SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
RegistrationStatement Under the Securities Act of 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [24]
and/or
Registration Statement Under the Investment Company Act of 1940 [X]
Amendment No. [27]
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Ultra Series Fund
2000 Heritage Way
Waverly, Iowa 50677
(319) 352-4090, ext. 2157
(Registrant's Exact Name, Address and Telephone Number)
Barbara L. Secor, Esq.
CUNA Mutual Life Insurance Company
2000 Heritage Way
Waverly, Iowa 50677
(Name and Address of Agent for Service)
Copy to:
Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D. C. 20004-2404
Approximate Date of Proposed Public Offering: [ ]
--------------------------------------------
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date)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.
<PAGE>
Ultra Series Fund
Prospectus May 1, 2000
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.
<PAGE>
TABLE OF CONTENTS
PAGE
The Fund
Expenses............................................................1
Money Market Fund...................................................2
Treasury 2000 Fund..................................................4
Bond Fund...........................................................6
Balanced Fund.......................................................8
Growth and Income Stock Fund.......................................10
Capital Appreciation Stock Fund....................................12
Mid-Cap Stock Fund.................................................14
Risk vs. Return....................................................16
Risks Associated with Certain Higher Risk Securities
Foreign Securities.................................................17
Euro Conversion....................................................17
Small Capitalization Stocks........................................18
The Shares
Offer..............................................................18
Purchase and Redemption............................................19
Pricing of Fund Shares.............................................20
Taxes..............................................................20
More About Ultra Series Fund
Portfolio
Management..................................................................21
Inquiries..........................................................22
Financial Highlights...............................................22
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.
<PAGE>
EXPENSES
This table describes the expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
None
ANNUAL FUND OPERATING EXPENSES
Total Annual
FUNDS Management Other Operating Expenses
<S> <C> <C> <C>
Money Market .45% .01% .46%
Treasury 2000 .45% None .45%
Bond .55% .01% .56%
Balanced .70% .01% .71%
Growth and Income Stock .60% .01% .61%
Capital Appreciation Stock .80% .01% .81%
Mid-Cap Stock 1.00% .01% 1.01%
</TABLE>
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.
Other expenses are trustees' fees, auditors' fees, interest on borrowings, any
taxes and extraordinary expenses.
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 assumes: (1) 5% annual return and (2) redemption at the
end of each period.
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
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.
<PAGE>
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:
- - require stability of principal
- - are seeking a mutual fund for the cash portion of an asset allocation
program
- - need to "park" your money temporarily or
- - consider yourself a saver rather than an investor.
You may want to invest fewer of your assets in this fund if you:
- - want federal deposit insurance
- - are seeking an investment that is likely to outpace inflation
- - are investing for retirement or other goals that are many years in the
future or
- - 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.
<PAGE>
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
Fund 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 Returns
(for years ended 12/31)
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
the Money Market Fund. Total returns are as follows:
1990 7.53% 1995 5.21%
1991 5.36% 1996 4.72%
1992 3.05% 1997 5.01%
1993 2.86% 1998 5.00%
1994 3.34% 1999 4.69%
Best Calendar Quarter: 2Q90 1.92%
Worst Calendar Quarter: 2Q93 0.60%
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.
- --------------------------------------------------------------------------------
How does the performance of the Money Market Fund compare to general money
market returns?
The following table compares the performance of the Money Market Fund 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, 1999)
One Year Five Year Ten Year
Money Market Fund Shares 4.69% 4.93% 4.67%
90-day U.S. Treasury Bill 4.73% 5.19% 5.04%
<PAGE>
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:
- - desire an assured future value of a portion of your investments at a
specified future date or
- - 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:
- - want Federal deposit insurance
- - are willing to assume some variability of future balance in pursuit of
higher long term returns or
- - 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 that 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.
At a specific time to be determined by the Adviser, between May 1, 2000 and
November 15, 2000, the securities held by the Fund will be liquidated. As the
Fund liquidates the portfolio, it will invest the proceeds in securities similar
to those purchased by the Money Market Fund. On or before December 31, 2000, the
fund will distribute any remaining assets and cease operations.
<PAGE>
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
Fund 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
(for years ended 12/31)
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
the Treasury 2000 Fund. Total returns are as follows:
1990 7.12% 1995 20.99%
1991 20.37% 1996 2.10%
1992 8.01% 1997 6.85%
1993 15.43% 1998 7.52%
1994 -7.12% 1999 3.04%
Best Calendar Quarter: 4Q90 9.94%
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.
- --------------------------------------------------------------------------------
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 Treasury 2000 Fund 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, 1999)
One Year Five Year Ten Year
Treasury 2000 Fund 3.04% 7.90% 8.12%
Lehman Index 0.41% 6.90% 8.56%
<PAGE>
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:
- - seek an investment based on a regular stream of income
- - seek higher potential returns than money market funds and are willing
to accept moderate risk of volatility
- - want to diversify your investments
- - seek a mutual fund for the income portion of an asset allocation program or
- - are retired or nearing retirement.
You may want to invest fewer of your assets in this fund if you:
- - invest for maximum return over a long time horizon or
- - 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. The CIMCO
management team utilizes an approach that involves frequent trading of the
securities in the portfolio. Under normal circumstances, the fund invests at
least 80% of its assets in:
- - Corporate debt securities: securities issued by domestic and foreign
corporations;
- - U.S. government debt securities: securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities; and
- - 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.
<PAGE>
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 Fund 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 Returns
(for years ended 12/31)
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
the Bond Fund. Total returns are as follows:
1990 7.41% 1995 16.37%
1991 14.70% 1996 2.86%
1992 6.47% 1997 7.45%
1993 8.87% 1998 6.18%
1994 -3.06% 1999 0.73%
Best Calendar Quarter: 2Q95 5.30%
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.
- --------------------------------------------------------------------------------
How does the performance of the Bond Fund compare to the bond market?
The following table compares the performance of the Bond Fund 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, 1999)
One Year Five Year Ten Year
Bond Fund 0.73% 6.59% 6.66%
Lehman Index 0.39% 7.10% 7.26%
<PAGE>
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:
- - are looking for a more conservative option to a growth-oriented fund
- - want a well-diversified and relatively stable investment allocation
- - need a core investment
- - seek a reasonable total return over the long term irrespective of its for
(i.e., capital gains or ordinary income) or
- - are retired or nearing retirement.
You may want to invest fewer of your assets in this fund if you:
- - are investing for maximum return over a long time horizon
- - want your return to be either ordinary income or capital gains, but not
both or
- - 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.
<PAGE>
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 Fund
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 Returns
(for years ended 12/31)
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
the Balanced Fund. Total returns are as follows:
1990 3.75% 1995 22.27%
1991 18.53% 1996 10.79%
1992 6.85% 1997 16.87%
1993 10.47% 1998 13.40%
1994 -0.46% 1999 14.49%
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.
- --------------------------------------------------------------------------------
How does the performance of the Balanced Fund compare to the balanced market?
The following table compares the performance of the Balanced Fund with the
performance of the Synthetic Index* and each of the components of the Synthetic
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 Synthetic Index returns bear no such expenses.
Average Annual Total Returns (As of December 31, 1999)
One Year Five Year Ten Year
Balanced Fund 14.49% 15.50% 11.50%
Synthetic Index* 10.14% 16.27% 11.95%
S&P 500 Stock Index 21.04% 28.55% 18.20%
Lehman Index 0.39% 7.10% 7.26%
90-day U.S. Treasury Bills 4.73% 5.19% 5.04%
*The synthetic 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%).
<PAGE>
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:
- - are looking for a stock fund that has both growth and income components
- - are looking for a more conservative option to a growth-oriented fund
- - need a core investment
- - seek above-average long-term total return through a combination of capital
gains and ordinary income or
- - are retired or nearing retirement.
You may want to invest fewer of your assets in this fund if you:
- - are investing for maximum return over a long time horizon
- - desire your return to be either ordinary income or capital gains, but not
both or
- - 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.
<PAGE>
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 Fund 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 Returns
(for years ended 12/31)
GRAPHIC: Bar chart that shows total returns for the past ten calendar years for
the Growth and Income Stock Fund. Total returns are as follows:
1990 -1.98% 1995 31.75%
1991 25.66% 1996 22.02%
1992 7.66% 1997 31.42%
1993 13.77% 1998 17.92%
1994 1.42% 1999 17.95%
Best Calendar Quarter: 4Q98 17.82%
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.
- --------------------------------------------------------------------------------
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 Growth & Income Stock Fund
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, 1999)
One Year Five Year Ten Year
Growth & Income Fund 17.95% 24.06% 16.22%
S&P 500 Stock Index 21.04% 28.55% 18.20%
(Capitalization-weighted)
S&P 500 Stock Index 19.53% 21.33% 13.37%
(Equal-weighted)*
Russell 1000 Index 20.91% 28.05% 18.13%
*The source of the S&P 500 Stock Index (Equal-Weighted) data is Birinyi
Associates, Inc.
<PAGE>
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:
- - have a longer investment time horizon
- - are willing to accept higher on-going short-term risk for the potential of
higher long-term returns
- - want to diversify your investments
- - are seeking a fund for the growth portion of an asset allocation program or
- - 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:
- - are investing with a shorter investment time horizon in mind
- - are seeking an investment based on income rather than capital gains or
- - 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 Fund 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 Returns
(for years ended 12/31)
GRAPHIC: Bar chart that shows total returns for 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%
1999 25.19%
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 Capital Appreciation Stock
Fund with the performance of the Russell 3000 Index and S&P 1500 SuperComposite
Stock Index, which are measures of the performance of the relevant market. The
S&P 1500 SuperComposite is a new benchmark for the Fund. We intend to include
the S&P 1500 SuperComposite, and not the S&P 400, going forward because the
Adviser believes the S&P 1500 SuperComposit more accurately reflects the
securities held in the Fund's portfolio of investments. Returns shown for the
Capital Appreciation Stock Fund are after the deduction of fund management and
operating expenses. The Russell 3000 Index, S&P 1500 SuperComposite, and S&P 400
Stock Index returns bear no such expenses.
Average Annual Total Returns (As of December 31, 1999)
One Year Five Year Ten Year
Capital Appreciation Fund 25.19% 25.89% N/A
Russell 3000 Index 20.90% 26.94% 17.68%
S&P 1500 SuperComposite Index 20.25% 25.62% 20.20%*
S&P 400 Index 14.70% 23.01% 15.10%
*Prior to 1995, the S&P Midcap 400 Index was utilized.
<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:
- - have a longer investment time horizon
- - are willing to accept higher on-going short-term risk for the potential of
higher long-term returns
- - want to diversify your investments
- - are seeking a fund for the growth portion of an asset allocation program
- - are seeking exposure to smaller companies as part of an asset allocation
program or
- - 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:
- - are investing with a shorter investment time horizon in mind
- - are seeking an investment based on income rather than capital gain or
- - 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 includes 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 diversifies its holdings among various industries and among companies
within those industries but is often 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 typically invests 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 does not have a calendar year of investment
performance, so there is not a bar chart showing the fund returns from year to
year. Once the Fund has at least one calendar year of performance it will be
shown along with the performance of the S&P 400 Midcap Index and the Russell
Midcap Index, which we use to measure the performance of the relevant market.
The following table shows the historical performance of these indexes.
Average Annual Total Returns
(As of December 31, 1999)
One Year Three Year
S&P 400 Midcap Index 13.58%* 21.78%
Russell Midcap Index 18.23% * 21.86%
*The time period is May 1, 1999 to December 31, 1999.
<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 ongoing 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 outside the U.S., 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:
- - Fluctuations in currency exchange rates.
- - Higher trading and custody charges compared to securities of U.S. companies.
- - 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.
- - Less stringent securities regulations than those of the U.S.
- - Potential political instability.
- - 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. Class C and Class Z are identical except that Class C shares bear a
distribution fee pursuant to a distribution plan, adopted in accordance with
Rule 12b-1 under the Act. Both Classes are sold in a continuous offering. This
prospectus offers the Class Z shares.
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
<PAGE>
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 between May 1, 2000 and November 15, 2000, 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.
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.
<PAGE>
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 regular trading on 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.
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.
<PAGE>
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 $8 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 manages the assets of the Mid-Cap Stock Fund and may in the future manage
other funds 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.
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 has engaged Wellington Management Company, llp ("Wellington Management"),
75 State Street, Boston, Massachusetts, 02109 as sub-adviser for the small-cap
portion of the assets within Mid-Cap Stock Fund. Wellington Management became
the sub-adviser on May 1, 2000. Wellington Management is a limited liability
partnership which traces its origins to 1928. Wellington Management provides
investment services to investment companies, employee benefit plans, endowments,
foundations, and other institutions and had over $235 billion in assets under
management as of December 31, 1999.
Stephen T. O'Brien, CFA is the Portfolio Manager from Wellington Management
primarily responsible for the Mid-Cap Stock Fund. Mr. O'Brien joined Wellington
Management in 1983 and has over 28 year of investment experience.
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
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. The
financial highlights for the year ended December 31, 1999 have been audited by
PricewaterhouseCoopers LLP, whose report, along with the Fund's financial
statements, are included in the SAI or annual report, which are available upon
request. The financial highlights for periods ended December 31, 1998 and prior
have been audited by KPMG LLP.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
Financial Highlights
Year Ended December 31
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
<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 0.05 0.05
Distributions
Distributions from Net Investment Income (0.05) (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* 4.69% 5.00% 5.01% 4.72% 5.21%
===========================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $82,646 $56,416 $41,170 $21,011 $11,374
Ratio of Expenses to Average Net Assets** 0.45% 0.45% 0.50% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 4.72% 4.99% 5.05% 4.74% 5.17%
===========================================================================================================================
</TABLE>
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1999, was 5.24% and the "effective" yield for that period was
5.38% (unaudited).
*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% and 0.73% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND
Financial Highlights
Year Ended December 31
(For a share outstanding throughout the period) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.93 $9.24 $8.64 $8.47 $7.00
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income** 0.57 0.58 0.58 0.58 0.58
Net Realized and Unrealized Gain (Loss)
on Investments (0.27) 0.11 0.02 (0.41) 0.89
------ ------ ------ ------ ------
Total from Investment Operations 0.30 0.69 0.60 0.17 1.47
--------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income -- -- -- -- --
Distributions from Realized Capital Gains -- -- -- -- --
------ ------ ------ ------ -----
Total Distributions -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.23 $9.93 $9.24 $8.64 $8.47
===========================================================================================================================
Total Return* 3.04% 7.52% 6.85% 2.10% 20.99%
===========================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,901 $1,836 $1,701 $1,585 $1,545
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 5.70% 6.01% 6.56% 7.03% 7.40%
- ----------------------------------------------------------------------------------------------------------------------------
</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.
**Based on average shares outstanding during year.
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Financial Highlights
Year Ended December 31
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.57 $10.54 $10.33 $10.63 $9.67
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income*** 0.62 0.63 0.54 0.65 0.60
Net Realized and Unrealized Gain (Loss)
on Investments (0.54) 0.02 0.20 (0.28) 0.96
------ ------ ------ ------ ------
Total from Investment Operations 0.08 0.65 0.74 0.37 1.56
--------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.60) (0.62) (0.51) (0.64) (0.59)
Distributions from Realized Capital Gains (0.00) (0.00) (0.02) (0.03) (0.01)
------ ------ ------ ------ ------
Total Distributions (0.60) (0.62) (0.53) (0.67) (0.60)
-----
Net Asset Value, End of Period $10.05 $10.57 $10.54 $10.33 $10.63
============================================================================================================================
Total Return* 0.73% 6.18% 7.45% 2.86% 16.37%
============================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $250,485 $228,281 $188,840 $26,572 $13,725
Ratio of Expenses to Average Net Assets** 0.55% 0.55% 0.56% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 5.92% 5.94% 6.50% 6.25% 6.08%
Portfolio Turnover Rate 713.52% 142.98% 30.71% 25.67% 14.74%
============================================================================================================================
</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 0.57%, 0.67% and 0.68% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Financial Highlights
Year Ended December 31
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.74 $17.02 $15.29 $14.63 $12.90
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income*** 0.56 0.57 0.62 0.58 0.55
Net Realized and Unrealized Gain (Loss)
on Investments 2.14 1.72 1.93 0.98 2.29
------ ------ ------
Total from Investment Operations 2.70 2.29 2.55 1.56 2.84
--------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.53) (0.57) (0.63) (0.58) (0.55)
Distributions from Realized Capital Gains (0.47) -- (0.19) (0.32) (0.56)
------ ------ ------ ------ ------
Total Distributions (1.00) (0.57) (0.82) (0.90) (1.11)
----
Net Asset Value, End of Period $20.44 $18.74 $17.02 $15.29 $14.63
===========================================================================================================================
Total Return* 14.49% 13.40% 16.87% 10.79% 22.27%
===========================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $603,136 $449,992 $309,804 $194,725 $110,969
Ratio of Expenses to Average Net Assets** 0.70% 0.70% 0.68% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 2.83% 3.20% 3.81% 3.91% 4.03%
Portfolio Turnover Rate 269.00% 78.71% 21.15% 33.48% 36.68%
===========================================================================================================================
</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 0.69%, 0.65% and 0.68% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Financial Highlights
Year Ended December 31
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $30.56 $27.20 $21.32 $18.20 $15.06
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income*** 0.34 0.34 0.31 0.34 0.37
Net Realized and Unrealized Gain (Loss)
on Investments 5.12 4.52 6.36 3.93 4.37
------ ------ ------ ------ ------
Total from Investment Operations 5.46 4.86 6.67 4.27 4.74
--------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.32) (0.34) (0.32) (0.34) (0.37)
Distributions from Realized Capital Gains (2.12) (1.16) (0.47) (0.81) (1.23)
------ ------ ------ ------ ------
Total Distributions (2.44) (1.50) (0.79) (1.15) (1.60)
Net Asset Value, End of Period $33.58 $30.56 $27.20 $21.32 $18.20
===========================================================================================================================
Total Return* 17.95% 17.92% 31.42% 22.02% 31.75%
===========================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,098,330 $833,174 $590,135 $232,841 $102,138
Ratio of Expenses to Average Net Assets** 0.60% 0.60% 0.61% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 0.99% 1.17% 1.39% 1.78% 2.28%
Portfolio Turnover Rate 20.13% 17.69% 20.39% 40.55% 57.80%
===========================================================================================================================
</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 0.61%, 0.65% and 0.69% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Financial Highlights
Year Ended December 31
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $22.19 $18.85 $14.60 $12.51 $9.97
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income*** 0.02 0.06 0.07 0.13 0.14
Net Realized and Unrealized Gain (Loss)
on Investments 5.55 3.87 4.52 2.55 2.91
------ ------ ------ ------ ------
Total from Investment Operations 5.57 3.93 4.59 2.68 3.05
----
Distributions
Distributions from Net Investment Income (0.02) (0.06) (0.07) (0.13) (0.14)
Distributions from Realized Capital Gains (2.15) (0.53) (0.27) (0.46) (0.37)
------ ------ ------ ------ ------
Total Distributions (2.17) (0.59) (0.34) (0.59) (0.51)
--------------------------------------------------------------------------
Net Asset Value, End of Period $25.59 $22.19 $18.85 $14.60 $12.51
===========================================================================================================================
Total Return* 25.19% 20.90% 31.57% 21.44% 30.75%
===========================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $839,134 $630,373 $456,194 $98,674 $38,117
Ratio of Expenses to Average Net Assets** 0.80% 0.80% 0.82% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 0.10% 0.31% 0.70% 0.96% 1.37%
Portfolio Turnover Rate 38.38% 18.67% 17.06% 49.77% 61.32%
===========================================================================================================================
</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 0.83%, 0.66% and 0.75% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Financial Highlights
Period Ended December 31
(For a share outstanding throughout the period) 1999(1)
<S> <C>
Net Asset Value, Beginning of Period $10.00
------
Income from Investment Operations
Net Investment Income**** 0.03
Net Realized and Unrealized Gain (Loss)
on Investments 1.34
------
Total from Investment Operations 1.37
------
Distributions
Distributions from Net Investment Income (0.02)
Distributions from Realized Capital Gains (0.20)
------
Total Distributions (0.22)
-------------------------
Net Asset Value, End of Period $11.15
==================================================================
Total Return* 13.68%**
==================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $26,479
Ratio of Expenses to Average Net Assets 1.00%***
Ratio of Net Investment Income to Average
Net Assets 0.39%***
Portfolio Turnover Rate 35.55%
==================================================================
</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.
**Not annualized.
***Annualized.
****Based on average shares outstanding during period.
(1)Commenced operations May 1, 1999.
<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:
(1) Class Z Shares by certain individual variable life insurance contracts
or variable annuity contracts;
(2) Class Z Shares 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
<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 Ultra Series Fund prospectus which is incorporated
by reference.
The prospectus contains information that an investor should know before
investing. For a copy of the most recent prospectus, call or write CUNA
Brokerage Services, Inc., 2000 Heritage Way, Waverly, Iowa 50677, (319)
352-4090, (800) 798-5500.
MAY 1, 2000
<PAGE>
TABLE OF CONTENTS PAGE
General Information.........................................................1
Investment Practices........................................................1
Lending Portfolio Securities.......................................1
Restricted Securities..............................................2
Foreign Securities.................................................2
Put and Call Options...............................................3
Financial Futures and Related Options..............................4
Stock Index Futures and Related Options............................5
Bond Fund Practices................................................6
Lower-Rated Corporate Debt Securities..............................7
Foreign Government Securities......................................8
Convertible Securities.............................................8
Repurchase Agreements..............................................9
Reverse Repurchase Agreements......................................9
U.S. Government Securities........................................10
Mortgage-Backed and Asset-Backed Securities.......................10
Forward Commitment and When-Issued Securities.....................11
Investment Limitations.....................................................12
Portfolio Turnover.........................................................14
Management of the Fund.....................................................14
Officers and Trustees.............................................14
Trustees Compensation.............................................16
Substantial Shareholders..........................................16
Beneficial Owners.................................................16
Code of Ethics....................................................17
The Investment Adviser.....................................................17
Management Agreements with Subadvisers.....................................18
Expenses of the Fund.......................................................19
Distribution Plan and Agreement............................................19
Transfer Agent.............................................................20
Custodian..................................................................21
Independent Accountants....................................................21
Brokerage..................................................................21
<PAGE>
How Securities Are Offered.................................................22
Shares Of Beneficial Interest.....................................22
Limitation of Trustee and Officer Liability.......................23
Limitation of Interseries Liability...............................23
Net Asset Value of Shares..................................................24
Money Market Fund.................................................24
Treasury 2000, Bond, Balanced, Growth and Income Stock,
Capital Appreciation Stock and Mid-Cap Stock Funds...............25
Dividends, Distributions and Taxes.........................................26
Options and Futures Transactions..................................28
Straddles.........................................................29
Distributor.......................................................30
Calculation of Yields and Total Returns....................................30
Money Market Fund Yields..........................................31
Other Fund Yields.................................................32
Average Annual Total Returns......................................33
Other Total Returns...............................................34
Financial Statements.......................................................34
<PAGE>
GENERAL INFORMATION
The Ultra Series Fund is an investment company consisting of seven separate
investment portfolios or funds (each, a "Fund") each of which has a different
investment objective. Each Fund is a diversified, open-end management investment
company, commonly known as a mutual fund. The seven Funds are Money Market,
Treasury 2000, Bond, Balanced, Growth and Income Stock, Capital Appreciation
Stock, and Mid-Cap Stock. 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's 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 is a diversified open-end management investment company
consisting of seven investment portfolios or funds, each with its own investment
objective and policies. The Ultra Series Fund Prospectus describes the
investment objective and policies of each of the seven 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 options, financial futures,
stock index futures and related options. Except for the Mid-Cap Stock Fund (as
described below), 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 securities 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
<PAGE>
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 Adviseror SubAdviser to be in good standing and will
not be made unless, in the judgment of the Investment Adviser or SubAdviser, the
consideration to be earned from such loans would justify the risk.
Restricted Securities
Each Fund, except the Money Market, Treasury 2000, and Mid-Cap Stock Funds, may
invest up to 10% of its net assets in restricted securities. The Mid-Cap Stock
Fund may invest up to 15% of its net 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.
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.
Except for the Mid-Cap Stock Fund, 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 Growth and Income Stock, and Capital Appreciation
Stock Funds may invest up to 25% of assets, and the Balanced Fund may invest up
to 15% of assets in American Depository Receipts and foreign securities. The
Mid-Cap Stock Fund may invest up to 25% of its total assets in foreign
securities and has no limitations on ADRs.
<PAGE>
Put and Call Options
All Funds, except the Money Market Fund, may engage in the purchase, sale and
covered 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 clearing corporation will cancel the writer's position. 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.
<PAGE>
The Fund may write put and call options only if they are covered, and the
options must remain covered so long as a Fund is obligated as a writer.
An option position may be closed out only on an exchange or board of trade which
provides a secondary market for an option of the same kind. Although the Fund
will generally purchase or write only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market on an exchange or board of trade will exist for any particular option, or
at any particular time, and for some options no secondary market on an exchange
or board of trade may exist. In such event it might not be possible to effect
closing transactions in particular options, with the result that the Fund would
have to exercise its options in order to realize any profit and would incur
brokerage commissions upon the exercise of call options and upon the subsequent
disposition of underlying securities or instruments acquired through the
exercise of call options or upon the purchase of underlying securities or
instruments for the exercise of put options. If the Fund, as a covered call
option writer, is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security or instrument until
the option expires or it delivers the underlying security or instrument upon
exercise.
The use of put and call options is restricted to no more than twenty percent
(20%) of the net assets in the Fund using such option.
Financial Futures and Related Options
The Balanced, Bond, and Treasury 2000 Funds may engage in transactions in
financial futures contracts or related options, but only as a hedge against
changes in the values of securities held in the Fund's portfolio resulting from
market conditions or which it intends to purchase and where the transactions are
economically appropriate to the reduction of risks inherent in the ongoing
management of the Fund. A Fund may not purchase or sell financial futures or
purchase related options if, immediately thereafter, more than one-third of its
net assets would be hedged. In addition, a Fund may not purchase or sell
financial futures or purchase related options if, immediately thereafter, the
sum of the amount of margin deposits on the Fund's existing futures positions
and premiums paid for related options would exceed five percent (5%) of the
market value of the Fund's total assets.
Unlike when a Fund purchases or sells a security, no price is paid or received
by the Fund upon the purchase or sale of a futures contract. Initially, the Fund
will be required to deposit with the custodian under the name of the futures
commission merchant an amount of cash or U.S. Treasury bills, known as initial
margin. The nature of initial margin in futures transactions is different from
that of margin in securities transactions in that a futures contract margin does
not involve the borrowing of funds by a customer to finance the transaction.
Rather, the initial margin is in the nature of a performance bond or a good
faith deposit on a contract which is returned to the Fund upon termination of
the Fund's contract assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to or from the custodian will be
made on a daily basis as the price of the underlying securities or instruments
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "mark to the market." At any time prior to
expiration of the futures contract, the Fund may elect to close the position by
taking an opposite position which will operate to terminate the Fund's position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.
<PAGE>
There are several risks in connection with the use of financial futures as a
hedging device. One risk arises because of the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities or instruments which are the subject of the hedge. The price of
the futures contract may move more than or less than the price of the securities
or instruments being hedged. If the price of the futures contract moves less
than the price of the securities or instruments which are the subject of the
hedge, the hedge will not be fully effective but, if the price of the securities
or instruments being hedged has moved in an unfavorable direction, the Fund
would be in a better position than if it had not hedged at all. If the price of
the securities being hedged has moved in a favorable direction, this advantage
will be partially offset by the futures. If the price of the futures contract
moves more than the price of the securities or instruments being hedged, the
Fund will experience either a loss or a gain on the futures contract which will
not be completely offset by movements in the price of the securities or
instruments. To compensate for the imperfect correlation of movements in the
price of securities or instruments being hedged and movements in the price of
the futures contracts, the Fund may buy or sell financial futures contracts in a
greater dollar amount than the dollar amount of securities being hedged if the
historical volatility of the prices of such securities has been greater than the
historical volatility of the futures. Conversely, the Fund may buy or sell fewer
financial futures contracts if the historical volatility of the price of the
securities being hedged is less than the historical volatility of the futures.
The financial impact of any use of financial futures is subject to movements in
interest rates. For example, if the Fund is hedged against the possibility of a
rise in interest rates, adversely affecting the value of bonds held in its
portfolio, and bond prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its bonds which it has hedged because it
will have offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the rising market.
The Fund may have to sell securities at a time when it may be disadvantageous to
do so.
Stock Index Futures and Related Options
The Balanced, Growth and Income Stock, Capital Appreciation Stock, and Mid-Cap
Stock 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
<PAGE>
"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 futures 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
<PAGE>
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.
Lower-Rated Corporate Debt Securities
As described in the prospectus, each fund, other than the Money Market Fund, may
make certain investments including corporate debt obligations that are unrated
or rated in the lower rating categories (i.e., ratings of BB or lower by
Standard & Poor's or Ba or lower by Moody's). Bonds rated BB or Ba or below by
Standard & Poor's or Moody's (or comparable unrated securities) are commonly
referred to as "lower-rated" securities or as "junk bonds" and are considered
speculative and may be questionable as to principal and interest payments. In
some cases, such bonds may be highly speculative, have poor prospects for
reaching investment standing and be in default. As a result, investment in such
bonds will entail greater speculative risks than those associated with
investment in investment-grade bonds (i.e., bonds rated AAA, AA, A or BBB by
Standard & Poor's or Aaa, Aa, A or Baa by Moody's).
An economic downturn could severely affect the ability of highly leveraged
issuers of junk bonds to service their debt obligations or to repay their
obligations upon maturity. Factors having an adverse impact on the market value
of lower rated securities will have an adverse effect on a fund's net asset
value to the extent it invests in such securities. In addition, a fund may incur
additional expenses to the extent it is required to seek recovery upon a default
in payment of principal or interest on its portfolio holdings.
The secondary market for junk bond securities, which is concentrated in
relatively few market makers, may not be as liquid as the secondary market for
more highly rated securities, a factor which may have an adverse effect on a
fund's ability to dispose of a particular security when necessary to meet its
liquidity needs. Under adverse market or economic conditions, the secondary
market for junk bond securities could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result,
the Investment Adviser could find it more difficult to sell these securities or
may be able to sell the securities only at prices lower than if such securities
were widely traded. Prices realized upon the sale of such lower rated or unrated
securities, under these circumstances, may be less than the prices used in
calculating a fund's net asset value.
Since investors generally perceive that there are greater risks associated with
lower-rated debt securities, the yields and prices of such securities may tend
to fluctuate more than those for higher
<PAGE>
rated securities do. In the lower quality segments of the fixed-income
securities market, changes in perceptions of issuers' creditworthiness tend to
occur more frequently and in a more pronounced manner than do changes in higher
quality segments of the fixed-income securities market resulting in greater
yield and price volatility.
Another factor which causes fluctuations in the prices of fixed-income
securities is the supply and demand for similarly rated securities. In addition,
the prices of fixed-income securities fluctuate in response to the general level
of interest rates. Fluctuations in the prices of portfolio securities subsequent
to their acquisition will not affect cash income from such securities but will
be reflected in a fund's net asset value.
Lower-rated (and comparable non-rated) securities tend to offer higher yields
than higher-rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers, increasing the risks of loss of income and
principal versus higher-rated securities. In addition to the risk of default,
there are the related costs of recovery on defaulted issues. The Investment
Adviser will attempt to reduce these risks through diversification of these
funds' portfolios and by analysis of each issuer and its ability to make timely
payments of income and principal, as well as broad economic trends in corporate
developments.
Foreign Government Securities
All of the funds other than the Treasury 2000 Fund may invest in debt
obligations of foreign governments and governmental agencies, including those of
emerging countries. Investment in sovereign debt obligations involves special
risks not present in debt obligations of corporate issuers. The issuer of the
debt or the governmental authorities that control the repayment of the debt may
be unable or unwilling to repay principal or interest when due in accordance
with the terms of such debt, and the funds may have limited recourse in the
event of a default. Periods of economic uncertainty may result in the volatility
of market prices of sovereign debt and in turn the fund's net asset value, to a
greater extent than the volatility inherent in debt obligations of U.S. issuers.
A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its foreign currency reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the sovereign debtor's policy
toward principal international lenders and the political constraints to which a
sovereign debtor may be subject.
Convertible Securities
The Balanced, Growth and Income Stock, Capital Appreciation Stock, and Mid-Cap
Stock Funds may each invest in convertible securities. Convertible securities
may include corporate notes or preferred stock but are ordinarily a long-term
debt obligation of the issuer convertible at a stated conversion rate into
common stock of the issuer. As with all debt and income-bearing securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality. However, when the market price of
the common stock underlying a convertible security exceeds the conversion price,
the price of the convertible security tends to reflect the value of the
underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield basis,
and thus may not decline in price to the same extent as the underlying common
stock. Convertible securities rank senior to common stocks in an issuer's
capital structure and are consequently of higher quality and
<PAGE>
entail less risk than the issuer's common stock. In evaluating a convertible
security, the fund's Investment Adviser gives primary emphasis to the
attractiveness of the underlying common stock. The convertible debt securities
in which the funds may invest are subject to the same rating criteria as that
fund's investments in non-convertible debt securities. Convertible debt
securities, the market yields of which are substantially below prevailing yields
on non-convertible debt securities of comparable quality and maturity, are
treated as equity securities for the purposes of a fund's investment policies or
restrictions.
Repurchase Agreements
Each fund may enter into repurchase agreements. In a repurchase agreement, a
security is purchased for a relatively short period (usually not more than 7
days) subject to the obligation to sell it back to the issuer at a fixed time
and price plus accrued interest. The funds will enter into repurchase agreements
only with member banks of the Federal Reserve System, U.S. Central Credit Union,
and with "primary dealers" in U.S. Government securities. The Investment Adviser
will continuously monitor the creditworthiness of the parties with whom the
funds enter into repurchase agreements.
The Trust has established a procedure providing that the securities serving as
collateral for each repurchase agreement must be delivered to the Trust's
custodian either physically or in book-entry form and that the collateral must
be marked to market daily to ensure that each repurchase agreement is fully
collateralized at all times. In the event of bankruptcy or other default by a
seller of a repurchase agreement, a fund could experience delays in liquidating
the underlying securities during the period in which the fund seeks to enforce
its rights thereto, possible subnormal levels of income, declines in value of
the underlying securities or lack of access to income during this period and the
expense of enforcing its rights.
Reverse Repurchase Agreements
Each fund may also enter into reverse repurchase agreements which involve the
sale of U.S. Government securities held in its portfolio to a bank with an
agreement that the fund will buy back the securities at a fixed future date at a
fixed price plus an agreed amount of "interest" which may be reflected in the
repurchase price. Reverse repurchase agreements are considered to be borrowings
by the fund entering into them. Reverse repurchase agreements involve the risk
that the market value of securities purchased by the fund with proceeds of the
transaction may decline below the repurchase price of the securities sold by the
fund which it is obligated to repurchase. A fund that has entered into a reverse
repurchase agreement will also continue to be subject to the risk of a decline
in the market value of the securities sold under the agreements because it will
reacquire those securities upon effecting their repurchase. To minimize various
risks associated with reverse repurchase agreements, each fund will establish
and maintain with the Trust's custodian a separate account consisting of liquid
securities, of any type or maturity, in an amount at least equal to the
repurchase prices of the securities (plus any accrued interest thereon) under
such agreements. No fund will enter into reverse repurchase agreements and other
borrowings (except from banks as a temporary measure for extraordinary emergency
purposes) in amounts in excess of 30% of the fund's total assets (including the
amount borrowed) taken at market value. No fund will use leverage to attempt to
increase income. No fund will purchase securities while outstanding borrowings
exceed 5% of the fund's total assets. Each fund will enter into reverse
repurchase agreements only with federally insured banks or credit unions which
are approved in advance as being creditworthy by the Trustees. Under procedures
established by the Trustees, the Investment Adviser will monitor the
creditworthiness of the institutions involved.
<PAGE>
U.S. Government Securities
All of the funds may purchase U.S. Government Securities. U.S. Government
Securities are obligations issued or guaranteed by the U.S. Government, its
agencies, authorities or instrumentalities.
Certain U.S. Government securities, including U.S. Treasury bills, notes and
bonds, and Government National Mortgage Association certificates ("Ginnie
Maes"), are supported by the full faith and credit of the U.S. Certain other
U.S. Government securities, issued or guaranteed by Federal agencies or
government sponsored enterprises, are not supported by the full faith and credit
of the U.S. Government, but may be supported by the right of the issuer to
borrow from the U.S. Treasury. These securities include obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Macs"), and obligations
supported by the credit of the instrumentality, such as Federal National
Mortgage Association Bonds ("Fannie Maes"). No assurance can be given that the
U.S. Government will provide financial support to such Federal agencies,
authorities, instrumentalities and government sponsored enterprises in the
future. U.S. Government Securities may also include zero coupon bonds.
Ginnie Maes, Freddie Macs and Fannie Maes are mortgage-backed securities which
provide monthly payments which are, in effect, a "pass-through" of the monthly
interest and principal payments (including any prepayments) made by individual
borrowers on the pooled mortgage loans. Collateralized mortgage obligations
("CMOs") in which the fund may invest are securities issued by a corporation or
a U.S. Government instrumentality that are collateralized by a portfolio of
mortgages or mortgage-backed securities. Mortgage-backed securities may be less
effective than traditional debt obligations of similar maturity at maintaining
yields during periods of declining interest rates. (See "Mortgage-Backed and
Asset-Backed Securities.")
<PAGE>
Each fund may invest in separately traded principal and interest components of
securities guaranteed or issued by the U.S. Treasury if such components are
traded independently under the Separate Trading of Registered Interest and
Principal of Securities program ("STRIPS").
All of the funds may acquire securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies, authorities or instrumentalities
in the form of custody receipts. Such receipts evidence ownership of future
interest payments, principal payments or both on certain notes or bonds issued
by the U.S. Government, its agencies, authorities or instrumentalities. For
certain securities law purposes, custody receipts are not considered obligations
of the U.S. Government.
Mortgage-Backed and Asset-Backed Securities
The Money Market, Bond, and Balanced Funds may invest in mortgage-backed
securities, which represent direct or indirect participation in, or are
collateralized by and payable from, fixed rate or variable rate mortgage loans
secured by real property. These funds may also invest in fixed or variable rate
asset-backed securities, which represent participation in, or are secured by and
payable from, assets such as motor vehicle installment sales, installment loan
contracts, leases of various types of real and personal property, receivables
from revolving credit (i.e., credit card) agreements and other categories of
receivables. Such assets are securitized though the use of trusts and special
purpose corporations. Payments or distributions of principal and interest may be
guaranteed up to certain amounts and for a certain time period by a letter of
credit or a pool insurance policy issued by a credit union or other financial
institution unaffiliated with the Trust, or other credit enhancements may be
present.
<PAGE>
Mortgage-backed and asset-backed securities are often subject to more rapid
repayment than their stated maturity date would indicate as a result of the
pass-through of prepayments of principal on the underlying loans. A fund's
ability to maintain positions in such securities will be affected by reductions
in the principal amount of such securities resulting from prepayments, and its
ability to reinvest the returns of principal at comparable yields is subject to
generally prevailing interest rates at that time. To the extent that a fund
invests in mortgage-backed and asset-backed securities, the values of its
portfolio securities will vary with changes in market interest rates generally
and the differentials in yields among various kinds of U.S. Government
securities and other mortgage-backed and asset-backed securities.
Asset-backed securities present certain additional risks that are not presented
by mortgage backed securities because asset-backed securities generally do not
have the benefit of a security interest in collateral that is comparable to
mortgage assets. Credit card receivables are generally unsecured and the debtors
on such receivables are entitled to the protection of a number of state and
federal consumer credit laws, many of which give such debtors the right to
set-off certain amounts owed on the credit cards, thereby reducing the balance
due. Automobile receivables generally are secured, but by automobiles rather
than residential real property. Most issuers of automobile receivables permit
the loan servicers to retain possession of the underlying obligations. If the
servicer were to sell these obligations to another party, there is a risk that
the purchaser would secure an interest superior to that of the holders of the
asset-backed securities. In addition, because of the large number of vehicles
involved in a typical issuance and technical requirements under state laws, the
trustee for the holders of the automobile receivables may not have a proper
security interest in the underlying automobiles. Therefore, there is the
possibility that, in some cases, recoveries on repossessed collateral may not be
available to support payments on these securities.
Forward Commitment and When-Issued Securities
Each fund may purchase securities on a when-issued or forward commitment basis.
"When-issued" refers to securities whose terms are specified and for which a
market exists, but which have not been issued. Each fund will engage in
when-issued transactions with respect to securities purchased for its portfolio
in order to obtain what is considered to be an advantageous price and yield at
the time of the transaction. For when-issued transactions, no payment is made
until delivery is due, often a month or more after the purchase. In a forward
commitment transaction, a fund contracts to purchase securities for a fixed
price at a future date beyond customary settlement time.
When a fund engages in forward commitment and when-issued transactions, it
relies on the seller to consummate the transaction. The failure of the issuer or
seller to consummate the transaction may result in the fund's losing the
opportunity to obtain a price and yield considered to be advantageous. The
purchase of securities on a when-issued or forward commitment basis also
involves a risk of loss if the value of the security to be purchased declines
prior to the settlement date.
On the date a fund enters into an agreement to purchase securities on a
when-issued or forward commitment basis, the fund will segregate in a separate
account cash or liquid securities, of any type or maturity, equal in value to
the fund's commitment. These assets will be valued daily at market, and
additional cash or securities will be segregated in a separate account to the
extent that the total value of the assets in the account declines below the
amount of the when-issued commitments. Alternatively, a fund may enter into
offsetting contracts for the forward sale of other securities that it owns.
<PAGE>
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). Except as noted below, 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. Except for the Mid-Cap Stock Fund, 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 financial 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.) The Mid-Cap Stock Fund
may invest in securities related to 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. The Mid-Cap Stock Fund may engage in such activities.
<PAGE>
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. The Mid-Cap Stock Fund may invest up to fifteen
percent (15%) of the value of its net assets in illiquid 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 (ADRs are not considered foreign securities)
in excess of ten percent (10%) of the value of its total assets. The
Mid-Cap Stock Fund may invest up to twenty-five percent (25%) of the value
of its total assets in foreign securities.
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
Treasury 2000, Bond, Balanced, Growth and Income Stock, Capital Appreciation
Stock, and Mid-Cap Stock 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.
<PAGE>
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
adversely affect Net Asset Value or net investment income.
The Treasury 2000, Bond, Balanced, Growth and Income Stock, Capital Appreciation
Stock, and Mid-Cap Stock Funds will trade whenever, in management's view,
changes are appropriate to achieve the stated investment objectives. Management
does not anticipate that high portfolio turnover will be required in the stock
funds and stock portion of the Balanced Fund 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 in the stock funds 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). In the Bond Fund and the bond portion of the Balanced Fund,
management employs active trading techniques which may result in portfolio
turnover rates of 500% or higher. Such active trading increased the funds'
transaction costs but is intended to more than compensate for such increased
costs by capitalizing on temporary mispricing of securities in the bond market
due to imbalances in supply and demand or changing perceptions of an issuer's
credit quality or prospects.
MANAGEMENT OF THE FUND
Ultra Series Fund is governed by a Board of Trustees. The Trustees have the
duties and responsibilities set forth under the applicable laws of the State of
Massachusetts, including but not limited to the management and supervision of
the funds.
The board, from time to time, may include individuals who may be deemed to be
affiliated persons of CIMCO, the funds' adviser. At all times, however, the
majority of board members will not be affiliated with CIMCO or the funds.
The funds do not hold annual shareholder meetings, but may hold special meetings
for such purposes as electing or removing board members, changing fundamental
policies, approving certain management contracts, approving or amending a 12b-1
plan, or as otherwise required by the 1940 Act.
Officers and Trustees
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address Fund Position(s) Principal Occupation(s)
For the Past 5 Years
Michael S. Daubs* President, CIMCO Inc.
5910 Mineral Point Road 1983 - Present President, 1982 - Present
Madison, WI 53705 Trustee, CUNA Mutual Life Insurance Company
Age - 55 Chief Investment Officer, 1973 - Present
CUNA Mutual Insurance Society
Chief Investment Officer, 1990 - Present
<PAGE>
Lawrence R. Halverson* Vice President, CIMCO Inc.
5910 Mineral Point Road 1987 - Present Senior Vice President, 1996 - Present
Madison, WI 53705 Secretary, Vice President, 1987 - 1996
Age - 53 1992 - Present CUNA Brokerage Services, Inc.
Trustee, President, 1996 - 1998
1997 - Present
Robert M. Buckingham* Assistant Secretary CUNA Mutual Life Insurance Company
2000 Heritage Way 1993-Present Vice President and Valuation Actuary
Waverly, IA 50677 1991-Present
Age - 44
Michael G. Joneson* Treasurer, CUNA Mutual Life Insurance Company
2000 Heritage Way and Assistant Vice President - Controller, Treasurer
Waverly, IA 50677 Secretary 1986-Present
Age - 52 1992-Present
Gwendolyn M. Boeke Trustee Evangelical Lutheran Church in America
2000 Heritage Way 1988 - Present Area Representative - Iowa
Waverly, IA 50677 1990 - Present
Age - 64
Alfred L. Disrud Trustee Planned Giving Services
2000 Heritage Way 1987 - Present Owner
Waverly, IA 50677 1986 - Present
Age - 78
Keith S. Noah Trustee Noah & Smith (Attorneys)
2000 Heritage Way 1984 - Present Partner
Waverly, IA 50677 1948 - Present
Age - 78
Thomas C. Watt Trustee MidAmerican Energy Company
2000 Heritage Way 1986 - Present Manager - Business Initiatives
Waverly, IA 50677 1997 - Present
Age - 62
MidAmerican Energy Company
District Manager
1995 - 1997
Midwest Power Systems, Inc.
Division Manager
1992 - 1995
</TABLE>
*An interested person within the meaning of the Act.
<PAGE>
Trustee Compensation
Aggregate Compensation Total Compensation from
Name, Position from Fund(1) Fund and Fund Complex(1)(2)
Michael S. Daubs(3) None None
Lawrence R. Halverson(3) None None
Gwendolyn M. Boeke $4,000 $8,000
Alfred L. Disrud $4,000 $8,000
Keith S. Noah $4,000 $8,000
Thomas C. Watt $4,000 $8,000
(1)Amounts for the fiscal year ending December 31, 1999.
(2)"Fund Complex" includes the Ultra Series Fund and MEMBERS Mutual Funds.
(3)Non-compensated 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, 2000, the separate accounts of the
Company and certain qualified plans 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 March 31, 1999, 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 March
31, 1999, the following persons had a beneficial interest exceeding five percent
(5%):
Percentage of
Fund Beneficial Owner Holdings Net Assets
Treasury 2000 CUNA Mutual Life $615,007.40 31.99%
Insurance Company
2000 Heritage Way
Waverly, IA 50677
<PAGE>
Code of Ethics
The Ultra Series Fund, its adviser CIMCO, Inc., and its principal underwriter,
CUNA Brokerage Services, Inc., have adopted codes of ethics pursuant to Rule
17j-1. The codes permit access people to invest in securities, including
securities that may be purchased or held by the Fund, for their own accounts.
The codes, however, establish certain procedures and prohibitions on investments
in securities for personal accounts. The codes are on public file with, and are
available from, the SEC.
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 effective May 1,
1997, 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
Money Market 0.45 %
Treasury 2000 0.45 %
Bond 0.55 %
Balanced 0.70 %
Growth & Income Stock 0.60 %
Capital Appreciation Stock 0.80 %
Mid-Cap Stock 1.00 %
<PAGE>
The total fee paid to the Investment Adviser during the years ended December 31
was as follows:
1997 $5,320,543
1998 $12,547,473
1999 $17,105,630
The Investment Adviser or subadviser (as applicable) 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.
The Adviser contracts 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. The Adviser paid $1,268,229, $2,800,753 and $3,827,693 for those
services in 1997, 1998, and 1999, respectively.
The Adviser contracts 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. The Adviser paid
$16,404, $0 and $0 for those services in 1997, 1998 and 1999, respectively.
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.
MANAGEMENT AGREEMENTS WITH SUBADVISERS
As described in the prospectus, CIMCO manages the assets of the Mid-Cap Stock
Fund using a "manager of managers" approach under which CIMCO may allocate some
of the fund's assets among one or more "specialist" subadvisers (each, a
"Subadviser").
Even though Subadvisers have day-to-day responsibility over the management of a
portion of the Mid-Cap Stock Fund, CIMCO retains the ultimate responsibility for
the performance of these funds and will oversee the Subadvisers and recommend
their hiring, termination, and replacement.
CIMCO may, at some future time, employ a subadvisory or "manager of managers"
approach to other new or existing funds in addition to the Mid-Cap Stock Fund.
As of the date of the prospectus, Wellington Management Company llp is the only
subadviser managing some of the assets of the Mid-Cap Stock Fund. Wellington
Management began managing
<PAGE>
these assets on May 1, 2000. The prospectus contains a description of Wellington
Management. Wellington Management's services are paid for out of the management
fee CIMCO receives for the Mid-Cap Stock Fund. There is no additional fee
charged to shareholders for Wellington Management's services.
The directors and principal officers of the Investment Adviser are as follows:
Janice C. Doyle Assistant Secretary
Michael S. Daubs Director and President
Lawrence R. Halverson Senior Vice President
Joyce A. Harris Director and Chair
James C. Hickman Director
Michael B. Kitchen Director
Daniel J. Larson Vice President
Thomas J. Merfeld Vice President and Secretary
George A. Nelson Director and Vice Chair
Jeffrey B. Pantages Senior Vice President
CUNA Brokerage Services, Inc., 5910 Mineral Point Road, Madison, WI 53705-4456
is the Trust's principal underwriter.
EXPENSES OF THE FUND
The Money Market, Bond, Balanced, Growth and Income Stock, Capital Appreciation
Stock, and Mid-Cap Stock Funds are currently obligated to pay to the Investment
Adviser the Management Fee set forth in the 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 provides
the Funds with administrative, fund accounting, transfer agency and shareholder
services. The Adviser pays the Company .15% of the average value of the daily
net assets for these services.
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.
The Company absorbed $48,308, $0 and $0 for the years ended December 31, 1997,
December 31, 1998, and December 31, 1999, respectively.
DISTRIBUTION PLAN AND AGREEMENT
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
<PAGE>
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 or to service Class C shareholders. 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 or to service Class C shareholders. 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 or service
Class C shareholders include, among other: (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. CUNA
Brokerage Services, Inc. did not incur any expenses in 1999 relating to the sale
of Class C 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 became effective 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.
TRANSFER AGENT
CUNA Mutual Life Insurance Company, 2000 Heritage Way, Waverly, IA 50677, is the
transfer agent and dividend disbursing agent for the Fund. As transfer agent,
CUNA Mutual maintains the shareholder records and reports. CIMCO pays CUNA
Mutual Life Insurance Company .15% of the
<PAGE>
average daily net assets for its transfer agency services and other services
described in the Fund Expenses section above.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, MA 02110, 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 ACCOUNTANTS
The financial statements for the fiscal year ended December 31, 1999 have been
included herein and elsewhere in the Registration Statement in reliance upon the
reports of PricewaterhouseCoopers LLP, 100 East Wisconsin Avenue, Milwaukee, WI
53202, independent accountants, and upon the authority of said firm as experts
in accounting and auditing. The financial statements for fiscal years ended
December 31, 1998 and prior have been audited by KPMG LLP.
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 or
Sub-Adviser ("Advisers" for purposes of this section), is considered to be in
addition to and not in lieu of services required to be performed by the Advisers
under its contract with the Ultra Series Fund. Research obtained on behalf of
the Ultra Series Fund may be used by the Advisers in connection with other
clients of the Advisers. Conversely, research received from placement of
brokerage for other accounts may be used by the Advisers in managing investments
of the Ultra Series Fund. Therefore, the correlation of the cost of research to
individual clients of the Advisers, including the Ultra Series Fund, is
indeterminable and cannot practically be allocated among the Ultra Series Fund
and the Advisers' 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
<PAGE>
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, 1997, Capital Appreciation Stock
Fund paid $186,338, Growth and Income Stock 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. For the year ended December 31, 1998,
Capital Appreciation Stock Fund paid $358,785, Growth and Income Stock Fund paid
$372,675, and Balanced Fund paid $117,875 in brokerage fees. There were no
brokerage fees paid by Bond, Money Market, or Treasury 2000 Funds in 1998. For
the year ended December 31, 1999, Capital Appreciation Stock Fund paid $563,777,
Growth and Income Stock Fund paid $497,353, Balanced Fund paid $131,328, and the
Mid-Cap Stock Fund paid $67,763 in brokerage fees. There were no brokerage fees
paid by the Bond, Money Market or the Treasury 2000 Funds in 1999.
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 Advisers in "bunching of trades" wherein one purchase or sale transaction
representing several different client accounts is placed with a broker. The
Advisers have 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
Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest of the Trust without par
value. Under the Declaration of Trust, the Trustees have the authority to create
and classify shares of beneficial interest in separate series, without further
action by shareholders. As of the date of this SAI, the Trustees have authorized
shares of the seven funds described in the prospectus. Additional series and/or
classes may be added in the future. The Declaration of Trust also authorizes the
Trustees to classify and reclassify the shares of the Trust, or new series of
the Trust, into one or more classes. As of the date of this SAI, the Trustees
have authorized the issuance of two classes of shares of the fund, designated as
Class C and Class Z. Additional classes of shares may be offered in the future.
<PAGE>
The shares of each class of each fund represent an equal proportionate interest
in the aggregate net assets attributable to that class of that fund. The
different classes of a fund may bear different expenses relating to the cost of
holding shareholder meetings necessitated by the exclusive voting rights of any
class of shares.
Dividends paid by each fund, if any, with respect to each class of shares will
be calculated in the same manner, at the same time and on the same day and will
be in the same amount, except for differences resulting from the fact that: (i)
the distribution and service fees relating to Class C or Class Z shares will be
borne exclusively by that class; (ii) each of Class C shares and Class Z shares
will bear any other class expenses properly allocable to such class of shares,
subject to the requirements imposed by the Internal Revenue Service on funds
having a multiple-class structure. Similarly, the NAV per share may vary
depending on whether Class C shares or Class Z shares are purchased.
In the event of liquidation, shareholders of each class of each fund are
entitled to share pro rata in the net assets of the class of the fund available
for distribution to these shareholders. Shares entitle their holders to one vote
per dollar value of shares, are freely transferable and have no preemptive,
subscription or conversion rights. When issued, shares are fully paid and
non-assessable, except as set forth below.
Share certificates will not be issued.
Limitation of Trustee and Officer Liability
The Declaration further provides that the Trust shall indemnify each of its
Trustees and officers against liabilities and expenses reasonably incurred by
them, in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Trust.
The Declaration does not authorize the Trust to indemnify any Trustee or officer
against any liability to which he or she would otherwise be subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.
Limitation of Interseries Liability
All persons dealing with a fund must look solely to the property of that
particular fund for the enforcement of any claims against that fund, as neither
the Trustees, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of a fund or the Trust. No fund is liable for
the obligations of any other fund. Since the funds use a combined prospectus,
however, it is possible that one fund might become liable for a misstatement or
omission in the prospectus regarding another fund with which its disclosure is
combined. The Trustees have considered this factor in approving the use of the
combined prospectus.
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
<PAGE>
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.
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.
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 Bond, Balanced, Growth and Income
Stock, Capital Appreciation Stock, and Mid-Cap Stock 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.
<PAGE>
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.
Treasury 2000, Bond, Balanced, Growth and Income Stock, Capital Appreciation
Stock, and Mid-Cap Stock 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
<PAGE>
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 complet
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 Fund intends that each of the Funds will qualify each year as a regulated
investment company under Subchapter M of Chapter 1 of the Code. If, as intended,
each Fund continues to qualify as a regulated investment company and distributes
substantially all of its net investment income and net capital gains to its
shareholders, then, under the provisions of Subchapter M, there should be little
or no income or gains taxable to it. In addition, each Fund intends to comply
with other distribution rules specified in Code so that it will not incur a 4%
nondeductible federal excise tax that otherwise would apply.
Each Fund of the Trust must meet several requirements to maintain its status as
a regulated investment company. These requirements include the following: (1) at
least 90% of the Fund's gross income must be derived from dividends, interest,
payments with respect to securities loaned, and gains from the sale
<PAGE>
or disposition of securities; and (2) at the close of each quarter of the Fund's
taxable year, (a) at least 50% of the value of the Fund's total assets must
consist of cash, U.S. Government securities and other securities (no more than
5% of the value of the Fund may consist of such other securities of any one
issuer, and the Fund must not hold more than 10% of the outstanding voting stock
of any issuer), and (b) the Fund must not invest more than 25% of the value of
its total assets in the securities of any one issuer (other than U.S. Government
securities).
Each of the Funds also intends to comply with section 817(h) of the Code and the
regulations issued thereunder, which impose certain investment diversification
requirements on separate accounts of life insurance companies that are used to
support variable annuity contracts ("VA contracts") and variable life insurance
policies ("VLI policies"). In general, these requirements are that no more than
55% of the value of the assets of a Fund may be represented by any one
investment; no more than 70% by any two investments; no more than 80% by any
three investments; and no more than 90% by any four investments. For these
purposes, all securities of the same issuer are treated as a single investment
and each United States government agency or instrumentality is treated as a
separate issuer. These diversification requirements are in addition to the
requirements of subchapter M and of the Investment Company Act, and may affect
the securities in which a Fund may invest. In order to comply with the current
or future requirements of section 817(h) (or related provisions of the Code),
the Trust may be required, for example, to alter the investment objectives of
one or more of the Funds. (To the extent required by law, approval of owners of
VA contracts or VLI policies or of the Commission will be obtained before
changing investment objectives.)
If a Fund fails to qualify as a regulated investment company, it will be subject
to federal, and possibly state, corporate taxes on its taxable income and gains
(without any deduction for its distributions to its shareholders) and
distributions to its shareholders will constitute ordinary income to the extent
of such Fund's available earnings and profits. Owners of VA contracts and VLI
policies indirectly invested in such a Fund might be taxed currently on the
investment earnings under their contracts or policies and thereby lose the
benefit of tax deferral. In addition, if a Fund fails to comply with the
diversification requirements of section 817(h) of the Code and the regulations
thereunder, owners of VA contracts and VLI policies indirectly invested in the
Fund would be taxed on the investment earnings under their contracts or policies
and thereby lose the benefit of tax deferral. Accordingly, compliance with the
above rules is carefully monitored by the investment adviser and the Trust
intends that each Fund comply with these rules as they exist or as they may be
modified from time to time. Compliance with the tax requirements described above
may result in a reduction in the return under a Fund, since, to comply with the
above rules, the investments utilized (and the time at which such investments
are entered into and closed out) may be different from what the investment
adviser might otherwise believe desirable.
The foregoing discussion of federal income tax consequences is a general and
abbreviated summary based on tax laws and regulations in effect on the date of
this SAI. Tax law is subject to change by legislative, administrative or
judicial action. Each prospective investor should consult his or her own tax
adviser as to the tax consequences of investments in the Funds. For information
concerning the federal income tax consequences to the owners of VA contracts and
VLI policies, see the prospectuses for such contracts or policies. [For
information concerning the federal income tax consequences to plan participants,
see the summary plan description.]
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:
<PAGE>
(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 Bond, Balanced, Growth and Income
Stock, and Capital Appreciation Stock, and Mid-Cap Stock Funds will be
declared and reinvested quarterly in additional full and fractional
shares of the respective Fund.
(iii) All net realized short-term and long-term capital gains of the Ultra
Series Fund, if any, will be declared and distributed at least
annually, but in any event, no more frequently than allowed under SEC
rules, to the shareholders of each Fund to which such gains are
attributable.
(iv) Dividends on the Treasury 2000 Fund cannot be paid to its shareholders
(the Separate Accounts) during the taxable year since no cash will be
available for distribution until the securities are sold or mature. The
Fund is treated as if it paid a dividend of a certain amount without
actually paying the dividend if the shareholder consents to the
treatment ("consent dividend"). The Separate Accounts will file a
consent on Form 972 each year to include in gross income, as a taxable
dividend for that year, an amount computed to be sufficient to enable
the Fund to meet the distribution requirements necessary for the Fund
to be treated as a conduit and taxed as a regulated investment company.
Because there will be no periodic payment of interest on the Stripped
Treasury Securities held by the Treasury 2000 Fund, shareholders (i.e.,
the separate accounts or qualified plans) will be requested
periodically to sign consents to have a certain portion of the accrued
amount of discount treated as dividends. Currently the separate
accounts are the only shareholders of the Treasury 2000 Fund; it is
anticipated that any taxable income will be offset by a corresponding
deduction for an increase in reserves.
Options and Futures Transactions
The tax consequences of options transactions entered into by a Fund will vary
depending on the nature of the underlying security, whether the option is
written or purchased and finally, whether the "straddle" rules, discussed
separately below, apply to the transaction. When a Fund writes a call or a put
option on an equity or convertible debt security, the treatment for federal
income tax purposes of the premium that it receives will, subject to the
straddle rules, depend on whether the option is exercised. If the option expires
unexercised, or if the Fund enters into a closing purchase transaction, the Fund
will realize a gain (or loss if the cost of the closing purchase transaction
exceeds the amount of the premium) without regard to any unrealized gain or loss
on the underlying security. Any such gain or loss will be short-term capital
gain or loss, except that any loss on a "qualified" covered call stock option
that is not treated as part of a straddle may be treated as long-term capital
loss. If a call option written by a Fund is exercised, the Fund will recognize a
capital gain or loss from the sale of the underlying security, and will treat
the premium as additional sales proceeds. Whether the gain or loss will be
long-term or short-term will depend on the holding period of the underlying
security. If a put option written by a Fund is exercised, the amount of the
premium will reduce the tax basis of the security that the Fund then purchases.
If a put or call option that a Fund has purchased on an equity or convertible
debt security expires unexercised, the Fund will realize a capital loss equal to
the cost of the option. If the Fund enters into a closing sale transaction with
respect to the option, it will realize a capital gain or loss (depending on
whether the proceeds from the closing transaction are greater or less than the
cost of the option). The
<PAGE>
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.
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>
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. CUNA Brokerage
has not received underwriting commissions from the Ultra Series Fund for any of
the last three fiscal years.
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.
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 SAI.
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.
<PAGE>
The Ultra Series Fund may also distribute sales literature showing yield figures
for its Money Market and Bond Funds. Yield figures are based on historical
earnings and are not intended to indicate future performance. The yield of the
fund refers to the income generated by an investment in the fund over the stated
period. This income is then annualized, that is, the amount of income generated
by the investment during that period is assumed to be generated 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.
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
statistically fitted (average) trendline of the actual 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.
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.
<PAGE>
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 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)] x 100
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 at the close of business on the day prior to the first day
of the seven-day period.
Effective yield = [(1 + ((NCS-ES)/UV)) 365/7 - 1] x 100
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 at the close of business on the day prior to 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:
<PAGE>
Yield = [2 X (((NI - ES)/(U X UV)) + 1)6 - 1)] x 100
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 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, 3, 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] x 100
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.
<PAGE>
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] x 100
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.
FINANCIAL STATEMENTS
Data from the most recent annual report begins on the next page.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
Schedule of Investments
December 31, 1999
% Net Quality Rating Annualized Maturity Par/Shares
Assets (Unaudited)* Yield Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER 38.3%
Bell South Telecom Inc. A-1+/P-1 5.842% 01/19/00 $ 2,000,000 $ 1,994,350
Bell South Telecom Inc. A-1+/P-1 5.858 01/27/00 1,000,000 995,905
CIT Group Inc. A-1/P-1 6.002 02/17/00 3,500,000 3,473,360
Coca-Cola Company A-1/P-1 5.865 02/15/00 2,000,000 1,985,850
General Mills Inc. A-1/P-1 5.981 01/05/00 4,000,000 3,997,391
General Motors Acceptance Corporation A-1/P-1 6.130 02/01/00 2,000,000 1,989,770
Goldman Sachs Group Inc. A-1+/P-1 6.028 02/22/00 3,300,000 3,272,305
Lucent Technologies A-1/P-1 5.995 02/28/00 3,500,000 3,467,295
Madison Gas & Electric A-1+/P-1 6.115 01/10/00 3,000,000 2,995,500
Merrill Lynch & Co Inc A-1+/P-1 6.146 01/31/00 1,000,000 995,034
Merrill Lynch & Co Inc A-1+/P-1 6.121 01/31/00 2,000,000 1,990,100
Procter & Gamble Co. A-1+/P-1 5.983 02/24/00 3,500,000 3,469,445
Walt Disney Company A-1/P-1 6.055 02/09/00 1,000,000 993,641
-----------
31,619,946
-----------
U.S. GOVERNMENT 4.8%
U.S. Treasury Bill 5.192 03/02/00 3,000,000 2,974,380
U.S. Treasury Note 5.374 07/31/00 1,000,000 1,000,000
-----------
3,974,380
-----------
QUASI-GOVERNMENT/
GOVERNMENT SPONSORED 52.4%
Federal Home Loan Bank Discount Note 5.671 01/24/00 3,000,000 2,989,497
Federal Home Loan Bank Discount Note 5.652 03/08/00 5,000,000 4,949,005
Federal Home Loan Bank Discount Note 5.683 03/13/00 3,000,000 2,966,940
Federal Home Loan Bank Discount Note 5.893 04/17/00 4,000,000 3,932,233
Federal Farm Credit Discount Notes 5.671 03/23/00 3,000,000 2,962,485
Federal Farm Credit Discount Notes 5.980 04/03/00 1,000,000 985,017
Federal Home Loan Mortgage Corp. Discount Notes 5.694 01/10/00 2,500,000 2,496,556
Federal Home Loan Mortgage Corp. Discount Notes 5.629 01/14/00 3,000,000 2,994,129
Federal Home Loan Mortgage Corp. Discount Notes 5.691 01/20/00 1,688,000 1,683,118
Federal Home Loan Mortgage Corp. Discount Notes 5.710 02/01/00 1,000,000 995,256
Federal Home Loan Mortgage Corp. Discount Notes 5.715 02/07/00 2,000,000 1,988,674
Federal Home Loan Mortgage Corp. Discount Notes 5.763 04/04/00 2,000,000 1,970,755
Federal National Mortgage Association Discount Notes 5.738 01/18/00 5,000,000 4,986,849
Federal National Mortgage Association Discount Notes 5.688 02/03/00 3,000,000 2,984,792
Federal National Mortgage Association Discount Notes 5.056 03/03/00 439,000 435,420
Federal National Mortgage Association 5.899 04/26/00 2,000,000 1,994,212
Federal Home Loan Bank 5.092 03/29/00 2,000,000 1,999,971
-----------
43,314,909
-----------
REGISTERED INVESTMENT COMPANY 3.8%
State Street Prime Money Market 5.440 3,165,212 3,165,212
----------
TOTAL INVESTMENTS, MONEY MARKET
FUND $ 82,074,447
===========
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND
Schedule of Investments
December 31, 1999
% of Interest Maturity Principal
Net Assets Rate Date Amount Value
<S> <C> <C> <C> <C> <C>
GOVERNMENT GUARANTEED - U.S.:
U.S. Treasury Strip (Cost $1,730,799)* 100.0% 9.69% 11/15/00 $ 2,000,000 $ 1,901,538
===========
</TABLE>
Values of investment securities are determined as described in Note 2 of the
financial statements.
Interest rate on stripped Treasury Security represents annualized yield to
maturity at date of purchase.
*At December 31, 1999, the cost of securities for federal income tax
purposes was $1,730,799. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation....................................... $170,739
Gross unrealized depreciation....................................... -
---------
Net unrealized appreciation......................................... $170,739
=========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Schedule of Investments
December 31, 1999
% Net Annualized
Assets Yield Shares Value
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 1.7%
State Street Prime Money Market 5.440% 4,290,761 $ 4,290,761
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST: $4,290,761) 4,290,761
-----------
Quality Rating Coupon Maturity Par
LONG-TERM INVESTMENTS: (Unaudited)* Rate Date Amount
U.S. GOVERNMENT & AGENCY BONDS: 40.0%
GOVERNMENT NOTES 12.0%
U.S. Treasury Note AAA 5.875% 10/31/01 $3,000,000 2,981,250
U.S. Treasury Note AAA 5.875 11/15/04 3,000,000 2,942,814
U.S. Treasury Note AAA 6.500 05/15/05 2,000,000 2,001,250
U.S. Treasury Note AAA 5.250 02/15/29 5,000,000 4,137,500
U.S. Treasury Note AAA 7.500 02/15/05 3,000,000 3,130,314
U.S. Treasury Note AAA 7.875 11/15/04 3,000,000 3,174,375
U.S. Treasury Note AAA 6.000 08/15/09 3,000,000 2,907,189
U.S. Treasury Note AAA 6.500 08/15/05 3,000,000 3,000,939
U.S. Treasury Note AAA 10.750 02/15/03 5,000,000 5,603,125
-----------
29,878,756
-----------
GOVERNMENT AGENCIES 28.0%
Federal Home Loan Bank Note-CPI Floating Rate AAA 6.142 02/20/07 2,000,000 1,897,400
Federal Home Loan Bank AAA 6.000 08/15/02 4,500,000 4,434,399
FHLMC (Gold) - Pool D92482 AAA 7.000 08/01/18 1,736,163 1,698,193
FHLMC (Gold) - Pool D92564 AAA 7.000 10/01/18 2,731,058 2,671,331
Federal Home Loan Mortgage Corp. AAA 6.625 09/15/09 3,000,000 2,911,362
Federal Home Loan Mortgage Corp. AAA 6.010 04/26/04 5,000,000 4,813,335
Federal Home Loan Mortgage Corp. AAA 6.250 10/15/02 3,000,000 2,970,861
Federal Home Loan Mortgage Corp.CMO Series 2062 BA AAA 6.500 07/15/24 3,241,878 3,167,040
Federal National Mortgage Association 96-M6 G AAA 7.750 09/17/23 1,000,000 991,195
Federal National Mortgage Association AAA 7.000 08/27/12 3,000,000 2,865,921
Federal National Mortgage Association AAA 5.960 02/23/04 2,000,000 1,930,060
Federal National Mortgage Association Pool 519049 AAA 8.000 09/01/29 4,935,515 4,970,064
Federal National Mortgage Association Pool 525277 AAA 7.500 11/01/14 2,380,235 2,398,159
Federal National Mortgage Association Pool 525281 AAA 7.500 10/01/14 2,858,744 2,878,699
Federal National Mortgage Association
CMO Series 1998-2 D AAA 6.500 04/18/25 2,497,472 2,429,679
Federal National Mortgage Association
CMO Series 1998-47 AB AAA 6.250 06/18/25 6,682,264 6,426,768
Government National Mortgage Assn. Pool 493966 AAA 7.000 06/15/29 4,946,826 4,783,482
Government National Mortgage Assn. Pool 2811 AAA 8.000 09/20/29 9,941,217 10,013,590
Government National Mortgage Assn. Pool 436306 AAA 7.500 07/15/26 3,093,233 3,067,002
Government National Mortgage Assn.
Pool CMO Series 1998-6 A AAA 6.250 07/20/21 3,021,270 2,927,596
-----------
70,246,136
-----------
TOTAL U.S. GOVERNMENT & AGENCY BONDS
(COST: $101,567,079) 100,124,892
-----------
U.S. CORPORATE BONDS: 48.0%
BASIC MATERIALS 5.9%
Chemicals 3.6%
Rohm & Haas Co. A-3/A- 6.950 07/15/04 2,334,000 2,309,397
Soultia Inc. BAA-2/BBB 6.500 10/15/02 4,000,000 3,873,000
Tosco Corp. BAA-1/BBB 8.250 05/15/03 3,000,000 3,053,004
-----------
9,235,401
-----------
Paper/Forest Products 1.5%
Chesapeake Corp. BA-1/BBB 7.200 03/15/05 1,000,000 922,262
Georgia-Pacific Corp. BAA-2/BBB- 7.750 11/15/29 3,000,000 2,867,019
-----------
3,789,281
-----------
Steel 0.8%
Commercial Metals BAA-1/BBB+ 7.200 07/15/05 2,000,000 1,934,992
-----------
</TABLE>
<TABLE>
<CAPTION>
BOND FUND
Schedule of Investments (Continued)
December 31, 1999
% Net Quality Rating Coupon Maturity Par
Assets (Unaudited)* Rate Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GOODS 8.3%
Aerospace/Defense 2.4%
Lockheed Martin Corp BAA-3/BBB- 8.200% 12/01/09 $3,000,000 $ 2,992,203
United Tech Corp. A-2/A+ 6.625 11/15/04 3,200,000 3,134,752
-----------
6,126,955
-----------
Containers 3.9%
Crown Cork & Seal BAA-2/BBB 7.125 09/01/02 2,200,000 2,175,538
Owens-Illinois Inc. BA-1/BB+ 7.150 05/15/05 2,800,000 2,602,292
Owens Corning BAA-3/BBB- 7.500 05/01/05 2,500,000 2,376,628
Temple-Inland Inc. BAA-2/BBB+ 6.750 03/01/09 3,000,000 2,761,173
-----------
9,915,631
-----------
Environmental 1.0%
Waste Management Inc., Step Coupon(A) BAA-3/BBB 7.700 10/01/02 2,500,000 2,396,042
-----------
Manufacturing-Diversified 1.0%
Giddings & Lewis BA1/BBB 7.500 10/01/05 2,500,000 2,440,065
-----------
COMMUNICATION SERVICES 4.9%
Telephone 3.3%
AT&T Corp. A-1/AA- 6.500 03/15/29 3,000,000 2,576,094
GTE Corp. BAA-1/A 6.840 04/15/18 3,000,000 2,745,009
Worldcom A-3/A- 6.400 08/15/05 3,000,000 2,885,544
-----------
8,206,647
-----------
Telephone - Long Distance 1.6%
Sprint Capital Corp. BAA-1/BBB+ 6.500 11/15/01 4,000,000 3,965,148
-----------
CONSUMER CYCLICAL 5.0%
Auto Manufacturers 3.0%
Daimler Chrysler NA Holdings A-1/A+ 6.460 12/07/01 5,000,000 4,956,950
Ford Motor Company A-1/A+ 6.375 02/01/29 3,000,000 2,531,052
-----------
7,488,002
-----------
Retail-General 0.9%
JC Penney Co Inc. A-3/BBB+ 7.950 04/01/17 2,500,000 2,229,455
-----------
Retail-Specialty 1.1%
Autozone Inc. BAA-1/A- 6.000 11/01/03 3,000,000 2,811,687
-----------
CONSUMER STAPLES 4.9%
Drug Stores 1.2%
Bergen Brunswig BAA-2/BBB- 7.375 12/15/03 3,250,000 3,127,858
-----------
Food Retailers 2.9%
Great Atlantic & Pacific Tea BA-1/BBB- 7.750 04/15/07 3,500,000 3,204,803
Supervalu Inc. BAA-1/BBB+ 7.625 09/15/04 4,000,000 3,963,004
-----------
7,167,807
-----------
Media-TV/Radio/Cable 0.8%
CSC Holdings Inc. BA-2/BB+ 7.875 12/15/07 2,000,000 1,980,000
-----------
ENERGY 4.3%
Oil-Domestic 1.1%
Ashland, Inc. BAA-2/BBB 6.860 05/01/09 3,000,000 2,787,648
-----------
Oil-International 0.8%
Chevron Corp. AA-2/AA 6.625 10/01/04 2,000,000 1,973,414
-----------
</TABLE>
<TABLE>
<CAPTION>
BOND FUND
Schedule of Investments (Continued)
December 31, 1999
% Net Quality Rating Coupon Maturity Par
Assets (Unaudited)* Rate Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
Oil-Services 2.4%
Foster Wheeler Corp. BAA-3/BBB- 6.750% 11/15/05 $4,000,000 $ 3,362,384
Phillips Petroleum Co. A-3/A- 7.000 03/30/29 3,000,000 2,703,570
-----------
6,065,954
-----------
FINANCE 6.7%
Banks 2.4%
Citicorp A-1/A+ 6.375 01/15/06 3,000,000 2,840,112
Compass Bank A-1/A- 8.100 08/15/09 3,000,000 3,035,637
-----------
5,875,749
-----------
Financial Services 4.3%
Capital One Bank BAA-2/BBB- 6.760 07/23/02 3,000,000 2,942,784
General Electric Capital Corp. AAA/AAA 5.760 04/24/00 2,000,000 1,999,186
General Motors Acceptance Corp A-2/A 6.750 12/10/02 3,000,000 2,977,758
Heller Financial Inc., 144A (B) A-3/A- 7.375 11/01/09 3,000,000 2,921,592
-----------
10,841,320
-----------
HEALTHCARE 0.7%
Medical Services 0.7%
Columbia/HCA Healthcare Corporation BA-2/BB+ 6.125 12/15/00 1,800,000 1,763,399
-----------
TECHNOLOGY 1.6%
Computer Related 1.6%
Comdisco Inc. BAA-1/BBB+ 6.130 08/01/01 4,000,000 3,904,068
-----------
TRANSPORTATION 2.1%
Airlines 2.0%
American Airlines A-2/BBB 8.040 09/16/11 1,717,841 1,712,576
Delta Air Lines BAA-1/BBB 8.540 01/02/07 263,780 268,346
Southwest Airlines A-1/A 8.700 07/01/11 18,127 19,112
US Airways Inc., Pass Thru Cert.
Series 99-1 A-3/AA- 8.360 07/20/20 3,000,000 2,908,245
-----------
4,908,279
-----------
Railroads 0.1%
Union Pacific RR A-1/A- 6.540 07/01/15 401,389 364,054
-----------
UTILITIES 3.6%
Electric Power 3.6%
Alliant Energy Resources, 144A (B) A-3/A 7.375 11/09/09 1,500,000 1,460,272
Florida Power & Light A-2/A+ 7.375 06/01/09 2,700,000 2,656,460
MidAmerican Energy Holdings BAA-3/BBB- 6.960 09/15/03 3,000,000 2,940,513
Texas Utilities Co. BAA-2/BBB 6.375 02/01/04 2,000,000 1,916,262
-----------
8,973,507
-----------
TOTAL U.S. CORPORATE BONDS
(COST: $122,605,395) 120,272,363
-----------
NON-U.S. CORPORATE BONDS: 8.7%
FOREIGN ISSUES: 8.7%
Abbey National PLC AA-3/AA- 7.950 10/26/29 3,000,000 3,005,592
Barclays Bank PLC AA-3/AA- 7.400 12/15/09 2,000,000 1,968,322
Petro Geo-Services ASA, 144A (B) BAA-3/BBB 7.125 03/30/28 3,000,000 2,625,660
Pemex Finance LTD 144A (B) BAA-1/BBB 9.690 08/15/09 3,000,000 3,104,265
Teleglobe, Inc. BAA-1/BBB+ 7.200 07/20/09 3,000,000 2,810,097
Tyco International Group SA, 144A(B) BAA-1/A- 6.250 06/15/03 2,385,000 2,262,974
Tyco International Group SA, 144A(B) BAA-1/A- 6.875 09/05/02 3,000,000 2,954,613
YPF Sociedad Anonima BAA-1/BBB- 9.125 02/24/09 3,000,000 3,099,624
-----------
TOTAL NON-U.S. CORPORATE BONDS
(COST $21,981,212) 21,831,147
-----------
TOTAL INVESTMENTS, BOND FUND
(COST: $250,444,447)** $246,519,163
===========
</TABLE>
<PAGE>
BOND FUND
Schedule of Investments (Continued)
December 31, 1999
Values of investment securities are determined as described in Note 2 of
the financial statements.
*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, 1999, the cost of securities for federal income tax
purposes was $250,698,558. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation..................................$ 153,569
Gross unrealized depreciation...................................(4,332,964)
------------
Net unrealized depreciation....................................($4,179,395)
============
***If applicable, 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.
(A) Represents a security that had a coupon rate of 4.1% until October 1, 1994,
at which time the stated coupon rate became the effective rate.
(B) Restricted security sold within the terms of a private placement memorandum
exempt from registration under section 144A of the
Securities Act of 1933, as amended, and may be sold only to dealers in that
program or other "qualified institutional investors." On December 31,
1999, the total market value of these investments was $15,329,376, or 6.12%
of total net assets.
ABS Asset Backed Security
CMO Collateralized Mortgage Obligation
CPI Consumer Price Index
IO Interest Only
MTN Medium Term Note
PLC Public Limited Company
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments
December 31, 1999
% Net Annualized
Assets Yield Shares Value
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 4.2%
State Street Prime Money Market 5.440% 25,039,170 $ 25,039,170
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST: $25,039,170) 25,039,170
-----------
Quality Rating Coupon Maturity Par
LONG-TERM INVESTMENTS: (Unaudited)* Rate Date Amount
BONDS: 40.7%
U.S. GOVERNMENT & AGENCY BONDS: 17.7%
GOVERNMENT NOTES 8.1%
U.S. Treasury Notes AAA 5.875% 10/31/01 $5,000,000 4,968,750
U.S. Treasury Notes AAA 5.875 11/15/04 6,000,000 5,885,628
U.S. Treasury Notes AAA 7.000 07/15/06 3,500,000 3,586,408
U.S. Treasury Notes AAA 5.250 02/15/29 5,000,000 4,137,500
U.S. Treasury Notes AAA 6.375 09/30/01 5,000,000 5,010,940
U.S. Treasury Notes AAA 6.000 08/15/09 9,000,000 8,721,567
U.S. Treasury Notes AAA 5.625 09/30/01 5,000,000 4,950,000
U.S. Treasury Notes AAA 6.500 08/15/05 2,000,000 2,000,626
U.S. Treasury Notes AAA 10.750 02/15/03 3,000,000 3,361,875
U.S. Treasury Notes AAA 4.250 11/15/03 7,000,000 6,503,441
-----------
49,126,735
-----------
GOVERNMENT AGENCIES 9.6%
Federal Home Loan Bank Note-CPI Floating Rate AAA 6.142 02/20/07 5,000,000 4,743,500
Federal Home Loan Mortgage Corp. AAA 6.625 09/15/09 2,700,000 2,620,226
Federal Home Loan Mortgage Corp. AAA 6.010 04/26/04 5,000,000 4,813,335
Federal Home Loan Mortgage Corp. AAA 6.250 10/15/02 3,000,000 2,970,861
Federal Home Loan Mortgage Corp. CMO Series 2134 H AAA 6.500 12/15/24 4,009,002 3,860,978
Federal Home Loan Mortgage Corp. CMO Series 2062 BA AAA 6.500 07/15/24 3,241,878 3,167,040
Federal National Mortgage Assn. AAA 7.000 08/27/12 3,000,000 2,865,921
Federal National Mortgage Assn. Pool 50564 AAA 7.500 04/01/22 2,137,611 2,123,696
Federal National Mortgage Assn. Pool 50665 AAA 7.500 12/01/22 2,866,141 2,847,483
Federal National Mortgage Assn. AAA 5.960 02/23/04 2,000,000 1,930,060
Federal National Mortgage Assn. Pool 519049 AAA 8.000 09/01/29 4,935,515 4,970,064
Federal National Mortgage Assn. - 96-M6 G AAA 7.750 09/17/23 4,000,000 3,964,780
Government National Mortgage Assn. Pool 2811 AAA 8.000 09/20/29 9,941,217 10,013,589
Government National Mortgage Assn. Pool 436306 AAA 7.500 07/15/26 3,026,949 3,001,281
Government National Mortgage Assn.
Pool CMO Series 1998-6 A AAA 6.250 07/20/21 3,776,588 3,659,495
-----------
57,552,309
-----------
TOTAL U.S. GOVERNMENT & AGENCY
BONDS (COST $108,372,946) 106,679,044
-----------
U.S. CORPORATE BONDS: 19.5%
BASIC MATERIALS 1.9%
Chemicals 1.6%
Rohm & Haas Co. A-3/A- 6.950 07/15/04 2,500,000 2,473,648
Soultia Inc. BAA-2/BBB 6.500 10/15/02 4,000,000 3,873,000
Tosco Corp. BAA-1/BBB 8.250 05/15/03 3,000,000 3,053,004
-----------
9,399,652
-----------
Steel 0.3%
Commercial Metals BAA-1/BBB+ 7.200 07/15/05 2,000,000 1,934,991
-----------
CAPITAL GOODS 3.1%
Aerospace/Defense 1.0%
Lockheed Martin Corp BAA-3/BBB- 8.200 12/01/09 3,000,000 2,992,203
United Tech Corp. A-2/A+ 6.625 11/15/04 3,200,000 3,134,752
-----------
6,126,955
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments (Continued)
December 31, 1999
% Net Quality Rating Coupon Maturity Par
Assets (Unaudited)* Rate Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
Containers 1.5%
Crown Cork & Seal BAA-2/BBB 7.125% 09/01/02 $2,000,000 $ 1,977,762
Owens-Illinois Inc. BA-1/BB+ 7.150 05/15/05 2,000,000 1,858,780
Owens Corning BAA-3/BBB- 7.500 05/01/05 2,500,000 2,376,628
Temple-Inland Inc. BAA-2/BBB+ 6.750 03/01/0 3,000,000 2,761,173
-----------
8,974,343
-----------
Environmental 0.5%
Waste Management Inc., Step Coupon(A) BAA-3/BBB 7.700 10/01/02 3,000,000 2,875,251
-----------
Manufacturing-Diversified 0.1%
Giddings & Lewis BA-1/BBB 7.500 10/01/05 500,000 488,013
-----------
COMMUNICATION SERVICES 2.1%
Telephone 1.3%
AT&T Corp. A-1/AA- 6.500 03/15/29 2,500,000 2,146,745
GTE Corp. BAA-1/A 6.840 04/15/18 3,000,000 2,745,009
Worldcom A-3/A- 6.400 08/15/05 3,000,000 2,885,544
-----------
7,777,298
-----------
Telephone - Long Distance 0.8%
Sprint Capital Corp. BAA-1/BBB+ 6.500 11/15/01 5,000,000 4,956,435
-----------
CONSUMER CYCLICAL 1.9%
Auto Manufacturers 1.2%
Daimler Chrysler NA Holdings A-1/A+ 6.460 12/07/01 7,000,000 6,939,729
-----------
Retail - General 0.3%
JC Penney Co Inc. A-3/BBB+ 7.950 04/01/17 2,000,000 1,783,564
-----------
Retail - Speciality 0.4%
Autozone Inc. BAA-1/A- 6.000 11/01/03 2,545,000 2,385,248
-----------
CONSUMER STAPLES 1.9%
Drug Stores 0.4%
Bergen Brunswig BAA-2/BBB- 7.375 01/15/03 2,000,000 1,924,836
Bergen Brunswig BAA-2/BBB- 7.250 06/01/05 500,000 460,303
-----------
2,385,139
-----------
Food Retailers 1.0%
Great Atlantic & Pacific Tea BA-1/BBB- 7.750 11/15/29 2,500,000 2,389,183
Supervalu Inc. BAA-1/BBB+ 7.625 09/15/04 4,000,000 3,963,004
-----------
6,352,187
-----------
Media-TV/Radio/Cable 0.5%
CSC Holdings Inc. BA-2/BB+ 7.875 12/15/07 3,000,000 2,970,000
-----------
ENERGY 1.6%
Oil-Domestic 0.5%
Ashland, Inc. BAA-2/BBB 6.860 05/01/09 3,000,000 2,787,648
-----------
Oil-International 0.3%
Chevron Corp. AA-2/AA 6.625 10/01/04 2,000,000 1,973,414
-----------
Oil-Services 0.8%
Foster Wheeler Corp. BAA-3/BBB- 6.750 11/15/05 2,520,000 2,118,302
Phillips Petroleum Co. A-3/A- 7.000 03/30/29 3,000,000 2,703,570
-----------
4,821,872
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments (Continued)
December 31, 1999
% Net Quality Rating Coupon Maturity Par
Assets (Unaudited)* Rate Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
FINANCE 4.0%
Banks 1.0%
Citicorp A-1/A+ 6.375% 01/15/06 $3,000,000 $ 2,840,112
Compass Bank A-1/A- 8.100 08/15/09 3,000,000 3,035,637
-----------
5,875,749
-----------
Financial Services 3.0%
Capital One Bank BAA-2/BBB- 6.760 07/23/02 4,000,000 3,923,712
Ford Motor Company A-1/A+ 6.375 02/01/29 3,200,000 2,699,789
General Electric Capital Corp. AAA/AAA 6.810 11/03/03 2,200,000 2,187,515
General Motors Acceptance Corp A-2/A 9.625 12/15/01 2,650,000 2,772,215
General Motors Acceptance Corp A-2/A 6.750 12/10/02 3,500,000 3,474,051
Heller Financial Inc., 144A (B) A-3/A- 7.375 11/01/09 3,000,000 2,921,592
-----------
17,978,874
-----------
HEALTHCARE 0.4%
Drugs 0.3%
Rite Aid B-1/BB 6.700 12/15/01 2,000,000 1,690,000
-----------
Medical Services 0.1%
Columbia/HCA Healthcare Corporation BA-2/BB+ 6.125 12/15/00 1,000,000 979,666
-----------
TECHNOLOGY 0.6%
Computer Related 0.6%
Comdisco Inc. BAA-1/BBB+ 6.130 08/01/01 4,000,000 3,904,068
-----------
TRANSPORTATION 0.9%
Airlines 0.8%
American Airlines -2/BBB 8.040 09/16/11 858,920 856,288
Delta Air Lines AA-1/BBB 8.540 01/02/07 1,333,419 1,356,498
US Airways Inc., Pass Thru Cert. Series 99-1 -3/AA- 8.360 07/20/20 3,000,000 2,908,245
-----------
5,121,031
-----------
Trucking & Shipping 0.1%
Federal Express A-3/BBB+ 7.890 09/23/08 421,894 416,311
-----------
UTILITIES 1.1%
Electric Power 1.1%
Alliant Energy Resources, 144A (B) A-3/A 7.375 11/09/09 1,000,000 973,515
Florida Power & Light A-2/A+ 7.375 06/01/09 3,000,000 2,951,622
MidAmerican Energy Holdings BAA-3/BBB- 6.960 09/15/03 3,000,000 2,940,513
-----------
6,865,650
-----------
TOTAL U.S. CORPORATE BONDS
(COST: $119,453,320) 117,763,088
-----------
NON-U.S. CORPORATE BONDS: 3.5%
FOREIGN ISSUES: 3.5%
Abbey National PLC AA-3/AA- 7.950 10/26/29 3,000,000 3,005,592
Barclays Bank PLC AA-3/AA- 7.400 12/15/09 2,000,000 1,968,322
Pemex Finance LTD, 144A (B) BAA-1/BBB 9.690 08/15/09 3,000,000 3,104,265
Petro Geo-services ASA, 144A (B) BAA-3/BBB 7.125 03/30/28 3,000,000 2,625,660
Teleglobe, Inc. BAA-1/BBB+ 7.200 07/20/09 4,000,000 3,746,796
Tyco International Group SA, 144A (B) BAA-1/A- 6.875 09/05/02 3,500,000 3,447,049
YPF Sociedad Anonima BAA-1/BBB- 9.125 02/24/09 3,000,000 3,099,624
-----------
TOTAL NON-U.S. CORPORATE BONDS
(COST: $21,186,669) 20,997,308
-----------
TOTAL BONDS (COST: $249,012,935) 245,439,440
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
COMMON STOCKS: 54.3%
FOREIGN ISSUES: 3.7%
BP Amoco PLC/ADR 64,746 $ 3,840,247
Glaxo Wellcome PLC - ADR 46,150 2,578,631
Koninklijke (Royal) Philips Electronics N.V. - ADR 41,824 5,646,240
Telefonos de Mexico SP ADR - Cl L 39,000 4,387,500
Vodafone AirTouch PLC-SP ADR 114,625 5,673,938
-----------
TOTAL FOREIGN ISSUES (COST: $8,697,693) 22,126,556
-----------
DOMESTIC ISSUES: 50.6%
BASIC MATERIALS 2.2%
Chemicals 1.7%
The Dow Chemical Company 34,200 4,569,975
Praxair, Inc. 46,000 2,314,375
Rohm and Haas Company 78,300 3,185,831
-----------
10,070,181
-----------
Paper/Forest Products 0.5%
Willamette Industries, Inc. 63,200 2,934,850
-----------
CAPITAL GOODS 3.1%
Containers 0.5%
Owens-Illinois, Inc. *** 125,800 3,152,862
-----------
Electrical Equipment 0.9%
Honeywell International Inc. 56,250 3,244,922
Rockwell International Corporation 49,900 2,388,962
-----------
5,633,884
-----------
Environmental 0.2%
Waste Management, Inc. 77,327 1,329,058
-----------
Machinery/Equipment 0.4%
Pall Corporation 123,300 2,658,656
-----------
Manufacturing-Diversified 1.1%
Illinois Tool Works, Inc. 51,700 3,492,981
United Technologies Corporation 45,000 2,925,000
-----------
6,417,981
-----------
COMMUNICATION SERVICES 1.8%
Telephone - Long Distance 0.6%
AT & T Corp. 67,650 3,433,237
-----------
Telephone 1.2%
GTE Corporation 54,600 3,852,713
SBC Communications Inc. 69,748 3,400,215
-----------
7,252,928
-----------
CONSUMER CYCLICAL 5.0%
Commercial/Consumer 0.4%
IMS Health Incorporated 89,000 2,419,687
-----------
Printing/Publishing 0.6%
PRIMEDIA Inc.*** 215,200 3,550,800
-----------
Retail-Discount 0.7%
Wal-Mart Stores, Inc. 59,200 4,092,200
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Retail-General 2.1%
Dayton Hudson Corporation 137,900 $ 10,127,031
Sears, Roebuck & Co. 91,000 2,769,813
-----------
12,896,844
-----------
Retail-Specialty 1.2%
Tiffany & Co. 81,500 7,273,875
-----------
CONSUMER STAPLES 7.0%
Cosmetics/Toiletries 1.1%
Kimberly-Clark Corporation 99,100 6,466,275
-----------
Drug Stores 0.8%
CVS Corporation 126,852 5,066,152
-----------
Entertainment 0.6%
The Walt Disney Company 135,800 3,972,150
-----------
Food Producers 1.9%
General Mills, Inc. 71,000 2,538,250
Nabisco Holdings Corp. - Class A 115,700 3,659,013
Sara Lee Corporation 131,600 2,903,425
Tyson Foods, Inc. - Class A 141,125 2,293,281
-----------
11,393,969
-----------
Food Retailers 0.5%
Safeway Inc. 94,800 3,371,325
-----------
Media-TV/Radio/Cable 2.1%
Cox Communications, Inc.*** 109,800 5,654,700
MediaOne Group, Inc.*** 91,000 6,989,938
-----------
12,644,638
-----------
ENERGY 3.0%
Exploration/Drilling 0.7%
Kerr-McGee Corporation 55,100 3,416,200
Transocean Sedco Forex Inc. 15,062 507,401
-----------
3,923,601
-----------
Oil-Domestic 1.0%
Unocal Corporation 93,700 3,144,806
USX-Marathon Group 108,700 2,683,531
-----------
5,828,337
-----------
Oil-International 0.6%
Exxon Corporation 45,900 3,697,819
-----------
Oil-Services 0.7%
Schlumberger Limited 77,800 4,376,250
-----------
FINANCE 6.3%
Banks 2.2%
Bank One Corporation 98,890 3,170,661
Bank of America Corporation 99,798 5,008,612
Wells Fargo Company 121,400 4,909,112
-----------
13,088,385
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Financial Services 2.5%
Countrywide Credit Industries, Inc. 97,100 $ 2,451,775
Household International, Inc. 114,100 4,250,225
Morgan Stanley Dean Witter and Co. 32,600 4,653,650
MBIA, Inc. 65,200 3,443,375
-----------
14,799,025
-----------
Insurance Companies 1.6%
The Allstate Corporation 137,214 3,293,136
Citigroup Inc. 121,429 6,746,899
-----------
10,040,035
-----------
HEALTHCARE 4.0%
Drugs 2.4%
American Home Products Corporation 148,400 5,852,525
Bristol-Myers Squibb Company 96,200 6,174,838
Pharmacia & Upjohn, Inc. 61,200 2,754,000
-----------
14,781,363
-----------
Medical Products/Supply 0.9%
ALZA Corporation*** 76,100 2,634,963
Johnson & Johnson 30,108 2,803,807
-----------
5,438,770
-----------
Medical Services 0.7%
Aetna Inc. 72,600 4,051,988
-----------
TECHNOLOGY 15.5%
Communications Equipment 2.3%
ADC Telecommunications, Inc.*** 78,900 5,725,181
Motorola, Inc. 56,700 8,349,075
-----------
14,074,256
-----------
Computer Related 8.4%
3Com Corporation*** 131,900 6,199,300
EMC Corporation*** 125,300 13,689,025
Gateway, Inc.*** 130,200 9,382,538
Hewlett-Packard Company 58,800 6,699,525
International Business Machines Corporation 73,600 7,948,800
Seagate Technology, Inc.*** 39,500 6,495,468
-----------
50,414,656
-----------
Computer Software/Services 1.3%
Compuware Corporation*** 55,300 2,059,925
Gartner Group, Inc.*** 11,587 160,045
Keane, Inc.*** 175,900 5,584,825
-----------
7,804,795
-----------
Semiconductors 3.5%
Conexant Systems, Inc.*** 116,600 7,739,325
Micron Technology, Inc.*** 49,650 3,860,288
Texas Instruments Incorporated 96,600 9,358,125
-----------
20,957,738
-----------
TRANSPORTATION 1.1%
Airlines 0.4%
Delta Air Lines, Inc. 44,400 2,211,675
-----------
Railroads 0.2%
Norfolk Southern Corporation 66,800 1,369,400
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Trucking & Shipping 0.5%
FDX Corporation*** 79,400 $ 3,250,438
-----------
UTILITIES 1.0%
Electric Power 0.4%
PG&E Corporation 113,000 2,316,500
-----------
Natural Gas 0.6%
The Williams Companies, Inc. 113,500 3,468,844
-----------
MISCELLANEOUS 0.6%
Professional Services 0.6%
Interim Services Inc.*** 150,000 3,712,500
-----------
TOTAL DOMESTIC ISSUES
(COST: $198,608,337) 305,637,927
-----------
TOTAL COMMON STOCKS
(COST: $207,306,030) 327,764,483
-----------
TOTAL INVESTMENTS, BALANCED FUND
(COST: $481,358,135)** $598,243,093
===========
</TABLE>
Values of investment securities are determined as described in Note 2 of the
financial statements.
*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, 1999, the cost of securities for federal income tax
purposes was $481,643,731. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation.................................$135,401,913
Gross unrealized depreciation................................. (18,802,551)
-----------
Net unrealized appreciation...................................$116,599,362
===========
***This security is non-income producing.
****If applicable, 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.
(A) Represents a security that had a coupon rate of 4.1% until October 1, 1994,
at which time the stated coupon rate became the effective rate.
(B) Restricted security sold within the terms of a private placement memorandum
exempt from registration under section 144A of the Securities Act of 1933,
as amended, and maybe sold only to dealers in that program or other
"qualified institutional investors."
On December 31, 1999, the total market value of these investments was
$13,072,081 or 2.17% of total net assets.
ABS Asset Backed Security
ADR American Depository Receipt
CMO Collateralized Mortgage Obligation
CPI Consumer Price Index
IO Interest Only
MTN Medium Term Note
PLC Pubic Limited Company
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Schedule of Investments
December 31, 1999
% Net Annualized
Assets Yield Shares Value
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 2.3%
State Street Prime Money Market 5.440% 25,405,252 $ 25,405,252
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST: $25,405,252) 25,405,252
-----------
LONG-TERM INVESTMENTS:
COMMON STOCKS: 97.5%
FOREIGN ISSUES: 8.9%
BP Amoco PLC- ADR 245,080 14,536,308
Glaxo Wellcome PLC - ADR 209,450 11,703,018
Koninklijke (Royal) Philips Electronics N.V. - ADR 194,544 26,263,440
Nortel Networks Corporation 448,000 45,248,000
-----------
TOTAL FOREIGN ISSUES
(COST: $41,266,990) 97,750,766
-----------
DOMESTIC ISSUES: 88.6%
BASIC MATERIALS 3.8%
Chemicals 2.7%
The Dow Chemical Company 111,550 14,905,869
PPG Industries, Inc. 234,400 14,664,650
-----------
29,570,519
-----------
Paper/Forest Products 1.1%
Georgia-Pacific Group 231,800 11,763,850
-----------
CAPITAL GOODS 6.6%
Electrical Equipment 4.1%
Emerson Electric Co. 170,000 9,753,750
Honeywell International Inc. 448,650 25,881,496
Rockwell International Corporation 198,800 9,517,550
-----------
45,152,796
-----------
Environmental 0.8%
Waste Management, Inc. 539,999 9,281,233
-----------
Manufacturing-Diversified 1.7%
United Technologies Corporation 280,000 18,200,000
-----------
COMMUNICATION SERVICES 6.9%
Telephone - Long Distance 3.4%
AT&T Corp. 191,752 9,731,414
Sprint Corporation 413,300 27,820,256
-----------
37,551,670
-----------
Telephone 3.5%
GTE Corporation 246,750 17,411,297
SBC Communications Inc. 423,883 20,664,296
-----------
38,075,593
-----------
CONSUMER CYCLICAL 3.7%
Auto Parts Manufacturers 0.8%
Dana Corporation 284,885 8,528,745
-----------
Retail-Discount 2.0%
Wal-Mart Stores, Inc. 324,900 22,458,713
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Retail-General 0.9%
Sears, Roebuck & Co. 315,100 $ 9,590,856
-----------
CONSUMER STAPLES 14.6%
Beverages 1.2%
PepsiCo, Inc. 377,600 13,310,400
-----------
Cosmetics/Toiletries 2.6%
Kimberly-Clark Corporation 442,900 28,899,225
-----------
Drug Stores 1.4%
CVS Corporation 392,806 15,687,690
-----------
Entertainment 2.2%
The Walt Disney Company 820,800 24,008,400
-----------
Food Producers 3.6%
ConAgra, Inc. 380,500 8,585,031
General Mills, Inc. 245,200 8,765,900
Nabisco Holdings Corp. - Class A 367,700 11,628,513
Sara Lee Corporation 494,700 10,914,319
-----------
39,893,763
-----------
Food Retailers 1.6%
The Kroger Co.*** 951,900 17,967,113
-----------
Media-TV/Radio/Cable 2.0%
MediaOne Group, Inc.*** 267,900 20,578,069
-----------
ENERGY 5.5%
Exploration/Drilling 0.2%
Transocean Sedco Forex Inc. 53,046 1,786,987
-----------
Oil-Domestic 1.8%
Unocal Corporation 271,450 9,110,541
USX-Marathon Group 422,850 10,439,109
-----------
19,549,650
-----------
Oil-International 2.1%
Exxon Corporation 155,100 12,495,244
Texaco Inc. 202,900 11,020,006
-----------
23,515,250
-----------
Oil-Services 1.4%
Schlumberger Limited 274,000 15,412,500
-----------
FINANCE 11.4%
Banks 4.5%
Bank of America Corporation 344,571 17,293,157
Bank One Corporation 408,540 13,098,814
First Union Corporation 246,800 8,098,125
Wachovia Corporation 152,100 10,342,800
-----------
48,832,896
-----------
Financial Services 3.3%
Household International, Inc. 524,700 19,545,075
Morgan Stanley Dean Witter and Co. 113,000 16,130,750
-----------
35,675,825
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Insurance Companies 3.6%
The Allstate Corporation 708,026 $ 16,992,624
Citigroup Inc. 431,486 23,974,441
-----------
40,967,065
-----------
HEALTHCARE 8.2%
Drugs 4.0%
American Home Products Corporation 543,500 21,434,281
Bristol-Myers Squibb Company 357,600 22,953,450
-----------
44,387,731
-----------
Medical Prods/Supply 3.0%
ALZA Corporation*** 283,200 9,805,800
Baxter International Inc. 193,100 12,129,094
Johnson & Johnson 121,000 11,268,125
-----------
33,203,019
-----------
Medical Services 1.2%
Aetna Inc. 237,700 13,266,631
-----------
TECHNOLOGY 22.4%
Communications Equipment 4.2%
Harris Corporation 370,900 9,898,394
Motorola, Inc. 248,200 36,547,450
-----------
46,445,844
-----------
Computer Related 9.1%
EMC Corporation*** 376,700 41,154,475
Hewlett-Packard Company 251,700 28,678,068
International Business Machines Corporation 276,200 29,829,600
-----------
99,662,143
-----------
Computer Software/Services 4.8%
Computer Associates International, Inc. 444,900 31,115,194
Computer Sciences Corporation*** 224,400 21,233,850
-----------
52,349,044
-----------
Office Equipment 1.0%
Lanier Worldwide Inc*** 370,900 1,437,238
Xerox Corporation 408,700 9,272,381
-----------
10,709,619
-----------
Semiconductors 3.3%
Texas Instruments Incorporated 376,200 36,444,375
-----------
TRANSPORTATION 1.6%
Airlines 0.7%
Delta Air Lines, Inc. 158,600 7,900,262
-----------
Railroads 0.9%
Burlington Northern Santa Fe Corporation 220,200 5,339,850
Norfolk Southern Corporation 227,700 4,667,850
-----------
10,007,700
-----------
UTILITIES 2.7%
Electric Power 1.5%
Duke Energy Corporation 180,000 9,022,500
PG&E Corporation 345,000 7,072,500
-----------
16,095,000
-----------
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Natural Gas 1.2%
The Williams Companies, Inc. 445,000 $ 13,600,313
-----------
MISCELLANEOUS 1.2%
Diversified 1.2%
Minnesota Mining and Manufacturing Company 131,400 12,860,775
-----------
TOTAL DOMESTIC ISSUES
(COST: $751,411,701) 973,191,264
-----------
TOTAL COMMON STOCKS
(COST: $792,678,691) 1,070,942,030
-------------
TOTAL INVESTMENTS, GROWTH AND INCOME
FUND (COST: $818,083,943)** $1,096,347,282
=============
</TABLE>
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings, if applicable, (unaudited). See
the current Prospectus and Statement of Additional Information for a
complete description of these ratings.
**At December 31, 1999, the cost of securities for federal income tax
purposes was $818,445,045. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation................................ $376,831,064
Gross unrealized depreciation................................ (98,928,827)
-----------
Net unrealized appreciation.................................. $277,902,237
===========
***This security is non-income producing.
ADR American Depository Receipt
PLC Public Limited Company
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Schedule of Investments
December 31, 1999
% Net Annualized
Assets Yield Shares Value
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 2.1%
State Street Prime Money Market 5.440% 17,944,730 $ 17,944,730
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST: $17,944,730) 17,944,730
-----------
LONG-TERM INVESTMENTS:
COMMON STOCKS: 97.9%
FOREIGN ISSUES: 7.9%
Ace Limited 560,000 9,345,000
Elan Corp PLC - ADR *** 507,300 14,965,350
Telefonos de Mexico SP ADR - Cl L 200,000 22,500,000
Vodafone AirTouch PLC-SP ADR 391,500 19,379,250
-----------
TOTAL FOREIGN ISSUES
(COST: $41,761,515) 66,189,600
-----------
DOMESTIC ISSUES: 90.0%
BASIC MATERIALS 3.7%
Chemicals 2.6%
Praxair, Inc. 226,500 11,395,781
Rohm and Haas Company 270,000 10,985,625
-----------
22,381,406
-----------
Paper/Forest Products 1.1%
Willamette Industries, Inc. 193,000 8,962,438
-----------
CAPITAL GOODS 5.1%
Containers 1.7%
Owens-Illinois, Inc.*** 593,700 14,879,606
-----------
Machinery/Equipment 1.1%
Pall Corporation 410,000 8,840,625
-----------
Manufacturing-Diversified 2.3%
Illinois Tool Works, Inc. 282,800 19,106,675
-----------
COMMUNICATION SERVICES 2.2%
Telecom-Cel/Wireless 0.8%
Sprint PCS Group*** 70,000 7,175,000
-----------
Telephone 1.4%
CenturyTel, Inc. 240,100 11,374,738
-----------
CONSUMER CYCLICAL 11.9%
Commercial/Consumer 1.0%
IMS Health Incorporated 302,200 8,216,063
-----------
Printing/Publishing 1.6%
PRIMEDIA Inc.*** 820,600 13,539,900
-----------
Retail-General 3.6%
Dayton Hudson Corporation 405,600 29,786,250
-----------
Retail-Specialty 5.7%
Lowe's Companies, Inc 226,200 13,515,450
The Sherwin-Williams Company 440,200 9,244,200
The TJX Companies, Inc. 428,400 8,755,425
Tiffany & Co. 186,500 16,645,125
-----------
48,160,200
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
CONSUMER STAPLES 9.2%
Food Producers 2.7%
Nabisco Holdings Corp. - Class A 257,500 $ 8,143,438
Sara Lee Corporation 253,200 5,586,225
Tyson Foods, Inc. - Class A 542,700 8,818,875
-----------
22,548,538
-----------
Food Retailers 1.6%
Safeway Inc.*** 386,500 13,744,906
-----------
Media-TV/Radio/Cable 4.9%
Cox Communications, Inc.*** 393,100 20,244,650
MediaOne Group, Inc.*** 270,900 20,808,506
-----------
41,053,156
-----------
ENERGY 5.4%
Exploration/Drilling 1.1%
Kerr-McGee Corporation 148,700 9,219,400
-----------
Oil-Domestic 4.3%
Unocal Corporation 344,350 11,557,247
USX-Marathon Group 393,800 9,721,937
Weatherford International, Inc.*** 367,200 14,665,050
-----------
35,944,234
-----------
FINANCE 11.1%
Banks 4.2%
First Security Corporation 320,900 8,192,994
SunTrust Banks, Inc. 200,100 13,769,381
Wells Fargo Company 325,600 13,166,450
-----------
35,128,825
-----------
Financial Services 4.1%
Associates First Capital Corporation 448,600 12,308,463
Countrywide Credit Industries, Inc. 233,000 5,883,250
Freddie Mac 168,300 7,920,618
MBIA, Inc. 163,000 8,608,438
-----------
34,720,769
-----------
Insurance Companies 2.8%
Citigroup Inc. 420,198 23,347,251
-----------
HEALTHCARE 4.2%
Biotech-Spec. Pharmaceutical 0.0%
Crescendo Pharmaceuticals Corporation*** 6,260 114,441
-----------
Drugs 1.2%
Pharmacia & Upjohn, Inc. 216,400 9,738,000
-----------
Medical Prod/Supply 1.6%
Boston Scientific Corporation*** 628,200 13,741,875
-----------
Medical Services 1.4%
Aetna Inc. 213,500 11,915,969
-----------
TECHNOLOGY 30.7%
Communication Equipment 2.2%
ADC Telecommunications, Inc.*** 256,200 18,590,512
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Computer Related 12.3%
3Com Corporation*** 354,600 $ 16,666,200
EMC Corporation*** 336,900 36,806,325
Gateway, Inc.*** 410,500 29,581,656
Seagate Technology, Inc.*** 428,400 19,947,375
-----------
103,001,556
-----------
Computer Software/Services 8.3%
Autodesk, Inc. 426,500 14,394,375
Cadence Design Systems, Inc.*** 570,900 13,701,600
Compuware Corporation*** 193,100 7,192,975
Gartner Group, Inc.*** 31,586 436,282
Keane, Inc.*** 586,500 18,621,375
PeopleSoft, Inc. 727,400 15,502,712
-----------
69,849,319
-----------
Electronics 1.0%
W.W. Grainger, Inc. 168,000 8,032,500
-----------
Semiconductors 6.9%
Conexant Systems Inc.*** 271,798 18,040,592
Dallas Semiconductor Corporation 144,100 9,285,444
Micron Technology, Inc.*** 129,350 10,056,963
Texas Instruments Incorporated 211,600 20,498,750
-----------
57,881,749
-----------
TRANSPORTATION 1.9%
Airlines 0.6%
Midwest Express Holdings, Inc.*** 169,875 5,414,766
-----------
Trucking & Shipping 1.3%
FDX Corporation*** 261,100 10,688,781
-----------
UTILITIES 2.9%
Electric Power 1.0%
Midamerican Energy Holdings Co.*** 254,000 8,556,625
-----------
Natural Gas 1.9%
El Paso Energy Corporation 162,000 6,287,625
The Williams Companies, Inc. 306,600 9,370,463
-----------
15,658,088
-----------
MISCELLANEOUS 1.7%
Professional Services 1.7%
Interim Services Inc.*** 562,200 13,914,450
-----------
TOTAL DOMESTIC COMMON STOCK
(COST: $547,719,703) 755,228,611
-----------
TOTAL COMMON STOCKS
(COST: $589,481,218) 821,418,211
-----------
TOTAL INVESTMENTS, CAPITAL APPRECIATION
STOCK FUND (COST: $607,425,948)** $839,362,941
===========
</TABLE>
<PAGE>
CAPITAL APPRECIATION STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings, if applicable, (unaudited). See
the current Prospectus and Statement of Additional Information for a
complete description of these ratings.
**At December 31, 1999, the cost of securities for federal income tax
purposes was $607,425,948. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation................................ $275,503,695
Gross unrealized depreciation................................ (43,566,702)
-----------
Net unrealized appreciation.................................. $231,936,993
===========
***This security is non-income producing.
ADR American Depository Receipt
PLC Public Limited Company
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Schedule of Investments
December 31, 1999
% Net Annualized
Assets Yield Shares Value
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 2.2%
State Street Prime Money Market 5.440% 588,653 $ 588,653
-------
TOTAL SHORT-TERM INVESTMENTS
(COST: $588,653) 588,653
-------
LONG-TERM INVESTMENTS:
COMMON STOCKS: 98.5%
FOREIGN ISSUES: 3.0%
Elan Corp - PLC ADR*** 14,400 424,800
London Pacific Group Limited - SP ADR 3,000 108,000
Newbridge Networks Corporation*** 9,600 216,600
Zindart Limited - ADR*** 6,500 44,688
-------
TOTAL FOREIGN ISSUES
(COST: $763,300) 794,088
-------
DOMESTIC ISSUES: 95.5%
BASIC MATERIALS 4.8%
Chemicals 0.8%
Air Prod & Chemicals, Inc. 6,000 201,375
-------
Chemicals-Specialty 1.9%
Albermale Corporation 5,500 105,531
Ecolab Inc. 7,500 293,437
Oil-Dri Corporation 7,500 107,812
-------
506,780
-------
Paper/Forest Products 1.5%
Bemis Company, Inc. 6,000 209,250
Westvaco Corporation 6,000 195,750
-------
405,000
-------
Steel 0.6%
Texas Industries, Inc. 3,500 148,968
-------
CAPITAL GOODS 8.3%
Aerospace/Defense 0.5%
The B.F. Goodrich Company 4,500 123,750
-------
Building Supplies 0.4%
Lafarge Corporation 3,500 96,688
-------
Construction 0.8%
Fluor Corporation 4,500 206,438
-------
Electrical Equipment 1.6%
Hubbell Incorporated - Class B 7,000 190,750
Molex Incorporated 4,400 249,425
-------
440,175
-------
Machinery/Equipment 2.2%
Ingersoll-Rand Company 7,000 385,438
Stewart & Stevenson Services, Inc. 9,500 112,516
Trinity Industries, Inc. 3,500 99,531
-------
597,485
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Manufacturing-Diversified 2.1%
Eaton Corporation 5,500 $ 399,438
National Service Industries. Inc. 5,500 162,250
-------
561,688
-------
Office Supplies/Equipment 0.7%
Herman Miller, Inc. 8,000 184,000
-------
COMMUNICATION SERVICES 1.8%
Telephone 1.8%
CenturyTel, Inc. 10,000 473,750
-------
CONSUMER CYCLICAL 15.6%
Apparel/Textiles 1.4%
Saucony, Inc.*** 7,500 104,062
V.F. Corporation 4,500 135,000
Wolverine World Wide, Inc. 11,300 123,594
-------
362,656
-------
Auto Parts Manufacturing 0.4%
Cooper Tire & Rubber 6,400 99,600
-------
Commercial/Consumer 0.6%
Pittston Brink's Group 2,500 55,000
Spar Group*** 30,000 101,250
-------
156,250
-------
Furniture/Appliances 2.3%
Ethan Allen Interiors Inc. 13,400 429,638
Flexsteel Industries, Inc. 4,800 64,200
Steelcase Inc. 9,300 111,600
-------
605,438
-------
Homebuilding/Supplies 0.7%
M/I Schottenstein Homes, Inc. 6,000 93,375
U.S. Home Corporation*** 4,000 102,250
-------
195,625
-------
Leisure Time/Gaming 0.3%
K2 Inc.*** 10,000 76,250
-------
Lodging/Hotels 0.6%
Host Marriott Corp. 20,000 165,000
-------
Printing/Publishing 1.7%
A. H. Belo Corporation, Class A 23,400 446,062
-------
Retail-Discount 1.2%
Dollar General Corporation 12,150 276,412
Duckwall-ALCO Stores, Inc.*** 7,500 57,188
-------
333,600
-------
Retail-Specialty 6.4%
Borders Group, Inc.*** 9,600 154,200
Linens 'n Things, Inc.*** 12,500 370,312
OfficeMax, Inc.*** 17,100 94,050
Pier 1 Imports, Inc. 20,200 128,775
Ross Stores, Inc. 10,900 195,518
The Sherwin-Williams Company 11,000 231,000
Tiffany & Co. 5,000 446,250
Wilson, The Leather Experts Inc.*** 4,000 73,750
---------
1,693,855
---------
</TABLE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
CONSUMER STAPLES 4.7%
Cosmetics/Toiletries 0.3%
Perrigo Company*** 10,000 $80,000
--------
Food Producers/Distributors 2.1%
Flowers Industries, Inc. 20,200 321,938
Tyson Foods, Inc. - Class A 14,100 229,125
--------
551,063
--------
Food Retailers 0.7%
Hannaford Brothers Co. 2,600 180,213
--------
Media-TV/Radio/Cable 1.6%
Adelphia Communications Corporation*** 6,700 439,688
--------
ENERGY 3.9%
Exploration/Drilling 3.7%
BJ Services Company*** 7,800 326,138
ENSCO International Incorporated 14,100 322,538
Smith International, Inc*** 6,500 322,968
--------
971,644
--------
Oil-Domestic 0.2%
Remington Oil & Gas Corporation*** 15,000 58,125
--------
FINANCE 11.7%
Banks 4.7%
Associated Banc-Corp 4,400 150,700
Bank United Corp. - Class A 3,100 84,475
Commercial Federal Corporation 12,000 213,750
First Security Corporation 7,300 186,378
First Tennessee National Corporation 6,400 182,400
Hibernia Corporation 10,600 112,625
Marshall & Ilsley Corporation 2,700 169,594
TCF Financial Corporation 5,600 139,300
---------
1,239,222
---------
Financial Services 1.8%
The Bear Stearns Companies Inc. 11,500 491,625
--------
Insurance Companies 4.9%
Ambac Financial Group, Inc. 9,000 469,687
American Medical Security Group, Inc.*** 10,000 60,000
Amerus Life Holdings, Inc. 5,800 133,400
The First American Financial Corporation 7,300 90,794
MGIC Investment Corporation 9,000 541,687
---------
1,295,568
---------
Real Estate Investment 0.3%
New Plan Excel Realty Trust 5600 88,550
--------
HEALTHCARE 11.5%
Biotech-Spec. Pharmaceutical 0.8%
IDEXX Laboratories, Inc.*** 12,700 204,788
--------
Drugs 4.6%
Chiron Corporation*** 10,900 461,888
Genzyme Corporation*** 8,100 364,500
ICN Pharmaceuticals, Inc. 13,500 341,719
Rexall Sundown, Inc.*** 4,500 46,406
---------
1,214,513
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
Medical Products/Supplies 5.1%
Biomet, Inc. 8,200 $328,000
Genzyme Surgical Products*** 590 3,429
OrthoLogic Corp.*** 32,000 82,000
St. Jude Medical, Inc.*** 9,500 291,531
Henry Schein, Inc. *** 2,500 33,281
STERIS Corporation*** 12,700 130,969
Sunrise Medical Inc.*** 17,500 108,281
Sybron International Corporation*** 15,100 372,781
---------
1,350,272
---------
Medical Services 1.0%
Chronimed Inc.*** 8,000 61,500
Humana Inc.*** 14,600 119,538
NABI*** 18,000 83,250
--------
264,288
--------
TECHNOLOGY 23.0%
Communication Equipment 2.4%
ADC Telecommunications, Inc.*** 4,500 326,531
Executone Information Systems, Inc. 35,000 190,313
Norstan Inc.*** 20,000 127,500
--------
644,344
--------
Computer Related 2.5%
Exabyte Corporation*** 20,000 150,000
NeoMagic Corporation*** 10,000 109,375
Quantum Corporation (DSSG)*** 15,300 231,412
Storage Technology Corporation*** 9,300 171,469
--------
662,256
--------
Computer Software/Services 6.1%
Autodesk, Inc. 5,100 172,125
Keane, Inc.*** 10,500 333,375
Indus International, Inc.*** 10,000 121,875
Rainbow Technologies, Inc.*** 3,000 69,750
Sterling Software, Inc.*** 6,700 211,050
SunGard Data Systems Inc.*** 10,700 254,125
Sybase, Inc.*** 7,000 119,000
Synopsys, Inc.*** 5,000 333,750
---------
1,615,050
---------
Electronics 5.4%
Arrow Electronics, Inc.*** 16,600 421,225
W. W. Grainger, Inc. 6,000 286,875
Tech-Sym Corporation*** 5,000 103,125
Teradyne, Inc.*** 6,000 396,000
Varian Medical Systems, Inc. 7,700 229,556
---------
1,436,781
---------
Photography/Imaging 0.3%
Polaroid Corporation 3,700 69,606
---------
Semiconductors 6.3%
Atmel Corporation*** 13,400 396,137
Dallas Semi-Conductors 5,000 322,188
Etec Systems, Inc.*** 5,000 224,375
LSI Logic Corporation*** 5,200 351,000
Quantum Corp (HDDS)*** 3,450 23,934
Varian Semiconductor Equipment Associates, Inc.*** 10,000 340,000
---------
1,657,634
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Schedule of Investments (Continued)
December 31, 1999
% Net
Assets Shares Value
<S> <C> <C> <C>
TRANSPORTATION 2.0%
Airlines 1.0%
Midwest Express Holdings, Inc.*** 8,200 $ 261,375
---------
Transportation-Miscellaneous 0.6%
The Hertz Corporation, Class A 3,000 150,375
---------
Trucking & Shipping 0.4%
Airborne Freight Corporation 5,000 110,000
---------
UTILITIES 3.9%
Electric Power 3.5%
El Paso Electric Company*** 14,300 140,319
Florida Progress Corporation 6,500 275,031
Midamerican Energy Holdings Company*** 12,000 404,250
TECO Energy, Inc. 5,800 107,663
---------
927,263
---------
Natural Gas 0.4%
Southwestern Energy Company 15,000 98,438
---------
MISCELLANEOUS 4.3%
Professional Services 4.3%
Affiliated Computer Services, Inc.*** 5,400 248,400
Business Resource Group*** 20,000 106,250
EZCORP, Inc. 20,000 81,250
Manpower Inc. 15,000 564,375
Modis Professional Services, Inc.*** 10,000 142,500
---------
1,142,775
---------
TOTAL DOMESTIC ISSUES
(COST: $22,963,798) 25,285,889
----------
TOTAL COMMON STOCKS
(COST: $23,727,098) 26,079,977
----------
TOTAL INVESTMENTS, MID-CAP STOCK FUND
(COST: $24,315,751)** $26,668,630
==========
</TABLE>
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings, if applicable, (unaudited). See
the current Prospectus and Statement of Additional Information for a
complete description of these ratings.
**At December 31, 1999, the cost of securities for federal income tax
purposes was $24,316,762. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation................................ $4,073,960
Gross unrealized depreciation................................ (1,722,092)
__________
Net unrealized appreciation........................... ...... $2,351,868
==========
***This security is non-income producing.
ADR American Depository Receipt
PLC Public Limited Company
REIT Real Estate Investment Trust
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Assets and Liabilities
December 31, 1999
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balanced Income Appreciation Stock
Assets: Fund Fund Fund Fund Stock Fund Stock Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in securities,
at value (note 2) - see
accompanying schedule* $82,074,447 $1,901,538 $246,519,163 $598,243,093 $1,096,347,282 $839,362,941 $26,668,630
Receivable for investment
securities sold - - - 2,799,103 3,160,766 3,218,982 -
Receivable for fund shares
sold 519,266 - 15,211 122,705 817,703 374,028 18,990
Accrued interest and
dividends receivable 83,600 - 3,968,013 4,434,879 1,501,987 457,956 24,424
----------- ----------- ----------- ----------- ------------- ------------ ------------
Total assets 82,677,313 1,901,538 250,602,387 605,599,780 1,101,827,738 843,413,907 26,712,044
----------- ----------- ----------- ----------- ------------- ------------ ------------
Liabilities:
Payable for investment
securities purchased - - - 2,109,286 2,948,333 3,728,761 211,616
Accrued management fees 31,012 398 116,329 352,734 545,577 548,544 20,900
Accrued other expenses 326 - 832 2,063 3,732 2,807 100
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities 31,338 398 117,161 2,464,083 3,497,642 4,280,112 232,616
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets applicable to
outstanding capital stock $82,645,975 $1,901,140 $250,485,226 $603,135,697 $1,098,330,096 $839,133,795 $26,479,428
=========== =========== =========== =========== ============= =========== ===========
Represented by:
Capital stock (par value $.01)
and additional paid-in
capital $82,645,975 $1,730,401 $262,280,366 $482,835,315 $816,115,948 $597,934,165 $24,092,961
Undistributed net investment
income - - 223,139 284,896 188,433 67,799 8,840
Accumulated net realized
gain (loss) on investments - - (8,092,995) 3,130,528 3,762,376 9,194,838 24,748
Unrealized appreciation
(depreciation) on investments - 170,739 (3,925,284) 116,884,958 278,263,339 231,936,993 2,352,879
----------- ----------- ----------- ----------- ------------ ----------- -----------
Total net assets - representing
net assets applicable to
outstanding capital stock $82,645,975 $1,901,140 $250,485,226 $603,135,697 $1,098,330,096 $839,133,795 $26,479,428
=========== =========== =========== =========== ============= =========== ===========
Number of Class Z Shares
issued and outstanding
(note 5) 82,645,975 185,786 24,923,230 29,509,549 32,710,130 32,791,492 2,375,783
=========== =========== =========== =========== =========== =========== ===========
Net asset value per share of
outstanding capital stock
(note 2) $1.00 $10.23 $10.05 $20.44 $33.58 $25.59 $11.15
----------- ----------- ----------- ----------- ----------- ----------- -----------
*Cost of Investments $82,074,447 $1,730,799 $250,444,447 $481,358,135 $818,083,943 $607,425,948 $24,315,751
----------- ----------- ----------- ------------ ------------ ----------- -----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Operations
Year Ended December 31, 1999
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balanced Income Appreciation Stock
Fund Fund Fund Fund Stock Fund Stock Fund Fund*
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (note 2):
Interest income $3,383,135 $114,237 $15,562,004 $15,302,197 $1,180,151 $833,638 $47,624
Dividend income - - - 3,451,969 14,589,000 5,586,205 135,064
----------- ---------- ----------- ------------ ----------- ----------- -----------
Total income 3,383,135 114,237 15,562,004 18,754,166 15,769,151 6,419,843 182,688
----------- ---------- ----------- ------------ ----------- ----------- -----------
Expenses (note 4):
Management fees 294,066 8,362 1,321,358 3,717,079 5,948,635 5,685,472 130,658
Trustees' fees 391 - 1,536 3,261 6,165 4,413 64
Audit fees 641 - 2,526 5,355 10,127 7,248 103
----------- ---------- ----------- ------------ ----------- ----------- -----------
Total expenses 295,098 8,362 1,325,420 3,725,695 5,964,927 5,697,133 130,825
----------- ---------- ----------- ------------ ----------- ----------- -----------
Net investment income 3,088,037 105,875 14,236,584 15,028,471 9,804,224 722,710 51,863
Realized and unrealized
gain (loss) on investments
(notes 2 and 3):
Net realized gain (loss)
on investments - - (8,092,995) 18,937,774 64,716,812 73,587,448 481,164
Net change in unrealized
appreciation (depreciation)
on investments - (49,993) (4,261,091) 37,197,027 81,136,793 91,564,086 2,352,878
----------- ---------- ----------- ------------ ----------- ----------- -----------
Net gain (loss) on investments - (49,993) (12,354,086) 56,134,801 145,853,605 165,151,534 2,834,042
----------- ---------- ----------- ------------ ----------- ----------- -----------
Net increase in net assets
resulting from operations $3,088,037 $ 55,882 $ 1,882,498 $71,163,272 $155,657,829 $165,874,244 $2,885,905
=========== ========== =========== =========== =========== =========== ===========
</TABLE>
*Commenced operations May 1, 1999.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Changes in Net Assets
Years Ended December 31, 1999 and 1998
MONEY MARKET FUND TREASURY 2000 FUND BOND FUND
<S> <C> <C> <C> <C> <C> <C>
Operations: 1999 1998 1999 1998 1999 1998
Net investment income $3,088,037 $ 2,251,161 $ 105,875 $ 106,292 $14,236,584 $12,280,579
Net realized gain (loss) on
investments - - - - (8,092,995) 159,188
Net change in unrealized appreciation
or depreciation on investments - - (49,993) 21,682 (4,261,091) (85,864)
----------- ----------- --------- ----------- ----------- -----------
Change in net assets from
operations 3,088,037 2,251,161 55,882 127,974 1,882,498 12,353,903
----------- ----------- --------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (3,088,037) (2,251,161) - - (14,083,486) (12,272,877)
From realized gains on investments - - - - (3,484) (155,703)
----------- ----------- --------- ----------- ----------- -----------
Change in net assets from
distributions (3,088,037) (2,251,161) - - (14,086,970) (12,428,580)
----------- ----------- --------- ----------- ---------- -----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 57,336,829 45,266,763 9,354 7,253 28,132,898 30,878,732
Net asset value of shares issued in
reinvestment of distributions 3,095,292 2,249,737 - - 14,086,970 12,428,580
----------- ----------- --------- ----------- ----------- -----------
60,432,121 47,516,500 9,354 7,253 42,219,868 43,307,312
Cost of shares repurchased (34,202,634) (32,270,164) - - (7,811,320 (3,791,053)
----------- ----------- --------- ----------- ----------- -----------
Change in net assets derived from
capital share transactions 26,229,487 15,246,336 9,354 7,253 34,408,548 39,516,259
----------- ----------- --------- ----------- ----------- -----------
Increase in net assets 26,229,487 15,246,336 65,236 135,227 22,204,076 39,441,582
Net assets:
Beginning of year 56,416,488 41,170,152 1,835,904 1,700,677 228,281,150 188,839,568
----------- ----------- ---------- ----------- ----------- -----------
End of year $82,645,975 $56,416,488 $1,901,140 $1,835,904 $250,485,226 $228,281,150
=========== =========== ========== =========== =========== ===========
Undistributed net investment
income included in net assets - - - - $223,139 $70,041
=========== =========== ========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Changes in Net Assets (Continued)
Years Ended December 31, 1999 and 1998
GROWTH AND INCOME CAPITAL APPRECIATION
BALANCED FUND STOCK FUND STOCK FUND
<S> <C> <C> <C> <C> <C> <C>
Operations: 1999 1998 1999 1998 1999 1998
Net investment income $ 15,028,471 $12,088,130 $ 9,804,224 $8,354,361 $ 722,710 $ 1,650,475
Net realized gain (loss) on
investments 18,937,774 (2,476,442) 64,716,812 34,291,135 73,587,448 15,075,685
Net change in unrealized appreciation
or depreciation on investments 37,197,027 38,583,512 81,136,793 73,755,119 91,564,086 86,357,794
----------- ----------- ------------ ------------ ----------- -----------
Change in net assets from
operations 71,163,272 48,195,200 155,657,829 116,400,615 165,874,244 103,083,954
----------- ----------- ------------ ------------ ----------- -----------
Distributions to shareholders:
From net investment income (14,771,068) (12,093,642) (9,615,791) (8,355,956) (654,910) (1,663,199)
From realized gains on investments (13,330,805) (19,797) (64,716,574) (30,527,402) (64,764,832) (14,650,506)
----------- ----------- ------------ ----------- ----------- -----------
Change in net assets from
distributions (28,101,873) (12,113,439) (74,332,365) (38,883,358) (65,419,742) (16,313,705)
----------- ----------- ------------ ------------ ----------- -----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 91,071,831 98,736,778 127,024,727 138,687,461 61,727,019 74,042,102
Net asset value of shares issued in
reinvestment of distributions 28,101,873 12,113,439 74,332,365 38,883,358 65,419,742 16,313,705
----------- ----------- ------------ ----------- ----------- -----------
119,173,704 110,850,217 201,357,092 177,570,819 127,146,761 90,355,807
Cost of shares repurchased (9,091,748) (6,743,348) (17,526,082) (12,049,887) (18,840,534) (2,947,225)
----------- ----------- ------------ ------------ ----------- -----------
Change in net assets derived from
capital share transactions 110,081,956 104,106,869 183,831,010 165,520,932 108,306,227 87,408,582
----------- ----------- ------------ ------------- ----------- -----------
Increase (decrease) in net assets 153,143,355 140,188,630 265,156,474 243,038,189 208,760,729 174,178,831
Net assets:
Beginning of year 449,992,342 309,803,712 833,173,622 590,135,433 630,373,066 456,194,235
----------- ----------- ------------ ------------ ----------- -----------
End of year $603,135,697 $449,992,342 $1,098,330,096 $833,173,622 $839,133,795 630,373,066
=========== =========== ============= ============ =========== ===========
Undistributed net investment
income included in net assets $284,896 $27,494 $188,433 - $67,799 -
=========== =========== =========== ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Changes in Net Assets (Continued)
Years Ended December 31, 1999 and 1998
MID-CAP STOCK FUND*
<S> <C>
Operations: 1999
Net investment income $ 51,863
Net realized gain (loss) on
investments 481,164
Net change in unrealized appreciation
or depreciation on investments 2,352,878
-----------
Change in net assets from
operations 2,885,905
-----------
Distributions to shareholders:
From net investment income (43,023)
From realized gains on investments (456,416)
-----------
Change in net assets from
distributions (499,439)
-----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 23,763,821
Net asset value of shares issued in
reinvestment of distributions 499,439
-----------
24,263,260
Cost of shares repurchased (170,298)
-----------
Change in net assets derived from
capital share transactions 24,092,962
-----------
Increase (decrease) in net assets 26,479,428
Net assets:
Beginning of year -
-----------
End of year $26,479,428
===========
Undistributed net investment
income included in net assets $ 8,840
===========
</TABLE>
*Commenced operations May 1, 1999.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
Financial Highlights
Year Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
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 0.05 0.05
----------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.05) (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* 4.69% 5.00% 5.01% 4.72% 5.21%
====================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $82,646 $56,416 $41,170 $21,011 $11,374
Ratio of Expenses to Average Net Assets** 0.45% 0.45% 0.50% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 4.72% 4.99% 5.05% 4.74% 5.17%
====================================================================================================================
</TABLE>
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1999, was 5.24% and the "effective" yield for that period
was 5.38%(unaudited).
*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% and 0.73% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND
Financial Highlights
Year Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period) 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $ 9.93 9.24 $ 8.64 $ 8.47 $ 7.00
------- ------ ------- ------- --------
Income from Investment Operations
Net Investment Income** 0.57 0.58 0.58 0.58 0.58
Net Realized and Unrealized Gain (Loss)
on Investments (0.27) 0.11 0.02 0.41) 0.89
------- ------ ------- ------- --------
Total from Investment Operations 0.30 0.69 0.60 0.17 1.47
------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income - - - - -
Distributions from Realized Capital Gains - - - - -
------- ------ ------- ------- --------
Total Distributions - - - - -
------------------------------------------------------------------------
Net Asset Value, End of Period $10.23 $9.93 $9.24 $ 8.64 $ 8.47
=================================================================================================================
Total Return* 3.04% 7.52% 6.85% 2.10% 20.99%
=================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,901 1,836 $1,701 $1,585 $1,545
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 5.70% 6.01% 6.56% 7.03% 7.40%
====================================================================================================================================
</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.
**Based on average shares outstanding during year.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Financial Highlights
Year Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $ 10.57 $ 10.54 $ 10.33 $ 10.63 $ 9.67
------- ------ ------- ------- -------
Income from Investment Operations
Net Investment Income*** 0.62 0.63 0.54 0.65 0.60
Net Realized and Unrealized Gain (Loss)
on Investments (0.54) 0.02 0.20 0.28) 0.96
------- ------ ------- ------- -------
Total from Investment Operations 0.08 0.65 0.74 0.37 1.56
----------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.60) (0.62) (0.51) (0.64) (0.59)
Distributions from Realized Capital Gains (0.00) (0.00) (0.02) (0.03) (0.01)
------- ------- ------- ------- -------
Total Distributions (0.60) (0.62) (0.53) (0.67) (0.60)
----------------------------------------------------------------------
Net Asset Value, End of Period $ 10.05 $ 10.57 $ 10.54 $ 10.33 $ 10.63
=================================================================================================================
Total Return* 0.73% 6.18% 7.45% 2.86% 16.37%
=================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $250,485 $228,281 $188,840 $26,572 $13,725
Ratio of Expenses to Average Net Assets** 0.55% 0.55% 0.56% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 5.92% 5.94% 6.50% 6.25% 6.08%
Portfolio Turnover Rate 713.52% 142.98% 30.71% 25.67% 14.74%
=================================================================================================================
</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 0.57%, 0.67% and 0.68% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Financial Highlights
Year Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $ 18.74 $ 17.02 $ 15.29 $ 14.63 $ 12.90
------ ------ ----- ------ ------
Income from Investment Operations
Net Investment Income*** 0.56 0.57 0.62 0.58 0.55
Net Realized and Unrealized Gain (Loss)
on Investments 2.14 1.72 1.93 0.98 2.29
------ ------ ----- ------ ------
Total from Investment Operations 2.70 2.29 2.55 1.56 2.84
----------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.53) (0.57) (0.63) (0.58) (0.55)
Distributions from Realized Capital Gains (0.47) - (0.19) (0.32) (0.56)
------ ------ ------ ------ ------
Total Distributions (1.00) (0.57) (0.82) (0.90) (1.11)
----------------------------------------------------------------------
Net Asset Value, End of Period $20.44 $18.74 $17.02 $15.29 $14.63
=================================================================================================================
Total Return* 14.49% 13.40% 16.87% 10.79% 22.27%
=================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $603,136 $449,992 $309,804 $194,725 $110,969
Ratio of Expenses to Average Net Assets** 0.70% 0.70% 0.68% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 2.83% 3.20% 3.81% 3.91% 4.03%
Portfolio Turnover Rate 269.00% 78.71% 21.15% 33.48% 36.68%
=================================================================================================================
</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 0.69%, 0.65% and 0.68% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Financial Highlights
Year Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $30.56 $27.20 $21.32 $18.20 $15.06
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income*** 0.34 0.34 0.31 0.34 0.37
Net Realized and Unrealized Gain (Loss)
on Investments 5.12 4.52 6.36 3.93 4.37
------ ------ ------ ------ ------
Total from Investment Operations 5.46 4.86 6.67 4.27 4.74
----------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.32) (0.34) (0.32) (0.34) (0.37)
Distributions from Realized Capital Gains (2.12) (1.16) (0.47) (0.81) (1.23)
------ ------ ------ ------ ------
Total Distributions (2.44) (1.50) (0.79) (1.15) (1.60)
----------------------------------------------------------------------
Net Asset Value, End of Period $33.58 30.56 $27.20 $21.32 $18.20
=================================================================================================================
Total Return* 17.95% 17.92% 31.42% 22.02% 31.75%
=================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,098,330 $833,174 $590,135 $232,841 $102,138
Ratio of Expenses to Average Net Assets** 0.60% 0.60% 0.61% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 0.99% 1.17% 1.39% 1.78% 2.28%
Portfolio Turnover Rate 20.13% 17.69% 20.39% 40.55% 57.80%
=================================================================================================================
</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 0.61%, 0.65% and 0.69% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Financial Highlights
Year Ended December 31
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $22.19 $18.85 $14.60 $12.51 $9.97
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income*** 0.02 0.06 0.07 0.13 0.14
Net Realized and Unrealized Gain (Loss)
on Investments 5.55 3.87 4.52 2.55 2.91
------ ------ ------ ------ ------
Total from Investment Operations 5.57 3.93 4.59 2.68 3.05
-----------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.02) (0.06) (0.07) (0.13) (0.14)
Distributions from Realized Capital Gains (2.15) (0.53) (0.27) (0.46) (0.37)
------ ------ ------ ------ ------
Total Distributions (2.17) (0.59) (0.34) (0.59) (0.51)
-----------------------------------------------------------------------
Net Asset Value, End of Period $25.59 $22.19 $18.85 $14.60 $12.51
=================================================================================================================
Total Return* 25.19% 20.90% 31.57% 21.44% 30.75%
=================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $839,134 $630,373 $456,194 $98,674 $38,117
Ratio of Expenses to Average Net Assets** 0.80% 0.80% 0.82% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 0.10% 0.31% 0.70% 0.96% 1.37%
Portfolio Turnover Rate 38.38% 18.67% 17.06% 49.77% 61.32%
=================================================================================================================
</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 0.83%, 0.66% and 0.75% for 1997, 1996 and 1995,
respectively.
***Based on average shares outstanding during year.
See accompanying notes to financial statements.
<PAGE>
MID-CAP STOCK FUND
Financial Highlights
Period Ended December 31
(For a share outstanding throughout the period) 1999(1)
Net Asset Value, Beginning of Period $10.00
------
Income from Investment Operations
Net Investment Income**** 0.03
Net Realized and Unrealized Gain (Loss)
on Investments 1.34
------
Total from Investment Operations 1.37
-------------------------
Distributions
Distributions from Net Investment Income (0.02)
Distributions from Realized Capital Gains (0.20)
------
Total Distributions (0.22)
-------------------------
Net Asset Value, End of Period $11.15
==================================================================
Total Return* 13.68%**
==================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $26,479
Ratio of Expenses to Average Net Assets 1.00%***
Ratio of Net Investment Income to Average
Net Assets 0.39%***
Portfolio Turnover Rate 35.55%
==================================================================
*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.
**Not annualized.
***Annualized.
****Based on average shares outstanding during period.
(1) Commenced operations May 1, 1999.
See accompanying notes to financial statements.
<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 seven 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. The assets of each fund are held separate from the assets of the
other funds. The Mid-Cap Stock Fund commenced operations May 1, 1999. On or
within 12 months prior to the portfolio maturity date, the securities of
the Treasury 2000 Fund will be liquidated. 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.
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, 1999, no Class C Shares have been
issued.
(2) Significant Accounting Policies
(a) Valuation of Investment Securities
Portfolio securities for which market quotations are readily available
are valued at current market value. If market quotations or valuations
are not available, or if such quotations or valuations are believed to
be inaccurate, unreliable or not reflective of market value, portfolio
securities are valued according to procedures adopted by the funds'
board of trustees in good faith at fair value.
Pricing services value domestic and foreign equity securities (and
occasionally fixed-income securities) traded on a securities exchange
or Nasdaq at the last reported sale price, up to the time of valuation.
If there are no reported sales of a security on the valuation date, it
is valued at the mean between the published bid and asked prices
reported by the exchange or Nasdaq. If there are no sales and no
published bid and asked quotations for a security on the valuation date
or the security is not traded on an exchange or Nasdaq, the pricing
service may obtain market quotations directly from broker-dealers.
Fixed-income securities are valued at prices obtained from a pricing
service, when such prices are available. In circumstances where prices
are not available from the fund's pricing service, securities may be
valued using market quotations obtained from one or more dealers or a
quotation system. Short-term securities with maturities of 60 days or
less and the Money Market Fund securities are valued at amortized cost,
which approximates market value.
(b) Share Valuation and Dividends to Shareholders
The net asset value of the shares of each fund is determined daily
based on the valuation of the net assets of the funds divided by the
number of shares of the fund outstanding. Expenses, including the
<PAGE>
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 are declared and reinvested daily in
additional full and fractional shares of the Money Market Fund.
Dividends of net investment income from the Mid-Cap Stock Fund, Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Bond Fund, and
Balanced Fund are declared and reinvested quarterly in additional full
and fractional shares of the respective funds. Distributions of 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 Taxes
Each 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.
Generally accepted accounting principals require that permanent
financial reporting and tax differences be reclassified in the capital
accounts.
For federal income tax purposes, at December 31, 1998, the Balanced
fund had a capital loss carryover of $2,476,442 that was offset by
capital gains in 1999. At December 31, 1999, the Bond Fund had a
capital loss carryover of $7,838,884 that will expire in the year 2007
if not offset by subsequent capital gains. To the extent the Bond Fund
realizes future net capital gains, taxable distributions will be
reduced by any unused capital loss carryover.
(d) Security Transactions and Investment Income
Security transactions are recorded on the trade date. 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) for each fund during the year
ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
U.S. Government Securities Other Investment Securities
Purchases Sales Purchases Sales
<S> <C> <C> <C> <C>
Bond $1,030,877,899 $1,051,193,309 $635,645,166 $584,851,515
Balanced 778,554,812 725,040,919 663,094,171 640,791,920
Growth and Income Stock 0 0 310,188,724 193,744,371
Capital Appreciation Stock 0 0 306,070,627 266,165,035
Mid-Cap Stock 0 0 30,154,053 6,928,419
</TABLE>
<PAGE>
(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. The fees under the
agreement, paid monthly, are calculated as a percentage of the average
daily net assets for each fund at the following annual rates:
Money Market 0.45%
Treasury 2000 0.45%
Bond 0.55%
Balanced 0.70%
Growth and Income Stock 0.60%
Capital Appreciation Stock 0.80%
Mid-Cap Stock 1.00%
Under this unified 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.
The Investment Advisor has entered into a Subadvisor Agreement for the
management of a portion of the investments in the Mid-Cap Stock Fund. The
Investment Advisor is solely responsible for the payment of all fees to the
Subadvisor. The Subadvisor for this Fund is Heartland Advisors, Inc.
In addition to the unified investment advisory fee and Subadvisor
Agreement, each fund also pays certain expenses including trustees fees,
brokerage commissions, interest expense, audit fees, and other
extraordinary expenses.
All capital shares outstanding at December 31, 1999, are owned by separate
investment accounts of CUNA Mutual Life.
Certain officers and trustees of the Fund are also officers of CUNA Mutual
Life or CIMCO Inc. During the year ended December 31, 1999, the Fund made
no direct payments to its officers and paid trustees' fees of approximately
$15,830 to its unaffiliated trustees.
Distribution Plan
All shares are distributed through CUNA Brokerage Service, Inc. ("CBSI"),
an affiliated company, or other registered broker-dealers authorized by
CBSI. 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.
<PAGE>
(5) Share Activity
Transactions in Class Z Shares of each fund for the years ended December
31, 1999 and 1998, were as follows:
<TABLE>
<CAPTION>
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balanced Income Stock Appreciation Stock
Fund Fund Fund Fund Fund Stock Fund Fund*
Shares outstanding at
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1997 41,170,152 184,138 17,909,312 18,199,350 21,692,803 24,200,359
Shares sold 45,266,764 732 2,875,932 5,517,500 4,697,780 3,603,822
Reinvestment dividend shares 2,249,736 -- 1,167,465 676,936 1,286,801 750,154
Shares repurchased (32,270,164) -- (353,989) (375,123) (413,009) (142,237)
---------- -------- ---------- ---------- ---------- ----------
Shares outstanding at
December 31, 1998 56,416,488 184,870 21,598,720 24,018,663 27,264,375 28,412,098 --
---------- -------- ---------- ---------- ---------- ---------- ---------
Shares sold 57,336,829 916 2,689,111 4,567,002 3,735,034 2,570,088 2,349,783
Reinvestment dividend shares 3,095,292 -- 1,378,627 1,376,385 2,218,655 2,576,478 42,297
Shares repurchased (34,202,634) -- (743,228) (452,501) (507,934) (767,172) (16,297)
---------- -------- ---------- ---------- ---------- ---------- ---------
Shares outstanding at
December 31, 1999 82,645,975 185,786 24,923,230 29,509,549 32,710,130 32,791,492 2,375,783
========== ======== ========== ========== ========== ========== =========
</TABLE>
*Commenced operations May 1, 1999
<PAGE>
ULTRA SERIES FUND
Report of Independent Accountants
To the Board of Trustees and Shareholders
Ultra Series Fund, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Money Market Fund, Treasury
2000 Fund, Bond Fund, Balanced Fund, Growth and Income Stock Fund, Capital
Appreciation Stock Fund and Mid-Cap Stock Fund (constituting the Ultra Series
Fund, Inc., hereafter referred to as the "Fund") at December 31, 1999, the
results of each of their operations, the changes in each of their net assets and
the financial highlights for the year then ended (since commencement of
operations May 1, 1999 for the Mid-Cap Stock Fund), in conformity accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with auditing standards generally
accepted in the United States, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above. The financial statements of the Fund for the year
ended December 31, 1998, including the financial highlights for each of the four
years in the period then ended, were audited by other independent accountants
whose report dated February 5, 1999 expressed an unqualified opinion on those
statements.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 11, 2000
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders
Ultra Series Fund:
We have audited the statements of changes in net assets of Money Market Fund,
Treasury 2000 Fund, Bond Fund, Balanced Fund, Growth and Income Stock Fund, and
Capital Appreciation Stock Fund (funds within Ultra Series Fund) for the year
ended December 31, 1998 and the financial highlights for each of the years in
the four-year period ended December 31, 1998. These financial statements and the
financial highlights are the responsibility of the funds' management. Our
responsibility is to express an opinion on these financial statements and the
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 the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. 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 the financial highlights referred
to above present fairly, in all material respects, the changes in net assets of
Money Market Fund, Treasury 2000 Fund, Bond Fund, Balanced Fund, Growth and
Income Stock Fund, and Capital Appreciation Stock Fund for the year ended
December 31, 1998 and their financial highlights for each of the years in the
four-year period ended December 31, 1998, in conformity with generally accepted
accounting principles.
KPMG LLP
Minneapolis, Minnesota
February 5, 1999
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits:
(a) 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.
(b) 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.
(c) Not Applicable.
(d) 1. 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.
2. Amendment No. 1 to Management Agreement effective May 1, 1999.
Incorporated herein by reference to post-effective amendment number 23
to this Form N-1A registration statement (File No. 2-87775) filed with
the Commission on April 23, 1999.
3. Investment Sub-Advisory Agreement Between CIMCO Inc. and Wellington
Management Company LLP effective February 17, 2000.
4. Servicing Agreement between CIMCO Inc. and CUNA Mutual Insurance
Society effective May 1, 1997. Incorporated herein by reference to
post-effective amendment number 22 to this Form N-1A registration
statement (File No. 2-87775) filed with the Commission on February 12,
1999.
5. Servicing Agreement between CUNA Mutual Life Insurance Company and
CIMCO Inc. effective May 1, 1997. Incorporated herein by reference to
post-effective amendment number 22 to this Form N-1A registration
statement (File No. 2-87775) filed with the Commission on February 12,
1999.
(e) 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.
(f) N/A
<PAGE>
(g) 1. Mutual Fund Custody Agreement between Ultra Series Fund and State
Street Bank and Trust Company effective April 30, 1997. Incorporated
herein by reference to post-effective amendment number 22 to this Form
N-1A registration statement (File No. 2-87775) filed with the
Commission on February 12, 1999.
2. Amendment No. 1 to Mutual Fund Custody Agreement effective May 1,
1999. Incorporated herein by reference to post-effective amendment
number 23 to this Form N-1A registration statement (File No. 2-87775)
filed with the Commission on April 23, 1999.
(h) 1. Participation Agreement between Ultra Series Fund and CUNA Mutual Life
Insurance Company Pension Plan for Home Office Employees.
Incorporated herein by reference to post-effective amendment number
22 to this Form N-1A registration statement (File No. 2-87775)filed
with the Commission on February 12, 1999.
2. Participation Agreement between Ultra Series Fund and CUNA Mutual Life
Insurance Company Pension Plan for Agents. Incorporated herein by
reference to post-effective amendment number 22 to this Form N-1A
registration statement (File No. 2-87775) filed with the Commission on
February 12, 1999.
3. Participation Agreement between Ultra Series Fund and CUNA Mutual Life
Insurance Company 401(k)/Thrift Plan for Home Office Employees.
Incorporated herein by reference to post-effective amendment number 22
to this Form N-1A registration statement (File No. 2-87775) filed with
the Commission on February 12, 1999.
4. Participation Agreement between Ultra Series Fund and CUNA Mutual Life
Insurance Company 401(k)/Thrift Plan for Agents. Incorporated herein
by reference to post-effective amendment number 22 to this Form N-1A
registration statement (File No. 2-87775) filed with the Commission on
February 12, 1999.
5. Participation Agreement between Ultra Series Fund and CUNA Mutual
Pension Plan. Incorporated herein by reference to post-effective
amendment number 22 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on February 12, 1999.
6. Participation Agreement between Ultra Series Fund and CUNA Mutual
Savings Plan. Incorporated herein by reference to post-effective
amendment number 22 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on February 12, 1999.
<PAGE>
7. Participation Agreement between Ultra Series Fund and CUNA Mutual
Thrift Plan. Incorporated herein by reference to post-effective
amendment number 22 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on February 12, 1999.
(i) 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.
(j) (1) Consent of PricewaterhouseCoopers LLP.
(j) (2) Consent of KPMG LLP.
(k) Not Applicable.
(l) Not Applicable.
(m) 1. 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.
2. Supplement No. 1 to Distrubution Plan effective May 1, 1999.
Incorporated herein by reference to post-effective amendment number 23
to this Form N-1A registration statement (File No. 2-87775) filed with
the Commission on April 23, 1999.
(n) Financial Data Schedules.
(o) 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.
(p) Ultra Series Fund's Code of Ethics.
CIMCO Inc.'s (Investment Adviser) Code of Ethics.
CUNA Brokerage Services, Inc.'s (Principal Underwriter) Code of Ethics
Other Exhibits
Powers of Attorney
<PAGE>
Item 24. Persons Controlled by or Under Common Control with the Fund
Class Z shares of the Ultra Series Fund are currently sold to separate accounts
of CUNA Mutual Life Insurance Company, CUNA Mutual Insurance Society, or their
affiliates, and to their qualified retirement plans.
Class C shares of the Ultra Series Fund are offered to separate accounts of
insurance companies other than CUNA Mutual Life Insurance Company, CUNA Mutual
Insurance Society, or their affiliates, and to qualified retirement plans of
companies not affiliated with the Fund, CUNA Mutual Life Insurance Company, CUNA
Mutual Insurance Society, or their affiliates. Currently, there are no Class C
shares outstanding.
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 Insurance Society
ORGANIZATIONAL CHART AS OF February 10, 2000
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 Insurance
May 23, 1960*
State of domicile: Wisconsin
CUMIS Insurance Society, Inc. is the 100% owner of the following
subsidiary:
(1) Credit Union Mutual Insurance Society New Zealand Ltd.
Business: Fidelity Bond Coverage
November l, 1990*
State of domicile: Wisconsin
b. CUNA Brokerage Services, Inc.
Business: Brokerage
July 19, 1985*
State of domicile: Wisconsin
c. CUNA Mutual General Agency of Texas, Inc.
Business: Managing General Agent
August 14, 1991*
State of domicile: Texas
d. MEMBERS Life Insurance Company
Business: Credit Disability/Life/Health
February 27, 1976*
State of domicile: Wisconsin
Formerly CUMIS Life & CUDIS
<PAGE>
e. International Commons, Inc.
Business: Special Events
January 13, 1981*
State of domicile: Wisconsin
f. CUNA Mortgage Corporation
Business: Mortgage Servicing
November 20, 1978*
State of domicile: Wisconsin
g. CUNA Mutual Insurance Agency, Inc.
Business: Leasing/Brokerage
March 1, 1974*
State of domicile: Wisconsin
Formerly CMCI Corporation
h. Stewart Associates Incorporated
Business: Credit Insurance
March 6, 1998
State of domicile: Wisconsin
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
<PAGE>
(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
3. CUNA Caribbean Insurance Society Limited
Business: Life and Health
July 4, 1985*
Country of domicile: Trinidad and Tobago
4. CUNA Mutual Group, Limited
Business: Brokerage
May 27, 1998
Country of domicile: United Kingdom
* 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:
<PAGE>
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. The CUMIS Group Limited
63.3% ownership by CUNA Mutual Insurance Society (as of 12-31 -96)
4. CIMCO Inc. (CIMCO)
50% ownership by CUNA Mutual Investment Corporation
50% ownership by CUNA Mutual Life Insurance Company
January 1, 1992
5. 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
6. SECURITY Management Company, Ltd. (Hungary)
90% ownership by CUNA Mutual Insurance Society
10% ownership by: Federation of Savings Cooperatives
Savings Cooperative of Szoreg
Savings Cooperative of Szekkutas
(collectively called Hungarian Associates)
September 5, 1992
7. CMG Mortgage Insurance Company
50% ownership by CUNA Mutual Investment Corporation 50% ownership by
PMI Mortgage Insurance Co.
April 14, 1994
8. 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
<PAGE>
9. 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
10. CMG Mortgage Reinsurance Company
50% ownership by CUNA Mutual Investment Corporation
50% ownership by PMI Insurance Company
July 26, 1999
11. 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
12. finsure.australia limited
50% ownership by CUNA Mutual Australia Holding Company Pty. Limited
50% ownership by CUSCAL
October 15, 1999
Partnerships
1. CM CUSO Limited Partnership, a Washington Partnership
CUMIS Insurance Society, Inc. - General Partner
Credit Unions in Washington - Limited Partners
June 14, 1993
Limited Liability Companies
1. "Sofia LTD." (Ukraine)
99.96% CUNA Mutual Insurance Society
.04% CUMIS Insurance Society, Inc.
March 6, 1996
2. 'FORTRESS' (Ukraine)
80% "Sofia LTD."
19% The Ukrainian National Association of Savings and Credit Unions
1% Service Center by UNASCU
September 25, 1996
Affiliated (Nonstock)
1. MEMBERS Prime Club, Inc.
August 8, 1978
<PAGE>
2. CUNA Mutual Group Foundation, Inc.
July 5, 1967
3. CUNA Mutual Life Insurance Company
July 1, 1990
<PAGE>
CUNA Mutual Life Insurance Company
ORGANIZATIONAL CHART AS OF DECEMBER 31, 1998
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. CIMCO Inc.
An Iowa Business Act Corporation
50% ownership by CUNA Mutual Life Insurance Company
50% ownership by CUNA Mutual Investment Corporation
CIMCO Inc. is the investment adviser of:
Ultra Series Fund
MEMBERS Mutual Funds
2. Plan America Program, Inc.
A Maine Business Act Corporation
100% ownership by CUNA Mutual Life Insurance Company
3. CMIA Wisconsin Inc.
A Wisconsin Business Act Corporation
100% ownership by CUNA Mutual Life Insurance Company
<PAGE>
Item 25. 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.
<PAGE>
Item 26. 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.
The officers and directors of the Investment Adviser are as follows:
NAME/ADDRESS POSITION HELD
Michael S. Daubs CIMCO Inc.
5910 Mineral Point Rd. President
Madison, WI 53705 1982-Present
Director
1995-Present
CUNA Mutual Insurance Society
Chief Officer - Investment
1990-Present
CUNA Mutual Life Insurance Company
Chief Officer - Investment
1989-Present
Janice C. Doyle CIMCO Inc.
5910 Mineral Point Rd. Assistant Secretary
Madison, WI 53705 1995-Present
Lawrence R. Halverson CIMCO Inc.
5910 Mineral Point Rd. Senior Vice President and Secretary
Madison, WI 53705 1996-Present
Vice President and Secretary
1992-1996
CUNA Brokerage Services, Inc.
President
1996-1998
Joyce A. Harris CIMCO Inc.
PO Box 7130 Director and Chair
Madison, WI 53707 1992 - Present
Telco Community Credit Union
President, Chief Executive Officer
1978- Present
<PAGE>
James C. Hickman CIMCO Inc.
975 University Avenue Director
Madison, WI 53706 1992 - Present
University of Wisconsin
Professor
1972 - Present
Michael B. Kitchen CIMCO Inc.
5910 Mineral Point Rd. Director
Madison, WI 53705 1995 - Present
CUNA Mutual Insurance Society
President and Chief Executive Officer
1995- Present
CUNA Mutual Life Insurance Company
President and Chief Executive Officer
1995 - Present
Daniel J. Larson CIMCO Inc.
5910 Mineral Point Rd. Vice President
Madison, WI 53705 1995 - Present
Thomas J. Merfeld CIMCO Inc.
5910 Mineral Point Rd. Vice President
Madison, WI 53705 1994 - Present
George A. Nelson CIMCO Inc.
PO Box 44965 Director and Vice Chair
Madison, WI 53744 1992 - Present
Evening Telegram Co. - WISC-TV
Vice President
1982 - Present
Jeffrey B. Pantages CIMCO Inc.
5910 Mineral Point Rd. Senior Vice President
Madison, WI 53705 1998-Present
<PAGE>
Item 27. 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, MEMBERS Mutual Funds, CUNA
Mutual Life Variable Account, and CUNA Mutual Life Variable Annuity Account.
b. The officers and directors of CUNA Brokerage Services, Inc. are as follows:
Name and Principal Position with Positions and Offices
Business Address Distributor with Registrant
Joseph L. Bauer* Assistant Treasurer Finance Reporting Operations
Manager
Wayne A. Benson* Director & President Chief Officer - Sales
Donna C. Blankenheim* Assistant Secretary Vice President
Assistant Secretary
Timothy L. Carlson** Assistant Treasurer None
Jan C. Doyle* Assistant Secretary Assistant Secretary
John C. Fritsche Assistant Vice President None
4455 LBJ Freeway
Suite 1108
Dallas, TX 75244
Tracy K. Gunderson* Assistant Secretary Recording Secretary/Technical
Writer
Lawrence R. Halverson* Director None
John W. Henry* Director & Vice President Vice President
Michael G. Joneson* Secretary Vice President
Campbell D. McHugh* Compliance Officer None
Andrew C. Osen* Associate Compliance Assistant Counsel
Officer
Faye A. Patzner* Vice President - General Senior Vice President and
Counsel General Counsel
Judd T. Schemmel* Associate Compliance Assistant Counsel
Officer
Brian L. Schroeder* Associate Compliance Assistant Director, Insurance
Officer & Securities Market
Barbara L. Secor** Assistant Secretary Assistant Vice President
Assistant Secretary
Jason E. Smith* Assistant Secretary Assistant Secretary
Scott Vignovich** Director and Vice None
President
Helen W. Wagabaza Assistant Secretary Recording Secretary/Technical
Writer
John W. Wiley* Associate Compliance None
Officer
*The principal business address of these persons is: 5910 Mineral Point Road,
Madison, Wisconsin 53705.
**The principal business address of these persons is: 2000 Heritage Way,
Waverly, Iowa 50677
c. There have been no commissions or other compensation paid by Registrant to
unaffiliated principal underwriters.
<PAGE>
Item 28. 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:
a. CUNA Mutual Life Insurance Company
2000 Heritage Way
Waverly, Iowa 50677
b. CIMCO Inc.
5910 Mineral Point Road
Madison, Wisconsin 53705
c CUNA Mutual Insurance Society
5910 Mineral Point Road
Madison, Wisconsin 53705
d. State Street Bank & Trust Company
225 Franklin Street
Boston, Massachusetts 02110
<PAGE>
Item 29. Management Services
Not applicable.
<PAGE>
Item 30. Undertakings
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Fund certifies that it meets all of the requirements
for effectiveness of this registration statement under rule 485(b) under the
Securities Act of 1933 and has duly caused this registration statement to be
signed on its behalf by the undersigned, duly authorized, in the City of
Madison, State of Wisconsin, on the 14th day of April, 2000.
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.
SIGNATURE AND TITLE DATE
/s/ Gwendolyn M. Boeke* 04/07/00
Gwendolyn M. Boeke
Trustee
/s/ Robert M. Buckingham 04/14/00
Robert M. Buckingham
Assistant Secretary
/s/ Michael S. Daubs 04/14/00
Michael S. Daubs
President and Trustee
/s/ Alfred L. Disrud* 04/07/00
Alfred L. Disrud
Trustee
/s/ Lawrence R. Halverson 04/14/00
Lawrence R. Halverson
Vice President, Secretary and Trustee
/s/ Michael G. Joneson 04/14/00
Michael G. Joneson
Treasurer and Assistant Secretary
/s/ Keith S. Noah* 04/07/00
Keith S. Noah
Trustee
/s/ Thomas C. Watt* 04/07/00
Thomas C. Watt
Trustee
*Pursuant to Powers of Attorney.
<PAGE>
INDEX TO EXHIBITS TO
FORM N-1A FOR
ULTRA SERIES FUND
Item 23.
(d) 3. Investment Sub-Advisory Agreement Between CIMCO Inc. Wellington
Management Company LLP effective February 17, 2000.
(j) (1) Consent of Pricewaterhouse Coopers LLP
(j) (2) Consent of KPMG LLP
(n) Financial Data Schedules
(p) Ultra Series Fund's Code of Ethics.
CIMCO Inc.'s (Investment Adviser) Code of Ethics.
CUNA Brokerage Services, Inc.'s (Principal Underwriter) Code of Ethics
Powers of Attorney
<PAGE>
Exhibit 23(d)
Mid-Cap Stock Portfolio
of the
ULTRA SERIES FUND
INVESTMENT SUB-ADVISORY AGREEMENT
Between
CIMCO Inc.
and
Wellington Management Company, llp
THIS INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement"), effective as of
the 1st day of May, 2000, by and between CIMCO Inc., an Iowa corporation
(the "Adviser"), and Wellington Management Company, llp, a Massachusetts limited
liability partnership (the "Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of a portion of the assets (which could be up to 100%) of
the Mid-Cap Stock Fund (the "Portfolio") of the Ultra Series Fund (the "Fund").
Adviser intends to use a manager of managers approach to the management of the
Portfolio, as well as other portfolios in the Fund. Therefore, the number of
sub-advisers and the percentage of assets of the Portfolio managed by each
sub-adviser will be determined by the Fund's Board of Trustees and CIMCO from
time to time. The portion of the assets assigned to the Sub-Adviser will be
referred to as the Sub-Portfolio. Pursuant to this Agreement and subject to the
oversight and supervision by Adviser and the officers and the Board of Trustees
of the Fund, Sub-Adviser shall manage the investment and reinvestment of the
assets of the Sub-Portfolio as requested by CIMCO.
2. Sub-Adviser hereby accepts employment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Sub-Portfolio and shall determine from time to time in its discretion
the securities and other investments to be purchased or sold or exchanged and
what portions of the Sub-Portfolio shall be held in various securities, cash or
other investments. In this connection, Sub-Adviser shall provide Adviser and the
officers and Trustees of the Fund with such reports and documentation as the
latter shall reasonably request regarding Sub-Adviser's management of the
Sub-Portfolio's assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's Trustees may from time to time establish or
issue, and (c) applicable law and related regulations. Adviser shall promptly
<PAGE>
notify Sub-Adviser of changes to (a) or (b) above and shall notify Sub-Adviser
of changes to (c) above promptly after it becomes aware of such changes.
5. The Sub-Adviser and Adviser acknowledge that the Sub-Adviser is not the
compliance agent for the Fund or for the Adviser, and does not have access to
all of the Fund's or the Portfolio's books and records necessary to perform
certain compliance testing. To the extent that the Sub-Adviser has agreed to
perform the services specified in this Agreement in accordance with the Fund's
registration statement, the Fund's Declaration of Trust, the Portfolio's
prospectus and any policies adopted by the Fund's Board of Trustees applicable
to the Portfolio, and in accordance with applicable law, the Sub-Adviser shall
perform such services based upon its books and records with respect to the
Portfolio, which comprise a portion the Portfolio's books and records, and upon
information and written instructions received from the Fund or the Adviser, and
shall not be held responsible under this Agreement so long as it performs such
services in accordance with this Agreement, the policies of the Fund's Board of
Trustees and applicable law based upon such books and records and such
information and instructions provided by the Fund or the Adviser. The Adviser
shall promptly provide the Sub-Adviser with copies of the Fund's registration
statement, the Fund's Declaration of Trust, the Portfolio's currently effective
prospectus and any written policies or procedures adopted by the Fund's Board of
Trustees applicable to the Portfolio and any amendments or revisions thereto.
6. The Sub-Adviser shall have full and complete discretion to establish
brokerage accounts with one or more brokers, dealers or other financial
intermediaries as Sub-Adviser may select, including those which from time to
time may furnish to Sub-Adviser or its affiliates statistical and investment
research information and other services. Sub-Adviser will place orders with or
through such brokers, dealers or other financial intermediaries in accordance
with Wellington Management's Statement of Policy on Brokerage Practices and the
policy with respect to brokerage set forth in the Fund's Registration Statement
or as the Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws
On occasions when Sub-Adviser deems the purchase or sale of a security to
be in the best interest of the Sub-Portfolio as well as other clients of the
Sub-Adviser, the Sub-Adviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transactions, will be made by the Sub-Adviser in the manner the Sub-Adviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to its other clients.
7. Unless the Adviser gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which it
reasonably believes best serves the interests of the Portfolio's shareholders to
vote or abstain from voting all proxies solicited by or with respect to the
issuers of securities in which assets of the Portfolio may be invested.
<PAGE>
The Sub-Adviser shall not file class action claims or derivative shareholder
claims on behalf of the Sub-Advised Funds. However, the Sub-Adviser will provide
transaction information to the Client or custodian upon reasonable request.
8. Sub-Adviser's services under this Agreement are not exclusive. Sub-Adviser
may provide the same or similar services to other clients. Sub-Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Adviser, the Fund or the Portfolio or otherwise be deemed agents
of the Adviser, the Fund or the Portfolio.
9. For the services rendered, the facilities furnished and the expenses assumed
by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each month, a fee
based on the average daily net assets of each Portfolio at the following annual
rates:
Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Sub-Portfolio shall be determined in the manner and on the dates set
forth in the current prospectus of the Fund, and, on days on which the net
assets are not so determined, the net asset value computation to be used shall
be as determined on the next day on which the net assets shall have been
determined. In the event of termination of this Agreement, all compensation due
through the date of termination will be calculated on a pro-rated basis through
the date of termination and paid within thirty business days of the date of
termination.
During any period when the determination of net asset value is
suspended, the net asset value of the Sub-Portfolio as of the last business day
prior to such suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is again determined.
10. The Sub-Adviser shall maintain all books and records with respect to the
Sub-Advised Fund's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the Investment
company Act of 1940, as amended (the "1940 Sub-Act") and shall render to the
Manager such periodic and special reports as the Manager may reasonably request.
Sub-Adviser agrees that all books and records which it maintains for the
Sub-Portfolio or the Fund pursuant to this section are the property of the Fund
and further agrees to surrender promptly to the Adviser or the Fund any such
books, records or information upon the Adviser's or the Fund's request. All such
books and records shall be made available, within five business days of a
written request, to the Fund's accountants or auditors during regular business
hours at Sub-Adviser's offices. Adviser and the Fund or either of their
authorized representative shall have the right to copy any records in the
possession of Sub-Adviser which pertain to the Portfolio or the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this Agreement, all such
books, records or other information shall be returned to Adviser or the Fund
free from any claim or assertion of rights by Sub-Adviser.
<PAGE>
11. The Adviser and Sub-Adviser shall cooperate with each other in providing
information, reports and other materials to regulatory and administrative bodies
having proper jurisdiction over the Portfolio, the Adviser and the Sub-Adviser
in connection with the services provided pursuant to this Agreement; provided,
however, that this agreement to cooperate does not apply to the provision of
information, reports and other materials which either the Adviser or the
Sub-Adviser reasonably believes the regulatory or administrative body does not
have the authority to request or is the privileged or confidential information
of the Adviser or Sub-Adviser.
12. Each party to this agreement agrees that it will not disclose or use any
records or information of the other party (the "non-disclosing party") obtained
pursuant to this Agreement in any manner whatsoever except as authorized in this
Agreement and that it will keep confidential any non-public information obtained
pursuant to this Agreement and disclose such information only if non-disclosing
party (or the Fund, in cases where the non-disclosing party is the Adviser) has
authorized such disclosure, or if such disclosure is required by federal or
state regulatory authorities.
13. In the absence of willful misfeasance, bad faith or gross negligence on the
part of Sub-Adviser or its officers, Trustees or employees, or reckless
disregard by Sub-Adviser of its duties under this Agreement, Sub-Adviser shall
not be liable to Adviser, the Portfolio, the Fund or to any shareholder of the
Portfolio for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security, except to the extent specified in Section 36(b)
of the 1940 Act concerning loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services.
14. Representations and Warranties.
a. Adviser represents and warrants that:
(1) Adviser is registered with the U.S. Securities and Exchange
Commission under the Advisers Act. The Adviser shall remain so
registered throughout the term of this Agreement and shall notify Sub-Adviser
immediately if Adviser ceases to be so registered as an investment adviser;
(2) The Adviser is a corporation duly organized and validly existing
under the laws of the State of Iowa with the power to own and possess its
assets and carry on its business as it is now being conducted;
(3) The execution, delivery and performance by the Adviser of Agreement
are within the Adviser's powers and have been duly authorized by all necessary
action on the part of its directors, and no action by or in respect of, or
filing with, any governmental body, agency or official is required on the
part of the Adviser for the execution, delivery and performance of this
Agreement by the parties hereto, and the execution, delivery and
performance of this Agreement by the parties hereto does not contravene or
constitute a default under: (a) any
<PAGE>
provision of applicable law, rule or regulation; (b) the Advisers' Articles of
Incorporation or Bylaws; or (c) any agreement, judgment, injunction, order,
decree or other instruments binding upon the Adviser;
(4) This Agreement is a valid and binding Agreement of the Adviser;
(5) The Adviser has provided the Sub-Adviser with a copy of its Form
ADV as most recently filed with the Securities and Exchange Commission ("SEC")
and the Adviser further represents that it will, within a reasonable time
after filing any amendment to its Form ADV with the SEC furnish a copy of
such amendments to the Sub-Adviser. The information contained in the Adviser's
Form ADV is accurate and complete in all material respects and does not omit to
state any material fact necessary in order to make the statements made, in light
of the circumstances under which they are made, not misleading; and
(6) The Adviser acknowledges that it received a copy of the Sub-Adviser's
current Form ADV, at least 48 hours prior to the execution of this Agreement and
has delivered a copy of the same to the Fund.
b. Sub-Adviser represents and warrants that:
(1) Sub-Adviser is registered with the U.S. Securities and Exchange
Commission under the Advisers Act. The Sub-Adviser shall remain so registered
throughout the term of this Agreement and shall notify Adviser immediately if
Sub-Adviser ceases to be so registered as an investment adviser;
(2) The Sub-Adviser is a limited liability partnership duly organized
and validly existing under the laws of the Commonwealth of
Massachusetts with the power to own and possess its assets and carry on its
business as it is now being conducted;
(3) The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly
authorized by all necessary action on the part of its directors, and no action
by or in respect of, or filing with, any governmental body, agency or official
is required on the part of the Sub-Adviser for the execution, delivery and
performance of this Agreement by the parties hereto, and the execution, delivery
and performance of this Agreement by the parties hereto does not contravene or
constitute a default under: (a) any provision of applicable law, rule or
regulation; (b) the Sub-Advisers Articles of Incorporation or Bylaws; or (c) any
agreement, judgment, injunction, order, decree or other instruments binding upon
the Sub-Adviser;
(4) This Agreement is a valid and binding Agreement of the Sub-Adviser;
(5) The Sub-Adviser has provided the Adviser with a copy of its Form
ADV as most recently filed with the SEC and the Sub-Adviser further represents
that it will, within a reasonable time after filing any amendment to its Form
ADV with the SEC furnish a copy of such amendments to the Adviser. The
information contained in the Sub-Adviser's Form ADV is
<PAGE>
accurate and complete in all material respects and does not omit to state any
material fact necessary in order to make the statements made, in light of the
circumstances under which they are made, not misleading; and
(6) The Sub-Adviser acknowledges that it received a copy of
the Adviser's current Form ADV, at least 48 hours prior to the execution of this
Agreement and has delivered a copy of the same to the Fund.
15. The Adviser will not use, and will not permit the Fund to use, the
Sub-Adviser's name (or that of any affiliate) or any derivative thereof or logo
associated therewith in Fund literature without prior review and approval by the
Sub-Adviser.
16. This Agreement shall not become effective unless and until it is approved by
the Board of Trustees of the Fund, including a majority of Trustees who are not
parties to this Agreement or interested persons of any such party to this
Agreement. This Agreement shall come into full force and effect on the date
which it is so approved. This Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the Fund, or by the vote of a majority of the outstanding votes
attributable to shares of the class of stock representing an interest in the
Portfolio; and (ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
17. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's Board of Trustees, or by vote of a majority of the
outstanding votes attributable to shares of the class of stock representing an
interest in the Portfolio on sixty (60) days written notice to the Adviser and
Sub-Adviser, or by the Adviser, or by the Sub-Adviser, on sixty (60) days
written notice to the other. This Agreement shall automatically terminate in the
event of its assignment or in the event of the termination of the investment
Advisery agreement between the Adviser and the Fund regarding the Adviser's
management of the Portfolio.
18. This Agreement may be amended by either party only if such amendment is
specifically approved by a majority of those Trustees who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
19. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the 1940
Act. The term "majority of the outstanding votes attributable to shares of the
class" means the lesser of (a) 67% or more of the shares of such class present
at a meeting if more than 50% of such shares are present or represented by proxy
or (b) more than 50% of the votes attributable to the shares of such class.
20. This Agreement shall be construed in accordance with laws of the
Commonwealth of Massachusetts, and applicable provisions of the Advisers Act.
<PAGE>
21. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
CIMCO Inc.
By: /s/ Michael S. Daubs
Michael S. Daubs, President
ATTEST:
/s/ Kevin S. Thompson
Kevin S. Thompson
Wellington Management Company, llp
By: John H. Gooch
Title: Senior Vice President
ATTEST:
/s/ Sara Lou Sherman
Sara Lou Sherman
<PAGE>
Exhibit 23(j)(1)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form N-1A of our
report dated February 11, 2000, relating to the financial statements and
financial highlights of Ultra Series Fund, which appear in such Registration
Statement. We also consent to the references to us under the headings "Financial
Highlights" and "Independent Accountants" in such Registration Statement.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
April 14, 2000
<PAGE>
Exhibit 23(j)(2)
Independent Auditors' Consent
The Board of Trustees
Ultra Series Fund:
We consent to the use of our report dated February 5, 1999 included herein and
to the references to our Firm under the heading "FINANCIAL HIGHLIGHTS" in Part A
and "INDEPENDENT ACCOUNTANTS" in Part B of the registration statement.
KPMG LLP
Minneapolis, Minnesota
April 17, 2000
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 1
<NAME> Money Market Fund
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-2000
<INVESTMENTS-AT-COST> 82,074,447
<INVESTMENTS-AT-VALUE> 82,074,447
<RECEIVABLES> 602,866
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 82,677,314
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31,339
<TOTAL-LIABILITIES> 31,339
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 82,645,975
<SHARES-COMMON-STOCK> 82,645,975
<SHARES-COMMON-PRIOR> 56,416,488
<ACCUMULATED-NII-CURRENT> 0
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 82,645,975
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,383,135
<OTHER-INCOME> 0
<EXPENSES-NET> 295,098
<NET-INVESTMENT-INCOME> 3,088,037
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,088,037
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,088,037
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 57,336,829
<NUMBER-OF-SHARES-REDEEMED> 34,202,634
<SHARES-REINVESTED> 3,095,292
<NET-CHANGE-IN-ASSETS> 26,229,487
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 294,066
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<GROSS-EXPENSE> 295,098
<AVERAGE-NET-ASSETS> 65,469,120
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
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<EXPENSE-RATIO> 0.45
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 2
<NAME> Treasury 2000 Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-2000
<INVESTMENTS-AT-COST> 1,730,799
<INVESTMENTS-AT-VALUE> 1,901,538
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,901,538
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 398
<TOTAL-LIABILITIES> 398
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,624,526
<SHARES-COMMON-STOCK> 185,786
<SHARES-COMMON-PRIOR> 184,870
<ACCUMULATED-NII-CURRENT> 105,875
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 170,739
<NET-ASSETS> 1,901,140
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 114,238
<OTHER-INCOME> 0
<EXPENSES-NET> 8,362
<NET-INVESTMENT-INCOME> 105,875
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (49,994)
<NET-CHANGE-FROM-OPS> 55,882
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 916
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 916
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8,362
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,362
<AVERAGE-NET-ASSETS> 1,863,995
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> .57
<PER-SHARE-GAIN-APPREC> (.27)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.23
<EXPENSE-RATIO> .45
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 3
<NAME> Bond Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-2000
<INVESTMENTS-AT-COST> 250,444,447
<INVESTMENTS-AT-VALUE> 246,519,163
<RECEIVABLES> 4,083,224
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 250,602,387
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 117,161
<TOTAL-LIABILITIES> 117,161
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 262,280,366
<SHARES-COMMON-STOCK> 24,923,320
<SHARES-COMMON-PRIOR> 21,598,720
<ACCUMULATED-NII-CURRENT> 223,139
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (8,092,995)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,925,284)
<NET-ASSETS> 250,485,226
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,562,004
<OTHER-INCOME> 0
<EXPENSES-NET> 1,325,420
<NET-INVESTMENT-INCOME> 14,236,584
<REALIZED-GAINS-CURRENT> (8,092,995)
<APPREC-INCREASE-CURRENT> (4,261,091)
<NET-CHANGE-FROM-OPS> 1,882,498
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14,083,486
<DISTRIBUTIONS-OF-GAINS> 3,484
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,689,111
<NUMBER-OF-SHARES-REDEEMED> 743,228
<SHARES-REINVESTED> 1,378,627
<NET-CHANGE-IN-ASSETS> 3,324,510
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,321,358
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,325,420
<AVERAGE-NET-ASSETS> 229,304,890
<PER-SHARE-NAV-BEGIN> 10.57
<PER-SHARE-NII> .62
<PER-SHARE-GAIN-APPREC> (.54)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .60
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 10.05
<EXPENSE-RATIO> .55
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 4
<NAME> Balanced Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-2000
<INVESTMENTS-AT-COST> 481,358,135
<INVESTMENTS-AT-VALUE> 598,243,093
<RECEIVABLES> 7,356,687
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 605,599,780
<PAYABLE-FOR-SECURITIES> 2,109,286
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 354,798
<TOTAL-LIABILITIES> 605,599,780
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 482,835,315
<SHARES-COMMON-STOCK> 29,509,549
<SHARES-COMMON-PRIOR> 24,018,663
<ACCUMULATED-NII-CURRENT> 284,896
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,130,528
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 116,884,958
<NET-ASSETS> 603,135,697
<DIVIDEND-INCOME> 3,451,969
<INTEREST-INCOME> 15,302,196
<OTHER-INCOME> 0
<EXPENSES-NET> 3,725,695
<NET-INVESTMENT-INCOME> 15,028,471
<REALIZED-GAINS-CURRENT> 18,937,774
<APPREC-INCREASE-CURRENT> 37,197,027
<NET-CHANGE-FROM-OPS> 71,163,272
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14,771,069
<DISTRIBUTIONS-OF-GAINS> 13,330,805
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,567,002
<NUMBER-OF-SHARES-REDEEMED> 452,501
<SHARES-REINVESTED> 1,376,385
<NET-CHANGE-IN-ASSETS> 5,490,886
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,717,079
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,725,695
<AVERAGE-NET-ASSETS> 507,734,109
<PER-SHARE-NAV-BEGIN> 18.74
<PER-SHARE-NII> .56
<PER-SHARE-GAIN-APPREC> 2.14
<PER-SHARE-DIVIDEND> 0
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<PER-SHARE-NAV-END> 20.44
<EXPENSE-RATIO> .70
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 5
<NAME> Growth & Income Stock Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-2000
<INVESTMENTS-AT-COST> 818,083,943
<INVESTMENTS-AT-VALUE> 1,096,347,282
<RECEIVABLES> 5,480,456
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,101,827,738
<PAYABLE-FOR-SECURITIES> 2,948,333
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 549,309
<TOTAL-LIABILITIES> 3,497,642
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 816,115,948
<SHARES-COMMON-STOCK> 32,710,130
<SHARES-COMMON-PRIOR> 27,264,375
<ACCUMULATED-NII-CURRENT> 188,433
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,762,376
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 278,263,339
<NET-ASSETS> 1,098,330,096
<DIVIDEND-INCOME> 14,589,000
<INTEREST-INCOME> 1,180,150
<OTHER-INCOME> 0
<EXPENSES-NET> 5,964,927
<NET-INVESTMENT-INCOME> 9,804,224
<REALIZED-GAINS-CURRENT> 64,716,812
<APPREC-INCREASE-CURRENT> 81,136,793
<NET-CHANGE-FROM-OPS> 155,657,829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 9,615,791
<DISTRIBUTIONS-OF-GAINS> 64,716,574
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,735,034
<NUMBER-OF-SHARES-REDEEMED> 507,934
<SHARES-REINVESTED> 2,218,655
<NET-CHANGE-IN-ASSETS> 5,445,755
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,948,634
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,964,927
<AVERAGE-NET-ASSETS> 962,479,886
<PER-SHARE-NAV-BEGIN> 30.56
<PER-SHARE-NII> .34
<PER-SHARE-GAIN-APPREC> 5.12
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .32
<RETURNS-OF-CAPITAL> 2.12
<PER-SHARE-NAV-END> 33.58
<EXPENSE-RATIO> .60
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 6
<NAME> Capital Appreciation Stock Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-2000
<INVESTMENTS-AT-COST> 607,425,948
<INVESTMENTS-AT-VALUE> 839,362,941
<RECEIVABLES> 4,050,966
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 843,413,906
<PAYABLE-FOR-SECURITIES> 3,728,761
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 551,351
<TOTAL-LIABILITIES> 4,280,112
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 597,934,165
<SHARES-COMMON-STOCK> 32,791,492
<SHARES-COMMON-PRIOR> 28,412,098
<ACCUMULATED-NII-CURRENT> 67,799
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,194,838
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 231,936,992
<NET-ASSETS> 839,133,795
<DIVIDEND-INCOME> 5,586,205
<INTEREST-INCOME> 833,637
<OTHER-INCOME> 0
<EXPENSES-NET> 5,697,133
<NET-INVESTMENT-INCOME> 722,710
<REALIZED-GAINS-CURRENT> 73,587,448
<APPREC-INCREASE-CURRENT> 91,564,086
<NET-CHANGE-FROM-OPS> 165,874,244
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 654,910
<DISTRIBUTIONS-OF-GAINS> 64,764,832
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,570,088
<NUMBER-OF-SHARES-REDEEMED> 767,172
<SHARES-REINVESTED> 2,576,478
<NET-CHANGE-IN-ASSETS> 4,379,394
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,685,472
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,697,133
<AVERAGE-NET-ASSETS> 693,524,237
<PER-SHARE-NAV-BEGIN> 22.19
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 5.55
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 2.15
<PER-SHARE-NAV-END> 25.59
<EXPENSE-RATIO> .80
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000732697
<NAME> Ultra Series Fund
<SERIES>
<NUMBER> 7
<NAME> Mid-Cap Stock Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-01-1999
<INVESTMENTS-AT-COST> 24,315,751
<INVESTMENTS-AT-VALUE> 26,668,630
<RECEIVABLES> 43,414
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,712,044
<PAYABLE-FOR-SECURITIES> 211,616
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,000
<TOTAL-LIABILITIES> 232,616
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,092,962
<SHARES-COMMON-STOCK> 2,375,783
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 8,840
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 24,747
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,352,878
<NET-ASSETS> 26,479,428
<DIVIDEND-INCOME> 135,064
<INTEREST-INCOME> 47,623
<OTHER-INCOME> 0
<EXPENSES-NET> 130,825
<NET-INVESTMENT-INCOME> 51,863
<REALIZED-GAINS-CURRENT> 481,164
<APPREC-INCREASE-CURRENT> 2,352,878
<NET-CHANGE-FROM-OPS> 2,885,905
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 43,023
<DISTRIBUTIONS-OF-GAINS> 456,416
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,349,783
<NUMBER-OF-SHARES-REDEEMED> 16,297
<SHARES-REINVESTED> 42,297
<NET-CHANGE-IN-ASSETS> 2,375,783
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 130,658
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130,825
<AVERAGE-NET-ASSETS> 19,484,932
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 1.34
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> .20
<PER-SHARE-NAV-END> 11.15
<EXPENSE-RATIO> 1.00
</TABLE>
Exhibit 23(p)
Ultra Series Fund
Code of Ethics
Amended and Restated as of March 19, 1997
Introductory Statement
On January 21, 1987, the Board of Trustees of the Ultra Series Fund (the "Fund")
adopted a Code of Ethics (the "Code"). The goal of this Code is to safeguard the
interests of the Fund shareholders, without incurring unnecessary administrative
duplication of existing procedures. Therefore, this Code incorporates sections
4.l, 4.2, and 5.4 of the Policy Against Insider Trading (Policy) adopted October
14, 1994, as amended March 19, 1997, by the Board of the Investment Adviser to
the Fund, CIMCO Inc. (CIMCO).
Statement of General Principles
All persons associated with the Fund shall place the interests of the
shareholders of the Fund before their own personal interests. All personal
securities transactions shall be conducted in such a manner as to avoid any
actual or potential conflict of interest or any abuse of any person's position
of trust and responsibility to the Fund. No person associated with the Fund
shall take inappropriate advantage of the person's association with the Fund.
Quarterly reports of personal securities transactions shall be completed by each
person subject to section 17(j) of the Investment Company Act, for example, a
person who:
"makes any recommendation, participates in the determination of which
recommendation shall be made, or whose principal function or duties
relate to the determination of which recommendation shall be made to
any registered investment company; or who, in connection with his
duties, obtains any information concerning securities recommendations
being made by such investment adviser to any registered investment
company."
Certification of Compliance
Each person who completes a quarterly report of personal securities transactions
shall certify annually that:
- The person has read and understood this Code and recognizes that the
person is subject to it.
- The person has complied with the requirements of this Code and has
reported all personal securities transactions required to be reported.
Prohibitions
No person who completes a quarterly report of personal securities transactions
may:
- Acquire any securities of an initial public offering for the
person's own account until the seventh calendar day after the
offering date and then only at the prevailing market price for
bonafide long-term investment in accordance with the person's
normal investment practice.
- Acquire any securities through a private placement for the
person's own account without the prior written approval of the
majority of the noninterested trustees of the Fund.
- Accept any gift or other thing of more than de minimus value
from any person or entity that does business with or on behalf
of the Fund.
- Serve as a director of a publicly traded company without the
prior written approval of the majority of the noninterested
trustees of the Fund.
Restricted List
This Code incorporates the provisions of the CIMCO Policy reproduced below:
"4.1 The Restricted List is the responsibility of the Vice
President-Investments. The Restricted List shall include two
categories of securities. The first category includes any
equity security which CIMCO, on behalf of clients, intends to
trade or is trading. The second category includes any security
of any company moved from the Watch List to the Restricted
List. CIMCO is prohibited from trading in any security in the
second
<PAGE>
category. The list will be kept in a nonpublic place in
the custody of a person designated by the Vice
President-Investments. The Restricted List will show:
- the date and time the security was added to the list,
- the name of the person who added it,
- the date and time a security was deleted,
- the name of the person who deleted it,
- whether the security is in category one, that is,
CIMCO is trading or intending to trade the security,
or is in category two, that is, CIMCO is prohibited
from trading the security.
4.2 Do not make any trade or recommendation involving any security
or any option on a security on the Restricted List for
yourself, any member of your family, or any other person,
except that you may trade securities in category one for
clients of CIMCO. Personal trading is prohibited during the
entire time a security is on the Restricted List and for seven
calendar days after the security has been removed from the
Restricted List. In addition, the quarterly audit will review
personal trading within seven days before a security is added
to the Restricted List. The Compliance Committee [as defined
in the CIMCO Policy] shall determine whether any abuse has
occurred. If an abuse has occurred, any profit resulting from
the abuse shall be disgorged and any other appropriate action
taken. To facilitate review of personal trades, any of which
may prove to have been made within seven days before a
security is added to the Restricted List, all personnel with
authority to make trading decisions on behalf of CIMCO and
clients of CIMCO shall document in writing all personal
trades, at the time of the trade, indicating why the trade
would not be appropriate for CIMCO and its clients. The
written documentation shall be filed within 24 hours after
making the trade in the Restricted List File."
Quarterly Audits
This Code incorporates the provisions of the CIMCO Policy reproduced below:
"5.4 A person designated by the head of Internal Auditing shall conduct an
audit within the month following the end of each quarter.
Notwithstanding the provisions of section 3.2, the names of companies
on the Watch List shall be made available to the auditor for purposes
of the quarterly audit. The audit will review quarterly reports of
personal securities transactions and compare personal trades to the
Restricted List. Any personal trades involving securities restricted
at the time of the trade or within the seven calendar days preceding
the date a security was added to the Restricted List will be noted.
The audit will also review whether securities of companies on the
Watch List were traded during the quarter. The results of the audit
will be presented to the members of the Compliance Committee."
Board Review
As soon as necessary, but in no event later than the board meeting following the
second quarter of 2000, the Board shall review any difficulties encountered in
administering this Code, any material violations of this Code, and any changes
in applicable laws and regulations. At the time of such review, the Board shall
consider the interests of shareholders and shall make any changes necessary to
comply with statutory and regulatory changes.
Sanctions
Violation of this Code may subject any person who completes quarterly reports to
disciplinary action. The Compliance Committee will report material violations to
the Board of Trustees and to regulatory authorities.
<PAGE>
Exhibit 23(p)
CIMCO INC. CODE OF ETHICS
I. INTRODUCTION
CIMCO Inc. is a registered investment advisor. In this role, CIMCO manages
other people's money. Accordingly, CIMCO and its employees are held to high
ethical standards. These high ethical standards include the following
principles:
1. At all times to place the interest of clients first;
2. All personal securities transactions be conducted consistent with this
Code of Ethics and in such a manner as to avoid any actual or
potential conflict of interest or any abuse of an individual's
position of trust and responsibility;
3. Never take inappropriate advantage of their positions;
4. To act with integrity, competence, dignity and in an ethical manner
when dealing with the public, clients, prospects, employers,
employees;
5. Strive to maintain and improve competence in the profession; and
6. Use of reasonable care and exercise independent and professional
judgment.
II. PERSONAL TRADING
In addition to the general principles stated above, federal securities laws
impose certain standards on the personal trading activities of all market
participants. In particular, all investors are precluded from engaging in
insider trading or tipping. Additionally, mutual fund and investment
advisor employees are subject to additional regulations that address
potential conflicts arising from their personal investment activities. This
Code of Ethics describes these standards and regulations. If you have any
questions about this Code of Ethics or a specific transaction please
contact a member of the Compliance Committee.
A. Persons covered. All CIMCO employees, their spouses and minor
children, and certain other individuals identified by the Compliance
Committee are subject to this Code of Ethics. ("Covered Persons")
B. Prohibitions. Covered Persons are prohibited from doing the following
for any transaction or account in which they have, or may acquire, any
direct or indirect beneficial ownership interest and over which
transaction the Covered Person has direct or indirect control:
1. Purchasing any securities in an initial public offering;
<PAGE>
2. Purchasing any securities on the Restricted List (the Restricted
List is described later in this policy);
3. Profiting in the purchase and sale or sale and purchase of the
same security within 60 calendar days;
4. Receiving any gift or other thing of more than de minimis value
from any person or entity that does business with or on behalf of
CIMCO or the mutual funds;
5. Serving on the board of directors of a publicly traded company
(absent prior written approval by the Compliance Committee);
6. Acquiring any security in a private placement transaction (absent
prior written approval by the Compliance Committee);
7. Purchasing a corporate bond or a municipal bond (absent prior
written approval by the Compliance Committee);
8. Trading on material, nonpublic information (If you have any
questions whether information is material or nonpublic, we
strongly recommend that you do not trade. If for some reason you
still believe it is appropriate to trade, we require that you
discuss this matter with the Compliance Committee.); and
9. Tipping - communicating nonpublic material information to others.
C. Procedures. Covered Persons must do the following:
1. Complete quarterly personal securities transaction reports. The
Legal Department will distribute the reports quarterly. The
reports must be completed and returned to the Legal Department
within ten days after the end of each quarter.
2. Acknowledge in writing your receipt, review and understanding of
this Code of Ethics.
3. Certify annually that you have complied with the requirements of
this Code of Ethics and have disclosed all personal security
transactions.
4. Obtain preclearance from a member of the Compliance Committee of
all personal security transactions before making the transaction
on the form attached as Exhibit A. The Compliance Committee will
issue a response within one business day. The clearance will be
effective for five business days.
5. Disclose all personal security holdings upon commencement of
employment and thereafter on an annual basis.
<PAGE>
D. Exemptions. The following investments are not subject to the
prohibitions set forth in Section II(B)and (C):
1. Securities issued by the government of the United States or its
agencies;
2. Bank certificates of deposit;
3. Shares of registered open-end investment companies;
4. Any other transaction specifically approved in writing by the
Compliance Committee.
III. Miscellaneous.
A. Restricted List.
A designated CIMCO employee will maintain the restricted list. The
restricted list will include all stocks for which CIMCO has a pending
buy or sell order (excepted as described below). A stock will remain
on the restricted list for seven calendar days after the trade is
executed or withdrawn. Anyone who purchases a stock while it is on the
restricted list will be directed to sell the stock and disgorge any
profits to the United Way of Dane County. Additionally, all portfolio
managers are prohibited from buying or selling stock within seven (7)
days before a portfolio he/she manages trades in that stock. Issues of
stocks with a market capitalization of more than $50 billion will not
be included on the restricted list. However, if there is any question
as to an issuer's market capitalization exceeding $50 billion, the
designated employee is directed to include it on the list.
B. Private Placement Information.
A watch list will be maintained by a designated CIMCO employee. The
Watch List will include companies for which the private placement
section has current material, nonpublic information. A company will be
removed from the Watch List when the designated employee determines
the information is no longer material, nonpublic information. The
designated employee will also maintain a locked file system to house
the material, nonpublic information. The designated employee will
control access to the locked filing system.
C. The Compliance Committee.
The Compliance Committee shall consist of three members. One member
shall be appointed by the President of CIMCO; one member shall be
appointed by the head of internal auditing; and one member shall be
appointed by the general counsel.
D. Quarterly Audits.
<PAGE>
A person designated by the head of internal auditing shall conduct an
audit within the month following the end of each quarter to review
compliance with this Code of Ethics. The audit will review quarterly
reports of personal securities transactions and compare personal
trades to the restricted list. The results of the audit will be
presented to the members of the Compliance Committee.
D. Sanctions.
Any violation of this Code of Ethics may subject the person to a
recommendation by the Compliance Committee which calls for
disciplinary action, dismissal, disgorgement of profits, divestiture
of stock, or other appropriate sanctions as determined by the
Compliance Committee.
E. Reports.
The Compliance Committee will prepare an annual report to the boards
of directors of the mutual funds and investment advisor. The report
will include any violations of this policy which required significant
remedial action and will contain recommendations for changes, if any,
in this policy.
F. Amendment.
The Board of Directors of CIMCO may amend this policy from time to
time.
The market capitalization exemption from the restricted list can be
amended by written notice of the Compliance Committee.
Exhibit 23(p)
CUNA BROKERAGE SERVICES, INC.
Code of Ethics
Adopted September 1, 1997
Introductory Statement
CUNA Brokerage is adopting this Code of Ethics to safeguard the interests of
CUNA Brokerage's customers, without incurring unnecessary administrative
duplication of existing procedures.
CUNA Brokerage is an affiliated company of CIMCO, a registered investment
advisor. CIMCO is sponsoring an Investment Company for which CUNA Brokerage is
acting as principal underwriter. This Code of Ethics is adopted to address the
requirements of Section 17(j) of the Investment Company Act of 1940, and Rule
17j-1 promulgated in accordance with the Investment Company Act.
Statement of General Policy
All persons associated with CUNA Brokerage shall place the interests of
customers before their own personal interests. All personal securities
transactions shall be conducted in such a manner as to avoid any actual or
potential conflict of interest or any abuse of any person's position of trust
and responsibility to CBS or its affiliated organizations. No person associated
with CBS shall take inappropriate advantage of the person's association with
CBS.
Quarterly reports of personal securities transactions shall be completed by each
person subject to section 17(j) of the Investment Company Act, for example, a
person who:
"makes any recommendation, participates in the determination of which
recommendation shall be made, or whose principal function or duties relate
to the determination of which recommendation shall be made to any
registered investment company; or who, in connection with his duties,
obtains any information concerning securities recommendations being made by
such investment adviser to any registered investment company."
Certification of Compliance
Each person who completes a quarterly report of personal securities transactions
shall certify annually that:
- The person has read and understands this Code and recognizes that the
person is subject to it.
- The person has complied with the requirements of this Code and has
reported all personal securities transactions required to be reported.
Prohibitions
No person who completes a quarterly report of personal securities transactions
may:
- Acquire any securities of an initial public offering for the person's
own account until the seventh calendar day after the offering date and
then only at the prevailing market price for bonafide long-term
investment in accordance with the person's normal investment practice.
- Acquire any securities through a private placement for the person's
own account without the prior written approval of CBS.
- Accept any gift or other thing of more than de minimus value from any
person or entity that does business with or on behalf of CBS.
- Serve as a director of a publicly traded company without the prior
written approval of CBS.
Restricted List
This Code incorporates the provisions of the CIMCO Policy reproduced below:
"4.1 The Restricted List is the responsibility of the Senior Vice
President. The Restricted List shall include two categories of
securities. The first category includes any equity security which
CIMCO, on behalf of clients, intends to trade or is trading. The
second category includes any security of any company moved from the
Watch List [as defined in the CIMCO policy] to the Restricted List.
CIMCO is prohibited from trading in
<PAGE>
any security in the second category. The list will be kept in a
nonpublic place in the custody of a person designated by the Senior
Vice President. The Restricted List will show:
- the date and time the security was added to the list,
- the name of the person who added it,
- the date and time a security was deleted,
- the name of the person who deleted it,
- whether the security is in category one, that is, CIMCO is
trading or intending to trade the security, or is in category
two, that is, CIMCO is prohibited from trading the security.
4.2 Do not make any trade or recommendation involving any security or any
option on a security on the Restricted List for yourself, any member
of your family, or any other person, except that you may trade
securities in category one [as defined in hte CIMCO policy] for
clients of CIMCO. Personal trading is prohibited during the entire
time a security is on the Restricted List and for seven calendar days
after the security has been removed from the Restricted List. In
addition, the quarterly audit will review personal trading within
seven days before a security is added to the Restricted List. The
Compliance Committee [as defined in the CIMCO Policy] shall determine
whether any abuse has occurred. If an abuse has occurred, any profit
resulting from the abuse shall be disgorged and any other appropriate
action taken. To facilitate review of personal trades, any of which
may prove to have been made within seven days before a security is
added to the Restricted List, all personnel with authority to make
trading decisions on behalf of CIMCO and clients of CIMCO shall
document in writing all personal trades, at the time of the trade,
indicating why the trade would not be appropriate for CIMCO and its
clients. The written documentation shall be filed within 24 hours
after making the trade in the Restricted List File."
Quarterly Audits
This Code incorporates the provisions of the CIMCO Policy reproduced below:
"5.4 A person designated by the head of Internal Auditing shall conduct an
audit within the month following the end of each quarter.
Notwithstanding the provisions of section 3.2, the names of companies
on the Watch List shall be made available to the auditor for purposes
of the quarterly audit. The audit will review quarterly reports of
personal securities transactions and compare personal trades to the
Restricted List. Any personal trades involving securities restricted
at the time of the trade or within the seven calendar days preceding
the date a security was added to the Restricted List will be noted.
The audit will also review whether securities of companies on the
Watch List were traded during the quarter. The results of the audit
will be presented to the members of the Compliance Committee."
Board Review
The Board shall review any difficulties encountered in administering this Code,
any material violations of this Code, and any changes in applicable laws and
regulations. At the time of such review, the Board shall consider the interests
of customers and shall make any changes necessary to comply with statutory and
regulatory changes.
Exceptions
All Directors, Officers and Advisory Persons, as defined in Rule 17j-1, who are
subject to a similar Code of Ethics and reporting requirement, are not required
to make quarterly reports to CUNA Brokerage. This exception specifically applies
to Directors, Officers and Advisory Persons of CUNA Brokerage Services subject
to the Code of Ethics adopted by CIMCO and/or Ultra Series Fund.
Sanctions
Violation of this Code may subject any person who completes quarterly reports to
disciplinary action. The Compliance Officer will report material violations to
the Board and to regulatory authorities.
Other Exhibits
Powers of Attorney
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 Kevin
S. Thompson and Michael A. Murphy, 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 7th day of April, 2000.
/s/ Gwendolyn M. Boeke
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 Kevin
S. Thompson and Michael A. Murphy, 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 7th day of April, 2000.
/s/ Michael S. Daubs
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 Kevin
S. Thompson and Michael A. Murphy, 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 7th day of April, 2000.
/s/ Alfred L. Disrud
Alfred L. 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 Kevin
S. Thompson and Michael A. Murphy, 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 7th day of April, 2000.
/s/ Lawrence R. Halverson
Lawrence 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 Kevin
S. Thompson and Michael A. Murphy, 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 7th day of April, 2000.
/s/ Keith S. Noah
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 Kevin
S. Thompson and Michael A. Murphy, 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 7th day of April, 2000.
/s/ T.C. Watt
T.C. Watt
Trustee for Ultra Series Fund
