healthcare Corporation 99,400 4,938,938
---------
Drugs/Health Care total 31,020,158
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Hospital Management/Supplies: 0.8%
Columbia/HCA Healthcare Corporation 123,700 $3,664,613
---------
Retail - Discount: 1.7%
The TJX Companies, Inc. 134,100 4,609,688
Wal-Mart Stores, Inc. 78,700 3,103,731
---------
Retail-Discount total 7,713,419
Retail - Department: 2.0%
Dayton Hudson Corporation 136,900 9,240,750
---------
Retail - Drug: 1.9%
Rite Aid Corporation 145,800 8,556,638
---------
Retail-Grocery: 2.6%
Safeway Inc.*** 183,800 11,625,350
---------
Media: 3.2%
Cognizant Corporation 121,300 5,405,431
PRIMEDIA Inc.*** 720,600 9,097,575
---------
Media total 14,503,006
Foods - Products & Service: 5.2%
General Mills, Inc. 56,050 4,014,581
Nabisco Holdings Corporation - Class A 194,100 9,401,719
Sara Lee Corporation 74,400 4,189,650
Tyson Foods, Inc. - Class A 303,800 6,227,900
---------
Foods - Products & Service total 23,833,850
Apparel/Textile: 1.1%
Nine West Group, Inc.*** 188,400 4,886,625
---------
Office Equipment/Computers: 10.0%
3Com Corporation*** 154,900 5,411,819
EMC Corporation*** 519,300 14,248,294
Gateway 2000, Inc.*** 159,700 5,210,213
International Business Machines Corporation 59,350 6,205,784
Seagate Technology, Inc.*** 151,700 2,920,225
Wang Laboratories, Inc.*** 526,250 11,643,281
---------
Office Equipment/Computers total 45,639,616
Electronics-Semiconductors: 1.9%
Dallas Semiconductor Corporation 142,700 5,815,025
Micron Technology, Inc.*** 104,450 2,715,700
---------
Electronics-Semiconductors total 8,530,725
Electronics: 1.2%
Texas Instruments Incorporated 124,800 5,616,000
---------
Pollution Control: 1.1%
Waste Management, Inc. 174,600 4,801,500
---------
Oil/Oil Service: 6.2%
Occidental Petroleum Corporation 296,550 8,692,622
Unocal Corporation 172,050 6,677,691
USX-Marathon Group 277,200 9,355,500
The Williams Companies, Inc. 123,400 3,501,475
---------
Oil/Oil Service total 28,227,288
Containers: 3.8%
Owens-Illinois, Inc.*** 455,600 17,284,325
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Chemicals: 3.5%
The Dow Chemical Company 48,000 $4,872,000
Kerr-Mcgee Corporation 77,300 4,894,056
Praxair Inc 134,500 6,052,500
---------
Chemicals total 15,818,556
Transportation: 2.6%
Delta Air Lines, Inc. 31,350 3,730,650
Federal Express Corporation*** 75,800 4,628,538
Midwest Express Holdings, Inc.*** 92,450 3,588,215
---------
Transportation total 11,947,403
Telecommunications: 8.8%
AirTouch Communications, Inc.*** 343,550 14,278,796
Cox Communications, Inc.*** 246,800 9,887,425
U.S. WEST Media Group*** 546,500 15,780,188
---------
Telecommunications total 39,946,409
Utilities-Telephone: 2.2%
Ameritech Corporation 61,400 4,942,700
Bell Atlantic Corporation 54,650 4,973,150
---------
Utilities-Telephone total 9,915,850
Utilities-Electric: 0.7%
PG& E Corporation 108,450 3,300,947
---------
Diversified Companies: 2.3%
Rockwell International Corporation 90,725 4,740,381
Sonat, Inc. 126,200 5,773,650
---------
Diversified Companies total 10,514,031
Miscellaneous: 2.3%
Interim Services, Inc.*** 406,800 10,525,950
---------
TOTAL COMMON STOCKS
(COST: $381,126,615) $435,141,728
-----------
TOTAL INVESTMENTS, CAPITAL APPRECIATION
STOCK FUND (COST:$404,240,049)** $458,255,162
===========
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, 1997, the cost of securities for federal income tax purposes
was $404,280,283. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation.................................... $62,867,872
Gross unrealized depreciation................................... (8,892,995)
----------
Net unrealized appreciation...................................... $53,974,878
==========
Tax cost and appreciation differ from the financial statement by $40,234 due to
timing of dividend distributions.
***This Security is not income producing.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
GROWTH AND INCOME 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%
Anheuser Busch Companies A-1/P-1 5.85% Jan 08, 1998 $3,000,000 $2,996,646
Associate Corp NA A-1+/P-1 5.68% Jan 06, 1998 1,500,000 1,498,848
Associate Corp NA A-1+/P-1 5.83% Jan 05, 1998 3,500,000 3,497,779
BellSouth Telecomm Inc A-1+/P-1 5.28% Jan 13, 1998 2,000,000 1,996,250
BellSouth Telecomm Inc A-1+/P-1 6.04% Jan 05, 1998 2,244,000 2,242,516
Ford Motor Credit Company A-1/P-1 5.83% Feb 02, 1998 2,500,000 2,487,378
Ford Motor Credit Company A-1/P-1 5.94% Jan 06, 1998 2,756,000 2,753,761
General Electric Capital Corp A-1+/P-1 5.73% Jan 12, 1998 1,000,000 998,292
General Electric Capital Corp A-1+/P-1 5.74% Jan 14, 1998 1,000,000 997,978
General Electric Capital Corp A-1+/P-1 5.86% Jan 14, 1998 2,000,000 1,995,869
Merrill Lynch & Co Inc A-1+/P-1 5.79% Feb 02, 1998 1,000,000 994,996
Merrill Lynch & Co Inc A-1+/P-1 5.86% Jan 16, 1998 3,000,000 2,992,850
State Street Bank & Trust 5.25% 2,250,069 2,250,070
----------
TOTAL COMMERCIAL PAPER/
SAVINGS, AT COST $27,703,233
----------
Quasi-Government/Government Sponsored: 0.2%
Federal Home Loan Discount Notes AAA 5.76% Feb 19, 1998 $1,055,000 $1,046,930
---------
% Net
Long-Term Investments: Assets Shares Value
Common Stocks: 94.2%
Foreign Issues: 2.8%
Glaxo Wellcome PLC - ADR 201,350 $9,639,631
Philips Electronics N.V. 113,700 6,878,850
---------
Foreign Issues total 16,518,481
Forest Products/Paper: 2.7%
Georgia-Pacific Corporation 94,300 5,728,725
Georgia-Pacific (Timber Grp)*** 78,100 1,771,894
Kimberly-Clark Corporation 173,900 8,575,444
---------
Forest Products/Paper total 16,076,063
Insurance: 8.3%
Aetna Inc. 192,700 13,597,393
Allstate Corporation 183,684 16,692,283
Everest Reinsurance Holdings, Inc. 142,350 5,871,937
Travelers Group, Inc. 242,724 13,076,755
---------
Insurance total 49,238,368
Banks: 3.7%
Banc One Corporation 233,100 12,660,244
Bankers Trust New York Corporation 81,100 9,118,681
---------
Banks total 21,778,925
Investment Banking/Brokerage: 2.4%
A. G. Edwards, Inc. 153,050 6,083,738
Morgan Stanley, Dean Witter, Discover
and Co. 133,000 7,863,625
---------
Investment Banking/Brokerage total 13,947,363
Drugs/Health Care: 7.8%
American Home Products Corporation 192,100 14,695,650
Bristol-Myers Squibb Company 170,400 16,124,100
Pharmacia and Upjohn, Inc. 139,200 5,098,200
Tenet Healthcare Corporation 300,300 9,947,438
---------
Drugs/Health Care total 45,865,388
Retail - Department: 1.6%
Sears, Roebuck & Co. 205,300 9,289,825
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Retail - Discount: 2.4%
Wal-Mart Stores, Inc. 354,200 $13,968,763
---------
Retail - Drug: 1.2%
CVS Corporation 112,653 7,216,833
---------
Retail - Grocery: 0.6%
American Stores Company 158,000 3,248,875
---------
Media: 1.3%
Cox Communications, Inc.*** 192,300 7,704,019
---------
Foods - Products & Service: 7.6%
General Mills, Inc. 141,200 10,113,450
Nabisco Holdings Corporation-Class A 325,800 15,780,937
Sara Lee Corporation 200,700 11,301,918
Tyson Foods, Inc. - Class A 382,725 7,845,863
---------
Foods - Products & Service total 45,042,168
Auto-Related: 1.7%
Echlin Inc. 147,300 5,330,419
General Motors Corporation 81,150 4,919,719
---------
Auto-Related total 10,250,138
Office Equipment/Computers: 8.9%
Computer Associates International, Inc. 252,000 13,324,500
EMC Corporation*** 554,100 15,203,118
Hewlett-Packard Company 110,400 6,900,000
International Business Machines Corporation 165,400 17,294,638
---------
Office Equipment/Computers total 52,722,256
Electronics: 2.9%
Motorola, Inc. 122,300 6,978,744
Texas Instruments Incorporated 219,400 9,873,000
---------
Electronics total 16,851,744
Aerospace/Defense: 1.4%
United Technologies Corporation 114,500 8,337,031
---------
Pollution Control: 1.1%
Waste Management, Inc. 240,550 6,615,125
---------
Oil/Oil Service: 8.9%
Amoco Corporation 61,800 5,260,725
Exxon Corporation 141,200 8,639,675
Occidental Petroleum Corporation 221,750 6,500,047
Texaco, Inc. 103,600 5,633,250
Unocal Corporation 198,750 7,713,984
USX-Marathon Group 281,650 9,505,688
The Williams Companies, Inc. 325,800 9,244,575
---------
Oil/Oil Service total 52,497,944
Containers: 3.5%
Crown Cork & Seal Company, Inc. 180,000 9,022,500
Owens-Illinois, Inc.*** 309,500 11,741,656
---------
Containers total 20,764,156
Chemicals: 4.4%
Dexter Corporation 246,700 10,654,356
The Dow Chemical Company 148,750 15,098,125
---------
Chemicals total 25,752,481
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Transportation: 1.0%
Delta Air Lines, Inc. 48,950 $5,825,050
---------
Railroad Equipment: 1.8%
Burlington Northern Santa Fe
Corporation 56,400 5,241,675
Norfolk Southern Corporation 182,200 5,614,038
---------
Railroad Equipment total 10,855,713
Telecommunications: 6.8%
AirTouch Communications, Inc.*** 207,100 8,607,594
Harris Corporation 159,800 7,330,825
Sprint Corporation 145,500 8,529,937
U.S. WEST Media Group 545,200 15,742,650
---------
Telecommunications total 40,211,006
Utilities-Telephone: 4.1%
Ameritech Corporation 112,950 9,092,475
Bell Atlantic Corporation 85,850 7,812,350
GTE Corporation 142,450 7,443,013
---------
Utilities-Telephone total 24,347,838
Utilities-Electric: 2.5%
Duke Energy Company 75,100 4,158,663
Northern States Power Company 61,000 3,553,250
PG&E Corporation 232,300 7,070,631
---------
Utilities-Electric total 14,782,544
Diversified Companies: 2.8%
Rockwell International Corporation 177,880 9,294,230
General Signal Corporation 169,000 7,129,688
---------
Diversified Companies total 16,423,918
TOTAL COMMON STOCKS
(COST: $432,760,587) $556,132,014
-----------
TOTAL INVESTMENTS, GROWTH AND
INCOME STOCK FUND
(COST: $461,510,749)** $584,882,177
===========
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, 1997, the cost of securities for federal income tax purposes
was $461,510,749. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation................................$131,689,818
Gross unrealized depreciation............ ....................(8,318,391)
-----------
Net unrealized appreciation..................................$123,371,427
===========
***This Security is not income producing.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
% Net Quality Annualized Maturity Par
BALANCED FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
Short-Term Investments:
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper/Savings: 7.2%
Associate Corp of North America A-1+/P-1 5.82% Jan 27, 1998 $1,500,000 $1,493,847
CIT Group Holdings A-1/P-1 5.71% Feb 03, 1998 2,000,000 1,989,825
Ford Motor Credit Corporation A-1/P-1 5.99% Jan 05, 1998 4,000,000 3,994,184
General Electric Capital Corporation A-1+/P-1 5.81% Jan 22, 1998 5,000,000 4,987,228
Interstate Power A-1/P-1 6.01% Jan 29, 1998 2,000,000 1,990,822
Merrill Lynch & Co., Inc A-1+/P-1 5.82% Feb 27, 1998 4,000,000 3,985,653
Walt Disney Company A-1/P-1 5.70% Jan 02, 1998 2,000,000 1,999,690
State Street Bank & Trust 5.25% 1,710,242 1,710,243
----------
TOTAL COMMERCIAL PAPER/
SAVINGS, AT COST $22,151,492
----------
% Net Quality Coupon Maturity Par
U.S. Government & Agency Bonds: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
Government Guaranteed: 7.1%
Government National Mortgage Assn.-97-8 PK**** AAA 7.500 Apr 16, 2026 $5,170,266 $1,625,263
U.S. Treasury Notes AAA 8.500 Feb 15, 2000 500,000 527,969
U.S. Treasury Notes AAA 7.500 Nov 15, 2001 1,000,000 1,060,938
U.S. Treasury Notes AAA 7.875 Apr 15, 1998 1,000,000 1,007,188
U.S. Treasury Notes AAA 5.500 Apr 15, 2000 500,000 498,282
U.S. Treasury Notes AAA 7.125 Sep 30, 1999 900,000 921,657
U.S. Treasury Notes AAA 5.875 Feb 15, 2004 950,000 958,907
U.S. Treasury Notes AAA 5.750 Aug 15, 2003 800,000 801,000
U.S. Treasury Notes AAA 6.500 May 15, 2005 1,100,000 1,147,094
U.S. Treasury Notes AAA 6.500 Aug 15, 2005 700,000 730,626
U.S. Treasury Notes AAA 5.875 Nov 15, 2005 7,350,000 7,391,351
U.S. Treasury Notes AAA 6.250 Feb 15, 2007 5,000,000 5,162,505
----------
TOTAL GOVERNMENT GUARANTEED
(COST: $21,704,168) $21,832,780
----------
Quasi-Government/Government Sponsored: 17.1%
Federal Home Loan Bank-CPI Floating Rate AAA 5.421 Feb 20, 2007 $5,000,000 $4,778,950
Federal Home Loan Mortgage Corp. 1455 HA AAA 7.900 Jun 15, 2021 3,344,000 3,641,338
Federal Home Loan Mortgage Corp. 1378 H AAA 10.000 Jan 15, 2021 2,250,000 2,561,834
Federal Home Loan Mortgage Corp.-GNMA 4-B AAA 6.500 Nov 25, 2002 4,500,000 4,526,046
Federal Home Loan Mortgage Corp. AAA 6.440 Jan 28, 2000 250,000 253,059
Federal Home Loan Mortgage Corp.-1992 PH**** AAA 7.000 Sep 15, 2027 2,000,000 818,550
Federal Home Loan Mortgage Corp.-1978 AD AAA 7.000 Apr 15, 2025 2,045,655 2,042,049
FNMA Pass Through Cert. AAA 8.000 Feb 01, 2002 68,685 70,371
Federal National Mortgage Assn.-89-82 G AAA 8.400 Nov 25, 2019 1,600,000 1,690,117
Federal National Mortgage Assn.-Strip 282-2**** AAA 7.000 Sep 01, 2025 7,513,262 2,239,118
Federal National Mortgage Assn.-97-59 J**** AAA 8.000 July 18, 2027 8,000,000 2,806,840
Federal National Mortgage Assn.-97-29 PL**** AAA 7.500 Aug 18, 2026 8,000,000 3,249,384
Federal National Mortgage Assn.-93-62 D AAA 7.000 Jun 25, 2021 4,000,000 4,027,788
Federal National Mortgage Assn.-96-M6 G AAA 7.750 Sep 17, 2023 4,000,000 4,222,520
Federal National Mortgage Assn.-91-137 H AAA 7.000 Oct 25, 2021 4,000,000 4,052,332
Federal National Mortgage Assn.-G93-8 PG AAA 6.500 July 25, 2018 2,000,000 2,000,620
Federal National Mortgage Assn.-97-48 C AAA 6.500 July 18, 2027 3,572,274 3,545,665
Federal National Mortgage Assn.-97-57 PT**** AAA 8.000 Mar 18, 2024 8,000,000 2,256,976
Federal Home Loan Mortgage Corp.-Strip 183 IO**** AAA 7.000 Apr 01, 2027 7,805,793 2,357,857
Federal National Mortgage Assn.-Strip 272-2**** AAA 7.500 July 01, 2026 7,278,272 1,865,021
----------
TOTAL QUASI-GOVERNMENT/GOVERNMENT
SPONSORED (COST: $53,322,686) $53,006,435
----------
Non-U.S. Government Bonds:
Sovereign Issues: 3.8%
Argentina Global Bond BA-3/BB 8.375 Dec 20, 2003 $4,250,000 $4,048,125
Brazil - Global B-1/BB- 8.875 Nov 05, 2001 2,500,000 2,475,000
Columbia, Republic BAA-3/BBB- 7.250 Feb 23, 2004 3,000,000 2,845,956
Ministry of Finance - Russia Ba-2/BB- 10.000 Jun 26, 2007 2,500,000 2,322,500
----------
TOTAL SOVEREIGN ISSUES (COST: $12,238,117) $11,691,581
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
U.S Corporate Bonds: 17.3%
Building Materials: 0.1%
Stanley Works A-2/A 7.375 Dec 15, 2002 $250,000 $263,287
--------
Drug/Health Care: 0.7%
Abbott Laboratories, Inc. AA-1/AAA 6.800 May 15, 2005 500,000 522,142
American Home Products, Corp. A-2/A 7.700 Feb 15, 2000 1,050,000 1,083,818
Bergen Brunswig BAA-1/A- 7.250 Jun 01, 2005 500,000 522,049
Bergen Brunswig BAA-1/A- 7.375 Jan 15, 2003 113,000 117,995
---------
Drug/Health Care total 2,246,004
Electronics: 0.4%
Motorola Inc AA-3/AA 6.500 Sep 01, 2025 50,000 52,134
Raytheon Co. BAA-1/BBB 6.500 Jul 15, 2005 530,000 533,380
Texas Instruments, Inc. A-3/A 9.000 Mar 15, 2001 500,000 541,729
---------
Electronics total 1,127,243
Forest Products/Paper: 1.3%
Champion International Corp. BAA-1/BBB 9.875 Jun 01, 2000 250,000 270,506
Champion International Corp. BAA-1/BBB 7.100 Sep 01, 2005 1,570,000 1,628,640
International Paper A-3/A- 7.875 Aug 01, 2006 500,000 545,132
Kimberly Clark Corp. AA-2/AA 9.000 Aug 01, 2000 750,000 803,219
Weyerhaeuser Company A-2/A 8.375 Feb 15, 2007 800,000 911,958
---------
Forest Products/Paper total 4,159,455
Hospital Management/Supplies: 0.3%
Baxter International, Inc. A-3/A 7.625 Nov 15, 2002 250,000 263,861
Columbia/HCA Healthcare Corporation BAA-2/BBB 6.910 Jun 15, 2005 700,000 684,779
---------
Hospital Management/Supplies total 948,640
Insurance/Casualty: 0.5%
Equitable Life Assoc A-2/A 6.950 Dec 01, 2005 1,050,000 1,070,702
Lincoln National Corp. A-2/A 7.250 May 15, 2005 500,000 519,633
---------
Insurance/Casualty total 1,590,335
Investment Banking/Brokerage: 2.0%
Donaldson, Lufkin Jenrette, Inc. A-3/A- 6.875 Nov 01, 2005 300,000 304,588
Donaldson, Lufkin Jenrette, Inc. A-3/A- 5.625 Feb 15, 2016 520,000 513,985
Merrill Lynch & Co., Inc. AA-3/AA- 6.250 Jan 15, 2006 650,000 639,939
Merrill Lynch & Co., Inc. AA-3/AA- 7.000 Mar 15, 2006 1,000,000 1,030,348
Paine Webber Group BAA-1/BBB+ 6.750 Feb 01, 2006 1,000,000 1,004,972
Salomon Inc. A-2/A 7.125 Aug 01, 1999 1,000,000 1,015,580
Salomon Inc. A-2/A 7.200 Feb 01, 2004 1,500,000 1,553,409
---------
Investment Banking/Brokerage total 6,062,821
Finance Co. - Consumer Loan: 0.5%
American General Finance A-2/A+ 7.125 Dec 01, 1999 500,000 509,439
Household Finance Co. A-2/A 7.125 Sep 01,2005 500,000 517,997
Norwest Financial Inc. AA-3/AA- 7.875 Feb 15, 2002 500,000 530,507
---------
Finance Co. - Consumer Loan total 1,557,943
Mortgage Related Securities: 0.5%
Prudential Home Funding AAA 6.050 Apr 25, 2024 1,500,000 1,398,930
---------
Media: 0.3%
Cox Communications BAA-2/A- 6.875 Jun 15, 2005 500,000 512,917
McGraw-Hill, Inc. A-1 9.430 Sep 01, 2000 250,000 269,239
---------
Media total 782,156
Publishing-News: 0.2%
Knight Ridder, Inc. A-3/A 8.500 Sep 01, 2001 500,000 518,935
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Retail-Department: 0.2%
Dayton Hudson Corp. BAA-1/BBB+ 9.750 Nov 01, 1998 $500,000 $514,127
---------
Beverage/Confect/Tobacco: 0.1%
Pepsico Inc. A-1/A 6.125 Jan 15, 1998 250,000 250,648
---------
Auto-Related: 1.3%
Borg-Warner Automotive BAA-2/BBB+ 7.000 Nov 01, 2006 1,150,000 1,187,162
Ford Motor Company A-1/A 7.500 Nov 15, 1999 500,000 512,553
Ford Motor Company A-1/A 7.250 Oct 01, 2008 2,000,000 2,127,636
General Motors Corporation A-3/A- 7.000 Jun 15, 2003 300,000 310,726
---------
Auto-Related total 4,138,077
Hotel & Motel: 0.4%
Marriott International, Inc. BAA-1/BBB+ 7.125 Jun 01, 2007 1,050,000 1,095,304
---------
Electric Household Appliances: 0.1%
Maytag Corporation BAA-1/BBB+ 9.750 May 15, 2002 250,000 282,138
---------
Finance-Diversified: 1.7%
Associate Corp of N America AA-3/AA- 5.250 Sep 01, 1998 40,000 39,822
Dow Capital B.V. A-1/A 7.125 Jan 15, 2003 250,000 259,379
Ford Motor Credit A-1/A 6.125 Jan 09, 2006 1,000,000 978,051
General Motors Acceptance Corp A-3/A- 6.450 Apr 15, 1999 2,900,000 2,912,882
U.S. West Capital Funding BAA-1/BBB+ 6.750 Oct 01, 2005 1,000,000 1,008,534
---------
Finance-Diversified total 5,198,668
Engineering/Construction Services: 0.3%
Foster Wheeler Corp. BAA-2/BBB 6.750 Nov 15, 2005 1,020,000 1,025,204
---------
Machinery/Tools: 0.4%
Giddings & Lewis BA-1 7.500 Oct 01, 2005 500,000 521,974
Ingersoll Rand Company A-3/A- 6.480 Jun 01. 2025 700,000 719,376
---------
Machinery/Tools total 1,241,350
Office Equipment/Computers: 0.1%
Xerox Corporation A-2/A 7.150 Aug 01, 2004 300,000 314,215
---------
Oil/Oil Service: 0.5%
Enron Corp. BAA-2/BBB+ 7.625 Sep 10, 2004 500,000 530,464
Mobil Corporation AA-2/AA 8.375 Feb 12, 2001 500,000 532,500
Union Oil California BAA-1/BBB+ 7.200 May 15, 2005 500,000 522,040
---------
Oil/Oil Service total 1,585,004
Chemicals: 0.4%
PPG Industries, Inc. A-1/A 6.875 Aug 01, 2005 500,000 521,446
Union Carbide Corporation BAA-2/BBB 6.790 Jun 01, 2025 700,000 725,847
---------
Chemicals total 1,247,293
Specialty Chemicals: 0.2%
Praxair, Inc. A-3/BBB+ 6.850 Jun 15, 2005 500,000 515,597
---------
Transportation: 2.4%
American Airlines A-3/BBB 8.040 Sep 16, 2011 1,000,000 1,077,780
Burlington Northern Inc. BAA-2/BBB 7.400 May 15, 1999 500,000 508,761
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 1,478,492 1,592,826
Federal Express A-3/BBB+ 7.850 Jan 30, 2015 983,319 1,071,346
Federal Express A-3/BBB+ 7.890 Sep 23, 2008 500,000 533,535
Golden State Petroleum Transport Corp. AA-2 8.040 Feb 01, 2019 2,000,000 2,143,428
United Airlines Baa-1/BBB 9.020 Apr 19, 2012 462,541 534,813
---------
Transportation total 7,462,489
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Aerospace/Defense: 0.6%
Lockheed Martin A-3/BBB+ 6.850 May 15, 2001 $1,250,000 $1,270,875
Rockwell International Corp. A-1/AA+ 7.625 Feb 17, 1998 500,000 500,961
---------
Aerospace/Defense total 1,771,836
Utilities-Telephone: 0.6%
Alltel Corporation A-2/A+ 7.250 Apr 01, 2004 500,000 523,121
BellSouth Telecommunications, Inc. AAA/AAA 6.500 Jun 15, 2005 350,000 357,087
GTE-California AA-3/AA- 6.250 Jan 15, 1998 250,000 250,026
GTE Corporation BAA-1/A 9.100 Jun 01, 2003 500,000 562,578
Northwestern Bell Telephone Co. AA-3/A 9.500 May 01, 2000 250,000 268,769
---------
Utilities-Telephone total 1,961,581
Utilities-Electric: 1.0%
Consolidated Edison of New York, Inc. A-1/A+ 6.250 Apr 01, 1998 300,000 300,222
Midwest Power Systems A-2/AA- 7.125 Feb 01, 2003 250,000 260,116
Pacific Gas & Electric Co. A-1/AA- 6.250 Aug 01, 2003 300,000 300,604
Pacificorp A-2/A 6.750 Apr 01, 2005 500,000 510,954
System Energy Resources BAA-3/BBB- 7.625 Apr 01, 1999 1,100,000 1,119,790
Wisconsin Public Service, Inc. AA-2/AA+ 7.300 Oct 01, 2002 500,000 525,360
---------
Utilities-Electric total 3,017,046
Utilities-Natural Gas Pipeline: 0.1%
Burlington Resources Inc. A-3/A- 9.625 Jun 15, 2000 250,000 269,712
Southern Cal Gas Co A-1/AA- 5.250 Mar 01, 1998 20,000 19,981
---------
Utilities-Natural Gas Pipeline total 289,693
Diversified Companies: 0.1%
Whitman Corporation BAA-2/BBB+ 7.500 Feb 01, 2003 300,000 315,538
---------
TOTAL U.S. CORPORATE BONDS,
AT COST: ($50,975,878) $52,881,547
----------
NON - U.S. CORPORATE BONDS: 0.2%
Shell Canada, Ltd. AA-2/AA 8.875 Jan 14, 2001 $500,000 $539,125
TOTAL NON - U.S. CORPORATE BONDS,
AT COST: ($505,991) $539,125
---------
% Net
Assets Shares Value
Common Stocks: 47.8%
Foreign Issues: 1.7%
Glaxo Wellcome PLC - ADR 38,150 $1,826,431
Philips Electronics N.V. 18,500 1,119,250
Telefonos deMexico SP ADR Cl L 39,000 2,186,438
---------
Foreign Issues total 5,132,119
Building Materials: 0.9%
Raychem Corporation 62,600 2,695,713
---------
Forest Products/Paper: 1.1%
Georgia-Pacific Corporation 26,400 1,603,800
Georgia-Pacific (Timber Grp)*** 19,800 449,213
Willamette Industries, Inc. 44,500 1,432,344
---------
Forest Products/Paper total 3,485,357
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Insurance: 3.9%
Aetna Inc. 43,400 $3,062,413
Allstate Corporation 41,557 3,776,492
Everest Reinsurance Holdings, Inc. 38,500 1,588,125
Travelers Group, Inc. 68,986 3,716,621
---------
Insurance total 12,143,651
Banks: 1.4%
Banc One Corporation 42,300 2,297,419
Bankers Trust New York Corporation 17,800 2,001,388
---------
Banks total 4,298,807
Investment Banking/Brokerage: 1.3%
A. G. Edwards, Inc. 54,600 2,170,350
Morgan Stanley, Dean Witter, Discover
and Co. 29,400 1,738,275
---------
Investment Banking/Brokerage total 3,908,625
Drugs/Health Care: 4.0%
American Home Products Corporation 45,700 3,496,050
Bristol-Myers Squibb Company 40,200 3,803,925
Centocor, Inc.*** 30,200 1,004,150
MedPartners, Inc.*** 39,188 876,832
Pharmacia & Upjohn, Inc. 42,700 1,563,888
United Healthcare Corp. 32,300 1,604,906
---------
Drugs/Health Care total 12,349,751
Hospital Management/Supplies: 0.6%
Columbia/HCA Healthcare Corporation 58,450 1,731,581
---------
Retail-Deptarment: 1.3%
Dayton Hudson Corporation 30,400 2,052,000
Sears, Roebuck & Co. 45,700 2,067,925
---------
Retail-Deptarment total 4,119,925
Retail - Discount: 0.8%
Wal-Mart Stores, Inc. 66,200 2,610,763
---------
Retail - Drug: 0.8%
CVS Corporation 37,126 2,378,384
---------
Retail - Grocery: 0.7%
Safeway Inc.*** 36,300 2,295,975
---------
Media: 2.0%
Cognizant Corporation 31,300 1,394,806
Cox Communications, Inc.*** 66,700 2,672,169
PRIMEDIA Inc.*** 171,500 2,165,188
---------
Media total 6,232,163
Foods-Food Products: 3.4%
General Mills, Inc. 31,400 2,249,025
Nabisco Holdings Corp. - Class A 88,200 4,272,188
Sara Lee Corp. 34,800 1,959,675
Tyson Foods, Inc. - Class A 104,625 2,144,813
---------
Foods-Food Products total 10,625,701
Auto-Related: 0.4%
General Motors Corporation 21,600 1,309,500
---------
Apparel/Textile: 0.4%
Nine West Group, Inc.*** 42,900 1,112,719
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Office Equipment/Computers: 4.8%
EMC Corporation*** 127,800 $3,506,513
Gateway 2000, Inc.*** 47,200 1,539,900
International Business Machines
Corporation 41,600 4,349,800
Seagate Technology, Inc.*** 24,200 465,850
3Com Corporation*** 67,600 2,361,775
Wang Laboratories, Inc.*** 112,500 2,489,063
---------
Office Equipment/Computers total 14,712,901
Electronics: 1.9%
Hewlett-Packard Company 25,000 1,562,500
Micron Technology Inc.*** 37,450 973,700
Motorola, Inc. 27,600 1,574,925
Texas Instruments Incorporated 40,000 1,800,000
---------
Electronics total 5,911,125
Pollution Control: 0.5%
Waste Management, Inc. 60,000 1,650,000
---------
Oil/Oil Service: 4.0%
Amoco Corporation 16,450 1,400,306
Exxon Corporation 32,000 1,958,000
Occidental Petroleum Corporation 56,600 1,659,088
Unocal Corporation 86,200 3,345,638
USX-Marathon Group 72,400 2,443,500
Williams Companies 51,200 1,452,800
---------
Oil/Oil Service total 12,259,332
Containers: 1.3%
Owens-Illinois, Inc.*** 108,500 4,116,219
---------
Chemicals: 1.6%
The Dow Chemical Company 20,900 2,121,350
Kerr-Mcgee Corporation 19,200 1,215,600
Praxair Inc 37,000 1,665,000
---------
Chemicals total 5,001,950
Transportation: 1.0%
Delta Air Lines, Inc. 10,500 1,249,500
Federal Express Corp*** 30,700 1,874,619
---------
Transportation total 3,124,119
Railroad Equipment: 0.5%
Norfolk Southern Corporation 44,900 1,383,481
---------
Telecommunications: 1.5%
U.S. WEST Media Group*** 159,100 4,594,013
---------
Utilities-Telephone: 3.5%
AirTouch Communications, Inc.*** 95,850 3,983,766
Ameritech Corporation 26,500 2,133,250
Bell Atlantic Corporation 25,000 2,275,000
GTE Corporation 44,100 2,304,225
---------
Utilities-Telephone total 10,696,241
Utilities-Electric: 1.0%
Northern States Power Company 29,100 1,695,075
PG&E Company 48,050 1,462,522
---------
Utilities-Electric total 3,157,597
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Diversified Companies: 1.1%
Rockwell International Corporation 32,500 $1,698,125
United Technologies 21,800 1,587,313
---------
Diversified Companies total 3,285,438
Miscellaneous: 0.6%
Interim Services, Inc*** 70,100 1,813,839
---------
TOTAL COMMON STOCKS,
AT COST: ($108,237,189) $148,136,979
-----------
TOTAL INVESTMENTS, BALANCED FUND
AT COST: ($269,135,520)** $310,239,939
===========
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, 1997, the cost of securities for federal income tax
purposes was $269,135,520. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation.....................................$45,550,324
Gross unrealized depreciation......................................(4,445,906)
---------
Net unrealized appreciation.......................................$41,104,418
==========
***This security is not income producing.
****This security provides a claim on the interest component of the underlying
mortgages, but not on their principal component. That is, the security's cash
flows depend on the amount of principal outstanding at the payment date. If
prepayments on the underlying mortgages are higher than expected, the yield on
the security may be adversely affected.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
% Net Quality Annualized Maturity Par
BOND FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Government Guaranteed - U.S.: 4.2%
U.S. Treasury Bill AAA 5.45% Feb 12, 1998 $8,000,000 $7,950,230
Commercial Paper/Savings: 1.8%
Ford Motor Credit Company A-1/P-1 6.11% Jan 02, 1998 $1,000,000 $999,832
General Electric Capital Corp A-1+/P-1 6.54% Jan 02, 1998 300,000 299,946
Merrill Lynch & Co Inc A-1+/P-1 6.09% Jan 02, 1998 2,000,000 1,999,667
State Street Bank & Trust 5.25% 14,035 14,035
---------
Total Commercial Paper/Savings 3,313,480
---------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $11,263,710
----------
% Net Quality Coupon Maturity Par
Assets Rating* Rate Date Amount Value
U.S. Government & Agency Bonds: 26.5%
Government Guaranteed: 12.1%
Government National Mortgage Assn
- 97-8 PK*** AAA 7.500 Apr 16, 2026 $2,000,000 $628,696
Government National Mortgage
Association AAA 8.000 Aug 15, 2006 70,203 73,742
Private Export Funding AAA 5.650 Mar 15, 2003 275,000 273,448
U.S. Treasury Note AAA 5.750 Aug 15, 2003 5,300,000 5,306,630
U.S. Treasury Note AAA 5.875 Nov 15, 2005 4,150,000 4,173,348
U.S. Treasury Note AAA 7.875 Nov 15, 1999 2,000,000 2,077,502
U.S. Treasury Note AAA 8.000 Aug 15, 1999 1,000,000 1,035,938
U.S. Treasury AAA 7.500 May 15, 2002 1,000,000 1,068,126
U.S. Treasury AAA 6.250 Feb 15, 2007 3,000,000 3,097,503
U.S. Treasury AAA 6.125 Aug 15, 2007 5,000,000 5,140,630
---------
Government Guaranteed total
(COST: $22,857,527) $22,875,563
----------
Quasi-Government/Government Sponsored: 14.4%
Federal Home Loan Bank AAA 5.490 Feb 01, 2001 $200,000 $197,831
Federal Home Loan Bank AAA 7.020 Jul 06, 1999 100,000 101,781
Federal Home Loan Bank AAA 7.020 Jul 06, 1999 100,000 104,383
Federal Home Loan Bank
-CPI Floating Rate AAA 5.421 Feb 20, 2007 2,000,000 1,911,580
FHLMC Pass Through Cert. AAA 8.500 Apr 01, 2001 6,329 6,479
FHLMC Pass Through Cert. AAA 8.500 May 01, 2001 15,807 16,182
FHLMC Pass Through Cert. AAA 8.000 May 01, 2007 31,668 32,819
Federal Home Loan Mortgage Corp. AAA 6.440 Jan 28, 2000 150,000 151,836
Federal Home Loan Mortgage Corp.
1455 HA AAA 7.900 Jun 15, 2021 836,000 910,335
Federal Home Loan Mortgage Corp.
1378 H AAA 10.000 Jan 15, 2021 750,000 853,945
Federal Home Loan Mortgage Corp.
-GNMA 4 B AAA 6.500 Nov 25, 2002 1,174,000 1,180,795
Federal Home Loan Mortgage Corp.
-1506 I AAA 6.750 May 15, 2008 2,000,000 2,033,588
Federal Home Loan Mortgage Corp.
- 1539 PM AAA 6.500 Jun 15, 2008 2,000,000 2,004,120
Federal Home Loan Mortgage Corp.
- 1510 F AAA 6.900 Mar 15, 2013 2,000,000 2,057,536
Federal Home Loan Mortgage Corp.
- 1948 IA*** AAA 7.500 Mar 15, 2027 561,391 209,399
Federal Home Loan Mortgage Corp.
- 1992 PH*** AAA 7.000 Sep 15, 2027 4,000,000 1,637,100
Federal Home Loan Mortgage Corp.
- 1978 AD AAA 7.000 Apr 15, 2025 1,000,000 998,237
Federal Home Loan Mortgage Corp.
- Strip 183 IO*** AAA 7.000 Mar 15, 2027 6,830,069 2,063,125
Federal Home Loan Mortgage Corp.
- Strip 282 2*** AAA 7.000 Sep 01, 2025 1,878,315 559,779
Federal National Mortgage Association
89-82 G AAA 8.400 Nov 25, 2019 400,000 422,529
Federal National Mortgage Association
96-M6 G AAA 7.750 Sep 17, 2023 1,000,000 1,055,630
Federal National Mortgage Association
93-62 D AAA 7.000 Jun 25, 2021 1,000,000 1,006,947
Federal National Mortgage Association
91-137 H AAA 7.000 Oct 25, 2021 1,000,000 1,013,083
Federal National Mortgage Association
G93-8 PG AAA 6.500 July 25, 2018 1,000,000 1,000,310
Federal National Mortgage Association
- 97-48 C AAA 6.500 July 18, 2027 921,877 915,010
Federal National Mortgage Association AAA 5.450 Oct 10, 2003 10,000 9,738
Federal National Mortgage Association AAA 6.850 Apr 05, 2004 45,000 46,952
Federal National Mortgage Association
- 97-59 J*** AAA 8.000 July 18, 2027 4,000,000 1,403,420
Federal National Mortgage Association
- 97-29 PL*** AAA 7.500 Aug 18, 2026 4,000,000 1,624,692
Federal National Mortgage Association
- 97-57 PT*** AAA 8.000 Mar 18, 2024 4,000,000 1,128,488
Federal National Mortgage Association
- Strip 272 2*** AAA 7.500 Jul 01, 2026 1,819,568 466,255
---------
Quasi-Government/Government Sponsored total
(COST: ($27,336,863) $27,123,904
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Non - U.S. Government Bonds: 6.1%
Canadian Provincials: 4.2%
Hydro Quebec A-1 8.400 Jan 15, 2022 $1,000,000 $1,181,620
New Brunswick, Prov A-1 6.750 Aug 15, 2013 2,000,000 2,075,880
Nova Scotia Prov of A-3 9.735 Jul 15, 2002 1,000,000 1,125,920
Ontario, Province of AA-3 7.750 Jun 04, 2002 1,000,000 1,064,450
Quebec Province of A-2 9.125 Mar 01, 2000 250,000 265,208
Saskatchewan Province of A-3 7.125 Mar 15, 2008 2,000,000 2,134,260
---------
Canadian Provincials total 7,847,338
Sovereign Issues: 1.9%
Argentina Global Bond BA-3/BB 8.375 Dec 20, 2003 750,000 714,375
Brazil - Global B-1/BB- 8.875 Nov 05, 2001 500,000 495,000
Columbia, Republic BAA-3/BBB- 7.250 Feb 23, 2004 2,000,000 1,897,304
Ministry of Finance - Russia BA-2/BB- 10.000 Jun 26, 2007 500,000 464,500
---------
Sovereign Issues total 3,571,179
TOTAL NON - U.S. GOVERNMENT BONDS
(COST: $11,496,772) $11,418,517
----------
U.S. Corporate Bonds: 56.5%
Forest Products/Paper: 5.6%
Boise Cascade Corp. BAA-3/BBB- 9.450 Nov 01, 2009 $500,000 $609,403
Boise Cascade Corp. BAA-3/BBB- 9.875 Feb 15, 2001 500,000 517,909
Champion International Corp. BAA-1/BBB 9.875 Jun 01, 2000 100,000 108,202
Champion International Corp. BAA-1/BBB 7.100 Sep 01, 2005 3,750,000 3,890,063
Champion International Corp. BAA-1/BBB 6.400 Feb 15, 2026 2,000,000 2,021,222
Chesapeake Corp. BAA-3/BBB 7.200 Mar 15, 2005 1,000,000 1,033,652
International Paper A-3/A- 7.875 Aug 01, 2006 1,000,000 1,090,264
Kimberly-Clark Corp. AA-2/AA 9.000 Aug 01, 2000 600,000 642,575
Scott Paper-Defeased NR 10.000 Mar 01, 2002 500,000 570,887
---------
Forest Products/Paper total 10,484,176
Investment Banking/Brokerage: 9.5%
Bear Stearns A-2/A 6.750 Apr 15, 2003 1,000,000 1,012,050
Dean Witter Discover A-1/A+ 6.750 Oct 15, 2013 2,500,000 2,499,783
Dean Witter Discover A-1/A+ 6.300 Jan 15, 2006 1,000,000 983,941
Donaldson, Lufkin, Jenrette, Inc. A-3/A- 6.875 Nov 01, 2005 700,000 710,706
Donaldson, Lufkin, Jenrette, Inc. A-3/A- 5.625 Feb 15, 2016 2,480,000 2,451,311
Lehman Brothers Holdings BAA-1/A 7.125 Sep 15, 2003 1,000,000 1,027,365
Lehman Brothers Holdings BAA-1/A 6.306 Sep 10, 2001 1,000,000 998,551
Merrill Lynch & Co., Inc. AA-3/AA- 6.250 Jan 15, 2006 350,000 344,583
Paine Webber Group BAA-1/BBB+ 6.750 Feb 01, 2006 700,000 703,480
Paine Webber Inc. BAA-1/BBB+ 7.875 Feb 15, 2003 1,000,000 1,058,878
Salomon Inc. A-2/A 7.125 Aug 01, 1999 500,000 507,790
Salomon Inc. A-2/A 7.200 Feb 01, 2004 3,500,000 3,624,621
Salomon Inc. A-2/A 7.500 Feb 01, 2003 2,000,000 2,098,524
---------
Investment Banking/Brokerage total 18,021,583
Finance Co. - Consumer Loans: 1.0%
Household Finance Co. A-2/A 7.125 Sep 01, 2005 1,735,000 1,797,450
---------
Finance/Insurance: 0.4%
Equitable Life Assurance A-2/A 6.950 Dec 01, 2005 792,000 807,615
---------
Finance - Diversified: 2.5%
Ameritech Capital AA-3/AA+ 7.500 Apr 01, 2005 2,000,000 2,147,254
Dow Capital A-1/A 7.125 Jan 15, 2003 900,000 933,765
General Motors Acceptance Corporation A-3 6.450 Apr 15, 1999 1,045,000 1,049,642
U.S. West Capital Funding BAA-1/BBB+ 6.750 Oct 01, 2005 500,000 504,267
---------
Finance - Diversified total 4,634,928
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
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: 0.2%
Prudential Home Funding AAA 6.050 Apr 25, 2024 $500,000 $466,310
---------
Drugs/Health Care: 0.3%
American Home Products A-2/A 7.700 Feb 15, 2000 530,000 547,070
---------
Hospital Management/Supplies 0.2%
Columbia/HCA Healthcare Corporation BAA-2/BBB 6.910 Jun 15, 2005 300,000 293,477
---------
Media: 0.1%
McGraw-Hill, Inc. A-1 9.430 Sep 1, 2000 100,000 107,695
---------
Publishing-News: 0.3%
Knight Ridder A-3/A 8.500 Sep 01, 2001 530,000 550,071
---------
Beverage/Confect/Tobacco: 0.3%
J Seagram & Sons A-2/A 9.650 Aug 15, 2018 500,000 657,175
---------
Retail-Department: 0.3%
Dayton Hudson Corp. BAA-1/BBB+ 9.750 Nov 01, 1998 250,000 257,063
Dayton Hudson Corp. BAA-1/BBB+ 7.250 Sep 01, 2004 310,000 323,014
---------
Retail-Department total 580,077
Auto-Related: 2.7%
Ford Motor Co. A-1/A 7.500 Nov 15, 1999 1,500,000 1,537,658
Ford Motor Co. A-1/A 7.250 Oct 01, 2008 1,000,000 1,063,818
Ford Motor Co. A-1/A 8.875 Apr 01, 2006 500,000 577,576
General Motors Corp. A-3/A- 7.000 Jun 15, 2003 745,000 771,635
Hertz Corp A-3/BBB+ 9.000 Nov 01, 2009 1,000,000 1,226,303
---------
Auto-Related total 5,176,990
Hotel & Motel: 0.3%
Marriott International, Inc. BAA-1/BBB+ 7.125 Jun 01, 2007 500,000 521,573
---------
Electronics: 2.0%
Motorola Inc. AA-3/AA 6.500 Sep 01, 2025 1,975,000 2,059,275
Xerox Corporation A-2/A 7.150 Aug 01, 2004 1,700,000 1,780,553
---------
Electronics total 3,839,828
Aerospace/Defense: 0.9%
Lockheed Martin A-3/BBB+ 6.850 May 15, 2001 750,000 762,525
Lockheed Corp A-3/BBB+ 9.375 Oct 15, 1999 500,000 527,410
Raytheon Co. BAA-1/BBB 6.500 Jul 15, 2005 500,000 503,189
---------
Aerospace/Defense total 1,793,124
Electric Household Appliance: 0.4%
Maytag Corporation BAA-1/BBB+ 9.750 May 15, 2002 600,000 677,132
---------
Engineering/Construction Services: 0.9%
Foster Wheeler Corp. BAA-2/BBB 6.750 Nov 15, 2005 1,710,000 1,718,723
---------
Machine Tools: 1.5%
Giddings & Lewis BA-1 7.500 Oct 01, 2005 2,500,000 2,609,870
Ingersoll Rand Company A-3/A- 6.480 Jun 01, 2025 300,000 308,304
---------
Machine Tools total 2,918,174
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Oil/Oil Service: 4.7%
Baroid Corp AA-3/A 8.000 Apr 15, 2003 $58,000 $62,645
Coastal Corp BAA-3/BBB- 10.250 Oct 15, 2004 1,000,000 1,201,620
Enron Corp. BAA-2/BBB+ 7.625 Sep 10, 2004 1,500,000 1,591,392
Enron Corp. BAA-2/BBB+ 6.875 Oct 15, 2007 1,500,000 1,526,691
Lyondell Petrochem BAA-3/BBB- 10.000 Jun 01, 1999 500,000 524,766
Occidental Peto Bond BAA-2/BBB 9.250 Aug 01, 2019 1,000,000 1,276,388
Union Oil Co. of California BAA-1/BBB+ 7.200 May 15, 2005 1,400,000 1,461,712
Union Oil Co. of California BAA-1/BBB+ 9.125 Feb 15, 2006 1,000,000 1,169,650
---------
Oil/Oil Service total 8,814,864
Containers: 0.5%
Bemis Co., Inc. A-2/A 6.700 Jul 01, 2005 1,010,000 1,028,088
---------
Chemicals: 1.8%
Union Carbide Corporation BAA-2/BBB 6.790 Jun 01, 2025 3,300,000 3,421,849
---------
Transportation: 7.1%
American Airlines A-3/BBB 8.040 Sep 16, 2011 2,000,000 2,155,560
Burlington Northern, Inc. BAA-2/BBB 7.400 May 15, 1999 200,000 203,504
CSX Corp BAA-2/BBB 9.000 Aug 15, 2006 1,800,000 2,086,528
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 292,674 315,307
Federal Express A-3/BBB+ 7.850 Jan 30, 2015 3,441,617 3,749,711
Golden State Petroleum Transport Ba1/BBB- 8.040 Feb 01, 2019 4,000,000 4,286,856
Southwest Airlines A-1/A 8.700 Jul 01, 2011 19,455 22,374
United Airlines Baa-1/BBB 9.020 Apr 19, 2012 462,541 534,813
---------
Transportation total 13,354,653
Railroad Equipment: 0.2%
Union Pacific RR Aa-3/A 6.540 Jul 01, 2015 434,739 438,674
---------
Utilities-Telephone: 4.7%
BellSouth Telecommunications, Inc. AAA/AAA 6.500 Jun 15, 2005 150,000 153,037
BellSouth Telecommunications, Inc. AAA/AAA 6.250 May 15, 2003 1,500,000 1,513,880
Carolina T&T AA-3/A+ 5.750 Aug 15, 2000 1,000,000 992,849
GTE Corporation BAA-1/A 9.100 Jun 01, 2003 1,000,000 1,125,155
GTE Corporation BAA-1/A 9.375 Dec 01, 2000 500,000 541,604
GTE North, Inc. A-1/AA- 6.000 Jan 15, 2004 4,000,000 3,956,208
Northwestern Bell Telephone Co. AA-3/A 9.500 May 01, 2000 600,000 645,044
Pacific NW Bell Telephone AA-3/A 4.375 Sep 01, 2002 35,000 32,503
---------
Utilities-Telephone total 8,960,280
Utilities-Electric: 5.4%
Cincinnati Gas & Electric A-3/A- 5.800 Feb 15, 1999 1,000,000 997,403
Commonwealth Edison BAA-2/BBB 7.000 Jul 01, 2005 1,000,000 1,024,427
Consolidated Edison of New York A-1/A+ 6.250 Apr 01, 1998 200,000 200,148
Florida Power A-1 6.720 Jul 01, 2005 2,000,000 2,033,606
Midwest Power Systems A-2/AA- 7.125 Feb 01, 2003 150,000 156,069
Niagara Mohawk Power BA-3/BB+ 9.250 Oct 01, 2001 500,000 538,008
Pacificorp A-2/A 6.750 Apr 01, 2005 250,000 255,477
System Energy Resourses BAA-3/BBB- 7.625 Apr 01, 1999 762,000 775,709
Wisconsin Power & Light AA-2/AA 7.600 Jul 01, 2005 2,000,000 2,145,968
Wisconsin Public Service, Inc. AA-2/AA+ 7.300 Oct 01, 2002 2,000,000 2,101,438
---------
Utilities-Electric total 10,228,253
Utilities-Natural Gas Pipeline: 2.6%
Burlington Resources, Inc. A-3/A- 9.625 Jun 15, 2000 100,000 107,885
Consolidated Natural Gas A-1/AA- 5.875 Oct 01, 1998 50,000 50,014
El Paso Natural Gas Baa-2/BBB 9.450 Sep 01, 1999 500,000 525,357
Michigan Consolidated Gas A-2/A 8.000 May 01, 2002 2,000,000 2,133,026
Michigan Consolidated Gas A-2/A 5.750 May 01, 2001 1,000,000 989,266
Southwestern Energy BAA-2/BBB+ 6.700 Dec 01, 2005 1,000,000 1,016,697
---------
Utilities-Natural Gas Pipeline total 4,822,245
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Diversified Companies: 0.1%
Whitman Corporation BAA-2/BBB+ 7.500 Feb 01, 2003 100,000 105,178
---------
TOTAL U.S. CORPORATE BONDS
(COST: $106,058,517) $106,767,256
-----------
Non - U.S. Corporate Bonds: 3.3%
BHP Finance, Inc. A-2/A 6.420 Mar 01, 2026 $2,000,000 $1,998,054
Falconbridge Ltd. BAA-2/BBB+ 7.350 Nov 01, 2006 2,000,000 2,104,272
Hanson Overseas A-3/A- 6.750 Sep 15, 2005 2,000,000 2,047,842
---------
TOTAL NON - U.S. CORPORATE BONDS
(COST: $6,164,058) $6,150,168
---------
TOTAL INVESTMENTS, BOND SERIES
(COST: $185,177,448)** $185,599,118
===========
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, 1997, the cost of securities for federal income tax purposes
was $185,177,448. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation.................................$1,093,246
Gross unrealized depreciation...................................(671,576)
--------
Net unrealized depreciation.................................... $421,670
========
***This security provides a claim on the interest component of the underlying
mortgages, but not on their principal component. That is, the security's cash
flows depend on the amount of principal outstanding at the payment date. If
prepayments on the underlying mortgages are higher than expected, the yield on
the security may be adversely affected.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1997
% 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: 68.0%
Anheuser Busch Companies A-1/P-1 5.76% Jan 22, 1998 $2,100,000 $2,093,092
Associates Corp NA A-1+/P-1 5.88% Jan 29, 1998 2,000,000 1,991,071
Bell South Telecom Inc. A-1+/P-1 5.28% Jan 13, 1998 2,000,000 1,996,250
Caterpillar Inc A-1/P-1 5.78% Feb 17, 1998 2,000,000 1,991,148
CIT Group Holdings A-1/P-1 5.71% Feb 03, 1998 2,000,000 1,989,825
Coca-Cola Co. A-1+/P-1 5.65% Feb 02 ,1998 2,100,000 2,089,733
Consolidated Natural Gas A-1+/P-1 6.30% Jan 07, 1998 369,000 368,619
Ford Motor Credit Company A-1/P-1 5.82% Feb 10, 1998 2,000,000 1,987,415
General Electric Capital Corporation A-1+/P-1 5.75% Jan 06, 1998 2,100,000 2,098,362
General Mills A-1/P-1 5.74% Jan 02, 1998 1,350,000 1,349,789
Interstate Power Co. A-1/P-1 5.90% Jan 26, 1998 1,000,000 995,993
Interstate Power Co. A-1/P-1 5.88% Jan 27, 1998 1,000,000 995,847
John Deere Capital Credit A-1/P-1 5.78% Jan 23, 1998 2,000,000 1,993,107
Madison Gas & Electric A-1+/P-1 5.88% Jan 12, 1998 1,000,000 998,237
Merrill Lynch & Co Inc A-1+/P-1 5.72% Jan 08, 1998 900,000 900,000
Morgan Stanley, Dean Witter, Discover
and Co. A-1/P-1 5.76% Jan 22, 1998 1,200,000 1,196,080
Northern Illinois Gas Co A-1+/P-1 5.85% Jan 23, 1998 1,800,000 1,793,675
Walt Disney Company A-1/P-1 5.63% Jan 02, 1998 1,100,000 1,099,832
State Street Bank & Trust 5.25% 56,342 56,342
----------
TOTAL COMMERCIAL PAPER/
SAVINGS, AT COST $27,984,417
----------
Quasi-Government/Government Sponsored: 21.5%
Federal Home Loan Discount Notes 5.78% Jan 02, 1998 $1,500,000 $1,498,115
Federal Home Loan Discount Notes 5.65% Jan 12, 1998 2,805,000 2,800,165
FNMA Discount Notes 5.86% Jan 20, 1998 2,321,000 2,316,600
FNMA Discount Notes 5.62% Jan 16, 1998 1,055,000 1,052,613
Federal Farm Credit Discount Notes 5.62% Jan 21, 1998 1,200,000 1,196,340
----------
TOTAL QUASI-GOVERNMENT/GOVERNMENT
SPONSORED, AT COST $8,863,833
----------
Government Guaranteed: 10.6%
U. S. Treasury Bill 4.97% Feb 05, 1998 $4,450,000 $4,344,277
----------
TOTAL INVESTMENTS, MONEY MARKET
FUND, AT COST $41,192,527
==========
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, 1997
% 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 $1,502,323)* 100.0% 9.69% Nov 15, 2000 $2,000,000 $1,701,374
=========
</TABLE>
See accompanying notes to investments in securities.
Notes to investments in securities:
Interest rates on and stripped Treasury Securities represent annualized yield to
maturity at date of purchase. Values of investment securities are determined as
described in Note 2 of the financial statements.
*At December 31, 1997, the cost of securities for federal income tax purposes
was $1,502,323. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation..................................... $199,050
Gross unrealized depreciation................................ --
--------
Net unrealized appreciation....................................... $199,050
========
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Operations
Year Ended December 31, 1997
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 $451,972 $881,021 $9,624,772 $3,320,834 $1,621,455 $114,238
Dividend income 1,854,993 6,473,882 1,727,637 -- -- --
---------- ---------- ---------- --------- --------- --------
Total income 2,306,965 7,354,903 11,352,409 3,320,834 1,621,455 114,238
---------- ---------- ---------- --------- --------- --------
Expenses (note 4):
Advisory fees 1,194,672 2,108,616 1,627,496 248,008 134,513 --
Advisory/Administrative fees -- -- -- -- -- 7,325
Accounting and custodian fees 18,100 37,708 30,955 6,462 5,387 --
Trustees' fees 2,203 5,276 4,030 641 493 23
Registration fees 19,125 45,350 36,131 5,394 4,550 --
Legal fees 4,858 11,521 9,179 1,370 1,156 --
Audit fees 5,711 13,634 10,888 1,654 1,351 39
Printing and mailing fees 8,245 19,550 15,576 2,325 1,962 --
Other expenses 3,760 8,916 7,104 1,061 895 --
---------- ---------- ---------- --------- --------- --------
Expenses before reimbursement 1,256,674 2,250,571 1,741,359 266,915 150,307 7,387
Reimbursable expenses from
CUNA Mutual Life Insurance Company (8,943) (16,291) (12,966) (4,363) (4,095) --
---------- ---------- ---------- --------- --------- --------
Total net expenses 1,247,731 2,234,280 1,728,393 262,552 146,212 7,387
---------- ---------- ---------- --------- --------- --------
Net investment income 1,059,234 5,120,623 9,624,016 3,058,282 1,475,243 106,851
---------- ---------- ---------- --------- --------- --------
</TABLE>
Realized and unrealized gain (loss) on investments (notes 2 and 3):
<TABLE>
<CAPTION>
Realized gain (loss) on security transactions:
<S> <C> <C> <C> <C> <C> <C>
Proceeds from sale of securities
and principal pay downs 29,124,058 76,016,996 56,037,257 15,142,309 4,961,839 --
Cost of securities sold (23,606,820) (66,517,987) (52,244,642) (15,119,915) (4,961,839) --
---------- ---------- ---------- --------- --------- --------
Net realized gain (loss) on
security transactions 5,517,238 9,499,009 3,792,615 22,394 -- --
Net change in unrealized
appreciation or depreciation
on investments 40,907,564 84,642,706 25,504,114 326,623 -- 1,846
---------- ---------- ---------- --------- --------- --------
Net gain (loss) on investments 46,424,802 94,141,715 29,296,729 349,017 -- 1,846
---------- ---------- ---------- --------- --------- --------
Net increase in net assets
resulting from operations $47,484,036 $99,262,338 $38,920,745 $3,407,299 $1,475,243 $108,697
========== ========== ========== ========= ========= ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
CAPITAL APPRECIATION GROWTH AND INCOME
STOCK FUND STOCK FUND BALANCED FUND
Operations: 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net investment income $1,059,234 $646,279 $5,120,623 $2,863,311 $9,624,016 $5,922,093
Net realized gain (loss) on security
transaction 5,517,238 3,152,749 9,499,009 5,656,957 3,792,615 4,268,803
Net change in unrealized appreciation
or depreciation on investments 40,907,564 9,688,795 84,642,706 26,520,015 25,504,114 6,612,755
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
operations 47,484,036 13,487,823 99,262,338 35,040,283 38,920,745 16,803,651
----------- ---------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (1,065,876) (639,086) (5,180,495) (2,804,744) (9,668,911) (5,850,662)
From realized gains on investments (5,541,711) (3,084,815) (9,518,672) (5,675,210) (3,841,952) (4,393,033)
Return of capital (43,461) -- (118,470) -- -- --
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
distributions (6,651,048) (3,723,901) (14,817,637) (8,479,954) (13,510,863) (10,243,695)
----------- ---------- ----------- ----------- ----------- -----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 311,778,406 48,543,686 260,073,329 99,870,808 80,187,804 70,374,669
Net asset value of shares issued in
reinvestment of distributions 6,651,048 3,723,901 14,817,637 8,479,954 13,510,863 10,243,695
----------- ---------- ----------- ----------- ----------- -----------
318,429,454 52,267,587 274,890,966 108,350,762 93,698,667 80,618,364
Cost of shares repurchased (1,742,040) (1,475,008) (2,041,007) (4,208,480) (4,029,711) (3,422,404)
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets derived from
capital share transactions 316,687,414 50,792,579 272,849,959 104,142,282 89,668,956 77,195,960
----------- ---------- ----------- ----------- ----------- -----------
Increase in net assets 357,520,402 60,556,501 357,294,660 130,702,611 115,078,838 83,755,916
Net assets:
Beginning of year 98,673,833 38,117,332 232,840,773 102,138,162 194,724,874 110,968,958
----------- ---------- ----------- ----------- ----------- -----------
End of year $456,194,235 $98,673,833 $590,135,433 $232,840,773 $309,803,712 $194,724,874
=========== ========== =========== =========== =========== ===========
Undistributed net investment
income included in net assets -- $14,253 -- $69,558 $49,986 $94,881
=========== ========== =========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Changes in Net Assets (Continued)
Years Ended December 31, 1997 and 1996
BOND FUND MONEY MARKET FUND TREASURY 2000 FUND
Operations: 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net investment income $3,058,282 $1,251,976 $1,475,243 $836,930 $106,851 $107,928
Net realized gain (loss) on security
transactions 22,394 49,716 -- -- -- --
Net change in unrealized appreciation
or depreciation on investments 326,623 (477,126) -- -- 1,846 (75,534)
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from
operations 3,407,299 824,566 1,475,243 836,930 108,697 32,394
----------- ---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income (3,013,977) (1,238,292) (1,475,243) (836,930) -- --
From realized gains on investments (22,394) (49,716) -- -- -- --
Return of capital -- -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Change in net assets from
distributions (3,036,371) (1,288,008) (1,475,243) (836,930) -- --
----------- ---------- ---------- ---------- ---------- ----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 160,361,652 13,819,369 57,328,276 32,934,173 7,239 7,020
Net asset value of shares issued in
reinvestment of distributions 3,036,371 1,288,008 1,473,088 835,642 -- --
----------- ---------- ---------- ---------- ---------- ----------
163,398,023 15,107,377 58,801,364 33,769,815 7,239 7,020
Cost of shares repurchased (1,501,306) (1,796,780) (38,642,199) (24,132,957) -- --
----------- ---------- ---------- ---------- ---------- ----------
Change in net assets derived from
capital share transactions 161,896,717 13,310,597 20,159,165 9,636,858 7,239 7,020
----------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets 162,267,645 12,847,155 20,159,165 9,636,858 115,936 39,414
Net assets:
Beginning of year 26,571,923 13,724,768 21,010,987 11,374,129 1,584,741 1,545,327
----------- ---------- ---------- ---------- ---------- ----------
End of year $188,839,568 $26,571,923 $41,170,152 $21,010,987 $1,700,677 $1,584,741
=========== ========== ========== ========== ========== ==========
Undistributed net investment
income included in net assets $62,339 $18,034 -- -- -- --
=========== ========== ========== ========== ========== ==========
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): 1997 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.60 $12.51 $9.97 $10.00
------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.07 0.13 0.14 0.16
Net Realized and Unrealized Gain (Loss)
on Investments 4.52 2.55 2.91 0.37
------ ------ ------ ------
Total from Investment Operations 4.59 2.68 3.05 0.53
-------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.07) (0.13) (0.14) (0.15)
Distributions from Realized Capital Gains (0.27) (0.46) (0.37) (0.41)
------ ------ ------ ------
Total Distributions (0.34) (0.59) (0.51) (0.56)
-------------------------------------------------------------
Net Asset Value, End of Period $18.85 $14.60 $12.51 $9.97
====================================================================================================================================
Total Return* 31.57% 21.44% 30.75% 5.44%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $456,194 $98,674 $38,117 $9,449
Ratio of Expenses to Average Net Assets** 0.82% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 0.70% 0.96% 1.37% 1.55%
Portfolio Turnover Rate 17.06% 49.77% 61.32% 65.81%
Average Commission Rate $0.06 $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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.83%, 0.66%, 0.75%, and 0.85%, for 1997, 1996, 1995, and 1994,
respectively.
</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): 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $21.32 $18.20 $15.06 $15.51 $15.49
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.31 0.34 0.37 0.32 0.29
Net Realized and Unrealized Gain (Loss)
on Investments 6.36 3.93 4.37 (0.04) 1.87
----- ----- ----- ----- -----
Total from Investment Operations 6.67 4.27 4.74 0.28 2.16
-----------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.32) (0.34) (0.37) (0.32) (0.29)
Distributions from Realized Capital Gains (0.47) (0.81) (1.23) (0.40) (1.85)
----- ----- ----- ----- -----
Total Distributions (0.79) (1.15) (1.60) (0.73) (2.14)
-----------------------------------------------------------------------------------
Net Asset Value, End of Period $27.20 $21.32 $18.20 $15.06 $15.51
====================================================================================================================================
Total Return* 31.42% 22.02% 31.75% 1.42% 13.77%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $590,135 $232,841 $102,138 $48,913 $32,468
Ratio of Expenses to Average Net Assets** 0.61% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 1.39% 1.78% 2.28% 2.19% 1.84%
Portfolio Turnover Rate 20.39% 40.55% 57.80% 45.36% 56.79%
Average Commission Rate $0.06 $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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.61%, 0.65%, 0.69%, 0.70%, and 0.73%, for 1997, 1996, 1995, 1994, and
1993, respectively.
</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): 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.29 $14.63 $12.90 $13.70 $13.54
------ ------ ------ ------ -----
Income from Investment Operations
Net Investment Income 0.62 0.58 0.55 0.52 0.50
Net Realized and Unrealized Gain (Loss)
on Investments 1.93 0.98 2.29 (0.56) 0.95
----- ----- ----- ----- ----
Total from Investment Operations 2.55 1.56 2.84 (0.04) 1.45
------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.63) (0.58) (0.55) (0.51) (0.50)
Distributions from Realized Capital Gains (0.19) (0.32) (0.56) (0.25) (0.79)
----- ----- ----- ----- -----
Total Distributions (0.82) (0.90) (1.11) (0.76) (1.29)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $17.02 $15.29 $14.63 $12.90 $13.70
====================================================================================================================================
Total Return* 16.87% 10.79% 22.27% -0.46% 10.47%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $309,804 $194,725 $110,969 $67,468 $54,363
Ratio of Expenses to Average Net Assets** 0.68% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 3.81% 3.91% 4.03% 4.00% 3.62%
Portfolio Turnover Rate 21.15% 33.48% 36.68% 28.53% 28.71%
Average Commission Rate $0.06 $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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.69%, 0.65%, 0.68%, 0.70%, and 0.74%, for 1997, 1996, 1995, 1994, and
1993, respectively.
</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): 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.33 $10.63 $9.67 $10.58 $10.32
------ ------ ------ ------ -----
Income from Investment Operations
Net Investment Income 0.29 0.65 0.60 0.59 0.64
Net Realized and Unrealized Gain (Loss)
on Investments 0.45 (0.28) 0.96 (0.90) 0.28
----- ----- ----- ----- ----
Total from Investment Operations 0.74 0.37 1.56 (0.31) 0.92
-----------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.51) (0.64) (0.59) (0.59) (0.65)
Distributions from Realized Capital Gains (0.02) (0.03) (0.01) (0.01) (0.01)
----- ----- ----- ----- -----
Total Distributions (0.53) (0.67) (0.60) (0.60) (0.66)
------------------------------------------------------------------------------
Net Asset Value, End of Period $10.54 $10.33 $10.63 $9.67 $10.58
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 7.45% 2.86% 16.37% -3.06% 8.87%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $188,840 $26,572 $13,725 $7,867 $6,297
Ratio of Expenses to Average Net Assets** 0.56% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 6.50% 6.25% 6.08% 6.03% 5.99%
Portfolio Turnover Rate 30.71% 25.67% 14.74% 11.97% 12.23%
====================================================================================================================================
<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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.57%, 0.67%, 0.68%, 0.70%, and 0.75%, for 1997, 1996, 1995, 1994, and
1993, respectively.
</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): 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<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 0.05 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 0.05 0.03 0.03
-----------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.05) (0.05) (0.05) (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) (0.05) (0.03) (0.03)
------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================================
Total Return* 4.75% 5.17% 5.21% 3.34% 2.86%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $41,170 $21,011 $11,374 $7,799 $4,749
Ratio of Expenses to Average Net Assets** 0.50% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 5.05% 4.74% 5.17% 3.66% 2.43%
Portfolio Turnover Rate -- -- -- -- --
====================================================================================================================================
<FN>
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1997, was 4.96% and the "effective" yield for that period was
5.09%.
*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 May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. 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 resulting ratio of expenses to average net assets would have
been 0.51%, 0.67%, 0.73%, 0.78%, and 0.77% for 1997, 1996, 1995, 1994, and
1993, respectively.
</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) 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.64 $8.47 $7.00 $7.53 $6.53
----- ----- ----- ----- ----
Income from Investment Operations
Net Investment Income 0.58 0.58 0.58 0.53 0.48
Net Realized and Unrealized Gain (Loss)
on Investments 0.02 (0.41) 0.89 (1.06) 0.52
----- ----- ----- ----- ----
Total from Investment Operations 0.60 0.17 1.47 (0.53) 1.00
-----------------------------------------------------------------------------
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 $9.24 $8.64 $8.47 $7.00 $7.53
====================================================================================================================================
Total Return* 6.85% 2.10% 20.99% -7.12% 15.43%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,701 $1,585 $1,545 $1,272 $1,363
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 6.56% 7.03% 7.40% 7.50% 6.69%
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 (the "Fund"), a Massachusetts Business Trust, is
registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended, as a diversified, open-end management investment company. The Fund
is a series fund with six investment portfolios (the "funds"), each with
different investment objectives and policies and each having available two
separate classes 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.
Effective May 1, 1997, the shares of each fund were divided into Class Z
and Class C Shares. Class Z Shares are offered to all insurance company
separate accounts issued by, and all qualified retirement plans sponsored
by, CUNA Mutual Life Insurance Company or its affiliates ("CUNA Mutual
Life"). Class C Shares are offered to separate accounts of insurance
companies other than CUNA Mutual Life, and to qualified retirement plans of
companies not affiliated with the Fund or CUNA Mutual Life. Both classes of
shares are identical in all respects except that: Class C Shares may be
subject to a distribution fee (note 4); each class will have exclusive
voting rights with respect to matters that affect just that class; and each
class will bear a different name or designation. All income earned and
expenses incurred by the Fund are borne on a pro-rata basis by each
outstanding share of each class based on the daily net asset value of
shares of that class. As of December 31, 1997, no Class C Shares have been
issued.
(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 1940 Act, 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, advisory/administrative, and distribution 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.
(c) Federal Income and Excise Taxes
The 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. Net investment income and net realized gains
(losses) for the funds may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains
(losses) were recorded by the funds. In addition, the Capital
Appreciation Stock Fund, the Growth and Income Stock Fund, and the
Balanced Fund paid consent dividends, whereby $91,306, $131,287 and
$16,980, respectively, of its realized gains were treated as being
distributed to their shareholders and reinvested in that fund.
<PAGE>
(d) Security Transactions and Investment Income
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, 1997, 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 $323,217,798 $315,654,405 $138,509,972 $163,798,811 $208,359,230 $ --
=========== =========== =========== =========== =========== ========
Total proceeds received on security
sales and principal paydowns $29,124,058 $76,016,996 $56,037,257 $15,142,309 $189,689,839 $ --
========== =========== =========== ========== =========== ========
</TABLE>
(4) Transactions with Affiliates
Fees and Expenses
The Fund has entered into an investment advisory agreement with CIMCO Inc.
(the "Investment Adviser"), an affiliated company. For the four-month
period ended April 30, 1997, 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. On May 1, 1997, a new advisory agreement
with the Investment Advisor changed this fee structure and provides for a
different fee for each portfolio within the Fund. The fees, paid monthly,
are calculated as a percentage of the average daily net assets for each
portfolio at the following annual rates:
Capital Appreciation Stock 0.80%
Balanced 0.70%
Growth and Income Stock 0.60%
Bond 0.55%
Money Market 0.45%
Treasury 2000 0.45%
Under the new unitary fee structure, the Investment Adviser is responsible
for providing or obtaining services and paying certain expenses including
custodian fees, transfer agent fees, pricing costs, and accounting and
legal fees as indicated in the investment advisory agreement.
In addition to the unitary investment advisor fee, each fund also pays
certain expenses including trustees fees, brokerage commissions, interest
expense, audit fees, and other extraordinary expenses.
For the four-month period ended April 30, 1997, the Investment Adviser was
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, for the four-month period ended April 30,
1997, CUNA Mutual Life has voluntarily agreed to reimburse the Capital
Appreciation Stock, Growth and Income Stock, Balance, 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, for the
four-month period ended April 30, 1997, the Investment Advisor 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 and CUNA Mutual
Insurance Society, affiliated companies, are providing administrative
services on behalf of the Investment Advisor.
<PAGE>
During the year ended December 31, 1997, CUNA Mutual Life voluntarily
reimbursed expenses for each of the funds in the following amounts:
Capital Appreciation Stock Fund.......... $ 8,943
Bond Fund ................................ $ 4,363
Growth and Income Stock Fund.............. $16,291
Money Market Fund ........................ $ 4,095
Balanced Fund............................. $12,966
All capital shares outstanding at December 31, 1997, are owned by separate
investment accounts of CUNA Mutual Life.
Certain officers and directors of the Fund are also officers of CUNA Mutual
Life or CIMCO Inc. During the twelve-month period ended December 31, 1997,
the Fund made no direct payments to its officers and paid trustees' fees of
approximately $12,675 to its unaffiliated trustees.
Distribution Plan
All shares are distributed through CUNA Brokerage Service, Inc.("CBS"), and
affiliated company, or other registered broker-dealers authorized by CBS.
Class C Shares may also be subject to an asset-based distribution fee
pursuant to Rule 12b-1 under the 1940 Act, equal to not more than 0.25%, on
an annual basis, of the average value of the daily net assets of each
series of the Fund attributable to Class C Shares on an annual basis.
(5) Share Activity
Transactions in Class Z Shares of each fund for the years ended December
31, 1997 and 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>
Shares outstanding at December 31, 1995 3,046,550 5,611,047 7,585,243 1,291,279 11,374,129 182,546
Shares 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
Shares sold, including reinvestment
of dividends 17,535,010 10,850,472 5,705,061 15,479,381 58,801,364 787
Shares repurchased (93,915) (77,316) (243,133) (143,139) (38,642,199) --
---------- ---------- --------- --------- ---------- -------
Shares outstanding at December 31, 1997 24,200,359 21,692,803 18,199,350 17,909,312 41,170,152 184,138
---------- ---------- ---------- ---------- ---------- -------
</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, 1997, 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 (four 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 information 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 requested confirmation from brokers, and where replies were 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 the Ultra Series Fund as
of December 31, 1997, the results of their operations for the year then ended,
the changes in their net 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
(four years for Capital Appreciation Stock Fund) period then ended in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Des Moines, Iowa
February 6, 1998
<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, 1997: 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, 1997)* 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.
Incorporated herein by reference to post-effective amendment
number 20 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on April 22, 1997.
(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.
D. 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.
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, 1997
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, 1997
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:
Credit Union Mutual Insurance Society New Zealand Ltd
Business: Fidelity Bond Coverages
November 1, 1990*
State of domicile: Wisconsin
b. CUMIS 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
63.5% ownership by CUNA Mutual Insurance Society (as of 12-31-97)
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 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
1. "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. LeaSo Partners, a California partnership
CUNA Mutual Insurance Society - 50% Partner
California Credit Union League - 50% Partner
December 29, 1981
2. 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, 1998
Capital Appreciation Stock 10
Growth and Income Stock 10
Balanced 10
Bond 10
Money Market 10
Treasury 2000 10
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:
<TABLE>
<CAPTION>
Name and Principal Position with Distributor Positions and Offices
Business Address with Registrant
<S> <C> <C>
Lawrence R. Halverson Director Vice President and Secretary
5910 Mineral Point Road President
Madison, WI 53705
Michael G. Joneson Director Chief Accounting Officer, Treasurer,
2000 Heritage Way Treasurer and Assistant Secretary
Waverly, IA 50677
Marc A. Krasnick Director None
5910 Mineral Point Road Vice President
Madison, WI 53705
John M. Waggoner Chief Officer - Legal 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
Sandra K. Steffeney Vice President None
33320 9th Avenue South
Suite 250
Federal Way, WA 98063-3919
John C. Fritsche Assistant Vice President None
2000 Heritage Way
Waverly, IA 50677
Scott Vignovich Assistant Vice President Administration & Operations Officer
2000 Heritage Way - Broker/Dealer
Waverly, IA 50677
Donna C. Blankenheim Assistant Secretary None
5910 Mineral Point Road
Madison, WI 53705
Janice C. Doyle Assistant Secretary None
5910 Mineral Point Road
Madison, WI 53705
Barbara L. Secor Assistant Secretary None
2000 Heritage Way
Waverly, IA 50677
Jason E. Smith Assistant Secretary None
5910 Mineral Point Road
Madison, WI 53705
Timothy L. Carlson Assistant Treasurer None
2000 Heritage Way
Waverly, IA 50677
Michael A. Ullsperger Assistant Treasurer None
5910 Mineral Point Road
Madison, WI 53705
John W. Wiley Associate Compliance Officer None
5910 Mineral Point Road
Madison, WI 53705
Joanne M. Toay Associate Compliance Officer None
5910 Mineral Point Road
Madison, WI 53705
</TABLE>
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(b) 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 8th day of April, 1998.
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
Keith S. Noah*
Keith S. Noah, Trustee
Thomas C. Watt*
Thomas C. Watt, Trustee
/s/ Linda L. Lilledahl 04/08/98
Linda L. Lilledahl, Attorney-In-Fact
Lawrence R. Halverson*
Lawrence R. Halverson, Trustee
Michael S. Daubs*
Michael S. Daubs, Trustee
* 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 04/08/98
Michael S. Daubs, President
/s/ Robert M. Buckingham 04/08/98
Robert M. Buckingham, Chief Financial
Officer and Assistant Secretary
/s/ Michael G. Joneson 04/08/98
Michael G. Joneson, Chief Accounting
Officer, Treasurer and Assistant Secretary
<PAGE>
INDEX TO EXHIBITS TO
FORM N-1A FOR
ULTRA SERIES FUND
11. A. Consent of KPMG Peat Marwick
17. Financial Data Schedules
19. Powers of attorney
<PAGE>
EXHIBIT 11.A.
The Trustees and Shareholders of Ultra Series Fund:
We consent to the use of our report 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.
KPMG Peat Marwick LLP
Des Moines, Iowa
April 17, 1998
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
ULTRA SERIES FUND (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 26th day of February, 1998.
/s/ Gwendolyn M. Boeke
Trustee for Ultra Series Fund
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
ULTRA SERIES FUND (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 26th day of February, 1998.
/s/ Michael S. Daubs
Trustee for Ultra Series Fund
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
ULTRA SERIES FUND (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 26th day of February, 1998.
/s/ Al Disrud
Trustee for Ultra Series Fund
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
ULTRA SERIES FUND (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 26th day of February, 1998.
/s/ L.R. Halverson
Trustee for Ultra Series Fund
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
ULTRA SERIES FUND (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 26th day of February, 1998.
/s/ Keith S. Noah
Trustee for Ultra Series Fund
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
ULTRA SERIES FUND (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 26th day of February, 1998.
/s/ T.C. Watt
Trustee for Ultra Series Fund
<TABLE> <S> <C>
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<NAME> Growth and Income
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<TABLE> <S> <C>
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<NAME> Balanced Fund
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<AVG-DEBT-PER-SHARE> 0
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<TABLE> <S> <C>
<ARTICLE> 6
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<NUMBER> 3
<NAME> Bond
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<AVG-DEBT-PER-SHARE> 0
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<TABLE> <S> <C>
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<NUMBER> 4
<NAME> Money Market
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> Treasury 2000 Series
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<INTEREST-INCOME> 114238
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<NET-INVESTMENT-INCOME> 106851
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<APPREC-INCREASE-CURRENT> 1846
<NET-CHANGE-FROM-OPS> 108697
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> Capital Appreciation Stock
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<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
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<SHARES-COMMON-PRIOR> 6759264
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<ACCUM-APPREC-OR-DEPREC> 54015113
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<EXPENSES-NET> 1247731
<NET-INVESTMENT-INCOME> 1059234
<REALIZED-GAINS-CURRENT> 46424802
<APPREC-INCREASE-CURRENT> 40907564
<NET-CHANGE-FROM-OPS> 47484036
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1065876
<DISTRIBUTIONS-OF-GAINS> 5585172
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<SHARES-REINVESTED> 93915
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<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 1256674
<AVERAGE-NET-ASSETS> 151353405
<PER-SHARE-NAV-BEGIN> 14.6
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 4.52
<PER-SHARE-DIVIDEND> (.07)
<PER-SHARE-DISTRIBUTIONS> (.27)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.85
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
