ULTRA SERIES FUND
PROSPECTUS MAY 1, 1999
Money Market Fund
Treasury 2000 Fund
Bond Fund
Balanced Fund
Growth and Income Stock Fund
Capital Appreciation Stock Fund
Mid-Cap Stock Fund
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the shares in these funds, nor does the Commission
guarantee the accuracy or adequacy of the prospectus. Any statement to the
contrary is a criminal offense.
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TABLE OF CONTENTS
PAGE
THE FUND
Expenses............................................................1
Money Market Fund...................................................3
Treasury 2000 Fund..................................................5
Bond Fund...........................................................7
Balanced Fund.......................................................9
Growth and Income Stock Fund.......................................11
Capital Appreciation Stock Fund....................................13
Mid-Cap Stock Fund.................................................15
Risk vs. Return....................................................17
RISKS ASSOCIATED WITH CERTAIN HIGHER RISK SECURITIES
Foreign Securities.................................................18
Euro Conversion....................................................18
Small Capitalization Stocks........................................19
THE SHARES
Offer..............................................................19
Purchase and Redemption............................................20
Distribution.......................................................20
Dividends..........................................................21
Pricing of Fund Shares.............................................21
Taxes..............................................................22
MORE ABOUT ULTRA SERIES FUND
Portfolio Management...............................................22
Inquiries..........................................................23
Year 2000..........................................................23
Financial Highlights...............................................23
Additional information about each fund's investments is available in the
Statement of Additional Information (SAI), and the annual and semiannual reports
to shareholders. In particular, the annual reports will discuss the relevant
market conditions and investment strategies used by the portfolio manager(s)
that materially affected performance during the prior fiscal year. You may get a
copy of the most recent of these reports at no cost by calling 1-800-798-5500.
Please note that an investment in any of these funds is not a deposit in a
credit union or other financial institution and is neither insured nor endorsed
in any way by any credit union, other financial institution, or government
agency. Such an investment involves certain risks, including loss of principal,
and is not guaranteed to result in positive investment gains. These funds may
not achieve their objectives.
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EXPENSES
This table describes the expenses that you may pay if you buy and hold shares of
the fund.
Annual fund operating expenses are paid out of fund assets and are reflected in
the share price.
Management fees are amounts paid to the investment adviser for managing the
funds' investments and administering fund operations.
Distribution or "12b-1" fees are fees each fund pays its distributor for
distribution-related expenses.
Other expenses are trustees' fees, auditors' fees, interest on borrowings, any
taxes and extraordinary expenses.
Shareholder Fees Class C Class Z
None None
Annual Fund Operating Expenses
Management Fees Class C Class Z
Money Market Fund .45% .45%
Treasury 2000 Fund .45% .45%
Bond Fund .55% .55%
Balanced Fund .70% .70%
Growth and Income Stock Fund .60% .60%
Capital Appreciation Stock Fund .80% .80%
Mid-Cap Stock Fund 1.00% 1.00%
Distribution (12b-1) Fees .25% None
Other Expenses
Money Market Fund .01% .01%
Treasury 2000 Fund None None
Bond Fund .01% .01%
Balanced Fund .01% .01%
Growth and Income Stock Fund .01% .01%
Capital Appreciation Stock Fund .01% .01%
Mid-Cap Stock Fund .01% .01%
Total Annual Fund Operating Expenses
Money Market Fund .71% .46%
Treasury 2000 Fund .70% .45%
Bond Fund .81% .56%
Balanced Fund .96% .71%
Growth and Income Stock Fund .86% .61%
Capital Appreciation Stock Fund 1.06% .81%
*Mid-Cap Stock Fund 1.26% 1.01%
*Because the Mid-Cap Stock Fund is new, these amounts are only estimates.
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EXAMPLES
The examples shown below are intended to help you compare the cost of investing
in each fund with the cost of investing in other mutual funds. The examples are
based on a $10,000 initial investment in each fund over the various time periods
indicated. The examples assume: (1) 5% annual return and (2) redemption at the
end of each period.
Class Z:
Fund 1 year 3 years 5 years 10 years
Money Market $ 47 $ 148 $ 258 $ 579
Treasury 2000 46 144 252 567
Bond 57 179 313 701
Balanced 73 227 395 883
Growth and Income Stock 62 195 340 762
Capital Appreciation Stock 83 259 450 1,002
Mid-Cap Stock 103 322 558 1,236
Class C:
Fund 1 year 3 years 5 years 10 years
Money Market $ 73 $ 227 $ 395 $ 883
Treasury 2000 72 224 390 871
Bond 83 259 450 1,002
Balanced 98 306 531 1,178
Growth and Income Stock 88 274 477 1,061
Capital Appreciation Stock 108 337 585 1,294
Mid-Cap Stock 128 400 692 1,523
You should not consider the examples above as a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
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MONEY MARKET FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Money Market Fund seeks high current income from money market instruments
consistent with the preservation of capital and liquidity. The fund intends to
maintain a stable value of $1.00 per share.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. require stability of principal;
2. are seeking a mutual fund for the cash portion of an asset allocation
program;
3. need to "park" your money temporarily; or
4. consider yourself a saver rather than an investor.
You may want to invest fewer of your assets in this fund if you:
1. want federal deposit insurance;
2. are seeking an investment that is likely to outpace inflation;
3. are investing for retirement or other goals that are many years in the
future; or
4. are investing for growth or maximum current income.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
As with any money market fund, the yield paid by the fund will vary with changes
in interest rates. Generally, if interest rates rise, the market value of income
bearing securities will decline. There is a possibility that the fund's share
value could fall below $1.00, which could reduce the value of your account. An
investment in the Money Market Fund is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Money Market Fund attempts to maintain a stable price of $1.00 per share,
there is no assurance that it will be able to do so and it is possible to lose
money by investing in the fund.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
The Money Market Fund invests exclusively in U.S. dollar-denominated money
market securities maturing (or resetting their interest rates to market levels)
in thirteen months or less from the date of purchase. It includes securities
issued by U.S. and foreign financial institutions, corporate issuers, the U.S.
Government and its agencies and instrumentalities, municipalities, foreign
governments, and multi-national organizations such as the World Bank. At least
95% of the fund's assets must be rated in the highest short-term category (or
its unrated equivalent), and 100% of the fund's assets must be invested in
securities rated in the two highest rating categories. A more detailed
description of the types of permissible issuers and rating categories is
contained in the SAI. The fund maintains a dollar-weighted average portfolio
maturity of 90 days or less. The fund may also invest in U.S. dollar-denominated
foreign money market securities, although no more than 25% of the fund's assets
may be invested in these securities unless they are backed by a U.S. parent
financial institution.
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MONEY MARKET FUND PERFORMANCE
How has the Money Market Fund performed?
The following chart provides an indication of the risks of investing in the
Money Market Fund by showing the changes in the portfolio performance of the
Class Z shares from year to year over a 10-year period. The chart assumes the
reinvestment of all dividends and distributions. The figures shown do not
reflect charges deducted in connection with variable contracts.
Total Return
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
Class Z shares of the Money Market Fund. Total returns are as follows:
1989 8.39% 1994 3.34%
1990 7.53% 1995 5.21%
1991 5.36% 1996 4.72%
1992 3.05% 1997 5.01%
1993 2.86% 1998 5.00%
Best Calendar Quarter: 2Q89 2.31%
Worst Calendar Quarter: 2Q93 .60%
Please remember that past performance is no guarantee of the results the Money
Market Fund may achieve in the future. Future returns may be higher or lower
than the returns the fund achieved in the past.
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How does the performance of the Money Market Fund compare to general money
market returns?
The following table compares the performance of Class Z Shares with the
performance of the 90-day U.S. Treasury Bill, which is one measure of the
performance of the relevant market. Returns shown for the Money Market Fund are
after the deduction of fund management and operating expenses. The Treasury Bill
returns bear no such expenses.
Average Annual Total Returns
(As of December 31, 1998)
One Year Five Year Ten Year
Class Z Shares 5.00% 4.65% 5.03%
90-day U.S. Treasury Bill 5.05% 5.10% 5.44%
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TREASURY 2000 FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Treasury 2000 Fund seeks to provide safety of capital and a relatively
predictable payout upon portfolio maturity.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. desire an assured future value of a portion of your investments at a
specified future date; or
2. prefer the very high credit quality of U. S. Treasury securities.
You may want to invest fewer of your assets in this fund if you:
1. want Federal deposit insurance;
2. are willing to assume some variability of future balance in pursuit of
higher long term returns; or
3. want an investment based on growth or maximum current income.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
Because of their substantial discount from face value, prices of Stripped
Treasury Securities are particularly sensitive to changes in interest rates. The
longer the term to maturity, the more susceptible these securities will be to a
given change in interest rates (interest rate risk).
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 of interest payments at
inopportune times in the market. Avoiding this risk is an important factor in
being able to achieve a relatively predictable payout upon portfolio maturity.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
The Treasury 2000 Fund invests primarily 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. 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 November 15, 2000.
Unlike most coupon-bearing bonds, Stripped Treasury Securities are sold at a
substantial discount from face value because the buyer receives only the right
to receive one future fixed payment and does not receive any rights to periodic
interest payments. While Stripped Treasury Securities insulate shareholders from
being unable to invest interest payments received at a rate as high as the yield
to maturity on the stripped security, they also prevent investing the interest
at a higher rate should interest rates rise.
In addition to Stripped Treasury Securities, this 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 investment
adviser's fees.
On or within 12 months prior to November 15, 2000, the securities held by the
Fund will be liquidated. Once the 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. If, at the time of the portfolio
liquidation 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.
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TREASURY 2000 FUND PERFORMANCE
How has the Treasury 2000 Fund performed?
The following chart provides an indication of the risks of investing in the
Treasury 2000 Fund by showing the changes in the portfolio performance of the
Class Z shares from year to year over a 10-year period. The chart assumes the
reinvestment of all dividends and distributions. The figures shown do not
reflect charges deducted in connection with variable contracts.
Total Return
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
Class Z shares of the Treasury 2000 Fund. Total returns are as follows:
1989 21.79% 1994 -7.12%
1990 7.12% 1995 20.99%
1991 20.37% 1996 2.10%
1992 8.01% 1997 6.85%
1993 15.43% 1998 7.52%
Best Calendar Quarter: 2Q89 15.51%
Worst Calendar Quarter: 1Q94 -5.03%
Please remember that past performance is no guarantee of the results the
Treasury 2000 Fund may achieve in the future. Future returns may be higher or
lower than the returns the fund achieved in the past.
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How does the performance of the Treasury 2000 Fund compare to the short-term
U.S. Treasury Note market?
The following table compares the performance of the Class Z Shares with the
performance of the Lehman Brothers Intermediate Treasury Bond Index, which is
one measure of the performance of the relevant market. Returns shown for the
Treasury 2000 Fund are after the deduction of fund management and operating
expenses. The Lehman Index returns bear no such expenses.
Average Annual Total Returns
(As of December 31, 1998)
One Year Five Year Ten Year
Class Z Shares 7.52% 5.68% 9.95%
Lehman Index 8.62% 6.13% 8.32%
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BOND FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Bond Fund seeks to generate a high level of current income, consistent with
the prudent limitation of investment risk, primarily through investment in a
diversified portfolio of income bearing debt securities.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. seek an investment based on a regular stream of income;
2. seek higher potential returns than money market funds and are willing
to accept moderate risk of volatility;
3. want to diversify your investments;
4. seek a mutual fund for the income portion of an asset allocation
program; or
5. are retired or nearing retirement.
You may want to invest fewer of your assets in this fund if you:
1. invest for maximum return over a long time horizon; or
2. need absolute stability of your principal.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
As with most income funds, the Bond Fund is subject to interest rate risk, the
risk that the value of your investment will fluctuate with changes in interest
rates. Typically, a rise in interest rates causes a decline in the market value
of income bearing securities. Other factors may affect the market price and
yield of the fund's securities, including investor demand and domestic and
worldwide economic conditions. Loss of money is a risk of investing in this
fund.
In addition, the fund is subject to credit risk, the risk that issuers of debt
securities may be unable 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. There is also prepayment/extension risk, which is the chance that a
rise or fall in interest rates will reduce/extend the life of a mortgage-backed
security by increasing/decreasing mortgage prepayments, reducing the return in
either case.
To the extent that the fund invests in non-investment grade securities, the fund
is also subject to above-average credit, market and other risks. Issuers of
non-investment grade securities (i.e., "junk" bonds) are typically in weak
financial health and their ability to pay interest and principal is uncertain.
Compared to issuers of investment-grade bonds, they are more likely to encounter
financial difficulties and to be materially affected by these difficulties when
they do encounter them.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
To keep current income relatively stable and to limit share price volatility,
the Bond Fund emphasizes investment grade securities and maintains an
intermediate (typically 3-6 year) average portfolio duration. Under normal
circumstances, the fund invests at least 80% of its assets in:
1. Corporate debt securities: securities issued by domestic and foreign
corporations;
2. U.S. government debt securities: securities issued or guaranteed by
the U.S. government or its agencies or instrumentalities; and
3. Foreign government debt securities: securities issued or guaranteed by
a foreign government or its agencies or instrumentalities, payable in
U.S. dollars.
To the extent permitted by law and available in the market, the fund may also
invest in asset-backed and mortgage-backed securities, including those
representing mortgage, commercial or consumer loans originated by credit unions.
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BOND FUND PERFORMANCE
How has the Bond Fund performed?
The following chart provides an indication of the risks of investing in the Bond
Fund by showing the changes in the portfolio performance of the Class Z shares
from year to year over a 10-year period. The chart assumes the reinvestment of
all dividends and distributions. The figures shown do not reflect charges
deducted in connection with variable contracts.
Total Return
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
Class Z shares of the Bond Fund. Total returns are as follows:
1989 11.74% 1994 -3.06%
1990 7.41% 1995 16.37%
1991 14.70% 1996 2.86%
1992 6.47% 1997 7.45%
1993 8.87% 1998 6.18%
Best Calendar Quarter: 2Q89 5.94%
Worst Calendar Quarter: 1Q94 -2.50%
Please remember that past performance is no guarantee of the results the Bond
Fund may achieve in the future. Future returns may be higher or lower than the
returns the fund achieved in the past.
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How does the performance of the Bond Fund compare to the bond market?
The following table compares the performance of the Class Z Shares with the
performance of the Lehman Brothers Intermediate Government/Corporate Bond Index
which is one measure of the performance of the relevant market. Returns shown
for the Bond Fund are after the deduction of fund management and operating
expenses. The Lehman Index returns bear no such expenses.
Average Annual Total Returns
(As of December 31, 1998)
One Year Five Year Ten Year
Class Z Shares 6.18% 5.77% 7.77%
Lehman Index 8.42% 6.59% 8.51%
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BALANCED FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Balanced Fund seeks a high total return through the combination of income
and capital appreciation.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. are looking for a more conservative option to a growth-oriented fund;
2. want a well-diversified and relatively stable investment allocation;
3. need a core investment;
4. seek a reasonable total return over the long term irrespective of its
form (i.e., capital gains or ordinary income); or
5. are retired or nearing retirement.
You may want to invest fewer of your assets in this fund if you:
1. are investing for maximum return over a long time horizon;
2. want your return to be either ordinary income or capital gains, but
not both; or
3. require a high degree of stability of your principal.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
The risks of this fund are similar to the risks described for the Bond, Money
Market, Growth and Income Stock and Capital Appreciation Stock Funds because it
invests in the same types of securities. As with any fund that invests in stocks
and bonds, the fund is subject to market and interest rate risks, the risks that
the value of your investment will fluctuate in response to stock and bond market
movements and changes in interest rates.
Generally, if interest rates rise, the market value of income bearing securities
(including bonds) will decline. There is also the risk that the issuer will not
pay its debts. If payments on an income bearing security are not paid when due,
it may cause the net asset value of the fund to go down.
Because different stocks and bonds move in and out of favor depending on market
conditions, investor sentiment and a myriad of other issues, the fund may
sometimes outperform funds with a different investment objective and sometimes
underperform them. Loss of money is a risk of investing in this fund.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
The Balanced Fund invests in a broadly diversified array of securities including
common stocks, bonds and money market instruments. The fund employs regular
rebalancing to maintain a relatively static asset allocation. Stock, bond and
cash components will vary, however, reflecting the relative availability of
attractively priced stocks and bonds. Generally, however, common stocks will
constitute 60% to 40% of the fund's assets, bonds will constitute 40% to 60% of
the fund's assets and money market instruments may constitute up to 20% of the
fund's assets. The Balanced Fund will invest primarily in the same types of
equity securities in which the Capital Appreciation Stock and Growth and Income
Stock Funds invest, the same types of bonds in which the Bond Fund invests, and
the same types of money market instruments in which the Money Market Fund
invests.
The fund may invest up to 25% of its assets in foreign securities.
The fund typically sells a stock when the fundamental expectations for buying it
no longer apply, the price exceeds its perceived value or other stocks appear
more attractively priced relative to their values.
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BALANCED FUND PERFORMANCE
How has the Balanced Fund performed?
The following chart provides an indication of the risks of investing in the
Balanced Fund by showing the changes in the portfolio performance of the Class Z
shares from year to year over a 10-year period. The chart assumes the
reinvestment of all dividends and distributions. The figures shown do not
reflect charges deducted in connection with variable contracts.
Total Return
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
Class Z shares of the Balanced Fund. Total returns are as follows:
1989 18.03% 1994 -.46%
1990 3.75% 1995 22.27%
1991 18.53% 1996 10.79%
1992 6.85% 1997 16.87%
1993 10.47% 1998 13.40%
Best Calendar Quarter: 4Q98 11.43%
Worst Calendar Quarter: 3Q90 -5.69%
Please remember that past performance is no guarantee of the results the
Balanced Fund may achieve in the future. Future returns may be higher or lower
than the returns the fund achieved in the past.
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How does the performance of the Balanced Fund compare to the balanced market?
The following table compares the performance of the Class Z Shares with the
performance of the Blended Index* and each of the components of the Blended
Index, which is one measure of the performance of the relevant market. Returns
shown for the Balanced Fund are after the deduction of fund management and
operating expenses. The Blended Index returns bear no such expenses.
Average Annual Total Returns
(As of December 31, 1998)
One Year Five Year Ten Year
Class Z Shares 13.40% 12.31% 11.84%
Blended Index* 17.26% 14.17% 12.94%
S&P 500 Stock Index 28.60% 24.05% 19.18%
Lehman Index 8.42% 6.59% 8.51%
90-day U.S. Treasury Bills 4.98% 5.09% 5.43%
*The blended index is a composition of the S&P 500 (Capitalization-weighted)
Stock Index (45%), the Lehman Brothers Intermediate Government/Corporate Bond
Index (40%), and 90-day U.S. Treasury Bills (15%).
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GROWTH AND INCOME STOCK FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Growth and Income Stock Fund seeks long-term capital growth, with income as
a secondary consideration.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. are looking for a stock fund that has both growth and income
components;
2. are looking for a more conservative option to a growth-oriented fund;
3. need a core investment;
4. seek above-average long-term total return through a combination of
capital gains and ordinary income; or
5. are retired or nearing retirement.
You may want to invest fewer of your assets in this fund if you:
1. are investing for maximum return over a long time horizon;
2. desire your return to be either ordinary income or capital gains, but
not both; or
3. require a high degree of stability of your principal.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
Any fund that invests in stocks and seeks income is subject to market and
interest rate risks, meaning the value of your investment will fluctuate when
the stock market and interest rates move. Loss of money is a risk of investing
in this fund.
In addition, a "value" approach to investing includes the risks that: 1. the
securities markets will not recognize the value of a security for an
unexpectedly long period of time; and 2. a stock that is believed to be
undervalued actually is appropriately priced or over-priced due to unanticipated
problems associated with the issuer or industry.
The fund may carry additional risks relating to foreign securities. The
principal risks of foreign securities are described later in this prospectus and
in the SAI.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
The Growth and Income Fund will focus on stocks of larger companies with
financial and market strengths and a long-term record of financial performance.
Under normal market conditions, the fund will maintain at least 80% of its
assets in these stocks. 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. The fund generally follows what is known as a
"value" approach, which generally means that the managers seek to invest in
stocks at prices below their estimated value based on fundamental analysis of
the issuing company and its prospects. By investing in value stocks, the fund
attempts to limit the downside risk over time but may also produce smaller gains
than other stock funds if their values are not realized by the market.
The fund will typically invest in securities representing every sector of the
S&P 500 in about (+/-50%) the same weightings as such sector has in the S&P 500.
For example, if technology companies represent 10% of the S&P 500, the fund will
typically have between 5% and 15% of its assets invested in securities issued by
technology companies.
The fund may also invest in warrants, preferred stocks and debt securities
(including non-investment grade debt securities). The fund may invest up to 25%
of its assets in foreign securities.
The fund typically sells a stock when the fundamental expectations for buying it
no longer apply, the price exceeds its value or other stocks appear more
attractively priced relative to their values.
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GROWTH AND INCOME STOCK FUND PERFORMANCE
How has the Growth and Income Stock Fund performed?
The following chart provides an indication of the risks of investing in the
Growth and Income Stock Fund by showing the changes in the portfolio performance
of the Class Z shares from year to year over a 10-year period. The chart assumes
the reinvestment of all dividends and distributions. The figures shown do not
reflect charges deducted in connection with variable contracts.
Total Return
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
Class Z shares of the Growth and Income Stock Fund. Total returns are as
follows:
1989 24.37% 1994 1.42%
1990 -1.98% 1995 31.75%
1991 25.66% 1996 22.02%
1992 7.66% 1997 31.42%
1993 13.77% 1998 17.92%
Best Calendar Quarter: 4Q98 17.81%
Worst Calendar Quarter: 3Q90 -13.69%
Please remember that past performance is no guarantee of the results the Growth
and Income Stock Fund may achieve in the future. Future returns may be higher or
lower than the returns the fund achieved in the past.
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How does the performance of the Growth and Income Stock Fund compare to the
growth and income market?
The following table compares the performance of the Class Z Shares with the
performance of the Russell 1000 Index and the S&P 500, which are measures of the
performance of the relevant market. Returns shown for the Growth and Income
Stock Fund are after the deduction of fund management and operating expenses.
The Russell 1000 Index and S&P 500 Index returns bear no such expenses.
Average Annual Total Returns
(As of December 31, 1998)
One Year Five Year Ten Year
Class Z Shares 17.92% 20.37% 16.84%
S&P 500 Stock Index 28.60% 24.05% 19.18%
(Capitalization-weighted)
S&P 500 Stock Index 12.76% 18.77% 16.78%
(Equal-weighted)
Russell 1000 Index 27.02% 23.27% 19.03%
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CAPITAL APPRECIATION STOCK FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Capital Appreciation Stock Fund seeks long-term capital appreciation.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. have a longer investment time horizon;
2. are willing to accept higher on-going short-term risk for the
potential of higher long-term returns;
3. want to diversify your investments;
4. are seeking a fund for the growth portion of an asset allocation
program; or
5. are investing for retirement or other goals that are many years in the
future.
You may want to invest fewer of your assets in this fund if you:
1. are investing with a shorter investment time horizon in mind;
2. are seeking an investment based on income rather than capital gains;
or
3. are uncomfortable with an investment whose value may vary
substantially.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
As with any fund that invests in equity securities, this fund is subject to
market risk, the risk that the value of a security may move up and down due to
factors not directly related to the issuer. Loss of money is a significant risk
of investing in this fund. Due to its focus on stocks that may appreciate in
value and lack of emphasis on those that provide current income, this fund will
typically experience greater volatility over time than the Growth and Income
Stock Fund.
In addition, a "value" approach to investing includes the risks that: 1. the
securities markets will not recognize the value of a security for an
unexpectedly long period of time; and 2. a stock that is believed to be
undervalued actually is appropriately priced or over-priced due to unanticipated
problems associated with the issuer or industry.
To the extent that the fund invests in higher-risk securities, it takes on
additional risks that could adversely affect its performance. For example, to
the extent that the fund invests in foreign securities, it will be subject to
the risks related to such securities, including the risks of adverse changes in
the rate of currency exchange and associated unstable political situations. A
further discussion of the principal risks associated with foreign securities is
contained in the foreign securities section and SAI. To the extent that the fund
invests in higher-risk securities, it takes on additional risks that could
adversely affect its performance. For example, to the extent that the fund
invests in foreign securities, it will be subject to the risks related to such
securities, including the risks of changes in the rate of currency exchange and
varying political situations. The principal risks of foreign securities and
small company stocks are described later in this prospectus and in the SAI.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
The Capital Appreciation Stock Fund invests primarily in common stocks of
companies of various sizes, and will, under normal market conditions, maintain
at least 80% of its assets in such securities. The fund seeks stocks that have
low market prices relative to their values based on analysis by the fund's
investment adviser of the issuing companies and their prospects. This is
referred to as a "value" approach which is further described on the Growth and
Income Stock Fund page. Relative to the Growth and Income Stock Fund, the
Capital Appreciation Stock Fund will include some smaller, less developed
companies and some companies undergoing more significant changes in their
operations or experiencing significant changes in their markets. 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 are typically available from less risky investments.
The fund will typically invest in securities representing every sector of the
S&P 400 in about (+/-100%) the same weightings as such sector has in the S&P
400. For example, if technology companies represent 10% of the S&P 400, the fund
will typically have between 0% and 20% of its assets invested in securities
issued by technology companies.
The fund may also invest in warrants, preferred stocks and convertible debt
securities, and may invest up to 25% of its assets in foreign securities.
The fund typically sells a stock when the fundamental expectations for buying it
no longer apply, the price exceeds its value, or other stocks appear more
attractively priced relative to their values.
<PAGE>
CAPITAL APPRECIATION STOCK FUND PERFORMANCE
How has the Capital Appreciation Stock Fund performed?
The following chart provides an indication of the risks of investing in the
Capital Appreciation Stock Fund by showing the changes in the portfolio
performance of the Class Z shares from year to year since inception. The chart
assumes the reinvestment of all dividends and distributions. The figures shown
do not reflect charges deducted in connection with variable contracts.
Total Return
GRAPHIC: Bar chart that shows total returns for Class Z shares of the Capital
Appreciation Stock Fund since inception. Total returns are as follows:
1994 5.44%
1995 30.75%
1996 21.44%
1997 31.57%
1998 20.90%
Best Calendar Quarter: 4Q98 20.84%
Worst Calendar Quarter: 3Q98 -12.04%
Please remember that past performance is no guarantee of the results the Capital
Appreciation Stock Fund may achieve in the future. Future returns may be higher
or lower than the returns the fund achieved in the past.
- --------------------------------------------------------------------------------
How does the performance of the Capital Appreciation Stock Fund compare to the
capital appreciation market?
The following table compares the performance of the Class Z Shares with the
performance of the Russell 3000 Index and S&P 400 Stock Index, which are
measures of the performance of the relevant market. Returns shown for the
Capital Appreciation Stock Fund are after the deduction of fund management and
operating expenses. The Russell 3000 Index and S&P 400 Stock Index returns bear
no such expenses.
Average Annual Total Returns
(As of December 31, 1998)
One Year Five Year Ten Year
Class Z Shares 20.90% 21.64% N/A
Russell 3000 Index 24.14% 22.26% 18.48%
S&P 400 Stock Index 19.10% 18.84% 19.26%
<PAGE>
MID-CAP STOCK FUND
INVESTMENT OBJECTIVE
What is this fund's goal?
The Mid-Cap Stock Fund seeks long-term capital appreciation by investing in
midsize and small companies.
INVESTOR PROFILE
Who should consider investing in this fund?
You may want to invest more of your assets in this fund if you:
1. have a longer investment time horizon;
2. are willing to accept higher on-going short-term risk for the
potential of higher long-term returns;
3. want to diversify your investments;
4. are seeking a fund for the growth portion of an asset allocation
program;
5. are seeking exposure to smaller companies as part of an asset
allocation program; or
6. are investing for retirement or other goals that are many years in the
future.
PRINCIPAL RISKS
What are the main risks of investing in this fund?
As with any fund that invests in equity securities, this fund is subject to
market risk, the risk that the value of your investment will fluctuate in
response to stock market movements. Loss of money is a significant risk of
investing in this fund.
Due to its focus on smaller companies' stocks that may appreciate in value and
lack of emphasis on those that provide current income, this fund will typically
experience greater volatility over time than the Growth and Income Stock Fund.
Securities issued by smaller companies may be less liquid than securities issued
by larger, more established companies. In addition, a "value" approach to
investing includes the risks that: 1. the securities markets will not recognize
the value of a security for an unexpectedly long period of time; and 2. a stock
that is believed to be undervalued actually is appropriately priced or
over-priced due to unanticipated problems associated with the issuer or
industry.
To the extent that the fund invests in higher-risk securities, it takes on
additional risks that could adversely affect its performance. For example, to
the extent that the fund invests in foreign securities, it will be subject to
the risks related to such securities, including the risks of changes in the rate
of currency exchange and varying political situations. The principal risks of
foreign securities and small company stocks are described later in this
prospectus and in the SAI.
PRINCIPAL INVESTMENT STRATEGIES
How does this fund pursue its objective?
The Mid-Cap Stock Fund invests primarily in common stocks of midsize and smaller
companies (market capitalization of less than $10 billion at the time of
purchase), and will under normal market conditions, maintain at least 80% of its
assets in such securities. However, the fund will not automatically sell a stock
just because the company's market capitalization has grown beyond the $10
billion upper limit and such position may be increased through additional
purchases.
<PAGE>
MID-CAP STOCK FUND (Continued)
INVESTOR PROFILE(Continued)
Who should consider investing in this fund?
You may want to invest fewer of your assets in this fund if you:
1. are investing with a shorter investment time horizon in mind;
2. are seeking an investment based on income rather than capital gain; or
3. are uncomfortable with an investment whose value may vary
substantially.
PRINCIPAL INVESTMENT STRATEGIES (Continued)
How does this fund pursue its objective?
The fund seeks stocks in this midsize to smaller range that have a low market
price relative to their value as estimated based on fundamental analysis of the
issuing company and its prospects. This is sometimes referred to as a "value"
approach. Relative to both the Growth and Income Stock and Capital Appreciation
Stock Funds, the Mid-Cap Stock Fund will include more smaller, less developed
issuers. These midsize and smaller companies often have difficulty competing
with larger companies, but the successful ones tend to grow faster than larger
companies. They often use profits to expand rather than to pay dividends.
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 are typically available from less risky
investments.
The fund will typically invest in securities representing every sector of the
S&P 400 Midcap Index in about (+/-100%) the same weightings as such sector has
in the S&P 400 Midcap Index. For example, if technology companies represent 10%
of the S&P 400 Midcap Index, the fund will typically have between 0% and 20% of
its assets invested in securities issued by technology companies.
The fund may also invest in warrants, preferred stocks and convertible debt
securities, and may invest up to 25% of its assets in foreign securities.
The fund typically sells a stock when the fundamental expectations for buying it
no longer apply, the price exceeds its value or other stocks appear more
attractively priced relative to their values.
Note: The Mid-Cap Stock Fund is a new fund that does not have historical
investment performance. When it does, its performance will be shown along with
the performance of the S&P 400 Midcap Index and the Russell Midcap Index, which
are measures of the performance of the relevant market. The following table
shows the historical performance of these indexes.
Average Annual Total Returns
(As of December 31, 1998)
One Year Three Year
S&P 400 Midcap Index 19.10% 23.37%
Russell Midcap Index 10.10% 19.12%
<PAGE>
RISK VS. RETURN
The risk/return curve below demonstrates that, in general for diversified
portfolios of securities of the various types, as short-term risk increases the
potential for long-term gain also increases. "Short-term risk" refers to the
likely volatility of a fund's total return and its potential for gain or loss
over a relatively short time period. "Long-term potential gain" means the
expected average annual total return over a relatively long time period, such as
20 years.
GRAPHIC: This graphic shows where each of the funds in the Ultra Series Fund,
in addition to other types of investments, fall on a curve that depicts the risk
taken for the gain potential. The x-axis is labelled "Long Term Potential for
Gains"; the y-axis is labelled "Short Term Risk (Volatility of Returns)."
This curve is not intended to indicate future volatility or performance. It is
merely intended to demonstrate the relationship between the on-going short-term
risk and the long-term potential for gain of each portfolio of the Ultra Series
Fund relative to other funds and types of investments.
Although each fund expects to pursue its investment objective using its
principal investment strategies regardless of market conditions, each fund may
invest up to 100% of its assets in money market securities as a defensive tactic
in abnormal market conditions.
The preceding fund pages provide descriptions of the general investment
strategies and what we believe to be the principal risks of each of the funds.
The fund pages do not contain an exhaustive description of all the risks and
investment strategies of the funds. Please read each of the fund pages to gain a
basic understanding of the funds. For a more detailed description, including
non-principal risks, investment strategies, and investment restrictions, please
consult the Statement of Additional Information. Also, if there are terms or
concepts you do not fully understand, please consult the SAI, other reference
material or your registered representative before investing.
<PAGE>
RISKS ASSOCIATED WITH CERTAIN HIGHER RISK SECURITIES
FOREIGN SECURITIES
As indicated in the earlier pages, several of the funds may invest in foreign
equity and debt securities. Foreign securities are securities that are issued by
companies organized or whose principal operations are outside the U.S., are
issued by a foreign government, are principally traded outside of the U.S., or
are quoted or denominated in a foreign currency. Equity securities include
common stocks, securities convertible into common stocks, preferred stocks, and
other securities representing equity interests such as American depository
receipts ("ADRs"), European depository receipts ("EDRs") and global depository
receipts ("GDRs"). The fund may also invest in debt securities, foreign money
market instruments, and other income bearing securities as well as forward
foreign currency exchange contracts and other derivative securities and
contracts.
Investing in foreign securities involves certain special considerations and
additional risks which are not typically associated with investing in securities
of domestic issuers or U.S. dollar denominated securities. For example, foreign
securities are typically subject to:
1. Fluctuations in currency exchange rates.
2. Higher trading and custody charges compared to securities of U.S.
companies.
3. Different accounting and reporting practices than U.S. companies. As a
result, it is often more difficult to evaluate financial information
from foreign issuers. Also, the laws of some foreign countries limit
the information that is made available to investors.
4. Less stringent securities regulations than those of the U.S.
5. Potential political instability.
6. Potential economic instability. The economies of individual foreign
countries may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross domestic product, rate of inflation,
and industry diversification. Such differences may cause the economies
of these countries to be less stable than the U.S. economy and may
make them more sensitive to economic fluctuations.
Some of the investments will be stocks or bonds of relatively large issuers
located or operating in developed countries. Such securities are those generally
representative of the companies comprising the Morgan Stanley Capital
International, Europe, Australia, and Far East ("EAFE") Stock Index.
EURO CONVERSION
On January 1, 1999, the European Monetary Union ("EMU") implemented a new
currency unit, the Euro. In effect, the Euro will become the official currency
of the EMU and will replace the individual currencies previously used by many
European countries. About 46% of the stock exchange capitalization of the entire
European market moved to Euros, and participating governments will issue their
bonds in Euros. The Euro transition may adversely affect financial markets
world-wide and may result in changes in the relative strength of other major
currencies, including the U.S. dollar. It is not possible to accurately predict
what affect, if any, the conversion to the Euro by the EMU will have on the
operations of the funds or the securities markets in general. However, if a fund
invests in securities denominated by the Euro, the fund will be exposed to risks
relating to the Euro conversion. For more details, please refer to the SAI.
<PAGE>
SMALL CAPITALIZATION STOCKS
Certain funds may also invest in small capitalization stocks and stocks or bonds
principally traded in emerging securities markets or of issuers located in or
having substantial business operations in emerging economies. The downside of
investing in smaller companies is that such investments entail a higher level of
risk compared to larger, more established companies. Small capitalization
companies often do not have the financial strength needed to do well in
difficult economic times. Also, they often sell limited numbers of products,
which can make it harder for them to compete with larger companies. As a result,
their securities prices may fluctuate more over the short-term, but they have
more potential to grow. The emerging economies in which the fund invests are
located primarily in the Asia-Pacific region, Eastern Europe, Central and South
America, and Africa. The small size, inexperience and limited trading volume of
the securities markets in certain of these countries may also make investments
in such countries more volatile and less liquid than investments in securities
traded in markets in Japan and Western European countries.
THE SHARES
OFFER
Currently, each series of shares is divided into two classes. Class C and Class
Z are identical except that Class C shares bear a distribution fee pursuant to a
distribution plan (the "Distribution Plan"), described below, adopted in
accordance with Rule 12b-1 under the Act.
Both Classes are sold in a continuous offering. The Ultra Series Fund generally
offers Class Z shares to separate accounts of CUNA Mutual Group and to qualified
pension and retirement plans of CUNA Mutual Group. The Ultra Series Fund 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. The
fund does not offer its shares directly to the general public.
Investments in the Ultra Series Fund by separate accounts of insurance companies
are made through either variable annuity or variable life insurance contracts,
together commonly known as variable contracts. Each separate account contains a
subaccount that corresponds to a portfolio in the Ultra Series Fund.
Ultra Series Fund Separate Account
Money Market Fund Money Market Subaccount
Treasury 2000 Fund Treasury 2000 Subaccount
Bond Fund Bond Subaccount
Balanced Fund Balanced Subaccount
Growth and Income Stock Fund Growth and Income Stock Subaccount
Capital Appreciation Stock Fund Capital Appreciation Stock Subaccount
Mid-Cap Stock Fund Mid-Cap Stock Subaccount
PURCHASE AND REDEMPTION
On each day that a Fund's net asset value is calculated, the Ultra Series Fund
processes any orders to purchase or redeem shares. Purchase and redemption
orders are processed at each fund's net asset value calculated on the day the
order is received, although orders may be executed the next morning. Shares are
purchased and redeemed at net asset value without the deduction of sales or
redemption charges.
For a more detailed description of the procedures for allocating interest in a
separate account to a portfolio of the Ultra Series Fund, owners of individual
variable contracts should refer to the separate prospectus for their contracts;
and participants in qualified pension or retirement plans should refer to their
plan documents.
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, it may not be possible to purchase additional Stripped Treasury Securities
with a maturity date the same as the Stripped Treasury Securities in the fund.
Accordingly, the Ultra Series Fund may stop selling shares in the fund if the
Trustees decide further sale of shares in the fund is not in its best interest.
At some time during the 12 months before maturity of the portfolio, the
securities will be liquidated and the proceeds (after deductions for accrued but
unpaid fees, taxes, governmental and other charges) will be automatically
invested at the 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. At least 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 fund a Notice of Impending Maturity. The notice will state that, unless the
Ultra Series Fund receives a written request to invest the proceeds in another
fund at least five days prior to portfolio maturity, on the date the portfolio
matures, each owner's proceeds will be automatically invested in the Money
Market Fund.
<PAGE>
DISTRIBUTION
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 that the Ultra
Series Fund will pay CUNA Brokerage Services, Inc. a distribution fee of 0.25%
of the average daily net assets of Class C shares of each fund annually. The
distribution fee is calculated and accrued daily and paid quarterly or at other
times as agreed upon by the Ultra Series Fund and CUNA Brokerage Services, Inc.
The distribution fee is paid out of each fund's assets supporting Class C
shares. This means that the net asset value of Class C shares is reduced by the
daily accrual of the fee. The net asset value of Class Z shares is not affected
by the distribution fee. Over time, these fees will increase the cost of your
investment in Class C shares and may cost you more than paying other types of
sales charges.
DIVIDENDS
Dividends of the various funds in the Ultra Series Fund (except those from the
Treasury 2000 Fund) are distributed to separate accounts for variable contracts
and qualified pension or retirement plans and automatically reinvested in Ultra
Series Fund shares.
Dividends from the Money Market Fund are declared daily and reinvested monthly
in full and fractional shares of the Money Market Fund.
Dividends of ordinary income from the Bond, Balanced, Growth and Income Stock,
Capital Appreciation Stock and Mid-Cap Stock Funds will be declared and
reinvested quarterly in full and fractional shares.
Dividends of capital gains from these funds will be declared and reinvested at
least annually in 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 funds' distributions may be subject to federal income tax. An exchange of
fund shares may also be treated as a sale of fund shares and any gain on the
transaction may be subject to federal income tax.
PRICING OF FUND SHARES
The funds' shares are sold and redeemed at the shares' net asset value without
sales or redemption charges. Net asset value is computed by adding the total
current values of each fund's assets, subtracting all liabilities and dividing
by the number of outstanding shares. On each day that net asset value is
calculated, the calculation occurs at the earlier of 3:00 p.m. Central Standard
Time or the close of the New York Stock Exchange.
Net asset values are calculated on any day the New York Stock Exchange is open
for business.
Federal securities regulations will be followed in case of an emergency that
interferes with valuation of shares.
The funds' shares will be purchased and redeemed at their net asset value.
Generally, the assets of each fund are valued using market quotations and
independent pricing services. If these are not available, the value of the
assets of the funds will be based on their "fair value" as determined in
accordance with procedures adopted by the Board of Trustees. The assets of the
Money Market Fund and other short-term investments having maturities of 60 days
or less will be valued at amortized cost. More information about the calculation
of net asset value is in the SAI.
<PAGE>
TAXES
For federal income tax purposes, each Fund will be treated as a separate entity.
Each Fund intends to qualify each year as a "regulated investment company" under
the Internal Revenue Code, as amended (the "Code"). By so qualifying, a Fund is
not subject to federal income tax to the extent that its net investment income
and net realized capital gains are distributed to the separate accounts of
insurance companies or to qualified plans. Further, each Fund intends to meet
certain diversification requirements applicable to mutual funds underlying
variable life insurance and variable annuity contracts.
The Shareholders of the Funds are qualified pension and profit sharing plans and
the separate accounts of life insurance companies. Under current law, plan
participants and owners of variable life insurance and annuity contracts which
have invested in a Fund are not subject to federal income tax on Fund
distributions or on gains realized upon the sale or redemption of Fund shares
until they are withdrawn from the plan or contracts.
For information concerning the federal tax consequences to the purchasers of the
variable annuity or variable life insurance contracts, see the prospectus for
such contract. For more information about the tax status of the Funds, see
"Taxes" in the SAI.
MORE ABOUT ULTRA SERIES FUND
PORTFOLIO MANAGEMENT
The investment adviser for the Ultra Series Fund is:
CIMCO Inc.
5910 Mineral Point Road
Madison, WI 53701-0391
CIMCO was established on July 6, 1982. It provides investment management of the
investment portfolios of CUNA Mutual Group, its "permanent affiliate" CUNA
Mutual Life Insurance Company, their subsidiaries and affiliates, and MEMBERS
Mutual Funds. CIMCO has over $7 billion of assets under management.
CIMCO employs a team approach in the management of investments of all the funds.
The Money Market, Treasury 2000, Bond, Balanced, Growth and Income Stock,
Capital Appreciation Stock and Mid-Cap Stock Funds are each managed by teams of
portfolio managers employed by CIMCO.
CIMCO selects subadvisers based on a continuing quantitative and qualitative
evaluation of their skills and proven abilities in managing assets pursuant to a
particular investment style. While superior performance is the ultimate goal,
short-term performance by itself will not be a significant factor in selecting
or terminating subadvisers, and CIMCO does not expect frequent changes in
subadvisers.
CIMCO received an order of the Commission that permits the Ultra Series Fund
board to employ particular subadvisers without shareholder approval for the
Mid-Cap Stock Fund. If there is a change in Mid-Cap Stock Fund subadvisers, you
will receive an "information statement" within 90 days of the change. The
statement will provide you with relevant information about the reason for the
change and information about any new subadvisers.
CIMCO manages the assets of the Mid-Cap Stock Fund using a "manager of managers"
approach under which CIMCO may manage some or all of the fund's assets and may
allocate some or all of the fund's assets among one or more "specialist"
subadvisers. CIMCO monitors the performance of each subadviser to the extent
that it deems appropriate to achieve a fund's investment objective, reallocates
fund assets among its own portfolio management team and individual subadvisers,
or recommends to the Ultra Series Fund board that a fund employ or terminate
particular subadvisers.
As of the date of this prospectus, Heartland Advisors, Inc. is the only
subadviser managing some of the assets of the Mid-Cap Stock Fund. Heartland
Advisors, Inc. also serves as investment adviser to each of the funds in the
Heartland family of funds. Net assets under management of the Heartland
organization were over $3 billion as of December 31, 1998.
In addition to providing portfolio management services, CIMCO also provides or
arranges for the provision of substantially all other services required by the
funds. Such services include all administrative, accounting, and legal services,
as well as the services of custodians, transfer agents, and dividend disbursing
agents.
As payment for its services as the investment adviser, CIMCO receives a
management fee based upon the assets of each fund. The management fee paid to
CIMCO is computed and accrued daily and paid monthly, as indicated in the
Expenses section.
<PAGE>
INQUIRIES
If you have any questions regarding the Ultra Series Fund, please contact:
CUNA Brokerage Services, Inc.
2000 Heritage Way
Waverly, IA 50677
(800) 798-5500
(319) 352-4090
YEAR 2000
The Ultra Series Fund, like all funds, could be adversely affected by computer
systems that do not properly process date-related information on and after
January 1, 2000. This is often referred to as "Year 2000" or "Y2K". While Year
2000 problems could have a negative effect on funds, CIMCO and its affiliated
entities are working to avoid such problems. They are also obtaining assurances
from service providers that they are taking similar steps. If the systems of
CIMCO or those of their service providers are not available or malfunction
because of Year 2000 problems, then the funds could experience substantial
delays in performing certain functions (for example, processing purchase and
sale transactions). As a result of CIMCO's efforts, it is not anticipated that
its systems will have any negative affects on your Ultra Series Fund
investments.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund, assuming reinvestment of all dividends and distributions. This
information has been audited by KPMG Peat Marwick LLP, whose report, along with
the Fund's financial statements, are included in the SAI or annual report, which
are available upon request.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND: CLASS Z
Financial Highlights
Years Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1994 1995 1996 1997 1998
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations
Net Investment Income 0.03 0.05 0.05 0.05 0.05
Net Realized and Unrealized Gain (Loss)
on Investments - - - - -
Total from Investment Operations 0.03 0.05 0.05 0.05 0.05
Distributions
Distributions from Net Investment Income (0.03) (0.05) (0.05) (0.05) (0.05)
Distributions from Realized Capital Gains - - - - -
Total Distributions (0.03) (0.05) (0.05) (0.05) (0.05)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
Total Return* 3.34% 5.21% 4.72% 5.01% 5.00%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $7,799 $11,374 $21,011 $41,170 $56,416
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.50% 0.45%
Ratio of Net Investment Income to Average Net Assets** 3.66% 5.17% 4.74% 5.05% 4.99%
</TABLE>
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1998, was 4.65% and the "effective" yield for that period was
4.76%.
* 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 0.78%, 0.73%, 0.67%, and 0.51% for 1994, 1995, 1996, and
1997, respectively.
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND: CLASS Z
Financial Highlights
Years Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1994 1995 1996 1997 1998
Net Asset Value, Beginning of Period $7.53 $7.00 $8.47 $8.64 $9.24
Income from Investment Operations
Net Investment Income 0.53 0.58 0.58 0.58 0.58
Net Realized and Unrealized Gain (Loss)
on Investments (1.06) 0.89 (0.41) 0.02 0.11
Total from Investment Operations (0.53) 1.47 0.17 0.60 0.69
Distributions
Distributions from Net Investment Income - - - - -
Distributions from Realized Capital Gains - - - - -
Total Distributions - - - - -
Net Asset Value, End of Period $7.00 $8.47 $8.64 $9.24 $9.93
Total Return* -7.12% 20.99% 2.10% 6.85% 7.52%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,272 $1,545 $1,585 $1,701 $1,836
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average Net Assets 7.50% 7.40% 7.03% 6.56% 6.01%
</TABLE>
* 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.
<PAGE>
<TABLE>
<CAPTION>
BOND FUND: CLASS Z
Financial Highlights
Years Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1994 1995 1996 1997 1998
Net Asset Value, Beginning of Period $10.58 $9.67 $10.63 $10.33 $10.54
Income from Investment Operations
Net Investment Income 0.59 0.60 0.65 0.54 0.63
Net Realized and Unrealized Gain (Loss)
on Investments (0.90) 0.96 (0.28) 0.20 0.02
Total from Investment Operations (0.31) 1.56 0.37 0.74 0.65
Distributions
Distributions from Net Investment Income (0.59) (0.59) (0.64) (0.51) (0.62)
Distributions from Realized Capital Gains (0.01) (0.01) (0.03) (0.02) -
Total Distributions (0.60) (0.60) (0.67) (0.53) (0.62)
Net Asset Value, End of Period $9.67 $10.63 $10.33 $10.54 $10.57
Total Return* -3.06% 16.37% 2.86% 7.45% 6.18%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $7,867 $13,725 $26,572 $188,840 $228,281
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.56% 0.55%
Ratio of Net Investment Income to Average Net Assets 6.03% 6.08% 6.25% 6.50% 5.94%
Portfolio Turnover Rate 11.97% 14.74% 25.67% 30.71% 142.98%
</TABLE>
* 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 0.70%, 0.68%, 0.67%, and 0.57% for 1994, 1995, 1996, and
1997, respectively.
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND: CLASS Z
Financial Highlights
Years Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1994 1995 1996 1997 1998
Net Asset Value, Beginning of Period $13.70 $12.90 $14.63 $15.29 $17.02
Income from Investment Operations
Net Investment Income 0.52 0.55 0.58 0.62 0.57
Net Realized and Unrealized Gain (Loss)
on Investments (0.56) 2.29 0.98 1.93 1.72
Total from Investment Operations (0.04) 2.84 1.56 2.55 2.29
Distributions
Distributions from Net Investment Income (0.51) (0.55) (0.58) (0.63) (0.57)
Distributions from Realized Capital Gains (0.25) (0.56) (0.32) (0.19) -
Total Distributions (0.76) (1.11) (0.90) (0.82) (0.57)
Net Asset Value, End of Period $12.90 $14.63 $15.29 $17.02 $18.74
Total Return* -0.46% 22.27% 10.79% 16.87% 13.40%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $67,468 $110,969 $194,725 $309,804 $449,992
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.68% 0.70%
Ratio of Net Investment Income to Average
Net Assets 4.00% 4.03% 3.91% 3.81% 3.20%
Portfolio Turnover Rate 28.53% 36.68% 33.48% 21.15% 78.71%
</TABLE>
* 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 0.70%, 0.68%, 0.65%, and 0.69% for 1994, 1995, 1996, and
1997, respectively.
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND: CLASS Z
Financial Highlights
Years Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1994 1995 1996 1997 1998
Net Asset Value, Beginning of Period $15.51 $15.06 $18.20 $21.32 $27.20
Income from Investment Operations
Net Investment Income 0.32 0.37 0.34 0.31 0.34
Net Realized and Unrealized Gain (Loss)
on Investments (0.04) 4.37 3.93 6.36 4.52
Total from Investment Operations 0.28 4.74 4.27 6.67 4.86
Distributions
Distributions from Net Investment Income (0.33) (0.37) (0.34) (0.32) (0.34)
Distributions from Realized Capital Gains (0.40) (1.23) (0.81) (0.47) (1.16)
Total Distributions (0.73) (1.60) (1.15) (0.79) (1.50)
Net Asset Value, End of Period $15.06 $18.20 $21.32 $27.20 $30.56
Total Return* 1.42% 31.75% 22.02% 31.42% 17.92%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $48,913 $102,138 $232,841 $590,135 $833,174
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.61% 0.60%
Ratio of Net Investment Income to Average Net Assets 2.19% 2.28% 1.78% 1.39% 1.17%
Portfolio Turnover Rate 45.36% 57.80% 40.55% 20.39% 17.69%
</TABLE>
* 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 0.70%, 0.69%, 0.65%, and 0.61% for 1994, 1995, 1996, and
1997, respectively.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND: CLASS Z
Financial Highlights
Years Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1994* 1995 1996 1997 1998
Net Asset Value, Beginning of Period $10.00 $9.97 $12.51 $14.60 $18.85
Income from Investment Operations
Net Investment Income 0.16 0.14 0.13 0.07 0.06
Net Realized and Unrealized Gain (Loss)
on Investments 0.37 2.91 2.55 4.52 3.87
Total from Investment Operations 0.53 3.05 2.68 4.59 3.93
Distributions
Distributions from Net Investment Income (0.15) (0.14) (0.13) (0.07) (0.06)
Distributions from Realized Capital Gains (0.41) (0.37) (0.46) (0.27) (0.53)
Total Distributions (0.56) (0.51) (0.59) (0.34) (0.59)
Net Asset Value, End of Period $9.97 $12.51 $14.60 $18.85 $22.19
Total Return** 5.44% 30.75% 21.44% 31.57% 20.90%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $9,449 $38,117 $98,674 $456,194 $630,373
Ratio of Expenses to Average Net Assets*** 0.65% 0.65% 0.65% 0.82% 0.80%
Ratio of Net Investment Income to Average Net Assets 1.55% 1.37% 0.96% 0.70% 0.31%
Portfolio Turnover Rate 65.81% 61.32% 49.77% 17.06% 18.67%
</TABLE>
* 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 0.85%, 0.75%, 0.66%, and 0.83% for 1994, 1995, 1996, and
1997, respectively.
<PAGE>
The following documents contain more information about the funds and are
available free upon request:
Statement of Additional Information (SAI). The SAI contains additional
information about all aspects of the funds. A current SAI has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
Annual and Semiannual Reports. The funds' annual and semiannual reports provide
additional information about the funds' investments. The annual report contains
a discussion of the market conditions and investment strategies that
significantly affected each fund's performance during the last fiscal year.
Requesting Documents. You may request copies of these documents, ask questions
about your account, or request further information about the funds either by
contacting your broker or by contacting the funds at:
Ultra Series Fund
CUNA Mutual Life Insurance Company
2000 Heritage Way
Waverly, IA 50677
(800) 798-5500
Public Information. You can review and copy information about the funds,
including the SAI, at the Securities and Exchange Commission's Public Reference
Room in Washington D.C. You may obtain information on the operation of the
public reference room by calling the Commission at 1-800-SEC-0330. Reports and
other information about the funds also are available on the Commission's
Internet site at http://www.sec.gov. You may obtain copies of this information,
upon payment of a duplicating fee, by writing the Public Reference Section of
the Securities and Exchange Commission, Washington, D.C. 20549-6009.
The Funds are available to the public only through the purchase of:
(1) Class Z shares of the Ultra Series Fund by certain individual variable
life insurance contracts or variable annuity contracts;
(2) Class Z shares of the Ultra Series Fund by certain group variable
annuity contracts for 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.
Investment Company File No. 811-4815
