<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
( ) PRE-EFFECTIVE AMENDMENT NO.
( ) POST-EFFECTIVE AMENDMENT NO.
------------------------
MANUFACTURERS INVESTMENT TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
116 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02116
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
------------------------
NAME AND ADDRESS OF AGENT FOR SERVICE:
JAMES D. GALLAGHER, ESQ.
73 TREMONT STREET
BOSTON, MASSACHUSETTS 02108
(617) 266-6008
(REGISTRANT'S AREA CODE AND TELEPHONE NUMBER)
------------------------
WITH A COPY TO:
SARAH E. COGAN, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Registration Statement becomes effective.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
------------------------
TITLE OF SECURITIES BEING REGISTERED:
SHARES OF BENEFICIAL INTEREST ($.01 PAR VALUE) OF
GLOBAL EQUITY TRUST AND INVESTMENT QUALITY BOND TRUST, EACH A SERIES OF THE
REGISTRANT
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OR AMOUNT OF ITS SHARES
UNDER THE SECURITIES ACT OF 1933 PURSUANT TO SECTION 24(f) UNDER THE INVESTMENT
COMPANY ACT OF 1940; ACCORDINGLY, NO FEE IS PAYABLE HEREWITH BECAUSE OF RELIANCE
UPON SECTION 24(f).
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<PAGE> 2
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a) UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
ITEM OF FORM N-14 LOCATION IN THE PROSPECTUS/PROXY STATEMENT
- --------------------------------------------- ---------------------------------------------
<S> <C>
PART A
1. Beginning of Registration Statement and Cover Page; Cross Reference Sheet; Notice of
Outside Front Cover Page of Prospectus Special Meeting of Shareholders
2. Beginning and Outside Back Cover Page of Table of Contents
Prospectus
3. Fee Table, Synopsis Information, and Risk Summary
Factors
4. Information About the Transaction Summary; Information About the
Reorganization; Additional Information
About the Trust; Agreement and Plan of
Reorganization
5. Information About the Registrant Summary; Information About the
Reorganization; Additional Information on
Investment Policies and Techniques and Risk
Factors; Additional Information About the
Trust
6. Information About the Company Being Summary; Information About the
Acquired Reorganization; Additional Information on
Investment Policies and Techniques and Risk
Factors; Additional Information About the
Trust
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Voting Information; Financial Statements and
Experts
9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters
PART B
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Statement of Additional Information
Registrant
13. Additional Information About the Company Statement of Additional Information
Being Acquired
14. Financial Statements Financial Statements and Experts; Pro Forma
Financial Statements; Historical Financial
Statements
PART C
Information required to be included in Part C is set forth under the appropriate Item, so
numbered, in Part C of the Registration Statement.
</TABLE>
<PAGE> 3
PART A
INFORMATION REQUIRED IN THE PROSPECTUS/PROXY STATEMENT
<PAGE> 4
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
MANUFACTURERS INVESTMENT TRUST
116 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02116
March , 1999
TO OUR VARIABLE ANNUITY AND VARIABLE LIFE CONTRACT OWNERS:
A Special Meeting of Shareholders of the Manufacturers Investment Trust
(the "Trust") will be held at 73 Tremont Street, Boston, Massachusetts 02108, on
April [27], 1999, at 10:00 a.m., Eastern Standard Time, for the purpose of
considering a reorganization proposal that will combine two of the Trust's
portfolios with two other Trust portfolios.
Although you are not a shareholder of the Trust, your purchase payments and
the earnings on such purchase payments under your variable annuity or variable
life insurance contracts issued by The Manufacturers Life Insurance Company of
North America ("Manulife North America"), The Manufacturers Life Insurance
Company of New York ("Manulife New York") and The Manufacturers Life Insurance
Company of America ("Manufacturers America") are invested in shares of one or
more of the Trust portfolios through sub-accounts of separate accounts
established by Manulife North America, Manulife New York and Manufacturers
America for such purpose. Since the value of your contract depends in part on
the investment performance of the Trust shares, you have the right to instruct
Manulife North America, Manulife New York or Manufacturers America, as
appropriate, as to the manner in which the Trust shares attributable to your
contract are voted. Thus, each of Manulife North America, Manulife New York and
Manufacturers America will vote all of the Trust shares held by it in accordance
with and in proportion to timely instructions received from you as a contract
owner. The number of votes as to each Trust portfolio for which you may give
instructions is determined by dividing your contract value (or the reserve for a
contract after its maturity date) allocated to the sub-account in which such
Trust portfolio shares are held by the value per share of that Trust portfolio.
Fractional votes are counted. Trust shares held in each sub-account as to which
executed voting instructions are not received, including shares not attributable
to contract owners, will be voted in the same proportion as shares in that
sub-account for which instructions are received from contract owners.
Contract owners whose assets are invested in either the Worldwide Growth
Trust or the Capital Growth Bond Trust (collectively, the "Transferor
Portfolios") of the Trust are being asked to consider a reorganization whereby
the Transferor Portfolios would merge with and into the Global Equity Trust and
the Investment Quality Bond Trust (collectively, the "Acquiring Portfolios"),
respectively, of the Trust. As a result of the reorganization, contract owners
whose assets are invested in the Transferor Portfolios will be able to pursue
substantially similar investment goals in the context of a larger fund with
potentially greater economies of scale and better performance. Such larger funds
should enhance the ability of portfolio managers to effect portfolio
transactions on more favorable terms and give portfolio managers greater
investment flexibility and the ability to select a larger number of portfolio
securities, with the attendant benefits of increased diversification. It is
anticipated that the investment advisory fees and the annualized expenses as a
percentage of average net assets paid by the Acquiring Portfolios generally will
be comparable to or lower than those paid by the corresponding Transferor
Portfolios. There are certain differences between the investment objectives,
policies and restrictions of the Transferor Portfolios and the Acquiring
Portfolios, as summarized in the tables beginning on page 6 and included under
the caption "Investment Objectives and Policies" in the enclosed
Prospectus/Proxy Statement.
The value of your investment will not be affected in the reorganization
transaction. Furthermore, in the opinion of legal counsel, the transaction will
not be subject to federal income taxes. The Transferor Portfolios and the
Acquiring Portfolios will bear the expenses of the reorganization.
For these reasons and the additional reasons discussed in the enclosed
Prospectus/Proxy Statement, the Board of Trustees of the Trust unanimously
recommends that you vote FOR approval of the reorganization proposal.
Enclosed you will find a Notice of Special Meeting of Shareholders, a
Prospectus/Proxy Statement for the Trust and a Voting Instructions Form for each
Transferor Portfolio in which your contract values were invested as of February
[28], 1999 (the record date for the Meeting). The number of shares of each Trust
portfolio which represents your voting interest determined as explained above
appears on each enclosed Voting Instructions Form. The Prospectus/Proxy
Statement provides background information and explains the matters to be voted
on at the Meeting. We urge you to read the Prospectus/Proxy Statement and then
complete and return each Voting Instructions Form on or before April [26], 1999.
Your vote is extremely important.
If you have any questions regarding the reorganization, please call (800)
344-1029.
Sincerely yours,
JOHN D. DESPREZ III
President
Manufacturers Investment Trust
<PAGE> 5
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
MANUFACTURERS INVESTMENT TRUST
116 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02116
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
March , 1999
To the Shareholders of
MANUFACTURERS INVESTMENT TRUST:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of Manufacturers Investment Trust (the "Trust"), will be held at 73
Tremont Street, Boston, Massachusetts 02108 on April [27], 1999 at 10:00 a.m.,
Eastern Standard Time. A Prospectus/Proxy Statement which provides information
about the purpose of the Meeting is included with this notice. The Meeting will
be held for the following purposes:
Item 1 To consider and act upon a proposal to approve an Agreement and
Plan of Reorganization (the "Plan") of the Trust on behalf of the
Worldwide Growth Trust and the Capital Growth Bond Trust portfolios
(collectively, the "Transferor Portfolios") and the Global Equity
Trust and the Investment Quality Bond Trust portfolios
(collectively, the "Acquiring Portfolios"). The following table
depicts each Transferor Portfolio and the corresponding Acquiring
Portfolio into which such Transferor Portfolio will be merged:
<TABLE>
<CAPTION>
TRANSFEROR PORTFOLIO CORRESPONDING ACQUIRING PORTFOLIO
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<S> <C>
Worldwide Growth Trust Global Equity Trust
Capital Growth Bond Trust Investment Quality Bond Trust
</TABLE>
Shareholders of each Transferor Portfolio will vote separately on Item 1.
Item 2 Transaction of any other business that may properly come before the
Meeting.
The Board of Trustees of the Trust has recently reviewed and unanimously
endorsed the proposal set forth in the accompanying Prospectus/Proxy Statement.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT SHAREHOLDERS VOTE FOR ITEM 1.
Approval of the Plan will require the affirmative vote of the holders of at
least a "majority of the outstanding voting securities" (as defined in this
Prospectus/Proxy Statement) of each of the Transferor Portfolios. By approving
the Plan, shareholders of the Transferor Portfolios will be deemed to have
waived certain of the Trust's investment limitations solely insofar as they
might be deemed to apply to the transactions contemplated by the Plan.
Each shareholder of record at the close of business on February [28], 1999
is entitled to receive notice of and to vote at the Meeting.
Sincerely yours,
JAMES D. GALLAGHER
Secretary
March , 1999
Boston, Massachusetts
<PAGE> 6
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND THE EXCHANGE COMMISSION ONLY
PROSPECTUS/PROXY STATEMENT DATED MARCH , 1999
Relating to the Acquisition of the Assets of
WORLDWIDE GROWTH TRUST
AND
CAPITAL GROWTH BOND TRUST
OF
MANUFACTURERS INVESTMENT TRUST
By and in exchange for shares of
GLOBAL EQUITY TRUST
AND
INVESTMENT QUALITY BOND TRUST
OF
MANUFACTURERS INVESTMENT TRUST
116 Huntington Avenue
Boston, Massachusetts 02116
(800) 344-1029
GENERAL
This Prospectus/Proxy Statement relates to the proposed transfer of all of
the assets and liabilities of the Worldwide Growth Trust and the Capital Growth
Bond Trust (collectively, the "Transferor Portfolios") of the Manufacturers
Investment Trust (the "Trust") to the Global Equity Trust and the Investment
Quality Bond Trust (collectively, the "Acquiring Portfolios"), respectively, of
the Trust in exchange for shares of such Acquiring Portfolio (the
"Reorganization"). As a result of the Reorganization, each shareholder of a
Transferor Portfolio will receive that number of shares of the corresponding
Acquiring Portfolio equal in value at the time of the exchange to the value of
such shareholder's shares of the Transferor Portfolio at such date. The terms
and conditions of the Reorganization are more fully described in this
Prospectus/Proxy Statement and in the Agreement and Plan of Reorganization
attached hereto as Exhibit A.
The Trust is a no-load, open-end management investment company, commonly
known as a mutual fund, registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers shares in 36 investment
portfolios. The shares of the Trust are divided into 36 series corresponding to
the investment portfolios. Each Transferor Portfolio and each Acquiring
Portfolio is a series of the Trust. In this Prospectus/Proxy Statement, for
simplicity, certain actions are described as being taken by either a Transferor
Portfolio or an Acquiring Portfolio, each of which is a portfolio of the Trust,
although all actions are actually taken by the Trust on behalf of the applicable
portfolio.
The Trust does not sell its shares directly to the public, but sells its
shares generally only to insurance companies and their separate accounts as the
underlying investment medium for variable annuity and variable life contracts
("contracts"). Only shares of a particular portfolio are entitled to vote on
matters which affect only the interests of that portfolio. As of the record date
for the Special Meeting of Shareholders, the shares of the Transferor Portfolios
were legally owned by The Manufacturers Life Insurance Company of North America
("Manulife North America"), The Manufacturers Life Insurance Company of New York
("Manulife New York") and The Manufacturers Life Insurance Company of America
("Manufacturers America"). The ultimate parent of each of Manulife North
America, Manulife New York and Manufacturers America, is The Manufacturers Life
Insurance Company ("Manulife"), a Canadian mutual life insurance company whose
principal address is 200 Bloor Street East, Toronto, Ontario, Canada M4W 1E5.
Manulife North America is a stock life insurance company organized under
the laws of Delaware. Manulife North America holds shares of the Transferor
Portfolios directly and attributable to variable annuity contracts in The
Manufacturers Life Insurance Company of North America Separate Account A and
variable life contracts in The Manufacturers Life Insurance Company of North
America Separate Account B, both of which are separate accounts registered under
the 1940 Act, as well as in an unregistered separate account.
Manulife New York is a stock life insurance company organized under the
laws of New York. Manulife New York holds shares of the Transferor Portfolios
directly and attributable to variable annuity contracts in The Manufacturers
Life
<PAGE> 7
Insurance Company of New York Separate Account A and variable life contracts in
The Manufacturers Life Insurance Company of New York Separate Account B, both of
which are separate accounts registered under the 1940 Act.
Manufacturers America is a stock life insurance company organized under the
laws of Pennsylvania and redomesticated under the laws of Michigan.
Manufacturers America holds shares of the Transferor Portfolios directly and
attributable to variable annuity contracts in Separate Account 2 and variable
life contracts in Separate Accounts 3 and 4, all of which are separate accounts
registered under the 1940 Act.
Each of Manulife North America, Manulife New York and Manufacturers America
has the right to vote upon matters that may be voted upon at a special
shareholders' meeting. However, all shares of the Transferor Portfolios will be
voted in proportion to the timely instructions received from owners of the
contracts issued by these insurance companies (the "contractholders"). As a
result, this Prospectus/Proxy Statement is being furnished in connection with
the solicitation of voting instructions from such contractholders regarding the
proposal to shareholders of the Transferor Portfolios to approve the
Reorganization.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Acquiring Portfolios
that a prospective investor ought to know before investing. For a more detailed
discussion of the investment objectives, policies, restrictions and risks of the
Acquiring Portfolios, see the prospectus for the Trust dated May 1, 1998, which
is incorporated by reference into this Prospectus/Proxy Statement. A copy of the
prospectus may be obtained without charge by writing to the Trust at the address
noted above or by calling toll free (800) 344-1029. A Statement of Additional
Information dated March , 1999 (the "Statement of Additional Information")
containing additional information about the Reorganization and the Trust has
been filed with the Securities and Exchange Commission (the "Commission") and is
incorporated by reference into this Prospectus/Proxy Statement. A copy of the
Statement of Additional Information may be obtained without charge by writing to
the Trust at the address noted above or by calling toll free (800) 344-1029. If
shareholders have any questions regarding the Reorganization, please call (800)
344-1029.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS/PROXY STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON, INCLUDING ANY DEALER OR SALESPERSON, HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, UNLESS THE INFORMATION OR
REPRESENTATION IS SET FORTH IN THIS PROSPECTUS/PROXY STATEMENT. IF ANY SUCH
INFORMATION IS GIVEN, IT SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE TRUST, THE ADVISER OR ANY SUBADVISERS TO THE TRUST OR THE PRINCIPAL
UNDERWRITER OF THE CONTRACTS. THIS PROSPECTUS/PROXY STATEMENT IS NOT AN OFFER TO
SELL SHARES OF THE TRUST IN ANY STATE WHERE SUCH OFFER OR SALE WOULD BE
PROHIBITED.
AN INVESTMENT IN ANY OF THE PORTFOLIOS IS NOT A DEPOSIT OF ANY BANK AND IS NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
2
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Summary..................................................... 3
Information About the Reorganization........................ 14
Voting Information.......................................... 18
Additional Information on Investment Policies and Techniques
and Risk Factors.......................................... 20
Additional Information About the Trust...................... 27
Financial Statements and Experts............................ 37
Legal Matters............................................... 37
Appendix.................................................... A-1
Exhibit A -- Agreement and Plan of Reorganization
</TABLE>
SUMMARY
The following is a summary of certain information contained in this
Prospectus/Proxy Statement. This summary is qualified by reference to the more
complete information contained elsewhere in this Prospectus/ Proxy Statement,
the prospectus of the Trust and the Agreement and Plan of Reorganization
attached to this Prospectus/Proxy Statement as Exhibit A. Shareholders should
read this entire Prospectus/Proxy Statement carefully.
PROPOSED TRANSACTION. The Board of Trustees of the Trust (the "Board"),
including all of the Trustees who are not "interested persons" of the Trust (the
"Independent Trustees"), has unanimously approved an Agreement and Plan of
Reorganization (the "Plan") providing for the transfer of all of the assets and
liabilities of each Transferor Portfolio to the corresponding Acquiring
Portfolio in exchange for shares of such corresponding Acquiring Portfolio.
Subject to its approval by the shareholders of the Transferor Portfolios
and the owners of the variable contracts issued by such shareholders, the Plan
provides for the tax-free reorganization of the Transferor Portfolios, including
(a) the transfer of all of the assets, subject to all of the liabilities, of the
Transferor Portfolios in exchange for the Acquiring Portfolio shares; (b) the
liquidation of the Transferor Portfolios; and (c) the distribution to Transferor
Portfolio shareholders of such Acquiring Portfolio shares. As a result of the
Reorganization, each holder of shares of each Transferor Portfolio specified in
the table below will become a holder of shares of the Acquiring Portfolio listed
opposite such Transferor Portfolio (each Transferor or Acquiring Portfolio being
referred to herein as the "corresponding" Transferor or Acquiring Portfolio to
the respective Acquiring or Transferor Portfolio listed opposite its name).
<TABLE>
<CAPTION>
TRANSFEROR PORTFOLIO ACQUIRING PORTFOLIO
<S> <C>
- ----------------------------------------------------------
Worldwide Growth Trust Global Equity Trust
- ----------------------------------------------------------
Investment Quality Bond
Capital Growth Bond Trust Trust
</TABLE>
The total value of all shares of each Acquiring Portfolio issued in the
Reorganization will equal the total value of the net assets of the corresponding
Transferor Portfolio being acquired by such Acquiring Portfolio. The number of
full and fractional shares of an Acquiring Portfolio received by a shareholder
of the corresponding Transferor Portfolio will be equal in value to the value of
that shareholder's shares of the corresponding Transferor Portfolio as of the
close of regularly scheduled trading on the New York Stock Exchange on the
closing date of the Reorganization (the "Effective Time of the Reorganization").
The Effective Time of the Reorganization is expected to occur on April 30, 1999
or on such later day as the parties may mutually agree (the "Exchange Date"). As
a result, shareholders should carefully consider the information about the
Acquiring Portfolios presented in this Prospectus/Proxy Statement in connection
with voting on the Reorganization.
3
<PAGE> 9
There are certain differences between the investment objectives, policies
and restrictions of the Acquiring Portfolios and the corresponding Transferor
Portfolios, as discussed below. See "Investment Objectives and Policies." The
fee structure of the Transferor Portfolios will also change, as discussed below.
The existing purchase, redemption and dividend policies of the Transferor
Portfolios will remain substantially unchanged. The consummation of the
Reorganization is contingent on the satisfaction of the conditions described
below under "Information About the Reorganization -- Agreement and Plan of
Reorganization."
If the Reorganization were to have been consummated as of June 30, 1998,
the approximate resulting aggregate net assets of the Acquiring Portfolios would
be (1) $1,007,235,042 in the case of the Global Equity Trust and (2)
$305,100,897 in the case of the Investment Quality Bond Trust. If the
Reorganization were to have been consummated as of December 31, 1997, the
approximate resulting aggregate net assets of the Acquiring Portfolios would be
(1) $892,674,782 in the case of the Global Equity Trust and (2) $242,534,888 in
the case of the Investment Quality Bond Trust.
No gain or loss will be recognized by the Transferor Portfolios or the
Acquiring Portfolios or shareholders of the Transferor Portfolios for federal
income tax purposes as a result of the Reorganization. For further information
about the tax consequences of the Reorganization, see "Information about the
Reorganization -- Federal Income Tax Consequences."
Under Massachusetts law, shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust, and requires that notice of such disclaimer be given
in each agreement, obligation, or instrument entered into or executed by the
Trust or the Trustees. Moreover, the Declaration of Trust provides for
indemnification out of the Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder's incurring financial loss on account of shareholder
liability is considered by the Trust to be remote, since it is limited to
circumstances in which the disclaimer is inoperative, inadequate insurance
existed (e.g., fidelity bonding and errors and omissions insurance) and the
Trust itself is unable to meet its obligations.
INVESTMENT MANAGEMENT. Manulife Securities Services, LLC ("Manulife
Securities") currently serves as investment adviser to the Trust and each of its
portfolios. Manulife Securities, a wholly-owned subsidiary of Manulife North
America, is a Delaware limited liability company whose principal offices are
located at 73 Tremont Street, Boston, Massachusetts 02108. In addition, each
portfolio of the Trust has a separate subadviser which is responsible for the
day-to-day decision making. Each of the subadvisers to the portfolios of the
Trust is registered as an investment adviser under the Investment Advisers Act
of 1940 or is otherwise exempt from registration.
The following table illustrates the current management arrangements for the
Transferor Portfolios and the management arrangements to be in effect for the
corresponding Acquiring Portfolios upon consummation of the Reorganization:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
MANAGEMENT ARRANGEMENTS
CURRENT MANAGEMENT ARRANGEMENTS UPON CONSUMMATION OF THE REORGANIZATION
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Transferor Investment Acquiring Investment
Portfolio Adviser Subadviser Portfolio Adviser Subadviser
----------------------------------------------------------------------------------------------------------------
Worldwide Growth Manulife Founders* Global Equity Manulife Morgan Stanley
Trust Securities Trust Securities
----------------------------------------------------------------------------------------------------------------
Capital Growth Manulife MAC** Investment Manulife Wellington
Bond Trust Securities Quality Bond Securities
Trust
----------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
* Founders Asset Management, Inc. ("Founders").
** Manufacturers Adviser Corporation ("MAC"), an indirect wholly owned
subsidiary of Manulife.
4
<PAGE> 10
SUBADVISORY ARRANGEMENTS. It is anticipated that following consummation of
the Reorganization and pursuant to existing agreements with Manulife Securities,
each of Morgan Stanley Asset Management Inc. ("Morgan Stanley") and Wellington
Management Company LLP ("Wellington Management") will continue to serve in its
current capacity.
MORGAN STANLEY
Morgan Stanley has been the subadviser to the Global Equity Trust since
October 1, 1996. Morgan Stanley, a wholly-owned subsidiary of Morgan Stanley,
Dean Witter, Discover & Co., conducts a worldwide portfolio management business,
providing a broad range of portfolio management services to customers in the
United States and abroad. Its principal offices are located at 1221 Avenue of
the Americas, New York, New York 10020.
Morgan Stanley, Dean Witter, Discover & Co. is a global financial services
firm with three major businesses: securities, asset management and credit
services.
Frances Campion has been primarily responsible for the portfolio management
of the Global Equity Trust since January 1, 1997. Ms. Campion joined Morgan
Stanley in January 1990 as a global equity fund manager and is now a Managing
Director of Morgan Stanley & Co. Incorporated. Her responsibilities include day
to day management of the Global Equity Portfolio of Morgan Stanley Institutional
Fund, Inc. Prior to joining Morgan Stanley, Ms. Campion was a U.S. equity
analyst with Lombard Odler Limited where she had responsibility for the
management of global portfolios. Ms. Campion has eleven years global investment
experience. She is a graduate of University of College, Dublin.
WELLINGTON MANAGEMENT
Wellington Management is subadviser to the Investment Quality Bond Trust.
Founded in 1933, Wellington Management is a Massachusetts limited liability
partnership whose principal business address is 75 State Street, Boston,
Massachusetts 02109. Wellington Management is a professional investment
counseling firm which provides investment services to investment companies,
employee benefit plans, endowments, foundations and other institutions and
individuals.
Thomas L. Pappas, Senior Vice President of Wellington Management, has
served as portfolio manager to the Investment Quality Bond Trust since March
1994. Mr. Pappas has been a portfolio manager with Wellington Management since
1987.
INVESTMENT OBJECTIVES AND POLICIES. The following table sets forth the
investment objective and approach of each Transferor Portfolio and its
corresponding Acquiring Portfolio. There are certain differences in the
investment objectives and approaches of the portfolios that should be
considered.
PORTFOLIO INVESTMENT OBJECTIVE AND APPROACH
Worldwide Growth Trust Seeks to achieve long-term growth capital by
normally investing at least 65% of its total
assets in equity securities of growth companies
in a variety of markets throughout the world.
Global Equity Trust Seeks to achieve long-term capital appreciation
by investing primarily in equity securities
throughout the world, including U.S. issuers
and emerging markets.
Capital Growth Bond Trust Seeks to achieve growth of capital by investing
in medium-grade or better debt securities, with
income as a secondary consideration.
Investment Quality Bond Trust Seeks to achieve a high level of current income
consistent with the maintenance of principal
and liquidity by investing primarily in a
diversified portfolio of investment grade
corporate bonds and U.S. Government bonds with
intermediate to longer term maturities. Up to
20% of the portfolio's assets may be invested
in non-investment grade fixed income
securities.
5
<PAGE> 11
The investment objectives and policies of each Transferor Portfolio are set
forth below, together with a discussion of the primary differences, if any, from
those of its corresponding Acquiring Portfolio. Each Transferor Portfolio and
Acquiring Portfolio has a stated investment objective which it pursues through
separate investment policies. The differences in objectives and policies among
the portfolios can be expected to affect the return of each portfolio and the
degree of market and financial risk to which each Transferor Portfolio and
corresponding Acquiring Portfolio is subject.
The investment objectives of each Acquiring Portfolio represent fundamental
policies of each such Acquiring Portfolio and may not be changed without the
approval of the holders of a majority of the outstanding shares of the Acquiring
Portfolio. Except for certain investment restrictions, the policies by which an
Acquiring Portfolio seeks to achieve its investment objectives may be changed by
the Trust's Board without the approval of shareholders.
The following is a description of the investment objective and policies of
each Transferor Portfolio and the corresponding Acquiring Portfolio. More
complete descriptions of the money market instruments in which the Transferor
Portfolios and Acquiring Portfolios may invest and of the options, futures,
currency and other derivative transactions that certain Transferor Portfolios
and Acquiring Portfolios may engage in are set forth in the Statement of
Additional Information. A description of the debt security ratings used by the
Transferor Portfolios and Acquiring Portfolios and assigned by Moody's Investors
Service, Inc. ("Moody's") or Standard and Poor's Corporation ("Standard and
Poor's") is included in the Appendix to this Prospectus/Proxy Statement.
Because the value of securities and the income derived therefrom may
fluctuate according to the earnings of the issuers and changes in economic and
market conditions, there can be no assurance that the investment objective of
any of the Transferor Portfolios or Acquiring Portfolios will be achieved.
WORLDWIDE GROWTH TRUST AND GLOBAL EQUITY TRUST
Worldwide Growth Trust
The investment objective of the Worldwide Growth Trust is long-term growth
of capital. The Worldwide Growth Trust seeks to attain this objective by
investing, under normal circumstances, at least 65% of the portfolio's total
assets in equity securities of growth companies in a variety of markets
throughout the world.
The Worldwide Growth Trust will emphasize common stocks of both emerging
and established growth companies that generally have proven performance records
and strong market positions. The portfolio's holdings will usually consist of
investments in companies in various countries throughout the world, but it will
always invest at least 65% of its total assets in three or more countries. The
portfolio will not invest more than 50% of its total assets in the securities of
any one foreign country.
The Worldwide Growth Trust has the ability to purchase securities in any
foreign country as well as in the United States. Foreign investments of the
portfolio may include securities issued by companies located in countries not
considered to be major industrialized nations. Such countries are subject to
more economic, political and business risk than major industrialized nations,
and the securities they issue are expected to be more volatile and more
uncertain as to payments of interest and principal. Investments of the portfolio
may include securities created through the Brady Plan, a program under which
heavily indebted countries have restructured their bank debt into bonds.
Since the Worldwide Growth Trust's assets will be invested primarily in
foreign securities and since substantially all of the portfolio's revenues will
be received in foreign currencies, the portfolio's net asset values will be
affected by changes in currency exchange rates. The portfolio will pay dividends
in dollars and will incur currency conversion costs.
The Worldwide Growth Trust may invest in convertible securities, preferred
stocks, bonds, debentures, and other corporate obligations when the subadviser
believes that these investments offer opportunities for capital appreciation.
Current income will not be a substantial factor in the selection of these
securities.
6
<PAGE> 12
The portfolio will only invest in bonds, debentures, and corporate
obligations -- other than convertible securities and preferred stocks -- rated
investment grade (BBB or higher) at the time of purchase or, if unrated, of
comparable quality in the opinion of the subadviser. Convertible securities and
preferred stocks purchased by the portfolio may be rated in medium and lower
categories by Moody's or Standard & Poor's (Ba or lower by Moody's and BB or
lower by Standard & Poor's), but will not be rated lower than B. The portfolio
may also invest in unrated convertible securities and preferred stocks in
instances in which the subadviser believes that the financial condition of the
issuer or the protection afforded by the terms of the securities limits risk to
a level similar to that of securities eligible for purchase by the portfolio
rated in categories no lower than B. At no time will the portfolio have more
than 5% of its total assets invested in any fixed-income securities (excluding
preferred stocks) which are unrated or are rated below investment grade either
at the time of purchase or as a result of a reduction in rating after purchase.
The portfolio is not required to dispose of debt securities whose ratings are
downgraded below these ratings subsequent to the portfolio's purchase of the
securities, unless such a disposition is necessary to reduce the portfolio's
holdings of such securities to less than 5% of its total assets.
Up to 100% of the assets of the Worldwide Growth Trust may be invested
temporarily in U.S. Government obligations, commercial paper, bank obligations,
repurchase agreements, and negotiable U.S. dollar-denominated obligations of
domestic and foreign branches of U.S. depository institutions, U.S. branches of
foreign depository institutions, and foreign depository institutions, in cash,
or in other cash equivalents, if the subadviser determines it to be appropriate
for purposes of enhancing liquidity or preserving capital in light of prevailing
market or economic conditions. The portfolio may also acquire certificates of
deposit and bankers' acceptances of banks which meet criteria established by the
Trust's Trustees. While the portfolio is in a defensive position, the
opportunity to achieve capital growth will be limited, and, to the extent that
this assessment of market conditions is incorrect, the portfolio will be
foregoing the opportunity to benefit from capital growth resulting from
increases in the value of equity investments.
The Worldwide Growth Trust may invest in the securities of small and
medium-sized companies. The subadviser considers small and medium-sized
companies to be those which are still in the developing stages of their life
cycles and are attempting to achieve rapid growth in both sales and earnings.
Investments in small sized companies involve greater risk than is customarily
associated with more established companies. For a description of these risks see
"Additional Information on Investment Policies and Techniques and Risk
Factors -- Small Company and Emerging Growth Securities."
The Worldwide Growth Trust will be subject to special risks as a result of
its ability to invest up to 100% of its total assets in foreign securities.
These risks are described under the caption "Additional Information on
Investment Policies and Techniques and Risk Factors -- Foreign Securities."
Moreover, substantial investments in foreign securities may have adverse tax
implications as described under "Additional Information About the Trust -- Tax
Matters."
The Worldwide Growth Trust is currently authorized to use all of the
various investment strategies referred to as "Hedging and Other Strategic
Transactions" under "Additional Information on Investment Policies and
Techniques and Risk Factors." The Statement of Additional Information contains a
description of these strategies and of certain risks associated therewith.
Global Equity Trust
The investment objective of the Global Equity Trust is long-term capital
appreciation. The Global Equity Trust seeks to attain this objective by
investing the portfolio's assets primarily in common and preferred stocks,
convertible securities, rights and warrants to purchase common stocks, American
and Global Depository Receipts and other equity securities of issuers throughout
the world, including issuers located in the U.S. and emerging market countries.
Under normal circumstances, at least 65% of the value of the total assets
of the Global Equity Trust will be invested in equity securities and at least
20% of the value of the portfolio's total assets will be invested in the common
stocks of U.S. issuers. The portfolio may also invest in money market
instruments. Although the portfolio intends to invest primarily in securities
listed on stock exchanges, it will also invest in equity
7
<PAGE> 13
securities that are traded over-the-counter or that are not admitted to listing
on a stock exchange or dealt in on a regulated market. As a result of the
absence of a public trading market, such securities may pose liquidity risks.
The subadviser's approach is oriented to individual stock selection and is
value driven. In selecting stocks for the portfolio, the subadviser initially
identifies those stocks that it believes to be undervalued in relation to the
issuer's assets, cash flow, earnings and revenues, and then evaluates the future
value of such stocks by running the results of an in-depth study of the issuer
through a dividend discount model. In selecting investments, the subadviser
utilizes the research of a number of sources, including an international
affiliate of the subadviser. Portfolio holdings are regularly reviewed and
subjected to fundamental analysis to determine whether they continue to conform
to the subadviser's value criteria. Equity securities which no longer conform to
such investment criteria will be sold. Although the portfolio will not invest
for short-term trading purposes, investment securities may be sold from time to
time without regard to the length of time they have been held.
The Global Equity Trust may engage in forward foreign currency exchanges
and when-issued or delayed delivery securities.
The Global Equity Trust will be subject to special risks as a result of its
ability to invest up to 100% of its total assets in foreign securities. These
risks, including the risks of the possible increased likelihood of expropriation
or the return to power of a communist regime which would institute policies to
expropriate, nationalize or otherwise confiscate investments are described under
the caption "Additional Information on Investment Policies and Techniques and
Risk Factors -- Foreign Securities." Moreover, substantial investments in
foreign securities may have adverse tax implications as described under
"Additional Information About the Trust -- Tax Matters."
The Global Equity Trust is currently authorized to use all of the various
investment strategies referred to as "Hedging and Other Strategic Transactions."
The Statement of Additional Information contains a description of these
strategies and of certain risks associated therewith.
Differences between the Worldwide Growth Trust and the Global Equity Trust
<TABLE>
<CAPTION>
WORLDWIDE GROWTH TRUST GLOBAL EQUITY TRUST COMMENT
---------------------- ------------------- -------
<S> <C> <C>
Authorized to invest in any Authorized to invest in any The Global Equity Trust will,
country, including the United country, including the United under normal circumstances,
States. States; under normal have at least 20% of its
circumstances, invests at portfolio invested in the
least 20% of the value of the United States, whereas the
portfolio's total assets in Worldwide Growth Trust is not
the common stocks of U.S. required to maintain this
issuers. level of investment.
(Historically, however, the
Worldwide Growth Trust has
invested more than 20% of its
assets in the United States.)
Emphasizes the common stocks Emphasizes common stocks of The Global Equity Trust seeks
of both emerging and undervalued companies (i.e., to invest in undervalued
established growth companies value investing). companies, whereas the
(i.e., growth investing). Worldwide Growth Trust seeks
to invest in growth companies.
</TABLE>
CAPITAL GROWTH BOND TRUST AND INVESTMENT QUALITY BOND TRUST
Capital Growth Bond Trust
The investment objective of the Capital Growth Bond Trust is to achieve
growth of capital by investing debt securities of medium-grade or better debt
securities, with income as a secondary consideration.
8
<PAGE> 14
The Capital Growth Bond Trust differs from most "bond" funds in that its
primary objective is capital appreciation, not income. Opportunities for capital
appreciation will usually exist only when the levels of prevailing interest
rates are falling. During periods when the subadviser expects interest rates to
decline, the portfolio will invest primarily in intermediate-term and long-term
corporate and government debt securities. However, during periods when the
subadviser expects interest rates to rise or believes that market or economic
conditions otherwise warrant such action, the portfolio may invest substantially
all its assets in short-term debt securities to preserve capital and maintain
income. The portfolio may also maintain a portion of its assets temporarily in
cash or short-term debt securities pending selection of particular long-term
investments.
The Capital Growth Bond Trust will be carefully positioned in relation to
the term of debt obligations and the anticipated movement of interest rates. It
is contemplated that at least 75% of the value of the portfolio's total
investment in corporate debt securities, excluding commercial paper, will be
represented by debt securities which have, at the time of purchase, a rating
within the four highest grades as determined by Moody's (Aaa, Aa, A or Baa),
Standard & Poor's (AAA, AA, A or BBB), or Fitch's Investors Service ("Fitch's")
(AAA, AA, A or BBB) and debt securities of banks and other issuers which,
although not rated as a matter of policy by either Moody's, Standard & Poor's,
or Fitch's, are considered by the subadviser to have investment quality
comparable to securities receiving ratings within such four highest grades.
Although the portfolio does not intend to acquire or hold debt securities of
below investment-grade quality, shareholders should note that even bonds of the
lowest categories of investment-grade quality may have speculative
characteristics, and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than is the case with higher-grade bonds. It should be further noted
that should an obligation in the portfolio drop below investment grade, the
portfolio will make every effort to dispose of it promptly so long as to do so
would not be detrimental to the portfolio.
Government obligations in which the Capital Growth Bond Trust may invest
include those of foreign governments provided they are denominated in U.S.
dollars. The portfolio may purchase securities on a forward-commitment,
when-issued or delayed-delivery basis.
The Capital Growth Bond Trust may purchase corporate debt securities which
carry certain equity features, such as conversion or exchange rights or warrants
for the acquisition of stock of the same or a different issuer or participations
based on revenues, sales, or profits. The portfolio will not exercise any such
conversion, exchange or purchase rights if, at the time, the value of all equity
interests so owned would exceed 10% of the value of the portfolio's total
assets.
The Capital Growth Bond Trust will be subject to certain risks as a result
of its ability to invest up to 100% of its total assets in the following types
of foreign securities: (i) U.S. dollar denominated obligations of foreign
branches of U.S. banks, (ii) securities represented by American Depository
Receipts ("ADRs") listed on a national securities exchange or traded in the U.S.
over-the-counter market, (iii) securities of a corporation organized in a
jurisdiction other than the U.S. and listed on the New York Stock Exchange or
NASDAQ or (iv) securities denominated in U.S. dollars but issued by non U.S.
issuers and issued under U.S. Federal securities regulations (for example, U.S.
dollar denominated obligations issued or guaranteed as to principal or interest
by the Government of Canada or any Canadian Crown agency). Moreover, substantial
investments in foreign securities may have adverse tax implications.
The Capital Growth Bond Trust is currently authorized to use all of the
investment strategies referred to as "Hedging and Other Strategic Transactions."
However, it is not presently contemplated that any of these strategies will be
used to a significant degree by the portfolio. The Statement of Additional
Information contains a description of these strategies and of certain risks
associated therewith.
Investment Quality Bond Trust
The investment objective of the Investment Quality Bond Trust is to provide
a high level of current income consistent with the maintenance of principal and
liquidity.
The Investment Quality Bond Trust seeks to achieve its objective by
investing the portfolio's assets primarily in investment grade corporate bonds
and U.S. Government bonds with intermediate to longer term
9
<PAGE> 15
maturities. Investment management will emphasize sector analysis, which focuses
on relative value and yield spreads among security types and among quality,
issuer, and industry sectors, call protection and credit research. Credit
research on corporate bonds is based on both quantitative and qualitative
criteria established by the subadviser, such as an issuer's industry, operating
and financial profiles, business strategy, management quality, and projected
financial and business conditions. The subadviser will attempt to maintain a
highly steady and possibly growing income stream.
At least 65% of the Investment Quality Bond Trust's assets will be invested
in:
(1) marketable debt securities of domestic issuers and foreign issuers
(payable in U.S. dollars) rated at the time of purchase "A" or better
by Moody's or Standard & Poor's (or, if unrated, of comparable quality
as determined by the subadviser);
(2) securities issued or guaranteed as to principal or interest by the U.S.
Government or its agencies or instrumentalities, including mortgage
backed securities; and
(3) cash and certain cash equivalent securities.
The balance of the Investment Quality Bond Trust's investments may include:
domestic and foreign debt securities rated below "A" by Moody's and Standard &
Poor's (and unrated securities of comparable quality as determined by the
subadviser), preferred stocks, convertible securities (including those issued in
the Euromarket) and securities carrying warrants to purchase equity securities,
privately placed debt securities, asset-backed securities and privately issued
mortgage securities. At least 65% of the Investment Quality Bond Trust's assets
will be invested in bonds and debentures.
In pursuing its investment objective, the Investment Quality Bond Trust may
invest up to 20% of its assets in domestic and foreign high yield (high risk)
corporate and government debt securities, commonly known as "junk bonds" (i.e.,
rated "Ba" or below by Moody's or "BB" or below by Standard & Poor's, or if
unrated, of comparable quality as determined by the subadviser). No minimum
rating standard is required for a purchase by the portfolio. Domestic and
foreign high yield debt securities involve comparatively greater risks,
including price volatility and risk of default in the payment of interest and
principal, than higher-quality securities.
The Investment Quality Bond Trust may also invest in debt securities
carrying the fourth highest quality rating ("Baa" by Moody's or "BBB" by
Standard & Poor's) and unrated securities of comparable quality as determined by
the subadviser. While such securities are considered investment grade quality
and are deemed to have adequate capacity for payment of principal and interest,
investments in such securities involve a higher degree of risk than that
associated with investments in debt securities in the higher rating categories;
such securities lack outstanding investment characteristics and in fact have
speculative characteristics as well. For example, changes in economic conditions
or other circumstances are more likely to lead to a weakened capacity to make
principal and interest payments than is the case with higher grade bonds. While
the Investment Quality Bond Trust may only invest up to 20% of its assets in
bonds rated below "Baa" by Moody's or "BBB" by Standard & Poor's (or, if
unrated, of comparable quality as determined by the subadviser), it is not
required to dispose of bonds that may be downgraded after being purchased by the
Investment Quality Bond Trust, even though such downgrade may cause the
portfolio to exceed this 20% maximum.
The Investment Quality Bond Trust is currently authorized to use all of the
various investment strategies referred to as "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith. The Investment
Quality Bond Trust will be subject to certain risks as a result of its ability
to invest up to 20% of its assets in foreign securities. These risks are
described under the caption "Additional Information on Investment Policies and
Techniques and Risk Factors -- Foreign Securities" in this Prospectus. Moreover,
substantial investments in foreign securities may have adverse tax implications
as described under "Additional Information About the Trust -- Tax Matters."
10
<PAGE> 16
\ Differences between the Capital Growth Bond Trust and the Investment Quality
Bond Trust
<TABLE>
<CAPTION>
CAPITAL GROWTH INVESTMENT QUALITY
BOND TRUST BOND TRUST COMMENT
-------------- ------------------ -------
<S> <C> <C>
Differs from most bond funds Stated fundamental investment The Investment Quality Bond
in that its primary objective is to provide a Trust seeks current income,
investment objective is high level of current income. not capital appreciation.
capital appreciation, not
income.
Stated fundamental investment Stated fundamental investment Because the Investment
objective is to achieve objective is to provide a Quality Bond Trust's
growth of capital by high level of current income investment approach is not
investing in medium-grade or consistent with the contained in its objective,
better debt securities, with maintenance of principal and it is non-fundamental and can
income as a secondary liquidity. be changed by the Trust's
consideration. Board without shareholder
approval, unlike the
investment approach of the
Capital Growth Bond Trust.
Does not invest in debt Authorized to invest up to The Investment Quality Bond
securities rated below BBB or 35% of its total assets in Trust will be subject to the
unrated securities of similar debt securities rated below additional risks associated
quality. A, and may invest up to 20% with investing in lower rated
of its assets in high yield securities.
(high risk) debt securities
rated below investment grade
(commonly known as "junk
bonds") and unrated
securities of similar
quality. Historically,
however, the Investment
Quality Bond Trust has not
invested more than 15% of its
assets in high yield (high
risk) debt securities.
</TABLE>
ADDITIONAL INVESTMENT TRUST PORTFOLIOS. In addition to the Transferor
Portfolios and the Acquiring Portfolios referred to above, the Trust currently
offers the following thirty-two additional portfolios.
Pacific Rim Emerging Markets Trust
Science & Technology Trust
International Small Cap Trust
Emerging Small Company Trust (formerly, Emerging Growth Trust)
Pilgrim Baxter Growth Trust
Small/Midcap Trust
International Stock Trust
Small Company Value Trust
Equity Trust
Growth Trust
Quantitative Equity Trust
Equity Index Trust
Blue Chip Growth Trust
Real Estate Securities Trust
Value Trust
International Growth and Income Trust
Growth and Income Trust
Equity-Income Trust
11
<PAGE> 17
Balanced Trust
Aggressive Asset Allocation Trust
High Yield Trust
Moderate Asset Allocation Trust
Conservative Asset Allocation Trust
Strategic Bond Trust
Global Government Bond Trust
U.S. Government Securities Trust
Money Market Trust
Lifestyle Aggressive 1000 Trust
Lifestyle Growth 820 Trust
Lifestyle Balanced 640 Trust
Lifestyle Moderate 460 Trust
Lifestyle Conservative 280 Trust
FEES AND EXPENSES. The tables which follow set forth the ratios of
expenses to average net assets and expense examples for each of the Transferor
Portfolios and the corresponding Acquiring Portfolios for the fiscal year ended
December 31, 1997, and the pro forma expense ratios and expense examples for the
shares of the corresponding Acquiring Portfolios as if the Reorganization had
occurred at the commencement of the fiscal year ended December 31, 1997, based
upon the fee arrangements that will be in place upon the consummation of the
Reorganization. Therefore, the tables describe the fees and expenses a
shareholder can expect to incur if the Reorganization is consummated.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
FOR FISCAL YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
WORLDWIDE GLOBAL
GROWTH TRUST EQUITY TRUST PRO FORMA
------------ ------------ ---------
<S> <C> <C> <C>
Advisory Fee....................... 1.00% 0.90% 0.90%
Other Expenses*.................... 0.32% 0.11% 0.11%
Total Annual Operating Expenses.... 1.32% 1.01% 1.01%
</TABLE>
<TABLE>
<CAPTION>
CAPITAL GROWTH INVESTMENT QUALITY
BOND TRUST** BOND TRUST PRO FORMA
-------------- ------------------ ---------
<S> <C> <C> <C>
Advisory Fee....................... 0.65% 0.65% 0.65%
Other Expenses*.................... 0.08% 0.09% 0.09%
Total Annual Operating Expenses.... 0.73% 0.74% 0.74%
</TABLE>
- ---------------
* "Other Expenses" include custody fees, registration fees, legal fees, audit
fees, trustees' fees, insurance fees and other miscellaneous expenses.
Advisory fees are reduced or Manulife Securities reimburses the Trust if the
total of all expenses (excluding advisory fees, taxes, portfolio brokerage
commissions, interest, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Trust's
business) applicable to a portfolio exceeds a specified annual rate (e.g.,
.75% in the case of the Worldwide Growth Trust and the Global Equity Trust or
.50% in the case of the Capital Growth Bond Trust and the Investment Quality
Bond Trust). These expense limitations continue in effect from year to year
unless terminated by Manulife Securities at any year end upon 30 days' notice
to the Trust.
** During the one year period ended December 31, 1997, Manulife Securities
voluntarily waived fees payable to it and reimbursed expenses to the extent
necessary to prevent Total Annual Operating Expenses for the Capital Growth
Bond Trust from exceeding 0.50% of the Trust's average daily net assets. This
voluntary fee waiver was terminated effective January 1, 1998.
12
<PAGE> 18
EXAMPLES: These Examples are intended to help you compare the cost of investing
in the Transferor Portfolios with the cost of investing in other mutual fund
portfolios. The Examples assume that you invest $10,000 in a particular
portfolio for the time periods indicated and then redeem all of your shares at
the end of those periods. The Examples also assume that your investment has a 5%
return each year and that such portfolio's operating expense levels remain the
same as set forth in the table above. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
Worldwide Growth Trust and Global Equity Trust
<TABLE>
<CAPTION>
WORLDWIDE GLOBAL
GROWTH TRUST EQUITY TRUST PRO FORMA
-------------- ------------------ ---------
<S> <C> <C> <C>
1 Year............................. $ 134 $ 103 $ 103
3 Years............................ $ 418 $ 322 $ 322
5 Years............................ $ 723 $ 558 $ 558
10 Years........................... $1,590 $1,236 $1,236
</TABLE>
Capital Growth Bond Trust and Investment Quality Bond Trust
<TABLE>
<CAPTION>
CAPITAL GROWTH INVESTMENT QUALITY
BOND TRUST BOND TRUST PRO FORMA
-------------- ------------------ ---------
<S> <C> <C> <C>
1 Year............................. $ 75 $ 76 $ 76
3 Years............................ $ 233 $ 237 $ 237
5 Years............................ $ 406 $ 411 $ 411
10 Years........................... $ 906 $ 918 $ 918
</TABLE>
THE EXAMPLES ASSUME REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. THE
EXAMPLES SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES OR ANNUAL RETURN OF SHARES OF AN ACQUIRING PORTFOLIO; ACTUAL EXPENSES
AND ANNUAL RETURN MAY BE GREATER OR LESS THAN THOSE SHOWN. There can be no
assurance that the foregoing pro forma expense ratios would have been the actual
expense ratios for the corresponding Acquiring Portfolios had the Reorganization
been consummated when assumed above, or that the foregoing pro forma expense
ratios reflect the actual expense ratios that will be incurred by the
corresponding Acquiring Portfolios indicated above if the Reorganization is
consummated. The purpose of these tables is to assist investors in understanding
the expenses an investor in each of the Transferor Portfolios and corresponding
Acquiring Portfolios will bear. The variable contracts issued by Manulife North
America, Manulife New York and Manufacturers America provide for charges not
reflected in the above table.
The expense ratio of the Global Equity Trust is lower than that of the
Worldwide Growth Trust, while the expense ratio of the Investment Quality Bond
Trust is substantially the same as that of the Capital Growth Bond Trust.
For the foregoing reasons and those set forth below under "Information
About the Reorganization -- Reasons for the Reorganization," the Board of
Trustees of the Trust, including all of the Independent Trustees, has
unanimously concluded that (i) the Reorganization is in the best interests of
each Transferor Portfolio, as well as its shareholders and the contractholders
whose contract values are invested in shares thereof; and (ii) the interests of
existing shareholders of the Transferor Portfolios and contractholders would not
be diluted as a result of the Reorganization. The Trust's Board has unanimously
recommended to shareholders approval of the Reorganization.
PURCHASE AND REDEMPTION. The purchase and redemption procedures with
respect to the Transferor Portfolios are identical to those of the corresponding
Acquiring Portfolios. Shares of the Trust are offered continuously, without
sales charge, at prices equal to the respective net asset values of the
portfolio being purchased. The Trust sells its shares directly without the use
of any underwriter. Shares of the Trust are sold and redeemed at their net asset
value next computed after a purchase payment or redemption request is received
by the shareholder from the contractholder or after any other purchase or
redemption order is
13
<PAGE> 19
received by the Trust. Depending upon the net asset values at that time, the
amount paid upon redemption may be more or less than the cost of the shares when
they were purchased. Payment for shares redeemed will be made as soon as
possible, but in any event within seven days after receipt of a request for
redemption.
DIVIDENDS AND DISTRIBUTIONS. The dividends and distributions procedures
with respect to the Transferor Portfolios are identical to those of the
corresponding Acquiring Portfolios. The Trust intends to declare as dividends
substantially all of the net investment income, if any, of each of the Acquiring
Portfolios. For dividend purposes, net investment income of each of the
Acquiring Portfolios, will consist of all payments of dividends (other than
stock dividends) or interest received by such portfolio less the estimated
expenses of such portfolio (including fees payable to Manulife Securities).
Dividends from the net investment income and the net realized short-term and
long-term capital gains, if any, for each Acquiring Portfolio, will be declared
not less frequently than annually and reinvested in additional full and
fractional shares of that Acquiring Portfolio or paid in cash.
FEDERAL INCOME TAX CONSEQUENCES. The Trust will have received an opinion
from Simpson Thacher & Bartlett, counsel to the Trust in connection with the
Reorganization, to the effect that, based upon certain facts, assumptions and
representations, the Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). If the Reorganization constitutes a tax-free
reorganization, no gain or loss will be recognized by the Acquiring Portfolios
or their respective shareholders as a result of the Reorganization. See
"Information About the Reorganization -- Federal Income Tax Consequences."
PRINCIPAL RISK FACTORS. The risks associated with an investment in an
Acquiring Portfolio, in general, are those typically associated with investing
in a managed portfolio of the specific types of instruments in which such
Acquiring Portfolio invests. Both of the Acquiring Portfolios may invest to
varying degrees in the securities of foreign issuers and the Investment Quality
Bond Trust may invest in high yield (high risk) securities which entail certain
additional risks. Further information relating to these and other risks
associated with an investment in the Acquiring Portfolios is set forth below
under "Additional Information on Investment Policies and Techniques and Risk
Factors."
WORLDWIDE GROWTH TRUST AND GLOBAL EQUITY TRUST
Risks of investment in these portfolios relate primarily to fluctuations in
stock prices and risks associated with foreign investing.
CAPITAL GROWTH BOND TRUST AND INVESTMENT QUALITY BOND TRUST
Risks of investment in these portfolios relate primarily to exposure to
interest rate and credit risks with respect to fixed-income securities.
Investment in the Investment Quality Bond Trust includes the additional risks
associated with its ability to invest up to 20% of its assets in high yield
(high risk) debt securities, commonly known as "junk bonds," including the
greater risk of default by the issuers of such bonds, and its ability to invest
up to 20% of its assets in foreign securities.
INFORMATION ABOUT THE REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION. The following summary of the Plan is
qualified in its entirety by reference to the form of the Plan attached to this
Prospectus/Proxy Statement as Exhibit A. The Plan provides that each Acquiring
Portfolio will acquire all of the assets, subject to all of the liabilities, of
the corresponding Transferor Portfolio in exchange for shares of such Acquiring
Portfolio. Subject to the satisfaction of the conditions described below, such
acquisitions shall take place on April 30, 1999 (the "Exchange Date"), or such
later date as may be agreed upon by the parties. The net asset value per share
for each Acquiring Portfolio and each Transferor Portfolio will be determined by
dividing each Acquiring Portfolio's assets, less liabilities, by the total
number of its outstanding shares. Portfolio assets will be valued in accordance
with the valuation practices of the Acquiring Portfolios. See "General
Information -- Shares of the Trust" in the Prospectus.
14
<PAGE> 20
The number of full and fractional shares of an Acquiring Portfolio received
by a shareholder of the corresponding Transferor Portfolio will be equal in
value to the value of that shareholder's shares of the corresponding Transferor
Portfolio as of the close of regularly scheduled trading on the New York Stock
Exchange on the Exchange Date of the Reorganization. As promptly as practicable
after the Exchange Date, each Transferor Portfolio will liquidate and distribute
pro rata to its shareholders of record as of the close of regularly scheduled
trading on the New York Stock Exchange on the Exchange Date the shares of the
corresponding Acquiring Portfolio received by that Transferor Portfolio in the
Reorganization. Such liquidation and distribution will be accomplished by the
establishment of accounts on the share records of the Acquiring Portfolios in
the names of the shareholders of the corresponding Transferor Portfolio, each
account representing the respective pro rata number of shares of such Acquiring
Portfolio due the shareholder. After such distribution, the Trust shall take all
necessary steps under Massachusetts law, the Trust's Declaration of Trust and
any other applicable law to effect a complete dissolution of each Transferor
Portfolio.
The Board has determined, with respect to the Transferor Portfolios and the
Acquiring Portfolios, that the interests of shareholders and of contractholders
whose contract values are invested in shares of such portfolios will not be
diluted as a result of the Reorganization and that participation in the
Reorganization is in the best interests of such portfolios and such shareholders
and contractholders.
Certain of the existing investment limitations of the Transferor Portfolios
that require shareholder approval for amendment prohibit each Transferor
Portfolio from engaging in activities such as investing more than a stated
percentage of its assets in an issuer's securities. By approving the Plan, the
shareholders of the Transferor Portfolios will be deemed to have agreed to waive
any such limitations solely insofar as they might be deemed to apply to the
Reorganization.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including that the affirmative vote of the holders of at
least a majority of the outstanding voting securities of each Transferor
Portfolio entitled to vote approve the Reorganization and that the Commission
grant exemptive relief from certain provisions of the 1940 Act that otherwise
would preclude consummation of the Reorganization. As used in this
Prospectus/Proxy Statement, a "majority of the outstanding voting securities"
means the affirmative vote of the lesser of (1) 67% or more of the voting
securities of a portfolio present at the Meeting, if the holders of more than
50% of the outstanding voting securities of such portfolio are present or
represented by proxy or (2) more than 50% of the outstanding voting securities
of the portfolio. On November 13, 1998, the Trust filed an Application with the
Commission requesting exemption from certain provisions of the 1940 Act as they
relate to the proposed Reorganization. Manulife, Manufacturers Securities,
Manulife North America, Manulife New York, Manufacturers America, The
Manufacturers Life Insurance Company (U.S.A.) ("Manufacturers U.S.A.") and
Manufacturers Adviser Corporation also are parties to the Application. Copies of
the Application may be obtained from the Commission in the manner explained
below. See "Additional Information About the Trust." In addition, the proposal
to approve the Plan will not be submitted to shareholders of the Transferor
Portfolios, and the Special Meeting of Shareholders therefore will not be held,
until such time as the Commission has granted the exemptive relief referred to
in the preceding sentence. There can be no assurance that the Commission will
grant such exemptive relief or that it will be granted in time for the Special
Meeting of Shareholders to be held on April [27], 1999, as scheduled.
The Plan may be terminated and the Reorganization abandoned at any time
prior to the Effective Time of the Reorganization, before or after approval by
the shareholders of the Transferor Portfolios, by either the Transferor
Portfolios or the Acquiring Portfolios if (i) any material condition or covenant
set forth in the Plan has not been fulfilled or waived by the party entitled to
its benefits, or (ii) there has been a material breach or default by the other
party or (iii) the Board determines that proceeding with the Reorganization is
not in the best interests of the Transferor Portfolios or the Acquiring
Portfolios, respectively, or their respective shareholders or contractholders.
The Plan provides that either party may waive compliance with any of the
covenants or conditions made therein for its benefit, except for certain
conditions regarding the receipt of regulatory approvals.
The expenses of the Reorganization (other than registration fees payable
for the registration of shares of the Acquiring Portfolios in connection with
the Reorganization, which will be payable by such Acquiring
15
<PAGE> 21
Portfolios), including the cost of a proxy soliciting agent that has been
retained will be borne by the Transferor Portfolios and the Acquiring
Portfolios. See "Voting Information."
Approval of the Plan will require a majority of the outstanding voting
securities of each Transferor Portfolio. See "Voting Information." If the
Reorganization is not approved by the shareholders of each Transferor Portfolio
or is not consummated for any other reason, the Board will consider other
possible courses of action. See "Voting Information." THE BOARD HAS UNANIMOUSLY
RECOMMENDED APPROVAL OF THE PLAN.
Shareholders of each Transferor Portfolio will receive shares of the
corresponding Acquiring Portfolio in accordance with the procedures provided for
in the Plan as described above. Each such share will be fully paid and
nonassessable when issued (except as noted under "Summary -- Proposed
Transaction") and transferable without restrictions and will have no preemptive
or conversion rights.
DESCRIPTION OF THE SECURITIES TO BE ISSUED. The Trust has an unlimited
number of authorized shares of beneficial interest, par value $0.01 per share.
These authorized shares may be divided into series and classes thereof. The
Declaration of Trust authorizes the Board to issue shares in different series.
In addition, the Declaration of Trust authorizes the Board to create new series
and to name the rights and preferences of the shareholders of each of the
series. The Board does not need additional shareholder action to divide the
shares into separate series or to name the shareholders' rights and preferences.
Each Transferor Portfolio and Acquiring Portfolio is a series of the Trust.
Currently, none of the Trust series issues multiple classes of shares, although
they may do so in the future. Each share of each series represents an equal
proportionate interest in that series with each other share of that series. The
shares of each series of the Trust participate equally in the earnings,
dividends and assets of the particular series. Fractional shares have
proportionate fractional rights to full shares. Expenses of the Trust which are
not attributable to a specific series are allocated to all series of the Trust
in a fair and equal manner, as determined by management of the Trust. Generally,
shares of each series will vote separately, for example, to approve an
investment advisory agreement. Shares of all series will vote together when the
1940 Act requires it, for example, to elect the Trustees or to select
independent accountants. The Trust is not required to hold shareholder meetings
annually, although shareholder meetings may be called from time to time. There
are no conversion or preemptive rights in connection with shares of the Trust.
REASONS FOR THE REORGANIZATION. The principal purpose of the
Reorganization is to provide a means by which shareholders of each of the
Transferor Portfolios, in combination with the corresponding Acquiring
Portfolios, can pursue substantially similar investment objectives and policies
in the context of a larger fund with better investment performance and
potentially greater economies of scale.
In determining whether to approve the Reorganization and recommend its
approval to shareholders, the Board (including the Independent Trustees (with
the advice and assistance of independent legal counsel), made an inquiry into a
number of matters and considered the following factors, among others: (1)
expense ratios and available information regarding the fees and expenses of each
Transferor Portfolio and each corresponding Acquiring Portfolio (historical and
pro forma), as well as of similar funds; (2) the compatibility of the investment
objectives, policies and restrictions of each Transferor Portfolio and each
corresponding Acquiring Portfolio; (3) the advantages to each Transferor
Portfolio of investing in larger asset pools with potentially greater
diversification; (4) the historical performance of each Transferor Portfolio and
each Acquiring Portfolio, as well as of each portfolio's respective investment
subadviser; (5) the investment experience, expertise and resources of each
subadviser to the Transferor Portfolios and the Acquiring Portfolios; (6)
portfolio transaction policies of the Transferor Portfolios and the Acquiring
Portfolios; (7) the terms and conditions of the Reorganization and whether the
Reorganization would result in dilution of shareholder or contractholder
interests; (8) any direct and indirect costs to be incurred by each Transferor
Portfolio and each corresponding Acquiring Portfolio as a result of the
Reorganization; (9) the tax consequences of the Reorganization; and (10)
possible alternatives to the Reorganization.
In reaching the decision to recommend approval of the Reorganization, the
Board concluded that the participation of each Transferor Portfolio and each
corresponding Acquiring Portfolio in the Reorganization is in the best interests
of each Transferor Portfolio and each corresponding Acquiring Portfolio, as well
as the
16
<PAGE> 22
best interests of shareholders and the contractholders whose contract values are
invested in shares of the Transferor Portfolios and the Acquiring Portfolios,
and that the interests of existing shareholders and contractholders will not be
diluted as a result of this transaction. Their conclusion was based on a number
of factors, including the following:
1. The expense ratios of the Acquiring Portfolios are comparable or lower
(without giving effect to fee waivers) than those of the corresponding
Transferor Portfolios.
2. The Reorganization will permit shareholders of each Transferor Portfolio
to pursue similar investment goals in the context of a larger fund
immediately following consummation of the Reorganization. It is
anticipated that the combined Transferor and Acquiring Portfolios will
experience more rapid asset growth in the future than would have been
the case for the Transferor Portfolios standing alone. Such larger funds
should enhance the ability of portfolio managers to effect portfolio
transactions on more favorable terms and give portfolio managers greater
investment flexibility and the ability to select a larger number of
portfolio securities, with the attendant benefits of increased
diversification.
3. (a) The one year annualized return as of December 31, 1998 of the Global
Equity Trust exceeded that of the Worldwide Growth Trust. The historical
performance of these portfolios could not be compared for any longer
period, as the inception date for the Worldwide Growth Trust was January
1, 1997.
(b) While the five year annualized return as of December 31, 1998 of the
Capital Growth Bond Trust slightly exceeded that of the Investment
Quality Bond Trust, the one year annualized return and the three year
annualized return as of December 31, 1998 of the Investment Quality Bond
Trust exceeded that of the Capital Growth Bond Trust.
FEDERAL INCOME TAX CONSEQUENCES. As a condition to the consummation of the
Reorganization, the Transferor Portfolios and the Acquiring Portfolios will have
received an opinion from Simpson Thacher & Bartlett to the effect that, based on
the facts and assumptions stated therein, for federal income tax purposes: (1)
the Reorganization will constitute a reorganization within the meaning of
Section 368(a)(1) of the Code with respect to each Transferor Portfolio and its
corresponding Acquiring Portfolio; (2) no gain or loss will be recognized by any
of the Transferor Portfolios or the corresponding Acquiring Portfolios upon the
transfer of all of the assets and liabilities, if any, of each Transferor
Portfolio to its corresponding Acquiring Portfolio solely in exchange for shares
of the Acquiring Portfolio or upon the distribution of the shares of the
Acquiring Portfolio to the holders of shares of the Transferor Portfolio solely
in exchange for all of their shares of the Transferor Portfolio; (3) no gain or
loss will be recognized by shareholders of any of the Transferor Portfolios upon
the exchange of such Transferor Portfolio's shares solely for shares of the
corresponding Acquiring Portfolio; (4) the holding period and tax basis of the
shares of each Acquiring Portfolio received by each holder of shares of the
corresponding Transferor Portfolio pursuant to the Reorganization will be the
same as the holding period and tax basis of the shares of the Transferor
Portfolio held by the shareholder (provided the shares of the Transferor
Portfolios were held as a capital asset on the date of the Reorganization)
immediately prior to the Reorganization; and (5) the holding period and tax
basis of the assets of each of the Transferor Portfolios acquired by its
corresponding Acquiring Portfolio will be the same as the holding period and tax
basis of those assets to each of the Transferor Portfolios immediately prior to
the Reorganization.
CAPITALIZATION. The following tables show the capitalization of each
Transferor Portfolio and the corresponding Acquiring Portfolio as of December
31, 1997 and June 30, 1998, and on a pro forma combined
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<PAGE> 23
basis as of those dates for the Reorganization giving effect to the proposed
acquisition of assets at net asset value.
<TABLE>
<CAPTION>
PRO FORMA
WORLDWIDE GLOBAL EQUITY FOR
GROWTH TRUST TRUST REORGANIZATION
-------------- ------------------ --------------
<S> <C> <C> <C>
DECEMBER 31, 1997
Net Assets............................ $24,262,035 $868,412,747 $ 892,674,782
Net Asset Value Per Share............. $ 14.04 $ 19.38 $ 19.38
Shares Outstanding.................... 1,727,778 44,813,235 46,065,146
JUNE 30, 1998
Net Assets............................ $34,580,155 $972,654,887 $1,007,235,042
Net Asset Value Per Share............. $ 15.84 $ 20.44 $ 20.44
Shares Outstanding.................... 2,183,020 47,593,856 49,285,644
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA
CAPITAL GROWTH INVESTMENT QUALITY FOR
BOND TRUST BOND TRUST REORGANIZATION
-------------- ------------------ --------------
<S> <C> <C> <C>
DECEMBER 31, 1997
Net Assets............................ $53,989,945 $188,544,943 $ 242,534,888
Net Asset Value Per Share............. $ 11.85 $ 12.13 $ 12.13
Shares Outstanding.................... 4,557,940 15,549,187 20,000,131
JUNE 30, 1998
Net Assets............................ $58,628,171 $246,472,726 $ 305,100,897
Net Asset Value Per Share............. $ 11.60 $ 11.94 $ 11.94
Shares Outstanding.................... 5,055,965 20,641,355 25,551,587
</TABLE>
VOTING INFORMATION
Proxies from the shareholders of each Transferor Portfolio are being
solicited by the Board for the Special Meeting of Shareholders to be held on
April [27], 1999 at 73 Tremont Street, Boston, Massachusetts 02108, at 10:00
a.m., Eastern Standard Time, or at such later time as necessary by adjournment.
All valid proxies will be voted in accordance with the specification thereon, or
in the absence of specification, for approval of the Plan. Approval of the Plan
will require a majority of the outstanding voting securities of each Transferor
Portfolio.
Voting instructions may be revoked at any time prior to the voting of the
shares represented thereby by: (i) mailing written instructions addressed to the
Secretary of the Trust at 116 Huntington Avenue, Boston, Massachusetts 02116 or
(ii) signing and returning a new voting instructions form, in each case if
received by the Trust by April [26], 1999. ALL PROPERLY EXECUTED VOTING
INSTRUCTIONS RECEIVED BY APRIL [26], 1999 WILL BE VOTED AS SPECIFIED IN THE
VOTING INSTRUCTION, OR, IF NO SPECIFICATION IS MADE, IN FAVOR OF THE PROPOSALS
REFERRED TO IN THIS PROSPECTUS/PROXY STATEMENT.
In the event the necessary quorum to transact business or the vote required
to approve a Proposal is not obtained at the Meeting, the persons named as
proxies may propose one or more adjournments of the Meeting in accordance with
applicable law, to permit further solicitation of proxies. Any such adjournment
as to a matter will require the affirmative vote of the holders of a majority of
the Trust's shares present in person or by proxy at the Meeting and entitled to
vote thereon. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Proposals and will vote against any such adjournment those proxies to be voted
against the Proposals.
Abstentions are counted as shares eligible to vote at the Meeting in
determining whether a quorum is present, but do not count as votes cast with
respect to the Reorganization proposal. Under the 1940 Act, the affirmative vote
necessary to approve a matter under consideration may be determined with
reference to a
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<PAGE> 24
percentage of votes present at the Meeting, which would have the effect of
treating abstentions as if they were votes against the Reorganization proposal.
The cost of the preparation and distribution of these proxy materials will
be borne by the Transferor Portfolios and the Acquiring Portfolios. In addition
to the solicitation of proxies by the use of the mails, proxies may be solicited
by officers and employees of the Trust, or of its agents or affiliates,
personally or by telephone. Brokerage houses, banks and other fiduciaries may be
requested to forward soliciting materials to their principals and to obtain
authorization for the execution of proxies. For those services, they will be
reimbursed by the Transferor Portfolios and the Acquiring Portfolios for their
out-of-pocket expenses.
Under the Plan, shareholders of each Transferor Portfolio will receive
shares of the corresponding Acquiring Portfolio, as described above, with an
aggregate net asset value equal to the value of the shareholder's investment in
each Transferor Portfolio at the effective time of the transaction. This method
of valuation is also consistent with interpretations of Rule 22c-1 under the
1940 Act by the Commission's Division of Investment Management. Any shareholder
of a Transferor Portfolio may redeem shares at the then-current net asset value
prior to the Exchange Date.
Shareholders of the Transferor Portfolios of record at the close of
business on February [28], 1999 (the "Record Date") will be entitled to vote at
the Meeting or any adjournment of the Meeting. The holders of 30% of the shares
outstanding of each such Transferor Portfolio at the close of business on that
date present in person or represented by proxy will constitute a quorum for the
Meeting; however, as noted above, a majority of the outstanding voting
securities of each Transferor Portfolio at the close of business on that date is
required to approve the Reorganization. Shareholders are entitled to one vote
for each share held and fractional votes for fractional shares held. Shares of
the Transferor Portfolios are sold only to Manulife North America, Manulife New
York and Manufacturers America and to the separate accounts of these insurance
companies mentioned earlier. Although Manulife North America, Manulife New York
and Manufacturers America own all shares of the Transferor Portfolios, shares
are attributed to, and will be voted in proportion to the timely instructions
received from the contractholders of these insurance companies. Transferor
Portfolio shares as to which no voting instructions are received, including
shares not attributable to contractholders, will be voted by these insurance
companies in the same proportion as those for which voting instructions are
received from contractholders.
As of the Record Date, the number of votes eligible to be cast at the
Meeting with respect to each Transferor Portfolio is as follows:
<TABLE>
<CAPTION>
VOTES HELD BY VOTES HELD BY VOTES HELD BY
NUMBER OF MANULIFE MANULIFE MANUFACTURERS
PORTFOLIO ELIGIBLE VOTES NORTH AMERICA* NEW YORK AMERICA
- --------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Worldwide Growth Trust.....................
------- ------- ------- -------
Capital Growth Bond Trust..................
------- ------- ------- -------
</TABLE>
- ---------------
* Also includes shares held by Manulife North America in its general account.
Trustees and officers of the Trust, in the aggregate, own, or have the
right to provide voting instructions for, less than 1% of each portfolio's
outstanding shares.
As of February [28], 1999, % of the Worldwide Growth Trust shares were
attributable to a contract owned by . As of February [28], 1999,
% of the Capital Growth Bond Trust shares were attributable to a contract
owned by . Upon the consummation of the Reorganization, each of
the foregoing person(s) would have the same percentage of attributable shares of
the corresponding Acquiring Portfolio.
The votes of the shareholders of the Acquiring Portfolios are not being
solicited to approve the Reorganization, since their approval or consent is not
required with respect to the Reorganization.
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<PAGE> 25
The Plan was approved for the Transferor Portfolios and the Acquiring
Portfolios by unanimous vote of the Board, including in each case all of the
Trustees then serving who were not interested persons of the Trust (other than
in their capacity as Trustees of the Trust).
ADDITIONAL INFORMATION ON INVESTMENT POLICIES
AND TECHNIQUES AND RISK FACTORS
INVESTMENT RESTRICTIONS GENERALLY. The Trust is subject to a number of
restrictions in pursuing its investment objectives and policies. The following
is a brief summary of certain restrictions that may be of interest to
contractholders. Some of these restrictions are subject to exceptions not stated
here. Such exceptions and a complete list of the investment restrictions
applicable to the individual portfolios and to the Trust are set forth in the
Statement of Additional Information under the caption "Investment Restrictions."
Except for the restrictions specifically identified as fundamental, all
investment restrictions described in this Prospectus/Proxy Statement and in the
Statement of Additional Information are not fundamental, so that the Board may
change them without shareholder approval. Fundamental policies may not be
changed without the affirmative vote of a majority of the outstanding voting
securities of a portfolio.
INDUSTRY CONCENTRATION. As a matter of fundamental policy, each Acquiring
Portfolio and Transferor Portfolio is prohibited from investing more than 25% of
its total assets in the securities of issuers having their principal activities
in any particular industry (with exceptions for U.S. Government securities and
certain other obligations).
BORROWING. As a matter of fundamental policy, each Acquiring Portfolio and
Transferor Portfolio is prohibited from borrowing money, except for temporary or
emergency purposes (but not for leveraging) and then not in excess of 33 1/3% of
the value of the total assets of the portfolio at the time the borrowing is
made. In addition, each Acquiring Portfolio and Transferor Portfolio may borrow
in connection with reverse repurchase agreements, mortgage dollar rolls and
other similar transactions. Reverse repurchase agreements and mortgage dollar
rolls may be considered a form of borrowing and will be treated as a borrowing
for purposes of the restriction on borrowing in excess of 33 1/3% of the value
of the total assets of a portfolio. A portfolio will not purchase securities
while borrowings (other than reverse repurchase agreements, mortgage dollar
rolls and similar transactions) exceed 5% of total assets.
ISSUER DIVERSIFICATION. As a matter of fundamental policy, each Acquiring
Portfolio and Transferor Portfolio is prohibited from purchasing securities of
any issuer if the purchase would cause more than 5% of the value of a
portfolio's total assets to be invested in the securities of any one issuer
(excluding U.S. Government securities) or cause more than 10% of the voting
securities of the issuer to be held by a portfolio, except that up to 25% of the
value of each Acquiring Portfolio or Transferor Portfolio's total assets may be
invested without regard to this restriction.
INVESTMENTS IN REAL ESTATE-RELATED SECURITIES. As a matter of fundamental
policy, each Acquiring Portfolio and Transferor Portfolio may not purchase or
sell real estate, except that each Acquiring Portfolio and Transferor Portfolio
may invest in mortgages and mortgage backed securities and securities issued by
companies which invest in real estate or interests therein.
INVESTMENTS IN COMMODITIES. As a matter of fundamental policy, each
Acquiring Portfolio and Transferor Portfolio may not purchase or sell
commodities or commodity contracts except that each Acquiring Portfolio and
Transferor Portfolio may purchase and sell futures contracts on financial
instruments and indices and options on such futures contract and futures
contracts on foreign currencies and options on such futures contracts.
INVESTMENTS IN ILLIQUID SECURITIES. Restrictions that apply to the
Acquiring Portfolios and the Transferor Portfolios and that are not fundamental
include prohibitions on knowingly investing more than 15% of the net assets of
any portfolio in "illiquid" securities (including repurchase agreements maturing
in more than seven days but excluding master demand notes).
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<PAGE> 26
PLEDGING ASSETS. Restrictions that apply to the Acquiring Portfolios and
the Transferor Portfolios and that are not fundamental include prohibitions on
pledging, hypothecating, mortgaging or transferring more than 10% of the total
assets of any portfolio as security for indebtedness (except that the applicable
percent is 15% in the case of the Worldwide Growth Trust).
INVESTMENTS IN OTHER FUNDS. Restrictions that apply to the Acquiring
Portfolios and the Transferor Portfolios and that are not fundamental include
prohibitions on purchasing securities of other investment companies, other than
in connection with a merger, consolidation or reorganization, if the purchase
would cause more than 10% of the value of a portfolio's total assets to be
invested in investment company securities.
HIGH YIELD (HIGH RISK) SECURITIES.
GENERAL
The Investment Quality Bond Trust, unlike the Capital Growth Bond Trust,
may invest up to 20% of its assets in "high yield" (high risk) securities.
Securities rated below investment grade and comparable unrated securities offer
yields that fluctuate over time, but generally are superior to the yields
offered by higher rated securities. However, securities rated below investment
grade also involve greater risks than higher rated securities. Under rating
agency guidelines, medium- and lower-rated securities and comparable unrated
securities will likely have some quality and protective characteristics that are
outweighed by large uncertainties or major risk exposures to adverse conditions.
Certain of the debt securities in which the Investment Quality Bond Trust may
invest may have, or be considered comparable to securities having, the lowest
ratings for non-subordinated debt instruments assigned by Moody's or Standard &
Poor's (i.e., rated Caa or lower by Moody's or CCC or lower by Standard &
Poor's). These securities are considered to have extremely poor prospects of
ever attaining any real investment standing, to have a current identifiable
vulnerability to default, to be unlikely to have the capacity to pay interest
and repay principal when due in the event of adverse business, financial or
economic conditions, and/or to be in default or not current in the payment of
interest or principal. Such securities are considered speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligations. Accordingly, it is possible that these types of
factors could, in certain instances, reduce the value of securities held by the
Investment Quality Bond Trust with a commensurate effect on the value of the
Investment Quality Bond Trust's shares.
Because the Investment Quality Bond Trust will invest primarily in
fixed-income securities, the net asset value of its shares can be expected to
change as general levels of interest rates fluctuate, although the market values
of securities rated below investment grade and comparable unrated securities
tend to react less to fluctuations in interest rate levels than do those of
higher-rated securities. Except to the extent that values are affected
independently by other factors such as developments relating to a specific
issuer, when interest rates decline, the value of a fixed-income portfolio can
generally be expected to rise. Conversely, when interest rates rise, the value
of a fixed-income portfolio can generally be expected to decline.
CORPORATE DEBT SECURITIES
While the market values of securities rated below investment grade and
comparable unrated securities tend to react less to fluctuations in interest
rate levels than do those of higher-rated securities, the market values of
certain of these securities also tend to be more sensitive to individual
corporate developments and changes in economic conditions than higher-rated
securities. In addition, such securities generally present a higher degree of
credit risk. Issuers of these securities are often highly leveraged and may not
have more traditional methods of financing available to them, so that their
ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. The risk of loss due
to default by such issuers is significantly greater than with investment grade
securities because such securities generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness.
FOREIGN SOVEREIGN DEBT SECURITIES
Investing in foreign sovereign debt securities will expose the Investment
Quality Bond Trust, unlike the Capital Growth Bond Trust, to the direct or
indirect consequences of political, social or economic changes in
21
<PAGE> 27
the developing and emerging countries that issue the securities. The ability and
willingness of sovereign obligors in developing and emerging countries or the
governmental authorities that control repayment of their external debt to pay
principal and interest on such debt when due may depend on general economic and
political conditions within the relevant country. Countries such as those in
which the Investment Quality Bond Trust may invest have historically
experienced, and may continue to experience, high rates of inflation, high
interest rates, exchange rate trade difficulties and extreme poverty and
unemployment. Many of these countries are also characterized by political
uncertainty or instability. Additional factors which may influence the ability
or willingness to service debt include, but are not limited to, a country's cash
flow situation, the availability of sufficient foreign exchange on the date a
payment is due, the relative size of its debt service burden to the economy as a
whole, and its government's policy towards the International Monetary Fund, the
World Bank and other international agencies.
The ability of a foreign sovereign obligor to make timely payments on its
external debt obligations will also be strongly influenced by the obligor's
balance of payments, including export performance, its access to international
credits and investments, fluctuations in interest rates and the extent of its
foreign reserves. A country whose exports are concentrated in a few commodities
or whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other than
dollars, its ability to make debt payments denominated in dollars could be
adversely affected. If a foreign sovereign obligor cannot generate sufficient
earnings from foreign trade to service its external debt, it may need to depend
on continuing loans and aid from foreign governments, commercial banks, and
multilateral organizations, and inflows of foreign investment. The commitment on
the part of these foreign governments, multilateral organizations and others to
make such disbursements may be conditioned on the government's implementation of
economic reforms and/or economic performance and the timely service of its
obligations. Failure to implement such reforms, achieve such levels of economic
performance or repay principal or interest when due may result in the
cancellation of such third parties' commitments to lend funds, which may further
impair the obligor's ability or willingness to timely service its debts. The
cost of servicing external debt will also generally be adversely affected by
rising international interest rates, because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to foreign
exchange. Currency devaluations may affect the ability of a sovereign obligor to
obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a governmental obligor may default on its
obligations. If such an event occurs, the Investment Quality Bond Trust may have
limited legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign sovereign debt securities to obtain recourse
may be subject to the political climate in the relevant country. In addition, no
assurance can be given that the holders of commercial bank debt will not contest
payments to the holders of other foreign sovereign debt obligations in the event
of default under their commercial bank loan agreements.
Sovereign obligors in developing and emerging countries are among the
world's largest debtors to commercial banks, other governments, international
financial organizations and other financial institutions. These obligors have in
the past experienced substantial difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and the restructuring
of certain indebtedness. Restructuring arrangements have included, among other
things, reducing and rescheduling interest and principal payments by negotiating
new or amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest payments.
Holders of certain foreign sovereign debt securities may be requested to
participate in the restructuring of such obligations and to extend further loans
to their issuers. There can be no assurance that the Brady Bonds and other
foreign sovereign debt securities in which the Investment Quality Bond Trust may
invest will not be subject to similar restructuring arrangements or to requests
for new credit which may adversely affect its holdings. Furthermore, certain
participants in the secondary market for such debt may be directly involved in
negotiating the terms of these arrangements and may therefore have access to
information not available to other market participants.
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<PAGE> 28
FOREIGN SECURITIES. Each of the Acquiring Portfolios and the Transferor
Portfolios, to the extent stated above under the description of such portfolios,
may invest in securities of foreign issuers. Such foreign securities may be
denominated in foreign currencies. The Global Equity Trust may, without
limitation, invest up to 100% of its assets in securities issued by foreign
entities and/or denominated in foreign currencies.
Securities of foreign issuers include obligations of foreign branches of
U.S. banks and of foreign banks, common and preferred stocks, debt securities
issued by foreign governments, corporations and supranational organizations, and
American Depository Receipts, European Depository Receipts and Global Depository
Receipts ("ADRs," "EDRs" and "GDRs"). ADRs are U.S. dollar-denominated
securities backed by foreign securities deposited in a U.S. securities
depository. ADRs are created for trading in the U.S. markets. The value of an
ADR will fluctuate with the value of the underlying security, reflect any
changes in exchange rates and otherwise involve risks associated with investing
in foreign securities. ADRs in which the Acquiring Portfolios and Transferor
Portfolios may invest may be sponsored or unsponsored. There may be less
information available about foreign issuers of unsponsored ADRs.
Securities of foreign issuers also include EDRs and GDRs, which are
receipts evidencing an arrangement with a non-U.S. bank similar to that for ADRs
and are designed for use in non-U.S. securities markets. EDRs and GDRs are not
necessarily quoted in the same currency as the underlying security.
Foreign securities may be subject to foreign government taxes which reduce
their attractiveness. See "Additional Information About the Trust -- Tax
Matters." In addition, investing in securities denominated in foreign currencies
and in the securities of foreign issuers, particularly non-governmental issuers,
involves risks which are not ordinarily associated with investing in domestic
issuers. These risks include political or economic instability in the country
involved and the possibility of imposition of currency controls. Since the
Acquiring Portfolios and the Transferor Portfolios may invest in securities
denominated or quoted in currencies other than the United States dollar, changes
in foreign currency exchange rates may affect the value of investments in the
Acquiring Portfolios and the Transferor Portfolios and the unrealized
appreciation or depreciation of investments insofar as United States investors
are concerned. Foreign currency exchange rates are determined by forces of
supply and demand on the foreign exchange markets. These forces are, in turn,
affected by the international balance of payments and other economic and
financial conditions, government intervention, speculation and other factors.
The Acquiring Portfolios and the Transferor Portfolios may incur transaction
charges in exchanging foreign currencies.
There may be less publicly available information about a foreign issuer
than about a domestic issuer. Foreign issuers, including foreign branches of
U.S. banks, are subject to different accounting and reporting requirements which
are generally less extensive than the requirements applicable to domestic
issuers. Foreign stock markets (other than Japan) have substantially less volume
than the United States exchanges and securities of foreign issuers are generally
less liquid and more volatile than those of comparable domestic issuers. There
is frequently less governmental regulation of exchanges, broker-dealers and
issuers than in the United States, and brokerage costs may be higher. In
addition, investments in foreign companies may be subject to the possibility of
nationalization, withholding of dividends at the source, expropriation or
confiscatory taxation, currency blockage, political or economic instability or
diplomatic developments that could adversely affect the value of those
investments. Finally, in the event of a default on any foreign obligation, it
may be difficult for the Trust to obtain or to enforce a judgment against the
issuer.
Foreign markets, especially emerging markets, may have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when a portion of the assets of a
portfolio is uninvested and no return is earned thereon. The inability of a
portfolio to make intended security purchases due to settlement problems could
cause the portfolio to miss attractive investment opportunities. Inability to
dispose of portfolio securities due to settlement problems could result in
losses to a portfolio due to subsequent declines in values of the portfolio
securities or, if the portfolio has entered into a contract to sell the
security, possible liability to the purchaser. Certain foreign markets,
especially emerging markets, may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. A portfolio could be
23
<PAGE> 29
adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as by the application
to the portfolio of any restrictions on investments.
In addition to the foreign securities listed above, the Worldwide Growth
Trust and the Investment Quality Bond Trust may also invest in foreign sovereign
debt securities, which involve certain additional risks. See "Additional
Information on Investment Policies and Techniques and Risk Factors," and High
Yield (High Risk) Securities -- Foreign Sovereign Debt Securities" above.
SMALL COMPANY AND EMERGING GROWTH SECURITIES. The Worldwide Growth Trust
may invest in small-sized and emerging growth companies (collectively,
"small-sized companies"). Investing in securities of small-sized companies may
involve greater risks since these securities may have limited marketability and,
thus, may be more volatile. Because small-sized companies normally have fewer
shares outstanding than larger companies, it may be more difficult to buy or
sell significant amounts of such shares without an unfavorable impact on
prevailing prices. In addition, small-sized companies are typically subject to a
greater degree of changes in earnings and business prospects than are larger,
more established companies. There is typically less publicly available
information concerning small-sized companies than for larger, more established
companies. Companies with small market capitalizations may also be dependent
upon a single proprietary product or market niche, may have limited product
lines, markets or financial resources, or may depend on a limited management
group. Although investing in securities of small-sized companies offers
potential for above-average returns if the companies are successful, the risk
exists that the companies will not succeed and the prices of the companies'
shares could significantly decline in value. Therefore, an investment in a
portfolio that invests in small-sized company securities may involve a greater
degree of risk than an investment in other mutual funds that seek capital
appreciation by investing in better-known, larger companies.
WARRANTS. Subject to certain restrictions, each of the Acquiring
Portfolios and the Transferor Portfolios may purchase warrants, including
warrants traded independently of the underlying securities. Warrants are rights
to purchase securities at specific prices valid for a specific period of time.
Their prices do not necessarily move parallel to the prices of the underlying
securities, and warrant holders receive no dividends and have no voting rights
or rights with respect to the assets of an issuer. Warrants cease to have value
if not exercised prior to the expiration date.
LENDING SECURITIES. Each Acquiring Portfolio and Transferor Portfolio may
lend its securities so long as such loans do not represent in excess of 33 1/3%
of a portfolio's total assets. This is a fundamental policy. The procedure for
lending securities is for the borrower to give the lending portfolio collateral
consisting of cash, cash equivalents or securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities. The lending portfolio may
invest the cash collateral and earn additional income or receive an agreed upon
fee from a borrower which has delivered cash equivalent collateral. The Trust
anticipates that its securities will be loaned only under the following
conditions: (1) the borrower must furnish collateral equal at all times to the
market value of the securities loaned and the borrower must agree to increase
the collateral on a daily basis if the securities increase in value; (2) the
loan will be made in accordance with New York Stock Exchange rules, which
presently require the borrower, after notice, to redeliver the securities within
five business days; and (3) the portfolio making the loan may pay reasonable
service, placement, custodian or other fees in connection with loans of
securities and share a portion of the interest from these investments with the
borrower of the securities. As with other extensions of credit there are risks
of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially.
WHEN-ISSUED SECURITIES ("FORWARD COMMITMENTS"). In order to help ensure
the availability of suitable securities, each of the Acquiring Portfolios and
the Transferor Portfolios may purchase debt securities on a "when-issued" or on
a "forward delivery" basis, which means that the obligations will be delivered
to the portfolio at a future date, which may be a month or more after the date
of commitment (referred to as "forward commitments"). It is expected that, under
normal circumstances, a portfolio purchasing securities on a when-issued or
forward delivery basis will take delivery of the securities, but the portfolio
may sell the securities before the settlement date, if such action is deemed
advisable. In general, a portfolio does not pay for the securities or start
earning interest on them until the obligations are scheduled to be settled, but
it does,
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<PAGE> 30
in the meantime, record the transaction and reflect the value each day of the
securities in determining its net asset value. At the time delivery is made, the
value of when-issued or forward delivery securities may be more or less than the
transaction price, and the yields then available in the market may be higher
than those obtained in the transaction. While awaiting delivery of the
obligations purchased on such bases, a portfolio will establish a segregated
account consisting of cash or high quality debt securities equal to the amount
of the commitments to purchase when-issued or forward delivery securities. The
availability of liquid assets for this purpose and the effect of asset
segregation on a portfolio's ability to meet its current obligations, to honor
requests for redemption and to have its investment portfolio managed properly
will limit the extent to which the portfolio may purchase when-issued or forward
delivery securities. Except as may be imposed by these factors, there is no
limit on the percent of a portfolio's total assets that may be committed to such
transactions.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. Each of the
Acquiring Portfolios and the Transferor Portfolios may enter into repurchase
agreements and reverse repurchase agreements. Repurchase agreements involve the
acquisition by a portfolio of debt securities subject to an agreement to resell
them at an agreed-upon price. Under a repurchase agreement, at the time the
portfolio acquires a security, it agrees to resell it to the original seller (a
financial institution or broker/dealer which meets the guidelines established by
the Trustees) and must deliver the security (and/or securities that may be added
to or substituted for it under the repurchase agreement) to the original seller
on an agreed-upon date in the future. The repurchase price is in excess of the
purchase price. The arrangement is in economic effect a loan collateralized by
securities.
The Trustees have adopted procedures that establish certain
creditworthiness, asset and collateralization requirements for the
counterparties to a portfolio's repurchase agreements. The Trustees will
regularly monitor the use of repurchase agreements and the subadvisers will,
pursuant to procedures adopted by the Trustees, continuously monitor the amount
of collateral held with respect to a repurchase transaction so that it equals or
exceeds the amount of the obligation.
A portfolio's risk in a repurchase transaction is limited to the ability of
the seller to pay the agreed-upon sum on the delivery date. In the event of
bankruptcy or other default by the seller, there may be possible delays and
expenses in liquidating the instrument purchased, decline in its value and loss
of interest. Securities subject to repurchase agreements will be valued every
business day and additional collateral will be requested if necessary so that
the value of the collateral is at least equal to the value of the repurchase
obligation, including the interest accrued thereon.
Each Acquiring Portfolio and Transferor Portfolio may enter into "reverse"
repurchase agreements. Under a reverse repurchase agreement, a portfolio may
sell a debt security and agree to repurchase it at an agreed upon time and at an
agreed upon price. The portfolio retains record ownership of the security and
the right to receive interest and principal payments thereon. At an agreed upon
future date, the portfolio repurchases the security by remitting the proceeds
previously received, plus interest. The difference between the amount the
portfolio receives for the security and the amount it pays on repurchase is
deemed to be payment of interest. The portfolio will maintain in a segregated
custodial account cash, Treasury bills or other U.S. Government securities
having an aggregate value equal to the amount of such commitment to repurchase
including accrued interest, until payment is made. In certain types of
agreements, there is no agreed-upon repurchase date and interest payments are
calculated daily, often based on the prevailing overnight repurchase rate. While
a reverse repurchase agreement may be considered a form of leveraging and may,
therefore, increase fluctuations in a portfolio's net asset value per share,
each portfolio will cover the transaction as described above.
MORTGAGE DOLLAR ROLLS. Each Acquiring Portfolio and Transferor Portfolio
may enter into mortgage dollar rolls. Under a mortgage dollar roll, a portfolio
sells mortgage-backed securities for delivery in the future (generally within 30
days) and simultaneously contracts to repurchase substantially similar (same
type, coupon and maturity) securities on a specified future date. During the
roll period, the portfolio forgoes principal and interest paid on the
mortgage-backed securities. A portfolio is compensated by the difference between
the current sale price and the lower forward price for the future purchase
(often referred to as the "drop") as well as by the interest earned on the cash
proceeds of the initial sale. A portfolio may also be
25
<PAGE> 31
compensated by receipt of a commitment fee. A portfolio may only enter into
covered rolls. A "covered roll" is a specific type of dollar roll for which
there is an offsetting cash or cash equivalent security position which matures
on or before the forward settlement date of the dollar roll transaction. Dollar
roll transactions involve the risk that the market value of the securities sold
by the portfolio may decline below the repurchase price of those securities.
While a mortgage dollar roll may be considered a form of leveraging, and may,
therefore, increase fluctuations in a portfolio's net asset value per share,
each portfolio will cover the transaction as described above.
HEDGING AND OTHER STRATEGIC TRANSACTIONS. Each of the Acquiring Portfolios
and the Transferor Portfolios may be authorized to use a variety of investment
strategies described below for hedging purposes only, including hedging various
market risks (such as interest rates, currency exchange rates and broad or
specific market movements) and managing the effective maturity or duration of
debt instruments held by the portfolio. The description in this Prospectus/Proxy
Statement of each Acquiring Portfolio and each Transferor Portfolio indicates
which, if any, of these types of transactions may be used by each such
portfolio. Limitations on the portion of a portfolio's assets that may be used
in connection with the investment strategies described below are set out in the
Statement of Additional Information.
Subject to the constraints described above, an individual portfolio may (if
and to the extent so authorized) purchase and sell (or write) exchange-listed
and over-the-counter put and call options on securities, financial futures
contracts and fixed-income indices and other financial instruments, enter into
financial futures contracts (including stock index futures), enter into interest
rate transactions, and enter into currency transactions (collectively, these
transactions are referred to in this Prospectus/Proxy Statement as "Hedging and
Other Strategic Transactions"). A portfolio's interest rate transactions may
take the form of swaps, caps, floors and collars, and a portfolio's currency
transactions may take the form of currency forward contracts, currency futures
contracts, currency swaps and options on currencies or currency futures
contracts.
Hedging and Other Strategic Transactions may be used:
- to attempt to protect against possible changes in the market value of
securities held or to be purchased by a portfolio resulting from
securities markets or currency exchange rate fluctuations;
- to protect a portfolio's unrealized gains in the value of its securities;
- to facilitate the sale of those securities for investment purposes;
- to manage the effective maturity or duration of a portfolio's securities;
and
- to establish a position in the derivatives markets as a temporary
substitute for purchasing or selling particular securities.
A portfolio may use any or all types of Hedging and Other Strategic
Transactions which it is authorized to use at any time; no particular strategy
will dictate the use of one type of transaction rather than another, as use of
any authorized Hedging and Other Strategic Transaction will be a function of
numerous variables, including market conditions. The ability of a portfolio to
utilize Hedging and Other Strategic Transactions successfully will depend on, in
addition to the factors described above, its subadviser's ability to predict
pertinent market movements, which cannot be assured. These skills are different
from those needed to select a portfolio's securities. None of the portfolios is
a "commodity pool" (i.e., a pooled investment vehicle which trades in commodity
futures contracts and options thereon and the operator of which is registered
with the Commodity Futures Trading Commission (the "CFTC")) and Hedging and
Other Strategic Transactions involving futures contracts and options on futures
contracts will be purchased, sold or entered into only for bona fide hedging,
risk management or appropriate portfolio management purposes and not for
speculative purposes. The use of certain Hedging and Other Strategic
Transactions will require that a portfolio segregate cash, liquid high grade
debt obligations or other assets to the extent a portfolio's obligations are not
otherwise "covered" through ownership of the underlying security, financial
instrument or currency. Risks associated with Hedging and Other Strategic
Transactions are described in "Hedging and Other Strategic Transactions -- Risk
Factors" in the Statement of Additional Information. A detailed discussion of
various Hedging
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<PAGE> 32
and Other Strategic Transactions, including applicable regulations of the CFTC
and the requirement to segregate assets with respect to these transactions, also
appears in the Statement of Additional Information.
ILLIQUID SECURITIES. Each of the Acquiring Portfolios and the Transferor
Portfolios is precluded from investing in excess of 15% of its net assets in
securities that are not readily marketable. Investment in illiquid securities
involves the risk that, because of the lack of consistent market demand for such
securities, the Trust may be forced to sell them at a discount from the last
offer price.
Excluded from the 15% limitation are securities that are restricted as to
resale but for which a ready market is available pursuant to exemption provided
by Rule 144A adopted pursuant to the Securities Act of 1933 ("1933 Act") or
other exemptions from the registration requirements of the 1933 Act. Whether
securities sold pursuant to Rule 144A are readily marketable for purposes of the
Trust's investment restriction is a determination to be made by the subadvisers
subject to the Trustees' oversight and for which the Trustees are ultimately
responsible. The subadvisers will also monitor the liquidity of Rule 144A
securities held by the portfolios for which they are responsible. To the extent
Rule 144A securities held by a portfolio should become illiquid because of a
lack of interest on the part of qualified institutional investors, the overall
liquidity of the portfolio could be adversely affected.
ADDITIONAL INFORMATION ABOUT THE TRUST
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The following discussion sets
forth information regarding the performance of each Transferor Portfolio and
Acquiring Portfolio for the period ended December 31, 1997. There are several
ways to evaluate a portfolio's historical performance. One can look at the total
percentage change in value, the average annual percentage change or the growth
of a hypothetical $10,000 investment. WITH RESPECT TO ALL PERFORMANCE
INFORMATION PRESENTED, IT IS IMPORTANT TO UNDERSTAND THAT PAST PERFORMANCE DOES
NOT GUARANTEE FUTURE RESULTS. RETURN AND PRINCIPAL FLUCTUATE, AND SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE TABLES
The following performance table for each Transferor Portfolio and Acquiring
Portfolio shows two types of total return information: CUMULATIVE TOTAL RETURN
AND AVERAGE ANNUAL TOTAL RETURN. A CUMULATIVE TOTAL RETURN is an expression of a
portfolio's total change in share value in percentage terms over a set period of
time -- one, five and ten years (or since the portfolio's inception if less than
the applicable period). An AVERAGE ANNUAL TOTAL RETURN takes the portfolio's
cumulative total return for a time period greater than one year and shows what
would have happened if the portfolio had performed at a constant rate each year.
Because the Global Equity Trust has had a portfolio management change, the
performance table for the Global Equity Trust shows an average annual total
return for the period since the current portfolio manager assumed
responsibility. THE TABLES SHOW ALL CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS,
NET OF FEES AND EXPENSES OF THE TRUST, BUT DO NOT REFLECT THE INSURANCE
(SEPARATE ACCOUNT) EXPENSES (INCLUDING A POSSIBLE CONTINGENT DEFERRED SALES
CHARGE) OF THE VARIABLE ANNUITY AND VARIABLE LIFE PRODUCTS THAT INVEST IN THE
TRUST.
GRAPH -- CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
The following performance graph for each Transferor Portfolio and Acquiring
Portfolio shows the change in value of a $10,000 investment over the life of
each portfolio. Each portfolio's performance is compared with the performance of
one or more broad-based securities indices as a "benchmark." All performance
information includes the reinvestment of dividends and capital gain
distributions, as well as the deduction of ongoing management fees and portfolio
operating expenses. The benchmarks used for comparison are unmanaged and include
reinvestment of dividends and capital gain distributions, if any, but do not
reflect any fees or expenses. Portfolios that invest in multiple asset classes
are compared with a customized benchmark. This benchmark is comprised of a set
percentage allocation from each of the asset classes in which the portfolio
invests.
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<PAGE> 33
PORTFOLIO MANAGER'S COMMENTARY
Following is a commentary by the portfolio manager regarding each
Transferor Portfolio's and Acquiring Portfolio's performance during the period
ended December 31, 1997.
The following information regarding the Worldwide Growth Trust was included
in the Trust's Annual Report dated December 31, 1997:
WORLDWIDE GROWTH TRUST
INVESTMENT OBJECTIVE: Seeks long-term growth of capital by normally
investing at least 65% of its total assets in
equity securities of growth companies in a variety
of markets throughout the world.
SUBADVISER: Founders
PORTFOLIO MANAGER: Michael W. Gerding
INCEPTION DATE: January 1, 1997
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
WORLDWIDE GROWTH
TRUST MSCI WORLD INDEX
<S> <C> <C>
DEC-96 10000 10000
JAN-97 10120 10122
FEB-97 10208 10240
MAR-97 10208 10040
APR-97 10320 10370
MAY-97 10912 11012
JUN-97 11176 11563
JUL-97 11624 12097
AUG-97 11176 11290
SEP-97 11696 11905
OCT-97 11288 11280
NOV-97 11224 11482
DEC-97 11329 11623
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-----------------------
SINCE
INCEPTION
-----------------------
<S> <C>
PERIODS ENDING DECEMBER 31, 1997
MSCI World Index* 16.23%
Worldwide Growth Trust (at net asset value) 13.29%
</TABLE>
- ---------------
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
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<PAGE> 34
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Worldwide Growth Trust rose 13.3%, ahead of
the 10.1% returns from the average Morningstar World funds but trailing the MSCI
World Index which gained 16.2%.
ENVIRONMENT: As we enter 1998, the Asian currency crisis and international
market volatility continue to dominate investors' attention around the world. In
response to the first warning signs of problems, we aggressively reduced our
exposure to Asia because we no longer had any confidence in our earnings
estimated for our companies. Currently, with the exception of Japan, we have no
holdings in Asia. Our Japanese exposure is relatively limited, as we remain
concerned about the health of the economy and companies' ability to grow their
earnings in 1998.
We are finding the best opportunities in Europe where we expect improving
economic conditions for the third straight year. This coupled with the potential
for lower interest rates and corporate restructuring should lead to much better
earnings across Europe. We look for the same broad impact from these
restructurings that the U.S. has already experienced. We are significantly
overweight in Europe and are finding very attractive companies across many
diverse industries.
OUTLOOK: In spite of the difficult markets of the last several months, our
outlook for growth companies around the world is very positive. During the last
year, we visited with nearly 1,000 companies from over 20 countries. Our focus
is the same -- build a portfolio of the most attractive, rapidly growing
companies from around the world one company at a time regardless of where they
are located.
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<PAGE> 35
The following information regarding the Capital Growth Bond Trust was
included in the Trust's Annual Report dated December 31, 1997:
CAPITAL GROWTH BOND TRUST
INVESTMENT OBJECTIVE: To achieve growth of capital by investing in
medium-grade or better debt securities, with income
as a secondary consideration.
SUBADVISER: MAC
PORTFOLIO MANAGER: Cathy Addison
INCEPTION DATE: June 26, 1984
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
SALOMON BROS BIG LEHMAN BROTHERS
CAPITAL GROWTH BOND INDEX- AGGREGATE BOND
BOND TRUST CORPORATE INDEX
<S> <C> <C> <C>
JUN-84 10000 10000 10000
DEC-84 11373 11926 11711
12859 13416 12995
DEC-85 14345 14906 14301
15949 16176 15595
DEC-86 17554 17445 16488
17405 17625 16461
DEC-87 17257 17806 16941
17873 18648 17755
DEC-88 18489 19490 18276
19772 20851 19958
DEC-89 21055 22211 20933
21747 23021 21524
DEC-90 22440 23830 22806
24278 26032 23824
DEC-91 26117 28234 26455
28885 29457 27173
DEC-92 27665 30739 28414
29115 32601 30376
DEC-93 30575 34484 31184
29889 33854 29977
DEC-94 29202 33244 30274
32157 36850 33739
DEC-95 35112 40455 35866
34307 39601 35429
DEC-96 35989 41798 37164
36881 43096 38319
DEC-97 39126 46049 40763
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN CUMULATIVE TOTAL RETURN
--------------------------------------- ------------------------------
SINCE SINCE
1 YEAR 5 YEARS 10 YEARS INCEPTION 5 YEARS 10 YEARS INCEPTION
------ ------- -------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
PERIODS ENDING DECEMBER 31, 1997
Salomon Bros BIG Bond Index (Corporate)+ 10.17% 8.42% 9.97% 11.95% 49.81% 158.62% 360.49%
Lehman Brothers Aggregate Bond Index* 9.68% 7.49% 9.18% 10.97% 43.46% 140.62% 307.63%
Capital Growth Bond Trust (at net asset
value) 8.72% 7.19% 8.53% 10.62% 41.48% 126.74% 291.26%
</TABLE>
- ---------------
+ Salomon Brothers Broad Investment Grade Bond Index -- Corporate Component.
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Capital Growth Bond Trust returned 8.7%
right in line with the 8.7% returns generated by the average Morningstar General
Bond fund but below the 9.6% return of the Salomon Broad Investment Grade Index.
ENVIRONMENT: The bond market rallied in 1997. The benchmark 30-year US
Treasury Bond began the year at 6.64% rising to a peak of 7.17% and falling to
5.92% by the end of the year. The yield on the long bond fell 72 basis points
and the yield on the two year note fell 23 basis points causing the yield curve
to flatten.
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<PAGE> 36
Early in the year interest rates rose largely due to investors' fears that
inflation would increase which in turn was fueled by economic indicators showing
that the economy had picked up speed. As a result, the Fed raised rates by 25
basis points in order to slow economic growth. However, interest rates began
their downward move from April until the end of the year.
The rally was supported by a slowdown in the economy as GDP dropped from
4.9% in the first quarter to 3.3% in the second quarter to 3.1% in the third
quarter. Bond yields were propelled even lower by technical factors such as
continued interest from foreign buyers and hedge fund managers, reallocation of
funds by equity managers, the need of mortgage back security traders to offset
the shortening in their portfolios with Treasuries, and decreased issuance of
Treasuries and corporate bonds.
In the latter part of the year, the meltdown in Asia caused a significant
sell in the Asian stock markets and a loss in foreign currency values. This
began a flight to quality with money flowing into US Treasuries. In addition the
Asian events have caused investors to anticipate slowdowns in growth and
inflation in the US.
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<PAGE> 37
The following information regarding the Global Equity Trust was included in
the Trust's Annual Report dated December 31, 1997:
GLOBAL EQUITY TRUST
INVESTMENT OBJECTIVE: To seek long term capital appreciation by investing
primarily in equity securities throughout the
world, including U.S. issuers and emerging markets.
SUBADVISER: Morgan Stanley
PORTFOLIO MANAGER: Frances Campion
INCEPTION DATE: March 18, 1988*
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
GLOBAL EQUITY TRUST MSCI WORLD INDEX
<S> <C> <C>
FEB-88 10000 10000
9890 10000
10000 10128
9761 9927
9870 9915
9681 10103
9252 9549
9771 9956
10209 10621
10110 10992
DEC-88 10120 11093
10568 11497
10439 11427
10279 11355
10528 11619
10658 11337
10887 11211
11775 12480
11924 12179
12383 12525
12024 12104
12183 12595
DEC-89 12532 13001
12014 12397
11864 11867
11745 11153
11338 10995
12421 12155
12594 12071
12891 12183
11757 11045
10531 9882
11093 10807
11052 10632
DEC-90 11226 10856
11593 11256
12462 12299
12094 11939
12125 12034
12342 12309
11618 11551
12156 12098
12073 12062
12208 12380
12373 12583
11877 12037
DEC-91 12663 12916
12746 12679
12818 12463
12363 11878
12718 12046
13315 12527
12948 12110
12707 12144
12749 12442
12456 12330
12110 11998
12561 12215
DEC-92 12571 12317
12613 12360
12791 12655
13567 13392
14306 14014
15102 14339
14975 14222
15357 14518
16196 15186
16281 14908
16568 15321
15538 14457
DEC-93 16706 15166
17704 16169
17747 15962
17205 15277
17709 15752
17450 15795
17644 15754
18065 16056
18659 16543
17979 16111
18206 16572
17029 15856
DEC-94 16996 16013
16068 15776
16057 16001
16694 16769
17096 17371
17130 17523
17073 17521
18062 18400
17926 17994
18108 18521
17687 18232
17812 18868
DEC-95 18301 19423
18494 19778
18665 19903
19108 20233
19767 20713
19582 20734
19570 20842
18484 20108
18912 20343
19085 21143
18981 21295
20206 22492
DEC-96 20610 22136
20656 22406
21176 22668
21003 22224
21197 22955
22674 24376
23792 25595
24781 26778
23573 24992
24845 26354
23920 24970
24036 25417
DEC-97 24896 25730
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
CUMULATIVE
AVERAGE ANNUAL TOTAL RETURN TOTAL RETURN
------------------------------------------- -------------------
SINCE SINCE* SINCE
1 YEAR 5 YEARS INCEPTION OCT. 1, 1996 5 YEARS INCEPTION
------ ------- --------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C>
PERIODS ENDING DECEMBER 31, 1997
MSCI World Index** 16.23% 15.87% 10.18% 17.01% 21.70% 157.30%
Global Equity Trust (at net asset
value) 20.80% 14.64% 9.77% 23.75% 98.04% 148.96%
</TABLE>
- ---------------
* Current subadviser assignment became effective 10/1/96.
** All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Global Equity Trust returned 20.8%, well
above both the 10.1% returns for the average Morningstar World fund and the
16.2% increase in the MSCI World Index. Out performance during 1997 came largely
from the combination of our heavily underweight position in Japan and Southeast
Asia and strong Japanese stock selection, notably the large exporters which
continued to benefit from yen
32
<PAGE> 38
weakness. Stock selection in many European markets, particularly financials,
also contributed, as did our over weighting in continental Europe.
ENVIRONMENT. After beginning 1997 as perceivably one of the most "at risk"
markets on a valuation basis, the US ended the year again among the strongest
developed markets. The "Goldilocks" investment scenario prevailed: a firming
dollar, robust growth, benign inflation (despite full employment), shrinking
supply in both debt and equities and booming demand, despite a 0.25% rise in the
Fed Funds Rate in February and warnings from the Federal Reserve Chairman of
"irrational exuberance."
In Europe, weaker currencies, lower yields, accelerating restructuring and
consolidation drove exceptional local currency returns. The UK lagged its
continental counterparts as the newly independent Bank of England hiked interest
rates 1.25% in an attempt to subdue the overheated domestic economy. In Japan, a
weak domestic economy following April's VAT hike, the specter of deregulation,
and the deepening banking crisis brought a further loss of confidence. Some hope
was extended by year end tax cuts, increasing government willingness to
restructure its banking system and the collapse of Yamaichi, Japan's 4th largest
broker, perhaps heralding a breakdown in the traditional keiretsu "convoy"
system. Significant risks to Japan remain, however, not least the threat to
corporate earnings posed by Asian devaluations. Despite the IMF "bail out" of
Korea, Indonesia and Thailand, the austerity programs, recessions and necessary
reforms in these economies have barely begun and the political willingness to
achieve this not yet demonstrated.
OUTLOOK: Given a projected slowdown in global growth, the US Treasury
market is now predicting the Fed will ease rates. If mid single digit growth can
be maintained, and inflation remains quiescent, the US market is arguably fairly
valued with long bond yields at current levels. We remain slightly underweight
in the US, finding better relative value in Europe, particularly Ireland and the
UK. We have moved from market to over weight in the UK recently having found
several strong business franchises with management dedicated to maximizing
shareholder value. Despite continued underperformance, we still struggle to find
value in Japan, other than in selected sectors such as pharmaceuticals. Hence we
expect to remain underweight in the foreseeable future. We also remain cautious
about Asia as a whole despite the exceptionally steep sell off.
33
<PAGE> 39
The following information regarding the Investment Quality Bond Trust
included in the Trust's Annual Report dated December 31, 1997:
INVESTMENT QUALITY BOND TRUST
INVESTMENT OBJECTIVE: To seek a high level of current income consistent
with the maintenance of principal and liquidity, by
investing primarily in a diversified portfolio of
investment grade corporate bonds and U.S.
Government bonds with intermediate to longer term
maturities. Up to 20% of the portfolio's assets may
be invested in non-investment grade fixed income
securities.
SUBADVISER: Wellington Management
PORTFOLIO MANAGER: Thomas L. Pappas
INCEPTION DATE: April 23, 1991
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
Lehman Brothers
Investment Quality Aggregate Bond Customized
Bond Trust Index Benchmark
<S> <C> <C> <C>
Mar-91 10000 10000 10000
10070 10000 10000
10110 10058 10054
10090 10053 10046
10181 10193 10179
10472 10413 10412
10753 10824 10626
10853 10742 10725
10944 10841 10832
Dec-91 11376 11163 11193
11155 11011 11036
11276 11083 11111
11195 11021 11065
11247 11100 11117
11521 11310 11344
11679 11465 11513
11984 11700 11812
12089 11818 11913
12216 11959 12069
12016 11800 11875
12016 11802 11874
Dec-92 12195 11990 12084
12469 12220 12353
12711 12434 12819
12795 12466 12662
12863 12573 12759
12863 12590 12760
13116 12817 13057
13173 12891 13143
13439 13116 13454
13494 13152 13495
13538 13200 13555
13350 13088 13397
Dec-93 13418 13158 13462
13594 13336 13685
13261 13104 13379
12574 12781 13023
12735 12678 12909
12724 12577 12877
12700 12649 12846
12933 12901 13126
12956 12916 13135
12758 12726 12920
12724 12715 12901
12689 12687 12879
Dec-94 12793 12775 12972
13028 13028 13230
13316 13338 13562
13409 13419 13561
13611 13607 13555
14170 14133 14472
14281 14237 14592
14232 14205 14533
14405 14377 14735
14554 14517 14893
14802 14705 15103
15038 14926 15355
Dec-95 15288 15135 15601
15361 15238 15699
15060 14973 15352
14926 14868 15223
14797 14785 15096
14758 14755 15070
14942 14953 15278
14982 14993 15311
14956 14988 15271
15233 15228 15559
15536 15565 15943
15839 15832 15252
Dec-96 15681 15685 16057
15721 15734 16077
15760 15773 16122
15562 15598 15911
15520 15832 16147
15961 15982 16307
16174 16172 16514
16885 16609 17051
16486 16486 16840
16756 16712 17114
16955 16964 17371
17040 17032 17484
Dec-97 17210 17204 17648
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
CUMULATIVE
AVERAGE ANNUAL TOTAL RETURN TOTAL RETURN
---------------------------- -------------------
SINCE SINCE
1 YEAR 5 YEARS INCEPTION 5 YEARS INCEPTION
------ ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
Customized Benchmark*+ 9.91% 7.87% 8.89% 46.05% 76.48%
Lehman Brothers Aggregate Bond Index* 9.68% 7.49% 8.48% 43.49% 72.04%
Investment Quality Bond Trust (at net asset value) 9.75% 7.13% 8.46% 41.12% 72.10%
</TABLE>
- ---------------
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Customized Benchmark is comprised of 50% of the return of the Lehman Brothers
Government Bond Index and 50% of the return of the Lehman Brothers Corporate
Bond Index.
34
<PAGE> 40
PORTFOLIO MANAGER'S COMMENTARY
PORTFOLIO: For the year, the Investment Quality Bond Trust returned 9.75%,
in line with the 9.68% returns on the Lehman Brothers Aggregate Bond Index.
ENVIRONMENT: During 1997, Treasury yields declined and prices rose.
Inflation expectations dove as commodity prices deflated. Oil prices dove 14%,
gold plummeted by 24% and domestic inflation, as measured by CPI, finished at
1.7%. In addition, with the deflationary implication of troubles in Asia, it was
not surprising to see long Treasuries fall by 70 basis points, breaking through
the 6% level.
Treasuries finished the year with the most momentum; for the year, however,
they performed in line with both mortgages and high quality corporate bonds.
Meanwhile, high yield continued to outperform, generating an index total return
over 12%. The Trust benefitted from the constructive rate outlook but was held
back by a small (under 2%) position in Southeast Asian bonds.
OUTLOOK: The current outlook for the US despite robust current growth and
little slack in labor or manufacturing capacity, is materially different as a
result of the situation in Asia. The consensus has reduced growth and inflation
expectations each by one-half percent. Anecdotal evidence which has recently
surfaced suggests that these reductions may not be enough. With a continued
positive backdrop for bonds, our inclination is to add to Treasuries rather than
mortgages or corporate bonds, as the extra yield premium to own corporates and
mortgages leaves little room for error as we enter a riskier time for the
economy. Opportunities continue to surface in high yield, but we do not expect
to increase exposure to the high yield sector.
TAX MATTERS. For more information regarding the tax implications for the
purchaser of a variable annuity or life insurance contracts who allocates
investments to a portfolio of the Trust, please refer to the prospectus for the
contract. The following is a general and abbreviated summary of the applicable
provisions of the Code and Treasury Regulations currently in effect. It is not
intended to be a complete explanation or a substitute for consultation with
individual tax advisors. For the complete provisions, reference should be made
to the pertinent Code sections and the Treasury Regulations promulgated
thereunder. The Code and Regulations are subject to change, possibly with
retroactive effect.
TAX STATUS
The Trust intends to take the steps necessary to qualify each portfolio as
a regulated investment company under Subchapter M of the Code and believes that
each Acquiring Portfolio and Transferor Portfolio will so qualify. As a result
of qualifying as a regulated investment company, each portfolio will not be
subject to U.S. Federal income tax on its net investment income (i.e., its
investment company taxable income, as that term is defined in the Code,
determined without regard to the deduction for dividends paid) and net capital
gain (i.e., the excess of its net realized long-term capital gain over its net
realized short-term capital loss), if any, that it distributes to its
shareholders in each taxable year, provided that it distributes to its
shareholders at least 90% of its net investment income for such taxable year.
Each portfolio is subject to a nondeductible 4% excise tax calculated as a
percentage of certain undistributed amounts of ordinary income and capital gain
net income. To the extent possible, each portfolio intends to make sufficient
distributions to avoid the application of both corporate income and excise
taxes. Under current law, distributions of net investment income and net capital
gain are not taxed to a life insurance company to the extent applied to increase
the reserves for the company's variable annuity and life insurance contracts.
SOURCES OF GROSS INCOME
To qualify as a regulated investment company, a portfolio must, among other
things, derive its income from certain sources. Specifically, in each taxable
year a portfolio must derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
(including, but not limited to, gains from options, futures or forward
contracts) derived with respect to its business of investing in stock,
securities or currencies.
35
<PAGE> 41
DIVERSIFICATION OF ASSETS
To qualify as a regulated investment company, a portfolio must also satisfy
certain requirements with respect to the diversification of its assets. A
portfolio must have, at the close of each quarter of the taxable year, at least
50% of the value of its total assets represented by cash, cash items, United
States Government securities, securities of other regulated investment
companies, and other securities which, in respect of any one issuer, do not
represent more than 5% of the value of the assets of the portfolio nor more than
10% of the voting securities of that issuer. In addition, at those times not
more than 25% of the value of the portfolio's assets may be invested in
securities (other than United States Government securities or the securities of
other regulated investment companies) of any one issuer, or of two or more
issuers which the portfolio controls and which are engaged in the same or
similar trades or businesses or related trades or businesses.
Because only insurance company separate accounts will own shares in the
Acquiring Portfolios, each insurance company separate account will be treated as
owning its proportionate share of the assets of any portfolio in which it
invests, provided that the portfolio qualifies as a regulated investment
company. Therefore, each Acquiring Portfolio intends to meet the additional
diversification requirements that are applicable to insurance company separate
accounts under Subchapter L of the Code. These requirements generally provide
that no more than 55% of the value of the assets of a portfolio 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.
FOREIGN INVESTMENTS
Portfolios investing in foreign securities or currencies may be required to
pay withholding or other taxes to foreign governments. Foreign tax withholding
from dividends and interest, if any, is generally imposed at a rate between 10%
and 35%. The investment yield of any portfolio that invests in foreign
securities or currencies will be reduced by these foreign taxes. A portfolio
investing in securities of a passive foreign investment company may be subject
to U.S. federal income taxes and interest charges (and the investment yield of a
portfolio making such an investment will be reduced by these taxes and interest
charges) on a portion of its distributions on and gain with respect to shares of
the passive foreign investment company even if such amounts are paid as a
dividend to its shareholders. Shareholders will bear the cost of these taxes and
interest charges. Alternatively, a portfolio may elect to (i) treat the passive
foreign investment company as a "qualified electing fund" (assuming the company
agrees to provide certain information to the Internal Revenue Service) and
include annually in income its proportionate share of the company's ordinary
earnings and capital gains (whether or not distributed) or (ii) mark to market
its stock in the passive foreign investment company and thereby recognize as
ordinary income any increase in the value of such shares, and as ordinary loss
any decrease in such value to the extent of prior increases.
ADDITIONAL TAX CONSIDERATIONS
If a portfolio failed to qualify as a regulated investment company, owners
of contracts based on the portfolio (i) would be treated as owning shares of the
portfolio (rather than their proportionate share of the assets of such
portfolio) for purposes of the diversification requirements under Subchapter L
of the Code, and as a result might be taxed currently on the investment earnings
under their contracts and thereby lose the benefit of tax deferral, and (ii) the
portfolio would incur regular corporate federal income tax on its taxable income
for that year and be subject to certain distribution requirements upon
requalification. In addition, if a portfolio failed to comply with the
diversification requirements of the regulations under Subchapter L of the Code,
owners of contracts based on the portfolio might be taxed on the investment
earnings under their contracts and thereby lose the benefit of tax deferral.
Accordingly, compliance with the above rules is carefully monitored by the
Manulife Securities and the subadvisers and it is intended that the portfolios
will 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 portfolio, 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 that subadvisers might
otherwise believe to be desirable.
36
<PAGE> 42
OTHER INFORMATION.
DIVIDENDS
The Trust intends to declare as dividends substantially all of the net
investment income, if any, of each portfolio. Dividends from the net investment
income and the net capital gain, if any, for each portfolio will be declared not
less frequently than annually and reinvested in additional full and fractional
shares of that portfolio or paid in cash.
CUSTODIAN
State Street Bank and Trust Company ("State Street") 225 Franklin Street,
Boston, Massachusetts 02110, currently acts as custodian and bookkeeping agent
of all the Trust assets. State Street has selected various banks and trust
companies in foreign countries to maintain custody of certain foreign
securities. State Street is authorized to use the facilities of the Depository
Trust Company, the Participants Trust Company and the book-entry system of the
Federal Reserve Banks.
ADDITIONAL INFORMATION
Additional information concerning the operations and management of the
Trust (including the Transferor Portfolios and the Acquiring Portfolios) is
incorporated herein by reference from its current prospectus and current
statement of additional information, each dated May 1, 1998, copies of which may
be obtained without charge by contacting the Trust at the address or telephone
number set forth on the cover page of this Prospectus/Proxy Statement.
The Trust is subject to the informational requirements of the Securities
and Exchange Act of 1934 and the 1940 Act, and in accordance therewith, files
reports, proxy material and other information about each of the Transferor
Portfolios and Acquiring Portfolios with the Securities and Exchange Commission.
Such reports, proxy material and other information filed by the Trust can
be inspected and copied at the Public Reference Facilities maintained by the
Commission, located at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
such material can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549 at prescribed rates. In addition, copies of recent
information filed by the Trust may be obtained from the Commission's Internet
address at http://www.sec.gov.
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF THE TRUST'S ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, AND A COPY OF THE TRUST'S
SEMIANNUAL REPORT FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1998, TO A SHAREHOLDER
UPON REQUEST. TO OBTAIN A REPORT, PLEASE CONTACT THE TRUST AT THE ADDRESS OR
TELEPHONE NUMBER SET FORTH ON THE COVER PAGE OF THIS PROSPECTUS/PROXY STATEMENT.
FINANCIAL STATEMENTS AND EXPERTS
The financial statements and financial highlights of the Acquiring
Portfolios and the Transferor Portfolios for the fiscal year ended December 31,
1997 included and incorporated by reference into this Prospectus/ Proxy
Statement have been so included and incorporated herein in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, One Post Office
Square, Boston, Massachusetts 02109, given on the authority of said firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain matters concerning the issuance of shares of the Acquiring
Portfolios will be passed upon by James D. Gallagher, Secretary of the Trust.
Certain tax consequences of the Reorganization will be passed upon by Simpson
Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017.
37
<PAGE> 43
APPENDIX
DEBT SECURITY RATINGS
STANDARD & POOR'S RATINGS GROUP ("S&P")
Commercial Paper:
A-1 The rating A-1 is the highest rating assigned by S&P to
commercial paper. This designation indicates that the
degree of safety regarding timely payment is either
overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted
with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this
designation is strong. However, the relative degree of
safety is not as high for issuers designated "A-1".
Bonds:
AAA Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is
extremely strong.
AA Debt rated AA has a very strong capacity to pay interest
and repay principal and differs from the higher rated
issues only in small degree.
A Debt rated A has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible
to the adverse effects of changes in circumstances and
economic conditions than debt in higher rated
categories.
BBB Debt rated BBB is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category
than in higher rated categories.
BB-B-CCC-CC Bonds rated BB, B, CCC and CC are regarded, on balance,
as predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations. BB
indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will
likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
D Bonds rated D are in default. The D category is used
when interest payments or principal payments are not
made on the date due even if the applicable grace period
has not expired. The D rating is also used upon the
filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings set forth above may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
Commercial Paper:
P-1 The rating P-1 is the highest commercial paper rating
assigned by Moody's. Issuers rated P-1 (or related
supporting institutions) have a superior capacity for
repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the
following characteristics: (1) leading market positions
in established industries; (2) high rates of return on
funds employed;
A-1
<PAGE> 44
(3) conservative capitalization structures with moderate
reliance on debt and ample asset protection; (4) broad
margins in earnings coverage of fixed financial charges
and high internal cash generation; and (5) well
established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated P-2 (or related supporting institutions)
have a strong capacity for repayment of short-term
promissory obligations. This will normally be evidenced
by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios,
while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample
alternative liquidity is maintained.
Bonds:
Aaa Bonds which are rated Aaa by Moody's are judged to be of
the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt
edge". Interest payments are protected by a large or by
an exceptionally stable margin and principal is secure.
While the various protective elements are likely to
change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa by Moody's are judged to be of
high quality by all standards. Together with the Aaa
group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat
larger than in Aaa securities.
A Bonds which are rated A by Moody's possess many
favorable investment attributes and are to be considered
as upper medium grade obligations. Factors giving
security to principal and interest are considered
adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa by Moody's are considered as
medium grade obligations, that is, they are neither
highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of
time. Such bonds lack outstanding investment
characteristics and in fact have speculative
characteristics as well.
B Bonds which are rated B generally lack characteristics
of a desirable investment. Assurance of interest and
principal payments or of maintenance and other terms of
the contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present
elements of danger with respect to principal or
interest.
Ca Bonds which are rated Ca represent obligations which are
speculative in high degree. Such issues are often in
default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of
bonds and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real
investment standing.
A-2
<PAGE> 45
Moody's applies numerical modifiers "1", "2" and "3" to certain of its
rating classifications. The modifier "1" indicates that the security ranks in
the higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category.
A-3
<PAGE> 46
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this
[ ] day of January, 1999, by Manufacturers Investment Trust (the
"Trust"), a Massachusetts business trust, on behalf of the Worldwide Growth
Trust and the Capital Growth Bond Trust (collectively, the "Transferor
Portfolios") and the Global Equity Trust and the Investment Quality Bond Trust
(collectively, the "Acquiring Portfolios").
The following table depicts each specific Transferor Portfolio and the
corresponding Acquiring Portfolio into which such Transferor Portfolio will be
merged:
<TABLE>
<CAPTION>
TRANSFEROR PORTFOLIO ACQUIRING PORTFOLIO
- -------------------- -------------------
<S> <C>
Worldwide Growth Trust Global Equity Trust
Capital Growth Bond Trust Investment Quality Bond Trust
</TABLE>
WHEREAS, the Board of Trustees of the Trust has determined that the
transfer of all of the assets and liabilities of each Transferor Portfolio to
the corresponding Acquiring Portfolio, noted above, is in the best interests of
each Transferor Portfolio and the corresponding Acquiring Portfolio, as well as
the best interests of shareholders and holders of variable life and annuity
contracts funded by shares of the Transferor Portfolios and the Acquiring
Portfolios, and that the interests of existing shareholders and contract owners
would not be diluted as a result of this transaction;
WHEREAS, the Trust intends to provide for the reorganization of the
Transferor Portfolios (the "Reorganization") through the acquisition by the
Acquiring Portfolios of all of the assets, subject to all of the liabilities, of
the Transferor Portfolios in exchange for shares of beneficial interest, par
value $.01 per share, of the Acquiring Portfolios (the "Acquiring Portfolio
Shares"), the liquidation of the Transferor Portfolios and the distribution to
Transferor Portfolio shareholders of such Acquiring Portfolio Shares, all
pursuant to the provisions of Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the Transferor Portfolios and the Acquiring Portfolios hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIOS IN EXCHANGE FOR THE ACQUIRING
PORTFOLIO SHARES AND LIQUIDATION OF THE TRANSFEROR PORTFOLIOS
(a) Plan of Reorganization.
(i) The Trust on behalf of each Transferor Portfolio listed above, will
convey, transfer and deliver the assets of each Transferor Portfolio to the
Acquiring Portfolio set forth opposite its name in the table above (each such
Acquiring Portfolio being the "Corresponding Acquiring Portfolio" of the
Transferor Portfolio set forth opposite its name, and each such Transferor
Portfolio being the "Corresponding Transferor Portfolio" of the Acquiring
Portfolio set forth opposite its name) all of the then existing assets of such
Transferor Portfolio (consisting, without limitation, of portfolio securities
and instruments, dividend and interest receivables, cash and other assets). In
consideration thereof, the Trust on behalf of each Acquiring Portfolio will (A)
assume and pay, to the extent that they exist on or after the Effective Time of
the Reorganization (as defined in Section 1(b)(i) hereof), all of the
obligations and liabilities of the Corresponding Transferor Portfolio and (B)
issue and deliver to the Corresponding Transferor Portfolio full and fractional
shares of beneficial interest of the Corresponding Acquiring Portfolio, with
respect to each Corresponding Acquiring Portfolio equal to that number of full
and fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof.
Any shares of capital stock (if any), par value $.01 per share, of the
Transferor Portfolios ("Transferor Portfolio Shares") held in the treasury of
the Trust at the Effective Time of the Reorganization shall thereupon be
retired. Such transactions shall take place [on the date provided for in Section
1(b) hereof (the "Exchange Date"]. All computations for the Transferor
Portfolios and the Acquiring Portfolios shall be performed by State Street Bank
and Trust Company (the "Custodian"), as custodian and pricing agent for the
Transferor
<PAGE> 47
Portfolios and the Acquiring Portfolios. The determination of said Custodian
shall be conclusive and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, each Transferor
Portfolio will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Corresponding Acquiring Portfolio Shares then credited to the
account of each Transferor Portfolio on the books of the Corresponding Acquiring
Portfolio, to open accounts on the share records of the Corresponding Acquiring
Portfolio in the names of the Transferor Portfolio shareholders and representing
the respective pro rata number of the Acquiring Portfolio Shares due such
shareholders. The Acquiring Portfolios will not issue certificates representing
the Acquiring Portfolio Shares in connection with such exchange.
(iii) As soon as practicable after the Effective Time of the
Reorganization, the Trust shall take all the necessary steps under Massachusetts
law, the Trust's Declaration of Trust and any other applicable law to effect a
complete dissolution of the Transferor Portfolios.
(b) Exchange Date and Effective Time of the Reorganization.
(i) Subject to the satisfaction of the conditions to the Reorganization
specified in this Plan, the Reorganization shall occur as of the close of
regularly scheduled trading on the New York Stock Exchange (the "Effective Time
of the Reorganization") on the day (the "Exchange Date") which is the later of
(A) the final adjournment of the meeting of the holders of Transferor Portfolio
shares at which this Plan will be considered, (B) April 30, 1999 and (C) such
later day as the parties may mutually agree.
(ii) All acts taking place on the Exchange Date shall be deemed to take
place simultaneously as of the Effective Time of the Reorganization unless
otherwise provided.
(iii) In the event that on the proposed Exchange Date (A) the New York
Stock Exchange shall be closed to trading or trading thereon shall be
restricted, or (B) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate valuation of the net assets of the
Acquiring Portfolios or the Transferor Portfolios is impracticable, the Exchange
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
(iv) On the Exchange Date, portfolio securities of the Transferor
Portfolios shall be transferred by the Custodian to the accounts of the
Corresponding Acquiring Portfolios duly endorsed in proper form for transfer, in
such condition as to constitute good delivery thereof in accordance with the
custom of brokers, and shall be accompanied by all necessary federal and state
stock transfer stamps or a check for the appropriate purchase price thereof.
(c) Valuation.
(i) The net asset value of the shares of each Acquiring Portfolio and the
net value of the assets of each Corresponding Transferor Portfolio to be
transferred in exchange therefore shall be determined as of the Effective Time
of the Reorganization. The net asset value of the Acquiring Portfolio Shares
shall be computed by the Custodian in the manner set forth in the Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of each Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Corresponding
Acquiring Portfolio, said assets and liabilities to be valued in the manner set
forth in the Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Acquiring Portfolio Shares to be issued (including
fractional shares, if any) by each Acquiring Portfolio in exchange for the
Corresponding Transferor Portfolio's assets shall be determined by an exchange
ratio computed by dividing the net value of such Transferor Portfolio's assets
by the net asset value per share of such Acquiring Portfolio, both as determined
in accordance with Section 1(c)(i).
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(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolios and the Transferor Portfolios.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PORTFOLIOS
Each of the Acquiring Portfolios represents and warrants as follows:
(a) Organization, Existence, etc. The Trust is a business trust that is
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its business as it
is now being conducted. Each Acquiring Portfolio is a validly existing series of
shares of such business trust representing interests therein under the laws of
Massachusetts. Each Acquiring Portfolio and the Trust has all necessary federal,
state and local authorization to own all of its properties and assets and to
carry on its business as now being conducted.
(b) Registration as Investment Company. The Trust is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end investment
company of the management type; such registration has not been revoked or
rescinded and is in full force and effect.
(c) Current Offering Documents. The current prospectus and statement of
additional information of the Trust, each dated May 1, 1998, as amended,
included in the Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") and the Act and do not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) Capitalization. The Trust has an unlimited number of authorized shares
of beneficial interest, par value $.01 per share, of which as of January 15,
1999 there were outstanding the following numbers of shares of the Acquiring
Portfolios: 45,422,874 shares of the Global Equity Trust and 25,146,929 shares
of the Investment Quality Bond Trust, and no shares of such portfolios were held
in the treasury of the Trust. All of the outstanding shares of the Trust have
been duly authorized and are validly issued, fully paid and nonassessable
(except as disclosed in the Trust's prospectus and recognizing that under
Massachusetts law, shareholders of a Trust portfolio could, under certain
circumstances, be held personally liable for the obligations of such Trust
portfolio). Because the Trust is an open-end investment company engaged in the
continuous offering and redemption of its shares, the number of outstanding
shares may change prior to the Effective Time of the Reorganization. All of the
issued and outstanding shares of each of the Acquiring Portfolios have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) Financial Statements. The financial statements of the Trust for the
fiscal year ended December 31, 1997, which have been audited by
PricewaterhouseCoopers LLP and the unaudited financial statements of the Trust
for the six months ended June 30, 1998 (collectively, the "Trust's Financial
Statements"), fairly present the financial position of the Acquiring Portfolios
as of the dates thereof and the respective results of operations and changes in
net assets for each of the periods indicated in accordance with generally
accepted accounting principles ("GAAP").
(f) Shares to be Issued Upon Reorganization. The Acquiring Portfolio
Shares to be issued in connection with the Reorganization will be duly
authorized and upon consummation of the Reorganization will be validly issued,
fully paid and nonassessable (except as disclosed in the Trust's prospectus and
recognizing that under Massachusetts law, shareholders of a Trust portfolio
could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) Authority Relative to this Plan. The Trust, on behalf of the Acquiring
Portfolios, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Trust's Board of Trustees and no other proceedings by the Trust other
than those contemplated under this Plan are necessary to authorize its officers
to effectuate this Plan and the transactions contemplated hereby. The Trust is
not a party to or obligated under any provision of its Declaration of Trust or
By-laws, or under any indenture or contract
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provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(h) Liabilities. There are no liabilities of the Acquiring Portfolios,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Trust's Financial
Statements with respect to the Acquiring Portfolios and liabilities incurred in
the ordinary course of business subsequent to June 30, 1998 or otherwise
previously disclosed to the Trust with respect to the Acquiring Portfolios, none
of which has been materially adverse to the business, assets or results of
operations of the Acquiring Portfolios.
(i) No Material Adverse Change. Since June 30, 1998, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolios, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) Litigation. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Trust, threatened which would adversely affect the
Trust or the Acquiring Portfolios' assets or business or which would prevent or
hinder consummation of the transactions contemplated hereby, there are no facts
which would form the basis for the institution of administrative proceedings
against the Trust or the Acquiring Portfolios and, to the knowledge of the
Trust, there are no regulatory investigations of the Trust or the Acquiring
Portfolios, pending or threatened, other than routine inspections and audits.
(k) Contracts. No default exists under any material contract or other
commitment to which the Trust, on behalf of any Acquiring Portfolio, is subject.
(l) Taxes. The federal income tax returns of the Trust with respect to
each Acquiring Portfolio, and all other income tax returns required to be filed
by the Trust with respect to each Acquiring Portfolio, have been filed for all
taxable years to and including December 31, 1997, and all taxes payable pursuant
to such returns have been paid. To the knowledge of the Trust, no such return is
under audit and no assessment has been asserted in respect of any such return.
All federal and other taxes owed by the Trust with respect to the Acquiring
Portfolios have been paid so far as due. The Trust and each Acquiring Portfolio
currently are, and will continue to be up until and at the Exchange Date, in
compliance with Section 817(h) of the Code.
(m) No Approvals Required. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolios'
shareholders (referred to in Section 6(a) hereof), the exemptive relief
requested in the Exemptive Application (as defined in Section 4(e) hereof), no
consents, approvals, authorizations, registrations or exemptions under federal
or state laws are necessary for the consummation by the Trust of the
Reorganization, except such as have been obtained as of the date hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR PORTFOLIOS
Each of the Transferor Portfolios represents and warrants as follows:
(a) Organization, Existence, etc. The Trust is a business trust that is
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its business as it
is now being conducted. Each Transferor Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each Transferor Portfolio and the Trust has all necessary
federal, state and local authorization to own all of its properties and assets
and to carry on its business as now being conducted.
(b) Registration as Investment Company. The Trust is registered under the
Act as an open-end investment company of the management type; such registration
has not been revoked or rescinded and is in full force and effect.
(c) Current Offering Documents. The current prospectus and statement of
additional information of the Trust, each dated May 1, 1998, as amended,
included in the Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act and the
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Act and do not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) Capitalization. The Trust has an unlimited number of authorized shares
of beneficial interest, par value $.01 per share, of which as of January 15,
1999 there were outstanding the following numbers of shares of the Transferor
Portfolios: 2,779,692 shares of the Worldwide Growth Trust and 5,432,114 shares
of the Capital Growth Bond Trust, and no shares of such portfolios were held in
the treasury of the Trust. All of the outstanding shares of the Trust have been
duly authorized and are validly issued, fully paid and nonassessable (except as
disclosed in the Trust's prospectus and recognizing that under Massachusetts
law, shareholders of a Trust portfolio could, under certain circumstances, be
held personally liable for the obligations of such Trust portfolio). Because the
Trust is an open-end investment company engaged in the continuous offering and
redemption of its shares, the number of outstanding shares may change prior to
the Effective Time of the Reorganization. All such shares will, at the Exchange
Date, be held by the shareholders of record of the Transferor Portfolios as set
forth on the books and records of the Trust in the amounts set forth therein,
and as set forth in any list of shareholders of record provided to the Acquiring
Portfolios for purposes of the Reorganization, and no such shareholders of
record will have any preemptive rights to purchase any Transferor Portfolio
shares, and the Transferor Portfolios do not have outstanding any options,
warrants or other rights to subscribe for or purchase any Transferor Portfolio
shares (other than any existing dividend reinvestment plans of the Transferor
Portfolios or as set forth in this Plan), nor are there outstanding any
securities convertible into any shares of the Transferor Portfolios (except
pursuant to any existing exchange privileges described in the current prospectus
and statement of additional information of the Trust). All of each Transferor
Portfolio's issued and outstanding shares have been offered and sold in
compliance in all material respects with applicable registration requirements of
the Securities Act and applicable state securities laws.
(e) Financial Statements. The Trust's Financial Statements fairly present
the financial position of the Transferor Portfolios as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with GAAP.
(f) Authority Relative to this Plan. The Trust, on behalf of the
Transferor Portfolios, has the power to enter into this Plan and to carry out
its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Trust's Board of Trustees and no other proceedings by the Trust other
than those contemplated under this Plan are necessary to authorize its officers
to effectuate this Plan and the transactions contemplated hereby. The Trust is
not a party to or obligated under any provision of its Declaration of Trust or
By-laws, or under any indenture or contract provision or any other commitment or
obligation, or subject to any order or decree, which would be violated by or
which would prevent its execution and performance of this Plan in accordance
with its terms.
(g) Liabilities. There are no liabilities of the Transferor Portfolios,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Trust's Financial
Statements with respect to the Transferor Portfolios and liabilities incurred in
the ordinary course of business subsequent to June 30, 1998 or otherwise
previously disclosed to the Trust with respect to the Transferor Portfolios,
none of which has been materially adverse to the business, assets or results of
operations of the Transferor Portfolios.
(h) No Material Adverse Change. Since June 30, 1998, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolios, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) Litigation. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Trust, threatened which would adversely affect the
Trust or the Transferor Portfolios' assets or business or which would prevent or
hinder consummation of the transactions contemplated hereby, there are no facts
which would form the basis for the institution of administrative proceedings
against the Trust or the Transferor Portfolios and, to the knowledge of the
Trust, there are no regulatory investigations of the Trust or the Transferor
Portfolios, pending or threatened, other than routine inspections and audits.
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(j) Contracts. The Trust, on behalf of the Transferor Portfolios, is not
subject to any contracts or other commitments (other than this Plan) which will
not be terminated with respect to the Transferor Portfolios without liability to
the Trust or the Transferor Portfolios as of or prior to the Effective Time of
the Reorganization.
(k) Taxes. The federal income tax returns of the Trust with respect to
each Transferor Portfolio, and all other income tax returns required to be filed
by the Trust with respect to each Transferor Portfolio, have been filed for all
taxable years to and including December 31, 1997, and all taxes payable pursuant
to such returns have been paid. To the knowledge of the Trust, no such return is
under audit and no assessment has been asserted in respect of any such return.
All federal and other taxes owed by the Trust with respect to the Transferor
Portfolios have been paid so far as due. The Trust and each Transferor Portfolio
currently are, and will continue to be up until and at the Exchange Date, in
compliance with Section 817(h) of the Code.
(l) No Approvals Required. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolios'
shareholders referred to in Section 6(a) hereof, the exemptive relief requested
by the Exemptive Application, no consents, approvals, authorizations,
registrations or exemptions under federal or state laws are necessary for the
consummation by the Trust of the Reorganization, except such as have been
obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING PORTFOLIOS
Each of the Acquiring Portfolios covenants to the following:
(a) Registration Statement. On behalf of the Acquiring Portfolios, the
Trust shall file with the Commission a Registration Statement on Form N-14 (the
"Registration Statement") under the Securities Act relating to the Acquiring
Portfolio Shares issuable hereunder and the proxy statement of the Transferor
Portfolios relating to the meeting of the Transferor Portfolios' shareholders
referred to in Section 5(a) herein. At the time the Registration Statement
becomes effective, the Registration Statement (i) will comply in all material
respects with the provisions of the Securities Act and the rules and regulations
of the Commission thereunder (the "Regulations") and (ii) will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and at the time the Registration Statement becomes effective, at the time of the
Transferor Portfolios shareholders' meeting referred to in Section 5(a) hereof,
and at the Effective Time of the Reorganization, the prospectus/proxy statement
(the "Prospectus") and statement of additional information (the "Statement of
Additional Information") included therein, as amended or supplemented by any
amendments or supplements filed by the Trust, will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) Cooperation in Effecting Reorganization. The Acquiring Portfolios
agree to use all reasonable efforts to effectuate the Reorganization, to
continue in operation thereafter, and to obtain any necessary regulatory
approvals for the Reorganization. The Acquiring Portfolios shall furnish such
data and information relating to each Acquiring Portfolio as shall be reasonably
requested for inclusion in the information to be furnished to the Transferor
Portfolio shareholders in connection with the meeting of the Transferor
Portfolios' shareholders for the purpose of acting upon this Plan and the
transactions contemplated herein.
(c) Operations in the Ordinary Course. Except as otherwise contemplated by
this Plan, each of the Acquiring Portfolios shall conduct its business in the
ordinary course until the consummation of the Reorganization, it being
understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions.
(d) Exemptive Application. The Acquiring Portfolios shall use all
reasonable efforts to cause the Commission to grant the exemptive relief
requested in the Exemptive Application filed on November 13, 1998 by the Trust
(the "Exemptive Application"), substantially in the form requested in the
Exemptive Application, including filing any necessary or advisable amendments to
the Exemptive Application.
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5. COVENANTS OF THE TRANSFEROR PORTFOLIOS
Each of the Transferor Portfolios covenants to the following:
(a) Meeting of the Transferor Portfolios' Shareholders. The Trust shall
call and hold a meeting of the shareholders of each Transferor Portfolio for the
purpose of acting upon this Plan and the transactions contemplated herein. The
Trust shall not hold such meeting until such time as the Commission shall have
granted the exemptive relief requested in the Exemptive Application
substantially in the form requested in the Exemptive Application.
(b) Portfolio Securities. With respect to the assets to be transferred in
accordance with Section 1(a), each Transferor Portfolio's assets shall consist
of all property and assets of any nature whatsoever, including, without
limitation, all cash, cash equivalents, securities, claims and receivables
(including dividend and interest receivables) owned, and any deferred or prepaid
expenses shown as an asset on the Trust's books. At least five (5) business days
prior to the Exchange Date, each Transferor Portfolio will provide the Trust,
for the benefit of each Corresponding Acquiring Portfolio, with a list of its
assets and a list of its stated liabilities. Each Transferor Portfolio shall
have the right to sell any of the securities or other assets shown on the list
of assets prior to the Exchange Date but will not, without the prior approval of
the Trust, on behalf of the Corresponding Acquiring Portfolio, respectively,
acquire any additional securities other than securities which the Corresponding
Acquiring Portfolio is permitted to purchase, pursuant to its investment
objective and policies or otherwise (taking into consideration its own portfolio
composition as of such date). In the event that any Transferor Portfolio holds
any investments that its Corresponding Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable and to the extent that its
shareholders would not be materially affected in an adverse manner by such a
disposition. In addition, the Trust will prepare and deliver immediately prior
to the Effective Time of the Reorganization, a Statement of Assets and
Liabilities of each Transferor Portfolio, prepared in accordance with GAAP
(each, a "Schedule"). All securities to be listed in the Schedule for a
Transferor Portfolio as of the Effective Time of the Reorganization will be
owned by such Transferor Portfolio free and clear of any liens, claims, charges,
options and encumbrances, except as indicated in such Schedule, and, except as
so indicated, none of such securities is or, after the Reorganization as
contemplated hereby, will be subject to any restrictions, legal or contractual,
on the disposition thereof (including restrictions as to the public offering or
sale thereof under the Securities Act) and, except as so indicated, all such
securities are or will be readily marketable.
(c) Registration Statement. In connection with the preparation of the
Registration Statement, the Transferor Portfolios will cooperate with the
Acquiring Portfolios and will furnish to the Trust the information relating to
the Transferor Portfolios required by the Securities Act and the Regulations to
be set forth in the Registration Statement (including the Prospectus and
Statement of Additional Information). At the time the Registration Statement
becomes effective, the Registration Statement, insofar as it relates to the
Transferor Portfolios, (i) will comply in all material respects with the
provisions of the Securities Act and the Regulations and (ii) will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and at the time the Registration Statement becomes effective, at the time of the
Transferor Portfolios' shareholders' meeting referred to in Section 5(a) and at
the Effective Time of the Reorganization, the Prospectus and Statement of
Additional Information, as amended or supplemented by any amendments or
supplements filed by the Trust, insofar as they relate to the Transferor
Portfolios, will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall apply only to
statements in or omissions from the Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in conformity with
information furnished by the Transferor Portfolios for use in the Registration
Statement, Prospectus or Statement of Additional Information as provided in this
Section 5(c).
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(d) Cooperation in Effecting Reorganization. The Transferor Portfolios
agree to use all reasonable efforts to effectuate the Reorganization and to
obtain any necessary regulatory approvals for the Reorganization.
(e) Operations in the Ordinary Course. Except as otherwise contemplated by
this Plan, each of the Transferor Portfolios shall conduct its business in the
ordinary course until the consummation of the Reorganization, it being
understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions.
(f) Contract Terminations. Prior to the Effective Time of the
Reorganization, the investment subadvisory agreement between Manulife Securities
and (i) Founders Asset Management, LLC ("Founders"), but only with respect to
the Worldwide Growth Trust and (ii) Manufacturers Adviser Corporation ("MAC"),
but only with respect to the Capital Growth Bond Trust, shall each be
terminated, such termination to be effective prior to or as of the Effective
Time of the Reorganization.
(g) Exemptive Application. The Transferor Portfolios shall use all
reasonable efforts to cause the Commission to grant the exemptive relief
requested in the Exemptive Application, substantially in the form requested in
the Exemptive Application, including filing any necessary or advisable
amendments to the Exemptive Application.
(h) Statement of Earnings and Profits. As promptly as practicable, but in
any case within 60 days after the Exchange Date, the Trust on behalf of each
Transferor Portfolio, shall prepare a statement of the earnings and profits of
each Transferor Portfolio for federal income tax purposes, and of any capital
loss carryovers and other items that the Acquiring Portfolios will succeed to
and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR PORTFOLIOS
The obligations of each Transferor Portfolio with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(a) Approval by the Transferor Portfolios' Shareholders. This Plan and the
transactions contemplated by the Reorganization shall have been approved by the
requisite vote of the shares of each Transferor Portfolio entitled to vote on
the matter ("Transferor Shareholder Approval").
(b) Covenants, Warranties and Representations. Each of the Acquiring
Portfolios shall have complied with each of its covenants contained herein, each
of the representations and warranties contained herein shall be true in all
material respects as of the Effective Time of the Reorganization (except as
otherwise contemplated herein), and there shall have been no material adverse
change (as described in Section 2(i)) in the financial condition, results of
operations, business, properties or assets of each of the Acquiring Portfolios
since June 30, 1998.
(c) Regulatory Approval. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, the Commission shall have granted the
exemptive relief requested in the Exemptive Application substantially in the
form requested in the Exemptive Application, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(i) Tax Opinion. The Trust shall have received the opinion of Simpson
Thacher & Bartlett, dated on or before the Exchange Date, addressed to and in
form and substance satisfactory to the Trust, as to certain of the federal
income tax consequences under the Code of the Reorganization, insofar as it
relates to each Transferor Portfolio and its Corresponding Acquiring Portfolio,
and to shareholders of each Transferor Portfolio (the "Tax Opinion"). For
purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett may rely
exclusively and without independent verification, as to factual matters, upon
the statements made in this Plan, the Prospectus and Statement of Additional
Information, and upon such other written representations as the President or
Treasurer of the Trust will have verified as of the Effective Time of the
Reorganization. The
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Tax Opinion will be to the effect that, based on the facts and assumptions
stated therein, for federal income tax purposes: (i) the Reorganization will
constitute a reorganization within the meaning of section 368(a)(1) of the Code
with respect to each Transferor Portfolio and its Corresponding Acquiring
Portfolio; (ii) no gain or loss will be recognized by any of the Transferor
Portfolios or the Corresponding Acquiring Portfolios upon the transfer of all
the assets and liabilities, if any, of each Transferor Portfolio to its
Corresponding Acquiring Portfolio solely in exchange for shares of the Acquiring
Portfolio or upon the distribution of the shares of the Acquiring Portfolio to
the holders of the shares of the Transferor Portfolio solely in exchange for all
of the shares of the Transferor Portfolio; (iii) no gain or loss will be
recognized by shareholders of any of the Transferor Portfolios upon the exchange
of shares of such Transferor Portfolio solely for shares of the Corresponding
Acquiring Portfolio; (iv) the holding period and tax basis of the shares of the
Acquiring Portfolio received by each holder of shares of the Transferor
Portfolio pursuant to the Reorganization will be the same as the holding period
and tax basis of shares of the Transferor Portfolio held by the shareholder
(provided the shares of the Transferor Portfolio were held as a capital asset on
the date of the Reorganization) immediately prior to the Reorganization; and (v)
the holding period and tax basis of the assets of each of the Transferor
Portfolios acquired by the Corresponding Acquiring Portfolio will be the same as
the holding period and tax basis of those assets to each of the Transferor
Portfolios immediately prior to the Reorganization. The payment by the Trust of
certain expenses of the Acquiring Portfolios and the Transferor Portfolios which
are directly related to the Reorganization referred to in Section 9 hereof will
not affect the opinions set forth above regarding the federal income tax
consequences of the exchanges by each Transferor Portfolio and the shareholders
of each Transferor Portfolio.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIOS
The obligations of each Acquiring Portfolio with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(a) Approval by the Transferor Portfolios' Shareholders. The Transferor
Shareholder Approval shall have been obtained.
(b) Covenants, Warranties and Representations. Each of the Transferor
Portfolios shall have complied with each of its covenants contained herein, each
of the representations and warranties contained herein shall be true in all
material respects as of the Effective Time of the Reorganization (except as
otherwise contemplated herein), and there shall have been no material adverse
change (as described in Section 3(h) in the financial condition, results of
operations, business, properties or assets of each of the Transferor Portfolios
since June 30, 1998.
(c) Portfolio Securities. All securities to be acquired by each Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by
Manulife Securities as consistent with the investment policies of such Acquiring
Portfolio.
(d) Regulatory Approval. The Regulatory Approvals shall have been
obtained.
(e) Contract Terminations. The agreements referred to in Section 5(f)
shall have been terminated as provided therein.
(f) Distribution of Income and Gains. The Trust on behalf of the
Transferor Portfolios shall have distributed to the shareholders of each
Transferor Portfolio all of such Transferor Portfolio's investment company
taxable income (without regard to the deductions for dividends paid) as defined
in Section 852(b)(2) of the Code for its taxable year ending on the Exchange
Date and all of its net capital gain as such term is used in Section 852(b)(3)
of the Code, after reduction by any capital loss carryforward, for its taxable
year ending on the Exchange Date.
(g) Tax Opinion. The Trust shall have received the Tax Opinion.
9
<PAGE> 55
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) Amendments. The parties hereto may, by agreement in writing authorized
by the Board of Trustees amend this Plan at any time before or after approval
hereof by the shareholders of the Transferor Portfolios, but after such
approval, no amendment shall be made which substantially changes the terms
hereof.
(b) Waivers. At any time prior to the Effective Time of the
Reorganization, either the Transferor Portfolios or the Acquiring Portfolios may
by written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein, except that conditions set forth in Sections 6(c) and 7(d) may
not be waived.
(c) Termination by the Transferor Portfolios. The Trust, on behalf of the
Transferor Portfolios, may terminate this Plan with respect to one or more of
the Transferor Portfolios at any time prior to the Effective Time of the
Reorganization by notice to the Acquiring Portfolios, the Trust and Manulife
Securities if (i) a material condition to the performance of one or more of the
Transferor Portfolios hereunder or a material covenant of one or more of the
Acquiring Portfolios contained herein shall not be fulfilled on or before the
date specified for the fulfillment thereof or (ii) a material default or
material breach of this Plan shall be made by one or more of the Acquiring
Portfolios.
(d) Termination by the Acquiring Portfolios. The Trust, on behalf of the
Acquiring Portfolios, may terminate this Plan with respect to one or more of the
Acquiring Portfolios at any time prior to the Effective Time of the
Reorganization by notice to the Transferor Portfolios, the Trust and Manulife
Securities if (i) a material condition to the performance of one or more of the
Acquiring Portfolios hereunder or a material covenant of one or more of the
Transferor Portfolios contained herein shall not be fulfilled on or before the
date specified for the fulfillment thereof or (ii) a material default or
material breach of this Plan shall be made by one or more of the Transferor
Portfolios.
(e) Termination by the Trust. This Plan may be terminated by the Trust at
any time prior to the Effective Time of the Reorganization, whether before or
after approval of this Plan by the shareholders of the Transferor Portfolios,
without liability on the part of any party hereto, its Directors, Trustees,
officers or shareholders or Manulife Securities, on notice to the other parties
in the event that the Board of Trustees determines that proceeding with this
Plan is not in the best interests of the shareholders or contract owners of the
Transferor Portfolios or the Acquiring Portfolios.
(f) Unless the parties hereto shall otherwise agree in writing, this Plan
shall terminate without liability as of the close of business on September 1,
1999 if the Effective Time of the Reorganization is not on or prior to such
date.
(g) Survival. No representations, warranties or covenants in or pursuant
to this Plan, except for the provisions of Section 5(h) and Section 9 of this
Plan, shall survive the Reorganization.
9. EXPENSES; INSURANCE
The expenses of the Reorganization will be borne by the Transferor
Portfolios and the Acquiring Portfolios. Such expenses include, without
limitation, (i) expenses incurred in connection with the entering into and the
carrying out of the provisions of this Plan; (ii) expenses associated with the
preparation and filing of the Registration Statement (other than registration
fees payable to the Commission in respect of the registration of the Acquiring
Portfolio shares registered thereby, which shall be payable by the respective
Acquiring Portfolios in which such shares represent interests); (iii) fees and
expenses of preparing and filing such forms as are necessary under any
applicable state securities laws in connection with the Reorganization; (iv)
postage; (v) printing; (vi) accounting fees; (vii) legal fees and (viii)
solicitation costs relating to the Reorganization.
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10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Trust (for itself or on
behalf of the Transferor
Portfolios or the Acquiring Portfolios):
73 Tremont Street
Boston, Massachusetts 02108
Attention: James D. Gallagher, Esq.
Facsimile: (617) 266-8201
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Sarah E. Cogan, Esq.
Facsimile: (212) 455-2502
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to have
been material and relied upon by the Transferor Portfolios, the Acquiring
Portfolios and the Trust notwithstanding any investigation made by such party or
on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
(b) This Plan may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with the
laws of The Commonwealth of Massachusetts.
(d) This Plan shall bind and inure to the benefit of the Trust, the
Transferor Portfolios and the Acquiring Portfolios and their respective
successors and assigns, but no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any party without the written consent of
the other parties. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Plan.
(e) The name "Manufacturers Investment Trust" is the designation of the
Trustees under a Declaration of Trust dated September 29, 1988, as amended, and
all persons dealing with the Trust must look solely to the Trust's property for
the enforcement of any claims against the Trust, as neither the Trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of the Trust. No series of the Trust shall be liable for
claims against any other series of the Trust.
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<PAGE> 57
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date
first above written.
MANUFACTURERS INVESTMENT TRUST
on behalf of the Transferor Portfolios
BY:
--------------------------------------
Name:
Title:
MANUFACTURERS INVESTMENT TRUST
on behalf of the Acquiring Portfolios
BY:
--------------------------------------
Name:
Title:
12
<PAGE> 58
[THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA]
[THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK]
[THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA]
VOTING INSTRUCTIONS FORM
VOTING PURSUANT TO THESE INSTRUCTIONS WILL BE AS SPECIFIED. IF NO SPECIFICATION
IS MADE AS TO AN ITEM, VOTING WILL BE FOR SUCH ITEM. A SEPARATE VOTING
INSTRUCTION FORM IS PROVIDED FOR EACH MANUFACTURERS INVESTMENT TRUST PORTFOLIO
IN WHICH YOUR CONTRACT VALUES WERE INVESTED AS OF FEBRUARY [26], 1999. PLEASE
SIGN, DATE AND RETURN ALL VOTING INSTRUCTION FORMS RECEIVED IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
VOTING INSTRUCTIONS MUST BE RECEIVED BY APRIL [20], 1999 TO BE VOTED FOR
THE MEETING TO BE HELD ON APRIL [21], 1999.
[NAME OF TRANSFEROR PORTFOLIO]
THESE VOTING INSTRUCTIONS ARE SOLICITED BY [THE MANUFACTURERS LIFE
INSURANCE COMPANY OF NORTH AMERICA] [THE MANUFACTURERS LIFE INSURANCE COMPANY OF
NEW YORK] [THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA] IN CONNECTION
WITH A SOLICITATION OF PROXIES BY THE BOARD OF TRUSTEES OF MANUFACTURERS
INVESTMENT TRUST.
The undersigned hereby instructs [The Manufacturers Life Insurance Company of
North America] [The Manufacturers Life Insurance Company of New York] [The
Manufacturers Life Insurance Company of America] to vote the shares of
Manufacturers Investment Trust (the "Trust") attributable to his or her variable
annuity or variable life contract at the Special Meeting of Shareholders to be
held at 73 Tremont Street, Boston, Massachusetts 02108 at 10:00 a.m., April
[21], 1999, and any adjournments thereof, as indicated below.
Date:
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each contract owner should sign. If only one
signs, his or her signature will be binding. If the contract owner is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the contract owner is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner." If the
contract owner is a trust, the trustee should sign in his or her own name,
indicating that he or she is a "Trustee."
_______________________________________
_______________________________________
Signature(s), Title(s), if applicable
<PAGE> 59
INDICATE YOUR VOTE BELOW BY FILLING IN THE APPROPRIATE BOXES
IN THIS MANNER [ ] USING BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK.
- --------------------------------------------------------------------------------
THIS VOTING INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE CONTRACT HOLDER. IF NO DIRECTION IS MADE, THIS VOTING
INSTRUCTION WILL BE VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE
PROSPECTUS/PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSALS.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. Approval of Agreement and Plan of
Reorganization. [ ] [ ] [ ]
2. To transact such other business as may
properly come before the Meeting.
</TABLE>
- --------------------------------------------------------------------------------
PLEASE MARK YOUR VOTING INSTRUCTION FORM, DATE AND SIGN IT ON THE REVERSE SIDE,
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE> 60
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 61
MANUFACTURERS INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
MARCH , 1999
This Statement of Additional Information is available to the shareholders
of the Worldwide Growth Trust and the Capital Growth Bond Trust in connection
with the proposed transfer of all of the assets and liabilities of the Worldwide
Growth Trust and the Capital Growth Bond Trust to, and in exchange for shares
of, the Global Equity Trust and the Investment Quality Bond Trust, respectively.
This Statement of Additional Information includes the Statement of Additional
Information of the Trust dated May 1, 1998.
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus/Proxy Statement dated March , 1999
(the "Prospectus/Proxy Statement"), which may be obtained without charge by
writing to Manufacturers Investment Trust (the "Trust") at 116 Huntington
Avenue, Boston, Massachusetts 02116, or by calling toll free 1-800-344-1029.
<PAGE> 62
TABLE OF CONTENTS FOR PART B
<TABLE>
<S> <C>
Statement of Additional Information of the Trust, dated May
1, 1998
Manufacturers Investment Trust -- Capital Growth Bond Trust
and Investment Quality Bond Trust
Pro Forma Combining Statement of Assets and
Liabilities -- June 30, 1998 (Unaudited)
Pro Forma Combining Statement of Operations -- For the Six
Months Ended June 30, 1998 (Unaudited)
Pro Forma Combining Schedule of Portfolio
Investments -- June 30, 1998 (Unaudited)
Notes to the Pro Forma Financial Statements -- June 30,
1998 (Unaudited)
Manufacturers Investment Trust -- Capital Growth Bond Trust
and Investment Quality Bond Trust
Pro Forma Combining Statement of Assets and
Liabilities -- December 31, 1997 (Unaudited)
Pro Forma Combining Statement of Operations -- For the
Year Ended December 31, 1997 (Unaudited)
Pro Forma Combining Schedule of Portfolio
Investments -- December 31, 1997 (Unaudited)
Notes to the Pro Forma Financial Statements -- December
31, 1997 (Unaudited)
</TABLE>
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<PAGE> 63
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
MANUFACTURERS INVESTMENT TRUST
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Trust's Prospectus dated May 1, 1998 which may be
obtained from Manufacturers Investment Trust, 116 Huntington Avenue, Boston,
Massachusetts, 02116.
The date of this Statement of Additional Information is May 1, 1998.
<PAGE> 64
TABLE OF CONTENTS
INVESTMENT POLICIES ...................................................... 3
Money Market Instruments ............................................ 3
Other Instruments ................................................... 5
HEDGING AND OTHER STRATEGIC TRANSACTIONS ................................. 11
General Characteristics of Options................................... 11
General Characteristics of Futures Contracts and Options on Futures
Contracts ........................................................... 13
Options on Securities Indices and Other Financial Indices ........... 14
Currency Transactions ............................................... 14
Combined Transactions ............................................... 15
Swaps, Caps, Floors and Collars ..................................... 15
Eurodollar Instruments .............................................. 16
Risk Factors ........................................................ 16
Risks of Hedging and Other Strategic Transactions Outside the
United States ....................................................... 17
Use of Segregated and Other Special Accounts ........................ 17
Other Limitations ................................................... 18
INVESTMENT RESTRICTIONS .................................................. 18
Fundamental ......................................................... 18
Nonfundamental ...................................................... 19
PORTFOLIO TURNOVER ....................................................... 21
MANAGEMENT OF THE TRUST .................................................. 22
Compensation of Trustees ............................................ 23
INVESTMENT MANAGEMENT ARRANGEMENTS ....................................... 24
The Advisory Agreement .............................................. 25
The Subadvisory Agreements .......................................... 27
Agreement with Prior Subadviser ..................................... 29
PORTFOLIO BROKERAGE ...................................................... 30
PURCHASE AND REDEMPTION OF SHARES ........................................ 34
DETERMINATION OF NET ASSET VALUE ......................................... 34
PERFORMANCE DATA ......................................................... 36
ORGANIZATION OF THE TRUST ................................................ 37
Shares of the Trust ................................................. 38
Principal Holders of Securities ..................................... 38
ADDITIONAL INFORMATION CONCERNING TAXES .................................. 39
REPORTS TO SHAREHOLDERS .................................................. 40
INDEPENDENT ACCOUNTANTS .................................................. 40
LEGAL COUNSEL ............................................................ 40
ADDITIONAL INFORMATION REGARDING SUBADVISERS ............................. 40
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<PAGE> 65
INVESTMENT POLICIES
The following discussion supplements "Investment Objectives and Policies"
set forth in the Prospectus of Manufacturers Investment Trust (the "Trust").
MONEY MARKET INSTRUMENTS
The Money Market Trust will be invested in the types of money market
instruments described below. Certain of the instruments listed below may also be
purchased by the other portfolios in accordance with their investment policies
and all portfolios may purchase such instruments to invest otherwise idle cash
or for defensive purposes, except that the U.S. Government Securities Trust and
the Equity Index Trust may not invest in the instruments described in 2. below.
1. U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS. Government
obligations are debt securities issued or guaranteed as to principal or interest
by the U.S. Treasury. These securities include treasury bills, notes and bonds.
U.S. Government agency obligations are debt securities issued or guaranteed as
to principal or interest by an agency or instrumentality of the U.S. Government
pursuant to authority granted by Congress. U.S. Government agency obligations
include, but are not limited to, the Student Loan Marketing Association, Federal
Home Loan Banks, Federal Intermediate Credit Banks and the Federal National
Mortgage Association. U.S. instrumentality obligations include, but are not
limited to, the Export-Import Bank and Farmers Home Administration. Some
obligations issued or guaranteed by U.S. Government agencies or
instrumentalities are supported by the right of the issuer to borrow from the
U.S. Treasury or the Federal Reserve Banks, such as those issued by Federal
Intermediate Credit Banks; others, such as those issued by the Federal National
Mortgage Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others, such
as those issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. There are also separately traded interest
components of securities issued or guaranteed by the United States Treasury. No
assurance can be given that the U.S. Government will provide financial support
to such U.S. Government sponsored agencies or instrumentalities in the future,
since it is not obligated to do so by law. The foregoing types of instruments
are hereafter collectively referred to as "U.S. Government securities."
2. CANADIAN AND PROVINCIAL GOVERNMENT AND CROWN AGENCY OBLIGATIONS.
Canadian Government obligations are debt securities issued or guaranteed as to
principal or interest by the Government of Canada pursuant to authority granted
by the Parliament of Canada and approved by the Governor in Council, where
necessary. These securities include treasury bills, notes, bonds, debentures and
marketable Government of Canada loans. Canadian Crown agency obligations are
debt securities issued or guaranteed by a Crown corporation, company or agency
("Crown agencies") pursuant to authority granted by the Parliament of Canada and
approved by the Governor in Council, where necessary. Certain Crown agencies are
by statute agents of Her Majesty in right of Canada, and their obligations, when
properly authorized, constitute direct obligations of the Government of Canada.
Such obligations include, but are not limited to, those issued or guaranteed by
the Export Development Corporation, Farm Credit Corporation, Federal Business
Development Bank and Canada Post Corporation. In addition, certain Crown
agencies which are not by law agents of Her Majesty may issue obligations which
by statute the Governor in Council may authorize the Minister of Finance to
guarantee on behalf of the Government of Canada. Other Crown agencies which are
not by law agents of Her Majesty may issue or guarantee obligations not entitled
to be guaranteed by the Government of Canada. No assurance can be given that the
Government of Canada will support the obligations of Crown agencies which are
not agents of Her Majesty, which it has not guaranteed, since it is not
obligated to do so by law.
Provincial Government obligations are debt securities issued or guaranteed
as to principal or interest by the government of any province of Canada pursuant
to authority granted by the Legislature of any such province and approved by the
Lieutenant Governor in Council of any such province, where necessary. These
securities include treasury bills, notes, bonds and debentures. Provincial Crown
agency obligations are debt securities issued or guaranteed by a provincial
Crown corporation, company or agency ("provincial Crown agencies") pursuant to
authority granted by a provincial Legislature and approved by the Lieutenant
Governor in Council of such province, where necessary. Certain provincial Crown
agencies are by statute agents of Her Majesty in right of a particular province
of Canada, and their obligations, when properly authorized, constitute direct
obligations of such province. Other provincial Crown agencies which are not by
law agents of Her Majesty in right of a particular province of Canada may issue
obligations which by statute the Lieutenant Governor in Council of such province
may guarantee, or may authorize the Treasurer thereof to guarantee, on behalf of
the government of such province. Finally, other provincial Crown agencies which
are not by law agencies of Her Majesty may issue or guarantee obligations not
entitled to be guaranteed by a provincial government. No assurance can be given
that the government of any province of
3
<PAGE> 66
Canada will support the obligations of provincial Crown agencies which are not
agents of Her Majesty, which it has not guaranteed, as it is not obligated to do
so by law. Provincial Crown agency obligations described above include, but are
not limited to, those issued or guaranteed by a provincial railway corporation,
a provincial hydroelectric or power commission or authority, a provincial
municipal financing corporation or agency and a provincial telephone commission
or authority.
Any Canadian obligation acquired by the Money Market Trust will be payable
in U.S. dollars.
3. CERTIFICATES OF DEPOSIT AND BANKERS' ACCEPTANCES. Certificates of
deposit are certificates issued against funds deposited in a bank or a savings
and loan. They are for a definite period of time and earn a specified rate of
return. Bankers' acceptances are short-term credit instruments evidencing the
obligation of a bank to pay a draft which has been drawn on it by a customer.
These instruments reflect the obligation both of the bank and of the drawer to
pay the face amount of the instrument upon maturity. They are primarily used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.
Trust portfolios may acquire obligations of foreign banks and foreign
branches of U.S. banks. These obligations are not insured by the Federal Deposit
Insurance Corporation.
4. COMMERCIAL PAPER. Commercial paper consists of unsecured promissory
notes issued by corporations to finance short-term credit needs. Commercial
paper is issued in bearer form with maturities generally not exceeding nine
months. Commercial paper obligations may include variable amount master demand
notes. Variable amount master demand notes are obligations that permit the
investment of fluctuating amounts at varying rates of interest pursuant to
direct arrangements between a portfolio, as lender, and the borrower. These
notes permit daily changes in the amounts borrowed. The portfolio has the right
to increase the amount under the note at any time up to the full amount provided
by the note agreement, or to decrease the amount, and the borrower may prepay up
to the full amount of the note without penalty. Because variable amount master
demand notes are direct lending arrangements between the lender and borrower, it
is not generally contemplated that such instruments will be traded, and there is
no secondary market for these notes, although they are redeemable (and thus
immediately repayable by the borrower) at face value, plus accrued interest, at
any time. A portfolio will only invest in variable amount master demand notes
issued by companies which at the date of investment have an outstanding debt
issue rated "Aaa" or "Aa" by Moody's or "AAA" or "AA" by S&P and which the
applicable Subadviser has determined present minimal risk of loss to the
portfolio. A Subadviser will look generally at the financial strength of the
issuing company as "backing" for the note and not to any security interest or
supplemental source such as a bank letter of credit. A master demand note will
be valued each day a portfolio's net asset value is determined, which value will
generally be equal to the face value of the note plus accrued interest unless
the financial position of the issuer is such that its ability to repay the note
when due is in question.
5. CORPORATE OBLIGATIONS. Corporate obligations include bonds and notes
issued by corporations to finance long-term credit needs.
6. REPURCHASE AGREEMENTS. Repurchase agreements are arrangements involving
the purchase of obligations by a portfolio and the simultaneous agreement to
resell the same obligations on demand or at a specified future date and at an
agreed upon price. A repurchase agreement can be viewed as a loan made by a
portfolio to the seller of the obligation with such obligation serving as
collateral for the seller's agreement to repay the amount borrowed with
interest. Such transactions afford an opportunity for a portfolio to earn a
return on cash which is only temporarily available. Repurchase agreements
entered into by the portfolio will be with banks, brokers or dealers. However, a
portfolio will enter into a repurchase agreement with a broker or dealer only if
the broker or dealer agrees to deposit additional collateral should the value of
the obligation purchased by the portfolio decrease below the resale price.
In selecting sellers with whom the portfolio will enter into repurchase
transactions, the Trustees have adopted procedures that establish certain credit
worthiness, asset and collateralization requirements and limit the
counterparties to repurchase transactions to those financial institutions which
are members of the Federal Reserve System and for a primary government
securities dealer reporting to the Federal Reserve Bank of New York's Market
Reports Division or a broker/dealer which meet certain credit worthiness
criteria or which report U.S. Government securities positions to the Federal
Reserve Board. However, the Trustees reserve the right to change the criteria
used to select such financial institutions and broker/dealers. The Trustees will
regularly monitor the use of repurchase agreements and the Subadviser will,
pursuant to
4
<PAGE> 67
procedures adopted by the Trustees, continuously monitor that the collateral
held with respect to a repurchase transaction equals or exceeds the amount of
the obligations.
Should an issuer of a repurchase agreement fail to repurchase the
underlying obligation, the loss to the portfolio, if any, would be the
difference between the repurchase price and the underlying obligation's market
value. A portfolio might also incur certain costs in liquidating the underlying
obligation. Moreover, if bankruptcy or other insolvency proceedings should be
commenced with respect to the seller, realization upon the underlying obligation
by the Trust might be delayed or limited. Generally, repurchase agreements are
of a short duration, often less than one week but on occasion for longer
periods.
OTHER INSTRUMENTS
The following provides a more detailed explanation of some of the other
instruments in which certain portfolios may invest.
1. MORTGAGE SECURITIES
Mortgage securities differ from conventional bonds in that principal is
paid over the life of the securities rather than at maturity. As a result, a
portfolio receives monthly scheduled payments of principal and interest, and may
receive unscheduled principal payments representing prepayments on the
underlying mortgages. When a portfolio reinvests the payments and any
unscheduled prepayments of principal it receives, it may receive a rate of
interest which is higher or lower than the rate on the existing mortgage
securities. For this reason, mortgage securities may be less effective than
other types of debt securities as a means of locking in long term interest
rates.
In addition, because the underlying mortgage loans and assets may be
prepaid at any time, if a portfolio purchases mortgage securities at a premium,
a prepayment rate that is faster than expected will reduce yield to maturity,
while a prepayment rate that is slower than expected will have the opposite
effect of increasing yield to maturity. Conversely, if a portfolio purchases
these securities at a discount, faster than expected prepayments will increase,
while slower than expected payments will reduce, yield to maturity.
Adjustable rate mortgage securities, are similar to the mortgage
securities discussed above, except that unlike fixed rate mortgage securities,
adjustable rate mortgage securities are collateralized by or represent interests
in mortgage loans with variable rates of interest. These variable rates of
interest reset periodically to align themselves with market rates. Most
adjustable rate mortgage securities provide for an initial mortgage rate that is
in effect for a fixed period, typically ranging from three to twelve months.
Thereafter, the mortgage interest rate will reset periodically in accordance
with movements in a specified published interest rate index. The amount of
interest due to an adjustable rate mortgage holder is determined in accordance
with movements in a specified published interest rate index by adding a
pre-determined increment or "margin" to the specified interest rate index. Many
adjustable rate mortgage securities reset their interest rates based on changes
in the one-year, three-year and five-year constant maturity Treasury rates, the
three-month or six-month Treasury Bill rate, the 11th District Federal Home Loan
Bank Cost of Funds, the National Median Cost of Funds, the one-month,
three-month, six-month or one-year London Interbank Offered Rate ("LIBOR") and
other market rates.
A portfolio will not benefit from increases in interest rates to the
extent that interest rates rise to the point where they cause the current coupon
of adjustable rate mortgages held as investments to exceed any maximum allowable
annual or lifetime reset limits (or "cap rates") for a particular mortgage. In
this event, the value of the mortgage securities in a portfolio would likely
decrease. Also, the portfolio's net asset value could vary to the extent that
current yields on adjustable rate mortgage securities are different than market
yields during interim periods between coupon reset dates. During periods of
declining interest rates, income to a portfolio derived from adjustable rate
mortgages which remain in a mortgage pool will decrease in contrast to the
income on fixed rate mortgages, which will remain constant. Adjustable rate
mortgages also have less potential for appreciation in value as interest rates
decline than do fixed rate investments.
PRIVATELY-ISSUED MORTGAGE SECURITIES. Privately-issued pass through
securities provide for the monthly principal and interest payments made by
individual borrowers to pass through to investors on a corporate basis, and in
privately issued collateralized mortgage obligations, as further described
below. Privately-issued mortgage securities are issued by private originators
of, or investors in, mortgage loans, including mortgage bankers, commercial
banks, investment banks, savings and loan associations and special purpose
subsidiaries of the foregoing. Since privately-issued mortgage certificates are
not
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guaranteed by an entity having the credit status of GNMA or FHLMC, such
securities generally are structured with one or more types of credit
enhancement. For a description of the types of credit enhancements that may
accompany privately-issued mortgage securities, see "Types of Credit Support"
below. A portfolio will not limit its investments to asset-backed securities
with credit enhancements.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"). CMOs generally are bonds or
certificates issued in multiple classes that are collateralized by or represent
an interest in mortgages. CMOs may be issued by single-purpose, stand-alone
finance subsidiaries or trusts of financial institutions, government agencies,
investment banks or other similar institutions. Each class of CMOs, often
referred to as a "tranche," may be issued with a specific fixed coupon rate
(which may be zero) or a floating coupon rate, and has a stated maturity or
final distribution date. Principal prepayments on the underlying mortgages may
cause the CMOs to be retired substantially earlier than their stated maturities
or final distribution dates. Interest is paid or accrued on CMOs on a monthly,
quarterly or semiannual basis. The principal of and interest on the underlying
mortgages may be allocated among the several classes of a series of a CMO in
many ways. The general goal sought to be achieved in allocating cash flows on
the underlying mortgages to the various classes of a series of CMOs is to create
tranches on which the expected cash flows have a higher degree of predictability
than the underlying mortgages. As a general matter, the more predictable the
cash flow is on a CMO tranche, the lower the anticipated yield will be on that
tranche at the time of issuance. As part of the process of creating more
predictable cash flows on most of the tranches in a series of CMOs, one or more
tranches generally must be created that absorb most of the volatility in the
cash flows on the underlying mortgages. The yields on these tranches are
relatively higher than on tranches with more predictable cash flows. Because of
the uncertainty of the cash flows on these tranches, and the sensitivity thereof
to changes in prepayment rates on the underlying mortgages, the market prices of
and yield on these tranches tend to be highly volatile.
CMOs purchased may be:
(1) collateralized by pools of mortgages in which each mortgage is
guaranteed as to payment of principal and interest by an agency or
instrumentality of the U.S. Government;
(2) collateralized by pools of mortgages in which payment of principal and
interest is guaranteed by the issuer and the guarantee is collateralized
by U.S. Government securities; or
(3) securities for which the proceeds of the issuance are invested in
mortgage securities and payment of the principal and interest is supported
by the credit of an agency or instrumentality of the U.S. Government.
STRIPS. In addition to the U.S. Government securities discussed above,
certain portfolios may invest in separately traded interest components of
securities issued or guaranteed by the United States Treasury. The interest
components of selected securities are traded independently under the Separate
Trading of Registered Interest and Principal of Securities program ("STRIPS").
Under the STRIPS program, the interest components are individually numbered and
separately issued by the United States Treasury at the request of depository
financial institutions, which then trade the component parts independently.
STRIPPED MORTGAGE SECURITIES. Stripped mortgage securities are derivative
multiclass mortgage securities. Stripped mortgage securities may be issued by
agencies or instrumentalities of the U.S. Government, or by private issuers,
including savings and loan associations, mortgage banks, commercial banks,
investment banks and special purpose subsidiaries of the foregoing. Stripped
mortgage securities have greater volatility than other types of mortgage
securities in which the portfolio invests. Although stripped mortgage securities
are purchased and sold by institutional investors through several investment
banking firms acting as brokers or dealers, the market for such securities has
not yet been fully developed. Accordingly, stripped mortgage securities are
generally illiquid and to such extent, together with any other illiquid
investments, will not exceed 15% of a portfolio's net assets.
Stripped mortgage securities are usually structured with two classes that
receive different proportions of the interest and principal distributions on a
pool of mortgage assets. A common type of stripped mortgage security will have
one class receiving some of the interest and most of the principal from the
mortgage assets, while the other class will receive most of the interest and the
remainder of the principal. In the most extreme case, one class will receive all
of the interest (the interest only or "IO" class), while the other class will
receive all of the principal (the principal only or "PO" class). The yield to
maturity on an IO class is extremely sensitive not only to changes in prevailing
interest rates but also the rate of principal payments
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(including prepayments) on the related underlying mortgage assets, and a rapid
rate of principal payments may have a material adverse effect on the portfolio's
yield to maturity. If the underlying mortgage assets experience greater than
anticipated prepayments of principal, the portfolio may fail to fully recoup its
initial investment in these securities even if the securities are rated AAA by
S&P.
As interest rates rise and fall, the value of IOs tends to move in the
same direction as interest rates. The value of the other mortgage securities
described in this Prospectus, like other debt instruments, will tend to move in
the opposite direction to interest rates. Accordingly, the Trust believes that
investing in IOs, in conjunction with the other mortgage securities described
herein, will contribute to a portfolio's relatively stable net asset value.
In addition to the stripped mortgage securities described above, the
Strategic Bond, High Yield and Value Trusts may invest in similar securities
such as Super POs and Levered IOs which are more volatile than POs, IOs and
IOettes. Risks associated with instruments such as Super POs are similar in
nature to those risks related to investments in POs. Risks connected with
Levered IOs and IOettes are similar in nature to those associated with IOs. The
Strategic Bond Trust may also invest in other similar instruments developed in
the future that are deemed consistent with the investment objectives, policies
and restrictions of the portfolio.
Under the Internal Revenue Code of 1986, as amended (the "Code"), POs may
generate taxable income from the current accrual of original issue discount,
without a corresponding distribution of cash to the portfolio.
INVERSE FLOATERS. The Strategic Bond, High Yield and Value Trusts may
invest in inverse floaters which are also derivative mortgage securities.
Inverse floaters may be issued by agencies or instrumentalities of the U.S.
Government, or by private issuers, including savings and loan associations,
mortgage banks, commercial banks, investment banks and special purpose
subsidiaries of the foregoing. Inverse floaters have greater volatility than
other types of mortgage securities in which the portfolio invests (with the
exception of stripped mortgage securities). Although inverse floaters are
purchased and sold by institutional investors through several investment banking
firms acting as brokers or dealers, the market for such securities has not yet
been fully developed. Accordingly, inverse floaters are generally illiquid and
to such extent, together with any other illiquid investments, will not exceed
15% of a portfolio's net assets.
Inverse floaters are structured as a class of security that receives
distributions on a pool of mortgage assets and whose yields move in the opposite
direction of short-term interest rates and at an accelerated rate. Inverse
floaters may be volatile and there is a risk that their market value will vary
from their amortized cost.
2. ASSET-BACKED SECURITIES
The securitization techniques used to develop mortgage securities are also
being applied to a broad range of other assets. Through the use of trusts and
special purpose corporations, automobile and credit card receivables are being
securitized in pass-through structures similar to mortgage pass-through
structures or in a pay-through structure similar to the CMO structure. Generally
the issuers of asset-backed bonds, notes or pass-through certificates are
special purpose entities and do not have any significant assets other than the
receivables securing such obligations. In general, the collateral supporting
asset-backed securities is of shorter maturity than mortgage loans. As a result,
investment in these securities should result in greater price stability for the
portfolio's shares. Instruments backed by pools of receivables are similar to
mortgage-backed securities in that they are subject to unscheduled prepayments
of principal prior to maturity. When the obligations are prepaid, the portfolio
must reinvest the prepaid amounts in securities the yields of which reflect
interest rates prevailing at the time. Therefore, a portfolio's ability to
maintain a portfolio which includes high-yielding asset-backed securities will
be adversely affected to the extent that prepayments of principal must be
reinvested in securities which have lower yields than the prepaid obligations.
Moreover, prepayments of securities purchased at a premium could result in a
realized loss. A portfolio will only invest in asset-backed securities rated, at
the time of purchase, AA or better by S&P or Aa or better by Moody's or which,
in the opinion of the investment subadviser, are of comparable quality.
As with mortgage securities, asset-backed securities are often backed by a
pool of assets representing the obligation of a number of different parties and
use similar credit enhancement techniques. For a description of the types of
credit enhancement that may accompany privately-issued mortgage securities, see
"Types of Credit Support" below. A portfolio will not limit its investments to
asset-backed securities with credit enhancements. Although asset-backed
securities are not
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generally traded on a national securities exchange, such securities are widely
traded by brokers and dealers, and to such extent will not be considered
illiquid securities for the purposes of the investment restriction under
"Investment Restrictions" below.
TYPES OF CREDIT SUPPORT. Mortgage securities and asset-backed securities
are often backed by a pool of assets representing the obligations of a number of
different parties. To lessen the effect of failure by obligors on underlying
assets to make payments, such securities may contain elements of credit support.
Such credit support falls into two categories: (i) liquidity protection and (ii)
protection against losses resulting from ultimate default by an obligor on the
underlying assets. Liquidity protection refers to the provision of advances,
generally by the entity administering the pool of assets, to ensure that the
pass-through of payments due on the underlying pool occurs in a timely fashion.
Protection against losses resulting from ultimate default enhances the
likelihood of ultimate payment of the obligations on at least a portion of the
assets in the pool. Such protection may be provided through guarantees,
insurance policies or letters of credit obtained by the issuer or sponsor from
third parties, through various means of structuring the transaction or through a
combination of such approaches. The Trust will not pay any additional fees for
such credit support, although the existence of credit support may increase the
price of a security.
The ratings of mortgage securities and asset-backed securities for which
third-party credit enhancement provides liquidity protection or protection
against losses from default are generally dependent upon the continued
creditworthiness of the provider of the credit enhancement. The ratings of such
securities could be subject to reduction in the event of deterioration in the
creditworthiness of the credit enhancement provider even in cases where the
delinquency and loss experience on the underlying pool of assets is better than
expected.
Examples of credit support arising out of the structure of the transaction
include "senior-subordinated securities" (multiple class securities with one or
more classes subordinate to other classes as to the payment of principal thereof
and interest thereon, with the result that defaults on the underlying assets are
borne first by the holders of the subordinated class), creation of "reserve
funds" (where cash or investments sometimes funded from a portion of the
payments on the underlying assets, are held in reserve against future losses)
and "over-collateralization" (where the scheduled payments on, or the principal
amount of, the underlying assets exceed those required to make payment of the
securities and pay any servicing or other fees). The degree of credit support
provided for each issue is generally based on historical information with
respect to the level of credit risk associated with the underlying assets.
Delinquency or loss in excess of that which is anticipated could adversely
affect the return on an investment in such security.
3. ZERO COUPON SECURITIES AND PAY-IN-KIND BONDS
Zero coupon securities and pay-in-kind bonds involve special risk
considerations. Zero coupon securities are debt securities that pay no cash
income but are sold at substantial discounts from their value at maturity. When
a zero coupon security is held to maturity, its entire return, which consists of
the amortization of discount, comes from the difference between its purchase
price and its maturity value. This difference is known at the time of purchase,
so that investors holding zero coupon securities until maturity know at the time
of their investment what the return on their investment will be. Certain zero
coupon securities also are sold at substantial discounts from their maturity
value and provide for the commencement of regular interest payments at a
deferred date. The portfolios also may purchase pay-in-kind bonds. Pay-in-kind
bonds are bonds that pay all or a portion of their interest in the form of debt
or equity securities.
Zero coupon securities and pay-in-kind bonds tend to be subject to greater
price fluctuations in response to changes in interest rates than are ordinary
interest-paying debt securities with similar maturities. The value of zero
coupon securities appreciates more during periods of declining interest rates
and depreciates more during periods of rising interest rates.
Zero coupon securities and pay-in-kind bonds may be issued by a wide
variety of corporate and governmental issuers. Although zero coupon securities
and pay-in-kind bonds are generally not traded on a national securities
exchange, such securities are widely traded by brokers and dealers and, to such
extent, will not be considered illiquid for the purposes of the investment
restriction under "Investment Restrictions" below.
Current Federal income tax law requires the holder of a zero coupon
security or certain pay-in-kind bonds to accrue income with respect to these
securities prior to the receipt of cash payments. To maintain its qualification
as a regulated investment company and avoid liability for Federal income and
excise taxes, a portfolio may be required to distribute income
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accrued with respect to these securities and may have to dispose of portfolio
securities under disadvantageous circumstances in order to generate cash to
satisfy these distribution requirements.
4. HIGH YIELD (HIGH RISK) DOMESTIC CORPORATE DEBT SECURITIES
The market for high yield U.S. corporate debt securities has undergone
significant changes in the past decade. Issuers in the U.S. high yield market
originally consisted primarily of growing small capitalization companies and
larger capitalization companies whose credit quality had declined from
investment grade. During the mid-1980's, participants in the U.S. high yield
market issued high yield securities principally in connection with leveraged
buyouts and other leveraged recapitalizations. In late 1989 and 1990, the volume
of new issues of high yield U.S. corporate debt declined significantly and
liquidity in the market decreased. Since early 1991, the volume of new issues of
high yield U.S. corporate debt securities has increased substantially and
secondary market liquidity has improved. During the same periods, the U.S. high
yield debt market exhibited strong returns, and it continues to be an attractive
market in terms of yield and yield spread over U.S. Treasury securities.
Currently, most new offerings of U.S. high yield securities are being issued to
refinance higher coupon debt and to raise funds for general corporate purposes.
High yield U.S. corporate debt securities in which the portfolios may
invest include bonds, debentures, notes and commercial paper and will generally
be unsecured. Most of these debt securities will bear interest at fixed rates.
However, the portfolios may also invest in debt securities with variable rates
of interest or which involve equity features, such as contingent interest or
participations based on revenues, sales or profits (i.e., interest or other
payments, often in addition to a fixed rate of return, that are based on the
borrower's attainment of specified levels of revenues, sales or profits and thus
enable the holder of the security to share in the potential success of the
venture).
5. HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES
The Strategic Bond, Investment Quality Bond and High Yield Trusts expect
that a significant portion of their emerging market governmental debt
obligations will consist of "Brady Bonds." In addition, the Worldwide Growth,
International Small Cap, Moderate Asset Allocation and Aggressive Asset
Allocation Trusts may also invest in Brady Bonds. Brady Bonds are debt
securities issued under the framework of the "Brady Plan," an initiative
announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989 as a
mechanism for debtor nations to restructure their outstanding external
commercial bank indebtedness. The Brady Plan framework, as it has developed,
contemplates the exchange of external commercial bank debt for newly issued
bonds (Brady Bonds). Brady Bonds may also be issued in respect of new money
being advanced by existing lenders in connection with the debt restructuring.
Investors should recognize that Brady Bonds have been issued only recently, and
accordingly do not have a long payment history. Brady Bonds issued to date
generally have maturities of between 15 and 30 years from the date of issuance
and have traded at a deep discount from their face value. The Trusts may invest
in Brady Bonds of emerging market countries that have been issued to date, as
well as those which may be issued in the future. In addition to Brady Bonds, the
Trusts may invest in emerging market governmental obligations issued as a result
of debt restructuring agreements outside of the scope of the Brady Plan.
Agreements implemented under the Brady Plan to date are designed to
achieve debt and debt-service reduction through specific options negotiated by a
debtor nation with its creditors. As a result, the financial packages offered by
each country differ. The types of options have included the exchange of
outstanding commercial bank debt for bonds issued at 100% of face value of such
debt which carry a below-market stated rate of interest (generally known as par
bonds), bonds issued at a discount from face value of such debt (generally known
as discount bonds), bonds bearing an interest rate which increases over time and
bonds issued in exchange for the advancement of new money by existing lenders.
Discount bonds issued to date under the framework of the Brady Plan have
generally borne interest computed semi-annually at a rate equal to 13/16 of one
percent above the current six month LIBOR rate. Regardless of the stated face
amount and stated interest rate of the various types of Brady Bonds, the
portfolios will purchase Brady Bonds in secondary markets, as described below,
in which the price and yield to the investor reflect market conditions at the
time of purchase. Brady Bonds issued to date have traded at a deep discount from
their face value. Certain sovereign bonds are entitled to "value recovery
payments" in certain circumstances, which in effect constitute supplemental
interest payments but generally are not collateralized. Certain Brady Bonds have
been collateralized as to principal due at maturity (typically 15 to 30 years
from the date of issuance) by U.S. Treasury zero coupon bonds with a maturity
equal to the final maturity of such Brady Bonds, although the collateral is not
available to investors until the final maturity of the Brady Bonds. Collateral
purchases are financed by the International Monetary Fund (the "IMF"), the World
Bank and the debtor nations' reserves. In addition, interest payments on certain
types
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of Brady Bonds may be collateralized by cash or high-grade securities in amounts
that typically represent between 12 and 18 months of interest accruals on these
instruments with the balance of the interest accruals being uncollateralized.
The Trusts may purchase Brady Bonds with no or limited collateralization, and
will be relying for payment of interest and (except in the case of principal
collateralized Brady Bonds) principal primarily on the willingness and ability
of the foreign government to make payment in accordance with the terms of the
Brady Bonds. Brady Bonds issued to date are purchased and sold in secondary
markets through U.S. securities dealers and other financial institutions and are
generally maintained through European transactional securities depositories. A
substantial portion of the Brady Bonds and other sovereign debt securities in
which the portfolios invest are likely to be acquired at a discount.
6. HYBRID INSTRUMENTS
Hybrid instruments (a type of potentially high-risk derivative) have been
developed and combine the elements of futures contracts or options with those of
debt, preferred equity or a depository instrument (hereinafter "Hybrid
Instruments"). Generally, a Hybrid Instrument will be a debt security, preferred
stock, depository share, trust certificate, certificate of deposit or other
evidence of indebtedness on which a portion of or all interest payments, and/or
the principal or stated amount payable at maturity, redemption or retirement, is
determined by reference to prices, changes in prices, or differences between
prices, of securities, currencies, intangibles, goods, articles or commodities
(collectively "Underlying Assets") or by another objective index, economic
factor or other measure, such as interest rates, currency exchange rates,
commodity indices, and securities indices (collectively "Benchmarks"). Thus,
Hybrid Instruments may take a variety of forms, including, but not limited to,
debt instruments with interest or principal payments or redemption terms
determined by reference to the value of a currency or commodity or securities
index at a future point in time, preferred stock with dividend rates determined
by reference to the value of a currency, or convertible securities with the
conversion terms related to a particular commodity.
Hybrid Instruments can be an efficient means of creating exposure to a
particular market, or segment of a market, with the objective of enhancing total
return. For example, a portfolio may wish to take advantage of expected declines
in interest rates in several European countries, but avoid the transactions
costs associated with buying and currency-hedging the foreign bond positions.
One solution would be to purchase a U.S. dollar- denominated Hybrid Instrument
whose redemption price is linked to the average three year interest rate in a
designated group of countries. The redemption price formula would provide for
payoffs of greater than par if the average interest rate was lower than a
specified level, and payoffs of less than par if rates were above the specified
level. Furthermore, the portfolio could limit the downside risk of the security
by establishing a minimum redemption price so that the principal paid at
maturity could not be below a predetermined minimum level if interest rates were
to rise significantly. The purpose of this arrangement, known as a structured
security with an embedded put option, would be to give the portfolio the desired
European bond exposure while avoiding currency risk, limiting downside market
risk, and lowering transactions costs. Of course, there is no guarantee that the
strategy will be successful and the portfolio could lose money if, for example,
interest rates do not move as anticipated or credit problems develop with the
issuer of the Hybrid.
The risks of investing in Hybrid Instruments reflect a combination of the
risks of investing in securities, options, futures and currencies. Thus, an
investment in a Hybrid Instrument may entail significant risks that are not
associated with a similar investment in a traditional debt instrument that has a
fixed principal amount, is denominated in U.S. dollars or bears interest either
at a fixed rate or a floating rate determined by reference to a common,
nationally published Benchmark. The risks of a particular Hybrid Instrument
will, of course, depend upon the terms of the instrument, but may include,
without limitation, the possibility of significant changes in the Benchmarks or
the prices of Underlying Assets to which the instrument is linked. Such risks
generally depend upon factors which are unrelated to the operations or credit
quality of the issuer of the Hybrid Instrument and which may not be readily
foreseen by the purchaser, such as economic and political events, the supply and
demand for the Underlying Assets and interest rate movements. In recent years,
various Benchmarks and prices for Underlying Assets have been highly volatile,
and such volatility may be expected in the future. Reference is also made to the
discussion below of futures, options, and forward contracts for a description of
certain risks associated with such investments.
Hybrid Instruments are potentially more volatile and carry greater market
risks than traditional debt instruments. Depending on the structure of the
particular Hybrid Instrument, changes in a Benchmark may be magnified by the
terms of the Hybrid Instrument and have an even more dramatic and substantial
effect upon the value of the Hybrid Instrument.
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Also, the prices of the Hybrid Instrument and the Benchmark or Underlying Asset
may not move in the same direction or at the same time.
Hybrid Instruments may bear interest or pay preferred dividends at below
market (or even relatively nominal) rates. Alternatively, Hybrid Instruments may
bear interest at above market rates but bear an increased risk of principal loss
(or gain). The latter scenario may result if "leverage" is used to structure the
Hybrid Instrument. Leverage risk occurs when the Hybrid Instrument is structured
so that a given change in a Benchmark or Underlying Asset is multiplied to
produce a greater value change in the Hybrid Instrument, thereby magnifying the
risk of loss as well as the potential for gain.
Hybrid Instruments may also carry liquidity risk since the instruments are
often "customized" to meet the portfolio needs of a particular investor, and
therefore, the number of investors that are willing and able to buy such
instruments in the secondary market may be smaller than that for more
traditional debt securities. In addition, because the purchase and sale of
Hybrid Instruments could take place in an over-the-counter market without the
guarantee of a central clearing organization or in a transaction between the
portfolio and the issuer of the Hybrid Instrument, the creditworthiness of the
counter party or issuer of the Hybrid Instrument would be an additional risk
factor which the portfolio would have to consider and monitor. Hybrid
Instruments also may not be subject to regulation of the Commodities Futures
Trading Commission ("CFTC"), which generally regulates the trading of commodity
futures by U.S. persons, the SEC, which regulates the offer and sale of
securities by and to U.S. persons, or any other governmental regulatory
authority. The various risks discussed above, particularly the market risk of
such instruments, may in turn cause significant fluctuations in the net asset
value of the portfolio.
HEDGING AND OTHER STRATEGIC TRANSACTIONS
As described in the Prospectus under "Hedging and Other Strategic
Transactions," an individual portfolio may be authorized to use a variety of
investment strategies. These strategies will be used for hedging purposes only,
including hedging various market risks (such as interest rates, currency
exchange rates and broad or specific market movements), and managing the
effective maturity or duration of debt instruments held by the portfolio (such
investment strategies and transactions are referred to herein as "Hedging and
Other Strategic Transactions"). The description in the Prospectus of each
portfolio indicates which, if any, of these types of transactions may be used by
the portfolio.
A detailed discussion of Hedging and Other Strategic Transactions follows
below. No portfolio which is authorized to use any of these investment
strategies will be obligated, however, to pursue any of such strategies and no
portfolio makes any representation as to the availability of these techniques at
this time or at any time in the future. In addition, a portfolio's ability to
pursue certain of these strategies may be limited by the Commodity Exchange Act,
as amended, applicable rules and regulations of the CFTC thereunder and the
Federal income tax considerations.
GENERAL CHARACTERISTICS OF OPTIONS
Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold. Thus, the following general
discussion relates to each of the particular types of options discussed in
greater detail below. In addition, many Hedging and Other Strategic Transactions
involving options require segregation of portfolio assets in special accounts,
as described below under "Use of Segregated and Other Special Accounts."
A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, currency or other instrument at the exercise price.
A portfolio's purchase of a put option on a security, for example, might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
of such instrument by giving the portfolio the right to sell the instrument at
the option exercise price. A call option, upon payment of a premium, gives the
purchaser of the option the right to buy, and the seller the obligation to sell,
the underlying instrument at the exercise price. A portfolio's purchase of a
call option on a security, financial futures contract, index, currency or other
instrument might be intended to protect the portfolio against an increase in the
price of the underlying instrument that it intends to purchase in the future by
fixing the price at which it may purchase the instrument. An "American" style
put or call option may be exercised at any time during the option period,
whereas a "European" style put or call option may be exercised only upon
expiration or during a
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fixed period prior to expiration. Exchange-listed options are issued by a
regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations of the parties to the options. The
discussion below uses the OCC as an example, but is also applicable to other
similar financial intermediaries.
OCC-issued and exchange-listed options, with certain exceptions, generally
settle by physical delivery of the underlying security or currency, although in
the future, cash settlement may become available. Index options and Eurodollar
instruments (which are described below under "Eurodollar Instruments") are cash
settled for the net amount, if any, by which the option is "in-the-money" (that
is, the amount by which the value of the underlying instrument exceeds, in the
case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.
A portfolio's ability to close out its position as a purchaser or seller
of an OCC-issued or exchange-listed put or call option is dependent, in part,
upon the liquidity of the particular option market. Among the possible reasons
for the absence of a liquid option market on an exchange are: (1) insufficient
trading interest in certain options, (2) restrictions on transactions imposed by
an exchange, (3) trading halts, suspensions or other restrictions imposed with
respect to particular classes or series of options or underlying securities,
including reaching daily price limits, (4) interruption of the normal operations
of the OCC or an exchange, (5) inadequacy of the facilities of an exchange or
the OCC to handle current trading volume or (6) a decision by one or more
exchanges to discontinue the trading of options (or a particular class or series
of options), in which event the relevant market for that option on that exchange
would cease to exist, although any such outstanding options on that exchange
would continue to be exercisable in accordance with their terms.
The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that would not be reflected in the corresponding option
markets.
Over-the-counter ("OTC") options are purchased from or sold to securities
dealers, financial institutions or other parties (collectively referred to as
"Counterparties" and individually referred to as a "Counterparty") through
direct bilateral agreement with the Counterparty. In contrast to exchange-listed
options, which generally have standardized terms and performance mechanics, all
of the terms of an OTC option, including such terms as method of settlement,
term, exercise price, premium, guaranties and security, are determined by
negotiation of the parties. It is anticipated that any portfolio authorized to
use OTC options will generally only enter into OTC options that have cash
settlement provisions, although it will not be required to do so.
Unless the parties provide for it, no central clearing or guaranty
function is involved in an OTC option. As a result, if a Counterparty fails to
make or take delivery of the security, currency or other instrument underlying
an OTC option it has entered into with a portfolio or fails to make a cash
settlement payment due in accordance with the terms of that option, the
portfolio will lose any premium it paid for the option as well as any
anticipated benefit of the transaction. Thus, the subadviser must assess the
creditworthiness of each such Counterparty or any guarantor or credit
enhancement of the Counterparty's credit to determine the likelihood that the
terms of the OTC option will be met. A portfolio will enter into OTC option
transactions only with U.S. Government securities dealers recognized by the
Federal Reserve Bank of New York as "primary dealers," or broker-dealers,
domestic or foreign banks, or other financial institutions that are deemed
creditworthy by the subadviser. In the absence of a change in the current
position of the staff of the Commission, OTC options purchased by a portfolio
and the amount of the portfolio's obligation pursuant to an OTC option sold by
the portfolio (the cost of the sell-back plus the in-the-money amount, if any)
or the value of the assets held to cover such options will be deemed illiquid.
If a portfolio sells a call option, the premium that it receives may serve
as a partial hedge, to the extent of the option premium, against a decrease in
the value of the underlying securities or instruments held by the portfolio or
will increase the portfolio's income. Similarly, the sale of put options can
also provide portfolio gains.
If and to the extent authorized to do so, a portfolio may purchase and
sell call options on securities and on Eurodollar instruments that are traded on
U.S. and foreign securities exchanges and in the OTC markets, and on securities
indices, currencies and futures contracts. All calls sold by a portfolio must be
"covered" (that is, the portfolio must own the securities
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or futures contract subject to the call) or must otherwise meet the asset
segregation requirements described below for so long as the call is outstanding.
Even though a portfolio will receive the option premium to help protect it
against loss, a call sold by the portfolio will expose the portfolio during the
term of the option to possible loss of opportunity to realize appreciation in
the market price of the underlying security or instrument and may require the
portfolio to hold a security or instrument that it might otherwise have sold.
Each portfolio reserves the right to invest in options on instruments and
indices which may be developed in the future to the extent consistent with
applicable law, the portfolio's investment objective and the restrictions set
forth herein.
If and to the extent authorized to do so, a portfolio may purchase and
sell put options on securities (whether or not it holds the securities in its
portfolio) and on securities indices, currencies and futures contracts. A
portfolio will not sell put options if, as a result, more than 50% of the
portfolio's assets would be required to be segregated to cover its potential
obligations under put options other than those with respect to futures
contracts. In selling put options, a portfolio faces the risk that it may be
required to buy the underlying security at a disadvantageous price above the
market price.
GENERAL CHARACTERISTICS OF FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
If and to the extent authorized to do so, a portfolio may trade financial
futures contracts (including stock index futures contracts which are described
below) or purchase or sell put and call options on those contracts as a hedge
against anticipated interest rate, currency or market changes, for duration
management and for risk management purposes. Futures contracts are generally
bought and sold on the commodities exchanges on which they are listed with
payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by a portfolio, as seller, to deliver
to the buyer the specific type of financial instrument called for in the
contract at a specific future time for a specified price (or, with respect to
certain instruments, the net cash amount). Options on futures contracts are
similar to options on securities except that an option on a futures contract
gives the purchaser the right, in return for the premium paid, to assume a
position in a futures contract and obligates the seller to deliver that
position.
A portfolio's use of financial futures contracts and options thereon will
in all cases be consistent with applicable regulatory requirements and in
particular the rules and regulations of the CFTC and will be entered into only
for bona fide hedging, risk management (including duration management) or to
attempt to increase income or gains. Maintaining a futures contract or selling
an option on a futures contract will typically require a portfolio to deposit
with a financial intermediary, as security for its obligations, an amount of
cash or other specified assets ("initial margin") that initially is from 1% to
10% of the face amount of the contract (but may be higher in some
circumstances). Additional cash or assets ("variation margin") may be required
to be deposited thereafter daily as the mark-to-market value of the futures
contract fluctuates. The purchase of an option on a financial futures contract
involves payment of a premium for the option without any further obligation on
the part of a portfolio. If a portfolio exercises an option on a futures
contract it will be obligated to post initial margin (and potentially variation
margin) for the resulting futures position just as it would for any futures
position. Futures contracts and options thereon are generally settled by
entering into an offsetting transaction, but no assurance can be given that a
position can be offset prior to settlement or that delivery will occur.
No portfolio will enter into a futures contract or option thereon if,
immediately thereafter, the sum of the amount of its initial margin and premiums
on open futures contracts and options thereon would exceed 5% of the current
fair market value of the portfolio's total assets; however, in the case of an
option that is in-the-money at the time of the purchase, the in-the-money amount
may be excluded in calculating the 5% limitation. The value of all futures
contracts sold by a portfolio (adjusted for the historical volatility
relationship between such portfolio and the contracts) will not exceed the total
market value of the portfolio's securities. The segregation requirements with
respect to futures contracts and options thereon are described below under "Use
of Segregated and Other Special Accounts."
STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is
a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A unit
is the value at a given time of the relevant index.
In connection with a portfolio's investment in common stocks, a portfolio
may invest in Index Futures while the subadviser seeks favorable terms from
brokers to effect transactions in common stocks selected for purchase. A
portfolio may also invest in Index Futures when a subadviser believes that there
are not enough attractive common stocks available to
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maintain the standards of diversity and liquidity set for the portfolio's
pending investment in such stocks when they do become available. Through the use
of Index Futures, a portfolio may maintain a pool of assets with diversified
risk without incurring the substantial brokerage costs which may be associated
with investment in multiple issuers. This may permit a portfolio to avoid
potential market and liquidity problems (e.g., driving up or forcing down the
price by quickly purchasing or selling shares of a portfolio security) which may
result from increases or decreases in positions already held by a portfolio. A
portfolio may also invest in Index Futures in order to hedge its equity
positions.
OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES
If and to the extent authorized to do so, a portfolio may purchase and
sell call and put options on securities indices and other financial indices. In
so doing, the portfolio can achieve many of the same objectives it would achieve
through the sale or purchase of options on individual securities or other
instruments. Options on securities indices and other financial indices are
similar to options on a security or other instrument except that, rather than
settling by physical delivery of the underlying instrument, options on indices
settle by cash settlement; that is, an option on an index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the closing
level of the index upon which the option is based exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price of the option
(except if, in the case of an OTC option, physical delivery is specified). This
amount of cash is equal to the excess of the closing price of the index over the
exercise price of the option, which also may be multiplied by a formula value.
The seller of the option is obligated, in return for the premium received, to
make delivery of this amount. The gain or loss on an option on an index depends
on price movements in the instruments comprising the market, market segment,
industry or other composite on which the underlying index is based, rather than
price movements in individual securities, as is the case with respect to options
on securities.
CURRENCY TRANSACTIONS
If and to the extent authorized to do so, a portfolio may engage in
currency transactions with Counterparties to hedge the value of portfolio
securities denominated in particular currencies against fluctuations in relative
value. Currency transactions include currency forward contracts, exchange-listed
currency futures contracts and options thereon, exchange-listed and OTC options
on currencies, and currency swaps. A forward currency contract involves a
privately negotiated obligation to purchase or sell (with delivery generally
required) a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set at
the time of the contract. A currency swap is an agreement to exchange cash flows
based on the notional difference among two or more currencies and operates
similarly to an interest rate swap, which is described below under "Swaps, Caps,
Floors and Collars." A portfolio may enter into currency transactions only with
Counterparties that are deemed creditworthy by the subadviser.
A portfolio's dealings in forward currency contracts and other currency
transactions such as futures contracts, options, options on futures contracts
and swaps will be limited to hedging and other non-speculative purposes,
including transaction hedging and position hedging. Transaction hedging is
entering into a currency transaction with respect to specific assets or
liabilities of a portfolio, which will generally arise in connection with the
purchase or sale of the portfolio's portfolio securities or the receipt of
income from them. Position hedging is entering into a currency transaction with
respect to portfolio securities positions denominated or generally quoted in
that currency. A portfolio will not enter into a transaction to hedge currency
exposure to an extent greater, after netting all transactions intended wholly or
partially to offset other transactions, than the aggregate market value (at the
time of entering into the transaction) of the securities held by the portfolio
that are denominated or generally quoted in or currently convertible into the
currency, other than with respect to proxy hedging as described below.
A portfolio may cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to increase or decline
in value relative to other currencies to which the portfolio has or in which the
portfolio expects to have exposure. To reduce the effect of currency
fluctuations on the value of existing or anticipated holdings of its securities,
a portfolio may also engage in proxy hedging. Proxy hedging is often used when
the currency to which a portfolio's holdings is exposed is difficult to hedge
generally or difficult to hedge against the dollar. Proxy hedging entails
entering into a forward contract to sell a currency, the changes in the value of
which are generally considered to be linked to a currency or currencies in which
some or all of a portfolio's securities are or are expected to be denominated,
and to buy dollars. The amount of the contract would not exceed the market value
of the portfolio's securities denominated in linked currencies.
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Currency transactions are subject to risks different from other portfolio
transactions, as discussed below under "Risk Factors." If a portfolio enters
into a currency hedging transaction, the portfolio will comply with the asset
segregation requirements described below under "Use of Segregated and Other
Special Accounts."
COMBINED TRANSACTIONS
If and to the extent authorized to do so, a portfolio may enter into
multiple transactions, including multiple options transactions, multiple futures
transactions, multiple currency transactions (including forward currency
contracts), multiple interest rate transactions and any combination of futures,
options, currency and interest rate transactions, instead of a single Hedging
and Other Strategic Transaction, as part of a single or combined strategy when,
in the judgment of the subadviser, it is in the best interests of the portfolio
to do so. A combined transaction will usually contain elements of risk that are
present in each of its component transactions. Although combined transactions
will normally be entered into by a portfolio based on the subadviser's judgment
that the combined strategies will reduce risk or otherwise more effectively
achieve the desired portfolio management goal, it is possible that the
combination will instead increase the risks or hinder achievement of the
portfolio management objective.
SWAPS, CAPS, FLOORS AND COLLARS
Among the Hedging and Other Strategic Transactions into which a portfolio
may be authorized to enter are interest rate, currency and index swaps, the
purchase or sale of related caps, floors and collars and other derivatives. A
portfolio will enter into these transactions primarily to seek to preserve a
return or spread on a particular investment or portion of its portfolio, to
protect against currency fluctuations, as a duration management technique or to
protect against any increase in the price of securities a portfolio anticipates
purchasing at a later date. A portfolio will use these transactions for
non-speculative purposes and will not sell interest rate caps or floors if it
does not own securities or other instruments providing the income the portfolio
may be obligated to pay. Interest rate swaps involve the exchange by a portfolio
with another party of their respective commitments to pay or receive interest
(for example, an exchange of floating rate payments for fixed rate payments with
respect to a notional amount of principal). A currency swap is an agreement to
exchange cash flows on a notional amount based on changes in the values of the
reference indices. The purchase of a cap entitles the purchaser to receive
payments on a notional principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate. The
purchase of an interest rate floor entitles the purchaser to receive payments of
interest on a notional principal amount from the party selling the interest rate
floor to the extent that a specified index falls below a predetermined interest
rate or amount. The purchase of a floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specific index falls below a predetermined interest rate or
amount. A collar is a combination of a cap and a floor that preserves a certain
return with a predetermined range of interest rates or values.
A portfolio will usually enter into interest rate swaps on a net basis,
that is, two payment streams are netted out in a cash settlement on the payment
date or dates specified in the instrument, with the portfolio receiving or
paying, as the case may be, only the net amount of the two payments. Inasmuch as
these swaps, caps, floors, collars and other similar derivatives are entered
into for good faith hedging or other non-speculative purposes, they do not
constitute senior securities under the Investment Company Act of 1940, as
amended, (the "1940 Act") and, thus, will not be treated as being subject to the
portfolio's borrowing restrictions. A portfolio will not enter into any swap,
cap, floor, collar or other derivative transaction unless the Counterparty is
deemed creditworthy by the subadviser. If a Counterparty defaults, a portfolio
may have contractual remedies pursuant to the agreements related to the
transaction. The swap market has grown substantially in recent years with a
large number of banks and investment banking firms acting both as principals and
as agents utilizing standardized swap documentation. As a result, the swap
market has become relatively liquid. Caps, floors and collars are more recent
innovations for which standardized documentation has not yet been fully
developed and, for that reason, they are less liquid than swaps.
The liquidity of swap agreements will be determined by a Subadviser based
on various factors, including (1) the frequency of trades and quotations, (2)
the number of dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including any
demand or tender features), and (5) the nature of the marketplace for trades
(including the ability to assign or offset a portfolio's rights and obligations
relating to the investment). Such determination will govern whether a swap will
be deemed to be within the 15% restriction on investments in securities that are
not readily marketable.
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Each portfolio will maintain cash and appropriate liquid assets in a
segregated custodial account to cover its current obligations under swap
agreements. If a portfolio enters into a swap agreement on a net basis, it will
segregate assets with a daily value at least equal to the excess, if any, of the
portfolio's accrued obligations under the swap agreement over the accrued amount
the portfolio is entitled to receive under the agreement. If a portfolio enters
into a swap agreement on other than a net basis, it will segregate assets with a
value equal to the full amount of the portfolio's accrued obligations under the
agreement. See also, "Use of Segregated and Other Special Accounts."
EURODOLLAR INSTRUMENTS
If and to the extent authorized to do so, a portfolio may make investments
in Eurodollar instruments, which are typically dollar-denominated futures
contracts or options on those contracts that are linked to the London Interbank
Offered Rate ("LIBOR"), although foreign currency denominated instruments are
available from time to time. Eurodollar futures contracts enable purchasers to
obtain a fixed rate for the lending of funds and sellers to obtain a fixed rate
for borrowings. A portfolio might use Eurodollar futures contracts and options
thereon to hedge against changes in LIBOR, to which many interest rate swaps and
fixed income instruments are linked.
RISK FACTORS
Hedging and Other Strategic Transactions have special risks associated
with them, including possible default by the Counterparty to the transaction,
illiquidity and, to the extent the subadviser's view as to certain market
movements is incorrect, the risk that the use of the Hedging and Other Strategic
Transactions could result in losses greater than if they had not been used. Use
of put and call options could result in losses to a portfolio, force the sale or
purchase of portfolio securities at inopportune times or for prices higher than
(in the case of put options) or lower than (in the case of call options) current
market values, or cause a portfolio to hold a security it might otherwise sell.
The use of futures and options transactions entails certain special risks.
In particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related securities position of a
portfolio could create the possibility that losses on the hedging instrument are
greater than gains in the value of the portfolio's position. In addition,
futures and options markets could be illiquid in some circumstances and certain
over-the-counter options could have no markets. As a result, in certain markets,
a portfolio might not be able to close out a transaction without incurring
substantial losses. Although a portfolio's use of futures and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time it will tend to
limit any potential gain to a portfolio that might result from an increase in
value of the position. Finally, the daily variation margin requirements for
futures contracts create a greater ongoing potential financial risk than would
purchases of options, in which case the exposure is limited to the cost of the
initial premium.
Currency hedging involves some of the same risks and considerations as
other transactions with similar instruments. Currency transactions can result in
losses to a portfolio if the currency being hedged fluctuates in value to a
degree or in a direction that is not anticipated. Further, the risk exists that
the perceived linkage between various currencies may not be present or may not
be present during the particular time that a portfolio is engaging in proxy
hedging. Currency transactions are also subject to risks different from those of
other portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy, purchases
and sales of currency and related instruments can be adversely affected by
government exchange controls, limitations or restrictions on repatriation of
currency, and manipulations or exchange restrictions imposed by governments.
These forms of governmental actions can result in losses to a portfolio if it is
unable to deliver or receive currency or monies in settlement of obligations and
could also cause hedges it has entered into to be rendered useless, resulting in
full currency exposure as well as incurring transaction costs. Buyers and
sellers of currency futures contracts are subject to the same risks that apply
to the use of futures contracts generally. Further, settlement of a currency
futures contract for the purchase of most currencies must occur at a bank based
in the issuing nation. Trading options on currency futures contracts is
relatively new, and the ability to establish and close out positions on these
options is subject to the maintenance of a liquid market that may not always be
available. Currency exchange rates may fluctuate based on factors extrinsic to
that country's economy.
Losses resulting from the use of Hedging and Other Strategic Transactions
will reduce a portfolio's net asset value, and possibly income, and the losses
can be greater than if Hedging and Other Strategic Transactions had not been
used.
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RISKS OF HEDGING AND OTHER STRATEGIC TRANSACTIONS OUTSIDE THE UNITED STATES
When conducted outside the United States, Hedging and Other Strategic
Transactions may not be regulated as rigorously as in the United States, may not
involve a clearing mechanism and related guarantees, and will be subject to the
risk of governmental actions affecting trading in, or the prices of, foreign
securities, currencies and other instruments. The value of positions taken as
part of non-U.S. Hedging and Other Strategic Transactions also could be
adversely affected by: (1) other complex foreign political, legal and economic
factors, (2) lesser availability of data on which to make trading decisions than
in the United States, (3) delays in a portfolio's ability to act upon economic
events occurring in foreign markets during non-business hours in the United
States, (4) the imposition of different exercise and settlement terms and
procedures and margin requirements than in the United States and (5) lower
trading volume and liquidity.
USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS
Use of many Hedging and Other Strategic Transactions by a portfolio will
require, among other things, that the portfolio segregate cash, liquid high
grade debt obligations or other assets with its custodian, or a designated
sub-custodian, to the extent the portfolio's obligations are not otherwise
"covered" through ownership of the underlying security, financial instrument or
currency. In general, either the full amount of any obligation by a portfolio to
pay or deliver securities or assets must be covered at all times by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory restrictions, an amount of cash or liquid high grade debt obligations
at least equal to the current amount of the obligation must be segregated with
the custodian or sub-custodian. The segregated assets cannot be sold or
transferred unless equivalent assets are substituted in their place or it is no
longer necessary to segregate them. A call option on securities written by a
portfolio, for example, will require the portfolio to hold the securities
subject to the call (or securities convertible into the needed securities
without additional consideration) or to segregate liquid high grade debt
obligations sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by a portfolio on an index will require the
portfolio to own portfolio securities that correlate with the index or to
segregate liquid high grade debt obligations equal to the excess of the index
value over the exercise price on a current basis. A put option on securities
written by a portfolio will require the portfolio to segregate liquid high grade
debt obligations equal to the exercise price. Except when a portfolio enters
into a forward contract in connection with the purchase or sale of a security
denominated in a foreign currency or for other non-speculative purposes, which
requires no segregation, a currency contract that obligates the portfolio to buy
or sell a foreign currency will generally require the portfolio to hold an
amount of that currency or liquid securities denominated in that currency equal
to a portfolio's obligations or to segregate liquid high grade debt obligations
equal to the amount of the portfolio's obligations.
OTC options entered into by a portfolio, including those on securities,
currency, financial instruments or indices, and OCC-issued and exchange-listed
index options will generally provide for cash settlement, although a portfolio
will not be required to do so. As a result, when a portfolio sells these
instruments it will segregate an amount of assets equal to its obligations under
the options. OCC-issued and exchange-listed options sold by a portfolio other
than those described above generally settle with physical delivery, and the
portfolio will segregate an amount of assets equal to the full value of the
option. OTC options settling with physical delivery or with an election of
either physical delivery or cash settlement will be treated the same as other
options settling with physical delivery.
In the case of a futures contract or an option on a futures contract, a
portfolio must deposit initial margin and, in some instances, daily variation
margin in addition to segregating assets sufficient to meet its obligations to
purchase or provide securities or currencies, or to pay the amount owed at the
expiration of an index-based futures contract. These assets may consist of cash,
cash equivalents, liquid debt or equity securities or other acceptable assets. A
portfolio will accrue the net amount of the excess, if any, of its obligations
relating to swaps over its entitlements with respect to each swap on a daily
basis and will segregate with its custodian, or designated sub-custodian, an
amount of cash or liquid high grade debt obligations having an aggregate value
equal to at least the accrued excess. Caps, floors and collars require
segregation of assets with a value equal to a portfolio's net obligation, if
any.
Hedging and Other Strategic Transactions may be covered by means other
than those described above when consistent with applicable regulatory policies.
A portfolio may also enter into offsetting transactions so that its combined
position, coupled with any segregated assets, equals its net outstanding
obligation in related options and Hedging and Other Strategic Transactions. A
portfolio could purchase a put option, for example, if the strike price of that
option is the same or higher than the strike price of a put option sold by the
portfolio. Moreover, instead of segregating assets if it holds a futures
contracts or forward contract, a portfolio could purchase a put option on the
same futures contract or forward contract with a
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strike price as high or higher than the price of the contract held. Other
Hedging and Other Strategic Transactions may also be offset in combinations. If
the offsetting transaction terminates at the time of or after the primary
transaction, no segregation is required, but if it terminates prior to that
time, assets equal to any remaining obligation would need to be segregated.
OTHER LIMITATIONS
No portfolio will maintain open short positions in futures contracts, call
options written on futures contracts, and call options written on securities
indices if, in the aggregate, the current market value of the open positions
exceeds the current market value of that portion of its securities portfolio
being hedged by those futures and options plus or minus the unrealized gain or
loss on those open positions, adjusted for the historical volatility
relationship between that portion of the portfolio and the contracts (e.g., the
Beta volatility factor). For purposes of the limitation stated in the
immediately preceding sentence, to the extent the portfolio has written call
options on specific securities in that portion of its portfolio, the value of
those securities will be deducted from the current market value of that portion
of the securities portfolio. If this limitation should be exceeded at any time,
the portfolio will take prompt action to close out the appropriate number of
open short positions to bring its open futures and options positions within this
limitation.
The degree to which a portfolio may utilize Hedging and Other Strategic
Transactions may also be affected by certain provisions of the Code.
INVESTMENT RESTRICTIONS
There are two classes of investment restrictions to which the Trust is
subject in implementing the investment policies of the portfolios: fundamental
and nonfundamental. Nonfundamental restrictions are subject to change by the
Trustees of the Trust without shareholder approval. Fundamental restrictions may
only be changed by a vote of the lesser of (i) 67% or more of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (ii) more than 50% of the outstanding shares.
With respect to the submission of a change in an investment restriction to
the holders of the Trust's outstanding voting securities, the matter shall be
deemed to have been effectively acted upon with respect to a particular
portfolio if a majority of the outstanding voting securities of the portfolio
vote for the approval of the matter, notwithstanding (1) that the matter has not
been approved by the holders of a majority of the outstanding voting securities
of any other portfolio affected by the matter, and (2) that the matter has not
been approved by the vote of a majority of the outstanding voting securities of
the Trust.
All of the restrictions through restriction (8) are fundamental.
Restrictions (9) through (15) are nonfundamental.
FUNDAMENTAL
The Trust may not issue senior securities, except to the extent that the
borrowing of money in accordance with restriction (3) may constitute the
issuance of a senior security. (For purposes of this restriction, purchasing
securities on a when-issued or delayed delivery basis and engaging in Hedging
and Other Strategic Transactions will not be deemed to constitute the issuance
of a senior security.) In addition, unless a portfolio is specifically excepted
by the terms of a restriction, each portfolio will not:
(1) Invest more than 25% of the value of its total assets in securities of
issuers having their principal activities in any particular industry,
excluding United States Government securities and obligations of domestic
branches of U.S. banks and savings and loan associations, except that this
restriction shall not apply to the Real Estate Securities Trust and the
Lifestyle Trusts. (The Trust has determined to forego the exclusion from
the above policy of obligations of domestic branches of U.S. savings and
loan associations and to limit the exclusion of obligations of domestic
branches of U.S. banks to the Money Market Trust.) For purposes of this
restriction, neither finance companies as a group nor utility companies as
a group are considered to be a single industry. Such companies will be
grouped instead according to their services; for example, gas, electric
and telephone utilities will each be considered a separate industry. Also
for purposes of this restriction, foreign government issuers and
supranational issuers are not considered members of any industry.
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(2) Purchase the securities of any issuer if the purchase would cause more
than 5% of the value of the portfolio's total assets to be invested in the
securities of any one issuer (excluding United States Government
securities) or cause more than 10% of the voting securities of the issuer
to be held by the portfolio, except that up to 25% of the value of each
portfolio's total assets may be invested without regard to these
restrictions. The Global Government Bond Trust, the Emerging Growth Trust
and the Lifestyle Trusts are not subject to these restrictions.
(3) Borrow money, except that each portfolio may borrow (i) for temporary or
emergency purposes (not for leveraging) up to 33 1/3% of the value of the
portfolio's total assets (including amounts borrowed) less liabilities
(other than borrowings) and (ii) in connection with reverse repurchase
agreements, mortgage dollar rolls and other similar transactions.
(4) Underwrite securities of other issuers except insofar as the Trust may be
considered an underwriter under the Securities Act of 1933 in selling
portfolio securities.
(5) Purchase or sell real estate, except that each portfolio may invest in
securities issued by companies which invest in real estate or interests
therein and each of the portfolios other than the Money Market Trust may
invest in mortgages and mortgage backed securities.
(6) Purchase or sell commodities or commodity contracts except that each
portfolio other than the Money Market Trust may purchase and sell futures
contracts on financial instruments and indices and options on such futures
contracts and each portfolio other than the Money Market Trust and U.S.
Government Securities Trust may purchase and sell futures contracts on
foreign currencies and options on such futures contracts.
(7) Lend money to other persons except by the purchase of obligations in which
the portfolio is authorized to invest and by entering into repurchase
agreements. For purposes of this restriction, collateral arrangements with
respect to options, forward currency and futures transactions will not be
deemed to involve the lending of money.
(8) Lend securities in excess of 33 1/3% of the value of its total assets. For
purposes of this restriction, collateral arrangements with respect to
options, forward currency and futures transactions will not be deemed to
involve loans of securities.
NONFUNDAMENTAL
(9) Knowingly invest more than 15% of the value of its net assets in
securities or other investments, including repurchase agreements maturing
in more than seven days but excluding master demand notes, that are not
readily marketable, except that the Money Market Trust may not invest in
excess of 10% of its net assets in such securities or other investments.
(10) Sell securities short or purchase securities on margin except that it may
obtain such short-term credits as may be required to clear transactions.
For purposes of this restriction, collateral arrangements with respect to
Hedging and Other Strategic Transactions will not be deemed to involve the
use of margin.
(11) Write or purchase options on securities, financial indices or currencies
except to the extent a portfolio is specifically authorized to engage in
Hedging and Other Strategic Transactions.
(12) Purchase securities for the purpose of exercising control or management.
(13) Purchase securities of other investment companies (A) in reliance on
Section 12(d)(1)(G) of the 1940 Act, or (B) if the purchase would cause
more than 10% of the value of the portfolio's total assets to be invested
in investment company securities, provided that (i) no investment will be
made in the securities of any one investment company if immediately after
such investment more than 3% of the outstanding voting securities of such
company would be owned by the portfolio or more than 5% of the value of
the portfolio's total assets would be invested in such company and (ii) no
restrictions shall apply to a purchase of investment company securities in
connection with a merger, consolidation or reorganization or in connection
with the investment of collateral received in connection with the lending
of securities in the Navigator Securities Lending Trust.* For purposes of
this restriction, privately issued
19
<PAGE> 82
collateralized mortgage obligations will not be treated as investment
company securities if issued by "Exemptive Issuers." Exemptive Issuers are
defined as unmanaged, fixed-asset issuers that (a) invest primarily in
mortgage-backed securities, (b) do not issue redeemable securities as
defined in section 2(a)(32) of the 1940 Act, (c) operate under general
exemptive orders exempting them from all provisions of the 1940 Act, and
(d) are not registered or regulated under the 1940 Act as investment
companies. This restriction (13) shall not apply to the Lifestyle Trusts.
(14) Pledge, hypothecate, mortgage or transfer (except as provided in
restriction (8)) as security for indebtedness any securities held by the
portfolio except in an amount of not more than 10% (33 1/3% in the case of
the Small Company Value, Blue Chip Growth, Equity-Income, International
Stock and Science & Technology Trusts, 15% in the case of the
International Small Cap, Growth, Balanced and Worldwide Growth Trusts and
50% in the case of the Value Trust) of the value of the portfolio's total
assets and then only to secure borrowings permitted by restrictions (3)
and (10). For purposes of this restriction, collateral arrangements with
respect to Hedging and Other Strategic Transactions will not be deemed to
involve a pledge of assets.
(15) Purchase securities of foreign issuers, except that (A) the Aggressive
Asset Allocation Trust may invest up to 35% of its assets in such
securities; (B) the Growth, Balanced and Science & Technology Trusts may
each invest up to 30% of its assets in such securities, (C) the
Equity-Income and Moderate Asset Allocation Trusts may each invest up to
25% of its assets in such securities; (D) the Pilgrim Baxter Growth and
Conservative Asset Allocation Trusts each may invest up to 15% of its
assets in such securities; (E) the Value Trust may invest up to 5% of its
assets in foreign securities; (F) each other portfolio other than the U.S.
Government Securities and Equity Index Trusts may invest up to 20% of its
total assets in such securities (in the case of the Small/Mid Cap, Growth,
Balanced and Value Trusts, ADRs and U.S. dollar-denominated securities are
not included in the applicable percentage limit); and (G) the foregoing
restriction shall not apply to the Small Company Value, International
Small Cap, Worldwide Growth, Global Equity, Pacific Rim Emerging Markets,
International Stock, High Yield, Global Government Bond, International
Growth and Income, Strategic Bond, Capital Growth Bond, Real Estate
Securities and Quantitative Equity Trusts.
*State Street Bank and Trust Company ("State Street"), the Trust's custodian,
pursuant to an agreement with the Trust provides a security lending service to
the Trust. In connection with the service, collateral from securities lent may
be invested in the Navigator Trust. The Navigator Trust is a registered
investment company managed by State Street that is sold only to mutual fund
lending clients of State Street. In connection with the creation of the
Navigator Trust, State Street received from the Securities and Exchange
Commission exemption from certain provisions of the 1940 Act in order to permit
its mutual fund clients to invest in the Navigator Trust. State Street received
exemption from Section 12(d)(1) of the 1940 Act and various provisions of
Section 17 of the 1940 Act.
In addition to the above policies, the Money Market Trust is subject to
certain restrictions required by Rule 2a-7 under the 1940 Act. In order to
comply with such restrictions, the Money Market Trust will, inter alia, not
purchase the securities of any issuer if it would cause (i) more than 5% of its
total assets to be invested in the securities of any one issuer (excluding U.S.
Government securities and repurchase agreements fully collateralized by U.S.
Government securities), except as permitted by Rule 2a-7 for certain securities
for a period of up to three business days after purchase, (ii) more than 5% of
its total assets to be invested in "second tier securities," as defined by Rule,
or (iii) more than the greater of $1 million or 1% of its total assets to be
invested in the second tier securities of that issuer.
If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in the investment's percentage of the value of a
portfolio's total assets resulting from a change in such values or assets will
not constitute a violation of the percentage restriction, except in the case of
the Money Market Trust where the percentage limitation of restriction (9) must
be met at all times.
20
<PAGE> 83
PORTFOLIO TURNOVER
The annual rate of portfolio turnover will normally differ for each
portfolio and may vary from year to year. Portfolio turnover is calculated by
dividing the lesser of purchases or sales of portfolio securities during the
fiscal year by the monthly average of the value of the portfolio's securities
(excluding from the computation all securities, including options, with
maturities at the time of acquisition of one year or less). A high rate of
portfolio turnover (100% or more) generally involves correspondingly greater
brokerage commission expenses, which must be borne directly by the portfolio. No
portfolio turnover rate can be calculated for the Money Market Trust due to the
short maturities of the instruments purchased. The portfolio turnover rate may
vary from year to year, as well as within a year. The portfolio turnover rates
for the portfolios of the Trust for the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
- -------------------------------------------------------
<S> <C> <C>
Pacific Rim Emerging Markets Trust 63% 48%
Science & Technology Trust 121% N/A
International Small Cap Trust 74% 50%*
Emerging Growth Trust 120% N/A
Pilgrim Baxter Growth Trust 63% N/A
Small/Mid Cap Trust 151% 67%*
International Stock Trust 43% N/A
Worldwide Growth Trust 84% N/A
Global Equity Trust 33% 169%
Small Company Value Trust 81%* N/A
Equity Trust 224% 223%
Growth Trust 179% 215%*
Quantitative Equity Trust 114% 105%
Equity Index Trust 7% 27%*
Blue Chip Growth Trust 37% 159%
Real Estate Securities Trust 148% 231%
Value Trust 43% N/A
International Growth and Income Trust 166% 148%
Growth and Income Trust 34% 49%
Equity-Income Trust 25% 158%
Balanced Trust 219% N/A
Aggressive Asset Allocation Trust 91% 75%
High Yield Trust 75% N/A
Moderate Asset Allocation Trust 78% 78%
Conservative Asset Allocation Trust 86% 73%
Strategic Bond Trust 131% 165%
Global Government Bond Trust 160% 167%
Capital Growth Bond Trust 73% 58%
Investment Quality Bond Trust 47% 68%
U.S. Government Securities Trust 110% 178%
Money Market Trust N/A N/A
Lifestyle Aggressive 1000 Trust 67% N/A
Lifestyle Growth 820 Trust 51% N/A
Lifestyle Balanced 640 Trust 44% N/A
Lifestyle Moderate 460 Trust 39% N/A
Lifestyle Conservative 260 Trust 38% N/A
</TABLE>
*Annualized
Prior rates of portfolio turnover do not provide an accurate guide as to
what the rate will be in any future year, and prior rates are not a limiting
factor when it is deemed appropriate to purchase or sell securities for a
portfolio. Each portfolio of
21
<PAGE> 84
the Trust intends to comply with the various requirements of the Code so as to
qualify as a "regulated investment company" thereunder.
MANAGEMENT OF THE TRUST
The Trustees and officers of the Trust, together with information as to
their principal occupations during the past five years, are listed below:
<TABLE>
<CAPTION>
================================================================================
POSITION WITH PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>
Don B. Allen Trustee Senior Lecturer, William E.
136 Knickerbocker Road Simon Graduate School of
Pittsford, NY 14534 Business Administration,
Age: 68 University of Rochester
- --------------------------------------------------------------------------------
John D. DesPrez III President Senior Vice President,
73 Tremont Street Annuities, Manulife Financial,
Boston, MA 02108 September 1996 to date;
Age: 41 President and Director,
Manulife North America,
September 1996 to date;
President, North American
Funds, March 1993 to September
1996; Vice President and
General Counsel, Manulife
North America, 1991 to 1994
- --------------------------------------------------------------------------------
Charles L. Bardelis Trustee President and Executive
297 Dillingham Ave. Officer, Island Commuter Corp.
Falmouth, MA 02540 (Marine Transport)
Age: 56
- --------------------------------------------------------------------------------
Samuel Hoar Trustee Senior Mediator, Judicial
73 Tremont Street Arbitration Mediation Services
Boston, MA 02108 "JAMS/Endispute," June 1994 to
Age: 70 date; Partner, Goodwin,
Proctor and Hoar, prior to
June 1994
- --------------------------------------------------------------------------------
John D. Richardson* Chairman of Executive Vice President and
200 Bloor Street East Trustees General Manager, U.S.
Toronto, Ontario, Canada Operations, Manulife
M4W 1E5 Financial, January 1995 to
Age: 60 date; Senior Vice President
and General Manager, Canadian
Operations, Manulife
Financial, June 1992 to
January 1995
- --------------------------------------------------------------------------------
F. David Rolwing Trustee Chairman, President and CEO,
17810 Meeting House Road Montgomery Mutual Insurance
Sandy Spring, MD 20860 Company, 1991 to date
Age: 63
- --------------------------------------------------------------------------------
Robert J. Myers Trustee Consulting Actuary
9610 Wire Avenue (self-employed), April 1983 to
Silver Springs, MD 20921 date; Member, Prospective
Age: 85 Payment Assessment Commission,
June 1993 to date
- --------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 85
<TABLE>
<CAPTION>
================================================================================
POSITION WITH PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>
John G. Vrysen Vice President Vice President, Chief
73 Tremont Street Financial Officer, U.S.
Boston, MA 02108 Operations,Manulife
Age: 42 Financial, January 1996 to
date; Vice President and
Actuary, Manulife North
America, January 1986 to date
- --------------------------------------------------------------------------------
James D. Gallagher Secretary Vice President, Legal
73 Tremont Street Services, Manulife Financial,
Boston, MA 02108 January 1996 to date; Vice
Age: 43 President, Secretary and
General Counsel, Manulife
North America, June 1994 to
date; Vice President and
Associate General Counsel, The
Prudential Insurance Company
of America, 1990 to 1994
- --------------------------------------------------------------------------------
Richard C. Hirtle Vice President Vice President, Strategic Development,
73 Tremont Street and Treasurer Annuities, Manulife Financial, December
Boston, MA 02108 1997 to date; Vice President, Strategic
Age: 42 Development, Manulife North America,
December 1997 to date, Vice President,
Chief Financial Officer, Annuities,
Manulife Financial, January 1996 to
December 1997; Vice President,
Treasurer and Chief Financial
Officer, Manulife North
America, November 1988 to
December 1997
================================================================================
</TABLE>
*Trustee who is an "interested person," as defined in the 1940 Act.
COMPENSATION OF TRUSTEES
The Trust does not pay any remuneration to its Trustees who are officers
or employees of the Adviser or its affiliates. Trustees not so affiliated
receive an annual retainer of $30,000, a fee of $7,500 for each meeting of the
Trustees that they attend in person and a fee of $200 for each such meeting
conducted by telephone. Trustees are reimbursed for travel and other
out-of-pocket expenses. The officers listed above are furnished to the Trust
pursuant to the Advisory Agreement described below and receive no compensation
from the Trust. These officers spend only a portion of their time on the affairs
of the Trust.
<TABLE>
<CAPTION>
===========================================================================================
NAMES OF PERSON, POSITION AGGREGATE COMPENSATION FROM TOTAL COMPENSATION FROM TRUST
TRUST FOR PRIOR FISCAL YEAR* COMPLEX FOR PRIOR FISCAL YEAR*#
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Don B. Allen, Trustee $57,500 $62,000
- -------------------------------------------------------------------------------------------
Charles L. Bardelis, Trustee 57,500 62,000
- -------------------------------------------------------------------------------------------
Samuel Hoar, Trustee 57,500 62,000
- -------------------------------------------------------------------------------------------
Robert J. Myers, Trustee 57,500 62,000
- -------------------------------------------------------------------------------------------
John D. Richardson, Trustee -- --
- -------------------------------------------------------------------------------------------
F. David Rolwing, Trustee 57,500 62,000
===========================================================================================
</TABLE>
23
<PAGE> 86
*Compensation received for services as Trustee.
#Trust Complex includes all portfolios of the Trust as well as all portfolios of
North American Funds (from January 1, 1997 to September 30, 1997) of which the
predecessor to Manufacturers Securities Services, LLC was the investment
adviser.
INVESTMENT MANAGEMENT ARRANGEMENTS
The following information supplements the material appearing in the
Prospectus under the caption "Management of the Trust." Copies of the Advisory
and Subadvisory Agreements discussed below have been filed with and are
available from the Securities and Exchange Commission.
The Trust, formerly a Maryland corporation known as "NASL Series Fund,
Inc." (the "Fund"), was reorganized as a Massachusetts business trust effective
December 31, 1988. Pursuant to such reorganization, the Trust assumed all the
assets and liabilities of the Fund and carried on its business and operations
with the same investment management arrangements as were in effect for the Fund
at the time of the reorganization. The assets and liabilities of each of the
Fund's separate portfolios were assumed by the corresponding portfolios of the
Trust. Effective December 31, 1996, Manulife Series Fund, Inc., a registered
management investment company with nine portfolios, was merged into the Trust.
The net assets of four of the portfolios of Manulife Series Fund, Inc. were
transferred to comparable portfolios of the Trust, and the remaining five
portfolios -- the Pacific Rim Emerging Markets, Real Estate Securities, Common
Stock, Capital Growth and Equity Index Portfolios -- were transferred to the
Trust and reconstituted as new portfolios of the Trust.
Manufacturers Securities Services, LLC ("MSS" or the "Adviser"), the
successor to NASL Financial Services, Inc., is a Delaware limited liability
corporation whose principal offices are located at 73 Tremont Street, Boston,
Massachusetts 02108. MSS is registered as an investment adviser under the
Investment Advisers Act of 1940 and as a broker-dealer under the Securities
Exchange Act of 1934. It is a member of the National Association of Securities
Dealers, Inc. (the "NASD"). In addition, MSS serves as principal underwriter of
certain contracts issued by The Manufacturers Life Insurance Company of North
America ("Manulife North America") and The Manufacturers Life Insurance Company
of New York.
The Advisory Agreement and each Subadvisory Agreement (except those
described below) were approved by the Trustees on September 28, 1995 and by the
shareholders of the portfolios on December 5, 1995. These approvals occurred in
connection with the change of control of MSS as a result of the merger of North
American Life Assurance Company, the ultimate controlling parent of MSS, with
The Manufacturers Life Insurance Company ("Manulife Financial") on January 1,
1996.
On December 15, 1995, the Trustees appointed Fred Alger Management, Inc.
("Alger") pursuant to a new Subadvisory Agreement with Alger ("Alger Subadvisory
Agreement") to manage the Small/Mid Cap Trust. The Alger Subadvisory Agreement
and an amendment to the Advisory Agreement, both to provide for the management
of the Small/Mid Cap Trust, were approved by the Trustees, including a majority
of the Trustees who are not parties to the agreements or interested persons of
any party to such agreements. The Alger Subadvisory Agreement and the related
amendment to the Advisory Agreement have been approved by the sole shareholder
of the Small/Mid Cap Trust.
Effective October 1, 1996, Oechsle International Advisors, L.P. ("Oechsle
International"), Wellington Management Company, LLP, Goldman Sachs Asset
Management and Roger Engemann Management Co., Inc., the Subadvisers of the
Global Equity, Money Market, Equity-Income and Blue Chip Growth Trusts,
respectively, resigned their positions as Subadvisers of those portfolios. On
September 27, 1996, the Trustees (i) appointed Morgan Stanley Asset Management
Inc. ("Morgan Stanley") pursuant to a new Subadvisory Agreement with Morgan
Stanley ("Morgan Stanley Subadvisory Agreement") to manage the Global Equity
Trust, (ii) appointed T. Rowe Price Associates, Inc. ("T. Rowe Price") pursuant
to a new Subadvisory Agreement with T. Rowe Price ("T. Rowe Price Subadvisory
Agreement") to manage the Blue Chip Growth and Equity-Income Trusts, and (iii)
appointed Manufacturers Adviser Corporation ("MAC") pursuant to a new
Subadvisory Agreement with MAC ("MAC Subadvisory Agreement") to manage the Money
Market Trust. All such Subadvisory Agreements were approved by the Trustees,
including a majority of the Trustees who are not parties to the agreements or
interested persons of any party to such agreements, on September 27, 1996 (with
an effective date of October 1, 1996) and by the shareholders of the respective
portfolios on December 20, 1996.
24
<PAGE> 87
Also on September 27, 1996, the Trustees (i) appointed Miller Anderson &
Sherrerd, LLP ("MAS") pursuant to a new Subadvisory Agreement with MAS ("MAS
Subadvisory Agreement") to manage the Value and High Yield Trusts, (ii)
appointed Warburg Pincus Asset Management, Inc. ("Warburg") pursuant to an
agreement with Warburg ("Warburg Subadvisory Agreement") to manage the Emerging
Growth Trust, (iii) appointed T. Rowe Price pursuant to the T. Rowe Price
Subadvisory Agreement to also manage the Science & Technology Trust, (iv)
appointed Rowe Price-Fleming International, Inc. ("Price-Fleming") pursuant to a
new Subadvisory Agreement with Price Fleming ("Price-Fleming Subadvisory
Agreement") to manage the International Stock Trust, (v) appointed Pilgrim
Baxter & Associates, Ltd. ("PBA") to manage the Pilgrim Baxter Growth Trust
pursuant to an agreement with PBA ("PBA Subadvisory Agreement"), (vi) appointed
MAC pursuant to the MAC Subadvisory Agreement to also manage the Pacific Rim
Emerging Markets, Real Estate Securities, Quantitative Equity, Capital Growth
Bond and Equity Index Trusts and (vii) appointed the Adviser to manage the
Lifestyle Trusts pursuant to an amendment to the Advisory Agreement. Such
Subadvisory Agreements or amended Subadvisory Agreement and amendments to the
Advisory Agreement, to provide for the management of the newly-established
portfolios, were approved by the Trustees, including a majority of the Trustees
who are not parties to the agreements or interested persons of any party to such
agreements, on September 27, 1996.
On December 13, 1996, the Trustees appointed MAC pursuant to the amended
MAC Subadvisory Agreement to also manage each of the Lifestyle Trusts. The
amended MAC Subadvisory Agreement was approved by the Trustees, including a
majority of the Trustees who are not parties to the agreement or interested
persons of any party to such agreement, on December 13, 1996. The amended MAC
Subadvisory Agreement was approved by the sole shareholder of each of the
Lifestyle Trusts.
On September 26, 1997, the Trustees appointed Rosenberg Institutional
Equity Management ("Rosenberg") to manage the Small Company Value Trust pursuant
to an agreement with Rosenberg. This subadvisory agreement and an amendment to
the Advisory Agreement, both to provide for the management of the Small Company
Value Trust were approved by the Trustees, including a majority of the Trustees
who are not parties to the agreement or interested persons of any party to such
agreement, on September 26, 1997.
On November 17, 1997, the Trustees appointed Salomon Brothers Asset
Management Inc ("SBAM") pursuant to a new subadvisory agreement with SBAM ("SBAM
Subadvisory Agreement") to manage the U.S. Government Securities and Strategic
Bond Trusts. In addition, on that date the Trustees approved a new subadvisory
consulting agreement with Salomon Brothers Asset Management Limited ("SBAM
Limited") ("Subadvisory Consulting Agreement") to provide certain advisory
services to SBAM with regard to currency transactions and investments in
non-dollar denominated debt securities for the benefit of the Strategic Bond
Trust. The SBAM Subadvisory Agreement and Subadvisory Consulting Agreement were
approved by the Trustees, including a majority of the Trustees who are not
parties to the agreements or interested persons of any party to such agreements,
on November 17, 1997. SBAM had previously managed the U.S. Government Securities
and Strategic Bond Trusts pursuant to a Subadvisory Agreement dated January 1,
1996. SBAM Limited had previously provided certain advisory services to SBAM
with regard to currency transactions and investments in non-dollar denominated
debt securities for the benefit of the Strategic Bond Trust pursuant to a
Subadvisory Consulting Agreement dated January 1, 1996.
On December 11, 1997, the Trustees appointed Founders Asset Management LLC
("Founders") pursuant to a new Subadvisory Agreement with Founders ("Founders
Subadvisory Agreement") to manage the International Small Cap, Growth, Worldwide
Growth and Balanced Trusts. The Founders Subadvisory Agreement was approved by
the Trustees, including a majority of the Trustees who are not parties to the
agreement or interested persons of any party to such agreement, on December 11,
1997. The predecessor to Founders, Founder Asset Management, Inc., previously
managed these Trusts pursuant to a Subadvisory Agreement dated January 4, 1996,
as amended June 20, 1996 and December 31, 1996.
THE ADVISORY AGREEMENT
Under the terms of the Advisory Agreement, the Adviser administers the
business and affairs of the Trust. The Adviser is responsible for performing or
paying for various administrative services for the Trust, including providing at
the Adviser's expense (i) office space and all necessary office facilities and
equipment, (ii) necessary executive and other personnel for managing the affairs
of the Trust and for performing certain clerical, accounting and other office
functions, and (iii) all other information and services, other than services of
counsel, independent accountants or investment subadvisory services provided by
any subadviser under a subadvisory agreement, required in connection with the
preparation of all tax returns and
25
<PAGE> 88
documents required to comply with the Federal securities laws. The Adviser pays
the cost of any advertising or sales literature relating solely to the Trust,
the cost of printing and mailing Prospectuses to persons other than current
holders of Trust shares or of variable contracts funded by Trust shares and the
compensation of the Trust's officers and Trustees that are officers, directors
or employees of the Adviser or its affiliates. In addition, advisory fees are
reduced or the Adviser reimburses the Trust if the total of all expenses
(excluding advisory fees, taxes, portfolio brokerage commissions, interest,
litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business) applicable to a
portfolio exceeds an annual rate of .75% in the case of the International Small
Cap, Global Equity, Global Government Bond, Worldwide Growth, International
Growth and Income, International Stock and Pacific Rim Emerging Markets Trusts,
.50% in the case of all other portfolios except for the Equity Index Trust, or
.15% in the case of the Equity Index Trust of the average annual net assets of
such portfolio. The expense limitation will continue in effect from year to year
unless otherwise terminated at any year end by the Adviser on 30 days' notice to
the Trust. In addition, in the case of the Lifestyle Trusts, the Adviser has
voluntarily agreed to pay the expenses of the Lifestyle Trusts (other than the
expenses of the Underlying Trusts). This voluntary expense reimbursement may be
terminated at any time.
In addition to providing the services and expense limitation described
above, the Adviser selects, contracts with and compensates subadvisers to manage
the investment and reinvestment of the assets of the Trust portfolios, except
for the Lifestyle Trusts. The Adviser monitors the compliance of such
subadvisers with the investment objectives and related policies of each
portfolio and reviews the performance of such subadvisers and reports
periodically on such performance to the Trustees of the Trust.
As compensation for its services, the Adviser receives a fee from the
Trust computed separately for each portfolio. The fee for each portfolio is
stated as an annual percentage of the current value of the net assets of such
portfolio. The fee, which is accrued daily and payable monthly, is calculated
for each day by multiplying the daily equivalent of the annual percentage
prescribed for a portfolio by the value of its net assets at the close of
business on the previous business day of the Trust. The management fees each
portfolio currently is obligated to pay the Adviser is as set forth in the
Prospectus. No management fees are currently payable by the Lifestyle Trusts.
For the years ended December 31, 1997, 1996 and 1995 the aggregate
investment advisory fee paid by the Trust under the fee schedule then in effect,
absent the expense limitation provision, was $70,977,648, $46,515,018 and
$33,808,255 allocated among the portfolios as follows:
<TABLE>
<CAPTION>
PORTFOLIO 1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets Trust .. $ 229,135 N/A N/A
Science & Technology Trust .......... 369,324 N/A N/A
International Small Cap Trust ....... 1,347,708 $ 492,152(1) N/A
Emerging Growth Trust ............... 2,331,739 N/A N/A
Pilgrim Baxter Growth Trust ......... 502,149 N/A N/A
Small/Mid Cap Trust ................. 2,145,327 756,997(1) N/A
International Stock Trust ........... 860,656 N/A N/A
Worldwide Growth Trust .............. 124,952 N/A N/A
Global Equity Trust ................. 7,256,254 6,234,116 $ 5,513,312
Small Company Value Trust ........... 134,688(2) N/A N/A
Equity Trust ........................ 10,703,211 8,774,975 5,643,363
Growth Trust ........................ 935,029 119,620(3) N/A
Quantitative Equity Trust ........... 913,996 N/A N/A
Equity Index Trust .................. 42,212 N/A N/A
Blue Chip Growth Trust .............. 5,156,008 3,317,165 2,115,434
Real Estate Securities Trust ........ 831,191 N/A N/A
Value Trust ......................... 523,446 N/A N/A
International Growth and Income Trust 1,965,899 1,327,151 450,200(4)
Growth and Income Trust ............. 10,037,637 6,298,799 3,922,671
Equity-Income Trust ................. 6,141,959 3,939,929 2,459,247
Balanced Trust ...................... 1,261,070 N/A N/A
Aggressive Asset Allocation Trust ... 1,766,662 1,656,217 1,463,421
</TABLE>
26
<PAGE> 89
<TABLE>
<CAPTION>
PORTFOLIO 1997 1996 1995
================================================================================
<S> <C> <C> <C>
High Yield Trust .................. 314,373 N/A N/A
Moderate Asset Allocation Trust ... 4,584,121 4,764,110 4,667,061
Conservative Asset Allocation Trust 1,521,047 1,643,494 1,639,903
Strategic Bond Trust .............. 2,240,478 1,298,996 767,448
Global Government Bond Trust ...... 1,837,451 1,934,856 1,757,909
Capital Growth Bond Trust ......... 315,701 N/A N/A
Investment Quality Bond Trust ..... $1,047,782 $ 965,766 $ 798,045
U.S. Government Securities Trust .. 1,401,568 1,401,130 1,291,668
Money Market Trust ................ 2,134,875 1,589,545 1,318,573
Lifestyle Aggressive 1000 Trust ... N/A N/A N/A
Lifestyle Growth 820 Trust ........ N/A N/A N/A
Lifestyle Balanced 640 Trust ...... N/A N/A N/A
Lifestyle Moderate 460 Trust ...... N/A N/A N/A
Lifestyle Conservative 280 Trust .. N/A N/A N/A
</TABLE>
(1) For the period March 4, 1996 (commencement of operations) to December 31,
1996.
(2) For the period October 1, 1997 (commencement of operations) to December
31, 1997.
(3) For the period July 15, 1996 (commencement of operations) to December 31,
1996.
(4) For the period January 9, 1995 (commencement of operations) to December 31,
1995.
For the years ended December 31, 1996 and 1995, the aggregate investment
advisory fee paid by the portfolios below to MAC under the fee schedule then in
effect was as follows:
<TABLE>
<CAPTION>
PORTFOLIO 1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Pacific Rim Emerging Markets Trust $161,272 $ 95,770
Quantitative Equity Trust..... 380,315 232,477
Equity Index Trust............ 11,227 N/A
Real Estate Securities Trust.. 292,384 232,449
Capital Growth Bond Trust..... 215,033 198,316
</TABLE>
Prior to January 1, 1997, the predecessor to the Trust, Manulife Series Fund,
Inc., had a direct investment advisory arrangement with MAC on behalf of the
Pacific Rim Emerging Markets, Quantitative Equity, Equity Index, Real Estate
Securities and Capital Growth Bond Portfolios. As of that date, the existing
investment advisory agreement was replaced by a subadvisory arrangement between
MAC and MSS whereby MAC serves as subadviser to the Portfolios.
THE SUBADVISORY AGREEMENTS
Under the terms of each of the current subadvisory agreements, including
the SBAM Limited Consulting Agreement (collectively "Subadvisory Agreements"),
the Subadviser manages the investment and reinvestment of the assets of the
assigned portfolios, subject to the supervision of the Trust's Trustees. The
Subadviser formulates a continuous investment program for each such portfolio
consistent with its investment objectives and policies outlined in the
Prospectus. Each Subadviser implements such programs by purchases and sales of
securities and regularly reports to the Adviser and the Trustees of the Trust
with respect to the implementation of such programs. Each Subadviser, at its
expense, furnishes all necessary investment and management facilities, including
salaries of personnel required for it to execute its duties, as well as
administrative facilities, including bookkeeping, clerical personnel, and
equipment necessary for the conduct of the investment affairs of the assigned
portfolios.
As compensation for their services, the Subadvisers receive fees from the
Adviser computed separately for each portfolio. The fee for each portfolio is
stated as an annual percentage of the current value of the net assets of the
portfolio. The fees are calculated on the basis of the average of all valuations
of net assets of each portfolio made at the close of business on each business
day of the Trust during the period for which such fees are paid. Once the
average net assets of a portfolio exceed
27
<PAGE> 90
specified amounts, the fee is reduced with respect to such excess. The schedule
of the management fees the Adviser currently is obligated to pay the Subadvisers
out of the advisory fee it receives from each portfolio is as set forth in the
Prospectus.
The Prospectus refers to a subadvisory consulting agreement between SBAM
and SBAM Limited which is subject to certain conditions as set forth in the
Prospectus. Under that agreement SBAM Limited provides certain investment
advisory services to SBAM relating to currency transactions and investments in
non-dollar denominated debt securities for the benefit of the Strategic Bond
Trust. SBAM pays SBAM Limited, as full compensation for all services provided
under the subadvisory consulting agreement, a portion of its subadvisory fee,
such amount being an amount equal to the fee payable under SBAM's subadvisory
agreement multiplied by the current value of the net assets of the portion of
the assets of the Strategic Bond Trust that SBAM Limited has been delegated to
manage divided by the current value of the net assets of the portfolio. The
Trust will not incur any expenses in connection with SBAM Limited's services.
SBAM Limited is a wholly owned subsidiary of Salomon Brothers Europe Limited
("SBEL"). Salomon (International) Finance A G ("SIF") owns 100% of SBEL's
Convertible Redeemable Preference Shares and 36.8% of SBEL's Ordinary Shares,
while the remaining 63.2% of SBEL's Ordinary Shares are owned by Salomon
Brothers Holding Company Inc. ("SBH"). SIF is wholly owned by SBH, which is in
turn, a wholly owned subsidiary of Salomon Inc.
For the years ended December 31, 1997, 1996 and 1995, the Adviser paid
aggregate subadvisory fees of $26,369,969, $15,882,911 and $12,007,940,
respectively, allocated among the portfolios as follows:
<TABLE>
<CAPTION>
PORTFOLIO 1997 1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets Trust $ 107,828 N/A N/A
Science & Technology Trust ....... 201,450 N/A N/A
International Small Cap Trust .... 760,136 $ 284,403(1) N/A
Emerging Growth Trust ............ 1,221,387 N/A N/A
Pilgrim Baxter Growth Trust ...... 286,942 N/A N/A
Small/Mid Cap Trust .............. 1,078,894 385,464(1) N/A
International Stock Trust ........ 487,128 N/A N/A
Worldwide Growth Trust ........... 74,971 N/A N/A
Global Equity Trust .............. 3,045,314 2,677,373 $2,415,918
Small Company Value Trust ........ 76,634(2) N/A N/A
Equity Trust ..................... 3,354,190 2,256,365 1,628,673
Growth Trust ..................... 495,015 63,328(3) N/A
Quantitative Equity Trust ........ 318,784 N/A N/A
Equity-Index Trust ............... 16,885 N/A N/A
Blue Chip Growth Trust ........... 2,298,963 1,452,025 978,146
Real Estate Securities Trust ..... 292,169 N/A N/A
Value Trust ...................... 233,286 N/A N/A
International Growth and Income
Trust ............................ 951,446 653,719 232,320(4)
Growth and Income Trust .......... 2,507,394 1,761,319 1,267,236
Equity-Income Trust .............. 1,785,490 1,235,667 864,812
Balanced Trust ................... 537,310 N/A N/A
Aggressive Asset Allocation Trust 831,665 622 181 560,019
High Yield Trust ................. 138,181 N/A N/A
Moderate Asset Allocation Trust .. 1,722,433 1,454,194 1,433,417
Conservative Asset Allocation
Trust ............................ 631,791 618,391 616,971
Strategic Bond Trust ............. 847,735 + 527,906 ++ 322,077+++
Global Government Bond Trust ..... 801,544 845,379 771,716
Capital Growth Bond Trust ........ 109,281 N/A N/A
Investment Quality Bond Trust .... 362,694 334,303 276,246
U.S. Government Securities Trust . 473,424 473,786 442,603
Money Market Trust ............... 319,605 237,108 197,786
Lifestyle Aggressive 1000 Trust .. N/A N/A N/A
Lifestyle Growth 820 Trust ....... N/A N/A N/A
Lifestyle Balanced 640 Trust ..... N/A N/A N/A
</TABLE>
28
<PAGE> 91
<TABLE>
<CAPTION>
PORTFOLIO 1997 1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Lifestyle Moderate 460 Trust ..... N/A N/A N/A
Lifestyle Conservative 280 Trust . N/A N/A N/A
</TABLE>
(1) For the period March 4, 1996 (commencement of operations) to December 31,
1996.
(2) For the period October 1, 1997 (commencement of operations) to December 31,
1997.
(3) For the period July 15, 1996 (commencement of operations) to December 31,
1996.
(4) For the period January 9, 1995 (commencement of operations) to December 31,
1995.
+ Of this amount, $211,934 was paid by SBAM to SBAM Limited under the
Subadvisory Consulting Agreement
++ Of this amount, $131,977 was paid by SBAM to SBAM Limited under the
Subadvisory Consulting Agreement.
+++ Of this amount, $63,231 was paid by SBAM to SBAM Limited under the
Subadvisory Consulting Agreement.
Subject to the expense limitations discussed above, the Trust is
responsible for the payment of all expenses of its organization, operations and
business, except those which the Adviser or Subadvisers have agreed to pay
pursuant to the Advisory or Subadvisory Agreements. Expenses borne by the Trust
include charges and expenses of the custodian, independent accountants and
transfer, bookkeeping and dividend disbursing agent appointed by the Trust;
brokers' commissions and issue and transfer taxes on securities transactions to
which the Trust is a party; taxes and fees payable by the Trust; and legal fees
and expenses in connection with the affairs of the Trust, including registering
and qualifying its shares with regulatory authorities and in connection with any
litigation.
The Advisory Agreement and each Subadvisory Agreement will continue in
effect as to a portfolio for a period no more than two years from the date of
its execution or the execution of an amendment making the agreement applicable
to that portfolio only so long as such continuance is specifically approved at
least annually either by the Trustees or by the vote of a majority of the
outstanding voting securities of the Trust, provided that in either event such
continuance shall also be approved by the vote of the majority of the Trustees
who are not interested persons of any party to the Agreements, cast in person at
a meeting called for the purpose of voting on such approval. The required
shareholder approval of any continuance of any of the Agreements shall be
effective with respect to any portfolio if a majority of the outstanding voting
securities of the series of shares of beneficial interest of that portfolio vote
to approve such continuance, notwithstanding that such continuance may not have
been approved by a majority of the outstanding voting securities of (i) any
other portfolio affected by the Agreement or (ii) all of the portfolios of the
Trust.
If the holders of any series of shares of beneficial interest of any
portfolio fail to approve any continuance of the Advisory Agreement or the
Subadvisory Agreement, the Adviser or Subadviser (including SBAM Limited) may
continue to act as investment adviser or subadviser with respect to such
portfolio pending the required approval of the continuance of such Agreement, of
a new contract with the Adviser or Subadviser or different adviser or
subadviser, or other definitive action. In the case of the Adviser, the
compensation received in respect of such a portfolio during such period will be
no more than its actual costs incurred in furnishing investment advisory and
management services to such portfolio or the amount it would have received under
the Advisory Agreement in respect of such portfolio, whichever is less. In the
case of the Subadvisers, the compensation received in respect of such a
portfolio during such period will be no more than that permitted by Rule 15a-4
under the 1940 Act.
The Advisory Agreement and the Subadvisory Agreements may be terminated at
any time without the payment of any penalty on 60 days' written notice to the
other party or parties to the Agreements, and to the Trust in the case of the
Subadvisory Agreements, (i) by the Trustees of the Trust; (ii) by the vote of a
majority of the outstanding voting securities of the Trust, or with respect to
any portfolio, by the vote of a majority of the outstanding voting securities of
the series of shares of beneficial interest of such portfolio; and (iii) by the
Adviser, and in the case of the Subadvisory Agreements, by the respective
Subadvisers. The Agreements will automatically terminate in the event of their
assignment.
The Advisory Agreement may be amended by the Trust and the Adviser and the
Subadvisory Agreements by the Adviser and respective Subadvisers provided such
amendment is specifically approved by the vote of a majority of the outstanding
voting securities of the Trust (except as noted below) and by the vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust, the Adviser or the applicable Subadviser (including SBAM Limited) cast in
person at a
29
<PAGE> 92
meeting called for the purpose of voting on such approval. The required
shareholder approval of any amendment shall be effective with respect to any
portfolio if a majority of the outstanding voting securities of that portfolio
vote to approve the amendment, notwithstanding that the amendment may not have
been approved by a majority of the outstanding voting securities of (i) any
other portfolio affected by the amendment or (ii) all the portfolios of the
Trust. As noted under "Subadvisory Arrangements" in the Prospectus, the Trust
has received an order from the Securities and Exchange Commission permitting the
Adviser to appoint a subadviser (other than an Affiliated Subadviser) or change
a subadvisory fee (other than for an Affiliated Subadviser) pursuant to an
agreement that is not approved by shareholders.
AGREEMENT WITH PRIOR SUBADVISER
The Conservative, Moderate and Aggressive Asset Allocation Trusts for
which Sass Investors acted as Subadviser up until December 13, 1991, and the
Bond Trust (now Investment Quality Bond Trust) for which Sass Investors acted as
Subadviser up until April 23, 1991, acquired certain taxable revenue bonds, the
value of which has declined substantially due to the default of the bonds caused
by the Conservatorship of Executive Life Insurance Company. The Trust retained
legal counsel to advise it as to any potential claims it may have arising out of
its purchase of such bonds. On the basis of the advice received and, to avoid
any prejudice resulting from the passage of time, the Trust has sought to obtain
agreements from certain persons which would toll the running of statutes of
limitations that might in time bar the assertion of any claims related to its
purchase of the bonds. In February 1991 the Trust entered into an agreement with
Sass Investors, its principals and affiliated companies concerning any claims
the Trust may have arising out of Sass Investors' performance under the Sass
Subadvisory Agreement in connection with the purchase or sale of the
aforementioned bonds. The parties agreed that the running of time under any
statute of limitations or by way of laches with respect to any claims or
defenses arising out of such purchase or sale would be tolled until thirty days
after termination of the agreement by either party giving written notice to the
other.
PORTFOLIO BROKERAGE
Pursuant to the Subadvisory Agreements, the Subadvisers are responsible
for placing all orders for the purchase and sale of portfolio securities of the
Trust. The Subadvisers have no formula for the distribution of the Trust's
brokerage business, their intention being to place orders for the purchase and
sale of securities with the primary objective of obtaining the most favorable
overall results for the Trust. The cost of securities transactions for each
portfolio will consist primarily of brokerage commissions or dealer or
underwriter spreads. Bonds and money market instruments are generally traded on
a net basis and do not normally involve either brokerage commissions or transfer
taxes.
Occasionally, securities may be purchased directly from the issuer. For
securities traded primarily in the over-the-counter market, the Subadvisers
will, where possible, deal directly with dealers who make a market in the
securities unless better prices and execution are available elsewhere. Such
dealers usually act as principals for their own account.
In selecting brokers or dealers through whom to effect transactions, the
Subadvisers will give consideration to a number of factors, including price,
dealer spread or commission, if any, the reliability, integrity and financial
condition of the broker-dealer, size of the transaction and difficulty of
execution. Consideration of these factors by a Subadviser, either in terms of a
particular transaction or the Subadviser's overall responsibilities with respect
to the Trust and any other accounts managed by the Subadviser, could result in
the Trust paying a commission or spread on a transaction that is in excess of
the amount of commission or spread another broker-dealer might have charged for
executing the same transaction. In selecting brokers and dealers, the
Subadvisers will also give consideration to the value and quality of any
research, statistical, quotation or valuation services provided by the broker or
dealer. In placing a purchase or sale order, a Subadviser may use a broker whose
commission in effecting the transaction is higher than that of some other broker
if the Subadviser determines in good faith that the amount of the higher
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker, viewed in terms of either the particular
transaction or the Subadviser's overall responsibilities with respect to the
Trust and any other accounts managed by the Subadviser. Brokerage and research
services provided by brokers and dealers include advice, either directly or
through publications or writings, as to the value of securities, the
advisability of purchasing or selling securities, the availability of securities
or purchasers or sellers of securities, and analyses and reports concerning
issuers, industries, securities, economic factors and trends and portfolio
strategy. Consistent with the foregoing considerations and the Rules of Fair
Practice of the NASD, sales of contracts for which the broker-dealer or an
affiliate thereof is responsible may be considered as a factor in the selection
of such brokers or dealers. A higher cost broker-dealer will not be selected,
however, solely on the basis of sales volume but will be selected in accordance
with the criteria set forth above.
30
<PAGE> 93
To the extent research services are used by the Subadvisers in rendering
investment advice to the Trust, such services would tend to reduce the
Subadvisers' expenses. However, the Subadvisers do not believe that an exact
dollar value can be assigned to these services. Research services received by
the Subadvisers from brokers or dealers executing transactions for the Trust
will be available also for the benefit of other portfolios managed by the
Subadvisers.
The Subadvisers manage a number of accounts other than the Trust's
portfolios. Although investment recommendations or determinations for the
Trust's portfolios will be made by the Subadvisers independently from the
investment recommendations and determinations made by them for any other
account, investments deemed appropriate for the Trust's portfolios by the
Subadvisers may also be deemed appropriate by them for other accounts, so that
the same security may be purchased or sold at or about the same time for both
the Trust's portfolios and other accounts. In such circumstances, the
Subadvisers may determine that orders for the purchase or sale of the same
security for the Trust's portfolios and one or more other accounts should be
combined, in which event the transactions will be priced and allocated in a
manner deemed by the Subadvisers to be equitable and in the best interests of
the Trust Portfolios and such other accounts. While in some instances combined
orders could adversely affect the price or volume of a security, the Trust
believes that its participation in such transactions on balance will produce
better overall results for the Trust.
For the years ended December 31, 1997, 1996 and 1995, the Trust paid
brokerage commissions in connection with portfolio transactions of $14,209.750,
$13,006,480 and $6,609,957, respectively, allocated among the portfolios as
follows:
<TABLE>
<CAPTION>
PORTFOLIO 1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets
Trust ............................. $ 148,339 N/A N/A
Science & Technology Trust ........ 71,708 N/A N/A
International Small Cap Trust ..... 420,472 $349,869(1) N/A
Emerging Growth Trust ............. 490,019 N/A N/A
Pilgrim Baxter Growth Trust ....... 73,688 N/A N/A
Small/Mid Cap Trust ............... 645,611 237,777(1) N/A
International Stock Trust ......... 424,132 N/A N/A
Worldwide Growth Trust ............ 73,362 N/A N/A
Global Equity Trust ............... 1,147,235 2,398,805 $2,684,254
Small Company Value Trust ......... 111,6732 N/A N/A
Equity Trust ...................... 5,018,862 4,407,265 861,497
Growth Trust ...................... 352,035 110,510(3) N/A
Quantitative Equity Trust ......... 307,370 N/A N/A
Equity-Index Trust ................ 266 N/A N/A
Blue Chip Growth Trust ............ 449,346 966,411 388,904
Real Estate Securities Trust ...... 736,968 N/A N/A
Value Trust ....................... 210,067 N/A N/A
International Growth and Income
Trust ............................. 700,640 871,203 374,962(4)
Growth and Income Trust ........... 1,129,311 1,084,722 697,618
Equity-Income Trust ............... 472,154 2,021,601 606,918
Balanced Trust .................... 588,464 N/A N/A
Aggressive Asset Allocation Trust . 214,279 177,940 286,517
High Yield Trust .................. N/A N/A N/A
Moderate Asset Allocation Trust ... 366,800 320,288 604,766
Conservative Asset Allocation Trust 56,949 60,089 104,521
Strategic Bond Trust .............. N/A N/A N/A
Global Government Bond Trust ...... N/A N/A N/A
Capital Growth Bond Trust ......... N/A N/A N/A
Investment Quality Bond Trust ..... N/A N/A N/A
U.S. Government Securities Trust .. N/A N/A N/A
Money Market Trust ................ N/A N/A N/A
Lifestyle Aggressive 1000 Trust ... N/A N/A N/A
Lifestyle Growth 820 Trust ........ N/A N/A N/A
</TABLE>
31
<PAGE> 94
<TABLE>
<CAPTION>
PORTFOLIO 1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Lifestyle Balanced 640 Trust ...... N/A N/A N/A
Lifestyle Moderate 460 Trust ...... N/A N/A N/A
Lifestyle Conservative 280 Trust .. N/A N/A N/A
</TABLE>
(1) For the period March 4, 1996 (commencement of operations) to December 31,
1996.
(2) For the period October 1, 1997 (commencement of operations) to December
31, 1997.
(3) For the period July 15, 1996 (commencement of operations) to
December 31, 1996.
(4) For the period January 9, 1995 (commencement of operations)
to December 31, 1995.
Goldman Sachs & Co., prior to October 1, 1996, was an affiliated broker of
the Equity-Income Trust due to the position of Goldman Sachs Asset Management as
subadviser to this Trust portfolio. Salomon Brothers Inc. is an affiliated
broker of the U.S. Government Securities and Strategic Bond Trusts due to the
position of SBAM as subadviser to these Trust portfolios. J.P. Morgan Securities
Inc. and J.P. Morgan Securities Ltd. are affiliated brokers of the International
Growth and Income Trust due to the position of J.P. Morgan Investment Management
Inc. as subadviser to this Trust portfolio. Dresdner Bank is an affiliated
broker of the Global Equity (prior to October 1, 1996) and Global Government
Bond Trusts due to the position of Oechsle International as subadviser to these
Trust portfolios. Fidelity Capital Markets is an affiliated broker of the Equity
and Asset Allocation Trusts due to the position of Fidelity Management Trust
Company as subadviser to these Trust portfolios. Morgan Stanley & Co.
Incorporated and Morgan Stanley International are affiliated brokers of the
Global Equity Trust (since October 1, 1996) due to the position of Morgan
Stanley as subadviser to this Trust portfolio. Fred Alger & Company is an
affiliated broker of the Small/Mid Cap Trust due to the position of Fred Alger
Management, Inc. as the subadviser to the Small/Mid Cap Trust.
For the period January 1, 1996 to September 30, 1996 and for the year
ended December 31, 1995, brokerage commissions were paid to GOLDMAN, SACHS & CO.
by the Equity-Income portfolio as follows:
<TABLE>
<CAPTION>
PERIOD ENDED DECEMBER 31, 1996
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity-Income Trust........... $75,615 3.74% 0.01%
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
Equity-Income Trust........... $63,836 10.52% 0.19%
</TABLE>
For the years ended December 31, 1997, 1996 and 1995, no brokerage
commissions were paid to SALOMON BROTHERS INC. by either the U.S. Government
Securities or Strategic Bond portfolios.
For the years ended December 31, 1997, 1996 and 1995, brokerage
commissions were paid to J.P. MORGAN SECURITIES by the International Growth and
Income portfolio as follows:
32
<PAGE> 95
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Growth and
Income Trust............... $516 0.07% 0.34%
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Growth and
Income Trust............... N/A N/A N/A
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Growth and
Income Trust............... $554* 0.15% 0.41%
</TABLE>
For the years ended December 31, 1997, 1996 and 1995, no brokerage
commissions were paid to DRESDNER BANK by either the Global Equity (prior to
October 1, 1996) or the Global Government Bond portfolios.
For the years ended December 31, 1997, 1996 and 1995, brokerage
commissions were paid to FIDELITY CAPITAL MARKETS by the Equity and Asset
Allocation portfolios as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Trust .......................$13,286 0.26% 0.08%
Aggressive Asset Allocation Trust .. N/A N/A N/A
Moderate Asset Allocation Trust .... N/A N/A N/A
Conservative Asset Allocation Trust N/A N/A N/A
</TABLE>
33
<PAGE> 96
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Trust ....................... N/A N/A N/A
Aggressive Asset Allocation Trust .. N/A N/A N/A
Moderate Asset Allocation Trust .... N/A N/A N/A
Conservative Asset Allocation Trust N/A N/A N/A
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Trust ...................... N/A N/A N/A
Aggressive Asset Allocation Trust . $3,240 1.13% 0.08%
Moderate Asset Allocation Trust ... 8,815 1.46% 0.07%
Conservative Asset Allocation Trust 1,920 1.84% 0.05%
</TABLE>
For the years ended December 31, 1997 and 1996, brokerage commissions were
paid to MORGAN STANLEY by the Global Equity portfolio as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Equity Trust........... $93,584 8.16% 0.28%
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Equity Trust........... $487,347 20.32% 0.02%
</TABLE>
For the year ended December 31, 1997 and the period March 4, 1996
(commencement of operations of the Small/Mid Cap Trust) to December 31, 1996,
brokerage commissions were paid to FRED ALGER & COMPANY as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Small/Mid Cap Trust........... $637,395 98.73% 0.19%
</TABLE>
34
<PAGE> 97
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
% of
aggregate
% of Portfolio's Brokerage $ amount of
Commissions Represented transactions
Portfolio Commissions for the period for the period
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Small/Mid Cap Trust........... $221,408 93.12% 0.02%
</TABLE>
PURCHASE AND REDEMPTION OF SHARES
The Trust will redeem all full and fractional portfolio shares for cash at
the net asset value per share of each portfolio. Payment for shares redeemed
will generally be made within seven days after receipt of a proper notice of
redemption. However, the Trust may suspend the right of redemption or postpone
the date of payment beyond seven days during any period when (a) trading on the
New York Stock Exchange is restricted, as determined by the Securities and
Exchange Commission, or such Exchange is closed for other than weekends and
holidays; (b) an emergency exists, as determined by the Commission, as a result
of which disposal by the Trust of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Trust fairly to
determine the value of its net assets; or (c) the Commission by order so permits
for the protection of security holders of the Trust.
DETERMINATION OF NET ASSET VALUE
The following supplements the discussion of the valuation of portfolio
assets set forth in the Prospectus under the caption "Purchase and Redemption of
Shares."
Securities held by the portfolios, except for debt instruments with
remaining maturities of 60 days or less, all debt instruments held by the Money
Market Trust and shares of the Underlying Portfolios held by the Lifestyle
Trusts, will be valued as follows: securities which are traded on stock
exchanges (including securities traded in both the over-the-counter market and
on an exchange) are valued at the last sales price as of the close of the
regularly scheduled trading of the New York Stock Exchange on the day the
securities are being valued, or, lacking any sales, at the closing bid prices.
Securities traded only in the over-the-counter market are valued at the last bid
prices quoted by brokers that make markets in the securities at the close of
trading on the New York Stock Exchange. Securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the Trustees. Shares of the Underlying
Portfolios held by the Lifestyle Trusts are valued at their net asset value as
described in the Prospectus under "Purchase and Redemption of Shares."
Generally, trading in non-U.S. securities, as well as U.S. Government
securities and money market instruments, is substantially completed each day at
various times prior to the close of the regularly scheduled trading of the New
York Stock Exchange. The values of such securities used in computing the net
asset value of a portfolio's shares are generally determined as of such times.
Occasionally, events which affect the values of such securities may occur
between the times at which they are generally determined and the close of the
New York Stock Exchange and would therefore not be reflected in the computation
of a portfolio's net asset value. For instance, if a fund with portfolio
securities primarily listed on foreign exchanges which trade on Saturdays or
other customary U.S. national business holidays, does not price on these days,
the portfolio will trade and the net asset value of the fund's redeemable
securities may be significantly affected on days when the investor has no access
to the fund. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value as
determined in good faith by the Subadvisers under procedures established and
regularly reviewed by the Trustees.
Debt instruments with a remaining maturity of 60 days or less held by each
of the portfolios other than the Money Market Trust, and all instruments held by
the Money Market Trust, will be valued on an amortized cost basis. Under this
method of valuation, the instrument is initially valued at cost (or in the case
of instruments initially valued at market value, at the market value on the day
before its remaining maturity is such that it qualifies for amortized cost
valuation); thereafter, the Trust assumes a constant proportionate amortization
in value until maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price that
would be received upon sale of the instrument.
35
<PAGE> 98
The Money Market Trust uses the amortized cost valuation method in
reliance upon Rule 2a-7 under the 1940 Act. As required by the Rule, the Money
Market Trust will maintain a dollar weighted average maturity of 90 days or
less. In addition, the Money Market Trust is permitted to purchase only
securities that the Trustees determine to present minimal credit risks and which
are at the time of purchase "eligible securities," as defined by the Rule.
Generally, eligible securities must be rated by a nationally recognized
statistical rating organization in one of the two highest rating categories for
short-term debt obligations or be of comparable quality. The Money Market Trust
will invest only in obligations that have remaining maturities of thirteen
months or less.
The Trustees have established procedures designed to stabilize, to the
extent reasonably possible, the Money Market Trust's price per share as computed
for the purpose of sales and redemptions at $10.00. Such procedures include a
direction to the Adviser to establish procedures which will allow for the
monitoring of the propriety of the continued use of amortized cost valuation to
maintain a constant net asset value of $10.00 per share. Such procedures include
a directive to the Adviser that requires that on determining net asset value per
share based upon available market quotations, the Money Market Trust shall value
weekly (a) all portfolio instruments for which market quotations are readily
available at market, and (b) all portfolio instruments for which market
quotations are not readily available or are not obtainable from a pricing
service, at their fair value as determined in good faith by the Trustees,
although the actual calculations may be made by persons acting pursuant to the
direction of the Trustees. If the fair value of a security needs to be
determined, the Subadviser will provide determinations, in accordance with
procedures and methods established by the Trustees of the Trust, of the fair
value of securities held by the Money Market Trust for which market quotations
are not readily available for purposes of enabling the Money Market Trust's
Custodian to calculate net asset value. The Adviser, with the Subadviser's
assistance, periodically (but no less frequently than annually) shall prepare a
written report to the Trustees verifying the accuracy of the pricing system or
estimate. A non-negotiable security which is not treated as an illiquid security
because it may be redeemed with the issuer, subject to a penalty for early
redemption, shall be assigned a value that takes into account the reduced amount
that would be received if it were currently liquidated. In the event that the
deviation from the amortized cost exceeds .50 of 1% or more or a difference of
$.05 per share in net asset value, the Adviser shall promptly call a special
meeting of the Trustees to determine what, if any, action should be initiated.
Where the Trustees believe the extent of any deviation from the Money Market
Trust's amortized cost price per share may result in material dilution or other
unfair results to investors or existing shareholders, they shall take such
action as they deem appropriate to eliminate or reduce to the extent reasonably
practical such dilution or unfair results. The actions that may be taken by the
Trustees include, but are not limited to: (a) redeeming shares in kind; (b)
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten the average portfolio maturity of the Money Market Trust;
(c) withholding or reducing dividends;(d) utilizing a net asset value per share
based on available market quotations; (e)investing all cash in instruments with
a maturity on the next business day. The Money Market Trust may also reduce the
number of shares outstanding by redeeming proportionately from shareholders,
without the payment of any monetary compensation, such number of full and
fractional shares as is necessary to maintain the net asset value at $10.00 per
share. Any such redemption will be treated as a negative dividend for purposes
of the Net Investment Factor under the contracts issued by Manulife North
America.
PERFORMANCE DATA
Each of the portfolios may quote total return figures in its advertising
and sales materials. Such figures will always include the average annual total
return for recent one year and, when applicable, five and ten year periods and
where less than five or ten years, the period since the portfolio, including its
predecessor prior to the reorganization of the Fund on December 31, 1988, became
available for investment. In the case of the Pacific Rim Emerging Markets, Real
Estate Securities, Quantitative Equity, Capital Growth Bond and Equity Index
Trusts, such quotations will be for periods that include the performance of the
predecessor portfolios of Manulife Series Fund, Inc. Where the period since
inception is less than one year, the total return quoted will be the aggregate
return for the period. The average annual total return is the average annual
compounded rate of return that equates the initial amount invested to the market
value of such investment on the last day of the period for which such return is
calculated. For purposes of the calculation it is assumed that an initial
payment of $1,000 is made on the first day of the period for which the return is
calculated and that all dividends and distributions are reinvested at the net
asset value on the reinvestment dates during the period. All recurring fees such
as advisory fees charged to the Trust and all Trust expenses are reflected in
the calculations. There are no non-recurring fees such as sales loads, surrender
charges or account fees charged by the Trust. If the period since inception is
less than one year, the figures will be based on an aggregate total return
rather than an average annual total return.
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<PAGE> 99
<TABLE>
<CAPTION>
TOTAL ANNUALIZED RETURN
- -------------------------------------------------------------------------------------------------------------
Trust One Year Ended Five Year Ended Since Inception or 10 Years, Date first
12/31/97 12/31/97 whichever is shorter through Available
12/31/97
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging
Markets# -34.12% N/A -8.01% 10/04/94
Science and Technology N/A N/A 10.71% 01/01/97
International Small Cap 0.79% N/A 5.40% 03/04/96
Emerging Growth N/A N/A 18.23% 01/01/97
Pilgrim Baxter Growth N/A N/A 0.00% 01/01/97
Small/Mid Cap 15.26% N/A 12.17% 03/04/96
International Stock N/A N/A 1.38% 01/01/97
Worldwide Growth N/A N/A 13.29% 01/01/97
Global Equity 20.80% 14.64% 9.77% 03/18/88
Small Company Value Trust N/A N/A -4.48% 10/01/97
Equity 19.25% 18.80% 15.14%** 06/18/85
Growth 25.35% N/A 25.03% 07/15/96
Quantitative Equity # 29.83% 16.54% 15.12%** 04/30/87
Equity Index # 33.53% N/A 25.56% 02/14/96
Blue Chip Growth 26.94% 13.12% 12.81% 12/11/92
Real Estate Securities # 18.41% 15.97% 15.88%** 04/30/87
Value N/A N/A 22.14% 01/01/97
International Growth and
Income -0.08% N/A 6.43% 01/09/95
Growth and Income 32.83% 18.90% 17.27% 04/23/91
Equity-Income 29.71% N/A 17.79% 02/19/93
Balanced N/A N/A 17.79% 01/01/97
Aggressive. Asset
Allocation 19.09% 12.60% 9.87% 08/03/89
High Yield N/A N/A 12.68% 01/01/97
Moderate Asset Allocation 15.87% 10.74% 8.95% 08/03/89
Conservative Asset
Allocation 11.44% 8.55% 7.72% 08/03/89
Strategic Bond 10.98% N/A 9.46% 02/19/93
Global Government Bond 2.95% 9.95% 8.88% 03/18/88
Capital Growth Bond # 8.72% 7.19% 8.53%** 06/26/84
Investment Quality Bond 9.75% 7.13% 5.75%** 06/18/85
</TABLE>
37
<PAGE> 100
<TABLE>
<CAPTION>
TOTAL ANNUALIZED RETURN
- -------------------------------------------------------------------------------------------------------------
Trust One Year Ended Five Year Ended Since Inception or 10 Years, Date first
12/31/97 12/31/97 whichever is shorter through Available
12/31/97
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Securities 8.47% 6.62% 7.24% 03/18/88
Money Market# 5.15% 4.47% 5.45%** 06/18/85
Lifestyle Aggressive 1000 N/A N/A 10.89% 01/07/97
Lifestyle Growth 820 N/A N/A 13.84% 01/07/97
Lifestyle Balanced 640 N/A N/A 14.11% 01/07/97
Lifestyle Moderate 460 N/A N/A 13.70% 01/07/97
Lifestyle Conservative 280 N/A N/A 12.15% 01/07/97
</TABLE>
* Aggregate total return from October 1, 1997 (inception date) to December 31,
1997.
** 10 Years
# Performance presented for these Trust portfolios is based upon the performance
of their respective predecessor Manulife Series Fund, Inc. portfolios for
periods prior to the consummation of the reorganization effective December 31,
1996. Performance presented for each of these Trust portfolios is based on the
historical expenses and performance of its predecessor Manulife Series Fund,
Inc. portfolio and, therefore, does not reflect for periods prior to December
31, 1996, the current Trust expenses that an investor would incur as a holder of
shares of such Trust portfolio.
The Trust may also from time to time include in advertising and sales
literature the following: 1) information regarding its portfolio subadvisers,
such as information regarding a subadvisers specific investment expertise,
client base, assets under management or other relevant information; 2)
quotations about the Trust, its portfolios or its investment subadvisers that
appear in various publications and media; and 3) general discussions of economic
theories, including but not limited to discussions of how demographics and
political trends may effect future financial markets, as well as market or other
relevant information.
ORGANIZATION OF THE TRUST
SHARES OF THE TRUST
The Declaration of Trust authorizes the Trustees of the Trust to issue an
unlimited number of full and fractional shares of beneficial interest having a
par value of $.01 per share, to divide such shares into an unlimited number of
series of shares and to designate the relative rights and preferences thereof,
all without shareholder approval. The Trust currently has thirty-six series of
shares as described in the Prospectus. The shares of each portfolio, when issued
and paid for, will be fully paid and non-assessable and will have no preemptive
or conversion rights. Holders of shares of any portfolio are entitled to redeem
their shares as set forth under "Purchase and Redemption of Shares." The Trust
reserves the right to later issue additional series of shares or separate
classes of existing series of shares without the consent of outstanding
shareholders.
Each issued and outstanding share is entitled to participate equally in
dividends and distributions declared by the respective portfolio and upon
liquidation in the net assets of such portfolio remaining after satisfaction of
outstanding liabilities. For these purposes and for purposes of determining the
sale and redemption prices of shares, any assets which are not clearly allocable
to a particular portfolio will be allocated in the manner determined by the
Trustees. Accrued liabilities which are not clearly allocable to one or more
portfolios will also be allocated among the portfolios in the manner determined
by the Trustees.
Shareholders of each portfolio of the Trust are entitled to one vote for
each full share held (and fractional votes for fractional shares held)
irrespective of the relative net asset values of the shares of the portfolio.
All shares entitled to vote are voted by series, except that when voting for the
election of Trustees and when otherwise permitted by the 1940 Act, shares are
voted in the aggregate and not by series. Only shares of a particular portfolio
are entitled to vote on matters determined by the
38
<PAGE> 101
Trustees to affect only the interests of that portfolio. Pursuant to the 1940
Act and the rules and regulations thereunder, certain matters approved by a vote
of a majority of all the shareholders of the Trust may not be binding on a
portfolio whose shareholders have not approved such matter. There will normally
be no meetings of shareholders for the purpose of electing Trustees unless and
until less than a majority of the Trustees holding office has been elected by
shareholders, at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees. Holders of not less than
two-thirds of the outstanding shares of the Trust may remove a Trustee by a vote
cast in person or by proxy at a meeting called for such purpose. Shares of the
Trust do not have cumulative voting rights, which means that the holders of more
than 50% of the Trust's shares voting for the election of Trustees can elect all
of the Trustees if they so choose. In such event, the holders of the remaining
shares would not be able to elect any Trustees.
Under Massachusetts law, shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust. The
Declaration of Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trustees or any officer of the Trust. The Declaration of Trust provides for
indemnification out of the property of a Trust portfolio for all losses and
expenses of any shareholder held personally liable for the obligations of such
portfolio. The Declaration of Trust also provides that the Trust shall, upon
request, assume the defense of any claim made against any shareholder for any
act or obligation of the Trust and satisfy any judgment thereon, but only out of
the property of a particular portfolio. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which a particular portfolio would be unable to meet its
obligations.
PRINCIPAL HOLDERS OF SECURITIES
The Trust currently has four shareholders: Manulife North America, The
Manufacturers Life Insurance Company of New York, The Manufacturers Life
Insurance Company of America ("Manufacturers America") and The Manufacturers
Life Insurance Company (U.S.A.). Each shareholder holds Trust shares
attributable to variable and variable life contracts in their separate accounts.
Each shareholder will solicit voting instructions from such variable and
variable life contract owners and vote all shares held in proportion to the
instructions received.
Reflecting the conditions of section 817(h) and other provisions of the
Code and regulations thereunder, the By-laws of the Trust provide that shares of
the Trust may be purchased only by the following eligible shareholders: (a)
separate accounts of Manulife North America or of other insurance companies; (b)
Manulife North America; (c) MSS; (d) any corporation related in a manner
specified in section 267(b) of the Code to Manulife North America or to MSS, and
(e) any trustee of a qualified pension or retirement plan. As a matter of
operating policy, shares of the Trust may be purchased only by the eligible
shareholders of categories (a), (b) and (d).
ADDITIONAL INFORMATION CONCERNING TAXES
The following discussion is a general and abbreviated summary of certain
additional tax considerations affecting a portfolio and its shareholders. No
attempt is made to present a detailed explanation of all Federal, state, local
and foreign tax concerns, and the discussions set forth here and in the
Prospectus do not constitute tax advice. Investors are urged to consult their
own tax advisors with specific questions relating to Federal, state and local or
foreign taxes.
The Trust believes that each portfolio will qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As a result of qualifying as a regulated investment
company, each portfolio will not be subject to U.S. Federal income tax on its
net investment income (i.e., its investment company taxable income, as that term
is defined in the Code, determined without regard to the deduction for dividends
paid) and net capital gain (i.e., the excess of its net realized long-term
capital gain over its net realized short-term capital loss), if any, that it
distributes to its shareholders in each taxable year, provided that it
distributes to its shareholders at least 90% of its net investment income for
such taxable year.
A portfolio will be subject to a non-deductible 4% excise tax to the
extent that the portfolio does not distribute by the end of each calendar year
(a) at least 98% of its ordinary income for the calendar year; (b) at least 98%
of its capital gain net income for the one-year period ending, as a general
rule, on October 31 of each year; and (c) 100% of the undistributed ordinary
income and capital gain net income from the preceding calendar years (if any)
pursuant to the
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<PAGE> 102
calculations in (a) and (b). For this purpose, any income or gain retained by a
portfolio that is subject to corporate tax will be considered to have been
distributed by year-end. Each portfolio intends to make sufficient distributions
to avoid imposition of both the corporate level tax and the excise tax.
A portfolio may make investments that produce income that is not matched
by a corresponding cash distribution to the portfolio, such as investments in
pay-in-kind bonds or in obligations such as certain Brady Bonds and zero-coupon
securities having original issue discount (i.e., an amount in excess of the
stated redemption price of the security at maturity over its issue price), or
market discount (i.e., an amount equal to the excess of the stated redemption
price at maturity of the security over its basis immediately after it was
acquired) if the portfolio elects to accrue market discount on a current basis.
In addition, income may continue to accrue for Federal income tax purposes with
respect to a non-performing investment. Any such income would be treated as
income earned by a portfolio and therefore would be subject to the distribution
requirements of the Code. Because such income may not be matched by a
corresponding cash distribution to a portfolio, such portfolio may be required
to borrow money or dispose of other securities to be able to make distributions
to its investors. In addition, if an election is not made to currently accrue
market discount with respect to a market discount bond, all or a portion of any
deduction for any interest expense incurred to purchase or hold such bond may be
deferred until such bond is sold or otherwise disposed.
Certain of the portfolios may engage in hedging or derivatives
transactions involving foreign currencies, forward contracts, options and
futures contracts (including options, futures and forward contracts on foreign
currencies) and short- sales (see "HEDGING AND OTHER STRATEGIC TRANSACTIONS").
Such transactions will be subject to special provisions of the Code that, among
other things, may affect the character of gains and losses realized by a
portfolio (that is, may affect whether gains or losses are ordinary or capital),
accelerate recognition of income of a portfolio and defer recognition of certain
of the portfolio's losses. These rules could therefore affect the character,
amount and timing of distributions to shareholders. In addition, these
provisions (1) will require a portfolio to "mark-to-market" certain types of
positions in its portfolio (that is, treat them as if they were closed out) and
(2) may cause a portfolio to recognize income without receiving cash with which
to pay dividends or make distributions in amounts necessary to satisfy the
distribution requirement and avoid the 4% excise tax. Each portfolio intends to
monitor its transactions, will make the appropriate tax elections and will make
the appropriate entries in its books and records when it acquires any option,
futures contract, forward contract or hedged investment in order to mitigate the
effect of these rules.
If a portfolio purchases shares in a "passive foreign investment company"
(a "PFIC"), the portfolio may be subject to U.S. Federal income tax on a portion
of any "excess distribution" or gain from the disposition of such shares even if
such income is distributed as a taxable dividend by the portfolio to its
shareholders. Additional charges in the nature of interest may be imposed on the
portfolio in respect of deferred taxes arising from such distributions or gains.
If a portfolio were to invest in a PFIC and elected to treat the PFIC as a
"qualified electing fund" under the Code, in lieu of the foregoing requirements,
the portfolio would be required to include in income each year a portion of the
ordinary earnings and net capital gain of the qualified electing fund, even if
not distributed to the portfolio. Alternatively, under recently enacted
legislation, a portfolio can elect to mark-to-market at the end of each taxable
year its shares in a PFIC; in this case, the portfolio would recognize as
ordinary income any increase in the value of such shares, and as ordinary loss
any decrease in such value to the extent it did not exceed prior increases
included in income. Under either election, a portfolio might be required to
recognize in a year income in excess of its distributions from PFICs and its
proceeds from dispositions of PFIC stock during that year, and such income would
nevertheless be subject to the distribution requirements and would be taken into
account for purposes of the 4% excise tax.
Since the portfolios' shareholders are the separate accounts of insurance
companies, no discussion is included herein as to the U.S. Federal income tax
consequences to the holder of a variable annuity or life insurance contract who
allocates investments to a portfolio. For information concerning the U.S.
Federal income tax consequences to such holders, see the prospectus for such
contract. Holders of variable annuity or life insurance contracts should consult
their tax advisors about the application of the provisions of the tax law
described in this Statement of Additional Information in light of their
particular tax situations.
40
<PAGE> 103
REPORTS TO SHAREHOLDERS
The financial statements of the Trust at December 31, 1997 are
incorporated herein by reference from its annual report to shareholders filed
with the Securities and Exchange Commission pursuant to Section 30(b) of the
1940 Act and Rule 30b2-1.
INDEPENDENT ACCOUNTANTS
The financial statements of the Trust at December 31, 1997, including the
related Financial Highlights which appear in the Prospectus, have been audited
by Coopers & Lybrand L.L.P., independent accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon said
report given on the authority of said firm as experts in accounting and
auditing. Coopers & Lybrand has offices at One Post Office Square, Boston, MA
02109.
LEGAL COUNSEL
Messrs. Jones & Blouch L.L.P., 1025 Thomas Jefferson Street, N.W.,
Washington, DC 20007, have passed upon certain legal matters relating to the
Federal securities laws.
ADDITIONAL INFORMATION REGARDING SUBADVISERS
ROSENBERG INSTITUTIONAL EQUITY MANAGEMENT
INVESTMENT PHILOSOPHY. Rosenberg believes that stock prices do not
perfectly reflect the "fundamental value" of companies but rather the market's
assessment of how well the company is positioned to generate future earnings
and/or future cash flow. Rosenberg identifies and purchases those stocks which
are undervalued (i.e., stocks which are currently cheaper than similar stocks
with the same characteristics.) Rosenberg believes that the market will over
time recognize the "better value" and that the mispricing will be corrected as
the stocks in the Small Company Value Trust are purchased by other investors.
In determining whether or not a stock is attractive, Rosenberg considers
the company's current estimated fundamental value as determined by Rosenberg's
proprietary appraisal model, the company's future earnings, and investor
sentiment toward the stock. The Small Company Value Trust is composed of
undervalued stocks from every sector represented in the benchmark (currently,
the Russell 2000 Index).
STOCK SELECTION. Fundamental valuation of stocks is key to Rosenberg's
investment process, and the heart of the valuation process lies in Rosenberg's
proprietary appraisal model.
An important feature of the appraisal model is the classification of
companies into one or more of 166 groups of "similar" businesses. Each company
is broken down into its individual business segments, and each segment is
compared with similar business operations of other companies. Rosenberg
appraises the company's assets, operating earnings and sales within each
business segment, accepting the market's valuation of that category of business
as fair. Rosenberg then integrates the segment appraisals into balance sheet,
income statement, and sales valuation models for the total company, and
simultaneously adjusts the segment appraisals to include appraisals for
variables which are declared only for the total company, such as taxes, capital
structure, and pension funding.
The difference between Rosenberg's appraisal and the market price is
believed to represent an opportunity for profit. For each stock, Rosenberg
develops "appraisal alphas" (i.e., the expected rate of extraordinary return) by
adjusting for the rate at which the market has corrected for such valuations in
the past.
A second sphere of analysis is captured by Rosenberg's proprietary
earnings change model, which analyzes more than 20 variables to predict
individual company earnings over a one year horizon. The value of the projected
earnings change is converted to an "earnings change alpha" by multiplying the
projected change by the market's historical response to changes of that
magnitude.
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<PAGE> 104
Finally, Rosenberg's proprietary investor sentiment model quantifies
investor sentiment about features of stocks which influence price. This model
measures company quality and also captures market enthusiasm towards individual
stocks by looking at broker recommendations and analyst estimates. Investor
sentiment alphas are developed by multiplying the model's sentiment scores by
the market's historical response to such scores.
Each company's earnings change alpha and investor sentiment alpha is added
to its appraisal alpha to arrive at a total company alpha. Stocks with large
positive total company alphas are candidates for purchase. Stocks held in a
portfolio with total company alphas that are only slightly positive, zero or
negative are candidates for sale.
Before trading, Rosenberg systematically analyzes the short-term price
behavior of individual stocks to determine the timing of trades. Rosenberg
develops a "trading alpha" for each stock (i.e., the expected short-term
extraordinary return) which is designed to enable the Small Company Value Trust
to purchase stocks from supply and to sell stocks into demand, greatly reducing
trading costs.
OPTIMIZATION. Rosenberg's portfolio optimization system seeks to optimize
the trade-off between risk and reward relative to the benchmark. It exploits the
information developed by Rosenberg's stock selection models to maximize return
relative to the benchmark. The optimizer recommends positions in companies which
in aggregate constitute the most efficient portfolio. The optimizer
simultaneously considers total company alphas, trading alphas, and risk and
quantifies the expected "net benefit" to the portfolio of each recommended
transaction. A stock is considered for sale when a higher alpha stock with
complementary risk characteristics has been identified. In the U.S. markets,
portfolios are reoptimized continuously throughout the day, allowing Rosenberg
to respond immediately to investment opportunities, subject to certain
limitations on short-term trading applicable by virtue of the Small Company
Value Trust's intention to qualify as a regulated investment company under the
Code.
TRADING. Rosenberg's trading system aggregates the recommended transaction
for the Small Company Value Trust and determines the feasibility of each
recommendation in light of the stock's liquidity, the expected transaction
costs, and general market conditions. Trades are executed through any one of
four trading strategies: traditional brokerage, networks, accommodation, and
package or "basket" trades designed to facilitate large volume trading with
little or no price disturbance.
Rosenberg continuously monitors trading costs to determine the impact of
commission and price disturbance on the Small Company Value Trust.
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<PAGE> 105
Pro Forma Financial Statements
<PAGE> 106
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES-DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL INVESTMENT
GROWTH BOND QUALITY BOND PRO FORMA PRO FORMA
ASSETS TRUST TRUST ADJUSTMENTS COMBINED
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investments in securities, at value (Includes a
repurchase agreement of $8,461,000 in the
Capital Growth Bond Trust)
(See accompanying portfolio of investments) ......... $ 56,164,078 $ 233,996,126 $ 290,160,204
Cash .................................................. -- 839 839
Receivables:
Fund shares sold ............................... 6,224 77,769 83,993
Dividends and interest ......................... 781,411 3,412,921 4,194,332
Other assets .......................................... 124 428 552
------------- ------------- -------------
Total assets ............................... 56,951,837 237,488,083 294,439,920
============= ============= =============
LIABILITIES
Payables:
Investments purchased .......................... -- 286,633 286,633
Fund shares redeemed ........................... 94,754 -- 94,754
Dividend and interest withholding tax .......... -- 773 773
Custodian fee .................................. 2,634 5,871 8,505
Securities lending ............................. 2,860,600 48,636,883 51,497,483
Other accrued expenses ......................... 3,904 12,980 16,884
------------- ------------- -------------
Total liabilities .......................... 2,961,892 48,943,140 51,905,032
------------- ------------- -------------
NET ASSETS ............................................ $ 53,989,945 $ 188,544,943 $ 242,534,888
============= ============= =============
Net assets consist of:
Undistributed net investment income
(Note 2) ..................................... $ 3,103,100 $ 11,620,376 $ 14,723,476
Accumulated undistributed net realized
loss on investments .......................... (857,064) (3,114,002) (3,971,066)
Unrealized appreciation on investments ......... 1,690,900 3,710,810 5,401,710
Capital shares at par value of $.01 (Note 3) ... 45,580 155,492 ($1,070) (A) 200,002
Additional paid-in capital ..................... 50,007,429 176,172,267 1,070 (A) 226,180,766
------------- ------------- ----------- -------------
Net assets ............................... $ 53,989,945 $ 188,544,943 $ 242,534,888
============= ============= =============
Capital shares outstanding (Note 3) ................... 4,557,940 15,549,187 (106,996) (B) 20,000,131
------------- ------------- ----------- -------------
Net asset value, offering price and redemption price
per share ........................................... $ 11.85 $ 12.13 $ 12.13
============= ============= =============
Investments in securities, at identified cost (Note 2) $ 54,473,178 $ 230,285,316 $ 284,758,494
============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 107
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL INVESTMENT
GROWTH BOND QUALITY BOND PRO FORMA PRO FORMA
TRUST TRUST ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment Income:
Interest .............................. 3,304,323 $ 12,713,368 $ 16,017,691
Total income .................... 3,304,323 12,713,368 16,017,691
------------ ------------ ------------
Expenses:
Investment adviser fee ................ 315,701 1,047,782 1,363,483
Custodian fee ......................... 30,794 117,680 148,474
Audit and legal fees .................. 4,196 21,627 25,823
Registration and filing fees .......... 754 1,961 2,715
Trustee fees and expenses ............. 1,576 4,533 6,109
Miscellaneous ......................... 478 1,775 2,253
------------ ------------ ------------
Expenses before reimbursement
by investment adviser ............... 353,499 1,195,358 1,548,857
Reimbursement of expenses by
investment adviser .................. 110,604 -- $ (110,604) (C) --
------------ ------------ ------------ ------------
Net expenses .................... 242,895 1,195,358 110,604 (C) 1,548,857
------------ ------------ ------------ ------------
Net investment income ........... 3,061,428 11,518,010 (110,604) (C) 14,468,834
------------ ------------ ------------ ------------
Realized and unrealized gain on investments:
Net realized gain on investments ...... 48,206 560,958 609,164
Change in unrealized appreciation
on investments ...................... 1,026,927 3,072,046 4,098,973
------------ ------------ ------------
Net gain on investments .......... 1,075,133 3,633,004 4,708,137
------------ ------------ ------------
Net increase(decrease) in net assets resulting
from operations ............................ $ 4,136,561 $ 15,151,014 $ (110,604) (C) $ 19,176,971
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 108
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PREFERRED STOCKS - 0.09%
MINING - 0.09%
270 270 Fairfield Manufacturing, Incorporated $279,450 $279,450
------------ ------------
TOTAL PREFERRED STOCKS
(Cost: $279,450) $279,450 $279,450
------------ ------------
U.S. TREASURY OBLIGATIONS - 31.07%
U.S. TREASURY BONDS - 28.94%
$750,000 $750,000 6.375% due 08/15//27 $791,017 791,017
1,065,000 1,065,000 6.625% due 02/15/27 1,156,185 1,156,185
235,000 235,000 6.75% due 08/15/26 258,721 258,721
-----------
$3,100,000 3,100,000 7.50% due 11/15/16 3,618,289 3,618,289
1,500,000 1,500,000 9.25% due 02/15/16 2,035,305 2,035,305
3,100,000 3,100,000 11.625% due 11/15/04 4,114,754 4,114,754
20,000,000 20,000,000 11.875% due 11/15/03 26,015,600 26,015,600
31,200,000 31,200,000 12.00% due 08/15/13 45,971,328 45,971,328
------------ ------------
2,205,923 81,755,276 83,961,199
U.S. TREASURY NOTES - 2.13%
4,000,000 4,000,000 5.75% due 10/31/00 4,005,000 4,005,000
------------
1,000,000 1,000,000 6.125% due 08/15/07 1,027,660 1,027,660
360,000 360,000 6.375% due 05/15/99 363,319 363,319
750,000 750,000 7.25% due 05/15/04 809,415 809,415
----------- ------------
2,200,394 4,005,000 6,205,394
----------- ------------ ------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $88,489,277) $4,406,317 $85,760,276 $90,166,593
----------- ------------ ------------
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 8.17%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.36%
686,436 686,436 6.00% due 02/01/03 - 07/01/03 680,376 680,376
500,000 500,000 6.50% due 08/17/11 502,030 502,030
900,000 900,000 6.50% due 06/25/19, REMIC 906,462 906,462
3,716,307 3,716,307 7.00% due 06/01/23 - 01/01/26 3,762,878 3,762,878
972,480 972,480 7.50% due 06/01/10 - 04/01/11 1,000,164 1,000,164
------------ ------------
6,851,910 6,851,910
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 0.34%
1,000,000 1,000,000 5.90% due 10/25/19, REMIC 992,180 992,180
------------ ------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 5.47%
184,992 184,992 6.50% due 07/15/08 - 05/15/09 186,840 186,840
7,618,933 7,618,933 7.00% due 04/15/23 - 02/15/24 7,706,919 7,706,919
3,711,486 3,711,486 7.50% due 04/15/02 - 01/15/24 3,811,843 3,811,843
2,095,593 2,095,593 8.00% due 06/15/23 - 10/15/23 2,181,386 2,181,386
1,867,573 1,867,573 8.50% due 09/15/16 - 04/15/22 1,985,240 1,985,240
816 816 9.50% due 10/15/09 905 905
------------ ------------
15,873,133 15,873,133
------------ ------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost: $23,053,945) $23,717,223 $23,717,223
------------ ------------
</TABLE>
<PAGE> 109
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS - 1.04%
GOVERNMENT OF CANADA - 0.38
$1,000,000 $1,000,000 Province of Quebec, 8.80% due 04/15/03 $1,108,760 $1,108,760
-----------
REPUBLIC OF ARGENTINA - 0.66%
$1,800,000 1,800,000 11.00% due 10/09/06 $1,921,500 1,921,500
------------ ------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost:$3,082,094) $1,108,760 $1,921,500 $3,030,260
----------- ------------ ------------
CORPORATE BONDS - 33.65%
APPAREL & TEXTILES - 0.14%
Clark-Schwebel, Incorporated,
95,000 95,000 10.50% due 04/15/06 103,550 103,550
Collins & Aikman Products Company,
250,000 250,000 11.50% due 04/15/06 280,938 280,938
Pillowtex Corporation,
30,000 30,000 9.00% due 12/15/07 30,750 30,750
------------ ------------
415,238 415,238
AUTOMOBILES - 1.07%
Ford Motor Credit Corporation,
1,000,000 1,000,000 6.375% due 06/15/03 1,004,200 1,004,200
Chrysler Corporation,
2,000,000 2,000,000 7.45% due 02/01/97 2,114,380 2,114,380
----------- ------------
3,118,580 3,118,580
BANKING - 6.26%
BankAmerica Corporation,
1,475,000 1,475,000 9.625% due 02/13/01 1,611,216 1,611,216
Bank of New York, Incorporated
1,000,000 1,000,000 6.625% due 06/15/03 1,012,810 1,012,810
Bank of Nova Scotia Halifax,
1,000,000 1,000,000 9.00% due 10/01/99 1,046,530 1,046,530
BCH Cayman Islands, Ltd.
1,000,000 1,000,000 6.50% due 02/15/06 984,880 984,880
1,000,000 1,000,000 Citicorp, 7.125% due 06/01/03 1,038,210 1,038,210
1,300,000 1,300,000 Credit National, 7.00% due 11/14/05 1,306,500 1,306,500
Export-Import Bank of Korea,
1,550,000 1,550,000 6.375% due 02/15/06 1,106,018 1,106,018
First Financial Caribbean Corporation,
450,000 450,000 7.84% due 10/10/06 473,062 473,062
First Republic Bancorp,
825,000 825,000 7.75% due 09/15/12 843,777 843,777
Korea Development Bank,
715,000 715,000 7.125% due 09/17/01 599,342 599,342
National Westminster Bank PLC,
1,000,000 1,000,000 9.45% due 05/01/01 1,092,470 1,092,470
2,000,000 2,000,000 NBD Bancorp, 8.25% due 11/01/24 2,370,320 2,370,320
Norwest Corporation,
900,000 900,000 6.00% due 03/15/00 897,534 897,534
Republic New York Corporation,
1,000,000 1,000,000 9.50% due 04/15/14 1,271,700 1,271,700
----------- ------------
2,300,000 2,300,000 U.S. Bancorp, 7.50% due 06/01/26 2,486,530
------------
5,354,130 12,786,769 18,170,899
</TABLE>
<PAGE> 110
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BROADCASTING - 0.28%
Chancellor Broadcasting Company,
$225,000 $225,000 8.125% due 12/15/07 $220,219 $220,219
Granite Broadcasting Corporation,
275,000 275,000 10.375% due 05/15/05 288,062 288,062
Jacor Communications Company,
$60,000 $60,000 8.75% due 06/15/07 61,500 61,500
Young Broadcasting, Incorporated,
250,000 250,000 9.00% due 01/15/06 250,000 250,000
------------ ------------
819,781 819,781
BUSINESS SERVICES - 0.52%
International Lease Finance
1,500,000 1,500,000 Corporation, 7.50% due 03/01/99 1,521,855 1,521,855
------------ ------------
CHEMICALS - 0.15%
Huntsman Corporation,
135,000 135,000 9.50% due 07/01/07 141,750 141,750
Sovereign Specialty Chemicals,
35,000 35,000 9.50% due 08/01/07 35,963 35,963
Texas-Petro Chemical Corporation,
250,000 250,000 11.125% due 07/01/06 270,000 270,000
------------ ------------
447,713 447,713
COMPUTERS & BUSINESS EQUIPMENT - 0.41%
$1,000,000 1,000,000 GTE Corporation, 8.75% due 11/01/21 $1,197,820 1,197,820
----------- ------------
CONGLOMERATES - 0.34%
1,000,000 1,000,000 ITT Corporation, 6.25% due 11/15/00 983,300 983,300
----------- ------------
COSMETICS & TOILETRIES - 0.09%
Revlon Worldwide Corporation,
370,000 370,000 Series B, zero coupon due 03/15/01 258,075 258,075
------------ ------------
DRUGS & HEALTH CARE - 1.79%
Allegiance Corporation,
2,570,000 2,570,000 7.00% due 10/15/26 2,652,882 2,652,882
Columbia/HCA Healthcare Corporation,
1,000,000 1,000,000 8.70% due 02/10/10 1,078,130 1,078,130
-----------
Owens & Minor, Incorporated,
250,000 250,000 10.875% due 06/01/06 277,500 277,500
Tenet Healthcare Corporation,
850,000 850,000 7.875% due 01/15/03 860,625 860,625
Vencor, Incorporated,
335,000 335,000 8.625% due 07/15/07 334,163 334,163
------------ ------------
1,078,130 4,125,170 5,203,300
ELECTRIC UTILITIES - 1.64%
Baltimore Gas and Electric Company,
1,000,000 1,000,000 6.125% due 07/01/03 997,830 997,830
Cleveland Electric Illuminating
1,010,000 1,010,000 Company, 7.19% due 07/01/00 1,024,958
Duke Energy Company,
700,000 700,000 7.50% due 04/01/99 712,159
------------
Northern States Power Company
1,000,000 1,000,000 6.375% due 04/01/03 1,008,120 1,008,120
</TABLE>
<PAGE> 111
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ELECTRIC UTILITIES - CONTINUED
Pacific Gas & Electric Company
$1,000,000 $1,000,000 6.25% due 08/01/03 $1,002,710 $1,002,710
----------- ------------
3,008,660 $1,737,117 4,745,777
ELECTRONICS - 0.09%
Fairchild Semiconductor Corporation,
$250,000 250,000 10.125% due 03/15/07 262,500 262,500
------------ ------------
FINANCIAL SERVICES - 8.01%
American General Finance
1,270,000 1,270,000 Corporation, 8.00% due 02/15/05 1,313,663 1,313,663
900,000 900,000 Amerus Capital I, 8.85% due 02/01/27 959,526 959,526
Associates Corporation of North America,
300,000 300,000 9.125% due 04/01/00 318,327 318,327
Associates Corporation of North America,
1,000,000 1,000,000 6.125% due 02/01/98 999,980 999,980
BanPonce Financial Corporation,
2,150,000 2,150,000 6.75% due 08/09/01 2,170,790 2,170,790
Bear Stearns Capital Trust, Incorporated
1,000,000 1,000,000 7.00% due 01/15/27 1,012,858 1,012,858
350,000 350,000 Beneficial Corporation, 8.40% due 05/15/08 396,868
396,868
1,000,000 1,000,000 CEZ Finance BV, 7.125% due 07/15/07 989,890 989,890
CIT Group Holdings, Incorporated,
1,000,000 1,000,000 8.75% due 04/15/98 1,007,880 1,007,880
Commercial Credit Group, Incorporated,
1,000,000 1,000,000 7.375% due 04/15/05 1,055,060 1,055,060
Dime Capital Trust I,
1,200,000 1,200,000 9.33% due 05/06/27 1,357,392 1,357,392
Donaldson Lufkin and Jenrette, Incorporated
1,000,000 1,000,000 5.625% due 02/15/16 984,640 984,640
Fifth Third Capital Trust, Incorporated,
1,000,000 1,000,000 8.136% due 03/15/27 1,113,341 1,113,341
General Electric Capital Corporation,
600,000 600,000 8.88% due 06/18/03 681,348
Household Finance Corporation,
1,000,000 1,000,000 7.75% due 06/01/99 1,020,790 1,020,790
Japan Financial Corporation,
1,500,000 1,500,000 8.70% due 07/30/01 1,619,610
500,000 500,000 9.125% due 10/11/00 537,605
Pindo Deli Financial Mauritius, Ltd.,
100,000 100,000 10.75% due 10/01/07 86,000
Salomon, Incorporated,
1,000,000 1,000,000 5.75% due 03/31/98 999,410 999,410
Southern Company Capital Trust, Incorporated
1,000,000 1,000,000 8.19% due 02/01/37 1,057,140 1,057,140
-----------
Sun Canada Financial Company,
1,500,000 1,500,000 7.25% due 12/15/15 1,576,275 1,576,140
Tembec Finance Corporation,
240,000 240,000 9.875% due 09/30/05 244,800 244,800
U.S. West Capital Funding,
1,515,000 1,515,000 Incorporated, 6.95% due 01/15/37 1,560,556 1,560,556
Western Financial Savings,
200,000 200,000 8.875% due 08/01/07 192,472 192,472
------------ ------------
10,240,989 13,015,232 23,256,221
</TABLE>
<PAGE> 112
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FOOD & BEVERAGES - 0.05%
Del Monte Foods Company,
$275,000 $275,000 Step up to 12.50% due 12/15/07 $157,437 $157,437
------------ ------------
FUNERAL SERVICES - 0.35%
Service Corporation International,
$1,000,000 1,000,000 6.75% due 06/01/01 $1,011,650 1,011,650
----------- ------------
HOMEBUILDERS - 0.04%
Standard Pacific Corporation,
115,000 115,000 8.50% due 06/15/07 114,856 114,856
------------ ------------
HOUSEHOLD PRODUCTS - 0.44%
1,000,000 1,000,000 Proctor & Gamble Profit, Series A, 1,284,854 1,284,854
----------- ------------
9.36% due 01/01/21
INDUSTRIALS - 2.93%
Acindar Industria, Argentina,
75,000 75,000 11.25% due 02/15/04 73,875 73,875
Advanced Micro Devices,
275,000 275,000 Incorporated, 11.00% due 08/01/03 294,250 294,250
Cincinnati Milacron, Incorporated,
870,000 870,000 7.875% due 05/15/00 890,709 890,709
Concentric Network Corporation,
40,000 40,000 12.75% due 12/15/07 40,950 40,950
Decision Holdings Corporation,
85,000 85,000 Step up to 11.50% due 08/01/08 54,400 54,400
EchoStar DBS Corporation,
250,000 250,000 12.50% due 07/01/02 270,000 270,000
Elgin National Industries,
210,000 210,000 Incorporated, 11.00% due 11/01/07 217,875 217,875
GCI, Incorporated,
250,000 250,000 9.75% due 08/01/07 258,125 258,125
Globalstar L.P. Capital Corporation,
350,000 350,000 10.75% due 11/01/04 343,000 343,000
Grupo Industrial Durango,
300,000 300,000 12.625% due 08/01/03 335,250 335,250
Guitar Center Management,
120,000 120,000 11.00% due 07/01/06 133,800 133,800
Hylsa SA De CV,
205,000 205,000 9.25% due 09/15/07 200,900 200,900
International Wire Group,
150,000 150,000 Incorporated, 11.75% due 06/01/05 165,298 165,298
Iridium LLC/Capital Corporation,
370,000 370,000 11.25% due 07/15/05 364,450 364,450
JCAC, Incorporated,
100,000 100,000 10.125% due 06/15/06 108,750 108,750
Key Plastics, Incorporated,
95,000 95,000 10.25% due 03/15/07 100,700 100,700
LDM Technologies, Incorporated,
160,000 160,000 10.75% due 01/15/07 174,400 174,400
Moog, Incorporated,
150,000 150,000 10.00% due 05/01/06 165,000 165,000
</TABLE>
<PAGE> 113
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIALS - CONTINUED
Neenah Corporation,
$85,000 $85,000 11.125% due 05/01/07 $92,863 $92,863
News America Holdings,
1,800,000 1,800,000 Incorporated, 9.25% due 02/01/13 2,143,962 2,143,962
Park Ohio Industries,
210,000 210,000 Incorporated, 9.25% due 12/01/07 213,150 213,150
Pioneer Americas Acquisition
175,000 175,000 Corporation, 9.25% due 06/15/07 176,313 176,313
Repap New Brunswick, Incorporated,
275,000 275,000 10.625% due 04/15/05 261,250 261,250
Rifkin Acquisitions Partners LP,
150,000 150,000 11.125% due 01/15/06 164,625 164,625
Scotsman Group, Incorporated,
65,000 65,000 8.625% due 12/15/07 65,522 65,522
YPF Sociedad Anonima,
1,150,000 1,150,000 8.00% due 02/15/04 1,187,570 1,187,570
------------ ------------
8,496,987 8,496,987
INSURANCE - 1.62%
Jackson National Life Insurance
1,000,000 1,000,000 Company, 8.15% due 03/15/27 1,098,520 1,098,520
Ohio National Life Insurance
1,150,000 1,150,000 Company, 8.50% due 05/15/26 1,285,401 1,285,401
Security Benefit Life Company,
1,150,000 1,150,000 8.75% due 05/15/16 1,306,862 1,306,862
------------
Zurich Reinsurance Centre Holdings Incorporated
$1,000,000 1,000,000 7.125% due 10/15/23 $1,023,600 1,023,600
----------- ------------
1,023,600 3,690,783 4,714,383
LEISURE TIME - 0.26%
Argosy Gaming Company,
210,000 210,000 13.25% due 06/01/04 219,450 219,450
Hollywood Casino, Incorporated,
205,000 205,000 12.75% due 11/01/03 219,862 219,862
Plitt Theatres, Incorporated,
95,000 95,000 10.875% due 06/15/04 102,719 102,719
Riviera Holdings Corporation,
200,000 200,000 10.00% due 08/15/04 198,500 198,500
------------ ------------
740,531 740,531
METAL & METAL PRODUCTS - 0.04%
140,000 140,000 CSN Iron SA, 9.125% due 06/01/07 116,200 116,200
------------ ------------
NATURAL GAS - 0.35%
Columbia Gas Systems, Incorporated
1,000,000 1,000,000 7.05% due 11/28/07 1,021,490 1,021,490
----------- ------------
NEWSPAPERS - 0.38%
News America Holdings, Incorporated
1,000,000 1,000,000 8.50% due 02/15/05 1,096,610 1,096,610
----------- ------------
NON-BANK FINANCE - 0.38%
KFW International Financial, Incorporated,
1,000,000 1,000,000 9.125% due 05/15/01 1,090,080 1,090,080
------------ ------------
</TABLE>
<PAGE> 114
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PETROLEUM SERVICES - 1.38%
Cross Timbers Oil Company,
$55,000 $55,000 8.75% due 11/01/09 $56,100 $56,100
210,000 210,000 9.25% due 04/01/07 218,400 218,400
Energy Corporation of America,
200,000 200,000 Incorporated, 9.50% due 05/15/07 200,000 200,000
Newfield Exploration Company,
340,000 340,000 7.45% due 10/15/07 331,740 331,740
Petroliam Nasional BHD,
1,450,000 1,450,000 7.125% due 08/15/05 1,383,010 1,383,010
Petroleos Mexicanos,
370,000 370,000 8.85% due 09/15/07 366,300 366,300
Plains Resources, Incorporated,
350,000 350,000 10.25% due 03/15/06 377,125 377,125
------------
Ultramar Corporation,
$1,000,000 1,000,000 8.00% due 03/15/05 $1,082,340 1,082,340
----------- ------------
1,082,340 2,932,675 4,015,015
PUBLISHING - 0.07%
Sullivan Graphics, Incorporated,
210,000 210,000 12.75% due 08/01/05 212,100 212,100
------------ ------------
REAL ESTATE - 0.36%
MEPC Finance, Incorporated
1,000,000 1,000,000 7.50% due 05/01/03 1,044,770 1,044,770
----------- ------------
RETAIL TRADE - 0.74%
J. Crew Group, Incorporated,
135,000 135,000 Step up to 13.125% due 10/15/08 60,750 60,750
J.C. Penney Company, Incorporated,
1,900,000 1,900,000 7.40% due 04/01/37 2,081,545 2,081,545
------------ ------------
2,142,295 2,142,295
STEEL - 0.15%
AK Steel Corporation,
115,000 115,000 9.125% due 12/15/06 117,587 117,587
Silgan Holdings, Incorporated,
65,000 65,000 9.00% due 06/01/09 66,463 66,463
Weirton Steel Corporation,
250,000 250,000 11.375% due 07/01/04 260,000 260,000
------------ ------------
444,050 444,050
TELECOMMUNICATION SERVICES - 0.59%
Esprit Telecom Group PLC,
60,000 60,000 11.50% due 12/15/07 61,800 61,800
Tele-Communications, Incorporated,
1,500,000 1,500,000 9.25% due 04/15/02 1,646,505 1,646,505
------------ ------------
1,708,305 1,708,305
TELEPHONE - 1.77%
BellSouth Savings, ESOT
667,674 667,674 9.19% due 07/01/03 729,614 729,614
-----------
Benedek Communications,
215,000 215,000 Step up to 13.25% due 05/15/06 161,250 161,250
Clearnet Communications,
300,000 300,000 Step up to 14.75% due 12/15/05 236,250 236,250
Comcast Cable Communications,
1,000,000 1,000,000 8.50% due 05/01/27 1,174,860 1,174,860
</TABLE>
<PAGE> 115
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
TELEPHONE - CONTINUED
GST Telecommunications,
$210,000 $210,000 Incorporated, 12.75% due 11/15/07 $219,975 $219,975
Intermedia Communications,
250,000 250,000 Incorporated, 8.875% due 11/01/07 256,875 256,875
Lenfest Communications, Incorporated
200,000 200,000 8.375% due 11/01/05 205,500 205,500
MobileMedia Communications,
250,000 250,000 Incorporated, 9.375% due 11/01/07* 28,750 28,750
NEXTEL Communications, Incorporated,
660,000 660,000 Step up to 9.75% due 10/31/07 405,075 405,075
Teleport Communications Group,
270,000 270,000 Step up to 11.125% due 07/01/07 220,050 220,050
WorldCom, Incorporated,
1,450,000 1,450,000 7.55% due 04/01/04 1,518,426 1,518,426
------------ ------------
$729,614 4,427,011 5,156,625
TRANSPORTATION SERVICES - 0.32%
Iron Mountain, Incorporated,
75,000 75,000 8.75% due 09/30/09 76,875 76,875
Johnstown American Industries,
300,000 300,000 Incorporated, 11.75% due 08/15/05 327,000 327,000
Southern Railway Company,
470,000 470,000 8.75% due 10/15/03 526,353 526,353
------------ ------------
930,228 930,228
TRANSPORTATION EQUIPMENT - 0.25%
Argo-Tech Corporation,
300,000 300,000 8.625% due 10/01/07 300,750 300,750
Hayes Wheels International,
200,000 200,000 Incorporated, 11.00% due 07/15/06 223,000 223,000
K & F Industries, Incorporated,
55,000 55,000 9.25% due 10/15/07 56,375 56,375
Walbro Corporation,
150,000 150,000 9.875% due 07/15/05 152,250 152,250
------------ ------------
732,375 732,375
TOTAL CORPORATE BONDS
(Cost: $61,821,757) $34,301,353 $63,325,363 $97,626,716
----------- ------------ ------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.54%
Asset Securitization Corporation,
Series 1992-D5, Class A1B,
2,110,000 2,110,000 6.66% due 02/14/41 2,146,925 2,146,925
CS First Boston Mortgage Securities
Corporation, Series 1992-C2,
400,000 400,000 Class A2, 6.52% due 07/17/07 400,875 400,875
First Union-Lehman Brothers Commercial
Mortgage Trust II, Series 1997-C2,
1,915,000 1,915,000 Class A2, 6.60% due 05/18/07 1,915,000 1,915,000
------------ ------------
4,462,800 4,462,800
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (Cost: $4,451,145) $4,462,800 $4,462,800
------------ ------------
</TABLE>
<PAGE> 116
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
(SHOWING PERCENTAGES OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FIXED INCOME - OTHER - 2.35%
MISCELLANEOUS ASSET BACKED SECURITIES -
2.35% American Express Master Trust,
Series 1992, Class A,
$1,500,000 $1,500,000 6.60% due 05/15/00 $1,510,770 $1,510,770
Carco Auto Loan Master Trust, Series 1997-1,
$1,000,000 1,000,000 Class A, 6.689% due 08/15/04 $1,010,240 1,010,240
Discover Card Master Trust I, Series 1997-2,
1,000,000 1,000,000 Class A, 6.72% due 04/16/10 1,009,790 1,009,790
Mortgage Index Amortizing Trust, Series 1997-1,
1,000,000 1,000,000 Class A-1, 7.00% due 08/25/04 1,003,750 1,003,750
Premier Auto Trust, Series 1993, Class A2,
290,036 290,036 4.65% due 11/02/99 287,861 287,861
------------
Residential Funding Mortgage Securities,
1,000,000 1,000,000 Series 1996-S1, Class A12, 7.25% due 01/25/26 1,010,621 1,010,621
Residential Funding Mortgage Securities,
981,758 981,758 Series 1996-S3, Class A5, 7.25% due 01/25/26 991,647 991,647
----------- ------------
TOTAL FIXED INCOME - OTHER
(Cost: $6,751,834) $5,026,048 $1,798,631 $6,824,679
----------- ------------ ------------
SHORT TERM INVESTMENT - 17.74%
2,860,600 48,636,883 51,497,483 Navigator Securities
Lending Trust, 5.74% 2,860,600 48,636,883 51,497,483
----------- ------------ ------------
REPURCHASE AGREEMENT - 4.32%
4,094,000 4,094,000 Repurchase Agreement with Lehman Brothers 4,094,000 4,094,000
dated 12/31/97 at 6.57% to be repurchased at
$4,095,494 on 01/02/98, collateralized by
$11,080,000 U.S. Treasury Treasury Strip, zero
coupon due 11/15/13 (valued at $4,305,555,
including interest)
8,461,000 8,461,000 Repurchase Agreement with State Street Bank & 8,461,000 8,461,000
Trust Company dated 12/31/97 at 5.85% to be ----------- ------------
repurchased at $8,463,750 0n 01/02/98,
collateralized by $8,415,000 U.S. Treasury
Notes, 5.875% due 01/31/99 ( valued at
$8,840,554, including interest)
$ 8,461,000 $ 4,094,000 $ 12,555,000
----------- ------------ ------------
TOTAL INVESTMENTS
(Cost: $284,758,494) $56,164,078 $233,996,126 $290,160,204
=========== ============ ============
</TABLE>
<PAGE> 117
MANUFACTURERS INVESTMENT TRUST
NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. BASIS OF COMBINATION. The Pro Forma Combining Schedule of Portfolio
Investments, the Statement of Assets and Liabilities and the Statement of
Operations reflect the accounts of the Manufacturers Investment Trust Investment
Quality Bond ("Investment Quality Bond") and Capital Growth Bond ("Capital
Growth Bond") Trusts, two of thirty six investment Portfolios offered by the
Manufacturers Investment Trust (the "Trust") for the year ended December 31,
1997. These statements have been derived from the books and records of each
Portfolio utilized in calculating daily net asset value at December 31, 1997.
The Pro Forma statements reflect the proposed transfer of the assets and
liabilities of Capital Growth Bond in exchange for shares of Investment Quality
Bond. Under generally accepted accounting principles ("GAAP"), the Investment
Quality Bond will be the surviving entity for accounting purposes. The Pro Forma
financial statements have been adjusted to reflect the anticipated fee
arrangements for the surviving entity and do not reflect the expenses of either
Portfolio in carrying out its obligations under the Agreement and Plan of
Reorganization.
The Pro Forma Combining Schedule of Portfolio Investments, Statement of Assets
and Liabilities and Statement of Operations should be read in conjunction with
the historical financial statements of Investment Quality Bond and Capital
Growth Bond incorporated by reference in the Statement of Additional
Information.
Manufacturers Securities Services, LLC ("MSS"), a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of North America ("MNA"), serves as
investment adviser to Investment Quality Bond and Capital Growth Bond for which
it receives a fee for services, computed daily and paid monthly, at the annual
rate 0.65% of the average daily net assets of each Trust. MNA is controlled by
The Manufacturers Life Insurance Company ("Manulife Financial"), a mutual life
insurance company based in Toronto, Canada.
Pro Forma Adjustments:
- ----------------------
(A) Adjustment to reflect amount allocated to capital shares ($0.01 par value)
for shares redeemed in reorganization.
(B) Adjustment to reflect reduction in outstanding shares relative to Net Asset
Value upon reorganization.
(C) Adjustment to reflect change in expense structure due to reorganization.
<PAGE> 118
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL INVESTMENT
GROWTH BOND QUALITY BOND PRO FORMA PRO FORMA
ASSETS TRUST TRUST ADJUSTMENTS COMBINED
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investments in securities, at value (Includes a
repurchase agreement of $8,774,000 in the
Capital Growth Bond Trust)
(See accompanying portfolio of investments) ........ $ 59,033,529 $ 303,758,821 $ 362,792,350
Cash ................................................. 108 383 491
Receivables:
Dividends and interest ........................ 869,922 4,485,559 5,355,481
Other assets ......................................... 382 1,422 1,804
------------- ------------- -------------
Total assets .............................. 59,903,941 308,246,185 368,150,126
------------- ------------- -------------
LIABILITIES
Payables:
Investments purchased ......................... -- 184,229 184,229
Dividend and interest withholding tax ......... -- 297 297
Custodian fee ................................. 2,718 5,510 8,228
Securities lending ............................ 1,270,000 61,573,772 62,843,772
Other accrued expenses ........................ 3,052 9,651 12,703
------------- ------------- -------------
Total liabilities ......................... 1,275,770 61,773,459 63,049,229
------------- ------------- -------------
NET ASSETS ........................................... $ 58,628,171 $ 246,472,726 $ 305,100,897
============= ============= =============
Net assets consist of:
Undistributed net investment income
(Note 2) .................................... $ 1,609,693 $ 7,417,531 $ 9,027,224
Accumulated undistributed net realized
loss on investments ......................... (940,353) (2,361,931) (3,302,284)
Unrealized appreciation on investments ........ 2,141,657 4,408,576 6,550,233
Capital shares at par value of $.01 (Note 3) . 50,560 206,413 $ (1,457)(A) 255,516
Additional paid-in capital .................... 55,766,614 236,802,137 1,457 (A) 292,570,208
------------- ------------- ------------- -------------
Net assets .............................. $ 58,628,171 $ 246,472,726 $ 305,100,897
============= ============= =============
Capital shares outstanding (Note 3) .................. 5,055,965 20,641,355 (145,733)(B) 25,551,587
------------- ------------- ------------- -------------
Net asset value, offering price and redemption price
per share .......................................... $ 11.60 $ 11.94 $ 11.94
============= ============= =============
Investments in securities, at identified cost (Note 2) $ 56,891,872 $ 299,350,245 $ 356,242,117
============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 119
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL INVESTMENT
GROWTH BOND QUALITY BOND PRO FORMA PRO FORMA
TRUST TRUST ADJUSTMENTS COMBINED
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Interest ................................. 1,809,966 $ 8,165,783 $ 9,975,749
Dividends ................................ -- 15,188 15,188
----------- ----------- -----------
Total income ....................... 1,809,966 8,180,971 9,990,937
----------- ----------- -----------
Expenses:
Investment adviser fee ................... 181,151 691,242 872,393
Custodian fee ............................ 13,035 53,100 66,135
Audit and legal fees ..................... 2,388 8,319 10,707
Registration and filing fees ............. 2,597 6,763 9,360
Trustee fees and expenses ................ 841 3,014 3,855
Miscellaneous ............................ 261 1,002 1,263
----------- ----------- -----------
Total expenses ..................... 200,273 763,440 963,713
----------- ----------- -----------
Net investment income .............. 1,609,693 7,417,531 9,027,224
----------- ----------- -----------
Realized and unrealized gain(loss)on investments:
Net realized gain(loss) on investments ... (83,289) 752,071 668,782
Change in unrealized appreciation
on investments ......................... 450,757 697,766 1,148,523
----------- ----------- -----------
Net gain on investments ............. 367,468 1,449,837 1,817,305
----------- ----------- -----------
Net increase in net assets resulting
from operations ............................... $ 1,977,161 $ 8,867,368 $10,844,529
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 120
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS - 0.08%
INDUSTRIALS - 0.04%
17 17 Sinking Fund Holdings Group, Incorporated $151,725 $151,725
PUBLISHING - 0.04%
1,380 1,380 Primedia, Incorporated 134,205 134,205
------------ ------------
TOTAL COMMON STOCKS
(Cost: $290,172) $285,930 $285,930
PREFERRED STOCK - 0.08%
MINING - 0.08%
270 270 Fairfield Manufacturing, Incorporated $289,575 $289,575
------------ ------------
TOTAL PREFERRED STOCK
(Cost: $279,450) $289,575 $289,575
------------ ------------
WARRANTS - 0.00%
SOFTWARE - 0.00%
Concentric Network Corporation
40 40 (Expiration Date 12/15/2007, strike price
$10.86) 3,800 3,800
------------ ------------
TOTAL WARRANTS
(Cost: $0) $3,800 $3,800
------------ ------------
U.S. TREASURY OBLIGATIONS - 35.12%
U.S. TREASURY BONDS - 32.05%
$1,595,000 $1,595,000 6.375% due 08/15/2027 $1,751,502 $1,751,502
1,065,000 1,065,000 6.625% due 02/15/2027 1,202,619 1,202,619
235,000 235,000 6.750% due 08/15/2026 269,037 269,037
-----------
$4,000,000 4,000,000 7.500% due 11/15/2016 $4,801,880 4,801,880
1,800,000 1,800,000 8.125% due 05/15/2021 2,343,654 2,343,654
25,800,000 25,800,000 11.875% due 11/15/2003 33,249,750 33,249,750
49,000,000 49,000,000 12.000% due 08/15/2013 72,650,340 72,650,340
------------ ------------
3,223,158 113,045,624 116,268,782
U.S. TREASURY NOTES - 3.07%
3,000,000 3,000,000 5.875% due 02/28/1999 3,007,980 3,007,980
4,700,000 1,000,000 6.125% due 08/15/2007 4,890,209 4,890,209
360,000 360,000 6.375% due 05/15/1999 362,588 362,588
2,000,000 2,000,000 6.500% due 08/31/2001 2,054,380 2,054,380
750,000 750,000 7.250% due 05/15/2004 813,750 813,750
----------- ------------
11,128,907 11,128,907
----------- ------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $125,551,192) $14,352,065 $113,045,624 $127,397,689
----------- ------------ ------------
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 7.69%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.82%
610,135 610,135 6.000% due 02/01/2003 - 07/01/2003 608,784 608,784
400,000 400,000 6.300% due 03/15/2023 404,624 404,624
1,400,000 1,400,000 6.500% due 08/17/2011 - 06/25/2019 1,410,772 1,410,772
3,291,861 3,291,861 7.000% due 06/01/2023 - 01/01/2026 3,342,317 3,342,317
808,756 808,756 7.500% due 06/01/2010 - 04/01/2011 833,053 833,053
------------ ------------
6,599,550 6,599,550
</TABLE>
<PAGE> 121
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 1.08%
$1,000,000 $1,000,000 5.900% due 10/25/2019 $998,120 $998,120
3,000,000 3,000,000 6.000% due 06/01/2028 2,920,290 2,920,290
------------ ------------
3,918,410 3,918,410
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 4.79%
170,214 170,214 6.500% due 07/15/2008 - 05/15/2009 172,378 172,378
7,183,067 7,183,067 7.000% due 04/15/2023 - 02/15/2024 7,308,688 7,308,688
6,282,961 6,282,961 7.500% due 04/15/2002 - 01/15/2024 6,463,195 6,463,195
1,866,148 1,866,148 8.000% due 06/15/2023 - 10/15/2023 1,940,216 1,940,216
1,420,594 1,420,594 8.500% due 09/15/2016 - 04/15/2022 1,505,673 1,505,673
798 798 9.500% due 10/15/2009 898 898
------------ ------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost: $27,240,920) $27,909,008 $27,909,008
------------ ------------
FOREIGN GOVERNMENT OBLIGATIONS - 1.46%
GOVERNMENT OF CANADA - 0.93%
1,000,000 1,000,000 Province of Quebec, 8.800% due 04/15/2003 1,104,380 1,104,380
2,000,000 2,000,000 Province of Quebec, 8.625% due 01/19/2005 2,286,580 2,286,580
------------ ------------
1,104,380 2,286,580 3,390,960
----------- ------------ ------------
REPUBLIC OF ARGENTINA - 0.53%
1,800,000 1,800,000 11.000% due 10/09/2006 1,908,000 1,908,000
------------ ------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $5,336,025) $1,104,380 $4,194,580 $5,298,960
----------- ------------ ------------
CORPORATE BONDS - 31.82%
AIR TRAVEL - 0.28%
Argo-Tech Corporation,
150,000 150,000 8.625% due 10/01/2007 150,000 150,000
Continental Airlines,
840,000 840,000 6.648% due 09/15/2017 857,119 857,119
------------ ------------
1,007,119 1,007,119
APPAREL & TEXTILES - 0.08%
Clark-Schwebel, Incorporated,
95,000 95,000 10.50% due 04/15/2006 105,925 105,925
Collins & Aikman Products Company,
150,000 150,000 11.50% due 04/15/2006 166,500 166,500
------------ ------------
272,425 272,425
AUTOMOBILES - 0.93%
Chrysler Corporation,
2,000,000 2,000,000 7.45% due 02/01/2097 2,214,520 2,214,520
Ford Motor Credit Corporation,
1,000,000 1,000,000 6.375% due 04/15/2000 1,007,380 1,007,380
-----------
LDM Technologies, Incorporated
160,000 160,000 10.75% due 01/15/2007 168,000 168,000
------------ ------------
3,221,900 168,000 3,389,900
BANKING - 4.12%
BankAmerica Corporation,
1,475,000 1,475,000 9.625% due 02/13/2001 1,598,959 1,598,959
</TABLE>
<PAGE> 122
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BANKING - CONTINUED
Bank of New York, Incorporated
$1,000,000 $1,000,000 6.625% due 06/15/2003 $1,019,180 $1,019,180
Bank of Nova Scotia Halifax,
1,000,000 1,000,000 9.00% due 10/01/1999 1,035,870 1,035,870
1,000,000 1,000,000 Citicorp, 7.125% due 06/01/2003 1,039,850 1,039,850
$1,300,000 1,300,000 Credit National, 7.00% due 11/14/2005 $1,326,000 1,326,000
Export-Import Bank of Korea,
1,550,000 1,550,000 6.375% due 02/15/2006 1,173,288 1,173,288
First Financial Caribbean Corporation,
530,000 530,000 7.84% due 10/10/2006 559,378 559,378
First Republic Bancorp,
825,000 825,000 7.75% due 09/15/2012 862,546 862,546
Korea Development Bank,
715,000 715,000 7.125% due 09/17/2001 635,470 635,470
National Westminster Bank PLC,
1,000,000 1,000,000 9.45% due 05/01/2001 1,085,510 1,085,510
2,000,000 2,000,000 NBD Bancorp, 8.25% due 11/01/2024 2,402,060 2,402,060
Norwest Corporation,
900,000 900,000 6.00% due 03/15/2000 901,701 901,701
------------
Republic New York Corporation,
1,000,000 1,000,000 9.50% due 04/15/2014 1,296,050 1,296,050
----------- ------------
4,390,950 10,544,912 14,935,862
BROADCASTING - 0.09%
Century Communications Corporation,
225,000 225,000 Zero coupon due 01/15/2008 102,094 102,094
Granite Broadcasting Corporation,
150,000 150,000 8.875% due 05/15/2008 151,687 151,687
Jacor Communications Company,
20,000 20,000 8.00% due 02/15/2010 20,000 20,000
60,000 60,000 8.75% due 06/15/2007 62,400 62,400
------------ ------------
336,181 336,181
BUILDING MATERIALS & CONSTRUCTION - 0.03%
Grove Worldwide, LLC
120,000 120,000 9.25% due 05/01/2008 117,600 117,600
------------ ------------
BUSINESS SERVICES - 0.06%
Psinet, Incorporated,
140,000 140,000 10.00% due 02/15/2005 142,800 142,800
Silgan Holdings, Incorporated
65,000 65,000 9.00% due 06/01/2009 67,275 67,275
------------ ------------
210,075 210,075
CHEMICALS - 0.11%
Huntsman Corporation,
135,000 135,000 9.50% due 07/01/2007 135,000 135,000
Pioneer Amers Acquisition Corporation,
75,000 75,000 9.25% due 06/15/2007 74,250 74,250
Sovereign Specialty Chemicals,
75,000 75,000 9.50% due 08/01/2007 76,875 76,875
Texas-Petro Chemical Corporation,
120,000 120,000 11.125% due 07/01/2006 130,800 130,800
------------ ------------
416,925 416,925
</TABLE>
<PAGE> 123
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
COAL - 0.10%
P&L Coal Holdings Corporation,
$350,000 $350,000 9.625% due 05/15/2008 $359,625 $359,625
------------ ------------
COMPUTERS & BUSINESS EQUIPMENT - 0.08%
100,000 100,000 Concentric Network Corporation,
12.75% due 12/15/2007 105,750 105,750
Decisionone Corporation,
100,000 100,000 9.75% due 08/01/2007 96,500 96,500
Verio, Incorporated,
100,000 100,000 10.375% due 04/01/2005 103,000 103,000
------------ ------------
305,250 305,250
CONGLOMERATES - 0.27
$1,000,000 1,000,000 ITT Corporation, 6.25% due 11/15/2000 $974,600 974,600
----------- ------------
COSMETICS & TOILETRIES - 0.03%
Revlon Worldwide Corporation,
160,000 160,000 Series B, zero coupon due 03/15/2001 124,400 124,400
------------ ------------
DRUGS & HEALTH CARE - 1.79%
Allegiance Corporation,
2,830,000 2,830,000 7.00% due 10/15/2026 2,892,062 2,892,062
Beckman Instruments, Incorporated,
240,000 240,000 7.10% due 03/04/2003 241,656 241,656
Dailey International, Incorporated,
100,000 100,000 9.50% due 02/15/2008 97,750 97,750
Healthsouth Corporation,
2,000,000 2,000,000 6.875% due 06/15/2005 2,000,740 2,000,740
Owens & Minor, Incorporated,
250,000 250,000 10.875% due 06/01/2006 272,500 272,500
Tenet Healthcare Corporation,
850,000 850,000 7.875% due 01/15/2003 864,875 864,875
Universal Hospital Services,
120,000 120,000 10.25% due 03/01/2008 120,000 120,000
------------ ------------
6,489,583 6,489,583
ELECTRICAL EQUIPMENT - 0.19%
Costilla Energy, Incorporated,
225,000 225,000 10.25% due 10/01/2006 228,375 228,375
Energy Corporation of America, Incorporated,
200,000 200,000 9.50% due 05/15/2007 195,500 195,500
Tesoro Petroleum Corporation,
135,000 135,000 9.00% due 07/01/2008 134,229 134,229
150,000 150,000 Wesco Distribution, Incorporated,
9.125% due 06/01/2008 148,500 148,500
------------ ------------
706,604 706,604
ELECTRIC UTILITIES - 1.31%
Baltimore Gas and Electric Company,
1,000,000 1,000,000 6.125% due 07/01/2003 1,005,840 1,005,840
Cleveland Electric Illuminating
1,010,000 1,010,000 Company, 7.19% due 07/01/2000 1,025,463 1,025,463
Duke Energy Company,
700,000 700,000 7.50% due 04/01/1999 707,812 707,812
Empresa Nacional De Electric,
1,000,000 1,000,000 7.325% due 02/01/2037 977,050 977,050
------------
</TABLE>
<PAGE> 124
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ELECTRIC UTILITIES - CONTINUED
Northern States Power Company of Minnesota
$1,000,000 $1,000,000 6.375% due 04/01/2003 $1,015,770 $1,015,770
Pacific Gas & Electric Company
1,000,000 1,000,000 6.25% due 08/01/2003 1,010,470 1,010,470
----------- ------------
3,032,080 $2,710,325 4,742,405
ELECTRONICS - 0.03%
Fairchild Semiconductor Corporation,
$120,000 120,000 10.125% due 03/15/2007 123,600 123,600
------------ ------------
FINANCIAL SERVICES - 10.37%
530,000 530,000 Allstate Financing, 7.83% due 12/01/2045 561,747 561,747
American General Finance
1,270,000 1,270,000 Corporation, 8.00% due 02/15/2005 1,308,443 1,308,443
900,000 900,000 Amerus Capital I, 8.85% due 02/01/2027 956,502 956,502
Amresco Commerce Mortgage
100,000 100,000 9.875% due 03/15/2005 101,000 101,000
2,000,000 2,000,000 Amvescap, PLC, 6.60% due 05/15/2005 2,021,900 2,021,900
Associates Corporation of North America,
300,000 300,000 9.125% due 04/01/2000 315,597 315,597
BanPonce Financial Corporation,
2,150,000 2,150,000 6.75% due 08/09/2001 2,182,185 2,182,185
Bear Stearns Capital Trust, Incorporated
1,000,000 1,000,000 7.00% due 07/15/1998 1,019,903 1,019,903
Beneficial Corporation,
350,000 350,000 8.40% due 05/15/2008 403,372 403,372
Cigna Corporation,
740,000 740,000 7.875% due 05/15/2027 830,332 830,332
Commercial Credit Group, Incorporated,
1,000,000 1,000,000 7.375% due 04/15/2005 1,068,380 1,068,380
Dime Capital Trust I,
1,200,000 1,200,000 9.33% due 05/06/2027 1,405,512 1,405,512
Donaldson Lufkin and Jenrette, Incorporated
1,000,000 1,000,000 5.625% due 02/15/2016 989,910 989,910
Equitable Companies, Incorporated
770,000 770,000 7.00% due 04/01/2028 786,663 786,663
Equitable Life Assured Society,
680,000 680,000 7.70% due 12/01/2015 750,162 750,162
Fifth Third Capital Trust, Incorporated,
1,000,000 1,000,000 8.136% due 03/15/2027 1,092,200 1,092,200
General Electric Capital Corporation,
600,000 600,000 8.88% due 06/18/2003 677,226 677,226
Globalstar LP/Globalstar Capital,
205,000 205,000 10.75% due 11/01/2004 194,750 194,750
Household Finance Corporation,
1,000,000 1,000,000 7.75% due 06/01/1999 1,016,610 1,016,610
Iridium Operating LLC/Iridium Capital,
285,000 285,000 10.875% due 07/15/2005 285,113 285,113
Japan Finance Corporation,
1,500,000 1,500,000 8.70% due 07/30/2001 1,611,150 1,611,150
500,000 500,000 9.125% due 10/11/2000 533,050 533,050
Liberty Mutual Insurance Company,
550,000 550,000 8.20% due 05/04/2007 620,406 620,406
700,000 700,000 8.50% due 05/15/2025 836,780 836,780
</TABLE>
<PAGE> 125
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - CONTINUED
Lumbermans Mutual Casualty Company,
$675,000 $675,000 9.15% due 07/01/2026 $813,274 $813,274
Olympic Financial, Ltd.,
100,000 100,000 11.50% due 03/15/2007 100,250 100,250
Pindo Deli Financial Mauritius, Ltd.,
100,000 100,000 10.75% due 10/01/2007 70,000 70,000
Private Export Funding Corporation,
1,175,000 1,175,000 6.49% due 07/15/2007 1,232,645 1,232,645
2,000,000 2,000,000 6.62% due 10/01/2005 2,101,240 2,101,240
3,650,000 3,650,000 6.90% due 01/31/2003 3,823,375 3,823,375
200,000 200,000 7.30% due 01/31/2002 210,312 210,312
Rifkin Acquisitions Participation LP,
80,000 80,000 11.125% due 01/15/2006 88,000 88,000
Southern Company Capital Trust, Incorporated
$1,000,000 1,000,000 8.19% due 02/01/2037 $1,081,660 1,081,660
-----------
Sun Canada Financial Company,
1,500,000 1,500,000 7.25% due 12/15/2015 1,625,655 1,625,655
Tembec Finance Corporation,
115,000 115,000 9.875% due 09/30/2005 121,325 121,325
2,300,000 2,300,000 United States Bancorp, 7.50% due 06/01/2026 2,572,044 2,572,044
United States West Capital Funding,
2,035,000 2,035,000 Incorporated, 6.25% due 07/15/2005 2,030,564 2,030,564
Western Financial Savings,
200,000 200,000 8.875% due 08/01/2007 184,000 184,000
------------ ------------
6,268,663 31,354,573 37,623,236
FOOD & BEVERAGES - 0.06%
Aurora Foods,
50,000 50,000 8.75% due 07/01/2008 50,550 50,550
Del Monte Foods Company,
275,000 275,000 Step up to 12.50% due 12/15/2007 178,750 178,750
------------ ------------
229,300 229,300
FUNERAL SERVICES - 0.28%
Service Corporation International,
1,000,000 1,000,000 6.75% due 06/01/2001 1,014,450 1,014,450
----------- ------------
GAS & PIPELINE UTILITIES - 0.29%
Columbia Gas Systems, Incorporated,
1,000,000 1,000,000 7.05% due 11/28/2007 1,023,190 1,023,190
----------- ------------
HOMEBUILDERS - 0.07%
Engle Homes, Incorporated,
150,000 150,000 9.25% due 02/01/2008 147,000 147,000
Standard Pacific Corporation,
115,000 115,000 8.50% due 06/15/2007 116,725 116,725
------------ ------------
263,725 263,725
HOUSEHOLD PRODUCTS - 0.36%
Proctor & Gamble ESOP, Series A,
1,000,000 1,000,000 9.36% due 01/01/2021 1,321,810 1,321,810
----------- ------------
INDUSTRIALS - 1.47%
Advanced Micro Devices,
275,000 275,000 Incorporated, 11.00% due 08/01/2003 290,125 290,125
</TABLE>
<PAGE> 126
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIALS - CONTINUED
Cincinnati Milacron, Incorporated,
$870,000 $870,000 7.875% due 05/15/2000 $889,084 $889,084
Falcon Building Products, Incorporated,
165,000 165,000 9.50% due 06/15/2007 161,700 161,700
Gaylord Container Corporation,
95,000 95,000 9.375% due 06/15/2007 91,438 91,438
Laroche Industry, Incorporated,
85,000 85,000 9.50% due 09/15/2007 82,875 82,875
Lin Holdings Corporation,
300,000 300,000 Step up to 10.00% due 03/01/2008 201,000 201,000
Moog, Incorporated,
150,000 150,000 10.00% due 05/01/2006 160,500 160,500
Neenah Corporation,
85,000 85,000 11.125% due 05/01/2007 92,650 92,650
News America Holdings,
1,800,000 1,800,000 Incorporated, 9.25% due 02/01/2013 2,189,232 2,189,232
Numatics, Incorporated,
25,000 25,000 9.625% due 04/01/2008 25,250 25,250
YPF Sociedad Anonima,
1,150,000 1,150,000 8.00% due 02/15/2004 1,158,395 1,158,395
------------ ------------
5,342,249 5,342,249
INSURANCE - 1.55%
Amerus Life Holdings, Incorporated,
715,000 715,000 6.95% due 06/15/2005 713,938 713,938
Jackson National Life Insurance
1,000,000 1,000,000 Company, 8.15% due 03/15/2027 1,168,240 1,168,240
Ohio National Life Insurance
1,150,000 1,150,000 Company, 8.50% due 05/15/2026 1,332,390 1,332,390
Security Benefit Life Company,
1,150,000 1,150,000 8.75% due 05/15/2016 1,344,073 1,344,073
------------
Zurich Reinsurance Centre Holdings Incorporated
$1,000,000 1,000,000 7.125% due 10/15/2023 $1,048,310 1,048,310
----------- ------------
1,048,310 4,558,641 5,606,951
LEISURE TIME - 0.38%
Argosy Gaming Company,
105,000 105,000 13.25% due 06/01/2004 117,862 117,862
Hollywood Casino, Incorporated,
150,000 150,000 12.75% due 11/01/2003 164,250 164,250
Viacom, Incorporated,
1,035,000 1,035,000 7.75% due 06/01/2005 1,102,741 1,102,741
------------ ------------
1,384,853 1,384,853
NEWSPAPERS - 0.31%
News America Holdings, Incorporated
1,000,000 1,000,000 8.50% due 02/15/2005 1,107,750 1,107,750
----------- ------------
NON-BANK FINANCE - 0.30%
KFW International Financial, Incorporated,
1,000,000 1,000,000 9.125% due 05/15/2001 1,082,450 1,082,450
------------ ------------
</TABLE>
<PAGE> 127
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OFFICE FURNISHINGS & SUPPLIES - 0.75%
Boise Cascade Office Products Company,
$2,700,000 $2,700,000 7.05% due 05/15/2005 $2,726,190 $2,726,190
------------ ------------
PAPER - 0.49%
185,000 185,000 American Pad & Paper Company,
13.00% due 11/15/2005 185,925 185,925
Boise Cascade Corporation,
1,000,000 1,000,000 9.90% due 10/01/2001 1,103,200 1,103,200
Domtar, Incorporated,
75,000 75,000 9.50% due 08/01/2016 81,687 81,687
Grupo Industrial Durango GIDUSA,
120,000 120,000 12.625% due 08/01/2003 127,800 127,800
Repap New Brunswick, Incorporated,
275,000 275,000 10.625% due 04/15/2005 277,750 277,750
------------ ------------
1,776,362 1,776,362
PETROLEUM SERVICES - 0.64%
100,000 100,000 Abraxas Pee Corporation,
11.50% due 11/01/2004 103,500 103,500
Cross Timbers Oil Company,
55,000 55,000 8.75% due 11/01/2009 55,275 55,275
150,000 150,000 9.25% due 04/01/2007 154,500 154,500
Great Lakes Carbon Corporation,
65,000 65,000 10.25% due 05/15/2008 66,300 66,300
Newfield Exploration Company,
445,000 445,000 7.45% due 10/15/2007 452,472 452,472
Petroleos Mexicanos,
250,000 250,000 8.85% due 09/15/2007 240,000 240,000
Plains Resources, Incorporated,
170,000 170,000 10.25% due 03/15/2006 181,475 181,475
------------
Ultramar Corporation,
$1,000,000 1,000,000 8.00% due 03/15/2005 $1,083,350 1,083,350
----------- ------------
1,083,350 1,253,522 2,336,872
PUBLISHING - 0.15%
300,000 300,000 Scholastic Corporation,
7.00% due 12/15/2003 309,744 309,744
Sullivan Graphics, Incorporated,
210,000 210,000 12.75% due 08/01/2005 219,975 219,975
------------ ------------
529,719 529,719
REAL ESTATE - 0.29%
MEPCO Finance, Incorporated
1,000,000 1,000,000 7.50% due 05/01/2003 1,049,890 1,049,890
----------- ------------
RETAIL TRADE - 0.65%
Duane Reade, Incorporated,
100,000 100,000 9.25 % due 02/15/2008 101,250 101,250
Guitar Center Management Company,
120,000 120,000 Incorporated, 11.00% due 07/01/2006 132,600 132,600
J.C. Penney Company, Incorporated,
1,900,000 1,900,000 7.40% due 04/01/2037 2,119,013 2,119,013
------------ ------------
2,352,863 2,352,863
</TABLE>
<PAGE> 128
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
STEEL - 0.15%
Accuride Corporation,
$95,000 $95,000 9.25% due 02/01/2008 $95,000 $95,000
Acindar Industria, Argentina,
75,000 75,000 11.25% due 02/15/2004 75,188 75,188
Bayou Steel Corporation, Louisiana Place,
150,000 150,000 9.50% due 05/15/2008 148,687 148,687
140,000 140,000 CSN Iron SA, 9.125% due 06/01/2007 112,000 112,000
Weirton Steel Corporation,
100,000 100,000 11.375% due 07/01/2004 106,500 106,500
------------ ------------
537,375 537,375
TELECOMMUNICATION SERVICES - 1.09%
American Mobile Satellite Corporation,
35,000 35,000 12.25% due 04/01/2008 32,550 32,550
BTI Telecom Corporation,
150,000 150,000 10.50% due 09/15/2007 150,750 150,750
EchoStar DBS Corporation,
60,000 60,000 12.50% due 07/01/2002 67,350 67,350
Facilicom International, Incorporated,
70,000 70,000 10.50% due 01/15/2008 68,950 68,950
GCI, Incorporated,
250,000 250,000 9.75% due 08/01/2007 261,250 261,250
GST Telecommunications, Incorporated,
210,000 210,000 12.75% due 11/15/2007 245,700 245,700
Innova S De RL,
200,000 200,000 12.875% due 04/01/2007 203,000 203,000
ITC Deltacom, Incorporated,
105,000 105,000 8.875% due 03/01/2008 107,100 107,100
Level 3 Commerce, Incorporated,
245,000 245,000 9.125% due 05/01/2008 238,262 238,262
RSL Communications PLC,
170,000 170,000 9.125% due 03/01/2008 164,900 164,900
Tele-Communications, Incorporated,
1,500,000 1,500,000 9.25% due 04/15/2002 1,653,480 1,653,480
533,000 533,000 9.65% due 10/01/2003 581,690 581,690
Viatel, Incorporated,
158,000 158,000 11.25% due 04/15/2008 165,900 165,900
------------ ------------
3,940,882 3,940,882
TELEPHONE - 1.84%
Allbritton Communications Company,
160,000 160,000 8.875% due 02/01/2008 172,800 172,800
BellSouth Savings, ESOT
$623,625 623,625 9.19% due 07/01/2003 $671,844 671,844
Comcast Cable Communications,
1,000,000 1,000,000 8.50% due 05/01/2027 1,132,990 1,132,990
GTE Corporation,
1,000,000 1,000,000 8.75% due 11/01/2021 1,222,790 1,222,790
-----------
E Spire Communications, Incorporated,
200,000 200,000 Step up to 12.75% due 04/01/2006 157,000 157,000
Intermedia Communications, Incorporated,
250,000 250,000 8.875% due 11/01/2007 255,625 255,625
80,000 80,000 8.60% due 06/01/2008 80,600 80,600
</TABLE>
<PAGE> 129
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
TELEPHONE - CONTINUED
IXC Communications, Incorporated,
$185,000 $185,000 9.00% due 04/15/2008 $185,925 $185,925
KMC Telecom Holdings, Incorporated,
425,000 425,000 Step up to 12.50% due 02/15/2008 246,500 246,500
McLeodUSA, Incorporated,
35,000 35,000 8.375% due 03/15/2008 35,088 35,088
MobileMedia Communications, Incorporated,
250,000 250,000 9.375% due 11/01/2007* 77,500 77,500
NEXTEL Communications, Incorporated,
660,000 660,000 Step up to 9.75% due 10/31/2007 430,650 430,650
Nextlink Communications, Incorporated,
250,000 250,000 9.45% due 04/15/2008 153,750 153,750
Paging Network, Incorporated,
150,000 150,000 10.125% due 08/01/2007 155,250 155,250
Telecommunications Techniques Company,
160,000 160,000 9.75% due 05/15/2008 163,600 163,600
World Common, Incorporated,
1,450,000 1,450,000 7.55% due 04/01/2004 1,535,579 1,535,579
------------ ------------
$1,894,634 4,782,857 6,677,491
TRANSPORTATION - 0.26%
Johnstown American Industries,
195,000 195,000 Incorporated, 11.75% due 08/15/2005 215,962 215,962
K& F Industry, Incorporated,
105,000 105,000 9.25% due 10/15/2007 106,050 106,050
MTL, Incorporated,
100,000 100,000 10.00% due 06/15/2006 99,000 99,000
Southern Railway Company,
470,000 470,000 8.75% due 10/15/2003 527,467 527,467
------------ ------------
948,479 948,479
TOYS, AMUSEMENTS & SPORTING GOODS - 0.29%
Brunswick Corporation,
$1,000,000 1,000,000 7.125% due 08/01/2027 1,037,790 1,037,790
----------- ------------
TOTAL CORPORATE BONDS
(Cost: $111,564,422) $28,469,367 $86,956,664 $115,426,031
----------- ------------ ------------
MUNICIPAL BONDS - 0.47%
ALABAMA - 0.27%
Huntsville, Alabama Solid Waste Disposal,
1,000,000 1,000,000 5.95% due 10/01/2003 991,020 991,020
MARYLAND 0.20%
Baltimore, Maryland, Series B,
750,000 750,000 6.375% due 10/15/2002 716,125 716,125
------------ ------------
TOTAL MUNICIPAL BONDS
(Cost: $1,710,168) $1,707,145 $1,707,145
------------ ------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.11%
First Union-Lehman Brothers Commercial
Mortgage Trust II, Series 1997-C2,
1,950,000 1,950,000 Class A2, 6.60% due 07/18/1998 1,989,975 1,989,975
------------
</TABLE>
<PAGE> 130
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
Residential Funding Mortgage Security I,
Incorporated, Series 1996-S1, Class A12,
$1,000,000 $1,000,000 7.25% due 01/25/2026 $1,024,565 $1,024,565
Residential Funding Mortgage Security I,
Incorporated, Series 1996-S3, Class A5,
976,506 976,506 7.25% due 01/25/2026 1,000,002 1,000,002
----------- ------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (Cost: $3,939,532) $2,024,567 $1,989,975 $4,014,542
----------- ------------ ------------
ASSET BACKED SECURITIES - 2.14%
American Express Master Trust,
Series 1992, Class A,
$1,500,000 1,500,000 6.60% due 05/15/2000 1,508,895 1,508,895
Asset Securitization Corporation,
2,110,000 2,110,000 6.66% due 02/14/2041 2,174,081 2,174,081
Carco Auto Loan Master Trust, Series 1997-1,
1,000,000 1,000,000 Class A, 6.689% due 08/15/2004 1,015,420 1,015,420
Credit Suisse First Boston,
400,000 400,000 6.52% due 07/17/2007 409,372 409,372
Green Tree Financial Corporation,
500,000 500,000 5.98% due 08/01/2008 500,155 500,155
Discover Card Master Trust I, Series 1997-2,
1,000,000 1,000,000 Class A, 6.792% due 04/16/2010 1,018,730 1,018,730
Mortgage Index Amortizing Trust, Series 1997-1,
1,000,000 1,000,000 Class A-1, 7.00% due 08/25/2004 1,005,000 1,005,000
-----------
Premier Auto Trust, Series 1993, Class A2,
142,781 142,781 4.65% due 11/02/1999 142,245 142,245
------------ ------------
TOTAL ASSET BACKED SECURITIES
(Cost: $7,644,464) $3,039,150 $4,734,748 $7,773,898
----------- ------------ ------------
SHORT TERM INVESTMENTS - 17.32%
$1,270,000 $61,573,772 $62,843,772 Navigator Securities
Lending Trust, 5.54% $1,270,000 $61,573,772 $62,843,772
----------- ------------ ------------
REPURCHASE AGREEMENTS - 2.71%
$1,068,000 $1,068,000 Repurchase Agreement with Swiss Bank 1,068,000 1,068,000
Dated 06/30/1998 at 5.70% to be repurchased at
$1,068,169 on 07/01/1998, collateralized by
$843,000 U.S. Treasury Bonds, 8.00%
due 11/15/2021 (valued at $1,081,411,
including interest)
</TABLE>
<PAGE> 131
MANUFACTURERS INVESTMENT TRUST - CAPITAL GROWTH BOND TRUST
MANUFACTURERS INVESTMENT TRUST - INVESTMENT QUALITY BOND TRUST
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
Principal Amount Value
---------------- -----
Capital Investment Capital Investment
Growth Quality Pro Forma Growth Quality Pro Forma
Bond Bond Combined Security Description Bond Bond Combined
---- ---- -------- -------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - CONTINUED
$8,774,000 $8,774,000 Repurchase Agreement with State Street Bank & 8,774,000 8,774,000
Trust Company dated 06/30/1998 at 5.71% to be
repurchased at $8,775,392 on 07/01/1998,
collateralized by $6,620,000 U.S. Treasury
Bonds, 8.75% due 05/15/2017 ( valued at
$8,953,550, including interest)
TOTAL REPURCHASE AGREEMENTS $8,774,000 $1,068,000 $9,842,000
----------- ------------ ------------
TOTAL INVESTMENTS
(Cost: $356,242,117) $59,033,529 $303,758,821 $362,792,350
=========== ============ ============
</TABLE>
<PAGE> 132
MANUFACTURERS INVESTMENT TRUST
NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION. The Pro Forma Combining Schedule of Portfolio
Investments, the Statement of Assets and Liabilities and the Statement of
Operations reflect the accounts of the Manufacturers Investment Trust Investment
Quality Bond ("Investment Quality Bond") and Capital Growth Bond ("Capital
Growth Bond") Trusts, two of thirty six investment Portfolios offered by the
Manufacturers Investment Trust (the "Trust") for the six months ended June 30,
1998. These statements have been derived from the books and records of each
Portfolio utilized in calculating daily net asset value at June 30, 1998.
The Pro Forma statements reflect the proposed transfer of the assets and
liabilities of Capital Growth Bond in exchange for shares of Investment Quality
Bond. Under generally accepted accounting principles ("GAAP"), the Investment
Quality Bond will be the surviving entity for accounting purposes. The Pro Forma
financial statements have been adjusted to reflect the anticipated fee
arrangements for the surviving entity and do not reflect the expenses of either
Portfolio in carrying out its obligations under the Agreement and Plan of
Reorganization.
The Pro Forma Combining Schedule of Portfolio Investments, Statement of Assets
and Liabilities and Statement of Operations should be read in conjunction with
the historical financial statements of Investment Quality Bond and Capital
Growth Bond incorporated by reference in the Statement of Additional
Information.
Manufacturers Securities Services, LLC ("MSS"), a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of North America ("MNA"), serves as
investment adviser to Investment Quality Bond and Capital Growth Bond for which
it receives a fee for services, computed daily and paid monthly, at the annual
rate 0.65% of the average daily net assets of each Trust. MNA is controlled by
The Manufacturers Life Insurance Company ("Manulife Financial"), a mutual life
insurance company based in Toronto, Canada.
Pro Forma Adjustments:
(A) Adjustment to reflect amount allocated to capital shares ($0.01 par value)
for shares redeemed in reorganization.
(B) Adjustment to reflect reduction in outstanding shares relative to Net Asset
Value upon reorganization.
<PAGE> 133
PART C
OTHER INFORMATION
<PAGE> 134
ITEM 15. INDEMNIFICATION
Sections 6.4 and 6.5 of the Agreement and Declaration of Trust of the
Registrant provide that the Registrant shall indemnify each of its Trustees and
officers against all liabilities, including, but not limited to, amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and against
all expenses, including, but not limited to, accountants and counsel fees,
reasonably incurred in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Trustee or officer may be or
may have been involved as a party or otherwise or with which such person may be
or may have been threatened, while in office or thereafter, by reason of being
or having been such a Trustee or officer, except that indemnification shall not
be provided if it shall have been finally adjudicated in a decision on the
merits by the court or other body before which the proceeding was brought that
such Trustee or officer (i) did not act in good faith in the reasonable belief
that his or her action was in the best interests of the Registrant or (ii) is
liable to the Registrant or its shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office.
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 Act 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 Act and will be governed by the final adjudication of
such issue.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
(1)(a) Registrant's Agreement and Declaration of Trust, dated
September 29, 1988 is incorporated by reference to Exhibit
(1)(a) to Post-Effective Amendment No. 31 filed February 28,
1996.
(1)(b) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Redesignation of the Series of
Shares known as the "Convertible Securities Trust" to the
"U.S. Government Bond Trust," dated May 1, 1989 is
incorporated by reference to Exhibit (1)(b) to
Post-Effective Amendment No. 31 filed February 28, 1996.
(1)(c) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Conservative, Moderate and
Aggressive Asset Allocation Trusts, dated May 1, 1989 is
incorporated by reference to Exhibit (1)(c) to
Post-Effective Amendment No. 31 filed February 28, 1996.
(1)(d) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Growth & Income Trust, dated
February 1, 1991 is incorporated by reference to Exhibit
(1)(d) to Post-Effective Amendment No. 31 filed February 28,
1996.
(1)(e) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Redesignation of the Series of
Shares known as the "Bond Trust" to the "Investment Quality
Bond Trust," dated April 16, 1991 is incorporated by
reference to Exhibit (1)(e) to Post-Effective Amendment No.
31 filed February 28, 1996.
(1)(f) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Redesignation of the Series of
Shares known as the "U.S. Government Bond Trust" to the
"U.S. Government Securities Trust," dated June 14, 1991 is
incorporated by reference to Exhibit (1)(f) to
Post-Effective Amendment No. 31 filed February 28, 1996.
</TABLE>
C-1
<PAGE> 135
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
(1)(g) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Pasadena Growth Trust, Growth
Trust and Strategic Income Trust, dated August 7, 1992 is
incorporated by reference to Exhibit (1)(g) to
Post-Effective Amendment No. 31 filed February 28, 1996.
(1)(h) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Redesignation of the Series of
Shares known as the "Strategic Income Trust" to the
"Strategic Bond Trust" and the Series of Shares known as the
"Growth Trust" to the "Value Equity Trust", dated April 4,
1993 is incorporated by reference to Exhibit (1)(h) to
Post-Effective Amendment No. 31 filed February 28, 1996.
(1)(i) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- International Growth and Income
Trust, dated December 28, 1994 is incorporated by reference
to Exhibit (1)(i) to Post-Effective Amendment No. 31 filed
February 28, 1996.
(1)(j) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Small/Mid Cap Trust, dated
February 1, 1996 is incorporated by reference to Exhibit
(1)(j) to Post-Effective Amendment No. 34 filed October 4,
1996.
(1)(k) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- International Small Cap Trust,
dated February 1, 1996 is incorporated by reference to
Exhibit (1)(k) to Post-Effective Amendment No. 34 filed
October 4, 1996.
(1)(l) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Growth Trust, dated July 9, 1996
is incorporated by reference to Exhibit (1)(l) to
Post-Effective Amendment No. 34 filed October 4, 1996.
(1)(m) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Value Trust, High Yield Trust,
International Stock Trust, Science & Technology Trust,
Balanced Trust, Worldwide Growth Trust, Emerging Growth
Trust, Pilgrim Baxter Growth Trust, Pacific Rim Emerging
Markets Trust, Real Estate Securities Trust, Capital Growth
Bond Trust, Equity Index Trust, Common Stock Trust,
Lifestyle Conservative 280 Trust, Lifestyle Moderate 460
Trust, Lifestyle Balanced 640 Trust, Lifestyle Growth 820
Trust, Lifestyle Aggressive 1000 Trust -- and Redesignation
of the Series of Shares known as the "Pasadena Growth Trust"
to the "Blue Chip Growth Trust" and the Series of Shares
Known as the "Value Equity Trust" to the "Equity-Income
Trust" is incorporated by reference to Exhibit (1)(m) to
Post-Effective Amendment No. 35 filed December 18, 1996.
(1)(n) Establishment and Designation of Additional Series of Shares
of Beneficial Interest -- Small Company Value Trust, dated
September 30, 1997 is incorporated by reference to Exhibit
(1)(m) to Post-Effective Amendment No. 39 filed March 2,
1998.
(1)(o) Amendment to the Agreement and Declaration of Trust (name
change) is incorporated by reference to Exhibit (1)(n) to
Post-Effective Amendment No. 39 filed March 2, 1998.
(2) Registrant's By-Laws are incorporated by reference to
Exhibit (2) to Post-Effective Amendment No. 38 filed
September 17, 1997.
(3) Not Applicable
(4) Agreement and Plan of Reorganization (filed herewith as
Exhibit A to the Prospectus/Proxy Statement).
(5) Included in Exhibits 1 and 2 hereto.
(6)(a) Advisory Agreement between NASL Series Trust and NASL
Financial Services, Inc. is incorporated by reference to
Exhibit (5)(a)(1) to Post-Effective Amendment No. 30 filed
December 14, 1995.
(6)(b) Amendment to Advisory Agreement between NASL Series Trust
and NASL Financial Services, Inc. adding the Growth Trust is
incorporated by reference to Post-Effective Amendment No. 30
filed December 14, 1995.
</TABLE>
C-2
<PAGE> 136
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
(6)(c) Amendment to Advisory Agreement between NASL Series Trust
and NASL Financial Services, Inc., dated October 1, 1996
reducing advisory fee for Blue Chip Growth Trust is
incorporated by reference to Exhibit (5)(a)(3) to
Post-Effective Amendment No. 34 filed October 4, 1996.
(6)(d) Amendment to Advisory Agreement between NASL Series Trust
and NASL Financial Services, Inc. adding Emerging Growth
Trust, Pilgrim Baxter Growth Trust, Pacific Rim Emerging
Markets Trust, International Stock Trust, Worldwide Growth
Trust, Science & Technology Trust, Common Stock Trust, Real
Estate Securities Trust, Value Trust, Equity Index Trust,
Balanced Trust, High Yield Trust, Capital Growth Bond Trust,
Lifestyle Conservative 280 Trust, Lifestyle Moderate 460
Trust, Lifestyle Balanced 640 Trust, Lifestyle Growth 820
Trust and Lifestyle Aggressive 1000 Trust is incorporated by
reference to Exhibit (5)(a)(4) to Post-Effective Amendment
No. 35 filed December 18, 1996.
(6)(e) Amendment to Advisory Agreement between NASL Series Trust
and NASL Financial Services, Inc. adding Small Company Value
Trust is incorporated by reference to Exhibit (5)(a)(5) to
Post-Effective Amendment No. 39 filed March 2, 1998.
(6)(f) Subadvisory Agreement between NASL Financial Services, Inc.
and Oechsle International Advisors, L.P. is incorporated by
reference to Exhibit (5)(b)(i) to Post-Effective Amendment
No. 37 filed August 1, 1997.
(6)(g) Subadvisory Agreement between NASL Financial Services, Inc.
and Wellington Management Company is incorporated by
reference to Exhibit (5)(b)(ii) to Post-Effective Amendment
No. 37 filed August 1, 1997.
(6)(h) Subadvisory Agreement between Manufacturers Securities
Services, LLC and Salomon Brothers Asset Management Inc. is
incorporated by reference to Exhibit 5(b)(iii) to Post-
Effective Amendment No. 39 filed March 2, 1998.
(6)(i) Subadvisory Consulting Agreement between Salomon Brothers
Asset Management Inc. and Salomon Brothers Asset Management
Limited is incorporated by reference to Exhibit (5)(b)(iv)
to Post-Effective Amendment No. 39 filed March 2, 1998.
(6)(j) Subadvisory Agreement between NASL Financial Services, Inc.
and J.P. Morgan Investment Management Inc. is incorporated
by reference to Exhibit (5)(b)(v) to Post-Effective
Amendment No. 37 filed August 1, 1997.
(6)(k) Form of Subadvisory Agreement between NASL Financial
Services, Inc. and Fred Alger Management, Inc. is
incorporated by reference to Exhibit (5)(b)(xi) to
Post-Effective Amendment No. 30 filed December 14, 1995.
(6)(l) Subadvisory Agreement between Manufacturers Securities
Services, LLC and Founders Asset Management, LLC is
incorporated by reference to Exhibit (5)(b)(vi) to
Post-Effective Amendment No. 40 filed April 30, 1998.
(6)(m) Amendment to Subadvisory Agreement between NASL Financial
Services, Inc. and Founders Asset Management, Inc. adding
the Growth Trust is incorporated by reference to Exhibit
(5)(b)(xiii) to Post-Effective Amendment No. 33 filed July
10, 1996.
(6)(n) Form of Amendment to Subadvisory Agreement between NASL
Financial Services, Inc. and Founders Asset Management,
Inc., dated October 1, 1996 adding the Worldwide Growth and
Balanced Trusts is incorporated by reference to Exhibit
(5)(b)(xii) to Post-Effective Amendment No. 34 filed October
4, 1996.
(6)(o) Subadvisory Agreement between NASL Financial Services, Inc.
and T. Rowe Price Associates, Inc., dated October 1, 1996
providing for the Blue Chip Growth and Equity-Income Trusts
is incorporated by reference to Exhibit (5)(b)(xiii) to
Post-Effective Amendment No. 35 filed December 18, 1996.
</TABLE>
C-3
<PAGE> 137
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
(6)(p) Form of Subadvisory Agreement between NASL Financial
Services, Inc. and Rowe Price-Fleming International, Inc.
adding the International Stock Trust is incorporated by
reference to Exhibit (5)(b)(xiv) to Post-Effective Amendment
No. 34 filed October 4, 1996.
(6)(q) Subadvisory Agreement between NASL Financial Services, Inc.
and Morgan Stanley Asset Management, Inc., dated October 1,
1996 providing for the Global Equity Trust is incorporated
by reference to Exhibit (5)(b)(xv) to Post-Effective
Amendment No. 35 filed December 18, 1996.
(6)(r) Subadvisory Agreement between NASL Financial Services, Inc.
and Miller Anderson & Sherrerd, LLP, dated October 1, 1996
adding the Value and High Yield Trusts is incorporated by
reference to Exhibit (5)(b)(xvi) to Post-Effective Amendment
No. 35 filed December 18, 1996.
(6)(s) Form of Subadvisory Agreement between NASL Financial
Services, Inc. and Warburg Pincus Counsellors, Inc. adding
the Emerging Growth Trust is incorporated by reference to
Exhibit (5)(b)(xvii) to Post-Effective Amendment No. 34
filed October 4, 1996.
(6)(t) Form of Subadvisory Agreement between NASL Financial
Services, Inc. and Manufacturers Adviser Corporation, dated
October 1, 1996 providing for the Money Market Trust is
incorporated by reference to Exhibit (5)(b)(xviii) to
Post-Effective Amendment No. 34 filed October 4, 1996.
(6)(u) Subadvisory Agreement between NASL Financial Services, Inc.
and Pilgrim Baxter & Associates, Inc., dated December 31,
1996 adding the Pilgrim Baxter Growth Trust is incorporated
by reference to Exhibit (5)(b)(xix) to Post-Effective
Amendment No. 35 filed December 18, 1996.
(6)(v) Form of Amendment to Subadvisory Agreement between NASL
Financial Services, Inc. and Manufacturers Adviser
Corporation, dated December 31, 1996 adding the Pacific Rim
Emerging Markets, Common Stock, Real Estate Securities,
Equity Index, Capital Growth Bond, Lifestyle Conservative
280, Lifestyle Moderate 460, Lifestyle Balanced 640,
Lifestyle Growth 820 and Lifestyle Aggressive 1000 Trusts is
incorporated by reference to Exhibit (5)(b)(xx) to
Post-Effective Amendment No. 35 filed December 18, 1996.
(6)(w) Subadvisory Agreement between NASL Financial Services, Inc.
and Fidelity Management Trust Company, dated January 1, 1996
and as amended December 31, 1996 providing for the Equity,
Conservative Asset Allocation, Moderate Asset Allocation and
Aggressive Asset Allocation Trusts is incorporated by
reference to Exhibit (5)(b)(xxi) to Post-Effective Amendment
No. 35 filed December 18, 1996.
(6)(x) Form of Amendment to Subadvisory Agreement between NASL
Financial Services, Inc. and T. Rowe Price Associates, Inc.,
dated December 31, 1996 adding the Science & Technology
Trust is incorporated by reference to Exhibit (5)(b)(xxii)
to Post-Effective Amendment No. 35 filed December 18, 1996.
(6)(y) Form of Subadvisory Agreement between Manufacturers
Securities Services, LLC (formerly NASL Financial Services,
Inc.) and Rosenberg Institutional Equity Management
regarding the Small Company Value Trust is incorporated by
reference to Exhibit (2) to Post-Effective Amendment No. 38
filed September 17, 1997.
(7) Not Applicable
(8) Not Applicable
(9) Custodian Agreement Between NASL Series Fund, Inc. and State
Street Bank and Trust Company, dated March 24, 1988 is
incorporated by reference to Exhibit (2) to Post-Effective
Amendment No. 38 filed September 17, 1997.
(10) Not Applicable
</TABLE>
C-4
<PAGE> 138
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
(11) Opinion of James D. Gallagher, Esq., regarding legality of
issuance of shares and other matters (filed herewith).
(12) Form of Opinion of Simpson Thacher & Bartlett on tax matters
(filed herewith).
(13) Not Applicable
(14)(a) Consent of PricewaterhouseCoopers LLP (filed herewith).
(14)(b) Consent of Simpson Thacher & Bartlett (filed herewith).
(14)(c) Consent of James D. Gallagher (included in Exhibit 11
hereto).
(15) Not Applicable
(16)(a) Powers of Attorney -- Don B. Allen, Charles L. Bardelis, and
Samuel Hoar, Trustees, dated September 27, 1996 is
incorporated by reference to Exhibit (2) to Post-Effective
Amendment No. 38 filed September 17, 1997.
(16)(b) Powers of Attorney -- John D. Richardson, Chairman of the
Board, and F. David Rowling, Trustee is incorporated by
reference to Exhibit (18)(e) to Post-Effective Amendment No.
36 filed April 30, 1997.
(17)(a) Prospectus of the Trust, dated May 1, 1998 (filed herewith).
(17)(b) Statement of Additional Information of the Trust, dated May
1, 1998 (filed herewith as part of Part B to the
Prospectus/Proxy Statement).
(17)(c) Semi-Annual Report of the Trust for the six months ended
June 30, 1998 (filed herewith).
(17)(d) Annual Report of the Trust for the year ended December 31,
1997 (filed herewith).
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a
part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(b) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
C-5
<PAGE> 139
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, Manufacturers Investment Trust,
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and Commonwealth
of Massachusetts, on the 27th day of January, 1999.
MANUFACTURERS INVESTMENT TRUST
(Registrant)
By: /s/ JOHN D. DESPREZ III
------------------------------------
John D. DesPrez III, President
Attest:
/s/ JAMES D. GALLAGHER
- --------------------------------------
James D. Gallagher, Secretary
C-6
<PAGE> 140
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<C> <S> <C>
* Trustee **
- ------------------------------------------ -------------------
Don B. Allen (Date)
/s/ JOHN D. DESPREZ III President **
- ------------------------------------------ (Chief Executive Officer) -------------------
John D. DesPrez III (Date)
* Trustee **
- ------------------------------------------ -------------------
Charles L. Bardelis (Date)
* Trustee **
- ------------------------------------------ -------------------
Samuel Hoar (Date)
* Trustee and Chairman **
- ------------------------------------------ -------------------
John D. Richardson (Date)
* Trustee **
- ------------------------------------------ -------------------
F. David Rolwing (Date)
/s/ JAMES BOYLE Vice President and Treasurer **
- ------------------------------------------ (Principal Financial and Accounting -------------------
James Boyle Officer) (Date)
*By: /s/ JAMES D. GALLAGHER ** January 27, 1999
------------------------------------ -------------------
James D. Gallagher (Date)
Attorney-in-Fact Pursuant to
Powers of Attorney
**
-------------------
</TABLE>
C-7
<PAGE> 141
MANUFACTURERS INVESTMENT TRUST
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
4 Agreement and Plan of Reorganization (filed herewith as
Exhibit A to the Prospectus/Proxy Statement).
11 Opinion of James D. Gallagher, Esq., regarding legality of
issuance of shares and other matters.
12 Form of Opinion of Simpson Thacher & Bartlett on tax matters.
14(a) Consent of PricewaterhouseCoopers LLP, Independent Accountants.
14(b) Consent of Simpson Thacher & Bartlett.
17(a) Prospectus of the Trust, dated May 1, 1998.
17(c) Semi-Annual Report of the Trust for the six months ended
June 30, 1998.
17(d) Annual Report of the Trust for the year ended December 31, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 11
MANUFACTURERS INVESTMENT TRUST
116 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02116
(617) 266-6008
January 25, 1999
To Whom it may concern:
This opinion is written in reference to the shares of beneficial interest, $.01
par value (the "Shares") of the Investment Quality Bond and the Global Equity
portfolios of Manufacturers Investment Trust, a Massachusetts business trust
(the "Trust"), to be offered and sold pursuant to a Registration Statement on
Form N-14 (the "Registration Statement") to be filed by the Trust pursuant to
the Securities Act of 1933.
I have examined such records and documents and reviewed such questions of law as
I deemed necessary for purposes of this opinion.
1. The Trust has been duly recorded under the laws of the Commonwealth
of Massachusetts and is a validly existing Massachusetts business trust.
2. The Shares have been duly authorized and, when sold, issued and
paid for in the manner contemplated by the Registration Statement, will be
legally issued, fully paid and non-assessable.
I consent to the filing of this letter with the Securities and Exchange
Commission as an exhibit to the Registration Statement and to the references
made to me therein and in any amendments thereto.
Very truly yours,
/s/ JAMES D. GALLAGHER
--------------------------------------
James D. Gallagher, Esq.
<PAGE> 1
EXHIBIT 12
[LETTERHEAD OF SIMPSON THACHER & BARTLETT]
, 1999
Re: Agreement and Plan of Reorganization
dated as of , 1999 of
Manufacturers Investment Trust
----------------------------------------------
Manufacturers Investment Trust
116 Huntington Avenue
Boston, Massachusetts 02116
Ladies and Gentlemen:
You have requested our opinion with respect to the federal income tax
consequences of certain aspects of the proposed transfers by Manufacturers
Investment Trust ("MIT") on behalf of each Transferor Portfolio((1)) of all of
the Transferor's assets to MIT on behalf of each Corresponding Acquiring
Portfolio solely in exchange for shares of the Corresponding Acquiring Portfolio
and the assumption of all of the Transferor Portfolio's obligations and
liabilities (as described in Section 1(a) of the Reorganization Agreement)
followed by the liquidation of the Transferor Portfolio and the distribution pro
rata of the shares of such Corresponding Acquiring Portfolio to the shareholders
of the Transferor Portfolio. The series of steps that will occur to effect such
transaction are hereinafter referred to as the "Reorganization." This opinion is
being delivered pursuant to Sections 6(d) and 7(g) of the Reorganization
Agreement.
MIT is a Massachusetts business trust registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end investment company
of the management type.
The Reorganization Agreement was approved by the Board of Directors of MIT
on January , 1999.
Upon satisfaction of all conditions precedent set forth in the
Reorganization Agreement, the Reorganization will be effected as set forth in
the following summary:
(1) Pursuant to the Reorganization Agreement, MIT will cause each
Transferor Portfolio to convey, transfer and deliver to the Corresponding
Acquiring Portfolio all of the then existing assets of such Transferor
Portfolio (consisting, without limitation, of portfolio securities and
instruments, dividend and interest receivables, cash and other assets). In
consideration thereof, MIT on behalf of each Acquiring Portfolio will (A)
assume and pay, to the extent that they exist on or after the Effective
Time of the Reorganization (as defined in Section 1(b)(i) of the
Reorganization Agreement), all of the obligations and liabilities of the
Corresponding Transferor Portfolio and (B) issue and deliver to the
Corresponding Transferor Portfolio full and fractional shares of beneficial
interest of the Corresponding Acquiring Portfolio, with respect to each
Corresponding Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section 1(c) of the
Reorganization Agreement. Any shares of capital stock (if any), par value
$.01 per share, of the Transferor Portfolios held in the treasury of MIT at
the Effective Time of the Reorganization shall thereupon be retired. Such
transactions shall take place on the Exchange Date. All computations for
the Transferor Portfolios and the Acquiring Portfolios shall be performed
by the Custodian, as custodian and pricing agent for the Transferor
- ---------------
(1) Where relevant, capitalized terms not otherwise defined herein have the
meanings they have for the purposes of the Form of Agreement and Plan of
Reorganization dated as of January , 1999, of MIT on behalf of the
Worldwide Growth Trust and the Capital Growth Bond Trust and the Global
Equity Trust and the Investment Quality Bond Trust (the "Reorganization
Agreement").
<PAGE> 2
Portfolios and the Acquiring Portfolios. The determination of said
Custodian shall be conclusive and binding on all parties in interest.
(2) As of the Effective Time of the Reorganization, each Transferor
Portfolio will liquidate and distribute pro rata to the Transferor
Portfolio shareholders as of the Effective Time of the Reorganization, the
shares of the Acquiring Portfolio received by such Transferor Portfolio
pursuant to Section 1(a)(i) of the Reorganization Agreement in actual or
constructive exchange for the shares of the Transferor Portfolio held by
the Transferor Portfolio shareholders. Such liquidation and distribution
will be accomplished by the transfer of the shares of the Corresponding
Acquiring Portfolio then credited to the account of each Transferor
Portfolio on the books of the Corresponding Acquiring Portfolio, to open
accounts on the share records of the Corresponding Acquiring Portfolio in
the names of the Transferor Portfolio shareholders and representing the
respective pro rata number of shares of the Acquiring Portfolio due such
shareholders. The Acquiring Portfolios will not issue certificates
representing shares of the Acquiring Portfolio in connection with such
exchange.
(3) As soon as practicable after the Effective Time of the
Reorganization, MIT shall take all the necessary steps under Massachusetts
law, MIT's Declaration of Trust and any other applicable law to effect a
complete dissolution of the Transferor Portfolios.
In acting as special counsel to MIT with respect to the Reorganization, we
have, among other things, reviewed the following documents:
1. The Reorganization Agreement; and
2. MIT's Registration Statement on Form N-14 under the Securities Act
of 1933, as filed with the Securities and Exchange Commission (the
"Registration Statement on Form N-14").
For purposes of this opinion, as hereinafter set forth, we have reviewed
such other documents relating to the Reorganization as we have deemed relevant
under the circumstances and have relied upon representations contained in
certain certificates (the "Certificates") provided to us by MIT.
If the Reorganization is effected on a factual basis different from that
contemplated above, any or all of the opinions expressed herein may be
inapplicable. Further, our opinion is based on (i) the Internal Revenue Code of
1986, as amended (the "Code"), (ii) Treasury Regulations, (iii) judicial
precedents and (iv) administrative interpretations (including the current ruling
practice of the Internal Revenue Service) as of the date hereof. If there is any
subsequent change in the applicable law or regulations, or if there are
subsequently any new administrative or judicial interpretations of the law or
regulations, any or all of the individual opinions expressed herein may become
inapplicable.
Based on the foregoing, and assuming that the Reorganization is effected in
accordance with the terms of the Reorganization Agreement (and exhibits thereto)
and that the statements set forth in the Certificates are true as of the
Effective Time of the Reorganization, it is our opinion that for federal income
tax purposes:
(i) the Reorganization will constitute a reorganization within the
meaning of section 368(a)(1) of the Code with respect to each Transferor
Portfolio and its Corresponding Acquiring Portfolio;
(ii) no gain or loss will be recognized by any of the Transferor
Portfolios or the Corresponding Acquiring Portfolios upon the transfer of
all the assets and liabilities, if any, of each Transferor Portfolio to its
Corresponding Acquiring Portfolio solely in exchange for shares of the
Acquiring Portfolio or upon the distribution of the shares of the Acquiring
Portfolio to the holders of shares of the Transferor Portfolio solely in
exchange for all of their shares of the Transferor Portfolio;
(iii) no gain or loss will be recognized by shareholders of any of the
Transferor Portfolios upon the exchange of shares of such Transferor
Portfolio solely for shares of the Corresponding Acquiring Portfolio;
(iv) the holding period and tax basis of the shares of each Acquiring
Portfolio received by each holder of shares of the Corresponding Transferor
Portfolio pursuant to the Reorganization will be the same as the holding
period and tax basis of shares of the Transferor Portfolio held by the
shareholder
2
<PAGE> 3
(provided the shares of the Transferor Portfolio were held as a capital
asset on the date of the Reorganization) immediately prior to the
Reorganization; and
(v) the holding period and tax basis of the assets of each of the
Transferor Portfolios acquired by the Corresponding Acquiring Portfolios
will be the same as the holding period and tax basis of those assets to
each of the Transferor Portfolios immediately prior to the Reorganization.
The payment by MIT of certain expenses of the Acquiring Portfolios and the
Transferor Portfolios which are directly related to the Reorganization (referred
to in section 9 of the Reorganization Agreement) will not affect the opinions
set forth above regarding the federal income tax consequences of the exchanges
by each Transferor Portfolio and the shareholders of each Transferor Portfolio.
However, no opinion is expressed as to any other federal income tax consequences
to any of the parties resulting from the payment of such expenses by MIT.
We express our opinion herein only for the exclusive purpose of
ascertaining the federal income tax consequences of the Reorganization
contemplated in the Reorganization Agreement to the Transferor Portfolios, the
Acquiring Portfolios and the shareholders of the Transferor Portfolios on their
receipt of the Transferor Portfolios shares of the Acquiring Portfolios pursuant
to the Reorganization Agreement. This opinion letter may not be relied upon by
you for any other purpose, or relied upon by, or furnished to, any other person,
firm or corporation without our prior written consent. We hereby consent to the
filing of this opinion as an exhibit to the Registration Statement on Form N-14
and to the use of our name therein.
Very truly yours,
SIMPSON THACHER & BARTLETT
3
<PAGE> 1
EXHIBIT 14(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion and incorporation by reference in the
Registration Statement on Form N-14 of our report dated February 25, 1998 on our
audits of the financial statements and financial highlights of Manufacturers
Investment Trust, for the year ended December 31, 1997, which are included and
incorporated by reference in the Registration Statement. We also consent to the
references to our Firm under the captions "Financial Statements and Experts" and
"Independent Accountants" in Parts A and B of the Registration Statement,
respectively.
/s/PricewaterhouseCoopers LLP
Boston, Massachusetts
January 25, 1999
<PAGE> 1
EXHIBIT 14(b)
CONSENT OF SIMPSON THACHER & BARTLETT
We consent to the filing of our tax opinion as an exhibit to Manufacturers
Investment Trust's Registration Statement on Form N-14 and to the references
made to our firm therein and in any amendments thereto.
/s/ SIMPSON THACHER & BARTLETT
New York, New York
January 25, 1999
<PAGE> 1
Exhibit 17(a)
Prospectus of the Trust, dated May 1, 1998.
<PAGE> 2
MANUFACTURERS INVESTMENT TRUST
116 Huntington Avenue, Boston, Massachusetts 02116
Manufacturers Investment Trust (the "Trust"), formerly NASL Series Trust,
is a no-load, open-end management investment company, commonly known as a mutual
fund. Shares of the Trust are not offered directly to the public but are sold
only to insurance companies and their separate accounts as the underlying
investment medium for variable contracts ("contracts"). The Trust provides a
range of investment objectives through thirty-six separate investment
portfolios, each of which issues its own series of shares of beneficial
interest. The names of those portfolios are as follows:
PACIFIC RIM EMERGING MARKETS TRUST GROWTH AND INCOME TRUST
SCIENCE & TECHNOLOGY TRUST EQUITY-INCOME TRUST
INTERNATIONAL SMALL CAP TRUST BALANCED TRUST
EMERGING GROWTH TRUST AGGRESSIVE ASSET ALLOCATION
TRUST
PILGRIM BAXTER GROWTH TRUST
HIGH YIELD TRUST
SMALL/MID CAP TRUST
MODERATE ASSET ALLOCATION TRUST
INTERNATIONAL STOCK TRUST
CONSERVATIVE ASSET ALLOCATION TRUST
WORLDWIDE GROWTH TRUST
STRATEGIC BOND TRUST
GLOBAL EQUITY TRUST
GLOBAL GOVERNMENT BOND TRUST
SMALL COMPANY VALUE TRUST
CAPITAL GROWTH BOND TRUST
EQUITY TRUST
INVESTMENT QUALITY BOND TRUST
GROWTH TRUST
U.S. GOVERNMENT SECURITIES TRUST
QUANTITATIVE EQUITY TRUST
MONEY MARKET TRUST
EQUITY INDEX TRUST
LIFESTYLE AGGRESSIVE 1000 TRUST
BLUE CHIP GROWTH TRUST
LIFESTYLE GROWTH 820 TRUST
REAL ESTATE SECURITIES TRUST
LIFESTYLE BALANCED 640 TRUST
VALUE TRUST
LIFESTYLE MODERATE 460 TRUST
INTERNATIONAL GROWTH AND INCOME
TRUST LIFESTYLE CONSERVATIVE 280 TRUST
The investment objectives and certain policies of each Trust are set forth
on the inside front cover. In pursuing their investment objectives, the
Strategic Bond and High Yield Trusts reserve the right to invest without
limitation, and the Investment Quality Bond and Equity-Income Trusts may invest
up to 20% and 10%, respectively, of their assets, in high yield (high risk)
securities, commonly known as "junk bonds" which also present a high degree of
risk. High-yielding, lower-quality securities involve comparatively greater
risks, including price volatility and risk of default in the timely payment of
interest and principal, than higher-quality securities. Although the Strategic
Bond Trust's Subadviser has the ability to invest up to 100% of the portfolio's
assets in lower-rated securities, the portfolio's Subadviser does not anticipate
investing in excess of 75% of the portfolio's assets in such securities.
Purchasers should carefully assess the risks associated with an investment in
the above-named Trusts (see "RISK FACTORS -- High Yield (High Risk)
Securities"). AN INVESTMENT IN THE MONEY MARKET TRUST IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE MONEY
MARKET TRUST WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $10.00 PER
SHARE.
This Prospectus sets forth concisely the information about the Trust that
a prospective purchaser of a contract should know before purchasing such a
contract. PLEASE READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
Additional information about the Trust has been filed with the Securities and
Exchange Commission (the "SEC") and is available upon request and without charge
by writing the Trust at the above address or calling (617) 266-6004 and
requesting the "Statement of Additional Information for Manufacturers Investment
Trust" dated the date of this Prospectus (hereinafter "Statement of Additional
Information"). The Statement of Additional Information is incorporated by
reference into this Prospectus. The SEC maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding registrants
that file electronically with the SEC. SHARES OF THE TRUST ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS
THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 1, 1998.
<PAGE> 3
THE INVESTMENT OBJECTIVES AND CERTAIN POLICIES OF EACH TRUST ARE AS
FOLLOWS:
PACIFIC RIM EMERGING MARKETS TRUST -- The investment objective of the Pacific
Rim Emerging Markets Trust is to achieve long-term growth of capital.
Manufacturers Adviser Corporation ("MAC") manages the Pacific Rim Emerging
Markets Trust and seeks to achieve this investment objective by investing in a
diversified portfolio that is comprised primarily of common stocks and
equity-related securities of corporations domiciled in countries in the Pacific
Rim region.
SCIENCE & TECHNOLOGY TRUST -- The investment objective of the Science &
Technology Trust is long-term growth of capital. Current income is incidental to
the portfolio's objective. T. Rowe Price Associates, Inc. ("T. Rowe Price")
manages the Science & Technology Trust.
INTERNATIONAL SMALL CAP TRUST -- The investment objective of the International
Small Cap Trust is to seek long-term capital appreciation. Founders Asset
Management LLC ("Founders") manages the International Small Cap Trust and will
pursue this objective by investing primarily in securities issued by foreign
companies which have total market capitalizations or annual revenues of $1
billion or less. These securities may represent companies in both established
and emerging economies throughout the world.
EMERGING GROWTH TRUST -- The investment objective of the Emerging Growth Trust
is maximum capital appreciation. Warburg Pincus Asset Management, Inc.
("Warburg") manages the Emerging Growth Trust and will pursue this objective by
investing primarily in a portfolio of equity securities of domestic companies.
The Emerging Growth Trust ordinarily will invest at least 65% of its total
assets in common stocks or warrants of emerging growth companies that represent
attractive opportunities for maximum capital appreciation.
PILGRIM BAXTER GROWTH TRUST -- The investment objective of the Pilgrim Baxter
Growth Trust is capital appreciation. Pilgrim Baxter & Associates, Ltd. ("PBA")
manages the Pilgrim Baxter Growth Trust and seeks to achieve its objective by
investing in companies believed by PBA to have an outlook for strong earnings
growth and the potential for significant capital appreciation.
SMALL/MID CAP TRUST -- The investment objective of the Small/Mid Cap Trust is to
seek long-term capital appreciation. Fred Alger Management, Inc. ("Alger")
manages the Small/Mid Cap Trust and will pursue this objective by investing at
least 65% of the portfolio's total assets (except during temporary defensive
periods) in small/mid cap equity securities.
INTERNATIONAL STOCK TRUST -- The investment objective of the International Stock
Trust is long-term growth of capital. Rowe Price-Fleming International, Inc.
("Price-Fleming") manages the International Stock Trust and seeks to attain this
objective by investing primarily in common stocks of established, non-U.S.
companies.
WORLDWIDE GROWTH TRUST -- The investment objective of the Worldwide Growth Trust
is long-term growth of capital. Founders manages the Worldwide Growth Trust and
seeks to attain this objective by normally investing at least 65% of its total
assets in equity securities of growth companies in a variety of markets
throughout the world.
GLOBAL EQUITY TRUST -- The investment objective of the Global Equity Trust is
long-term capital appreciation. Morgan Stanley Asset Management Inc. ("Morgan
Stanley") manages the Global Equity Trust and intends to pursue this objective
by investing primarily in equity securities of issuers throughout the world,
including U.S. issuers and emerging market countries.
SMALL COMPANY VALUE TRUST -- The investment objective of the Small Company Value
Trust is to seek long-term growth of capital. Rosenberg Institutional Equity
Management ("Rosenberg") manages the Small Company Value Trust and will pursue
this objective by investing in equity securities of smaller companies which are
traded principally in the markets of the United States. The Small Company Value
Trust is designed for long-term investors willing to assume above-average risk
in return for above-average capital growth potential.
EQUITY TRUST -- The principal investment objective of the Equity Trust is growth
of capital. Current income is a secondary consideration although growth of
income may accompany growth of capital. Fidelity Management Trust Company
("FMTC") manages the Equity Trust and seeks to attain the foregoing objective by
investing primarily in common stocks of U. S. issuers or securities convertible
into or which carry the right to buy common stocks.
2
<PAGE> 4
GROWTH TRUST -- The investment objective of the Growth Trust is to seek
long-term growth of capital. Founders manages the Growth Trust and will pursue
this objective by investing, under normal market conditions, at least 65% of its
total assets in common stocks of well-established, high-quality growth companies
that Founders believes have the potential to increase earnings faster than the
rest of the market.
QUANTITATIVE EQUITY TRUST -- The investment objective of the Quantitative Equity
Trust (prior to December 31, 1996, the "Common Stock Trust") is to achieve
intermediate- and long-term growth through capital appreciation and current
income by investing in common stocks and other equity securities of well
established companies with promising prospects for providing an above average
rate of return. MAC manages the Quantitative Equity Trust.
EQUITY INDEX TRUST -- The investment objective of the Equity Index Trust is to
achieve investment results which approximate the total return of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index"). MAC manages the Equity Index
Trust.
BLUE CHIP GROWTH TRUST -- The primary investment objective of the Blue Chip
Growth Trust (prior to October 1, 1996, the "Pasadena Growth Trust") is to
provide long-term growth of capital. Current income is a secondary objective,
and many of the stocks in the portfolio are expected to pay dividends. T. Rowe
Price manages the Blue Chip Growth Trust.
REAL ESTATE SECURITIES TRUST -- The investment objective of the Real Estate
Securities Trust is to achieve a combination of long-term capital appreciation
and satisfactory current income by investing in real estate related equity and
debt securities. MAC manages the Real Estate Securities Trust.
VALUE TRUST -- The investment objective of the Value Trust is to realize an
above-average total return over a market cycle of three to five years,
consistent with reasonable risk. Miller Anderson & Sherrerd, LLP ("MAS") manages
the Value Trust and seeks to attain this objective by investing primarily in
common and preferred stocks, convertible securities, rights and warrants to
purchase common stocks, ADRs and other equity securities of companies with
equity capitalizations usually greater than $300 million.
INTERNATIONAL GROWTH AND INCOME TRUST -- The investment objective of the
International Growth and Income Trust is to seek long-term growth of capital and
income. The portfolio is designed for investors with a long-term investment
horizon who want to take advantage of investment opportunities outside the
United States. J.P. Morgan Investment Management Inc. ("J.P. Morgan") manages
the International Growth and Income Trust.
GROWTH AND INCOME TRUST -- The investment objective of the Growth and Income
Trust is to provide long-term growth of capital and income consistent with
prudent investment risk. Wellington Management Company, LLP ("Wellington
Management") manages the Growth and Income Trust and seeks to achieve the
Trust's objective by investing primarily in a diversified portfolio of common
stocks of U.S. issuers which Wellington Management believes are of high quality.
EQUITY-INCOME TRUST -- The investment objective of the Equity-Income Trust
(prior to December 31, 1996, the "Value Equity Trust") is to provide substantial
dividend income and also long-term capital appreciation. T. Rowe Price manages
the Equity-Income Trust and seeks to attain this objective by investing
primarily in dividend-paying common stocks, particularly of established
companies with favorable prospects for both increasing dividends and capital
appreciation.
BALANCED TRUST -- The investment objective of the Balanced Trust is current
income and capital appreciation. Founders is the manager of the Balanced Trust
and seeks to attain this objective by investing in a balanced portfolio of
common stocks, U.S. and foreign government obligations and a variety of
corporate fixed-income securities.
HIGH YIELD TRUST -- The investment objective of the High Yield Trust is to
realize an above-average total return over a market cycle of three to five
years, consistent with reasonable risk. MAS manages the High Yield Trust and
seeks to attain this objective by investing primarily in high yield debt
securities, including corporate bonds and other fixed-income securities.
3
<PAGE> 5
AUTOMATIC ASSET ALLOCATION TRUSTS (AGGRESSIVE, MODERATE AND CONSERVATIVE) -- The
investment objective of each of the Automatic Asset Allocation Trusts is to
obtain the highest potential total return consistent with a specified level of
risk tolerance -- aggressive, moderate and conservative. The amount of each
portfolio's assets invested in each category of securities is dependent upon the
judgment of FMTC as to what percentages of each portfolio's assets in each
category will contribute to the limitation of risk and the achievement of its
investment objective.
STRATEGIC BOND TRUST -- The investment objective of the Strategic Bond Trust is
to seek a high level of total return consistent with preservation of capital.
The Strategic Bond Trust seeks to achieve its objective by giving its
Subadviser, Salomon Brothers Asset Management Inc ("SBAM"), broad discretion to
deploy the Strategic Bond Trust's assets among certain segments of the
fixed-income market as SBAM believes will best contribute to the achievement of
the portfolio's objective.
GLOBAL GOVERNMENT BOND TRUST -- The investment objective of the Global
Government Bond Trust is to seek a high level of total return by placing primary
emphasis on high current income and the preservation of capital. Oechsle
International Advisors, L.P. ("Oechsle International") manages the Global
Government Bond Trust and intends to pursue this objective by investing
primarily in a selected global portfolio of high-quality, fixed-income
securities of foreign and U.S. governmental entities and supranational issuers.
CAPITAL GROWTH BOND TRUST -- The investment objective of the Capital Growth Bond
Trust is to achieve growth of capital by investing in medium-grade or better
debt securities, with income as a secondary consideration. MAC manages the
Capital Growth Bond Trust. The Capital Growth Bond Trust differs from most
"bond" funds in that its primary objective is capital appreciation, not income.
INVESTMENT QUALITY BOND TRUST -- The investment objective of the Investment
Quality Bond Trust is to provide a high level of current income consistent with
the maintenance of principal and liquidity. Wellington Management manages the
Investment Quality Bond Trust and seeks to achieve the Trust's objective by
investing primarily in a diversified portfolio of investment grade corporate
bonds and U.S. Government bonds with intermediate to longer term maturities.
U.S. GOVERNMENT SECURITIES TRUST -- The investment objective of the U.S.
Government Securities Trust is to obtain a high level of current income
consistent with preservation of capital and maintenance of liquidity. SBAM
manages the U.S. Government Securities Trust and seeks to attain its objective
by investing a substantial portion of its assets in debt obligations and
mortgage backed securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and derivative securities such as collateralized
mortgage obligations backed by such securities.
MONEY MARKET TRUST -- The investment objective of the Money Market Trust is to
obtain maximum current income consistent with preservation of principal and
liquidity. MAC manages the Money Market Trust and seeks to achieve this
objective by investing in high quality, U.S. dollar denominated money market
instruments.
LIFESTYLE AGGRESSIVE 1000 TRUST -- The investment objective of the Lifestyle
Aggressive 1000 Trust is to provide long-term growth of capital. Current income
is not a consideration. MAC manages the Lifestyle Aggressive 1000 Trust and
seeks to achieve this objective by investing 100% of the Lifestyle Trust's
assets in other portfolios of NASL Series Trust ("Underlying Portfolios") which
invest primarily in equity securities.
LIFESTYLE GROWTH 820 TRUST -- The investment objective of the Lifestyle Growth
820 Trust is to provide long-term growth of capital with consideration also
given to current income. MAC manages the Lifestyle Growth 820 Trust and seeks to
achieve this objective by investing approximately 20% of the Lifestyle Trust's
assets in Underlying Portfolios which invest primarily in fixed-income
securities and approximately 80% of its assets in Underlying Portfolios which
invest primarily in equity securities.
LIFESTYLE BALANCED 640 TRUST -- The investment objective of the Lifestyle
Balanced 640 Trust is to provide a balance between a high level of current
income and growth of capital with a greater emphasis given to capital growth.
MAC manages the Lifestyle Balanced 640 Trust and seeks to achieve this objective
by investing approximately 40% of the Lifestyle Trust's assets in Underlying
Portfolios which invest primarily in fixed-income securities and approximately
60% of its assets in Underlying Portfolios which invest primarily in equity
securities.
4
<PAGE> 6
LIFESTYLE MODERATE 460 TRUST -- The investment objective of the Lifestyle
Moderate 460 Trust is to provide a balance between a high level of current
income and growth of capital with a greater emphasis given to high income. MAC
manages the Lifestyle Moderate 460 Trust and seeks to achieve this objective by
investing approximately 60% of the Lifestyle Trust's assets in Underlying
Portfolios which invest primarily in fixed-income securities and approximately
40% of its assets in Underlying Portfolios which invest primarily in equity
securities.
LIFESTYLE CONSERVATIVE 280 TRUST -- The investment objective of the Lifestyle
Conservative 280 Trust is to provide a high level of current income with some
consideration also given to growth of capital. MAC manages the Lifestyle
Conservative 280 Trust and seeks to achieve this objective by investing
approximately 80% of the Lifestyle Trust's assets in Underlying Portfolios which
invest primarily in fixed-income securities and approximately 20% of its assets
in Underlying Portfolios which invest primarily in equity securities.
5
<PAGE> 7
MANUFACTURERS INVESTMENT TRUST
TABLE OF CONTENTS
SYNOPSIS.................................................................... 8
FINANCIAL HIGHLIGHTS........................................................ 10
INVESTMENT OBJECTIVES AND POLICIES.......................................... 47
Pacific Rim Emerging Markets Trust..................................... 47
Science & Technology Trust............................................. 48
International Small Cap Trust.......................................... 48
Emerging Growth Trust.................................................. 50
Pilgrim Baxter Growth Trust............................................ 51
Small/Mid Cap Trust.................................................... 52
International Stock Trust.............................................. 52
Worldwide Growth Trust ................................................ 54
Global Equity Trust.................................................... 55
Small Company Value Trust.............................................. 56
Equity Trust........................................................... 56
Growth Trust........................................................... 57
Quantitative Equity Trust (formerly, the "Common Stock Trust")......... 58
Equity Index Trust..................................................... 58
Blue Chip Growth Trust (formerly, "Pasadena Growth Trust")............. 59
Real Estate Securities Trust........................................... 60
Value Trust............................................................ 61
International Growth and Income Trust.................................. 62
Growth and Income Trust ............................................... 63
Equity-Income Trust (formerly, "Value Equity Trust")................... 64
Balanced Trust......................................................... 65
High Yield Trust....................................................... 66
Automatic Asset Allocation Trusts...................................... 67
Strategic Bond Trust................................................... 69
Global Government Bond Trust........................................... 71
Capital Growth Bond Trust.............................................. 72
Investment Quality Bond Trust.......................................... 73
U.S. Government Securities Trust....................................... 74
Money Market Trust..................................................... 75
The Lifestyle Trusts................................................... 76
RISK FACTORS................................................................ 78
Investment Restrictions Generally...................................... 78
High Yield (High Risk) Securities...................................... 78
Foreign Securities..................................................... 80
Small Company and Emerging Growth Securities........................... 81
Warrants............................................................... 82
Lending Securities..................................................... 82
When-Issued Securities ("Forward Commitments")......................... 82
Repurchase Agreements and Reverse Repurchase Agreements................ 82
Mortgage Dollar Rolls.................................................. 83
Hedging and Other Strategic Transactions............................... 83
Illiquid Securities.................................................... 84
MANAGEMENT OF THE TRUST..................................................... 84
Advisory Arrangements.................................................. 85
Subadvisory Arrangements............................................... 87
Expenses............................................................... 96
Performance Data....................................................... 98
<PAGE> 8
GENERAL INFORMATION......................................................... 99
Shares of the Trust.................................................... 99
Taxes.................................................................. 99
Dividends.............................................................. 100
Purchase and Redemption of Shares...................................... 100
Custodian.............................................................. 101
Year 2000 Issues....................................................... 101
Appendix I - Debt Security Ratings.......................................... 102
Appendix II - Strategic Bond and Investment Quality Bond Trust Debt Ratings. 104
Appendix III - Standard & Poor's Disclaimers................................ 105
----------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE TRUST, THE ADVISER, THE SUBADVISERS OR THE
PRINCIPAL UNDERWRITER OF THE CONTRACTS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING IN ANY STATE IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE> 9
SYNOPSIS
Manufacturers Investment Trust (the "Trust"), formerly NASL Series Trust,
is a series trust, which means that it has a number of portfolios, each with a
stated investment objective which it pursues through separate investment
policies. Currently, there are thirty-six such portfolios. The investment
objective of each portfolio is set forth below in the description of the
portfolio.
In addition to the risks inherent in any investment in securities, certain
portfolios of the Trust are subject to particular risks associated with
investing in foreign securities, lending portfolio securities, investing in
when-issued securities and hedging techniques employed through the use of
futures contracts, options on futures contracts, forward currency contracts and
various options (see "RISK FACTORS").
The investment adviser of the Trust is Manufacturers Securities Services,
LLC (the "Adviser"), the successor to NASL Financial Services, Inc. The Trust
currently has fifteen Subadvisers who manage all of the portfolios:
<TABLE>
<CAPTION>
SUBADVISER SUBADVISER TO
- ---------- -------------
<S> <C>
Fidelity Management Trust Company Equity Trust
Conservative Asset Allocation Trust
Moderate Asset Allocation Trust
Aggressive Asset Allocation Trust
Founders Asset Management LLC Growth Trust
Worldwide Growth Trust
Balanced Trust
International Small Cap Trust
Fred Alger Management, Inc. Small/Mid Cap Trust
J.P. Morgan Investment Management Inc. International Growth and Income
Trust
Manufacturers Adviser Corporation Pacific Rim Emerging Markets
Trust
Quantitative Equity Trust
Real Estate Securities Trust
Equity Index Trust
Capital Growth Bond Trust
Money Market Trust
Lifestyle Trusts
Miller Anderson & Sherrerd, LLP Value Trust
High Yield Trust
Morgan Stanley Asset Management Inc. Global Equity Trust
Oechsle International Advisors, L.P. Global Government Bond Trust
Pilgrim Baxter & Associates, Ltd. Pilgrim Baxter Growth Trust
Rosenberg Institutional Equity Management Small Company Value Trust
Rowe Price-Fleming International, Inc. International Stock Trust
Salomon Brothers Asset Management Inc U.S. Government Securities Trust
Strategic Bond Trust
</TABLE>
8
<PAGE> 10
<TABLE>
<CAPTION>
SUBADVISER SUBADVISER TO
- ---------- -------------
<S> <C>
T. Rowe Price Associates, Inc. Science & Technology Trust
Blue Chip Growth Trust
Equity-Income Trust
Warburg Pincus Asset Management, Inc. Emerging Growth Trust
Wellington Management Company, LLP Growth and Income Trust
Investment Quality Bond Trust
</TABLE>
The Adviser receives a fee from the Trust computed separately for each
portfolio, except for the Lifestyle Trusts, as indicated in the expense table
below. The Subadviser of each portfolio receives a fee from the Adviser computed
separately for each portfolio, which is paid out of the advisory fee and is not
an additional charge to the portfolio or its shareholders (see "Management of
the Trust").
The Trust currently serves as the underlying investment medium for sums
invested in annuity and variable life contracts issued by The Manufacturers Life
Insurance Company of North America, ("Manulife North America"), formerly North
American Security Life Insurance Company, The Manufacturers Life Insurance
Company of New York ("Manulife New York"), formerly First North American Life
Assurance Company, The Manufacturers Life Insurance Company of America
("Manufacturers America") and The Manufacturers Life Insurance Company (U.S.A.)
("Manufacturers USA"). The Trust may, however, be used for other purposes in the
future, such as funding annuity contracts issued by other insurance companies.
Manulife North America is controlled by The Manufacturers Life Insurance Company
("Manulife Financial"), a mutual life insurance company based in Toronto,
Canada. Manulife New York is a wholly-owned subsidiary of Manulife North
America. Manufacturers America and Manufacturers USA are indirect wholly owned
subsidiaries of Manulife Financial. Currently, the Trust has four shareholders,
Manulife North America, Manulife New York, Manufacturers America and
Manufacturers USA. Trust shares are not offered directly to and may not be
purchased directly by members of the public. Consequently, as of the date of
this Prospectus, the terms "shareholder" and "shareholders" in this Prospectus
refer to Manulife North America, Manulife New York, Manufacturers America and
Manufacturers USA.
Certain contract values will vary with the investment performance of the
portfolios of the Trust. Because contract owners will allocate their investments
among the portfolios, prospective purchasers should carefully consider the
information about the Trust and its portfolios presented in this Prospectus
before purchasing such a contract.
The Trust is a no-load, open-end management investment company registered
with the Securities and Exchange Commission (the "SEC") under the Investment
Company Act of 1940, as amended (the "1940 Act"), and each of the portfolios,
except the Global Government Bond Trust, the Emerging Growth Trust and the five
Lifestyle Trusts, is diversified for purposes of the 1940 Act (see "Global
Government Bond Trust," "Emerging Growth Trust" and "The Lifestyle Trusts").
Information about the performance of each portfolio of the Trust is
contained in the Trust's Annual Report to shareholders which may be obtained
without charge.
9
<PAGE> 11
FINANCIAL HIGHLIGHTS
The tables below provide Financial Highlights for the Trust. In the case
of the Quantitative Equity, Pacific Rim Emerging Markets, Real Estate
Securities, Capital Growth Bond and Equity Index Trusts, the Financial
Highlights for each period shown below consist of financial information for the
predecessors to these portfolios. On December 31, 1996, the Common Stock,
Pacific Rim Emerging Markets, Real Estate Securities, Capital Growth Bond and
Equity Index portfolios of Manulife Series Fund, Inc. merged into the
Quantitative Equity, Pacific Rim Emerging Markets, Real Estate Securities,
Capital Growth Bond and Equity Index portfolios of the Trust, respectively, each
of which was created to be successors to the corresponding portfolio of Manulife
Series Fund, Inc. This information is supplemented by financial statements and
accompanying notes appearing in the Trust's Annual Report to shareholders for
the fiscal year ended December 31, 1997 which has been incorporated by reference
into the Statement of Additional Information. The financial statements of the
Trust at December 31, 1997 have been audited by Coopers & Lybrand L.L.P.
independent accountants, as indicated in their report with respect thereto, and
are included herein in reliance upon said report given on the authority of said
firm as experts in accounting and auditing.
10
<PAGE> 12
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM EMERGING MARKETS TRUST
--------------------------------------------------------
10/04/94*
YEARS ENDED DECEMBER 31, TO
----------------------------------------
1997 1996** 1995 12/31/94
--------- --------- -------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................................. $ 10.90 $ 10.36 $ 9.41 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................... 0.05 0.07 0.12 0.04
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................ (3.77) 0.94 0.96 (0.59)
-------- -------- -------- -------
Total from investment
operations .......................... (3.72) 1.01 1.08 (0.55)
LESS DISTRIBUTIONS:
Dividends from net investment income ....... -- (0.07) (0.09) (0.04)
Dividends in excess of net investment income -- (0.01) -- --
Distributions from capital gains ........... -- (0.39) (0.04) --
Distributions in excess of capital gains ... (0.02) -- -- --
-------- -------- -------- -------
Total distributions ................... (0.02) (0.47) (0.13) (0.04)
-------- -------- -------- -------
Net asset value, end of period ............... $ 7.16 $ 10.90 $ 10.36 $ 9.41
======== ======== ======== =======
Total return .......................... (34.12%) 9.81% 11.47% (5.63%)+
Net assets, end of period (000's) ............ $ 23,850 $ 23,241 $ 13,057 $ 7,657
Ratio of operating expenses to
average net assets ......................... 1.42% 1.50% 1.50% 1.50%(A)
Ratio of net investment income to
average net assets ......................... 0.65% 0.78% 1.01% 1.84%(A)
Portfolio turnover rate ...................... 63% 48% 55% 0%(A)
Average commission rate per share (B) ........ $ 0.013 $ 0.015 N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective December 31, 1996, the Portfolio changed its name from the
Pacific Rim Emerging Markets Fund.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
11
<PAGE> 13
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCIENCE &
TECHNOLOGY TRUST
------------------
01/01/97*
TO
12/31/97
------------------
<S> <C>
Net asset value, beginning
of period ............................... $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ..................... (0.04)
Net realized and unrealized gain
on investments ........................ 1.38
--------
Total from investment
operations ....................... 1.34
LESS DISTRIBUTIONS:
Distributions from capital gains ....... (0.04)
Distributions in excess of capital gains (0.18)
--------
Total distributions ................ (0.22)
--------
Net asset value, end of period ............ $ 13.62
========
Total return ....................... 10.71%
Net assets, end of period (000's) ......... $ 67,348
Ratio of operating expenses to
average net assets ...................... 1.26%
Ratio of net investment loss to
average net assets ...................... (0.54%)
Portfolio turnover rate ................... 121%
Average commission rate per share ......... $ 0.039
</TABLE>
- ----------
* Commencement of operations.
12
<PAGE> 14
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL CAP TRUST
----------------------------
YEAR 03/04/96*
ENDED TO
12/31/97 12/31/96
------------ ------------
<S> <C> <C>
Net asset value, beginning
of period ........................... $ 13.60 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............... 0.08 0.06
Net realized and unrealized gain
on investments and foreign currency
transactions ..................... 0.03 1.09
--------- ---------
Total from investment
operations ................... 0.11 1.15
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.05)
--------- ---------
Net asset value, end of period ........ $ 13.70 $ 13.60
========= =========
Total return ................... 0.79% 9.20%+
Net assets, end of period (000's) ..... $ 128,576 $ 97,218
Ratio of operating expenses to
average net assets .................. 1.31% 1.29%(A)
Ratio of net investment income to
average net assets .................. 0.63% 0.93%(A)
Portfolio turnover rate ............... 74% 50%(A)
Average commission rate per share (B) . $ 0.012 $ 0.015
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
13
<PAGE> 15
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING GROWTH TRUST
---------------------
01/01/97*
TO
12/31/97
---------------------
<S> <C>
Net asset value, beginning
of period ...................... $ 20.60
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ............ (0.02)
Net realized and unrealized
gain on investments .......... 3.55
---------
Total from investment
operations .............. 3.53
Net asset value, end of period ... $ 24.13
=========
Total return .............. 17.14%
Net assets, end of period (000's) $ 275,774
Ratio of operating expenses to
average net assets ............. 1.11%
Ratio of net investment loss to
average net assets ............. (0.13%)
Portfolio turnover rate .......... 120%
Average commission rate per share $ 0.057
</TABLE>
- ----------
* Commencement of operations.
14
<PAGE> 16
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PILGRIM BAXTER
GROWTH TRUST
--------------
01/01/97*
TO
12/31/97
--------------
<S> <C>
Net asset value, beginning
of period ...................... $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ............ (0.03)
Net realized and unrealized gain
on investments ............... 0.03
--------
Total from investment
operations .............. --
Net asset value, end of period ... $ 12.50
========
Total return .............. 0.00%
Net assets, end of period (000's) $ 93,335
Ratio of operating expenses to
average net assets ............. 1.18%
Ratio of net investment loss to
average net assets ............. (0.46%)
Portfolio turnover rate .......... 63%
Average commission rate per share $ 0.047
</TABLE>
- ----------
* Commencement of operations.
15
<PAGE> 17
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL/MID CAP TRUST
------------------------------
YEAR 03/04/96*
ENDED TO
12/31/97 12/31/96
------------ ------------
<S> <C> <C>
Net asset value, beginning
of period ...................... $ 13.37 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ............ (0.04) --
Net realized and unrealized gain
on investments ............... 2.08 0.87
---------- ----------
Total from investment
operations .............. 2.04 0.87
Net asset value, end of period ... $ 15.41 $ 13.37
========== ==========
Total return .............. 15.26% 6.96%+
Net assets, end of period (000's) $ 268,377 $ 176,062
Ratio of operating expenses to
average net assets ............. 1.05% 1.10%(A)
Ratio of net investment loss to
average net assets ............. (0.33%) (0.02%)(A)
Portfolio turnover rate .......... 151% 67%(A)
Average commission rate per share $ 0.070 $ 0.069
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
16
<PAGE> 18
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
STOCK TRUST
-------------------
01/01/97*
TO
12/31/97
-------------------
<S> <C>
Net asset value, beginning
of period ............................... $ 11.47
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................... 0.04
Net realized and unrealized gain
on investments and foreign currency
transactions ......................... 0.12
---------
Total from investment
operations ....................... 0.16
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.03)
Distributions from capital gains ....... (0.05)
Distributions in excess of capital gains (0.08)
---------
Total distributions ................ (0.16)
---------
Net asset value, end of period ............ $ 11.47
=========
Total return ....................... 1.38%
Net assets, end of period (000's) ......... $ 145,253
Ratio of operating expenses to
average net assets ...................... 1.38%
Ratio of net investment income to
average net assets ...................... 0.56%
Portfolio turnover rate ................... 43%
Average commission rate per share (A) ..... $ 0.026
</TABLE>
- ----------
* Commencement of operations.
(A) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
17
<PAGE> 19
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE
GROWTH TRUST
--------------------
01/01/97*
TO
12/31/97
--------------------
<S> <C>
Net asset value, beginning
of period ............................... $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................... 0.04
Net realized and unrealized gain
on investments and foreign currency
transactions ......................... 1.62
---------
Total from investment
operations ....................... 1.66
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.03)
Distributions from capital gains ....... (0.02)
Distributions in excess of capital gains (0.07)
---------
Total distributions ................ (0.12)
---------
Net asset value, end of period ............ $ 14.04
=========
Total return ....................... 13.29%
Net assets, end of period (000's) ......... $ 24,262
Ratio of operating expenses to
average net assets ...................... 1.32%
Ratio of net investment income to
average net assets ...................... 0.61%
Portfolio turnover rate ................... 84%
Average commission rate per share (A) ..... $ 0.032
</TABLE>
- ----------
* Commencement of operations.
(A) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
18
<PAGE> 20
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL EQUITY TRUST
------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
-------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ............................... $ 17.84 $ 16.10 $ 15.74 $ 15.73 $ 12.00 $ 12.24 $ 11.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (B) ....... 0.19 0.12 0.29 0.05 0.12 0.10 0.16
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ........ 3.16 1.89 0.84 0.22 3.79 (0.19) 1.23
--------- --------- --------- --------- --------- --------- ---------
Total from investment operations ..... 3.35 2.01 1.13 0.27 3.91 (0.09) 1.39
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.27) (0.27) (0.08) (0.02) (0.18) (0.15) (0.15)
Distributions from capital gains ........ (1.54) -- -- (0.69) (0.24) -- --
--------- --------- --------- --------- --------- ---------
Total distributions .................. (1.81) (0.27) (0.77) (0.26) (0.18) (0.15) (0.15)
--------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period ............ $ 19.38 $ 17.84 $ 16.10 $ 15.74 $ 15.73 $ 12.00 $ 12.24
========= ========= ========= ========= ========= ========= =========
Total return ......................... 20.80% 12.62% 7.68% 1.74% 32.89% (0.72%) 12.80%
Net assets, end of period (000's).......... $868,413 $ 726,842 $ 648,183 $ 616,138 $ 377,871 $ 116,731 $ 89,003
Ratio of operating expenses to
average net assets (C) .................. 1.01% 1.01% 1.05% 1.08% 1.16% 1.16% 1.23%
Ratio of net investment income
(loss) to average net assets ............ 1.02% 0.78% 0.61% 0.44% 0.77% 1.12% 1.47%
Portfolio turnover rate ................... 33% 169% 63% 52% 52% 69% 74%
Average commission rate per share (D) ..... $ 0.032 $ 0.015 N/A N/A N/A N/A N/A
<CAPTION>
GLOBAL EQUITY TRUST
------------------------------------------
YEARS ENDED DECEMBER 31, 03/18/88*
------------------------------- TO
1990 1989 12/31/88
------- ------- ----------
<S> <C> <C> <C>
Net asset value, beginning
of period ............................... $ 12.57 $ 10.15 $ 10.03
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (B) ....... 0.12 0.10 (0.05)
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ........ (1.41) 2.32 0.17
--------- --------- ---------
Total from investment operations ..... (1.29) 2.42 0.12
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.04) -- --
Distributions from capital gains ........ -- (0.24) --
--------- --------- ---------
Total distributions .................. (0.28) -- --
--------- --------- ---------
Net asset value, end of period ............ $ 11.00 $ 12.57 $ 10.15
========= ========= =========
Total return ......................... (10.43%) 23.84% 1.20%+
Net assets, end of period (000's).......... $ 63,028 $ 26,223 $ 2,143
Ratio of operating expenses to
average net assets (C) .................. 1.28% 1.62% 3.98%(A)
Ratio of net investment income
(loss) to average net assets ............ 1.97% 1.82% (1.71%)(A)
Portfolio turnover rate ................... 67% 109% 81%(A)
Average commission rate per share (D) ..... N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement per share of $0.02 in 1988.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 4.53% in 1988.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
19
<PAGE> 21
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY
VALUE TRUST
-------------------------
10/01/97*
TO
12/31/97
-------------------------
<S> <C>
Net asset value, beginning
of period ........................... $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............... 0.01
Net realized and unrealized loss
on investments and foreign currency
transactions ..................... (0.57)
---------
Total from investment
operations ................... (0.56)
Net asset value, end of period ........ $ 11.94
=========
Total return ................... (4.48%)+
Net assets, end of period (000's) ..... $ 67,091
Ratio of operating expenses to
average net assets .................. 1.19%(A)
Ratio of net investment income to
average net assets .................. 0.54%(A)
Portfolio turnover rate ............... 81%(A)
Average commission rate per share (B) . $ 0.032
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
20
<PAGE> 22
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY TRUST
------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1997 1996 1995 1994 1993* 1992 1991
------- ------ ------ ------ -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 22.62 $ 20.79 $ 14.66 $ 15.57 $ 13.97 $ 13.12 $ 11.33
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.08 0.13 0.10 0.11 0.07 0.64 0.14
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 3.31 3.77 6.14 (0.18) 2.11 0.38 1.88
--------- --------- --------- --------- --------- --------- ---------
Total from investment
operations .................... 3.39 3.90 6.24 (0.07) 2.18 1.02 2.02
LESS DISTRIBUTIONS:
Dividends from net investment income (0.14) (0.09) (0.11) (0.05) (0.58) (0.17) (0.23)
Distributions from capital gains ... (4.37) (1.98) -- (0.79) -- -- --
--------- --------- --------- --------- ---------
Total distributions ............. (4.51) (2.07) (0.11) (0.84) (0.58) (0.17) (0.23)
--------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period ....... $ 21.50 $ 22.62 $ 20.79 $ 14.66 $ 15.57 $ 13.97 $ 13.12
========= ========= ========= ========= ========= ========= =========
Total return .................... 19.25% 20.14% 42.79% (0.53%) 16.31% 7.93% 17.94%
Net assets, end of period (000's) .... $1,521,382 $1,345,461 $ 988,800 $ 534,562 $ 387,842 $ 192,626 $ 88,235
Ratio of operating expenses to
average net assets ................. 0.80% 0.80% 0.80% 0.84% 0.88% 0.95% 0.89%
Ratio of net investment income to
average net assets ................. 0.35% 0.71% 0.63% 0.88% 0.50% 7.31% 2.23%
Portfolio turnover rate .............. 224% 223% 88% 132% 173% 782% 172%
Average commission rate per share (A) $ 0.043 $ 0.043 N/A N/A N/A N/A N/A
<CAPTION>
EQUITY TRUST
-----------------------------------
YEARS ENDED DECEMBER 31,
-----------------------------------
1990 1989 1988
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 19.14 $ 15.17 $ 12.57
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.24 0.29 0.15
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. (1.95) 3.87 2.45
--------- --------- ---------
Total from investment
operations .................... (1.71) 4.16 2.60
LESS DISTRIBUTIONS:
Dividends from net investment income (0.29) (0.12) --
Distributions from capital gains ... (5.81) (0.07) --
--------- --------- ---------
Total distributions ............. (6.10) (0.19) --
--------- --------- ---------
Net asset value, end of period ....... $ 11.33 $ 19.14 $ 15.17
========= ========= =========
Total return .................... (11.79%) 27.70% 20.71%
Net assets, end of period (000's) .... $ 36,564 $ 32,108 $ 133,852
Ratio of operating expenses to
average net assets ................. 0.97% 1.02% 1.08%
Ratio of net investment income to
average net assets ................. 2.74% 1.90% 1.80%
Portfolio turnover rate .............. 95% 111% 49%
Average commission rate per share (A) N/A N/A N/A
</TABLE>
- ----------
* Net investment income per share was calculated using the average shares
method for fiscal year 1993.
(A) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
21
<PAGE> 23
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH TRUST
----------------------------
YEAR 07/15/96*
ENDED TO
12/31/97 12/31/96
------------ ------------
<S> <C> <C>
Net asset value, beginning
of period ........................... $ 13.73 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............... 0.08 0.09
Net realized and unrealized gain
on investments and foreign currency
transactions ..................... 3.40 1.23
--------- ---------
Total from investment
operations ................... 3.48 1.32
LESS DISTRIBUTIONS:
Dividends from net investment income -- (0.09)
--------- ---------
Net asset value, end of period ........ $ 17.21 $ 13.73
========= =========
Total return ................... 25.35% 10.53%+
Net assets, end of period (000's) ..... $ 167,388 $ 56,807
Ratio of operating expenses to
average net assets .................. 0.95% 1.01%(A)
Ratio of net investment income to
average net assets .................. 0.74% 2.57%(A)
Portfolio turnover rate ............... 179% 215%(A)
Average commission rate per share ..... $ 0.061 $ 0.048
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
22
<PAGE> 24
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE EQUITY TRUST
-------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1997 1996** 1995 1994 1993 1992 1991 1990
------- ------- ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $ 17.33 $ 17.27 $ 13.36 $ 14.68 $ 13.73 $ 13.33 $ 10.48 $ 11.25
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (A) .............. 0.26 0.26 0.24 0.20 0.19 0.18 0.21 0.32
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ...... 4.91 2.83 3.67 (0.81) 1.64 0.61 2.94 (0.77)
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations ........................ 5.17 3.09 3.91 (0.61) 1.83 0.79 3.15 (0.45)
LESS DISTRIBUTIONS:
Dividends from net investment income ... -- (0.50) -- (0.20) (0.19) (0.18) (0.21) (0.32)
Distributions from capital gains ....... -- (2.51) -- (0.51) (0.69) (0.21) (0.09) --
Distributions in excess of capital gains -- (0.02) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions ................. -- (3.03) -- (0.71) (0.88) (0.39) (0.30) (0.32)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 22.50 $ 17.33 $ 17.27 $ 13.36 $ 14.68 $ 13.73 $ 13.33 $ 10.48
======== ======== ======== ======== ======== ======== ======== ========
Total return ........................ 29.83% 17.92% 29.23% (4.19%) 13.39% 6.07% 30.18% (4.06%)
Net assets, end of period (000's) ........ $167,530 $ 91,900 $ 60,996 $ 34,829 $ 21,651 $ 9,708 $ 5,480 $ 2,872
Ratio of operating expenses to
average net assets (B) ................. 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 1.50% 1.81% 1.76% 1.53% 1.39% 1.51% 1.78% 3.06%
Portfolio turnover rate .................. 114% 105% 109% 85% 88% 48% 53% 121%
Average commission rate per share (C) .... $ 0.059 $ 0.060 N/A N/A N/A N/A N/A N/A
<CAPTION>
QUANTITATIVE EQUITY TRUST
-------------------------
YEARS ENDED DECEMBER 31,
-------------------------
1989 1988
------- -------
<S> <C> <C>
Net asset value, beginning
of period .............................. $ 8.91 $ 8.36
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (A) .............. 0.36 0.28
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ...... 2.34 0.56
-------- --------
Total from investment
operations ........................ 2.70 0.84
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.36) (0.29)
Distributions from capital gains ....... -- --
Distributions in excess of capital gains -- --
-------- --------
Total distributions ................. (0.36) (0.29)
-------- --------
Net asset value, end of period ........... $ 11.25 $ 8.91
======== ========
Total return ........................ 30.66% 9.86%
Net assets, end of period (000's) ........ $ 2,138 $ 1,176
Ratio of operating expenses to
average net assets (B) ................. 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 3.48% 3.16%
Portfolio turnover rate .................. 121% 172%
Average commission rate per share (C) .... N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective December 31, 1996, the Portfolio changed its name from the
Common Stock Fund.
(A) After investment adviser expense reimbursement per share of $0.05 for the
year ended December 31, 1997.
(B) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.77% for the year ended December 31, 1997.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
23
<PAGE> 25
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INDEX TRUST
-------------------------
YEAR 02/14/96*
ENDED TO
12/31/97 12/31/96**
----------- ----------
<S> <C> <C>
Net asset value, beginning
of period ............................... $ 10.69 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ............... 0.32 0.19
Net realized and unrealized gain
on investments ........................ 3.26 1.29
-------- --------
Total from investment
operations ....................... 3.58 1.48
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.32) (0.19)
Distributions from capital gains ....... (1.47) (0.21)
Distributions in excess of capital gains -- (0.39)
-------- --------
Total distributions ................ (1.79) (0.79)
-------- --------
Net asset value, end of period ............ $ 12.48 $ 10.69
======== ========
Total return ....................... 33.53% 14.86%+
Net assets, end of period (000's) ......... $ 27,075 $ 7,818
Ratio of operating expenses to
average net assets (C) .................. 0.40% 0.40%(A)
Ratio of net investment income to
average net assets ...................... 3.64% 4.74%(A)
Portfolio turnover rate ................... 7% 27%(A)
Average commission rate per share ......... $ 0.033 $ 0.041
</TABLE>
- ----------
* Commencement of operations.
** Effective December 31, 1996, the Portfolio changed its name from the
Equity Index Fund.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.01 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.57% for the year ended December 31, 1997.
24
<PAGE> 26
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BLUE CHIP GROWTH TRUST
----------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 12/11/92*
-------------------------------------------------------------------- TO
1997 1996** 1995 1994 1993 12/31/92
-------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .. $ 14.31 $ 11.40 $ 9.05 $ 9.55 $ 9.93 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) .......... 0.09 0.03 0.03 0.04 0.05 0.00
Net realized and unrealized gain
(loss) on investments ............ 3.13 2.92 2.36 (0.50) (0.42) (0.07)
--------- --------- --------- --------- --------- ---------
Total from investment operations 3.22 2.95 2.39 (0.46) (0.37) (0.07)
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.04) (0.04) (0.04) (0.01) --
Distributions from capital gains ... (2.50) -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions ............ (2.53) (0.04) (0.04) (0.04) (0.01) --
--------- --------- --------- --------- --------- ---------
Net asset value, end of period ........ $ 15.00 $ 14.31 $ 11.40 $ 9.05 $ 9.55 $ 9.93
========= ========= ========= ========= ========= =========
Total return ................... 26.94% 25.90% 26.53% (4.80%) (3.80%) (0.70%)+
Net assets, end of period (000's) ..... $ 708,807 $ 422,571 $ 277,674 $ 151,727 $ 104,966 $ 31,118
Ratio of operating expenses to
average net assets (C) .............. 0.975% 0.975% 0.975% 0.975% 0.975% 1.06%(A)
Ratio of net investment income to
average net assets .................. 0.74% 0.26% 0.42% 0.65% 0.75% 1.04%(A)
Portfolio turnover rate ............... 37% 159% 57% 33% 12% 0%(A)
Average commission rate per share (D) . $ 0.043 $ 0.049 N/A N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective October 1, 1996, the Portfolio changed its name from the
Pasadena Growth Trust.
+ Non-annualized
(A) Annualized
(B) After investment adviser and subadviser expense reimbursement per share of
$0.006, $0.004, $0.006 and $0.01 for the years ended December 31, 1996,
1995, 1994 and 1993, respectively.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser and subadviser, was 1.02%, 1.03%, 1.06% and 1.09% for the years
ended December 31, 1996, 1995, 1994 and 1993, respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
25
<PAGE> 27
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REAL ESTATE SECURITIES TRUST
--------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
1997 1996** 1995 1994 1993 1992 1991 1990
------- -------- ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $ 16.95 $ 15.10 $ 13.34 $ 14.07 $ 12.75 $ 10.92 $ 8.16 $ 9.24
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (A) .............. 0.80 0.74 0.67 0.55 0.47 0.45 0.53 0.67
Net realized and unrealized gain
(loss) on investments ................ 2.32 4.31 1.35 (0.93) 2.38 1.83 2.76 (1.09)
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations ........................ 3.12 5.05 2.02 (0.38) 2.85 2.28 3.29 (0.42)
LESS DISTRIBUTIONS:
Dividends from net investment income ... -- (1.39) (0.26) (0.27) (0.47) (0.45) (0.53) (0.66)
Distributions from capital gains ....... -- (1.77) -- (0.08) (1.06) -- -- --
Distributions in excess of capital gains -- (0.04) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions ................. -- (3.20) (0.26) (0.35) (1.53) (0.45) (0.53) (0.66)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 20.07 $ 16.95 $ 15.10 $ 13.34 $ 14.07 $ 12.75 $ 10.92 $ 8.16
======== ======== ======== ======== ======== ======== ======== ========
Total return ........................ 18.41% 34.69% 15.14% (2.76%) 22.61% 21.29% 41.10% (4.53%)
Net assets, end of period (000's) ........ $161,759 $ 76,220 $ 52,440 $ 42,571 $ 24,106 $ 7,273 $ 4,120 $ 2,774
Ratio of operating expenses to
average net assets (B) ................. 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 5.42% 5.22% 5.06% 4.26% 3.93% 4.13% 5.40% 7.74%
Portfolio turnover rate .................. 148% 231% 136% 36% 143% 71% 40% 24%
Average commission rate per share (C) .... $ 0.052 $ 0.059 N/A N/A N/A N/A N/A N/A
<CAPTION>
REAL ESTATE SECURITIES TRUST
-----------------------------
YEARS ENDED DECEMBER 31,
-----------------------------
1989 1988
------- -------
<S> <C> <C>
Net asset value, beginning
of period .............................. $ 9.12 $ 8.76
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (A) .............. 0.68 0.70
Net realized and unrealized gain
(loss) on investments ................ 0.15 0.37
-------- --------
Total from investment
operations ........................ 0.83 1.07
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.71) (0.71)
Distributions from capital gains ....... -- --
Distributions in excess of capital gains -- --
-------- --------
Total distributions ................. (0.71) (0.71)
-------- --------
Net asset value, end of period ........... $ 9.24 $ 9.12
======== ========
Total return ........................ 9.23% 11.72%
Net assets, end of period (000's) ........ $ 2,874 $ 2,490
Ratio of operating expenses to
average net assets (B) ................. 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 7.29% 7.18%
Portfolio turnover rate .................. 15% 23%
Average commission rate per share (C) .... N/A N/A
</TABLE>
- ----------
* Commencement of operations
** Effective December 31, 1996, the Portfolio changed its name from the Real
Estate Securities Fund.
(A) After investment adviser expense reimbursement per share of $0.04 for the
year ended December 31, 1997.
(B) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.77% for the year ended December 31, 1997.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
26
<PAGE> 28
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
<S> <C>
Net asset value, beginning
of period............................... $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.10
Net realized and unrealized gain
on investments........................ 2.67
-----
Total from investment
operations....................... 2.77
LESS DISTRIBUTIONS:
Dividends from net investment income... (0.10)
Distributions from capital gains....... (0.30)
Distributions in excess of capital gains (0.06)
------
Total distributions................ (0.46)
------
Net asset value, end of period............ $14.81
======
Total return....................... 22.14%
Net assets, end of period (000's)......... $144,672
Ratio of operating expenses to
average net assets...................... 0.96%
Ratio of net investment income to
average net assets...................... 1.50%
Portfolio turnover rate................... 43%
Average commission rate per share......... $0.058
</TABLE>
- ----------
* Commencement of operations.
27
<PAGE> 29
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH AND INCOME TRUST
------------------------------------------
YEARS ENDED DECEMBER 31, 01/09/95*
--------------------------- TO
1997 1996 12/31/95
----------- ----------- ----------
<S> <C> <C> <C>
Net asset value, beginning
of period............................ $11.77 $10.47 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............... 0.23 0.17 0.11
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions..................... (0.26) 1.15 0.59
------ ----- -----
Total from investment
operations.................... (0.03) 1.32 0.70
LESS DISTRIBUTIONS:
Dividends from net investment income (0.22) (0.02) (0.12)
Distributions from capital gains.... (0.51) -- (0.11)
------ ------- ------
Total distributions............. (0.73) (0.02) (0.23)
------ ------ ------
Net asset value, end of period......... $11.01 $11.77 $10.47
====== ====== ======
Total return.................... (0.08%) 12.61% 6.98%+
Net assets, end of period (000's)...... $203,776 $189,010 $88,638
Ratio of operating expenses to
average net assets................... 1.12% 1.11% 1.47%(A)
Ratio of net investment income to
average net assets................... 2.08% 1.82% 0.71%(A)
Portfolio turnover rate................ 166% 148% 112%(A)
Average commission rate per share (B).. $0.004 $0.028 N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
28
<PAGE> 30
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME TRUST
------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 04/23/91*
----------------------------------------------------------------------- TO
1997 1996 1995 1994 1993 1992 12/31/91
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................... $ 19.38 $ 16.37 $ 13.04 $ 13.05 $ 12.10 $ 11.08 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............... 0.22 0.22 0.27 0.25 0.17 0.20 0.13
Net realized and unrealized gain
on investments and foreign currency
transactions ..................... 5.73 3.41 3.45 0.11 0.98 0.92 0.95
-------- -------- -------- -------- -------- -------- --------
Total from investment operations 5.95 3.63 3.72 0.36 1.15 1.12
1.08
LESS DISTRIBUTIONS:
Dividends from net investment income (0.24) (0.26) (0.26) (0.19) (0.18) (0.10) --
Distributions from capital gains .... (1.20) (0.36) (0.13) (0.18) (0.02) -- --
-------- -------- -------- -------- -------- -------- --------
Total distributions ............ (1.44) (0.62) (0.39) (0.37) (0.20) (0.10) --
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period ........ $ 23.89 $ 19.38 $ 16.37 $ 13.04 $ 13.05 $ 12.10 $ 11.08
======== ======== ======== ======== ======== ======== ========
Total return ................... 32.83% 22.84% 29.20% 2.85% 9.62% 10.23% 10.80%+
Net assets, end of period (000's) ..... $1,605,387 $1,033,738 $669,387 $409,534 $288,765 $130,984 $ 57,404
Ratio of operating expenses to
average net assets .................. 0.79% 0.80% 0.80% 0.82% 0.85% 0.85% 0.98%(A)
Ratio of net investment income to
average net assets .................. 1.14% 1.56% 2.23% 2.40% 2.29% 2.78% 2.92%(A)
Portfolio turnover rate ............... 34% 49% 39% 42% 39% 44% 62%(A)
Average commission rate per share (B) . $ 0.055 $ 0.055 N/A N/A N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged.
29
<PAGE> 31
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY-INCOME TRUST
----------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 02/19/93*
---------------------------------------------------------------- TO
1997 1996** 1995 1994(1) 12/31/93
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................... $ 15.41 $ 13.81 $ 11.33 $ 11.31 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.34 0.21 0.17 0.12 0.07
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions ............. 3.68 2.39 2.49 (0.03) 1.24
-------- -------- -------- -------- --------
Total from investment
operations ................... 4.02 2.60 2.66 0.09 1.31
LESS DISTRIBUTIONS:
Dividends from net investment income (0.21) (0.16) (0.08) (0.05) --
Distributions from capital gains ... (1.98) (0.84) (0.10) (0.02) --
-------- -------- -------- -------- --------
Total distributions ............ (2.19) (1.00) (0.18) (0.07) --
-------- -------- -------- -------- --------
Net asset value, end of period ........ $ 17.24 $ 15.41 $ 13.81 $ 11.33 $ 11.31
======== ======== ======== ======== ========
Total return ................... 29.71% 19.85% 23.69% 0.79% 13.10%+
Net assets, end of period (000's) ..... $941,705 $599,486 $396,827 $221,835 $ 86,472
Ratio of operating expenses to
average net assets .................. 0.85% 0.85% 0.85% 0.87% 0.94%(A)
Ratio of net investment income to
average net assets .................. 2.47% 1.78% 1.63% 1.08% 1.30%(A)
Portfolio turnover rate ............... 25% 158% 52% 26% 33%(A)
Average commission rate per share (B) . $ 0.035 $ 0.052 N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective October 1, 1996, the Portfolio changed its name from the Value
Equity Trust.
(1) Net investment income per share was calculated using the average shares
method for fiscal year 1994.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
30
<PAGE> 32
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
<S> <C>
Net asset value, beginning
of period............................... $16.41
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.51
Net realized and unrealized
gain on investments................... 2.41
-----
Total from investment
operations....................... 2.92
Net asset value, end of period............ $19.33
======
Total return....................... 17.79%
Net assets, end of period (000's)......... $177,045
Ratio of operating expenses to
average net assets...................... 0.88%
Ratio of net investment income to
average net assets...................... 2.97%
Portfolio turnover rate................... 219%
Average commission rate per share......... $0.061
</TABLE>
- ----------
* Commencement of operations.
31
<PAGE> 33
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE ASSET ALLOCATION TRUST
------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 13.45 $ 12.85 $ 11.17 $ 12.03 $ 11.25 $ 10.72
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.29 0.36 0.35 0.31 0.34 0.30
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 2.01 1.21 2.07 (0.41) 0.79 0.55
-------- -------- -------- -------- -------- --------
Total from investment operations 2.30 1.57 2.42 (0.10) 1.13 0.85
LESS DISTRIBUTIONS:
Dividends from net investment income (0.38) (0.33) (0.33) (0.31) (0.30) (0.32)
Distributions from capital gains ... (1.01) (0.64) (0.41) (0.45) (0.05) --
-------- -------- -------- -------- -------- --------
Total distributions ............. (1.39) (0.97) (0.74) (0.76) (0.35) (0.32)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 14.36 $ 13.45 $ 12.85 $ 11.17 $ 12.03 $ 11.25
======== ======== ======== ======== ======== ========
Total return .................... 19.09% 13.00% 22.77% (0.69%) 10.30% 8.24%
Net assets, end of period (000's) .... $243,533 $226,699 $211,757 $184,662 $174,448 $151,627
Ratio of operating expenses to
average net assets ................. 0.90% 0.90% 0.91% 0.89% 0.86% 0.89%
Ratio of net investment income to
average net assets ................. 1.99% 2.73% 2.76% 2.90% 2.96% 3.08%
Portfolio turnover rate .............. 91% 75% 111% 136% 92% 123%
Average commission rate per share (B) $ 0.022 $ 0.025 N/A N/A N/A N/A
<CAPTION>
AGGRESSIVE ASSET ALLOCATION TRUST
----------------------------------
YEARS ENDED DECEMBER 31, 08/03/89*
------------------------ TO
1991 1990 12/31/89
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 9.08 $ 9.88 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.36 0.36 0.08
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 1.69 (1.07) (0.20)
-------- -------- --------
Total from investment operations 2.05 (0.71) (0.12)
LESS DISTRIBUTIONS:
Dividends from net investment income (0.41) (0.07) --
Distributions from capital gains ... -- (0.02) --
-------- -------- --------
Total distributions ............. (0.41) (0.09) --
-------- -------- --------
Net asset value, end of period ....... $ 10.72 $ 9.08 $ 9.88
======== ======== ========
Total return .................... 22.96% (7.27%) (1.20%)+
Net assets, end of period (000's) .... $124,632 $ 91,581 $ 87,301
Ratio of operating expenses to
average net assets ................. 0.88% 0.78% 0.89%(A)
Ratio of net investment income to
average net assets ................. 3.63% 4.08% 3.32%(A)
Portfolio turnover rate .............. 172% 82% 22%(A)
Average commission rate per share (B) N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
32
<PAGE> 34
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATE ASSET ALLOCATION TRUST
--------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 12.49 $ 12.39 $ 10.79 $ 11.76 $ 11.14 $ 10.72
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.48 0.54 0.50 0.45 0.41 0.41
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 1.29 0.60 1.65 (0.65) 0.67 0.43
-------- -------- -------- -------- -------- --------
Total from investment operations 1.77 1.14 2.15 (0.20) 1.08 0.84
LESS DISTRIBUTIONS:
Dividends from net investment income (0.57) (0.52) (0.45) (0.40) (0.39) (0.42)
Distributions from capital gains ... (0.74) (0.52) (0.10) (0.37) (0.07) --
-------- -------- -------- -------- -------- --------
Total distributions ............. (1.31) (1.04) (0.55) (0.77) (0.46) (0.42)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 12.95 $ 12.49 $ 12.39 $ 10.79 $ 11.76 $ 11.14
======== ======== ======== ======== ======== ========
Total return .................... 15.87% 9.96% 20.68% (1.61%) 10.06% 8.30%
Net assets, end of period (000's) .... $609,142 $624,821 $650,136 $604,491 $644,257 $505,967
Ratio of operating expenses to
average net assets ................. 0.85% 0.84% 0.84% 0.85% 0.84% 0.87%
Ratio of net investment income to
average net assets ................. 3.37% 4.17% 4.09% 4.01% 4.02% 4.21%
Portfolio turnover rate .............. 78% 78% 129% 180% 135% 169%
Average commission rate per share (B) $ 0.022 $ 0.027 N/A N/A N/A N/A
<CAPTION>
MODERATE ASSET ALLOCATION TRUST
-------------------------------------
YEARS ENDED DECEMBER 31, 08/03/89*
-------------------------- TO
1991 1990 12/31/89
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 9.29 $ 10.03 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.42 0.48 0.11
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 1.50 (1.10) (0.08)
-------- -------- --------
Total from investment operations 1.92 (0.62) 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.49) (0.10) --
Distributions from capital gains ... -- (0.02) --
-------- -------- --------
Total distributions ............. (0.49) (0.12) --
-------- -------- --------
Net asset value, end of period ....... $ 10.72 $ 9.29 $ 10.03
======== ======== ========
Total return .................... 21.23% (6.23%) 0.30%+
Net assets, end of period (000's) .... $420,074 $327,328 $318,439
Ratio of operating expenses to
average net assets ................. 0.86% 0.73% 0.79%(A)
Ratio of net investment income to
average net assets ................. 4.38% 5.10% 4.51%(A)
Portfolio turnover rate .............. 168% 76% 41%(A)
Average commission rate per share (B) N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
33
<PAGE> 35
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONSERVATIVE ASSET ALLOCATION TRUST
--------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 11.64 $ 11.59 $ 10.34 $ 11.26 $ 10.78 $ 10.63
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.54 0.57 0.54 0.55 0.50 0.47
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 0.67 0.20 1.26 (0.76) 0.44 0.26
-------- -------- -------- -------- -------- --------
Total from investment operations 1.21 0.77 1.80 (0.21) 0.94 0.73
LESS DISTRIBUTIONS:
Dividends from net investment income (0.59) (0.56) (0.55) (0.46) (0.46) (0.58)
Distributions from capital gains ... (0.48) (0.16) -- (0.25) -- --
-------- -------- -------- -------- -------- --------
Total distributions ............. (1.07) (0.72) (0.55) (0.71) (0.46) (0.58)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 11.78 $ 11.64 $ 11.59 $ 10.34 $ 11.26 $ 10.78
======== ======== ======== ======== ======== ========
Total return .................... 11.44% 7.03% 18.07% (1.84%) 8.99% 7.36%
Net assets, end of period (000's) .... $204,348 $208,466 $224,390 $216,716 $250,117 $201,787
Ratio of operating expenses to
average net assets ................. 0.89% 0.87% 0.87% 0.87% 0.86% 0.89%
Ratio of net investment income to
average net assets ................. 4.39% 4.59% 4.68% 4.86% 4.78% 4.99%
Portfolio turnover rate .............. 86% 73% 110% 220% 170% 252%
Average commission rate per share (B) $ 0.021 $ 0.028 N/A N/A N/A N/A
<CAPTION>
CONSERVATIVE ASSET ALLOCATION TRUST
-------------------------------------
YEARS ENDED DECEMBER 31, 08/03/89*
-------------------------- TO
1991 1990 12/31/89
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 9.56 $ 10.11 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.58 0.62 0.15
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 1.15 (1.01) (0.04)
-------- -------- --------
Total from investment operations 1.73 (0.39) 0.11
LESS DISTRIBUTIONS:
Dividends from net investment income (0.66) (0.13) --
Distributions from capital gains ... -- (0.03) --
-------- -------- --------
Total distributions ............. (0.66) (0.16) --
-------- -------- --------
Net asset value, end of period ....... $ 10.63 $ 9.56 $ 10.11
======== ======== ========
Total return .................... 18.80% (3.84%) 1.10%+
Net assets, end of period (000's) .... $165,167 $149,901 $141,191
Ratio of operating expenses to
average net assets ................. 0.88% 0.76% 0.82%(A)
Ratio of net investment income to
average net assets ................. 5.65% 6.68% 6.00%(A)
Portfolio turnover rate .............. 211% 78% 85%(A)
Average commission rate per share (B) N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
34
<PAGE> 36
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
<S> <C>
Net asset value, beginning
of period............................... $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.46
Net realized and unrealized gain
on investments and foreign currency
transactions......................... 1.13
-----
Total from investment
operations....................... 1.59
LESS DISTRIBUTIONS:
Dividends from net investment income... (0.46)
Distributions from capital gains....... (0.07)
------
Total distributions................ (0.53)
------
Net asset value, end of period............ $13.56
======
Total return....................... 12.68%
Net assets, end of period (000's)......... $92,748
Ratio of operating expenses to
average net assets...................... 0.89%
Ratio of net investment income to
average net assets...................... 7.40%
Portfolio turnover rate................... 75%
</TABLE>
- ----------
* Commencement of operations.
35
<PAGE> 37
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC BOND TRUST
-----------------------------------------------------------------
YEARS ENDED DECEMBER 31, 02/19/93*
----------------------------------------------- TO
1997 1996 1995 1994 12/31/93
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $ 11.94 $ 11.26 $ 9.91 $ 10.88 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. 0.67 0.62 0.78 0.57 0.33
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ...................... 0.57 0.92 1.04 (1.22) 0.55
-------- -------- -------- -------- --------
Total from investment
operations ...................... 1.24 1.54 1.82 (0.65) 0.88
LESS DISTRIBUTIONS:
Dividends from net investment income .. (0.71) (0.86) (0.47) (0.28) --
Distributions from capital gains ...... (0.09) -- -- (0.04) --
-------- -------- -------- -------- --------
Total distributions ............... (0.80) (0.86) (0.47) (0.32) --
-------- -------- -------- -------- --------
Net asset value, end of period ........... $ 12.38 $ 11.94 $ 11.26 $ 9.91 $ 10.88
======== ======== ======== ======== ========
Total return ...................... 10.98% 14.70% 19.22% (5.99%) 8.80%+
Net assets, end of period (000's) ........ $365,590 $221,277 $122,704 $ 84,433 $ 53,640
Ratio of operating expenses to
average net assets ..................... 0.87% 0.86% 0.92% 0.91% 1.00%(A)
Ratio of net investment income to
average net assets ..................... 7.54% 8.20% 8.76% 7.49% 6.56%(A)
Portfolio turnover rate .................. 131% 165% 181% 197% 356%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
36
<PAGE> 38
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GOVERNMENT BOND TRUST
-------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 14.97 $ 14.56 $ 12.47 $ 13.93 $ 12.47 $ 12.88
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.93 0.93 1.16 0.74 0.59 0.42
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. (0.57) 0.79 1.62 (1.54) 1.67 (0.16)
-------- -------- -------- -------- -------- --------
Total from investment operations 0.36 1.72 2.78 (0.80) 2.26 0.26
LESS DISTRIBUTIONS:
Dividends from net investment income (1.23) (1.31) (0.69) (0.30) (0.70) (0.43)
Distributions from capital gains ... (0.03) -- -- (0.36) (0.10) (0.24)
-------- -------- -------- -------- -------- --------
Total distributions ............. (1.26) (1.31) (0.69) (0.66) (0.80) (0.67)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 14.07 $ 14.97 $ 14.56 $ 12.47 $ 13.93 $ 12.47
======== ======== ======== ======== ======== ========
Total return .................... 2.95% 13.01% 23.18% (5.75%) 18.99% 2.27%
Net assets, end of period (000's) .... $216,117 $249,793 $235,243 $208,513 $196,817 $ 67,859
Ratio of operating expenses to
average net assets ................. 0.93% 0.90% 0.93% 0.96% 1.06% 1.05%
Ratio of net investment income to
average net assets ................. 5.87% 6.38% 6.83% 6.10% 5.61% 6.71%
Portfolio turnover rate .............. 160% 167% 171% 157% 154% 132%
<CAPTION>
GLOBAL GOVERNMENT BOND TRUST
------------------------------------------------
YEARS ENDED DECEMBER 31, 03/18/88*
---------------------------------- TO
1991 1990 1989 12/31/88
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 11.59 $ 10.50 $ 10.21 $ 10.03
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.55 0.25 0.45 0.14
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 1.21 1.13 -- 0.04
-------- -------- -------- --------
Total from investment operations 1.76 1.38 0.45 0.18
LESS DISTRIBUTIONS:
Dividends from net investment income (0.46) (0.24) (0.09) --
Distributions from capital gains ... (0.01) (0.05) (0.07) --
-------- -------- -------- --------
Total distributions ............. (0.47) (0.29) (0.16) --
-------- -------- -------- --------
Net asset value, end of period ....... $ 12.88 $ 11.59 $ 10.50 $ 10.21
======== ======== ======== ========
Total return .................... 15.86% 13.49% 4.49% 1.79%+
Net assets, end of period (000's) .... $ 28,251 $ 11,582 $ 4,065 $ 1,355
Ratio of operating expenses to
average net assets ................. 1.14% 1.21% 1.50% 3.39%(A)
Ratio of net investment income to
average net assets ................. 17.28% 6.62% 7.15% 3.74%(A)
Portfolio turnover rate .............. 164% 142% 50% 234%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
37
<PAGE> 39
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL GROWTH BOND TRUST
------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------
1997 1996* 1995 1994 1993 1992 1991
------- ------- ------- ------- ------- ------- -------
Net asset value, beginning
of period .......................... $ 10.90 $ 11.30 $ 10.10 $ 11.33 $ 11.12 $ 11.47 $ 10.62
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (A) .......... 0.67 0.68 0.72 0.72 0.65 0.77 0.83
Net realized and unrealized gain
(loss) on investments ............ 0.28 (0.40) 1.32 (1.22) 0.51 (0.11) 0.85
------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.95 0.28 2.04 (0.50) 1.16 0.66 1.68
LESS DISTRIBUTIONS:
Dividends from net investment income -- (0.68) (0.72) (0.72) (0.65) (0.78) (0.83)
Distributions from capital gains ... -- -- (0.12) (0.01) (0.30) (0.23) --
------- ------- ------- ------- ------- ------- -------
Total distributions ............. -- (0.68) (0.84) (0.73) (0.95) (1.01) (0.83)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ....... $ 11.85 $ 10.90 $ 11.30 $ 10.10 $ 11.33 $ 11.12 $ 11.47
======= ======= ======= ======= ======= ======= =======
Total return .................... 8.72% 2.48% 20.24% (4.49%) 10.56% 5.89% 16.38%
Net assets, end of period (000's) .... $53,990 $45,393 $42,694 $33,618 $41,183 $30,695 $29,326
Ratio of operating expenses to
average net assets (B) ............. 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ................. 6.30% 6.15% 6.36% 6.29% 5.69% 6.76% 7.54%
Portfolio turnover rate .............. 73% 58% 85% 79% 95% 153% 20%
<CAPTION>
CAPITAL GROWTH BOND TRUST
--------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------
1990 1989 1988
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 10.82 $ 10.32 $ 10.53
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (A) .......... 0.88 0.90 0.92
Net realized and unrealized gain
(loss) on investments ............ (0.21) 0.50 (0.17)
------- ------- -------
Total from investment operations 0.67 1.40 0.75
LESS DISTRIBUTIONS:
Dividends from net investment income (0.87) (0.90) (0.93)
Distributions from capital gains ... -- -- (0.03)
------- ------- -------
Total distributions ............. (0.87) (0.90) (0.96)
------- ------- -------
Net asset value, end of period ....... $ 10.62 $ 10.82 $ 10.32
======= ======= =======
Total return .................... 6.58% 13.88% 7.14%
Net assets, end of period (000's) .... $24,808 $22,768 $19,732
Ratio of operating expenses to
average net assets (B) ............. 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ................. 8.25% 8.34% 8.48%
Portfolio turnover rate .............. 41% 69% 29%
</TABLE>
- ----------
* Effective December 31, 1996, the Portfolio changed its name from the
Capital Growth Bond Fund.
(A) After investment adviser expense reimbursement per share of $0.02 for the
year ended December 31, 1997.
(B) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.73% for the year ended December 31, 1997.
38
<PAGE> 40
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT QUALITY BOND TRUST
-------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 11.89 $ 12.32 $ 11.01 $ 12.12 $ 11.58 $ 11.33
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.77 0.77 0.77 0.66 0.60 0.63
Net realized and unrealized gain
(loss) on investments ............ 0.30 (0.50) 1.28 (1.23) 0.53 0.15
-------- -------- -------- -------- -------- --------
Total from investment operations 1.07 0.27 2.05 (0.57) 1.13 0.78
LESS DISTRIBUTIONS:
Dividends from net investment income (0.83) (0.70) (0.74) (0.54) (0.59) (0.53)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 12.13 $ 11.89 $ 12.32 $ 11.01 $ 12.12 $ 11.58
======== ======== ======== ======== ======== ========
Total return .................... 9.75% 2.58% 19.49% (4.64%) 10.01% 7.21%
Net assets, end of period (000's) .... $188,545 $152,961 $143,103 $111,423 $ 99,474 $ 60,185
Ratio of operating expenses to
average net assets ................. 0.74% 0.73% 0.74% 0.76% 0.77% 0.80%
Ratio of net investment income to
average net assets ................. 7.15% 6.95% 6.91% 6.49% 6.03% 6.96%
Portfolio turnover rate .............. 47% 68% 137% 140% 33% 59%
<CAPTION>
INVESTMENT QUALITY BOND TRUST
------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------
1991* 1990 1989 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 10.74 $ 12.37 $ 11.55 $ 10.79
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.76 1.12 0.75 0.57
Net realized and unrealized gain
(loss) on investments ............ 0.85 (1.50) 0.51 0.19
-------- -------- -------- --------
Total from investment operations 1.61 (0.38) 1.26 0.76
LESS DISTRIBUTIONS:
Dividends from net investment income (1.02) (1.25) (0.44) --
-------- -------- -------- --------
Net asset value, end of period ....... $ 11.33 $ 10.74 $ 12.37 $ 11.55
======== ======== ======== ========
Total return .................... 16.07% (2.73%) 11.34% 7.09%
Net assets, end of period (000's) .... $ 38,896 $ 20,472 $ 26,965 $114,221
Ratio of operating expenses to
average net assets ................. 0.85% 0.70% 0.83% 0.89%
Ratio of net investment income to
average net assets ................. 7.47% 8.41% 8.77% 7.97%
Portfolio turnover rate .............. 115% 120% 351% 94%
</TABLE>
- ----------
* The Investment Quality Bond Trust is the successor to the Bond Trust effective
April 23, 1991.
39
<PAGE> 41
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES TRUST
-------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 13.32 $ 13.65 $ 12.64 $ 13.48 $ 13.05 $ 12.85
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) .......... 0.75 0.83 0.89 0.77 0.48 0.10
Net realized and unrealized gain
(loss) on investments ............ 0.31 (0.41) 0.99 (0.95) 0.49 0.65
-------- -------- -------- -------- -------- --------
Total from investment operations 1.06 0.42 1.88 (0.18) 0.97 0.75
LESS DISTRIBUTIONS:
Dividends from net investment income (0.88) (0.75) (0.87) (0.51) (0.46) (0.38)
Distributions from capital gains ... -- -- -- (0.15) (0.08) (0.17)
-------- -------- -------- -------- -------- --------
Total distributions ............. (0.88) (0.75) (0.87) (0.66) (0.54) (0.55)
-------- -------- -------- -------- --------
Net asset value, end of period ....... $ 13.50 $ 13.32 $ 13.65 $ 12.64 $ 13.48 $ 13.05
======== ======== ======== ======== ======== ========
Total return .................... 8.47% 3.38% 15.57% (1.25%) 7.64% 6.19%
Net assets, end of period (000's) .... $251,277 $204,053 $216,788 $188,813 $222,072 $125,945
Ratio of operating expenses to
average net assets (C) ............. 0.72% 0.71% 0.71% 0.73% 0.75% 0.76%
Ratio of net investment income to
average net assets ................. 6.27% 6.36% 6.46% 5.68% 5.05% 6.12%
Portfolio turnover rate .............. 110% 178% 212% 387% 213% 141%
<CAPTION>
U.S. GOVERNMENT SECURITIES TRUST
-------------------------------------------------
YEARS ENDED DECEMBER 31, 03/18/88*
----------------------------------- TO
1991 1990 1989** 12/31/88
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 11.83 $ 10.98 $ 9.81 $ 10.03
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) .......... 0.19 1.07 0.20 0.07
Net realized and unrealized gain
(loss) on investments ............ 1.40 (0.13) 1.08 (0.29)
-------- -------- -------- --------
Total from investment operations 1.59 0.94 1.28 (0.22)
LESS DISTRIBUTIONS:
Dividends from net investment income (0.53) (0.08) (0.11) --
Distributions from capital gains ... (0.04) (0.01) -- --
-------- -------- -------- --------
Total distributions ............. (0.57) (0.09) (0.11) --
-------- -------- -------- --------
Net asset value, end of period ....... $ 12.85 $ 11.83 $ 10.98 $ 9.81
======== ======== ======== ========
Total return .................... 14.01% 8.63% 13.16% (2.19%)+
Net assets, end of period (000's) .... $ 29,246 $ 10,469 $ 5,905 $ 344
Ratio of operating expenses to
average net assets (C) ............. 0.87% 1.04% 0.90% 5.16%(A)
Ratio of net investment income to
average net assets ................. 7.09% 7.70% 6.66% 1.16%(A)
Portfolio turnover rate .............. 233% 284% 330% 156%(A)
</TABLE>
- ----------
* Commencement of operations.
** The U.S. Government Securities Trust is the successor to the Convertible
Securities Trust effective May 1, 1989.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement per share of $0.01 and $0.06 in 1989 and 1988,
respectively.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 1.62% and 6.16% in 1989 and 1988, respectively.
40
<PAGE> 42
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET TRUST
-------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.50 0.49 0.55 0.38 0.27 0.33
LESS DISTRIBUTIONS:
Dividends from net investment income (0.50) (0.49) (0.55) (0.38) (0.27) (0.33)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
======== ======== ======== ======== ======== ========
Total return .................... 5.15% 5.05% 5.62% 3.78% 2.69% 3.36%
Net assets, end of period (000's) .... $439,714 $363,566 $258,117 $276,674 $132,274 $ 89,535
Ratio of operating expenses to
average net assets ................. 0.54% 0.55% 0.54% 0.57% 0.59% 0.60%
Ratio of net investment income to
average net assets ................. 5.03% 4.97% 5.48% 3.93% 2.66% 3.28%
<CAPTION>
MONEY MARKET TRUST
-----------------------------------------------
YEARS ENDED DECEMBER 31,
-----------------------------------------------
1991 1990 1989 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 10.00 $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.56 0.75 0.72 0.57
LESS DISTRIBUTIONS:
Dividends from net investment income (0.56) (0.75) (0.72) (0.57)
-------- -------- -------- --------
Net asset value, end of period ....... $ 10.00 $ 10.00 $ 10.00 $ 10.00
======== ======== ======== ========
Total return .................... 5.71% 7.76% 8.56% 6.77%
Net assets, end of period (000's) .... $ 79,069 $ 85,040 $ 19,403 $ 12,268
Ratio of operating expenses to
average net assets ................. 0.60% 0.57% 0.79% 0.99%
Ratio of net investment income to
average net assets ................. 5.65% 7.27% 8.26% 6.68%
</TABLE>
41
<PAGE> 43
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE
AGGRESSIVE 1000 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
<S> <C>
Net asset value, beginning
of period............................ $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)........... 0.05
Net realized and unrealized gain
on investments.................... 1.26
-----
Total from investment
operations.................... 1.31
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05)
Distributions from capital gains.... (0.29)
------
Total distributions............. (0.34)
------
Net asset value, end of period......... $13.47
======
Total return.................... 10.89%+
Net assets, end of period (000's)...... $49,105
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 1.29%(A)
Portfolio turnover rate................ 67%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.007 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
42
<PAGE> 44
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH 820 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
<S> <C>
Net asset value, beginning
of period............................ $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)........... 0.30
Net realized and unrealized gain
on investments.................... 1.38
-----
Total from investment
operations.................... 1.68
LESS DISTRIBUTIONS:
Dividends from net investment income (0.30)
Distributions from capital gains.... (0.11)
------
Total distributions............. (0.41)
------
Net asset value, end of period......... $13.77
======
Total return.................... 13.84%+
Net assets, end of period (000's)...... $217,158
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 2.44%(A)
Portfolio turnover rate................ 51%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.004 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
43
<PAGE> 45
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE
BALANCED 640 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
<S> <C>
Net asset value, beginning
of period............................ $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)........... 0.50
Net realized and unrealized gain
on investments.................... 1.19
-----
Total from investment
operations.................... 1.69
LESS DISTRIBUTIONS:
Dividends from net investment income (0.50)
Distributions from capital gains.... (0.13)
------
Total distributions............. (0.63)
------
Net asset value, end of period......... $13.56
======
Total return.................... 14.11%+
Net assets, end of period (000's)...... $186,653
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 3.24%(A)
Portfolio turnover rate................ 44%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.005 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
44
<PAGE> 46
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE
MODERATE 460 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
<S> <C>
Net asset value, beginning
of period............................ $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)........... 0.65
Net realized and unrealized gain
on investments.................... 0.98
-----
Total from investment
operations.................... 1.63
LESS DISTRIBUTIONS:
Dividends from net investment income (0.65)
Distributions from capital gains.... (0.13)
------
Total distributions............. (0.78)
------
Net asset value, end of period......... $13.35
======
Total return.................... 13.70%+
Net assets, end of period (000's)...... $52,746
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 3.91%(A)
Portfolio turnover rate................ 39%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.005 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
45
<PAGE> 47
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE
CONSERVATIVE 280 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
<S> <C>
Net asset value, beginning
of period............................ $12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)........... 0.76
Net realized and unrealized gain
on investments.................... 0.67
-----
Total from investment
operations.................... 1.43
LESS DISTRIBUTIONS:
Dividends from net investment income (0.76)
Distributions from capital gains.... (0.16)
------
Total distributions............. (0.92)
------
Net asset value, end of period......... $13.01
======
Total return.................... 12.15%+
Net assets, end of period (000's)...... $19,750
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 3.95%(A)
Portfolio turnover rate................ 38%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.006 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
46
<PAGE> 48
INVESTMENT OBJECTIVES AND POLICIES
Each portfolio has a stated investment objective which it pursues through
separate investment policies. The differences in objectives and policies among
the portfolios can be expected to affect the return of each portfolio and the
degree of market and financial risk to which each portfolio is subject.
The investment objectives of each portfolio represent fundamental policies
of each such portfolio and may not be changed without the approval of the
holders of a majority of the outstanding shares of the portfolio. Except for
certain investment restrictions, the policies by which a portfolio seeks to
achieve its investment objectives may be changed by the Trustees of the Trust
without the approval of the shareholders.
The following is a description of the investment objectives and policies
of each portfolio. More complete descriptions of the money market instruments
and certain other instruments in which the Trust may invest and of the options,
futures, currency and other derivative transactions that certain portfolios may
engage in are set forth in the Statement of Additional Information. A more
complete description of the debt security ratings used by the Trust assigned by
Moody's Investors Service, Inc. ("Moody's") or Standard and Poor's Corporation
("Standard & Poor's") is included in Appendix I to this Prospectus.
PACIFIC RIM EMERGING MARKETS TRUST
The investment objective of the Pacific Rim Emerging Markets Trust is to
achieve long-term growth of capital. MAC manages the Pacific Rim Emerging
Markets Trust and seeks to achieve this investment objective by investing in a
diversified portfolio that is comprised primarily of common stocks and
equity-related securities of corporations domiciled in countries in the Pacific
Rim region. Current income from dividends and interest will not be an important
consideration in the selection of portfolio securities.
In pursuit of its investment objective, the Pacific Rim Emerging Markets
Trust will vary the geographical distribution of its investments based upon the
continuous evaluation of political, economic and market trends throughout the
world. Investments will be shifted among the world's capital markets in
accordance with the ongoing analyses of trends and developments affecting such
markets and securities. The Pacific Rim Emerging Markets Trust will invest
primarily in companies domiciled in potentially all countries of the Pacific Rim
region. As used herein, the countries of the Pacific Rim region are India,
Pakistan, Japan, Hong Kong, Singapore, Malaysia, Thailand, Indonesia, Australia,
South Korea, Taiwan, Philippines, New Zealand and China.
The Pacific Rim Emerging Markets Trust will, under normal conditions,
invest at least 65% of its net assets in common stocks and equity-related
securities of established larger-capitalization non-U.S. companies located in
the Pacific Rim region that have attractive long-term prospects for growth of
capital. Equity-related securities in which the portfolio may invest include:
preferred stocks, warrants (see "RISK FACTORS -- Warrants" for further
information on warrants) and securities convertible into or exchangeable into
common stocks.
The Pacific Rim Emerging Markets Trust may, for defensive purposes, invest
all or a portion of its assets in non-convertible fixed-income securities
denominated in U.S. and non-U.S. dollars. These non-convertible fixed-income
securities will include debt of corporations, foreign governments and
supranational organizations. The portfolio may also maintain a portion of its
assets in cash or short-term debt securities pending the selection of certain
long-term investments.
The Pacific Rim Emerging Markets Trust will be subject to special risks as
a result of its ability to invest up to 100% of its total assets in foreign
securities. These risks are described under the caption "RISK FACTORS -- Foreign
Securities" in this Prospectus. Moreover, substantial investments in foreign
securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Pacific Rim Emerging Markets Trust may also purchase and sell the
following equity-related financial instruments: exchange-listed call and put
options on equity indices, over-the-counter ("OTC") and exchange-listed equity
index futures, OTC and exchange-listed call and put options on various
currencies in the portfolio, and OTC foreign currency futures contracts on
various currencies in the portfolio. (A call option gives the holder the right
to buy shares of the underlying security at a fixed price before a specified
date in the future. A put option gives the holder the right to sell a specified
number of shares of the underlying security at a particular price within a
specified time period.) The Statement of Additional Information contains a
description of these strategies and of certain risks associated therewith.
47
<PAGE> 49
SCIENCE & TECHNOLOGY TRUST
The investment objective of the Science & Technology Trust is long-term
growth of capital. Current income is incidental to the portfolio's objective. T.
Rowe Price manages the Science & Technology Trust.
The Science & Technology Trust will invest at least 65% of its total
assets in the common stocks of companies expected to benefit from the
development, advancement, and use of science and technology. Industries likely
to be represented in the portfolio include computers and peripheral products,
software, electronic components and systems, telecommunications, media and
information services, pharmaceuticals, hospital supply and medical devices,
biotechnology, environmental services, chemicals and synthetic materials, and
defense and aerospace. Investments may also include companies that should
benefit from the commercialization of technological advances even if they are
not directly involved in research and development.
Most of the assets of the Science & Technology Trust will be invested in
U.S. common stocks. However, the portfolio may also purchase other types of
securities, for example, foreign securities, convertible stocks and bonds, and
warrants, when considered consistent with the portfolio's investment objective
and program. The portfolio will hold a certain portion of its assets in U.S. and
foreign dollar-denominated money market securities, including repurchase
agreements, in the two highest rating categories, maturing in one year or less.
For temporary, defensive purposes, the portfolio may invest without limitation
in such securities. This reserve position provides flexibility in meeting
redemptions, expenses, and the timing of new investments and serves as a
short-term defense during periods of unusual market volatility.
Stock selection for the portfolio is not based on company size but rather
on an assessment of the company's fundamental prospects. As a result, holdings
can range from small companies developing new technologies or pursuing
scientific breakthroughs to large, blue chip firms with established track
records of developing and marketing such advances.
Companies in the rapidly changing fields of science and technology face
special risks. For example, their products or services may not prove
commercially successful or may become obsolete quickly. Therefore, a portfolio
of these stocks will likely be more volatile in price than one with broader
diversification that includes investments in more economic sectors. The level of
risk will be increased to the extent that the portfolio has significant exposure
to smaller or unseasoned companies (those with less than a three-year operating
history). See "RISK FACTORS - Small Company and Emerging Growth Securities" for
a discussion of the risks involved with investing in these securities.
The Science & Technology Trust may also engage in a variety of investment
management practices, such as buying and selling futures and options. The
portfolio may invest up to 10% of its total assets in hybrid instruments, which
are a type of high-risk derivative which can combine the characteristics of
securities, futures and options. For example, the principal amount, redemption
or conversion terms of a security could be related to the market price of some
commodity, currency or securities index. Such securities may bear interest or
pay dividends at below market (or even relatively nominal) rates. The Statement
of Additional Information contains a fuller description of such instruments and
the risks associated therewith.
The Science & Technology Trust will be subject to special risks as a
result of its ability to invest up to 30% of its total assets in foreign
securities. These include non-dollar-denominated securities traded outside of
the U.S. and dollar-denominated securities of foreign issuers traded in the U.S.
(such as ADRs). See "RISK FACTORS -- Foreign Securities" in this Prospectus for
a description of these risks as well as a definition of ADRs. Moreover,
substantial investments in foreign securities may have adverse tax implications
as described under "GENERAL INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Science & Technology Trust is currently authorized to use all of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
INTERNATIONAL SMALL CAP TRUST
The investment objective of the International Small Cap Trust is to seek
long-term capital appreciation. Founders manages the International Small Cap
Trust and will pursue this objective by investing primarily in securities issued
by foreign companies which have total market capitalizations (present market
value per share multiplied by the total number of shares outstanding) or annual
revenues of $1 billion or less ("small company securities"). These securities
may represent companies in both established and emerging economies throughout
the world. For a discussion of the risks of investing in small company
securities see "RISK FACTORS - Small Company and Emerging Growth Securities."
48
<PAGE> 50
At least 65% of the portfolio's total assets will normally be invested in
foreign securities representing a minimum of three countries (other than the
United States). The portfolio may invest in larger foreign companies or in U.S.
based companies if, in Founders' opinion, they represent better prospects for
capital appreciation.
The International Small Cap Trust will invest primarily in equity
securities but may also invest in convertible securities, preferred stocks,
bonds, debentures and other corporate obligations when Founders believes that
these investments offer opportunities for capital appreciation. Current income
will not be a substantial factor in the selection of these securities. The
portfolio will only invest in bonds, debentures and corporate obligations--other
than convertible securities and preferred stock--rated investment-grade (Baa or
higher by Moody's or BBB or higher by Standard & Poor's) at the time of purchase
or, if unrated, of comparable quality in the opinion of Founders. Convertible
securities and preferred stocks purchased by the Portfolio may be rated in
medium and lower categories by Moody's or Standard & Poor's (Ba or lower by
Moody's and BB or lower by Standard & Poor's) but will not be rated lower than
B. The portfolio may also invest in unrated convertible securities and preferred
stocks in instances in which Founders believes that the financial condition of
the issuer or the protection afforded by the terms of the securities limits risk
to a level similar to that of securities rated in categories no lower than B. At
no time will the portfolio have more than 5% of its total assets invested in any
fixed-income securities (excluding preferred stocks) which are unrated or are
rated below investment grade either at the time of purchase or as a result of a
reduction in rating after purchase. The portfolio is not required to dispose of
debt securities whose ratings are downgraded below these ratings subsequent to
the portfolio's purchase of the securities, unless such a disposition is
necessary to reduce the portfolio's holdings of such securities to less than 5%
of its total assets (see "RISK FACTORS -- High Yield (High Risk) Securities"). A
description of the ratings used by Moody's and Standard & Poor's is set forth in
Appendix I to the Prospectus.
The International Small Cap Trust may invest up to 100% of its assets
temporarily in the following securities if Founders determines that it is
appropriate for purposes of enhancing liquidity or preserving capital in light
of prevailing market or economic conditions: cash, cash equivalents, U.S.
government obligations, commercial paper, bank obligations, repurchase
agreements, and negotiable U.S. dollar-denominated obligations of domestic and
foreign branches of U.S. depository institutions, U.S. branches of foreign
depository institutions, and foreign depository institutions. The portfolio may
also acquire certificates of deposit and bankers' acceptances of banks which
meet criteria established by the Trust's Trustees. When the portfolio is in a
defensive position, the opportunity to achieve capital growth will be limited,
and, to the extent that this assessment of market conditions is incorrect, the
portfolio will be foregoing the opportunity to benefit from capital growth
resulting from increases in the value of equity investments and may not achieve
its investment objective.
FOREIGN SECURITIES. The portfolio may invest up to 100% of its total
assets in foreign securities and will be subject to special risks as a result of
these investments. These risks are described under the caption "RISK FACTORS --
Foreign Securities" in this Prospectus. Moreover, substantial investments in
foreign securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus. In order to comply with limitations
imposed by the State of California Insurance Department, the International Small
Cap Trust will comply with the restrictions regarding foreign investments set
forth under "RISK FACTORS -- Additional Investment Restrictions on Borrowing and
Foreign Investing."
Foreign investments of the International Small Cap Trust may include
securities issued by companies located in countries not considered to be major
industrialized nations. Such countries are subject to more economic, political
and business risk than major industrialized nations, and the securities issued
by issuers located in such countries are expected to be more volatile and more
uncertain as to payments of interest and principal. The secondary market for
such securities is expected to be less liquid than for securities of major
industrialized nations. Such countries may include (but are not limited to)
Argentina, Australia, Austria, Belgium, Bolivia, Brazil, Chile, China, Colombia,
Costa Rica, Croatia, Czech Republic, Denmark, Ecuador, Egypt, Finland, Greece,
Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Jordan, Malaysia,
Mexico, Netherlands, New Zealand, Nigeria, North Korea, Norway, Pakistan,
Paraguay, Peru, Philippines, Poland, Portugal, Singapore, Slovak Republic. South
Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand,
Turkey, Uruguay, Venezuela, Vietnam and the countries of the former Soviet
Union. Investments of the Portfolio may include securities created through the
Brady Plan, a program under which heavily indebted countries have restructured
their bank debt into bonds. See "OTHER INSTRUMENTS -- High Yield Foreign
Sovereign Debt Securities" in the Statement of Additional Information.
Since the International Small Cap Trust's assets will be invested
primarily in foreign securities and since substantially all of the portfolio's
revenues will be received in foreign currencies, the portfolio's net asset
values will be affected by changes in currency exchange rates. The portfolio
will pay dividends in dollars and will incur currency conversion costs.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS. The International Small
Cap Trust is currently authorized to use all of the various investment
strategies referred to under "RISK FACTORS -- Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
49
<PAGE> 51
EMERGING GROWTH TRUST
The investment objective of the Emerging Growth Trust is maximum capital
appreciation. Warburg manages the Emerging Growth Trust and will pursue this
objective by investing primarily in a portfolio of equity securities of domestic
companies.
The Emerging Growth Trust ordinarily will invest at least 65% of its total
assets in common stocks or warrants of emerging growth companies that represent
attractive opportunities for maximum capital appreciation. Emerging growth
companies are small- or medium-sized companies that have passed their start-up
phase and that show positive earnings and prospects of achieving significant
profit and gain in a relatively short period of time.
The Emerging Growth Trust is classified as a non-diversified investment
company under the 1940 Act, which means that the portfolio is not limited by the
1940 Act in the proportion of its assets that it may invest in the obligations
of a single issuer. As a non-diversified investment company, the portfolio may
invest a greater proportion of its assets in the obligations of a small number
of issuers and, as a result, may be subject to greater risk with respect to
portfolio securities. To the extent that the portfolio assumes large positions
in the securities of a small number of issuers, its return may fluctuate to a
greater extent than that of a diversified company as a result of changes in the
financial condition or in the market's assessment of the issuers.
Although under current market conditions the Emerging Growth Trust expects
to invest in companies having stock market capitalizations of up to
approximately $500 million, the portfolio may invest in emerging growth
companies without regard to their market capitalization. Emerging growth
companies generally stand to benefit from new products or services,
technological developments or changes in management and other factors and
include smaller companies experiencing unusual developments affecting their
market value. These "special situation companies" include companies that are
involved in the following: an acquisition or consolidation; a reorganization; a
recapitalization; a merger, liquidation, or distribution of cash, securities or
other assets; a tender or exchange offer; a breakup or workout of a holding
company; litigation which, if resolved favorably, would improve the value of the
company's stock; or a change in corporate control. For a discussion of the risks
involved with investing in securities of emerging growth companies see "RISK
FACTORS -- Small Company and Emerging Growth Securities."
The Emerging Growth Trust may invest up to 20% of its total assets in
investment grade debt securities (other than money market obligations) and
preferred stocks that are not convertible into common stock for the purpose of
seeking capital appreciation. The interest income to be derived may be
considered as one factor in selecting debt securities for investment by Warburg.
Because the market value of debt obligations can be expected to vary inversely
to changes in prevailing interest rates, investing in debt obligations may
provide an opportunity for capital appreciation when interest rates are expected
to decline. The success of such a strategy is dependent upon Warburg's ability
to accurately forecast changes in interest rates. The market value of debt
obligations may also be expected to vary depending upon, among other factors,
the ability of the issuer to repay principal and interest, any change in
investment rating and general economic conditions.
A security will be deemed to be investment grade if it is rated within the
four highest grades by Moody's or Standard & Poor's or, if unrated, is
determined to be of comparable quality by Warburg. Bonds rated in the fourth
highest grade may have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade
bonds. Subsequent to its purchase by the portfolio, an issue of securities may
cease to be rated or its rating may be reduced below the minimum required for
purchase by the portfolio. Neither event will require sale of such securities,
although Warburg will consider such event in its determination of whether the
portfolio should continue to hold the securities.
When Warburg believes that a defensive posture is warranted, the Emerging
Growth Trust may invest temporarily without limit in investment grade debt
obligations and in domestic and foreign money market obligations, including
repurchase agreements.
The Emerging Growth Trust is authorized to invest, under normal market
conditions, up to 20% of its total assets in domestic and foreign short-term
(one year or less remaining to maturity) and medium-term (five years or less
remaining to maturity) money market obligations and for temporary defensive
purposes may invest in these securities without limit. These instruments consist
of obligations issued or guaranteed by the U.S. government or a foreign
government, their agencies or instrumentalities; bank obligations (including
certificates of deposit, time deposits and bankers' acceptances of domestic or
foreign banks, domestic savings and loans and similar institutions) that are
high quality investments or, if unrated, deemed by Warburg to be high quality
investments; commercial paper rated no lower than A-2 by Standard & Poor's or
Prime-2 by Moody's or the equivalent from another major rating service or, if
unrated, of an issuer having an outstanding, unsecured debt issue then rated
within the three highest rating categories; and repurchase agreements with
respect to the foregoing.
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The Emerging Growth Trust will be subject to certain risks as a result of
its ability to invest up to 20% of its total assets in the securities of foreign
issuers. These risks are described under the caption "RISK FACTORS -- Foreign
Securities" in this Prospectus. Moreover, substantial investments in foreign
securities may have adverse tax implications as described under "GENERAL
INFORMATION --Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS The Emerging Growth Trust
is currently authorized to use all of the investment strategies referred to
under "Hedging and Other Strategic Transactions." However, it is not presently
contemplated that any of these strategies will be used to a significant degree
by the portfolio.
PILGRIM BAXTER GROWTH TRUST
The investment objective of the Pilgrim Baxter Growth Trust is capital
appreciation. PBA manages the Pilgrim Baxter Growth Trust and seeks to achieve
its objective by investing in companies believed by the Subadviser to have an
outlook for strong earnings growth and the potential for significant capital
appreciation.
The Pilgrim Baxter Growth Trust will normally be as fully invested as
practicable in common stocks and securities convertible into common stocks, but
also may invest up to 5% of its assets in warrants and rights to purchase common
stocks. In the opinion of PBA, there may be times when the shareholders'
interests are best served and the investment objective is more likely to be
achieved by having varying amounts of the portfolio's assets invested in
convertible securities.
Under normal market conditions, the Pilgrim Baxter Growth Trust will
invest at least 65% of its total assets in common stocks and convertible
securities of small and medium sized growth companies (market capitalization or
annual revenues up to $2 billion). At certain times that percentage may be
substantially higher. The average market capitalizations or annual revenues of
holdings in the portfolio may, however, fluctuate over time as a result of
market valuation levels and the availability of specific investment
opportunities. In addition, the portfolio may continue to hold securities of
companies whose market capitalizations or annual revenues grow above $2 billion
subsequent to purchase, if the company continues to satisfy the other investment
policies of the portfolio.
PBA tries to keep the portfolio fully invested at all times. However, for
temporary defensive purposes, when PBA determines that market conditions
warrant, each portfolio may invest up to 100% of its assets in cash and money
market instruments (consisting of securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; certificates of deposit, time
deposits and bankers' acceptances issued by banks or savings and loan
associations having net assets of at least $500 million as stated on their most
recently published financial statements; commercial paper rated in one of the
two highest rating categories by at least one nationally recognized statistical
rating organization ("NRSRO"); repurchase agreements involving such securities;
and, to the extent permitted by applicable law and the portfolio's investment
restrictions, shares of other investment companies investing solely in money
market securities). To the extent the portfolio is invested in temporary
defensive instruments, it will not be pursuing its investment objective.
PBA's investment process in managing the assets of the Pilgrim Baxter
Growth Trust is both quantitative and fundamental, and is extremely focused on
quality earnings growth. In seeking to identify investment opportunities for the
portfolio, PBA begins by creating a universe of rapidly growing companies with
market capitalizations within the parameters described above and that possess
certain quality characteristics. Using proprietary software and research models
that incorporate important attributes of successful growth, such as positive
earnings surprises, upward earnings estimate revisions, and accelerating sales
and earnings growth, PBA creates a universe of growing companies. Then, using
fundamental research, PBA evaluates each company's earnings quality and assesses
the sustainability of the company's current growth trends. Through this highly
disciplined process, the Subadviser seeks to construct an investment portfolio
that possesses strong growth characteristics.
While PBA intends to invest in small capitalization companies that have
strong balance sheets and that PBA's research indicates should exceed consensus
earnings expectations, any investment in small capitalization companies involves
greater risk and price volatility than that customarily associated with
investments in larger, more established companies. For information on the risks
associated with investing in securities of small capitalization companies see
"RISK FACTORS Small Company and Emerging Growth Securities."
Securities will be sold when PBA believes that anticipated appreciation is
no longer probable, alternative investments offer superior appreciation
prospects, or the risk of a decline in market price is too great. Because of its
policy with respect to the sales of investments, the Pilgrim Baxter Growth Trust
may from time to time realize short-term gains or losses. The portfolio will
likely have somewhat greater volatility than the stock market in general, as
measured by the S&P 500 Index.
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Normally, the Pilgrim Baxter Growth Trust will purchase only securities
traded in the United States or Canada on registered exchanges or in the
over-the-counter market. The portfolio may invest up to 15% of its total assets
in securities of foreign issuers (including ADRs). To the extent the portfolio
invests in foreign securities, it will be subject to certain risks as described
under the caption "RISK FACTORS -- Foreign Securities" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Pilgrim Baxter Growth Trust is currently authorized to use all of the
investment strategies referred to under "Hedging and Other Strategic
Transactions." With the exception of forward foreign currency contracts,
however, it is not presently contemplated that any of these strategies will be
used to a significant degree by the portfolio. (Forward foreign currency
contracts are the purchase of a fixed quantity of foreign currency at a future
date at a price set at the time of the contract.) The Statement of Additional
Information contains a description of these strategies and certain risks
associated therewith.
SMALL/MID CAP TRUST
The investment objective of the Small/Mid Cap Trust is to seek long-term
capital appreciation. Alger manages the Small/Mid Cap Trust and will pursue this
objective by investing at least 65% of the portfolio's total assets (except
during temporary defensive periods) in small/mid cap equity securities. As used
in this Prospectus, small/mid cap equity securities are equity securities of
companies that, at the time of purchase, have "total market capitalization" --
present market value per share multiplied by the total number of shares
outstanding -- between $500 million and $5 billion. The portfolio may invest up
to 35% of its total assets in equity securities of companies that, at the time
of purchase, have total market capitalization of $5 billion or greater and in
excess of that amount (up to 100% of its assets ) during temporary defensive
periods.
The Small/Mid Cap Trust seeks to achieve its investment objective by
investing in equity securities, such as common or preferred stocks, or
securities convertible into or exchangeable for equity securities, including
warrants and rights. The portfolio will invest primarily in companies whose
securities are traded on domestic stock exchanges or in the over-the-counter
market.
The Small/Mid Cap Trust may invest a significant portion of its assets in
the securities of small companies. Small companies are those which are still in
the developing stages of their life cycles and will attempt to achieve rapid
growth in both sales and earnings. For the risks associated with investing in
securities of small companies see "RISK FACTORS - Small Company and Emerging
Growth Securities."
In order to afford the portfolio the flexibility to take advantage of new
opportunities for investments in accordance with its investment objectives, it
may hold up to 15% of its net assets (up to 100% of their assets during
temporary defensive periods) in money market instruments, bank and thrift
obligations, obligations issued or guaranteed by the U.S. Government or by its
agencies or instrumentalities, foreign bank obligations and obligations of
foreign branches of domestic banks, variable rate master demand notes and
repurchase agreements. When the portfolio is in a defensive position, the
opportunity to achieve capital growth will be limited, and, to the extent that
this assessment of market conditions is incorrect, the portfolio will be
foregoing the opportunity to benefit from capital growth resulting from
increases in the value of its investments and may not achieve its investment
objective.
FOREIGN SECURITIES. The portfolio may invest up to 20% of its total assets
in foreign securities and will be subject to certain risks as a result of these
investments. These risks are described under the caption "RISK FACTORS --
Foreign Securities" in this Prospectus. Moreover, substantial investments in
foreign securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus. The portfolio may also purchase
American Depository Receipts ("ADRs") or U.S. dollar-denominated securities of
foreign issuers that are not included in the 20% foreign securities limitation.
See "RISK FACTORS -- Foreign Securities" in this Prospectus for a description of
ADRs.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS. The Small/Mid Cap Trust
is currently authorized to use all of the various investment strategies referred
to under "RISK FACTORS -- Hedging and Other Strategic Transactions." The
Statement of Additional Information contains a description of these strategies
and of certain risks associated therewith.
INTERNATIONAL STOCK TRUST
The investment objective of the International Stock Trust is long-term
growth of capital. Price-Fleming manages the International Stock Trust and seeks
to attain this objective by investing primarily in common stocks of established,
non-U.S. companies. The portfolio expects to invest substantially all of its
assets outside the U.S. and to diversify broadly among countries throughout the
world -developed, newly industrialized, and emerging. The portfolio will invest
in at least three countries outside the United States.
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The International Stock Trust expects to invest substantially all of its
assets in common stocks. However, the portfolio may also invest in a variety of
other equity-related securities, such as preferred stocks, warrants and
convertible securities, as well as corporate and governmental debt securities,
when considered consistent with the portfolio's investment objectives and
program. Under normal market conditions, the portfolio's investment in
securities other than common stocks is limited to no more than 35% of total
assets. However, for temporary defensive purposes, the portfolio may invest all
or a significant portion of its assets in U.S. Government and corporate debt
obligations. The portfolio will not purchase any debt security which at the time
of purchase is rated below investment grade. This would not prevent the
portfolio from retaining a security downgraded to below investment grade after
purchase.
The International Stock Trust will hold a certain portion of its assets in
U.S. and foreign dollar-denominated money market securities, including
repurchase agreements, in the two highest rating categories, maturing in one
year or less. For temporary, defensive purposes, the portfolio may invest
without limitation in such securities. This reserve position provides
flexibility in meeting redemptions, expenses, and the timing of new investments
and serves as a short-term defense during periods of unusual market volatility.
Price-Fleming uses a "bottom-up" approach to stock selection based on
fundamental research. A company's prospects for achieving and sustaining
above-average, long-term earnings growth is generally the Subadviser's primary
focus. However, valuation factors, such as price/earnings, price/cash flow, and
price/book are also important considerations. In conjunction with identifying
potential stocks for investment, external factors are also reviewed. For
example, a country's or region's political, economic, and financial status helps
shape the outlook for individual stocks and also affects decisions regarding the
prudent level of overall exposure to particular areas.
It is the present intention of Price-Fleming to invest in companies based
in (or governments of or within) the Far East (for example, Japan, Hong Kong,
Singapore, and Malaysia), Europe (for example, United Kingdom, Germany, Hungary,
Poland, Netherlands, France, Spain, and Switzerland), South Africa, Australia,
Canada, Latin America, and such other areas and countries as Price-Fleming may
determine from time to time.
In determining the appropriate distribution of investments among various
countries and geographic regions, Price-Fleming ordinarily considers the
following factors: prospects for relative economic growth between foreign
countries; expected levels of inflation; government policies influencing
business conditions; the outlook for currency relationships; and the range of
individual investment opportunities available to international investors. In
analyzing companies for investment, Price-Fleming ordinarily looks for one or
more of the following characteristics: an above-average earnings growth per
share; high return on invested capital; healthy balance sheet; sound financial
and accounting policies and overall financial strength; strong competitive
advantages; effective research and product development and marketing; efficient
service; pricing flexibility; strength of management; and general operating
characteristics which will enable the companies to compete successfully in their
market place.
While current dividend income is not a prerequisite in the selection of
International Stock Trust companies, the companies in which the portfolio
invests normally will have a record of paying dividends, and will generally be
expected to increase the amounts of such dividends in future years as earnings
increase. It is expected that the portfolio's investments will ordinarily be
traded on exchanges located at least in the respective countries in which the
various issuers of such securities are principally based.
The International Stock Trust may purchase the securities of certain
foreign investment portfolios or trusts called passive foreign investment
companies. Such trusts have been the only or primary way to invest in certain
countries. In addition to bearing their proportionate share of the trust's
expenses (management fees and operating expenses), shareholders will also
indirectly bear similar expenses of such trusts. Capital gains on the sale of
such holdings are considered ordinary income regardless of how long the
portfolio held its investment. In addition, the portfolio may be subject to
corporate income tax and an interest charge on certain dividends and capital
gains earned from these investments, regardless of whether such income and gains
are distributed to shareholders. To avoid such tax and interest, the portfolio
intends to treat these securities as sold on the last day of its fiscal year and
recognize any gains for tax purposes at that time; losses will not be
recognized. Such gains will be considered ordinary income, which the portfolio
will be required to distribute even though it has not sold the security.
The International Stock Trust may also engage in a variety of investment
management practices, such as buying and selling futures and options and
engaging in foreign currency exchange contracts. The portfolio may invest up to
10% of its total assets in hybrid instruments, which are a type of high-risk
derivative which can combine the characteristics of securities, futures and
options. For example, the principal amount, redemption or conversion terms of a
security could be related to the market price of some commodity, currency or
securities index. Such securities may bear interest or pay dividends at below
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market (or even relatively nominal) rates. The Statement of Additional
Information contains a fuller description of such instruments and the risks
associated therewith.
The International Stock Trust will be subject to special risks as a result
of its ability to invest up to 100% of its total assets in foreign securities.
These include non-dollar-denominated securities traded outside of the U.S. and
dollar-denominated securities of foreign issuers traded in the U.S. (such as
ADRs). These risks are described under the caption "RISK FACTORS -- Foreign
Securities" in this Prospectus. Moreover, substantial investments in foreign
securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The International Stock Trust is currently authorized to use all of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
WORLDWIDE GROWTH TRUST
The investment objective of the Worldwide Growth Trust is long-term growth
of capital. Founders manages the Worldwide Growth Trust and seeks to attain this
objective by normally investing at least 65% of its total assets in equity
securities of growth companies in a variety of markets throughout the world.
The Worldwide Growth Trust will emphasize common stocks of both emerging
and established growth companies that generally have proven performance records
and strong market positions. The portfolio's holdings will usually consist of
investments in companies in various countries throughout the world, but it will
always invest at least 65% of its total assets in three or more countries. The
portfolio will not invest more than 50% of its total assets in the securities of
any one foreign country.
The Worldwide Growth Trust has the ability to purchase securities in any
foreign country as well as in the United States. Foreign investments of the
portfolio may include securities issued by companies located in countries not
considered to be major industrialized nations. Such countries are subject to
more economic, political and business risk than major industrialized nations,
and the securities they issue are expected to be more volatile and more
uncertain as to payments of interest and principal. Investments of the portfolio
may include securities created through the Brady Plan, a program under which
heavily indebted countries have restructured their bank debt into bonds.
Since the Worldwide Growth Trust's assets will be invested primarily in
foreign securities and since substantially all of the portfolio's revenues will
be received in foreign currencies, the portfolio's net asset values will be
affected by changes in currency exchange rates. The portfolio will pay dividends
in dollars and will incur currency conversion costs.
The Worldwide Growth Trust may invest in convertible securities, preferred
stocks, bonds, debentures, and other corporate obligations when Founders
believes that these investments offer opportunities for capital appreciation.
Current income will not be a substantial factor in the selection of these
securities.
The portfolio will only invest in bonds, debentures, and corporate
obligations -- other than convertible securities and preferred stocks -- rated
investment grade (BBB or higher) at the time of purchase or, if unrated, of
comparable quality in the opinion of Founders. Convertible securities and
preferred stocks purchased by the portfolio may be rated in medium and lower
categories by Moody's or Standard & Poor's (Ba or lower by Moody's and BB or
lower by Standard & Poor's), but will not be rated lower than B. The portfolio
may also invest in unrated convertible securities and preferred stocks in
instances in which Founders believes that the financial condition of the issuer
or the protection afforded by the terms of the securities limits risk to a level
similar to that of securities eligible for purchase by the portfolio rated in
categories no lower than B. At no time will the portfolio have more than 5% of
its total assets invested in any fixed-income securities (excluding preferred
stocks) which are unrated or are rated below investment grade either at the time
of purchase or as a result of a reduction in rating after purchase. The
portfolio is not required to dispose of debt securities whose ratings are
downgraded below these ratings subsequent to the portfolio's purchase of the
securities, unless such a disposition is necessary to reduce the portfolio's
holdings of such securities to less than 5% of its total assets (see "RISK
FACTORS -- High Yield (High Risk) Securities"). A description of the ratings
used by Moody's and Standard & Poor's is set forth in Appendix I to the
Prospectus.
Up to 100% of the assets of the Worldwide Growth Trust may be invested
temporarily in U.S. Government obligations, commercial paper, bank obligations,
repurchase agreements, and negotiable U.S. dollar-denominated obligations of
domestic and foreign branches of U.S. depository institutions, U.S. branches of
foreign depository institutions, and foreign depository institutions, in cash,
or in other cash equivalents, if Founders determines it to be appropriate for
purposes of enhancing liquidity or preserving capital in light of prevailing
market or economic conditions. The portfolio may also
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acquire certificates of deposit and bankers' acceptances of banks which meet
criteria established by the Trust's Trustees. While the portfolio is in a
defensive position, the opportunity to achieve capital growth will be limited,
and, to the extent that this assessment of market conditions is incorrect, the
portfolio will be foregoing the opportunity to benefit from capital growth
resulting from increases in the value of equity investments.
The Worldwide Growth Trust may invest in the securities of small and
medium-sized companies. The Subadviser considers small and medium-sized
companies to be those which are still in the developing stages of their life
cycles and are attempting to achieve rapid growth in both sales and earnings.
Investments in small sized companies involve greater risk than is customarily
associated with more established companies. For a description of these risks see
"RISK FACTORS - Small Company and Emerging Growth Securities. "
The Worldwide Growth Trust will be subject to special risks as a result of
its ability to invest up to 100% of its total assets in foreign securities.
These risks are described under the caption "RISK FACTORS -- Foreign Securities"
in this Prospectus. Moreover, substantial investments in foreign securities may
have adverse tax implications as described under "GENERAL INFORMATION -- Taxes"
in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Worldwide Growth Trust is currently authorized to use all of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
GLOBAL EQUITY TRUST
The investment objective of the Global Equity Trust is long-term capital
appreciation. Morgan Stanley manages the Global Equity Trust and seeks to attain
this objective by investing primarily in common and preferred stocks,
convertible securities, rights and warrants to purchase common stocks, American
and Global Depository Receipts and other equity securities of issuers throughout
the world, including issuers in the U.S. and emerging market countries.
Under normal circumstances, at least 65% of the value of the total assets
of the Global Equity Trust will be invested in equity securities and at least
20% of the value of the portfolio's total assets will be invested in the common
stocks of U.S. issuers. The portfolio may also invest in money market
instruments. Although the portfolio intends to invest primarily in securities
listed on stock exchanges, it will also invest in equity securities that are
traded over-the-counter or that are not admitted to listing on a stock exchange
or dealt in on a regulated market. As a result of the absence of a public
trading market, such securities may pose liquidity risks.
The Subadviser's approach is oriented to individual stock selection and is
value driven. In selecting stocks for the portfolio, the Subadviser initially
identifies those stocks that it believes to be undervalued in relation to the
issuer's assets, cash flow, earnings and revenues, and then evaluates the future
value of such stocks by running the results of an in-depth study of the issuer
through a dividend discount model. In selecting investments, the Subadviser
utilizes the research of a number of sources, including Morgan Stanley Capital
International, an affiliate of the Subadviser located in Geneva, Switzerland.
Portfolio holdings are regularly reviewed and subjected to fundamental analysis
to determine whether they continue to conform to the Subadviser's value
criteria. Equity securities which no longer conform to such investment criteria
will be sold. Although the portfolio will not invest for short-term trading
purposes, investment securities may be sold from time to time without regard to
the length of time they have been held.
The Global Equity Trust may engage in forward foreign currency exchanges
and when-issued or delayed delivery securities.
The Global Equity Trust will be subject to special risks as a result of
its ability to invest up to 100% of its total assets in foreign securities.
These risks, including the risks of the possible increased likelihood of
expropriation or the return to power of a communist regime which would institute
policies to expropriate, nationalize or otherwise confiscate investments, are
described under the caption "RISK FACTORS -- Foreign Securities" in this
Prospectus. Moreover, substantial investments in foreign securities may have
adverse tax implications as described under "GENERAL INFORMATION -- Taxes" in
this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Global Equity Trust is currently authorized to use all of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions." With the exception of currency transactions, however, it is not
presently
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anticipated that any of these strategies will be used to a significant degree by
the portfolio. The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
SMALL COMPANY VALUE TRUST
The investment objective of the Small Company Value Trust is to seek
long-term growth of capital. Rosenberg manages the Small Company Value Trust and
will pursue this objective by investing in equity securities of smaller
companies which are traded principally in the markets of the United States.
Because the companies in which the Small Company Value Trust invests typically
do not distribute significant amounts of company earnings to shareholders, the
Small Company Value Trust's objective will place relatively greater emphasis on
capital appreciation than on current income.
Rosenberg seeks long-term growth of capital through a quantitative stock
selection process. Rosenberg also attempts to control risk in the portfolio
relative to the securities constituting its relevant benchmark (currently, the
Russell 2000 Index). Rosenberg identifies and purchases those stocks which are
undervalued (i.e., stocks which are currently cheaper than stocks with similar
characteristics). Rosenberg does not seek to achieve extraordinary returns by
timing the market but rather seeks to construct a portfolio with characteristics
similar to those of the Small Company Value Trust's benchmark. These
characteristics include market capitalization, historic volatility or "beta" (a
stock's relative volatility) and industry weightings. In managing the portfolio,
Rosenberg utilizes several computer models to assess a company's fundamental
value and earnings potential as well as investor sentiment about the company.
For additional information on Rosenberg's computer models, general investment
philosophy and strategy, see "Additional Information Regarding Subadvisers" in
the Statement of Additional Information.
It is currently expected that, under normal circumstances, most (at least
80%) of the Small Company Value Trust's assets will be invested in common stocks
of companies with total market capitalization of less than $1 billion ("small
capitalization securities"). Investments in issues of small capitalization
securities may present greater opportunities for capital appreciation but may
also involve greater risk as discussed in "RISK FACTORS - Small Company
Securities."
To meet redemptions or pending investment in common stocks, the Small
Company Value Trust may also temporarily hold a portion of its assets not
invested in small capitalization securities in full faith and credit obligations
of the United States government (e.g. U.S. Treasury Bills) and in short-term
notes, commercial paper or other money market instruments of high quality (i.e.,
rated at least "A-2" or "AA" by Standard & Poor's or Prime 2 or "Aa" by Moody's
Investors Service, Inc. ("Moody's")) issued by companies having an outstanding
debt issue rated at least "AA" by Standard & Poor's or at least "Aa" by Moody's,
or determined by Rosenberg to be of comparable quality to any of the foregoing.
The Small Company Value Trust may invest without limit in common stocks of
foreign issuers which are listed on a United States securities exchange or trade
in the United States in the OTC market. Investment in common stocks of foreign
issuers may involve certain special risks due to foreign economic, political and
legal developments. These risks are described under the caption "RISK FACTORS
- -Foreign Securities" in this Prospectus. The Small Company Value Trust will not
invest in securities which are principally traded outside of the United States.
The Small Company Value Trust is designed for long-term investors willing
to assume above-average risk in return for above-average capital growth
potential.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS The Small Company Value
Trust is currently authorized to use all of the investment strategies referred
to under "Hedging and Other Strategic Transactions."
EQUITY TRUST
The principal investment objective of the Equity Trust is growth of
capital. Current income is a secondary consideration although growth of income
may accompany growth of capital.
FMTC manages the Equity Trust and seeks to attain the foregoing objective
by investing primarily in common stocks of United States issuers or securities
convertible into or which carry the right to buy common stocks. It may also
invest to a limited degree, normally not in excess of 15% of the value of the
Equity Trust's total assets, in non-convertible preferred stocks and debt
securities. Portfolio securities may be selected with a view toward either
short-term or long-term capital growth. When in FMTC's opinion market or
economic conditions warrant a defensive posture, the Equity Trust may place any
portion of its assets in investment grade debt securities (i.e., the four
highest bond ratings assigned by Moody's or Standard & Poor's), preferred
stocks, Government securities or cash. The fourth highest category of investment
grade bonds has some speculative characteristics and instruments with such
ratings are subject to greater fluctuations in value than more highly rated
instruments as economic conditions change. The Equity Trust is not required to
dispose of such instruments in the event they are downgraded.
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It may also maintain amounts in cash or short-term debt securities pending
selection of investments in accordance with its policies.
The Equity Trust will invest primarily in securities listed on national
securities exchanges, but from time to time it may also purchase securities
traded in the "over the counter" market. The Equity Trust will be subject to
certain risks as a result of its ability to invest up to 20% of its assets in
foreign securities. These risks are described under the caption "RISK FACTORS --
Foreign Securities" in this Prospectus. Moreover, substantial investments in
foreign securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Equity Trust is currently authorized to use all of the various
investment strategies referred to under "RISK FACTORS -- Hedging and Other
Strategic Transactions." However, it is not presently anticipated that any of
these strategies will be used to a significant degree by the portfolio. The
Statement of Additional Information contains a description of these strategies
and of certain risks associated therewith.
GROWTH TRUST
The investment objective of the Growth Trust is to seek long-term growth
of capital. Founders manages the Growth Trust and will pursue this objective by
investing, under normal market conditions, at least 65% of its total assets in
common stocks of well-established, high-quality growth companies that Founders
believes have the potential to increase earnings faster than the rest of the
market. These companies tend to have strong performance records, solid market
positions and reasonable financial strength, and have continuous operating
records of three years or more.
The Growth Trust may invest in convertible securities, preferred stocks,
bonds, debentures and other corporate obligations when Founders believes that
these investments offer opportunities for capital appreciation. Current income
will not be a substantial factor in the selection of these securities. The
Growth Trust will only invest in bonds, debentures and corporate
obligations--other than convertible securities and preferred stock--rated
investment-grade (Baa or higher by Moody's and BBB or higher by Standard &
Poor's) or, if unrated, of comparable quality in the opinion of Founders at the
time of purchase. Convertible securities and preferred stocks purchased by the
Trust may be rated in medium and lower categories by Moody's or Standard &
Poor's (Ba or lower by Moody's and BB or lower by Standard & Poor's) but will
not be rated lower than B. The Growth Trust may also invest in unrated
convertible securities and preferred stocks in instances in which Founders
believes that the financial condition of the issuer or the protection afforded
by the terms of the securities limits risk to a level similar to that of
securities rated in categories no lower than B. At no time will the portfolio
have more than 5% of its total assets invested in any fixed-income securities
(excluding preferred stocks) which are unrated or are rated below investment
grade either at the time of purchase or as a result of a reduction in rating
after purchase. The portfolio is not required to dispose of debt securities
whose ratings are downgraded below these ratings subsequent to the portfolio's
purchase of the securities, unless such a disposition is necessary to reduce the
portfolio's holdings of such securities to less than 5% of its total assets (see
"RISK FACTORS -- High Yield Securities").
The Growth Trust may invest up to 100% of its assets temporarily in the
following securities if Founders determines that it is appropriate for purposes
of enhancing liquidity or preserving capital in light of prevailing market or
economic conditions: cash, cash equivalents, U.S. government obligations,
commercial paper, bank obligations, repurchase agreements, and negotiable U.S.
dollar-denominated obligations of domestic and foreign branches of U.S.
depository institutions, U.S. branches of foreign depository institutions, and
foreign depository institutions. The portfolio may also acquire certificates of
deposit and bankers' acceptances of banks which meet criteria established by the
Trust's Trustees. When the Growth Trust is in a defensive position, the
opportunity to achieve capital growth will be limited, and, to the extent that
this assessment of market conditions is incorrect, the Growth Trust will be
foregoing the opportunity to benefit from capital growth resulting from
increases in the value of equity investments and may not achieve its investment
objective.
FOREIGN SECURITIES. The Growth Trust may invest without limit in ADRs and
up to 30% of its total assets in foreign securities (other than ADRs), with no
more than 25% invested in any one foreign country. The Growth Trust will be
subject to certain risks as a result of these investments. These risks are
described under the caption "RISK FACTORS -- Foreign Securities" in this
Prospectus. Moreover, substantial investments in foreign securities may have
adverse tax implications as described under "GENERAL INFORMATION -- Taxes" in
this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS. The Growth Trust is
currently authorized to use all of the various investment strategies referred to
under "RISK FACTORS -- Hedging and Other Strategic Transactions." The Statement
of Additional Information contains a description of these strategies and of
certain risks associated therewith.
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QUANTITATIVE EQUITY TRUST
The investment objective of the Quantitative Equity Trust (prior to
December 31, 1996, the "Common Stock Fund") is to achieve intermediate- and
long-term growth through capital appreciation and current income by investing in
common stocks and other equity securities of well established companies with
promising prospects for providing an above average rate of return. MAC manages
the Quantitative Equity Trust.
In pursuit of its objective, the Quantitative Equity Trust will invest
principally in common stocks or in securities convertible into common stocks or
carrying rights or warrants to purchase common stock or to participate in
earnings. In selecting investments, emphasis will be placed on companies with
good financial resources, strong balance sheet, satisfactory rate of return on
capital, good industry position, superior management skills, and earnings that
tend to grow at above average rates. The Trust's investments are not limited to
any particular type or size of company, but high-quality growth and income
stocks are emphasized.
Investments will be made primarily in securities listed on national
securities exchanges, but the Trust may purchase securities traded in the United
States over-the-counter market. When, in the opinion of management, market or
economic conditions warrant a defensive posture, the Trust may place all or a
portion of its assets in fixed-income securities. The Trust may also maintain a
portion of its assets in cash or short-term debt securities pending selection of
particular long-term investments. The Trust may purchase securities on a
forward-commitment, when-issued or delayed-delivery basis.
The Quantitative Equity Trust will be subject to certain risks as a result
of its ability to invest up to 100% of its total assets in the following types
of foreign securities: (i) U.S. dollar denominated obligations of foreign
branches of U.S. banks, (ii) securities represented by ADRs listed on a national
securities exchange or traded in the U.S. over-the-counter market, (iii)
securities of a corporation organized in a jurisdiction other than the U.S. and
listed on the New York Stock Exchange or NASDAQ or (iv) securities denominated
in U.S. dollars but issued by non U.S. issuers and issued under U.S. Federal
securities regulations (for example, U.S. dollar denominated obligations issued
or guaranteed as to principal or interest by the Government of Canada or any
Canadian Crown agency). These risks are described under the caption "RISK
FACTORS -- Foreign Securities" in this Prospectus. Moreover, substantial
investments in foreign securities may have adverse tax implications as described
under "GENERAL INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS The Quantitative Equity
Trust does not presently use any of the investment strategies referred to under
"Hedging and Other Strategic Transactions."
EQUITY INDEX TRUST
The investment objective of the Equity Index Trust is to achieve
investment results which approximate the total return of publicly traded common
stocks in the aggregate, as represented by the Standard & Poor's 500 Composite
Stock Price Index (the "Index"). MAC manages the Equity Index Trust.
The Equity Index Trust is designed to provide an economical and convenient
means of maintaining a widely diversified investment in the United States equity
market as part of an overall investment strategy. The portfolio uses the Index
as its standard performance comparison because it represents more than 70% of
the total market value of all publicly traded common stocks in the United States
and is widely viewed among investors as representative of the performance of
publicly traded common stocks in the United States.
The Index is composed of 500 selected common stocks, over 95% of which are
listed on the New York Stock Exchange. The Index is an unmanaged index of common
stock prices. The performance of the Index is based on changes in the prices of
stocks comprising the Index and assumes the reinvestment of all dividends paid
on such stocks. Taxes, brokerage, commissions and other fees are disregarded in
computing the level of the Index. Standard & Poor's selects the stocks to be
included in the Index on a proprietary basis but does incorporate such factors
as the market capitalization and trading activity of each stock and its adequacy
as representative of stocks in a particular industry group. Stocks in the Index
are weighted according to their market capitalization (I.E., the number of
shares outstanding multiplied by the stock's current price).(1)
The Index fluctuates in value with changes in the market value of the 500
stocks included in the Index at any point in time. An investment in the
Equity-Index Trust involves risks similar to the risks of investing directly in
the stocks included in the Index.
- ----------
(1) "Standard & Poor's (R)," "S&P 500 (R)," "S&P (R)," "Standard & Poor's 500
(R) and "500" are trademarks of McGraw-Hill, Inc.
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The Subadviser will not attempt to "manage" the Equity Index Trust in the
traditional portfolio management sense which generally involves the buying and
selling of securities based upon investment analysis of economic, financial and
market factors. Instead, the portfolio, utilizing a "passive" or "indexing"
investment approach, attempts to duplicate the performance of the Index. The
adverse financial situation of a company will not directly result in its
elimination from the portfolio unless, of course, the company in question is
removed from the Index. Conversely, the projected superior financial performance
of a company would not normally lead to an increase in the portfolio's holdings
of the company. Under normal circumstances, the net assets of the Equity Index
Trust will be invested in any combination of the following investments: 1)
representative common stocks, 2) Standard & Poor's 500 Futures Contracts and 3)
Standard & Poor's Depository Receipts (R).
With regard to the portion of the Equity Index Trust invested in common
stocks, the method used to select investments for the portfolio involves
investing in common stocks in approximately the order of their respective market
value weightings in the Index, beginning with those having the highest
weightings. For diversification purposes, the portfolio can purchase stocks with
smaller weightings in order to represent other sectors of the Index. The
portfolio will invest only in those stocks, and in such amounts, as its
Subadviser deems necessary and appropriate in order for the portfolio to
approximate the performance of the Index.
There is no minimum or maximum number of stocks included in the Index
which the Equity Index Trust must hold. Under normal circumstances, it is
expected that the portion of the portfolio invested in stocks would hold between
300 and 500 different stocks included in the Index. The portfolio may compensate
for the omission of a stock that is included in the Index, or for purchasing
stocks in other than the same proportion that they are represented in the Index,
by purchasing stocks that are believed to have characteristics that correspond
to those of the omitted stocks. The portfolio may invest in short-term debt
securities to maintain liquidity or pending investment in stocks or Standard &
Poor's Stock Index Futures Contracts (S&P 500 Futures Contracts).
Tracking error is measured by the difference between the total return for
the Index and the total return for the portfolio after deductions of fees and
expenses. All tracking error deviations are reviewed to determine the
effectiveness of investment policies and techniques. Tracking error is reviewed
at least weekly and more frequently if such a review is indicated by significant
cash balance changes, market conditions or changes in the composition of the
Index. If deviation accuracy is not maintained, the Equity Index Trust will
rebalance its composition by selecting securities which, in the opinion of the
Subadviser, will provide a more representative sampling of the capitalization of
the securities in the Index as a whole or a more representative sampling of the
sector diversification in the Index.
Standard & Poor's licenses certain trademarks and trade names to the Trust
but disclaims any responsibility or liability to the Trust and its shareholders.
See Appendix III for such disclaimer.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS The Equity Index Trust may
(i) invest any portion of its net assets in S&P 500 Futures Contracts until the
portfolio reaches $25 million in net assets and (ii) once the portfolio reaches
$25 million in net assets, invest no more than 20% of its net assets in S&P 500
Futures Contracts. A description of this investment strategy appears under "RISK
FACTORS -- Hedging and Other Strategic Transactions" below in this Prospectus
and under "Hedging and Other Strategic Transactions" in the Statement of
Additional Information.
BLUE CHIP GROWTH TRUST
The primary investment objective of the Blue Chip Growth Trust (prior to
October 1, 1996, the "Pasadena Growth Trust") is to provide long-term growth of
capital. Current income is a secondary objective, and many of the stocks in the
portfolio are expected to pay dividends. T. Rowe Price manages the Blue Chip
Growth Trust.
The portfolio will invest at least 65% of its total assets in the common
stocks of large and medium-sized blue chip companies, as defined by T. Rowe
Price. These companies will be well established in their industries and have the
potential for above-average growth in earnings.
In identifying blue chip companies, T. Rowe Price will generally take the
following into consideration:
o Leading market positions. Blue chip companies often have leading
market positions that are expected to be maintained or enhanced over
time. Strong positions, particularly in growing industries, can give
a company pricing flexibility as well as the potential for good unit
sales. These factors, in turn, can lead to higher earnings growth
and greater share price appreciation.
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o Seasoned management teams. Seasoned management teams with a track
record of providing superior financial results are important for a
company's long-term growth prospects. T. Rowe Price analysts will
evaluate the depth and breadth of a company's management experience.
o Strong financial fundamentals. Companies should demonstrate faster
earnings growth than their competitors and the market in general;
high profit margins relative to competitors; strong cash flow; a
healthy balance sheet with relatively low debt; and a high return on
equity with a comparatively low dividend payout ratio.
Most of the assets of the portfolio will be invested in U.S. common
stocks. However, the portfolio may also purchase other types of securities, for
example, foreign securities, convertible stocks and bonds, and warrants, when
considered consistent with the portfolio's investment objective and program.
Investments in convertible securities, preferred stocks and debt securities are
limited to 25% of total assets. The portfolio will hold a certain portion of its
assets in U.S. and foreign dollar-denominated money market securities, including
repurchase agreements, in the two highest rating categories, maturing in one
year or less. For temporary, defensive purposes, the portfolio may invest
without limitation in such securities. This reserve position provides
flexibility in meeting redemptions, expenses, and the timing of new investments
and serves as a short-term defense during periods of unusual market volatility.
T. Rowe Price analysts evaluate the growth prospects of companies and the
industries in which they operate. This approach seeks to identify companies with
strong market franchises in industries that appear to be strategically poised
for long-term growth. The investment approach reflects T. Rowe Price's belief
that the combination of solid company fundamentals (with emphasis on the
potential for above-average growth in earnings) along with a positive outlook
for the overall industry will ultimately reward investors with a higher stock
price. While primary emphasis is placed on a company's prospects for future
growth, the portfolio will not purchase securities that, in T. Rowe Price's
opinion, are overvalued considering the underlying business fundamentals. In the
search for substantial capital appreciation, the portfolio looks for stocks
attractively priced relative to their anticipated long-term value.
The Blue Chip Growth Trust may invest in debt securities of any type
without regard to quality or rating. Such securities would be purchased in
companies which meet the investment criteria for the portfolio. The total return
and yield of lower-quality (high-yield/high-risk) bonds, commonly referred to as
"junk" bonds, can be expected to fluctuate more than the total return and yield
of higher-quality, shorter-term bonds, but not as much as common stocks. Junk
bonds (those rated below BBB or in default) are regarded as predominantly
speculative with respect to the issuer's continuing ability to meet principal
and interest payments. The portfolio will not purchase a non-investment-grade
debt security (or junk bond) if immediately after such purchase the portfolio
would have more than 5% of its total assets invested in such securities. See
"RISK FACTORS -- High Yield (High Risk) Securities" for further information.
The Blue Chip Growth Trust may also engage in a variety of investment
management practices, such as buying and selling futures and options. The
portfolio may invest up to 10% of its total assets in hybrid instruments, which
are a type of high-risk derivative which can combine the characteristics of
securities, futures and options. For example, the principal amount, redemption
or conversion terms of a security could be related to the market price of some
commodity, currency or securities index. Such securities may bear interest or
pay dividends at below market (or even relatively nominal) rates. The Statement
of Additional Information contains a fuller description of such instruments and
the risks associated therewith.
The Blue Chip Growth Trust will be subject to special risks as a result of
its ability to invest up to 20% of its total assets in foreign securities. These
include non-dollar-denominated securities traded outside of the U.S. and
dollar-denominated securities of foreign issuers traded in the U.S. (such as
ADRs). These risks are described under the caption "RISK FACTORS -- Foreign
Securities" in this Prospectus. Moreover, substantial investments in foreign
securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Blue Chip Growth Trust is currently authorized to use all of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
REAL ESTATE SECURITIES TRUST
The investment objective of the Real Estate Securities Trust is to achieve
a combination of long-term capital appreciation and satisfactory current income
by investing in real estate related equity and debt securities. MAC manages the
Real Estate Securities Trust and seeks to attain this objective by investing
principally in real estate investment trust ("REIT") equity and debt securities
and other securities issued by companies which invest in real estate or
interests therein.
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REITs are pooled investment vehicles which invest primarily in income
producing real estate or real estate related loans or interests. Investing in
REITs involves the risks associated with real estate investing, such as risks
relating to declines in real estate values, deterioration in general and local
economic conditions, overbuilding and increased competition, increases in
operating expenses and increases in interest rates, as well as certain unique
risks, such as risks relating to heavy cash flow dependency, defaults by
borrowers, self-liquidation and the possibility of failing to qualify for
exemption from tax for distributed income under the Code or failing to maintain
exemption from regulation under the 1940 Act. REITs are dependent on management
skills, are not diversified and are subject to the risks of financing projects.
They may have limited financial resources, trade less frequently and in a
limited volume and be subject to more abrupt or erratic price movements than
securities of larger issuers.
The Real Estate Securities Trust may also purchase the common stocks,
preferred stocks, convertible securities and bonds of companies operating in
industry groups relating to the real estate industry. This would include
companies engaged in the development of real estate, building and construction,
and other market segments related to real estate. The portfolio will not invest
directly in real property nor will it purchase mortgage notes directly.
Under normal circumstances, at least 65% of the value of the Real Estate
Securities Trust's total assets will be invested in real estate related equity
and debt securities. When, in the opinion of the Subadviser, market or economic
conditions warrant a defensive posture, the portfolio may place all or a portion
of its assets in fixed-income securities which may or may not be real estate
debt related securities. The portfolio may also maintain a portion of its assets
in cash or short-term debt securities pending selection of particular long-term
investments. The portfolio may purchase securities on a forward-commitment,
when-issued or delayed-delivery basis. For a discussion of these securities,
please see the discussion under "When-Issued Securities ("Forward Commitments")
below.
The Real Estate Securities Trust will be subject to certain risks as a
result of its ability to invest up to 100% of its total assets in the following
types of foreign securities: (i) U.S. dollar denominated obligations of foreign
branches of U.S. banks, (ii) securities represented by ADRs listed on a national
securities exchange or traded in the U.S. over-the-counter market, (iii)
securities of a corporation organized in a jurisdiction other than the U.S. and
listed on the New York Stock Exchange or NASDAQ or (iv) securities denominated
in U.S. dollars but issued by non U.S. issuers and issued under U.S. Federal
securities regulations (for example, U.S. dollar denominated obligations issued
or guaranteed as to principal or interest by the Government of Canada or any
Canadian Crown agency). These risks are described under the caption "RISK
FACTORS -- Foreign Securities" in this Prospectus. Moreover, substantial
investments in foreign securities may have adverse tax implications as described
under "GENERAL INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS The Real Estate Securities
Trust does not presently use any of the investment strategies referred to under
"Hedging and Other Strategic Transactions."
VALUE TRUST
The investment objective of the Value Trust is to realize an above-average
total return over a market cycle of three to five years, consistent with
reasonable risk. MAS manages the Value Trust and seeks to attain this objective
by investing primarily in common and preferred stocks, convertible securities,
rights and warrants to purchase common stocks, ADRs and other equity securities
of companies with equity capitalizations usually greater than $300 million.
Under normal circumstances, the Value Trust will invest at least 65% of
its total assets in equity securities. The portfolio may also invest in
obligations issued or guaranteed by the U.S. Government or by its agencies or
instrumentalities, corporate bonds, foreign bonds, zero coupons, repurchase
agreements, cash equivalents, foreign currencies, investment company securities
and derivatives, including when-issued or delayed delivery securities, forward
foreign currency exchange contracts, futures, options and swaps. See "INVESTMENT
POLICIES -- Other Instruments" and "HEDGING AND OTHER STRATEGIC TRANSACTIONS" in
the Statement of Additional Information.
The Subadviser's approach is to select equity securities which are deemed
to be undervalued relative to the stock market in general as measured by the S&P
500 Index, based on value measures such as price/earnings ratios and price/book
ratios, as well as fundamental research. While capital return will be emphasized
somewhat more than income return, the Value Trust's total return will consist of
both capital and income returns. Stocks that are deemed to be under-valued in
the marketplace have, under most market conditions, provided higher dividend
income returns than stocks that are deemed to have long-term earnings growth
potential which normally sell at higher price/earnings ratios.
The Value Trust may invest without limit in ADRs and up to 5% of its total
assets in foreign equities excluding ADRs. The risks associated with foreign
securities are described under the caption "RISK FACTORS -- Foreign Securities"
in this Prospectus.
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USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Value Trust is currently authorized to use all of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
INTERNATIONAL GROWTH AND INCOME TRUST
The investment objective of the International Growth and Income Trust is
to seek long-term growth of capital and income. The portfolio is designed for
investors with a long-term investment horizon who want to take advantage of
investment opportunities outside the United States.
J.P. Morgan manages the International Growth and Income Trust and will
seek to achieve the portfolio's objective by investing, under normal
circumstances, at least 65% of its total assets in equity securities of foreign
issuers, consisting of common stocks and other securities with equity
characteristics such as preferred stock, warrants, rights and convertible
securities. The portfolio will focus primarily on the common stock of
established companies based in developed countries outside the United States
although it may invest up to 15% of its assets in emerging market securities.
Such investments will be made in at least three foreign countries. The portfolio
invests in securities listed on foreign or domestic securities exchanges and
securities traded in foreign or domestic over-the-counter markets, and may
invest in certain restricted or unlisted securities (see "RISK FACTORS --
Foreign Securities"). Under normal circumstances, the International Growth and
Income Trust expects to invest primarily in equity securities. However, the
portfolio may invest up to 35% of its assets in debt obligations of corporate or
sovereign or supranational organizations rated A or higher by Moody's or
Standard & Poor's, or if unrated, of equivalent credit quality as determined by
the Subadviser. See "Global Government Bond Trust" for further information on
supranational organizations. J.P. Morgan may allocate the portfolio's investment
in these asset classes in a manner consistent with the portfolio's investment
objective and current market conditions. Using a variety of analytical tools,
J.P. Morgan assesses the relative attractiveness of each asset class and
determines an optimal allocation between them. Yields on non-U.S. equity
securities tend to be lower than those on equity securities of U.S. issuers.
Therefore, current income from the portfolio may not be as high as that
available from a portfolio of U.S. equity securities.
In pursuing the International Growth and Income Trust's objective, J.P.
Morgan will actively manage the assets of the portfolio through country
allocation and stock valuation and selection. Based on fundamental research,
quantitative valuation techniques and experienced judgment, J.P. Morgan uses a
structured decision-making process to allocate the portfolio primarily across
the developed countries of the world outside the United States. This universe is
typically represented by the Morgan Stanley Europe, Australia and Far East Index
(the "EAFE Index").
Using a dividend discount model and based on analysts' industry expertise,
securities within each country are ranked within economic sectors according to
their relative value. Based on this valuation, J.P. Morgan selects the
securities which appear the most attractive for the portfolio. J.P. Morgan
believes that under normal market conditions, economic sector weightings
generally will be similar to those of the relevant equity index.
Finally, J.P. Morgan actively manages currency exposure, in conjunction
with country and stock allocation, in an attempt to protect and possibly enhance
the International Growth and Income Trust's market value. Through the use of
forward currency exchange contracts, J.P. Morgan will adjust the portfolio's
foreign currency weightings to reduce its exposure to currencies that the
Subadviser deems unattractive and, in certain circumstances, increase exposure
to currencies deemed attractive, as market conditions warrant, based on
fundamental research, technical factors and the judgment of a team of
experienced currency managers.
The International Growth and Income Trust intends to manage its investment
portfolio actively in pursuit of its investment objective. The portfolio does
not expect to trade in securities for short-term profits; however, when
circumstances warrant, securities may be sold without regard to the length of
time held (see "GENERAL INFORMATION -- Taxes"). To the extent the portfolio
engages in short-term trading, it may incur increased transaction costs.
The International Growth and Income Trust may also invest in securities on
a when-issued or delayed delivery basis, enter into repurchase agreements, loan
its portfolio securities and purchase certain privately placed securities (see
"RISK FACTORS").
The International Growth and Income Trust may make money market
investments pending other investments or settlement or for liquidity purposes.
In addition, when J.P. Morgan believes that investing for defensive purposes is
appropriate, such as during periods of unusual or unfavorable market or
economics conditions, up to 100% of the portfolio's assets may be temporarily
invested in money market instruments. The money market investments permitted for
the portfolio include
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obligations of the U.S. Government and its agencies and instrumentalities, other
debt securities, commercial paper, bank obligations and repurchase agreements,
as described below under "Money Market Trust."
The International Growth and Income Trust will be subject to special risks
as a result of its ability to invest up to 100% of its assets in foreign
securities, including up to 15% in emerging market securities. These risks are
described under the captions "RISK FACTORS -- Foreign Securities" and
"INTERNATIONAL SMALL CAP TRUST -- Foreign Securities." in this Prospectus.
Moreover, substantial investments in foreign securities may have adverse tax
implications as described under "GENERAL INFORMATION -- Taxes" in this
Prospectus. The ability to diversify its investments among the equity markets of
different countries may, however, reduce the overall level of market risk to the
extent it may reduce the portfolio's exposure to a single market. In order to
comply with limitations imposed by the State of California Insurance Department,
the International Growth and Income Trust will comply with the restrictions
regarding foreign investments set forth under "RISK FACTORS -- Additional
Investment Restrictions on Borrowing and Foreign Investing."
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The International Growth and Income Trust is currently authorized to use
all of the various investment strategies referred to under "RISK FACTORS --
Hedging and Other Strategic Transactions." With the exception of currency
transactions, however, it is not presently anticipated that any of these
strategies will be used to a significant degree by the portfolio. The Statement
of Additional Information contains a description of these strategies and of
certain risks associated therewith.
GROWTH AND INCOME TRUST
The investment objective of the Growth and Income Trust is to provide
long-term growth of capital and income consistent with prudent investment risk.
Wellington Management manages the Growth and Income Trust and seeks to
achieve the Trust's objective by investing primarily in a diversified portfolio
of common stocks of U.S. issuers which Wellington Management believes are of
high quality. Wellington Management believes that high quality is evidenced by a
leadership position within an industry, a strong or improving balance sheet,
relatively high return on equity, steady or increasing dividend payout and
strong management skills. The Trust's investments will primarily emphasize
dividend-paying stocks of larger companies. The Trust may also invest in
securities convertible into or which carry the right to buy common stocks,
including those convertible securities issued in the Euromarket, preferred
stocks and debt securities. When market or financial conditions warrant a
temporary defensive posture, the Trust may, in order to reduce risk and achieve
attractive total investment return, invest up to 100% of its assets in
securities which are authorized for purchase by the Investment Quality Bond
Trust (excluding non-investment grade securities) or the Money Market Trust. The
Subadviser expects that under normal market conditions the Growth and Income
Trust will consist primarily of equity securities.
Investments will be selected on the basis of fundamental analysis to
identify those securities that, in Wellington Management's judgment, provide the
potential for long-term growth of capital and income. Fundamental analysis
involves assessing a company and its business environment, management, balance
sheet, income statement, anticipated earnings and dividends and other related
measures of value. When selecting securities of issuers domiciled outside of the
United States, Wellington Management will also monitor and evaluate the economic
and political climate and the principal securities markets of the country in
which each company is located.
The Growth and Income Trust will invest primarily in securities listed on
national securities exchanges, but from time to time it may also purchase
securities traded in the "over the counter" market.
The Growth and Income Trust will be subject to certain risks as a result
of its ability to invest up to 20% of its assets in foreign securities. These
risks are described under the caption "RISK FACTORS -- Foreign Securities" in
this Prospectus. Moreover, substantial investments in foreign securities may
have adverse tax implications as described under "GENERAL INFORMATION -- Taxes"
in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Growth and Income Trust is currently authorized to use all of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions." However, it is not presently anticipated that any of these
strategies will be used to a significant degree by the portfolio. The Statement
of Additional Information contains a description of these strategies and of
certain risks associated therewith.
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EQUITY-INCOME TRUST
The investment objective of the Equity-Income Trust (prior to December 31,
1996, the "Value Equity Trust") is to provide substantial dividend income and
also long-term capital appreciation. T. Rowe Price manages the Equity-Income
Trust and seeks to attain this objective by investing primarily in
dividend-paying common stocks, particularly of established companies with
favorable prospects for both increasing dividends and capital appreciation.
Under normal circumstances, the Equity-Income Trust will invest at least
65% of total assets in the common stocks of established companies paying
above-average dividends. T. Rowe Price believes that income can be a significant
contributor to total return over time and expects the portfolio's yield to be
above that of the S&P 500 Index.
The Equity-Income Trust will generally consider companies with the
following characteristics:
o Established operating histories;
o Above-average current dividend yield relative to the average yield
of the S&P 500 Index;
o Low price/earnings ratios relative to the S&P 500 Index;
o Sound balance sheets and other financial characteristics;
o Low stock price relative to a company's underlying value as measured
by assets, earnings, cash flow, or business franchises.
The Equity-Income Trust will tend to take a "value" approach and invest in
stocks and other securities that appear to be temporarily undervalued by various
measures, such as price/earnings ratios. Value investors seek to buy a stock (or
other security) when its price is low in relation to what they believe to be its
real worth or future prospects. By identifying companies whose stocks are
currently out of favor, value investors hope to realize significant appreciation
as other investors recognize the stock's intrinsic value and the price rises
accordingly. Finding undervalued stocks requires considerable research to
identify the particular stock, to analyze the company's underlying financial
condition and prospects, and to assess the likelihood that the stock's
underlying value will be recognized by the market and reflected in its price.
The Equity-Income Trust may also purchase other types of securities, for
example, foreign securities, preferred stocks, convertible stocks and bonds, and
warrants, when considered consistent with the portfolio's investment objective
and program. The portfolio will hold a certain portion of its assets in U.S. and
foreign dollar-denominated money market securities, including repurchase
agreements, in the two highest rating categories, maturing in one year or less.
For temporary, defensive purposes, the portfolio may invest without limitation
in such securities. This reserve position provides flexibility in meeting
redemptions, expenses, and the timing of new investments and serves as a
short-term defense during periods of unusual market volatility.
The Equity-Income Trust may also invest in debt securities of any type
including municipal securities without regard to quality or rating. The total
return and yield of lower-quality (high-yield/high-risk) bonds, commonly
referred to as "junk" bonds, can be expected to fluctuate more than the total
return and yield of higher-quality, shorter-term bonds, but not as much as
common stocks. Junk bonds (those rated below BBB or in default) are regarded as
predominantly speculative with respect to the issuer's continuing ability to
meet principal and interest payments. The portfolio will not purchase a
non-investment-grade debt security (or junk bond) if immediately after such
purchase the portfolio would have more than 10% of its total assets invested in
such securities.
The Equity-Income Trust may also engage in a variety of investment
management practices, such as buying and selling futures and options. The
portfolio may invest up to 10% of its total assets in hybrid instruments, which
are a type of high-risk derivative which can combine the characteristics of
securities, futures and options. For example, the principal amount, redemption
or conversion terms of a security could be related to the market price of some
commodity, currency or securities index. Such securities may bear interest or
pay dividends at below market (or even relatively nominal) rates. The Statement
of Additional Information contains a fuller description of such instruments and
the risks associated therewith.
The Equity-Income Trust will be subject to special risks as a result of
its ability to invest up to 25% of its total assets in foreign securities. These
include non-dollar-denominated securities traded outside of the U.S. and
dollar-denominated securities of foreign issuers traded in the U.S. (such as
ADRs). These risks are described under the caption "RISK FACTORS -- Foreign
Securities" in this Prospectus. Moreover, substantial investments in foreign
securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
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USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Equity-Income Trust is currently authorized to use all of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
BALANCED TRUST
The investment objective of the Balanced Trust is current income and
capital appreciation. Founders is the manager of the Balanced Trust and seeks to
attain this objective by investing in a balanced portfolio of common stocks,
U.S. and foreign government obligations and a variety of corporate fixed-income
securities.
Normally, the Balanced Trust will invest a significant percentage (up to
75%) of its total assets in common stocks, convertible corporate obligations,
and preferred stocks. The portfolio emphasizes investment in dividend-paying
common stocks with the potential for increased dividends, as well as capital
appreciation. The portfolio also may invest in non-dividend-paying companies if,
in Founders' opinion, they offer better prospects for capital appreciation.
The Balanced Trust may invest in convertible securities, preferred stocks,
bonds, debentures, and other corporate obligations when Founders believes that
these investments offer opportunities for capital appreciation. Current income
is also a factor in the selection of these securities.
The Balanced Trust will maintain a minimum of 25% of its total assets in
fixed-income, investment-grade securities rated Baa or higher by Moody's or BBB
or higher by Standard & Poor's. There is, however, no limit on the amount of
straight debt securities in which the portfolio may invest. Up to 5% of the
Balanced Trust's total assets may be invested in lower-grade (Ba or less by
Moody's, BB or less by Standard & Poor's) or unrated straight debt securities,
generally referred to as junk bonds, where Founders determines that such
securities present attractive opportunities. The portfolio will not invest in
securities rated lower than B. Securities rated B generally lack characteristics
of a desirable investment and are deemed speculative with respect to the
issuer's capacity to pay interest and repay principal over a long period of
time.
The Balanced Trust may also invest in convertible corporate obligations
and preferred stocks. Convertible securities and preferred stocks purchased by
the portfolio may be rated in medium and lower categories by Moody's or Standard
& Poor's (Ba or lower by Moody's and BB or lower by Standard & Poor's) but will
not be rated lower than B. The portfolio may also invest in unrated convertible
securities and preferred stocks in instances in which Founders believes that the
financial condition of the issuer or the protection afforded by the terms of the
securities limits risk to a level similar to that of securities eligible for
purchase by the portfolio rated in categories no lower than B. At no time will
the portfolio have more than 5% of its total assets invested in any fixed-income
securities (excluding preferred stocks) which are unrated or are rated below
investment grade either at the time of purchase or as a result of a reduction in
rating after purchase. The portfolio is not required to dispose of debt
securities whose ratings are downgraded below these ratings subsequent to the
portfolio's purchase of the securities, unless such a disposition is necessary
to reduce the portfolio's holdings of such securities to less than 5% of its
total assets (see "RISK FACTORS -- High Yield (High Risk) Securities"). A
description of the ratings used by Moody's and Standard & Poor's is set forth in
Appendix I to the Prospectus.
Up to 100% of the assets of the Balanced Trust may be invested temporarily
in U.S. Government obligations, commercial paper, bank obligations, repurchase
agreements, and negotiable U.S. dollar-denominated obligations of domestic and
foreign branches of U.S. depository institutions, U.S. branches of foreign
depository institutions, and foreign depository institutions, in cash, or in
other cash equivalents, if Founders determines it to be appropriate for purposes
of enhancing liquidity or preserving capital in light of prevailing market or
economic conditions. The portfolio may also acquire certificates of deposit and
bankers' acceptances of banks which meet criteria established by the Trust's
Board of Trustees. While the portfolio is in a defensive position, the
opportunity to achieve capital growth will be limited, and, to the extent that
this assessment of market conditions is incorrect, the portfolio will be
foregoing the opportunity to benefit from capital growth resulting from
increases in the value of equity investments.
The Balanced Trust may invest without limit in ADRs and up to 30% of its
total assets in foreign securities (other than ADRs). The portfolio will not
invest more than 25% of its total assets in the securities of any one country.
The Balanced Trust will be subject to special risks as a result of its
ability to invest up to 30% of its total assets in foreign securities, excluding
ADRs. These risks are described under the caption "RISK FACTORS -- Foreign
Securities" in this Prospectus. Moreover, substantial investments in foreign
securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
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USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Balanced Trust is currently authorized to use all of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
HIGH YIELD TRUST
The investment objective of the High Yield Trust is to realize an
above-average total return over a market cycle of three to five years,
consistent with reasonable risk. MAS manages the High Yield Trust and seeks to
attain this objective by investing primarily in high yield debt securities,
including corporate bonds and other fixed-income securities.
The High Yield Trust expects to achieve its objective through maximizing
current income, although the portfolio may seek capital growth opportunities
when consistent with its objective. The portfolio's average weighted maturity
ordinarily will be greater than five years. Under normal circumstances, the
portfolio will invest at least 65% of the value of its total assets in high
yield debt securities.
High yield securities are generally considered to include corporate bonds,
preferred stocks and convertible securities rated Ba through C by Moody's or BB
through D by Standard & Poor's, and unrated securities considered to be of
equivalent quality. Securities rated less than Baa by Moody's or BBB by Standard
& Poor's are classified as non-investment grade securities and are commonly
referred to as junk bonds or high yield securities. Such securities carry a high
degree of risk and are considered speculative by the major credit rating
agencies.
While such securities offer high yields, they also normally carry with
them a greater degree of risk than securities with higher ratings. Lower-rated
bonds are considered speculative by traditional investment standards. High yield
securities may be issued as a consequence of corporate restructuring or similar
events. Also, high yield securities are often issued by smaller, less credit
worthy companies, or by highly leveraged (indebted) firms, which are generally
less able than more established or less leveraged firms to make scheduled
payments of interest and principal. The price movement of these securities is
influenced less by changes in interest rates and more by the financial and
business position of the issuing corporation when compared to investment grade
bonds. The risks posed by securities issued under such circumstances are
substantial. If a security held by the portfolio is down-graded, the portfolio
may retain the security (see "RISK FACTORS -- High Yield (High Risk)
Securities"). A description of the ratings used by Moody's and Standard & Poor's
is set forth in Appendix I to the Prospectus.
The Subadviser's approach is to use equity and fixed-income valuation
techniques and analyses of economic and industry trends to determine portfolio
structure. Individual securities are selected and monitored by fixed-income
portfolio managers who specialize in credit analysis of fixed-income securities
and use in-depth financial analysis to uncover opportunities in undervalued
issues. The Subadviser seeks to invest in high yield securities based on the
Subadviser's analysis of economic and industry trends and individual security
characteristics. The Subadviser conducts credit analysis for each security
considered for investment to evaluate its attractiveness relative to its risk. A
high level of diversification is also maintained to limit credit exposure to
individual issuers.
One of two primary components of the Subadviser's fixed-income strategy is
value investing, whereby the Subadviser seeks to identify undervalued sectors
and securities through analysis of credit quality, option characteristics and
liquidity. Quantitative models are used in conjunction with judgment and
experience to evaluate and select securities with embedded put or call options
(options which are part of the security) which are attractive on a risk- and
option-adjusted basis. Successful value investing will permit a portfolio to
benefit from the price appreciation of individual securities during periods when
interest rates are unchanged.
The other primary component of the Subadviser's fixed-income investment
strategy is maturity and duration management. The maturity and duration
structure of a portfolio investing in fixed-income securities is actively
managed in anticipation of cyclical interest rate changes. Adjustments are not
made in an effort to capture short-term, day-to- day movements in the market,
but instead are implemented in anticipation of longer term shifts in the levels
of interest rates. Adjustments made to shorten portfolio maturity and duration
are made to limit capital losses during periods when interest rates are expected
to rise. Conversely, adjustments made to lengthen maturity are intended to
produce capital appreciation in periods when interest rates are expected to
fall. The foundation for maturity and duration strategy lies in analysis of the
U.S. and global economies, focusing on levels of real interest rates, monetary
and fiscal policy actions, and cyclical indicators.
At times it is anticipated that greater than 50% of High Yield Trust's
assets may be invested in mortgage-backed securities. These include securities
which represent pools of mortgage loans made by lenders such as commercial
banks, savings and loan associations, mortgage bankers and others. The pools are
assembled by various Governmental,
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Government-related and private organizations. It is expected that the
portfolio's primary emphasis will be in mortgage-backed securities issued by the
various Government-related organizations. However, the portfolio may invest,
without limit, in mortgage-backed securities issued by private issuers when the
Subadviser deems that the quality of the investment, the quality of the issuer,
and market conditions warrant such investments. Securities issued by private
issuers will be rated investment grade by Moody's or Standard & Poor's or be
deemed by the Subadviser to be of comparable investment quality. It is not
anticipated that greater than 25% of a portfolio's assets will be invested in
mortgage pools comprised of private organizations. See "INVESTMENT POLICIES --
Other Instruments" in the Statement of Additional Information for a description
of these investments and of certain risks associated therewith.
The High Yield Trust will invest in foreign bonds and other fixed-income
securities denominated in foreign currencies, where, in the opinion of the
Subadviser, the combination of current yield and currency value offer attractive
expected returns. Foreign securities in which the portfolio may invest include
emerging market securities. The Subadviser's approach to emerging markets
investing is based on the Subadviser's evaluation of both short-term and
long-term international economic trends and the relative attractiveness of
emerging markets and individual emerging market securities. Emerging markets
describes any country which is generally considered to be an emerging, or
developing country by the international financial community such as the
International Bank for Reconstruction and Development (more commonly known as
the World Bank) and the International Finance Corporation. Securities available
to the portfolio also include securities created through the Brady Plan, a
program under which heavily indebted countries have restructured their bank debt
into bonds.
The High Yield Trust will be subject to special risks as a result of its
ability to invest up to 100% of its total assets in foreign securities,
including emerging market securities. These risks, including the risks of the
possible increased likelihood of expropriation or the return to power of a
communist regime which would institute policies to expropriate, nationalize or
otherwise confiscate investments, are described under the caption "RISK FACTORS
- -- Foreign Securities" in this Prospectus. Moreover, substantial investments in
foreign securities may have adverse tax implications as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The High Yield Trust is currently authorized to use all of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
AUTOMATIC ASSET ALLOCATION TRUSTS
There are three Automatic Asset Allocation Trusts -- Aggressive, Moderate
and Conservative. The investment objective of each of the Automatic Asset
Allocation Trusts is to obtain the highest potential total return consistent
with a specified level of risk tolerance -- aggressive, moderate and
conservative. Currently, the risk tolerance levels--aggressive, moderate and
conservative--of the Asset Allocation Trusts are defined in terms of limiting
the decline in portfolio value in very adverse market conditions. The definition
of a risk tolerance level is not a fundamental policy and, therefore, can be
changed by the Trustees at any time. The Automatic Asset Allocation Trusts are
designed for:
o The investor who wants to maximize total return potential, but lacks
the time, temperament or expertise to do so effectively;
o The investor who does not want to monitor the financial markets in
order to make periodic exchanges among portfolios;
o The investor who wants the opportunity to improve on the return of
an income-oriented investment program, but wants to take advantage
of the risk management features of an asset allocation program; and
o Retirement program fiduciaries who have a responsibility to limit
risk in a meaningful way, while seeking the highest potential total
return.
Each of the Automatic Asset Allocation Trusts may invest in a combination
of equity, fixed-income and money market securities. The amount of each
portfolio's assets invested in each category of securities is dependent upon the
judgment of FMTC as to what percentages of each portfolio's assets in each
category will contribute to the limitation of risk and the achievement of its
investment objective. Unlike many asset allocation and timing services offered
by competitors, the Automatic Asset Allocation Trusts permit FMTC to reallocate
each portfolio's assets among the categories of securities "automatically,"
without a delay for a request or response by the shareholder, whenever, in the
Subadviser's judgment, market or economic changes warrant such a reallocation.
FMTC reserves complete discretion to determine the allocations among the
categories of securities.
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The investor chooses an Automatic Asset Allocation Trust by determining
which risk tolerance level most closely corresponds to the investor's individual
planning needs, objectives and comfort. Generally, the higher the portfolio's
level of risk tolerance, the higher is the expected total return for the
portfolio over the long-term and under favorable market conditions. Over the
long-term, it is expected that the total return of the Aggressive Asset
Allocation Trust will exceed that of the Moderate Asset Allocation Trust and
that the total return of the Moderate Asset Allocation Trust will exceed that of
the Conservative Asset Allocation Trust, although there is no assurance that
this will be the case. Moreover, as a general matter, the higher the risk
tolerance of a portfolio, the greater is the expected volatility of the
portfolio. In adverse market conditions, it is expected that the losses will be
greater in the Aggressive Asset Allocation Trust than in the Moderate Asset
Allocation Trust and greater in the Moderate Asset Allocation Trust than in the
Conservative Asset Allocation Trust, although again there is no assurance that
this will be the case.
FMTC attempts to limit the maximum amount of decline in value each
portfolio incurs under very adverse market conditions, to define the level of
risk tolerance -- aggressive, moderate or conservative. Very adverse market
conditions are defined as a substantial increase in long-term interest rates
accompanied by a similarly substantial decline in one or more commonly-followed
stock market indices over a three year period. Of course, FMTC cannot predict
with certainty when adverse market conditions will arise. Consequently, FMTC
must manage each of the Automatic Asset Allocation Trusts under all market
conditions with a view toward limiting risk and portfolio decline should very
adverse market conditions arise. For example, since the Conservative Asset
Allocation Trust has the lowest risk tolerance level, its assets under all
market conditions will be invested less aggressively (i.e., with greater
emphasis on fixed-income securities and money market instruments) than those of
the other Automatic Asset Allocation Trusts. In addition, when market conditions
deteriorate (the probability of very adverse market conditions rises), FMTC will
give greater emphasis to fixed-income securities and money market instruments in
an effort to limit overall declines in portfolio value.
An investor should select an Automatic Asset Allocation Trust depending on
his or her objective in terms of balancing the potential long-term total returns
of a portfolio against limiting risk and portfolio declines in very adverse
market conditions. There can be no assurance that actual declines in portfolio
value will not exceed the percentage limitations set forth below in the
description of each portfolio.
THE AGGRESSIVE ASSET ALLOCATION TRUST
The investment objective of the Aggressive Asset Allocation Trust is to
seek the highest total return consistent with an aggressive level of risk
tolerance. This Trust attempts to limit the decline in portfolio value in very
adverse market conditions to 15% in any three year period. This Trust will tend
to invest a greater portion of its assets in equity and foreign securities than
the Moderate and Conservative Asset Allocation Trusts and a lower percentage of
its assets in fixed-income securities and money market instruments than such
Trusts. FMTC will invest the Aggressive Asset Allocation Trust's assets to
attempt to produce a total return competitive with that of equity funds, while
at the same time exposing the Trust's assets to less risk than the typical
aggressive equity fund by allocating a portion of the portfolio's assets to
fixed-income securities and money market instruments. There can be no assurance
that FMTC will be able to attain this objective.
THE MODERATE ASSET ALLOCATION TRUST
The investment objective of the Moderate Asset Allocation Trust is to seek
the highest total return consistent with a moderate level of risk tolerance.
This Trust attempts to limit the decline in portfolio value in very adverse
market conditions to 10% over any three year period. The amount of the Moderate
Asset Allocation Trust's assets invested in each category of securities will
depend on the judgment of FMTC as to what relative portions of the portfolio's
assets in each category will contribute to the achievement of its objective.
Generally, it will place greater emphasis on equity and foreign securities than
the Conservative Asset Allocation Trust but more emphasis on fixed-income
securities and money market instruments than the Aggressive Asset Allocation
Trust. FMTC will invest the Moderate Asset Allocation Trust's assets to attempt
to give the portfolio a substantial participation in favorable equity and bond
markets, although the expected total return will not necessarily exceed the best
returns available from either of those markets.
THE CONSERVATIVE ASSET ALLOCATION TRUST
The investment objective of the Conservative Asset Allocation Trust is to
seek the highest total return consistent with a conservative level of risk
tolerance. This Trust attempts to limit the decline in portfolio value in very
adverse market conditions to 5% over any three year period. This Trust will tend
to invest a greater portion of its assets in fixed-income securities and money
market instruments than the Moderate and Aggressive Asset Allocation Trusts and
a lower percentage of its assets in equity and foreign securities than such
Trusts. FMTC will attempt to invest the Conservative Asset Allocation Trust's
assets in order to produce a higher total return than that which is available
from a bond or a money market portfolio alone, although there can be no
assurance that FMTC will be able to attain this objective.
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The types and characteristics of equity securities to be purchased by the
Automatic Asset Allocation Trusts are set forth above in the discussion of
investment objectives and policies for the Equity Trust; the types and
characteristics of the fixed-income securities to be purchased are set forth in
the discussion of investment objectives and policies for the Investment Quality
Bond (the Automatic Asset Allocation Trusts may not invest in below investment
grade securities except as noted below) and U.S. Government Securities Trusts;
and the types and characteristics of the money market securities to be purchased
are set forth in the discussion of investment objectives of the Money Market
Trust. Potential investors should review the discussion therein in considering
an investment in shares of the Automatic Asset Allocation Trusts.
The Aggressive Asset Allocation Trust and the Moderate Asset Allocation
Trust may each invest up to 10% of their assets in domestic and foreign high
yield corporate and government debt securities, commonly known as "junk bonds"
(i.e., rated "Ba" or below by Moody's or "BB" or below by Standard & Poor's, or
if unrated, of comparable quality as determined by FMTC. Domestic and foreign
high yield debt securities involve comparatively greater risks, including price
volatility and risk of default in the payment of interest and principal, than
higher quality securities. See "RISK FACTORS -- High Yield (High Risk)
Securities" for further information.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Automatic Asset Allocation Trusts are currently authorized to use all
of the various investment strategies referred to under "Hedging and Other
Strategic Transactions." The Statement of Additional Information contains a
description of these strategies and of certain risks associated therewith. The
Aggressive Asset Allocation Trust may invest up to 35% of its assets, the
Moderate Asset Allocation Trust may invest up to 25% of its assets and the
Conservative Allocation Trust may invest up to 15% of its assets in securities
issued by foreign entities and/or denominated in foreign currencies. The
Automatic Asset Allocation Trusts will be subject to certain risks as a result
of their ability to invest in foreign securities. These risks are described
under the caption "RISK FACTORS -- Foreign Securities" in this Prospectus.
Moreover, substantial investments in foreign securities may have adverse tax
implications as described under "GENERAL INFORMATION -- Taxes" in this
Prospectus. In order to comply with limitations imposed by the State of
California Insurance Department, the Aggressive and Moderate Asset Allocation
Trusts will comply with the restrictions regarding foreign investments set forth
under "RISK FACTORS -- Additional Investment Restrictions on Borrowing and
Foreign Investing."
STRATEGIC BOND TRUST
The investment objective of the Strategic Bond Trust is to seek a high
level of total return consistent with preservation of capital.
The Strategic Bond Trust seeks to achieve its objective by giving its
Subadviser, SBAM, broad discretion to deploy the Strategic Bond Trust's assets
among certain segments of the fixed-income market as SBAM believes will best
contribute to the achievement of the portfolio's objective. At any point in
time, the Subadviser will deploy the portfolio's assets based on the
Subadviser's analysis of current economic and market conditions and the relative
risks and opportunities present in the following market segments: U.S.
Government obligations, investment grade domestic corporate debt, high yield
(high risk) corporate debt securities, mortgage backed securities and investment
grade and high yield international debt securities. The Subadviser is an
affiliate of Salomon Brothers Inc. ("SBI"), and in making investment decisions
is able to draw on the research and market expertise of SBI with respect to
fixed-income securities.
In pursuing its investment objective, the Strategic Bond Trust may invest
without limitation in high yield (high risk) securities. High yield securities,
commonly known as "junk bonds," also present a high degree of risk.
High-yielding, lower-quality securities involve comparatively greater risks,
including price volatility and the risk of default in the timely payment of
interest and principal, than higher-quality securities. Due to the risks
inherent in certain of the securities in which the Strategic Bond Trust may
invest, an investment in the portfolio should not be considered as a complete
investment program and may not be appropriate for all investors (see "RISK
FACTORS -- High Yield (High Risk) Securities").
The Subadviser will determine the amount of assets to be allocated to each
type of security in which it invests based on its assessment of the maximum
level of total return that can be achieved from a portfolio which is invested in
these securities without incurring undue risks to principal value. In making
this determination, the Subadviser will rely in part on quantitative analytical
techniques that measure relative risks and opportunities of each type of
security based on current and historical economic, market, political and
technical data for each type of security, as well as on its own assessment of
economic and market conditions both on a global and local (country) basis. In
performing quantitative analysis, the Subadviser will employ prepayment analysis
and option adjusted spread technology to evaluate mortgage securities, mean
variance optimization models to evaluate international debt securities, and
total rate of return analysis to measure relative risks and opportunities in
other fixed-income markets. Economic factors considered will include current and
projected levels of growth and inflation, balance of payment status and monetary
policy. The allocation of assets to international debt securities will further
be influenced by current and expected currency relationships and political and
sovereign factors. The portfolio's assets may not always be allocated to the
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highest yielding securities if the Subadviser feels that such investments would
impair the portfolio's ability to preserve shareholder capital. The Subadviser
will continuously review this allocation of assets and make such adjustments as
it deems appropriate. The portfolio does not plan to establish a minimum or a
maximum percentage of the assets which it will invest in any particular type of
fixed-income security.
In addition, the Subadviser will have discretion to select the range of
maturities of the various fixed-income securities in which the portfolio
invests. Such maturities may vary substantially from time to time depending on
economic and market conditions.
The types and characteristics of the U.S. Government obligations,
mortgage-backed securities, investment grade corporate debt securities and
investment grade international debt securities to be purchased are set forth in
the discussion of investment objectives and policies for the Investment Quality
Bond, U.S. Government Securities and Global Government Bond Trusts, and in the
section entitled "Other Investments" in the Statement of Additional Information;
and the types and characteristics of the money market securities to be purchased
are set forth in the discussion of investment objectives of the Money Market
Trust. Potential investors should review the discussion therein in considering
an investment in shares of the Strategic Bond Trust. As described below, the
Strategic Bond Trust may also invest in high yield domestic and foreign debt
securities.
The Strategic Bond Trust will be subject to special risks as a result of
its ability to invest up to 100% of its assets in foreign securities. These
risks are described under the captions "RISK FACTORS -- High Yield (High Risk)
Securities" and "RISK FACTORS -- Foreign Securities" in this Prospectus.
Moreover, substantial investments in foreign securities may have adverse tax
implications as described under "GENERAL INFORMATION -- Taxes" in this
Prospectus. The ability to spread its investments among the fixed-income markets
in a number of different countries may, however, reduce the overall level of
market risk to the extent it may reduce the Strategic Bond Trust's exposure to a
single market. In order to comply with limitations imposed by the State of
California Insurance Department, the Strategic Bond Trust will comply with the
restrictions regarding foreign investments set forth under "RISK FACTORS --
Additional Investment Restrictions on Borrowing and Foreign Investing."
The Strategic Bond Trust currently intends to invest substantially all of
its assets in fixed-income securities. In order to maintain liquidity, however,
the Strategic Bond Trust may invest up to 20% of its assets in high-quality
short-term money market instruments. If at some future date, in the opinion of
the Subadviser, adverse conditions prevail in the market for fixed-income
securities, the Strategic Bond Trust for temporary defensive purposes may invest
its assets without limit in high-quality short-term money market instruments.
As discussed above, the Strategic Bond Trust may invest in U.S.
dollar-denominated securities issued by domestic issuers that are rated below
investment grade or of comparable quality. Although the Subadviser does not
anticipate investing in excess of 75% of the portfolio's assets in domestic and
developing country debt securities that are rated below investment grade, the
portfolio may invest a greater percentage in such securities when, in the
opinion of the Subadviser, the yield available from such securities outweighs
their additional risks. By investing a portion of the portfolio's assets in
securities rated below investment grade, as well as through investments in
mortgage securities and international debt securities, as described below, the
Subadviser expects to provide investors with a higher yield than a high-quality
domestic corporate bond fund while at the same time presenting less risk than a
fund that invests principally in securities rated below investment grade.
Certain of the debt securities in which the portfolio may invest may have, or be
considered comparable to securities having, the lowest ratings for
non-subordinated debt instruments assigned by Moody's or Standard & Poor's
(i.e., rated C by Moody's or CCC or lower by Standard & Poor's) (see "RISK
FACTORS -- High Yield (High Risk) Securities--General").
In light of the risks associated with high yield corporate and sovereign
debt securities, the Subadviser will take various factors into consideration in
evaluating the credit worthiness of an issue. For corporate debt securities,
these will typically include the issuer's financial resources, its sensitivity
to economic conditions and trends, the operating history of the issuer, and the
experience and track record of the issuer's management. For sovereign debt
instruments, these will typically include the economic and political conditions
within the issuer's country, the issuer's overall and external debt levels and
debt service ratios, the issuer's access to capital markets and other sources of
funding, and the issuer's debt service payment history. The Subadviser will also
review the ratings, if any, assigned to the security by any recognized rating
agencies, although the Subadviser's judgment as to the quality of a debt
security may differ from that suggested by the rating published by a rating
service. The Strategic Bond Trust's ability to achieve its investment objective
may be more dependent on the Subadviser's credit analysis than would be the case
if it invested in higher quality debt securities.
A description of the ratings used by Moody's and Standard & Poor's is set
forth in Appendix I to this Prospectus.
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In addition to the types of international debt securities as set forth in
the discussion of investment objectives and policies of the Global Government
Bond Trust, the Strategic Bond Trust may also invest in international debt
securities that are below investment grade.
The high yield sovereign debt securities in which the Strategic Bond Trust
may invest are U.S. dollar-denominated and non-dollar-denominated debt
securities issued or guaranteed by governments or governmental entities of
developing and emerging countries. The Subadviser expects that these countries
will consist primarily of those which have issued or have announced plans to
issue Brady Bonds, but the portfolio is not limited to investing in the debt of
such countries. Brady Bonds are debt securities issued under the framework of
the Brady Plan, an initiative announced by U.S. Treasury Secretary Nicholas F.
Brady in 1989 as a mechanism for debtor nations to restructure their outstanding
external indebtedness. The Subadviser anticipates that the portfolio's initial
investments in sovereign debt will be concentrated in Latin American countries,
including Mexico and Central and South American and Caribbean countries. The
Subadviser expects to take advantage of additional opportunities for investment
in the debt of North African countries, such as Nigeria and Morocco, Eastern
European countries, such as Poland and Hungary, and Southeast Asian countries,
such as the Philippines. Sovereign governments may include national, provincial,
state, municipal or other foreign governments with taxing authority.
Governmental entities may include the agencies and instrumentalities of such
governments, as well as state-owned enterprises.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Strategic Bond Trust is currently authorized to use all of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions." With the exception of currency transactions, however, it is not
presently anticipated that any of these strategies will be used to a significant
degree by the portfolio. The Statement of Additional Information contains a
description of these strategies and of certain risks associated therewith.
GLOBAL GOVERNMENT BOND TRUST
The investment objective of the Global Government Bond Trust is to seek a
high level of total return by placing primary emphasis on high current income
and the preservation of capital. Oechsle International manages the Global
Government Bond Trust and intends to pursue this objective by investing
primarily in a selected global portfolio of high-quality, fixed-income
securities of foreign and U.S. governmental entities and supranational issuers.
Oechsle International will select the Global Government Bond Trust's
assets from among countries and in currency denominations where opportunities
for total return are expected to be the most attractive. Fundamental economic
strength, credit quality, and currency and interest rate trends will be the
principal determinants of the various country and sector weightings within the
Global Government Bond Trust. The Global Government Bond Trust may substantially
invest in one or more countries but intends to have represented in its portfolio
securities from a number of different countries, although there is no limit on
the value of the portfolio's assets that may be invested in any one country or
in assets denominated in any one country's currency. Moreover, the Global
Government Bond Trust may for temporary defensive purposes choose to invest
substantially all its assets in U.S. securities or cash and cash items.
The Global Government Bond Trust, unlike the other portfolios of the
Trust, is non-diversified for purposes of the 1940 Act. Due to its status as
non-diversified, the Global Government Bond Trust is not subject to the general
limitation under the 1940 Act that it not invest more than 5% of its total
assets in the securities of a single issuer. The Global Government Bond Trust
has elected non-diversified status so that it may invest more than 5% of its
assets in the obligations of a foreign government and this practice may expose
the Global Government Bond Trust to increased financial and market risks. While
non-diversified for purposes of the 1940 Act, the Global Government Bond Trust
remains subject to certain diversification requirements imposed under the
Internal Revenue Code of 1986, as amended (the "Code") which are described under
the caption "GENERAL INFORMATION -- Taxes" in this Prospectus.
The Global Government Bond Trust will generally invest at least 65% of its
assets in the following investments: (i) debt obligations issued or guaranteed
by the U.S. government or one of its agencies or political subdivisions; (ii)
debt obligations issued or guaranteed by a foreign sovereign government or one
of its agencies or political subdivisions; (iii) debt obligations issued or
guaranteed by supranational organizations. Supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Examples include the International
Bank for Reconstruction and Development (the "World Bank"), the European Coal
and Steel Community, the Asian Development Bank and the Inter-American
Development Bank. Such supranational issued instruments may be denominated in
multi-national currency units. Investments in multi-currency, debt securities
will be limited to those assigned within the four highest bond ratings by
Moody's or Standard & Poor's or, if not rated, that are of equivalent investment
quality as determined by Oechsle International. The Global Government Bond Trust
may also invest up to 35% of its assets in (i) corporate debt securities
assigned within the three highest bond ratings by Moody's or Standard & Poor's
or, if not rated, that are of equivalent investment quality as determined by
Oechsle International, (ii)
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preferred stocks and (iii) securities convertible into or exercisable for common
stocks. In addition, the Global Government Bond Trust will hold short-term cash
reserves (money market instruments maturing in a period of thirteen months or
less) as Oechsle International believes is advisable to maintain liquidity or
for temporary defensive purposes. Reserves may be held in any currency deemed
attractive by Oechsle International.
Oechsle International intends to invest in fixed-income securities in
countries where the combination of fixed-income market returns and exchange rate
movements is judged to be attractive. Oechsle International will actively manage
the Global Government Bond Trust's maturity structure according to its interest
rate outlook for each foreign economy. In response to rising interest rates and
falling prices, the Global Government Bond Trust may invest in securities with
shorter maturities to protect its principal value. Conversely, when certain
interest rates are falling and prices are rising, the Global Government Bond
Trust may invest in securities with longer maturities to take advantage of
higher yields and to seek capital appreciation. The Global Government Bond Trust
will seek to invest in countries having favorable currency and interest rate
trends. Investments in countries where the currency trend is unfavorable may be
made when the currency risk can be minimized through hedging. The Global
Government Bond Trust does not intend to invest in longer-term fixed-income
securities in countries where the fixed-income market is fundamentally
unattractive, regardless of the currency trend, but may invest in short-term
fixed-income securities in such countries.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Global Government Bond Trust is currently authorized to use all of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions." With the exception of currency transactions, however, it is not
presently anticipated that any of these strategies will be used to a significant
degree by the portfolio. The Statement of Additional Information contains a
description of these strategies and of certain risks associated therewith. The
Global Government Bond Trust will be subject to special risks as a result of its
ability to invest up to 100% of its assets in foreign securities. These risks
are described under the caption "RISK FACTORS -- Foreign Securities" in this
Prospectus. Moreover, substantial investments in foreign securities may have
adverse tax implications as described under "GENERAL INFORMATION -- Taxes" in
this Prospectus. The ability to spread its investments among the fixed-income
markets in a number of different countries may, however, reduce the overall
level of market risk to the extent it may reduce the Global Government Bond
Trust's exposure to a single market. In order to comply with limitations imposed
by the State of California Insurance Department, the Global Government Bond
Trust will comply with the restrictions regarding foreign investments set forth
under "RISK FACTORS -- Additional Investment Restrictions on Borrowing and
Foreign Investing."
CAPITAL GROWTH BOND TRUST
The investment objective of the Capital Growth Bond Trust is to achieve
growth of capital by investing in medium-grade or better debt securities, with
income as a secondary consideration. MAC manages the Capital Growth Bond Trust.
The Capital Growth Bond Trust differs from most "bond" funds in that its
primary objective is capital appreciation, not income. Opportunities for capital
appreciation will usually exist only when the levels of prevailing interest
rates are falling. During periods when MAC expects interest rates to decline,
the portfolio will invest primarily in intermediate-term and long-term corporate
and government debt securities. However, during periods when the Subadviser
expects interest rates to rise or believes that market or economic conditions
otherwise warrant such action, the portfolio may invest substantially all of its
assets in short-term debt securities to preserve capital and maintain income.
The portfolio may also maintain a portion of its assets temporarily in cash or
short-term debt securities pending selection of particular long-term
investments.
The Capital Growth Bond Trust will be carefully positioned in relation to
the term of debt obligations and the anticipated movement of interest rates. It
is contemplated that at least 75% of the value of the portfolio's total
investment in corporate debt securities, excluding commercial paper, will be
represented by debt securities which have, at the time of purchase, a rating
within the four highest grades as determined by Moody's (Aaa, Aa, A or Baa),
Standard & Poor's (AAA, AA, A or BBB), or Fitch's Investors Service ("Fitch's")
(AAA, AA, A or BBB) and debt securities of banks and other issuers which,
although not rated as a matter of policy by either Moody's, Standard & Poor's,
or Fitch's, are considered by the Subadviser to have investment quality
comparable to securities receiving ratings within such four highest grades.
Although the portfolio does not intend to acquire or hold debt securities of
below investment-grade quality, shareholders should note that even bonds of the
lowest categories of investment-grade quality may have speculative
characteristics, and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than is the case with higher-grade bonds. It should be further noted
that should an obligation in the portfolio drop below investment grade, the
portfolio will make every effort to dispose of it promptly so long as to do so
would not be detrimental to the portfolio.
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Government obligations in which the Capital Growth Bond Trust may invest
include those of foreign governments provided they are denominated in U.S.
dollars. The portfolio may purchase securities on a forward-commitment,
when-issued or delayed-delivery basis. See "RISK FACTORS -- When-Issued
Securities" for additional information on this practice.
The Capital Growth Bond Trust may purchase corporate debt securities which
carry certain equity features, such as conversion or exchange rights or warrants
for the acquisition of stock of the same or a different issuer or participations
based on revenues, sales, or profits. The portfolio will not exercise any such
conversion, exchange or purchase rights if, at the time, the value of all equity
interests so owned would exceed 10% of the value of the portfolio's total
assets.
The Capital Growth Bond Trust will be subject to certain risks as a result
of its ability to invest up to 100% of its total assets in the following types
of foreign securities: (i) U.S. dollar denominated obligations of foreign
branches of U.S. banks, (ii) securities represented by American Depository
Receipts listed on a national securities exchange or traded in the U.S.
over-the-counter market, (iii) securities of a corporation organized in a
jurisdiction other than the U.S. and listed on the New York Stock Exchange or
NASDAQ ("Interlisted Securities") or (iv) securities denominated in U.S. dollars
but issued by non U.S. issuers and issued under U.S. Federal securities
regulations (for example, U.S. dollar denominated obligations issued or
guaranteed as to principal or interest by the Government of Canada or any
Canadian Crown agency). These risks are described under the caption "RISK
FACTORS -- Foreign Securities" in this Prospectus. Moreover, substantial
investments in foreign securities may have adverse tax implications as described
under "GENERAL INFORMATION -- Taxes" in this Prospectus.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS The Capital Growth Bond
Trust is currently authorized to use all of the investment strategies referred
to under "Hedging and Other Strategic Transactions." However, it is not
presently contemplated that any of these strategies will be used to a
significant degree by the portfolio.
INVESTMENT QUALITY BOND TRUST
The investment objective of the Investment Quality Bond Trust is to
provide a high level of current income consistent with the maintenance of
principal and liquidity.
Wellington Management manages the Investment Quality Bond Trust and seeks
to achieve the Trust's objective by investing primarily in a diversified
portfolio of investment grade corporate bonds and U.S. Government bonds with
intermediate to longer term maturities. Investment management will emphasize
sector analysis, which focuses on relative value and yield spreads among
security types and among quality, issuer, and industry sectors, call protection
and credit research. Credit research on corporate bonds is based on both
quantitative and qualitative criteria established by Wellington Management, such
as an issuer's industry, operating and financial profiles, business strategy,
management quality, and projected financial and business conditions. Wellington
Management will attempt to maintain a high, steady and possibly growing income
stream.
At least 65% of the Investment Quality Bond Trust's assets will be
invested in:
(1) marketable debt securities of domestic issuers and of foreign issuers
(payable in U.S. dollars) rated at the time of purchase "A" or better by
Moody's or Standard & Poor's or, if unrated, of comparable quality as
determined by Wellington Management;
(2) securities issued or guaranteed as to principal or interest by the U.S.
Government or its agencies or instrumentalities, including mortgage backed
securities (described below under U.S. Government Securities Trust); and
(3) cash and cash equivalent securities which are authorized for purchase by
the Money Market Trust.
The balance of the Investment Quality Bond Trust's investments may
include: domestic and foreign debt securities rated below "A" by Moody's and
Standard & Poor's (and unrated securities of comparable quality as determined by
Wellington Management), preferred stocks, convertible securities (including
those issued in the Euromarket) and securities carrying warrants to purchase
equity securities, privately placed debt securities, asset-backed securities and
privately issued mortgage securities. At least 65% of the Investment Quality
Bond Trust's assets will be invested in bonds and debentures.
In pursuing its investment objective, the Investment Quality Bond Trust
may invest up to 20% of its assets in domestic and foreign high yield (high
risk) corporate and government debt securities, commonly known as "junk bonds"
(i.e., rated "Ba" or below by Moody's or "BB" or below by Standard & Poor's, or
if unrated, of comparable quality as determined by Wellington Management). The
high yield sovereign debt securities in which the portfolio will invest are
described above under "Strategic Bond Trust." No minimum rating standard is
required for a purchase by the portfolio. Domestic and foreign high yield debt
securities involve comparatively greater risks, including price volatility and
risk of default in the payment of interest and
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principal, than higher-quality securities (see "RISK FACTORS -- High Yield (High
Risk) Securities and Foreign Sovereign Debt Securities").
The Investment Quality Bond Trust may also invest in debt securities
carrying the fourth highest quality rating ("Baa" by Moody's or "BBB" by
Standard & Poor's) and unrated securities of comparable quality as determined by
Wellington Management. While such securities are considered investment grade
quality and are deemed to have adequate capacity for payment of principal and
interest, investments in such securities involve a higher degree of risk than
that associated with investments in debt securities in the higher rating
categories; such securities lack outstanding investment characteristics and in
fact have speculative characteristics as well. For example, changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade
bonds. While the Investment Quality Bond Trust may only invest up to 20% of its
assets in bonds rated below "Baa" by Moody's or "BBB" by Standard & Poor's (or,
if unrated, of comparable quality as determined by Wellington Management) at the
time of investment, it is not required to dispose of bonds that may be
downgraded after being purchased by the Investment Quality Bond Trust, even
though such downgrade may cause the portfolio to exceed this 20% maximum.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Investment Quality Bond Trust is currently authorized to use all of
the various investment strategies referred to under "Hedging and Other Strategic
Transactions." The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith . The Investment
Quality Bond Trust will be subject to certain risks as a result of its ability
to invest up to 20% of its assets in foreign securities. These risks are
described under the caption "Foreign Securities" in this Prospectus. Moreover,
substantial investments in foreign securities may have adverse tax implications
as described under "Taxes" in this Prospectus.
U.S. GOVERNMENT SECURITIES TRUST
The investment objective of the U.S. Government Securities Trust is to
obtain a high level of current income consistent with preservation of capital
and maintenance of liquidity. SBAM manages the U.S. Government Securities Trust
and seeks to attain its objective by investing a substantial portion of its
assets in debt obligations and mortgage backed securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and derivative
securities such as collateralized mortgage obligations backed by such
securities. The portfolio may also invest a portion of its assets in the types
of securities in which the Investment Quality Bond Trust may invest.
At least 80% of the total assets of the U.S. Government Securities Trust
will be invested in:
(1) mortgage backed securities guaranteed by the Government National Mortgage
Association that are supported by the full faith and credit of the U.S.
Government and which are the "modified pass-through" type of mortgage
backed security ("GNMA Certificates"). Such securities entitle the holder
to receive all interest and principal payments due whether or not payments
are actually made on the underlying mortgages;
(2) U.S. Treasury obligations;
(3) obligations issued or guaranteed by agencies or instrumentalities of the
U.S. Government which are backed by their own credit and may not be backed
by the full faith and credit of the U.S. Government;
(4) mortgage backed securities guaranteed by agencies or instrumentalities of
the U.S. Government which are supported by their own credit but not the
full faith and credit of the U.S. Government, such as the Federal Home
Loan Mortgage Corporation and the Federal National Mortgage Association;
and
(5) collateralized mortgage obligations issued by private issuers for which
the underlying mortgage backed securities serving as collateral are backed
(i) by the credit alone of the U.S. Government agency or instrumentality
which issues or guarantees the mortgage backed securities, or (ii) by the
full faith and credit of the U.S. Government.
The mortgage backed securities in which the U.S. Government Securities
Trust invests represent participating interests in pools of residential mortgage
loans which are guaranteed by the U.S. Government, its agencies or
instrumentalities. However, the guarantee of these types of securities runs only
to the principal and interest payments and not to the market value of such
securities. In addition, the guarantee only runs to the portfolio securities
held by the U.S. Government Securities Trust and not the purchase of shares of
the portfolio.
Mortgage backed securities are issued by lenders such as mortgage bankers,
commercial banks, and savings and loan associations. Such securities differ from
conventional debt securities which provide for periodic payment of interest in
fixed
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amounts (usually semiannually) with principal payments at maturity or specified
call dates. Mortgage backed securities provide monthly payments which are, in
effect, a "pass-through" of the monthly interest and principal payments
(including any prepayments) made by the individual borrowers on the pooled
mortgage loans. Principal prepayments result from the sale of the underlying
property or the refinancing or foreclosure of underlying mortgages.
The yield of mortgage-backed securities is based on the average life of
the underlying pool of mortgage loans, which is computed on the basis of the
maturities of the underlying instruments. The actual life of any particular pool
may be shortened by unscheduled or early payments of principal and interest. The
occurrence of prepayments is affected by a wide range of economic, demographic
and social factors and, accordingly, it is not possible to accurately predict
the average life of a particular pool. For pools of fixed rate 30-year
mortgages, it has been common practice to assume that prepayments will result in
a 12-year average life. The actual prepayment experience of a pool of mortgage
loans may cause the yield realized by the U.S. Government Securities Trust to
differ from the yield calculated on the basis of the average life of the pool.
In addition, if any of these mortgage backed securities are purchased at a
premium, the premium may be lost in the event of early prepayment which may
result in a loss to the portfolio.
Prepayments tend to increase during periods of falling interest rates,
while during periods of rising interest rates prepayments will most likely
decline. Reinvestment by the U.S. Government Securities Trust of scheduled
principal payments and unscheduled prepayments may occur at higher or lower
rates than the original investment, thus affecting the yield of this portfolio.
Monthly interest payments received by the portfolio have a compounding effect
which will increase the yield to shareholders as compared to debt obligations
that pay interest semiannually. Because of the reinvestment of prepayments of
principal at current rates, mortgage-backed securities may be less effective
than Treasury bonds of similar maturity at maintaining yields during periods of
declining interest rates. Also, although the value of debt securities may
increase as interest rates decline, the value of these pass-through type of
securities may not increase as much due to the prepayment feature.
The U.S. Government Securities Trust must comply with diversification
requirements established pursuant to the Code for investments of separate
accounts funding contracts. Under these requirements, no more than 55% of the
value of the assets of a portfolio 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. As a
result of these requirements, the U.S. Government Securities Trust may not
invest more than 55% of the value of its assets in GNMA Certificates or in
securities issued or guaranteed by any other single United States government
agency or instrumentality. See the discussion under "GENERAL INFORMATION --
Taxes" below for additional information.
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The U.S. Government Securities Trust is currently authorized to use only
certain of the various investment strategies referred to under "Hedging and
Other Strategic Transactions." Specifically, the U.S. Government Securities
Trust may write covered call options and put options on securities and purchase
call and put options on securities, write covered call and put options on
securities indices and purchase call and put options on securities indices, and,
may enter into futures contracts on financial instruments and indices and write
and purchase put and call options on such futures contracts. It is not presently
anticipated that any of these strategies will be used to a significant degree by
the portfolio. The Statement of Additional Information contains a description of
these strategies and of certain risks associated therewith.
MONEY MARKET TRUST
The investment objective of the Money Market Trust is to obtain maximum
current income consistent with preservation of principal and liquidity. MAC
manages the Money Market Trust and seeks to achieve this objective by investing
in high quality, U.S. dollar denominated money market instruments of the
following types:
(1) obligations issued or guaranteed as to principal and interest by the
United States Government, or any agency or authority controlled or
supervised by and acting as an instrumentality of the U.S. Government
pursuant to authority granted by Congress (hereinafter "U.S. Government
securities"), or obligations of foreign governments including those issued
or guaranteed as to principal or interest by the Government of Canada, the
government of any province of Canada, or any Canadian or provincial Crown
agency (any foreign obligation acquired by the Trust will be payable in
U.S. dollars);
(2) certificates of deposit, bank notes, time deposits, Eurodollars, Yankee
obligations and bankers' acceptances of U.S. banks, foreign branches of
U.S. banks, foreign banks and U.S. savings and loan associations which at
the date of investment have capital, surplus and undivided profits as of
the date of their most recent published financial statements in excess of
$100,000,000 (or less than $100,000,000 if the principal amount of such
bank obligations is insured by the Federal Deposit Insurance Corporation
or the Saving Association Insurance Fund);
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(3) commercial paper which at the date of investment is rated (or guaranteed
by a company whose commercial paper is rated) within the two highest
rating categories by any nationally recognized statistical rating
organization ("NRSRO") (such as "P-1" or "P-2" by Moody's or "A-1" or
"A-2" by Standard & Poor's) or, if not rated, is issued by a company which
MAC acting pursuant to guidelines established by the Trustees, has
determined to be of minimal credit risk and comparable quality;
(4) corporate obligations maturing in 397 days or less which at the date of
investment are rated within the two highest rating categories by any NRSRO
(such as "Aa" or higher by Moody's or "AA" or higher by Standard &
Poor's); and
(5) short-term obligations issued by state and local governmental issuers;
(6) securities that have been structured to be eligible money market
instruments such as participation interests in special purpose trusts that
meet the quality and maturity requirements in whole or in part due to
arrangements for credit enhancement or for shortening effective maturity;
and
(7) repurchase agreements with respect to any of the foregoing obligations.
Commercial paper may include variable amount master demand notes, which
are obligations that permit investment of fluctuating amounts at varying rates
of interest. Such notes are direct lending arrangements between the Money Market
Trust and the note issuer, and MAC will monitor the creditworthiness of the
issuer and its earning power and cash flow, and will also consider situations in
which all holders of such notes would redeem at the same time. Variable amount
master demand notes are redeemable on demand.
All of the Money Market Trust's investments will mature in 397 days or
less and the portfolio will maintain a dollar-weighted average portfolio
maturity of 90 days or less. By limiting the maturity of its investments, the
Money Market Trust seeks to lessen the changes in the value of its assets caused
by fluctuations in short-term interest rates. In addition, the Money Market
Trust will invest only in securities the Trustees determine to present minimal
credit risks and which at the time of purchase are "eligible securities" as
defined by Rule 2a-7 under the 1940 Act. The Money Market Trust also intends to
maintain, to the extent practicable, a constant per share net asset value of
$10.00, but there is no assurance that it will be able to do so.
The Money Market Trust will be subject to certain risks as a result of its
ability to invest up to 20% of its assets in foreign securities. These risks are
described under "RISK FACTORS -- Foreign Securities."
USE OF HEDGING AND OTHER STRATEGIC TRANSACTIONS
The Money Market Trust is not authorized to use any of the various
investment strategies referred to under "Hedging and Other Strategic
Transactions."
THE LIFESTYLE TRUSTS
There are five Lifestyle Trusts (each of which is a fund of funds) --
Aggressive 1000, Growth 820, Balanced 640, Moderate 460 and Conservative 280.
The Lifestyle Trusts differ from the portfolios previously described in that
each Lifestyle Trust invests in a number of the other portfolios of the Trust
("Underlying Portfolios"). Each Lifestyle Trust has its own investment objective
and policies.
LIFESTYLE AGGRESSIVE 1000 TRUST. The investment objective of the Lifestyle
Aggressive 1000 Trust is to provide long-term growth of capital. Current income
is not a consideration. MAC seeks to achieve this objective by investing 100% of
the Lifestyle Trust's assets in Underlying Portfolios which invest primarily in
equity securities.
LIFESTYLE GROWTH 820 TRUST. The investment objective of the Lifestyle
Growth 820 Trust is to provide long-term growth of capital with consideration
also given to current income. MAC seeks to achieve this objective by investing
approximately 20% of the Lifestyle Trust's assets in Underlying Portfolios which
invest primarily in fixed-income securities and approximately 80% of its assets
in Underlying Portfolios which invest primarily in equity securities.
LIFESTYLE BALANCED 640 TRUST. The investment objective of the Lifestyle
Balanced 640 Trust is to provide a balance between a high level of current
income and growth of capital with a greater emphasis given to capital growth.
MAC seeks to achieve this objective by investing approximately 40% of the
Lifestyle Trust's assets in Underlying Portfolios which invest primarily in
fixed-income securities and approximately 60% of its assets in Underlying
Portfolios which invest primarily in equity securities.
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LIFESTYLE MODERATE 460 TRUST. The investment objective of the Lifestyle
Moderate 460 Trust is to provide a balance between a high level of current
income and growth of capital with a greater emphasis given to high income. MAC
seeks to achieve this objective by investing approximately 60% of the Lifestyle
Trust's assets in Underlying Portfolios which invest primarily in fixed-income
securities and approximately 40% of its assets in Underlying Portfolios which
invest primarily in equity securities.
LIFESTYLE CONSERVATIVE 280 TRUST. The investment objective of the
Lifestyle Conservative 280 Trust is to provide a high level of current income
with some consideration also given to growth of capital. MAC seeks to achieve
this objective by investing approximately 80% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed-income securities and
approximately 20% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The Lifestyle Trusts are designed to provide a simple means of obtaining a
professionally-determined comprehensive investment program designed for
differing investment orientations. Each program is implemented by means of
selected long-term investment allocations among the Underlying Portfolios.
The portfolios eligible for purchase by the Lifestyle Trusts consist of
all of the non-Lifestyle Trusts. The Underlying Portfolios are grouped according
to whether they invest primarily in fixed-income securities or equity
securities. The Underlying Portfolios investing primarily in fixed-income
securities are the Strategic Bond, Global Government Bond, Capital Growth Bond,
Investment Quality Bond, U.S. Government Securities and Money Market Trusts. The
other Underlying Portfolios invest primarily in equity securities.
The percentage allocations between the two types of Underlying Portfolios
specified for each Lifestyle Trust are approximate only. Variations in the
percentages are permitted up to 10% in either direction. Thus, for example, the
Lifestyle Conservative 280 Trust may have a fixed-income/equity allocation of
10%/90% or 30%/70%. Variations beyond the permissible deviation range of 10% are
not permitted, unless the Adviser determines that in light of market or economic
conditions the normal percentage limitations should be exceeded to protect the
portfolio or to achieve the portfolio's objective.
The Adviser and MAC manage the Lifestyle Trusts at no cost, although they
reserve the right to seek compensation for services in the future. Within the
prescribed percentage allocations between the two types of Underlying Portfolio,
MAC will select the percentage levels to be maintained in specific portfolios.
On each valuation day, the assets of each Lifestyle Trust will be rebalanced to
maintain the selected percentage levels for the specific portfolios. MAC may
from time to time adjust the percent of assets invested in any specific
portfolios held by a Lifestyle Trust. Such adjustments may be made to increase
or decrease the Lifestyle Trust's holdings of particular assets classes, such as
common stocks of foreign issuers, or to adjust portfolio quality or the duration
of fixed-income securities. Adjustments may also be made to increase or reduce
the percent of the Lifestyle Trust's assets subject to the management of a
particular Subadviser. In addition, changes may be made to reflect some
fundamental change in the investment environment.
Although substantially all of the assets of the Lifestyle Trusts will be
invested in shares of the Underlying Portfolios, the Lifestyle Trusts may invest
up to 100% of their assets in cash or in the money market instruments of the
type in which the Money Market Trust is authorized to invest for the purpose of
meeting redemption requests or making other anticipated cash payments or to
protect the portfolio in the event the Adviser determines that market or
economic conditions warrant a defensive posture. Because substantially all of
the securities in which the Lifestyle Trusts may invest are Underlying
Portfolios, each of the Lifestyle Trusts is non-diversified for purposes of the
1940 Act.
The Lifestyle Trusts are subject to the risks of the Underlying Portfolios
in which they invest. The Lifestyle Trusts are not authorized to use any of the
various investment strategies referred to under "Hedging and Other Strategic
Transactions."
Investors in the Lifestyle Trusts, in addition to bearing their
proportionate share of the expenses of a Lifestyle Trust, will indirectly bear
expenses of the Underlying Portfolio. Therefore, some investors may be able to
realize lower aggregate charges and expenses by investing directly in the
Underlying Portfolios rather than investing indirectly in the Underlying
Portfolio by investing in the Lifestyle Trusts. An investor who chose to invest
directly in the Underlying Portfolios rather than purchasing the Lifestyle
Trusts would, however, forego the asset allocation services provided by the MAC
in its management of the Lifestyle Trusts.
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RISK FACTORS
INVESTMENT RESTRICTIONS GENERALLY
The Trust is subject to a number of restrictions in pursuing its
investment objectives and policies. The following is a brief summary of certain
restrictions that may be of interest to contract owners. Some of these
restrictions are subject to exceptions not stated here. Such exceptions and a
complete list of the investment restrictions applicable to the individual
portfolios and to the Trust are set forth in the Statement of Additional
Information under the caption "Investment Restrictions."
Except for the restrictions specifically identified as fundamental, all
investment restrictions described in this Prospectus and in the Statement of
Additional Information are not fundamental, so that the Trustees of the Trust
may change them without shareholder approval. Fundamental policies may not be
changed without the affirmative vote of a majority of the outstanding voting
securities.
Fundamental policies applicable to all portfolios include prohibitions on
(i) investing more than 25% of the total assets of any portfolio, except the
Real Estate Securities Trust and the Lifestyle Trusts, in the securities of
issuers having their principal activities in any particular industry (with
exceptions for U.S. Government securities and certain other obligations) and
(ii) borrowing money, except for temporary or emergency purposes (but not for
leveraging) and then not in excess of 33-1/3% of the value of the total assets
of the portfolio at the time the borrowing is made. In addition, each portfolio
may borrow in connection with reverse repurchase agreements, mortgage dollar
rolls and other similar transactions. Reverse repurchase agreements and mortgage
dollar rolls may be considered a form of borrowing and will be treated as a
borrowing for purposes of the restriction on borrowing in excess of 33-1/3% of
the value of the total assets of a portfolio. A portfolio will not purchase
securities while borrowings (other than reverse repurchase agreements, mortgage
dollar rolls and similar transactions) exceed 5% of total assets. In addition,
each of the portfolios except the Global Government Bond, Emerging Growth and
Lifestyle Trusts, is prohibited from purchasing securities of any issuer if the
purchase would cause more than 5% of the value of a portfolio's total assets to
be invested in the securities of any one issuer (excluding U.S. Government
securities) or cause more than 10% of the voting securities of the issuer to be
held by a portfolio, except that up to 25% of the value of each portfolio's
total assets (except the Money Market Trust) may be invested without regard to
this restriction.
Restrictions that apply to all portfolios and that are not fundamental
include prohibitions on (i) knowingly investing more than 15% of the net assets
of any portfolio in "illiquid" securities (including repurchase agreements
maturing in more than seven days but excluding master demand notes), (ii)
pledging, hypothecating, mortgaging or transferring more than 10% of the total
assets of any portfolio as security for indebtedness (except that the applicable
percent is 33-1/3% in the case of the Small Company Value, Blue Chip Growth,
Equity-Income, International Stock and Science & Technology Trusts, 15% in the
case of the International Small Cap, Growth, Balanced and Worldwide Growth
Trusts and 50% in the case of the Value Trust), and (iii) purchasing securities
of other investment companies, other than in connection with a merger,
consolidation or reorganization, if the purchase would cause more than 10% of
the value of a portfolio's total assets to be invested in investment company
securities, except that the Lifestyle Trusts are not subject to this
restriction. The percentage restriction in clause (i) of the preceding sentence,
however, is 10% in the case of the Money Market Trust.
Finally, the Money Market Trust is subject to certain restrictions
required by Rule 2a-7 under the 1940 Act. In order to comply with such
restrictions, the Money Market Trust will, INTER ALIA, not purchase the
securities of any issuer if it would cause (i) more than 5% of its total assets
to be invested in the securities of any one issuer (excluding U.S. Government
securities and repurchase agreements fully collateralized by U.S. Government
securities), except as permitted by the Rule for certain securities for a period
of up to three business days after purchase, (ii) more than 5% of its total
assets to be invested in "second tier securities," as defined by the Rule, or
(iii) more than the greater of $1 million or 1% of its total net assets to be
invested in the second tier securities of that issuer.
* * *
There are also diversification and other requirements for all of the
portfolios imposed by the Federal tax laws, as described under "GENERAL
INFORMATION -- Taxes" in this Prospectus.
The following is a description of certain investment policies subject to
investment restrictions that may be of particular interest to contract owners.
HIGH YIELD (HIGH RISK) SECURITIES
GENERAL. The Strategic Bond and High Yield Trusts may invest without
limitation, the Investment Quality Bond Trust may invest up to 20% of its
assets, the Equity-Income, Aggressive Asset Allocation and Moderate Asset
Allocation Trusts may each invest up to 10% of its assets, and the Balanced,
International Small Cap, Growth, Blue Chip Growth and Worldwide Growth Trusts
may each invest up to 5% of its assets, in "high yield" (high risk) securities.
Securities rated below investment
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grade and comparable unrated securities offer yields that fluctuate over time,
but generally are superior to the yields offered by higher rated securities.
However, securities rated below investment grade also involve greater risks than
higher rated securities. Under rating agency guidelines, medium- and lower-rated
securities and comparable unrated securities will likely have some quality and
protective characteristics that are outweighed by large uncertainties or major
risk exposures to adverse conditions. Certain of the debt securities in which
the portfolios may invest may have, or be considered comparable to securities
having, the lowest ratings for non-subordinated debt instruments assigned by
Moody's or Standard & Poor's (i.e., rated Caa or lower by Moody's or CCC or
lower by Standard & Poor's). These securities are considered to have extremely
poor prospects of ever attaining any real investment standing, to have a current
identifiable vulnerability to default, to be unlikely to have the capacity to
pay interest and repay principal when due in the event of adverse business,
financial or economic conditions, and/or to be in default or not current in the
payment of interest or principal. Such securities are considered speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations. Accordingly, it is possible that
these types of factors could, in certain instances, reduce the value of
securities held by the portfolio with a commensurate effect on the value of the
portfolio's shares. Because the Strategic Bond and High Yield Trusts may invest
without limitation in high yield debt securities, an investment in those
portfolios should not be considered as a complete investment program for all
investors.
Because the Strategic Bond, High Yield, and Investment Quality Bond Trusts
will invest primarily in fixed-income securities, the net asset value of each
portfolio's shares can be expected to change as general levels of interest rates
fluctuate, although the market values of securities rated below investment grade
and comparable unrated securities tend to react less to fluctuations in interest
rate levels than do those of higher-rated securities. Except to the extent that
values are affected independently by other factors such as developments relating
to a specific issuer, when interest rates decline, the value of a fixed-income
portfolio can generally be expected to rise. Conversely, when interest rates
rise, the value of a fixed-income portfolio can generally be expected to
decline.
The secondary markets for high yield corporate and sovereign debt
securities are not as liquid as the secondary markets for higher rated
securities. The secondary markets for high yield debt securities are
concentrated in relatively few market makers and participants in the market are
mostly institutional investors, including insurance companies, banks, other
financial institutions and mutual funds. In addition, the trading volume for
high yield debt securities is generally lower than that for higher-rated
securities and the secondary markets could contract under adverse market or
economic conditions independent of any specific adverse changes in the condition
of a particular issuer. These factors may have an adverse effect on the ability
of portfolios investing in high yield securities to dispose of particular
portfolio investments and may limit the ability of those portfolios to obtain
accurate market quotations for purposes of valuing securities and calculating
net asset value. If a portfolio investing in high yield debt securities is not
able to obtain precise or accurate market quotations for a particular security,
it will become more difficult for the Trustees to value that portfolio's
investment portfolio and the Trustees may have to use a greater degree of
judgment in making such valuations. Less liquid secondary markets may also
affect a portfolio's ability to sell securities at their fair value. In
addition, each portfolio may invest up to 15% (10% in the case of the Money
Market Trust) of its net assets, measured at the time of investment, in illiquid
securities, which may be more difficult to value and to sell at fair value. If
the secondary markets for high yield debt securities are affected by adverse
economic conditions, the proportion of a portfolio's assets invested in illiquid
securities may increase.
CORPORATE DEBT SECURITIES. While the market values of securities rated
below investment grade and comparable unrated securities tend to react less to
fluctuations in interest rate levels than do those of higher-rated securities,
the market values of certain of these securities also tend to be more sensitive
to individual corporate developments and changes in economic conditions than
higher-rated securities. In addition, such securities generally present a higher
degree of credit risk. Issuers of these securities are often highly leveraged
and may not have more traditional methods of financing available to them, so
that their ability to service their debt obligations during an economic downturn
or during sustained periods of rising interest rates may be impaired. The risk
of loss due to default by such issuers is significantly greater than with
investment grade securities because such securities generally are unsecured and
frequently are subordinated to the prior payment of senior indebtedness.
FOREIGN SOVEREIGN DEBT SECURITIES. Investing in foreign sovereign debt
securities will expose the Strategic Bond, High Yield and Investment Quality
Bond Trusts and other portfolios investing in such securities to the direct or
indirect consequences of political, social or economic changes in the developing
and emerging countries that issue the securities. The ability and willingness of
sovereign obligors in developing and emerging countries or the governmental
authorities that control repayment of their external debt to pay principal and
interest on such debt when due may depend on general economic and political
conditions within the relevant country. Countries such as those in which these
portfolios may invest have historically experienced, and may continue to
experience, high rates of inflation, high interest rates, exchange rate trade
difficulties and extreme poverty and unemployment. Many of these countries are
also characterized by political uncertainty or instability. Additional factors
which may influence the ability or willingness to service debt include, but are
not limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its government's policy towards
the International Monetary Fund, the World Bank and other international
agencies.
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The ability of a foreign sovereign obligor to make timely payments on its
external debt obligations will also be strongly influenced by the obligor's
balance of payments, including export performance, its access to international
credits and investments, fluctuations in interest rates and the extent of its
foreign reserves. A country whose exports are concentrated in a few commodities
or whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other than
dollars, its ability to make debt payments denominated in dollars could be
adversely affected. If a foreign sovereign obligor cannot generate sufficient
earnings from foreign trade to service its external debt, it may need to depend
on continuing loans and aid from foreign governments, commercial banks, and
multilateral organizations, and inflows of foreign investment. The commitment on
the part of these foreign governments, multilateral organizations and others to
make such disbursements may be conditioned on the government's implementation of
economic reforms and/or economic performance and the timely service of its
obligations. Failure to implement such reforms, achieve such levels of economic
performance or repay principal or interest when due may result in the
cancellation of such third parties' commitments to lend funds, which may further
impair the obligor's ability or willingness to timely service its debts. The
cost of servicing external debt will also generally be adversely affected by
rising international interest rates, because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to foreign
exchange. Currency devaluations may affect the ability of a sovereign obligor to
obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a governmental obligor may default on its
obligations. If such an event occurs, the portfolio may have limited legal
recourse against the issuer and/or guarantor. Remedies must, in some cases, be
pursued in the courts of the defaulting party itself, and the ability of the
holder of foreign sovereign debt securities to obtain recourse may be subject to
the political climate in the relevant country. In addition, no assurance can be
given that the holders of commercial bank debt will not contest payments to the
holders of other foreign sovereign debt obligations in the event of default
under their commercial bank loan agreements.
Sovereign obligors in developing and emerging countries are among the
world's largest debtors to commercial banks, other governments, international
financial organizations and other financial institutions. These obligors have in
the past experienced substantial difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and the restructuring
of certain indebtedness. Restructuring arrangements have included, among other
things, reducing and rescheduling interest and principal payments by negotiating
new or amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest payments.
Holders of certain foreign sovereign debt securities may be requested to
participate in the restructuring of such obligations and to extend further loans
to their issuers. There can be no assurance that the Brady Bonds and other
foreign sovereign debt securities in which the portfolios may invest will not be
subject to similar restructuring arrangements or to requests for new credit
which may adversely affect the portfolio's holdings. Furthermore, certain
participants in the secondary market for such debt may be directly involved in
negotiating the terms of these arrangements and may therefore have access to
information not available to other market participants.
In addition to high yield foreign sovereign debt securities, many of the
Trust's portfolios may invest in investment grade foreign securities. For a
discussion of such securities and their associated risks, see "Foreign
Securities" below.
FOREIGN SECURITIES
Each of the portfolios, other than the U.S. Government Securities and
Equity Index Trusts, may invest in securities of foreign issuers. Such foreign
securities may be denominated in foreign currencies, except with respect to the
Money Market Trust which may only invest in U.S. dollar-denominated securities
of foreign issuers. The International Small Cap, Capital Growth Bond, Global
Equity, Global Government Bond, Worldwide Growth, High Yield, International
Growth and Income, International Stock, Strategic Bond, Real Estate Securities,
Quantitative Equity and Pacific Rim Emerging Markets Trusts may each, without
limitation, invest up to 100% of its assets in securities issued by foreign
entities and/or denominated in foreign currencies. The Small Company Value Trust
may invest without limit in common stocks of foreign issuers which are listed on
a United States securities exchange or traded in the United States in the OTC
market, but will not invest in securities which are principally traded outside
of the United States. The Aggressive Asset Allocation Trust may invest up to 35%
of its assets, the Growth, Balanced and Science & Technology Trusts each up to
30% of its assets, the Moderate Asset Allocation and Equity-Income Trusts each
up to 25% of its assets, the Pilgrim Baxter Growth and Conservative Asset
Allocation Trusts each up to 15% of its assets, the Value Trust up to 5% of its
assets, and each of the other portfolios other than the U.S. Government
Securities and Equity Index Trusts up to 20% of its assets in securities issued
by foreign entities and/or denominated in foreign currencies. (In the case of
the Small/Mid Cap, Growth, Balanced and Value Trusts, ADRs and U.S. dollar
denominated securities are not included in the percentage limitation.)
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Securities of foreign issuers include obligations of foreign branches of
U.S. banks and of foreign banks, common and preferred stocks, debt securities
issued by foreign governments, corporations and supranational organizations, and
American Depository Receipts, European Depository Receipts and Global Depository
Receipts ("ADRs," "EDRs" and "GDRs"). ADRs are U.S. dollar-denominated
securities backed by foreign securities deposited in a U.S. securities
depository. ADRs are created for trading in the U.S. markets. The value of an
ADR will fluctuate with the value of the underlying security, reflect any
changes in exchange rates and otherwise involve risks associated with investing
in foreign securities. ADRs in which the portfolios may invest may be sponsored
or unsponsored. There may be less information available about foreign issuers of
unsponsored ADRs.
Securities of foreign issuers also include EDRs and GDRs, which are
receipts evidencing an arrangement with a non-U.S. bank similar to that for ADRs
and are designed for use in non-U.S. securities markets. EDRs and GDRs are not
necessarily quoted in the same currency as the underlying security.
Foreign securities may be subject to foreign government taxes which reduce
their attractiveness (see "GENERAL INFORMATION -- Taxes"). In addition,
investing in securities denominated in foreign currencies and in the securities
of foreign issuers, particularly non-governmental issuers, involves risks which
are not ordinarily associated with investing in domestic issuers. These risks
include political or economic instability in the country involved and the
possibility of imposition of currency controls. Since certain portfolios may
invest in securities denominated or quoted in currencies other than the United
States dollar, changes in foreign currency exchange rates may affect the value
of investments in the portfolio and the unrealized appreciation or depreciation
of investments insofar as United States investors are concerned. Foreign
currency exchange rates are determined by forces of supply and demand on the
foreign exchange markets. These forces are, in turn, affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors. The portfolios may incur
transaction charges in exchanging foreign currencies.
There may be less publicly available information about a foreign issuer
than about a domestic issuer. Foreign issuers, including foreign branches of
U.S. banks, are subject to different accounting and reporting requirements which
are generally less extensive than the requirements applicable to domestic
issuers. Foreign stock markets (other than Japan) have substantially less volume
than the United States exchanges and securities of foreign issuers are generally
less liquid and more volatile than those of comparable domestic issuers. There
is frequently less governmental regulation of exchanges, broker-dealers and
issuers than in the United States, and brokerage costs may be higher. In
addition, investments in foreign companies may be subject to the possibility of
nationalization, withholding of dividends at the source, expropriation or
confiscatory taxation, currency blockage, political or economic instability or
diplomatic developments that could adversely affect the value of those
investments. Finally, in the event of a default on any foreign obligation, it
may be difficult for the Trust to obtain or to enforce a judgment against the
issuer.
EMERGING MARKETS. Foreign markets, especially emerging markets, may have
different clearance and settlement procedures, and in certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions.
Delays in settlement could result in temporary periods when a portion of the
assets of a portfolio is uninvested and no return is earned thereon. The
inability of a portfolio to make intended security purchases due to settlement
problems could cause the portfolio to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to settlement problems could
result in losses to a portfolio due to subsequent declines in values of the
portfolio securities or, if the portfolio has entered into a contract to sell
the security, possible liability to the purchaser. Certain foreign markets,
especially emerging markets, may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. A portfolio could be adversely affected by
delays in, or a refusal to grant, any required governmental approval for
repatriation of capital, as well as by the application to the portfolio of any
restrictions on investments.
In addition to the foreign securities listed above, the Strategic Bond,
High Yield, Investment Quality Bond, Worldwide Growth, International Small Cap,
Growth, Balanced, Aggressive Asset Allocation and Moderate Asset Allocation
Trusts may also invest in foreign sovereign debt securities, which involve
certain additional risks. See "RISK FACTORS -- High Yield (High Risk)
Securities--Foreign Sovereign Debt Securities" above.
SMALL COMPANY AND EMERGING GROWTH SECURITIES
The Science & Technology, International Small Cap, Emerging Growth,
Pilgrim Baxter Growth, Small/Mid Cap, Worldwide Growth and Small Company Value
Trust may each invest in small-sized and emerging growth companies
(collectively, "small-sized companies"). Investing in securities of small-sized
companies may involve greater risks since these securities may have limited
marketability and, thus, may be more volatile. Because small-sized companies
normally have fewer shares outstanding than larger companies, it may be more
difficult to buy or sell significant amounts of such shares without an
unfavorable impact on prevailing prices. In addition, small-sized companies are
typically subject to a greater degree of changes in earnings and business
prospects than are larger, more established companies. There is typically less
publicly available information concerning small-sized companies than for larger,
more established companies.
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Companies with small market capitalizations may also be dependent upon a single
proprietary product or market niche, may have limited product lines, markets or
financial resources, or may depend on a limited management group. Although
investing in securities of small-sized companies offers potential for
above-average returns if the companies are successful, the risk exists that the
companies will not succeed and the prices of the companies' shares could
significantly decline in value. Therefore, an investment in a Trust that invests
in small-sized company securities may involve a greater degree of risk than an
investment in other mutual funds that seek capital appreciation by investing in
better-known, larger companies.
WARRANTS
Subject to certain restrictions, each of the Portfolios except the Money
Market Trust and the Lifestyle Trusts may purchase warrants, including warrants
traded independently of the underlying securities. Warrants are rights to
purchase securities at specific prices valid for a specific period of time.
Their prices do not necessarily move parallel to the prices of the underlying
securities, and warrant holders receive no dividends and have no voting rights
or rights with respect to the assets of an issuer. Warrants cease to have value
if not exercised prior to the expiration date.
LENDING SECURITIES
Each portfolio may lend its securities so long as such loans do not
represent in excess of 33-1/3% of a portfolio's total assets. This is a
fundamental policy. The procedure for lending securities is for the borrower to
give the lending portfolio collateral consisting of cash, cash equivalents or
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. The lending portfolio may invest the cash collateral and earn
additional income or receive an agreed upon fee from a borrower which has
delivered cash equivalent collateral. The Trust anticipates that its securities
will be loaned only under the following conditions: (1) the borrower must
furnish collateral equal at all times to the market value of the securities
loaned and the borrower must agree to increase the collateral on a daily basis
if the securities increase in value; (2) the loan will be made in accordance
with New York Stock Exchange rules, which presently require the borrower, after
notice, to redeliver the securities within five business days; and (3) the
portfolio making the loan may pay reasonable service, placement, custodian or
other fees in connection with loans of securities and share a portion of the
interest from these investments with the borrower of the securities. As with
other extensions of credit there are risks of delay in recovery or even loss of
rights in the collateral should the borrower of the securities fail financially.
WHEN-ISSUED SECURITIES ("FORWARD COMMITMENTS")
In order to help ensure the availability of suitable securities, each of
the portfolios may purchase debt securities on a "when-issued" or on a "forward
delivery" basis, which means that the obligations will be delivered to the
portfolio at a future date, which may be a month or more after the date of
commitment (referred to as "forward commitments"). It is expected that, under
normal circumstances, a portfolio purchasing securities on a when-issued or
forward delivery basis will take delivery of the securities, but the portfolio
may sell the securities before the settlement date, if such action is deemed
advisable. In general, a portfolio does not pay for the securities or start
earning interest on them until the obligations are scheduled to be settled, but
it does, in the meantime, record the transaction and reflect the value each day
of the securities in determining its net asset value. At the time delivery is
made, the value of when-issued or forward delivery securities may be more or
less than the transaction price, and the yields then available in the market may
be higher than those obtained in the transaction. While awaiting delivery of the
obligations purchased on such bases, a portfolio will establish a segregated
account consisting of cash or high quality debt securities equal to the amount
of the commitments to purchase when-issued or forward delivery securities. The
availability of liquid assets for this purpose and the effect of asset
segregation on a portfolio's ability to meet its current obligations, to honor
requests for redemption and to have its investment portfolio managed properly
will limit the extent to which the portfolio may purchase when-issued or forward
delivery securities. Except as may be imposed by these factors, there is no
limit on the percent of a portfolio's total assets that may be committed to such
transactions.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS
Each of the Trust's portfolios may enter into repurchase agreements and
reverse repurchase agreements. Repurchase agreements involve the acquisition by
a portfolio of debt securities subject to an agreement to resell them at an
agreed-upon price. Under a repurchase agreement, at the time the portfolio
acquires a security, it agrees to resell it to the original seller (a financial
institution or broker/dealer which meets the guidelines established by the
Trustees) and must deliver the security (and/or securities that may be added to
or substituted for it under the repurchase agreement) to the original seller on
an agreed-upon date in the future. The repurchase price is in excess of the
purchase price. The arrangement is in economic effect a loan collateralized by
securities.
The Trustees have adopted procedures that establish certain
creditworthiness, asset and collateralization requirements for the
counterparties to a portfolio's repurchase agreements. The Trustees will
regularly monitor the use of repurchase
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agreements and the Subadvisers will, pursuant to procedures adopted by the
Trustees, continuously monitor the amount of collateral held with respect to a
repurchase transaction so that it equals or exceeds the amount of the
obligation.
A portfolio's risk in a repurchase transaction is limited to the ability
of the seller to pay the agreed-upon sum on the delivery date. In the event of
bankruptcy or other default by the seller, there may be possible delays and
expenses in liquidating the instrument purchased, decline in its value and loss
of interest. Securities subject to repurchase agreements will be valued every
business day and additional collateral will be requested if necessary so that
the value of the collateral is at least equal to the value of the repurchase
obligation, including the interest accrued thereon.
Each portfolio of the Trust may enter into "reverse" repurchase
agreements. Under a reverse repurchase agreement, a portfolio may sell a debt
security and agree to repurchase it at an agreed upon time and at an agreed upon
price. The portfolio retains record ownership of the security and the right to
receive interest and principal payments thereon. At an agreed upon future date,
the portfolio repurchases the security by remitting the proceeds previously
received, plus interest. The difference between the amount the portfolio
receives for the security and the amount it pays on repurchase is deemed to be
payment of interest. The portfolio will maintain in a segregated custodial
account cash, Treasury bills or other U.S. Government securities having an
aggregate value equal to the amount of such commitment to repurchase including
accrued interest, until payment is made. In certain types of agreements, there
is no agreed-upon repurchase date and interest payments are calculated daily,
often based on the prevailing overnight repurchase rate. While a reverse
repurchase agreement may be considered a form of leveraging and may, therefore,
increase fluctuations in a portfolio's net asset value per share, each portfolio
will cover the transaction as described above.
MORTGAGE DOLLAR ROLLS
Each portfolio of the Trust (except the Money Market Trust and the
Lifestyle Trusts) may enter into mortgage dollar rolls. Under a mortgage dollar
roll, a portfolio sells mortgage-backed securities for delivery in the future
(generally within 30 days) and simultaneously contracts to repurchase
substantially similar (same type, coupon and maturity) securities on a specified
future date. During the roll period, the portfolio forgoes principal and
interest paid on the mortgage-backed securities. A portfolio is compensated by
the difference between the current sale price and the lower forward price for
the future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. A portfolio may also be
compensated by receipt of a commitment fee. A portfolio may only enter into
covered rolls. A "covered roll" is a specific type of dollar roll for which
there is an offsetting cash or cash equivalent security position which matures
on or before the forward settlement date of the dollar roll transaction. Dollar
roll transactions involve the risk that the market value of the securities sold
by the portfolio may decline below the repurchase price of those securities.
While a mortgage dollar roll may be considered a form of leveraging, and may,
therefore, increase fluctuations in a portfolio's net asset value per share,
each portfolio will cover the transaction as described above.
HEDGING AND OTHER STRATEGIC TRANSACTIONS
Individual portfolios may be authorized to use a variety of investment
strategies described below for hedging purposes only, including hedging various
market risks (such as interest rates, currency exchange rates and broad or
specific market movements) and managing the effective maturity or duration of
debt instruments held by the portfolio. The description in this Prospectus of
each portfolio indicates which, if any, of these types of transactions may be
used by the portfolio. Limitations on the portion of a portfolio's assets that
may be used in connection with the investment strategies described below are set
out in the Statement of Additional Information.
Subject to the constraints described above, an individual portfolio may
(if and to the extent so authorized) purchase and sell (or write)
exchange-listed and over-the-counter put and call options on securities,
financial futures contracts and fixed-income indices and other financial
instruments, enter into financial futures contracts (including stock index
futures), enter into interest rate transactions, and enter into currency
transactions (collectively, these transactions are referred to in this
Prospectus as "Hedging and Other Strategic Transactions"). A portfolio's
interest rate transactions may take the form of swaps, caps, floors and collars,
and a portfolio's currency transactions may take the form of currency forward
contracts, currency futures contracts, currency swaps and options on currencies
or currency futures contracts.
Hedging and Other Strategic Transactions may be used to attempt to protect
against possible changes in the market value of securities held or to be
purchased by a portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect a portfolio's unrealized gains in the value of its
securities, to facilitate the sale of those securities for investment purposes,
to manage the effective maturity or duration of a portfolio's securities or to
establish a position in the derivatives markets as a temporary substitute for
purchasing or selling particular securities. A portfolio may use any or all
types of Hedging and Other Strategic Transactions which it is authorized to use
at any time; no particular strategy will dictate the use of one type of
transaction rather than another, as use of any authorized Hedging and Other
Strategic Transaction will be a function of numerous variables, including market
conditions. The ability of a portfolio to utilize Hedging and Other Strategic
Transactions
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successfully will depend on, in addition to the factors described above, the
Subadviser's ability to predict pertinent market movements, which cannot be
assured. These skills are different from those needed to select a portfolio's
securities. None of the portfolios is a "commodity pool" (i.e., a pooled
investment vehicle which trades in commodity futures contracts and options
thereon and the operator of which is registered with the Commodity Futures
Trading Commission (the "CFTC")) and Hedging and Other Strategic Transactions
involving futures contracts and options on futures contracts will be purchased,
sold or entered into only for BONA FIDE hedging, risk management or appropriate
portfolio management purposes and not for speculative purposes. The use of
certain Hedging and Other Strategic Transactions will require that a portfolio
segregate cash, liquid high grade debt obligations or other assets to the extent
a portfolio's obligations are not otherwise "covered" through ownership of the
underlying security, financial instrument or currency. Risks associated with
Hedging and Other Strategic Transactions are described in "Hedging and Other
Strategic Transactions -- Risk Factors" in the Statement of Additional
Information. A detailed discussion of various Hedging and Other Strategic
Transactions, including applicable regulations of the CFTC and the requirement
to segregate assets with respect to these transactions, also appears in the
Statement of Additional Information.
ILLIQUID SECURITIES
Each of the portfolios is precluded from investing in excess of 15% of its
net assets in securities that are not readily marketable, except that the Money
Market Trust may not invest in excess of 10% of its net assets in such
securities. Investment in illiquid securities involves the risk that, because of
the lack of consistent market demand for such securities, the Trust may be
forced to sell them at a discount from the last offer price.
Excluded from the 10% and 15% limitation are securities that are
restricted as to resale but for which a ready market is available pursuant to
exemption provided by Rule 144A adopted pursuant to the Securities Act of 1933
("1933 Act") or other exemptions from the registration requirements of the 1933
Act. Whether securities sold pursuant to Rule 144A are readily marketable for
purposes of the Trust's investment restriction is a determination to be made by
the Subadvisers subject to the Trustees' oversight and for which the Trustees
are ultimately responsible. The Subadvisers will also monitor the liquidity of
Rule 144A securities held by the portfolios for which they are responsible. To
the extent Rule 144A securities held by a portfolio should become illiquid
because of a lack of interest on the part of qualified institutional investors,
the overall liquidity of the portfolio could be adversely affected. In addition,
the Money Market Trust may invest in commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the 1933 Act. Section
4(2) commercial paper is restricted as to the disposition under Federal
securities law, and is generally sold to institutional investors, such as the
Trust, who agree that they are purchasing the paper for investment purposes and
not with a view to public distribution. Any resale by the purchaser must be made
in an exempt transaction. Section 4(2) commercial paper is normally resold to
other institutional investors like the Money Market Trust through or with the
assistance of the issuer or investment dealers who make a market in Section 4(2)
commercial paper, thus providing liquidity. The Money Market Trust's Subadviser
believes that Section 4(2) commercial paper meets its criteria for liquidity and
is quite liquid. The Money Market Trust intends, therefore, to treat Section
4(2) commercial paper as liquid and not subject to the investment limitation
applicable to illiquid securities. The Money Market Trust's Subadviser will
monitor the liquidity of 4(2) commercial paper held by the Money Market Trust,
subject to the Trustees' oversight and for which the Trustees are ultimately
responsible.
MANAGEMENT OF THE TRUST
Under Massachusetts law and the Trust's Declaration of Trust and By-Laws,
the management of the business and affairs of the Trust is the responsibility of
its Trustees. The Trust was originally organized on August 3, 1984 as "NASL
Series Fund, Inc." (the "Fund"), a Maryland corporation. Pursuant to an
Agreement and Plan of Reorganization and Liquidation approved at the Special
Meeting of Shareholders held on December 2, 1988, the Fund was reorganized as a
Massachusetts business trust established pursuant to an Agreement and
Declaration of Trust dated September 29, 1988 (the "Declaration of Trust"). The
reorganization became effective on December 31, 1988. At that time, the assets
and liabilities of each of the Fund's separate investment portfolios were
assumed by the corresponding portfolios of the Trust and the Trust carried on
the business and operations of the Fund with the same investment management
arrangements as were in effect for the Fund immediately prior to such
reorganization. Effective December 31, 1996, Manulife Series Fund, Inc., a
registered management investment company with nine portfolios, was merged into
the Trust. The net assets of four of the portfolios of Manulife Series Fund,
Inc. were transferred to comparable portfolios of the Trust, and the remaining
five portfolios -- the Pacific Rim Emerging Markets, Common Stock, Real Estate
Securities, Capital Growth and Equity Index Portfolios -- were transferred to
the Trust and reconstituted as new portfolios of the Trust.
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<PAGE> 86
ADVISORY ARRANGEMENTS
Manufacturers Securities Services, LLC (the "Adviser"),the successor to
NASL Financial Services, Inc., a Delaware limited liability company whose
principal offices are located at 73 Tremont Street, Boston, Massachusetts 02108,
is a subsidiary of Manulife North America, the ultimate parent of which is
Manulife Financial, a Canadian mutual life insurance company based in Toronto,
Canada. Prior to January 1, 1996, Manulife North America was a wholly owned
subsidiary of North American Life Assurance Company ("NAL"), a Canadian mutual
life insurance company. On January 1, 1996, NAL and Manulife Financial merged
with the combined company retaining the name Manulife Financial. The Adviser is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and as a broker-dealer under the Securities Exchange Act of 1934,
and it is a member of the National Association of Securities Dealers, Inc. (the
"NASD"). In addition, the Adviser serves as principal underwriter of certain
contracts issued by Manulife North America.
Under the terms of the Advisory Agreement, the Adviser administers the
business and affairs of the Trust. The Adviser is responsible for performing or
paying for various administrative services for the Trust, including providing at
the Adviser's expense, (i) office space and all necessary office facilities and
equipment, (ii) necessary executive and other personnel for managing the affairs
of the Trust and for performing certain clerical, accounting and other office
functions, and (iii) all other information and services, other than services of
counsel, independent accountants or investment subadvisory services provided by
any Subadviser under a subadvisory agreement, required in connection with the
preparation of all tax returns and documents required to comply with the Federal
securities laws. The Adviser pays the cost of (i) any advertising or sales
literature relating solely to the Trust, (ii) the cost of printing and mailing
prospectuses to persons other than current holders of Trust shares or of
variable contracts funded by Trust shares and (iii) the compensation of the
Trust's officers and Trustees that are officers, directors or employees of the
Adviser or its affiliates. In addition, advisory fees are reduced or the Adviser
reimburses the Trust if the total of all expenses (excluding advisory fees,
taxes, portfolio brokerage commissions, interest, litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Trust's business) applicable to a portfolio exceeds an annual rate of .75%
in the case of the International Small Cap, Global Equity, Global Government
Bond, Worldwide Growth, International Growth and Income, International Stock and
Pacific Rim Emerging Markets Trusts, .50% in the case of all other portfolios
except for the Equity Index Trust, or .15% in the case of the Equity Index Trust
of the average annual net assets of such portfolio. The expense limitations will
continue in effect from year to year unless otherwise terminated at any year end
by the Adviser on 30 days' notice to the Trust . See "MANAGEMENT OF THE TRUST --
Expenses" below. The Adviser has voluntarily agreed to pay the expenses of the
Lifestyle Trusts (other than the expenses of the Underlying Portfolios). This
voluntary expense reimbursement may be terminated at any time.
In addition to providing the services and expense limitations described
above, the Adviser selects, contracts with and compensates Subadvisers to manage
the investment and reinvestment of the assets of all portfolios of the Trust.
(The Adviser does not manage any of the Trust portfolio assets.) The Adviser
monitors the compliance of such Subadvisers with the investment objectives and
related policies of each portfolio and reviews the performance of such
Subadvisers and reports periodically on such performance to the Trustees of the
Trust. The Trust has received an order from the Securities and Exchange
Commission permitting the Adviser to appoint a Subadviser or change the terms of
a subadvisory agreement pursuant to an agreement that is not approved by
shareholders. The Trust, therefore, is able to change Subadvisers or the fees
paid to Subadvisers from time to time without the expense and delays associated
with obtaining shareholder approval of the change. This order does not permit
the Adviser to appoint a Subadviser that is an affiliate of the Adviser or the
Trust (other than by reason of serving as Subadviser to a portfolio) (an
"Affiliated Subadviser") or to change a subadvisory fee of an Affiliated
Subadviser without the approval of shareholders. Currently, MAC is an Affiliated
Subadviser.
As compensation for its services, the Adviser receives a fee from the
Trust computed separately for each portfolio, except for the Lifestyle Trusts
for which the Adviser makes no charge. The fee for each portfolio is stated as
an annual percentage of the current value of the net assets of the portfolio.
The fee, which is accrued daily and payable monthly, is calculated for each day
by multiplying the daily equivalent of the annual percentage prescribed for a
portfolio by the value of the net assets of the portfolio at the close of
business on the previous business day of the Trust. The following is a schedule
of the management fees each portfolio currently is obligated to pay the Adviser:
<TABLE>
<CAPTION>
PORTFOLIO
------------------------------------------------------
<S> <C>
Pacific Rim Emerging Markets Trust........ .850%
Science & Technology Trust................ 1.100%
International Small Cap Trust............. 1.100%
Emerging Growth Trust..................... 1.050%
Pilgrim Baxter Growth Trust............... 1.050%
</TABLE>
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<TABLE>
<CAPTION>
PORTFOLIO
------------------------------------------------------
<S> <C>
Small/Mid Cap Trust....................... 1.000%
International Stock Trust................. 1.050%
Worldwide Growth Trust.................... 1.000%
Global Equity Trust....................... .900%
Small Company Value Trust................. 1.050%
Equity Trust.............................. .750%
Growth Trust.............................. .850%
Quantitative Equity Trust................. .700%
Equity Index Trust........................ .250%
Blue Chip Growth Trust.................... .925%
Real Estate Securities Trust.............. .700%
Value Trust............................... .800%
International Growth and Income Trust..... .950%
Growth and Income Trust................... .750%
Equity-Income Trust....................... .800%
Balanced Trust............................ .800%
Aggressive Asset Allocation Trust......... .750%
High Yield Trust.......................... .775%
Moderate Asset Allocation Trust........... .750%
Conservative Asset Allocation Trust....... .750%
Strategic Bond Trust...................... .775%
Global Government Bond Trust.............. .800%
Capital Growth Bond....................... .650%
Investment Quality Bond Trust............. .650%
U.S. Government Securities Trust.......... .650%
Money Market Trust........................ .500%
Lifestyle Trusts.......................... no advisory fees
</TABLE>
For the year ended December 31, 1997 the aggregate investment advisory fee
paid by the Trust was $70,977,648, allocated among the portfolios as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT OF ADVISORY FEE
- ---------------------------------------------------------------------------
<S> <C>
Pacific Rim Emerging Markets Trust $ 229,135
Science & Technology Trust 369,324
International Small Cap Trust 1,347,708
Emerging Growth Trust 2,331,739
Pilgrim Baxter Growth Trust 502,149
Small/Mid Cap Trust 2,145,327
International Stock Trust 860,656
Worldwide Growth Trust 124,952
Global Equity Trust 7,256,254
Small Company Value Trust* 134,688
Equity Trust 10,703,211
Growth Trust 935,029
Quantitative Equity Trust 913,996
Equity Index Trust 42,212
Blue Chip Growth Trust 5,156,008
Real Estate Securities Trust 831,191
Value Trust 523,446
International Growth and Income Trust 1,965,899
Growth and Income Trust 10,037,637
Equity-Income Trust 6,141,959
Balanced Trust 1,261,070
Aggressive Asset Allocation Trust 1,766,662
High Yield Trust 314,373
Moderate Asset Allocation Trust 4,584,121
</TABLE>
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<PAGE> 88
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT OF ADVISORY FEE
- --------------------------------------------------------------------------
<S> <C>
Conservative Asset Allocation Trust $1,521,047
Strategic Bond Trust 2,240,478
Global Government Bond Trust 1,837,451
Capital Growth Bond 315,701
Investment Quality Bond Trust 1,047,782
U.S. Government Securities Trust 1,401,568
Money Market Trust 2,134,875
</TABLE>
* For the period October 1, 1997 (commencement of operations) to December 31,
1997.
For the year ended December 31, 1997 the net investment advisory fee
retained by the Adviser after payment of subadvisory fees was $44,607,679,
allocated among the portfolios as follows:
<TABLE>
<CAPTION>
ANNUAL % OF
$ AMOUNT PORTFOLIO NET ASSETS
-------- --------------------
<S> <C> <C>
Pacific Rim Emerging Markets Trust $ 121,307 0.450%
Science & Technology Trust 167,874 0.500%
International Small Cap Trust 587,572 0.480%
Emerging Growth Trust 1,110,352 0.500%
Pilgrim Baxter Growth Trust 215,207 0.450%
Small/Mid Cap Trust 1,066,433 0.500%
International Stock Trust 373,528 0.460%
Worldwide Growth Trust 49,981 0.400%
Global Equity Trust 4,210,940 0.520%
Small Company Value Trust* 58,054 0.450%
Equity Trust 7,349,021 0.510%
Growth Trust 440,014 0.400%
Quantitative Equity Trust 595,212 0.460%
Equity Index Trust 25,327 0.150%
Blue Chip Growth Trust 2,857,045 0.513%
Real Estate Securities Trust 539,022 0.450%
Value Trust 290,160 0.440%
International Growth and Income Trust 1,014,453 0.490%
Growth and Income Trust 7,530,243 0.560%
Equity-Income Trust 4,356,469 0.570%
Balanced Trust 723,760 0.460%
Aggressive Asset Allocation Trust 934,997 0.400%
High Yield Trust 176,192 0.434%
Moderate Asset Allocation Trust 2,861,688 0.470%
Conservative Asset Allocation Trust 889,256 0.440%
Strategic Bond Trust 1,392,743 0.482%
Global Government Bond Trust 1,035,907 0.450%
Capital Growth Bond 206,420 0.430%
Investment Quality Bond Trust 685,088 0.420%
U.S. Government Securities Trust 928,144 0.430%
Money Market Trust 1,815,270 0.425%
</TABLE>
* For the period October 1, 1997 (commencement of operations) to December 31,
1997.
SUBADVISORY ARRANGEMENTS
Each of the Trust's Subadvisers, except FMTC, is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
Agreements with the Subadvisers have heretofore been approved by the vote of a
majority of the then outstanding voting securities of each series of shares of
the portfolios to be managed by the Subadviser. The Trust has received an order
from the Securities and Exchange Commission permitting the Adviser to appoint a
Subadviser or change the terms of a subadvisory agreement pursuant to an
agreement that is not approved by shareholders. The Trust, therefore, is able to
change Subadvisers or the fees paid to Subadvisers from time to time without the
expense and delays associated with
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<PAGE> 89
obtaining shareholder approval of the change. This order does not permit the
Adviser to appoint an Affiliated Subadviser or to change a subadvisory fee of an
Affiliated Subadviser without the approval of shareholders. Currently, MAC is an
Affiliated Subadviser.
FIDELITY MANAGEMENT TRUST COMPANY
Fidelity Management Trust Company ("FMTC"), the Subadviser to the Equity
and Automatic Asset Allocation Trusts, is located at 82 Devonshire Street,
Boston, Massachusetts 02109. FMTC is a wholly-owned subsidiary of Fidelity
Investments which was founded in 1946. Headquartered in Boston, Fidelity also
has offices in London, Tokyo and Hong Kong. Today, Fidelity Investments, along
with its affiliates, is the largest privately-held investment management firm in
the United States, managing over $529 billion as of December 31, 1997. Fidelity
Investments is a privately-held company (there is no outside ownership), and no
ownership changes are anticipated.
FMTC was established by Fidelity Investments in 1981 to provide investment
management services for institutional clients. FMTC is a bank as defined in the
Investment Advisers Act of 1940. FMTC currently manages in excess of $48 billion
for more than 265 institutional clients. FMTC offers institutional investors
clearly-defined equity, fixed income, international, high yield bond, real
estate and alternative disciplines. Each discipline serves either as a
stand-alone investment option or in combination with other disciplines to meet
specific client investment objectives.
Katherine Collins and Richard B. Fentin have been responsible for the
day-to-day management of the Equity Trust since July 1, 1997. Scott D. Stewart
has had primary responsibility for the day-to-day management of the three Asset
Allocation Trusts since December 1991.
Katherine Collins joined Fidelity Investments in 1990 and is the portfolio
manager of Fidelity Mid-Cap Stock Fund and Fidelity Advisor Mid-Cap Stock Fund.
Ms. Collins previously served as sector leader of Fidelity's consumer equity
research group from 1996 to January 1997. She was named manager of Fidelity
Select Leisure, Fidelity Select Consumer Industries and Fidelity Advisor
Consumer Industries portfolios in 1996. From 1994 to 1995, Ms. Collins was
assistant director of research. From 1992 to 1994, she managed Fidelity Select
Construction and Housing Portfolio. Ms. Collins is a Chartered Financial
Analyst.
Richard B. Fentin, Senior Vice President, joined Fidelity Investments in
1979 and is the portfolio manager of Fidelity Value Fund. He has managed the
Value Fund since March 1996, and previously managed the same fund during 1992.
Prior to 1993, Mr. Fentin also managed Fidelity Puritan Fund, Fidelity Growth
Company Fund, Fidelity Select Precious Metal Portfolio and Fidelity Trust
Portfolio: Growth Fund and served as a research assistant for the Fidelity
Magellan Fund.
Scott Stewart joined Fidelity in 1987, and is Senior Vice President,
Portfolio Manager and head of the Structured Equity Group. Mr. Stewart has
managed the Fidelity Fifty Fund since September 1993. Prior to joining Fidelity
he was a portfolio manager of Fixed Income, International and Derivative
Investments for State Street Bank and Trust Company
FOUNDERS ASSET MANAGEMENT LLC
Investment decisions for the Growth, International Small Cap, Balanced and
Worldwide Growth Trusts are made by its Subadviser, Founders Asset Management
LLC ("Founders"), located at 2930 East Third Avenue, Denver, Colorado 80206, a
registered investment adviser first established as an asset manager in 1938.
Founders is a subsidiary of Mellon Bank, N.A., which is a wholly owned
subsidiary of Mellon Bank Corporation. As of December 31, 1997, Founders had
over $6.4 billion of assets under management, including approximately $4.6
billion in mutual fund accounts and $1.8 billion in other advisory accounts.
Founders is a "growth-style" manager of equity portfolios and gives
priority to the selection of individual securities that have the potential to
provide superior results over time, despite short-term volatility. Under normal
circumstances, Founders' approach to investment management gives greater
emphasis to the fundamental financial, marketing and operating strengths of the
companies whose securities it buys, and is less concerned with the short-term
impact of changes in macroeconomic and market conditions. Founders focuses on
purchasing the stocks of companies with strong management and market positions
that have earnings prospects that are significantly above the average for their
market sectors.
To facilitate the day-to-day investment management of the Growth,
International Small Cap, Balanced and Worldwide Growth Trusts, Founders employs
a unique team-and-lead-manager system. The management team is composed of
several members of the Investment Department, including lead portfolio managers,
portfolio traders and research analysts. Team members share responsibility for
providing ideas, information, knowledge and expertise in the management of the
portfolios. Daily decisions on portfolio selection for the portfolio rests with
a lead portfolio manager assigned to the portfolio.
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<PAGE> 90
Michael W. Gerding, Vice President of Investments, has been the lead
portfolio manager for the International Small Cap Trust and the Worldwide Growth
Trust since the portfolios' inception (March, 1996 and January, 1997,
respectively). Mr. Gerding is a chartered financial analyst who has been part of
Founders' investment department since 1990. Prior to joining Founders, Mr.
Gerding served as a portfolio manager and research analyst with NCNB Texas for
several years. Mr. Gerding earned a BBA in finance and an MBA from Texas
Christian University.
Edward F. Keely, Vice President of Investments, has been the lead
portfolio manager for the Growth Trust since the portfolio's inception (July,
1996). Mr. Keely is a chartered financial analyst who joined Founders in 1989. A
graduate of The Colorado College, Mr. Keely holds a Bachelor of Arts degree in
economics.
Brian F. Kelly, Vice President of Investments, is the lead portfolio
manager for the Balanced Trust, which commenced operations on January 1, 1997.
Mr. Kelly joined Founders in 1996. Prior to joining Founders, Mr. Kelly served
as portfolio manager for Invesco Trust Company (1993-1996) and as a senior
investment analyst for Sears Investment Management Company (1986-1993). A
graduate of the University of Notre Dame, Mr. Kelly received his MBA and JD from
the University of Iowa. He is also a Certified Public Accountant.
FRED ALGER MANAGEMENT, INC.
Investment decisions for the Small/Mid Cap Trust are made by its
Subadviser, Fred Alger Management, Inc. ("Alger"). Alger, located at 75 Maiden
Lane, New York, New York 10038, has been in the business of providing investment
advisory services since 1964 and as of December 31, 1997 had approximately $7.7
billion under management, including $4.5 billion in mutual fund accounts and
$3.2 billion in other advisory accounts. Alger is wholly owned by Fred Alger &
Company, Incorporated which in turn is wholly owned by Alger Associates, Inc., a
financial services holding company. Fred M. Alger, III and his brother, David D.
Alger, are the majority shareholders of Alger Associates, Inc. and may be deemed
to control that company and its subsidiaries.
David D. Alger, President of Alger, has been primarily responsible for the
day-to-day management of the Small/Mid Cap Trust since the portfolio's inception
(March, 1996). He has been employed by Alger as Executive Vice President and
Director of Research since 1971 and as President since 1995 and he serves as
portfolio manager for other mutual funds and investment accounts managed by
Alger Management. Also participating in the management of the Small/Mid Cap
Trust since the portfolio's inception are Ronald Tartaro and Seilai Khoo. Mr.
Tartaro has been employed by Alger Management since 1990 and he serves as a
Senior Vice President. Ms. Khoo has been employed by Alger Management since 1989
and she serves as a Senior Vice President.
J.P. MORGAN INVESTMENT MANAGEMENT INC.
J.P. Morgan Investment Management Inc. ("J.P. Morgan") is the Subadviser
to the International Growth and Income Trust. J.P. Morgan, with principal
offices at 522 Fifth Avenue, New York 10036, is a wholly-owned subsidiary of
J.P. Morgan & Co. Incorporated ("J.P. Morgan & Co."), a bank holding company
organized under the laws of Delaware which is located at 60 Wall Street, New
York, New York 10260. Through offices in New York City and abroad, J.P. Morgan &
Co., through J.P. Morgan and other subsidiaries, offers a wide range of services
to governmental, institutional, corporate and individual customers and acts as
investment adviser to individual and institutional clients with combined assets
under management of approximately $255 billion as of December 31, 1997. J.P.
Morgan has managed international securities for institutional investors since
1974. As of December 31, 1997, assets managed pursuant to J.P. Morgan's
international securities strategies were approximately $50 billion.
J.P. Morgan provides investment advice and portfolio management services
to the Portfolio. Subject to the supervision of the Trustees, J.P. Morgan makes
the Portfolio's day-to-day investment decisions, arranges for the execution of
portfolio transactions and generally manages the Portfolio's investments. J.P.
Morgan uses a sophisticated, disciplined, collaborative process for managing the
portfolio. The following persons are primarily responsible for the day-to-day
management of the portfolio (their business experience for the past five years
is indicated parenthetically): Paul A. Quinsee, Vice President (employed by J.P.
Morgan since February 1992, previously Vice President, Citibank) and Andrew
Cormie, Vice President (employed by J.P. Morgan since 1984). Mr. Quinsee has
been managing the International Growth and Income Trust since the portfolio's
inception (January, 1995) and Mr. Cormie has been involved in the management of
the portfolio since April, 1998.
Mr. Quinsee is primarily responsible for the day-to-day management of
several other institutional and investment company accounts that invest in
international securities constituting in excess of $5 billion of assets. Mr.
Cormie is an international equity portfolio manager in the Global Micro Group of
J.P. Morgan's London office.
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MANUFACTURERS ADVISER CORPORATION
Manufacturers Adviser Corporation ("MAC"), a Colorado corporation, is the
Subadviser of the Money Market, Pacific Rim Emerging Markets, Capital Growth
Bond, Quantitative Equity, Real Estate Securities, Equity Index and Lifestyle
Trusts. Its principal business at the present time is to provide investment
management services to these portfolios. MAC is an indirect wholly-owned
subsidiary of Manulife Financial. The address of MAC is 200 Bloor Street East,
Toronto, Ontario, Canada M4W 1E5. As of December 31, 1997, MAC together with
Manulife Financial had approximately $55.7 billion of assets under management.
Management of the above portfolios is provided by a team of investment
professionals each of whom plays an important role in the management process of
each portfolio. Team members work together to develop investment strategies and
select securities for a portfolio. They are supported by research analysts,
traders and other investment specialists who work alongside the investment
professionals in an effort to utilize all available resources to benefit the
shareholders.
The persons with primary responsibility for the day to day management of
the Real Estate Securities Trust are Mark Schmeer and Leslie Grober. Mr. Schmeer
joined MAC in 1995 and has managed the Real Estate Securities Trust and the
predecessor portfolio of Manulife Series Fund, Inc. since then. He is an
investment manager of U.S. Equities at Manulife Financial. Prior to 1995 he was
a Vice President of Sun Life Investment Management, where he served from 1993 to
1995. Mr. Schmeer was a manager of U.S. Investments for Ontario Hydro
Corporation from 1986 to 1993. Mr. Grober also joined MAC in 1995 and has
managed the Real Estate Securities Trust and the predecessor portfolio of
Manulife Series Fund, Inc., since then. He has been an investment manager of
U.S. Equities at Manulife Financial since 1994. Mr. Grober was an investment
representative of Toronto-Dominion Bank from 1991 to 1993. Prior to that he was
employed by the Bank of Montreal.
The persons with primary responsibility for the day to day management of
the Quantitative Equity Trust are Mark Schmeer and Rhonda Chang. Ms. Chang
joined MAC in 1995 and has managed the Quantitative Equity Trust and the
predecessor portfolio of Manulife Series Fund, Inc. since then. She has been an
investment manager at Manulife Financial since 1994. From 1990 to 1994, Ms.
Chang was an investment analyst with American International Group. Mark Schmeer
has managed the Quantitative Equity Trust and the predecessor portfolio of
Manulife Series Fund, Inc. since 1995.
Catherine Addison has primary responsibility for the day to day management
of the Capital Growth Bond Trust. She has had such responsibility for that
portfolio and the predecessor portfolio of Manulife Series Fund, Inc., since
1988. She has been an investment manager of U.S. Fixed-income at Manulife
Financial since 1985.
The persons with primary responsibility for the day to day management of
the Pacific Rim Emerging Markets Trust are Stephen Hill, Richard James Crook and
Emilia Panadero-Perez. Mr. Hill joined MAC in 1995 and has managed the Pacific
Rim Emerging Market Trust and the predecessor portfolio of Manulife Series Fund,
Inc. since then. He is also an investment manager at Manulife Financial. Prior
to 1995, Mr. Hill was a director of INVESCO Asset Management, where he served in
1993 and 1994. Mr. Hill was a director of Yasuda Trust Europe from 1989 to 1992.
Mr. Crook joined MAC in 1994 and has managed the Pacific Rim Emerging Market
Trust and the predecessor portfolio of Manulife Series Fund, Inc. since then. He
has been an investment manager of Manulife Financial since 1975. Ms.
Panadero-Perez joined MAC in 1995. She has been an investment manager at
Manulife Financial since 1989.
The Lifestyle Trusts are managed by an investment advisory committee
composed of the following members: Felix Chee (chairman), Mark Schmeer, Robert
Laughton, Richard Crook, Stephen Lewis. Mr. Chee joined Manulife in 1993 and
currently holds the position of Executive Vice President and Chief Investment
Officer. Prior to 1993, he was Senior Vice President, Corporate Finance of
Ontario Hydro. Mr. Chee was elected President of MAC in November, 1997.
MILLER ANDERSON & SHERRERD, LLP
Miller Anderson & Sherrerd, LLP ("MAS"), the Subadviser to the Value and
High Yield Trusts, is a Pennsylvania limited liability partnership founded in
1969 and is located at One Tower Bridge, West Conshohocken, PA 19428. MAS
provides investment services to employee benefit plans, endowment funds,
foundations and other institutional investors and as of December 31, 1997 had
approximately $61 billion in assets under management. MAS is an indirectly
wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover & Co., Inc.
The investment professionals of MAS who are primarily responsible for the
day to day management of the Value Trust are Robert J. Marcin, Richard M. Behler
and Nicholas J. Kovich. All three have managed the portfolio since January 1,
1997. Robert J. Marcin, Portfolio Manager and Nicholas J. Kovich, Portfolio
Manager, joined MAS in 1988. Richard M Behler, Portfolio Manager, joined MAS in
1995. Mr. Marcin, Mr. Behler and Mr. Kovich have been portfolio managers since
joining MAS. Prior to joining MAS, Mr. Behler served as portfolio manager from
1992-1995 for Moore Capital
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<PAGE> 92
Management and Senior Vice President for Merrill Lynch Economics from 1987
through 1992. Messrs. Marcin and Behler are also primarily responsible for the
management of the Value Portfolios of MAS Funds, Morgan Stanley Fund, Inc. and
Morgan Stanley Universal Funds, Inc. The investment professionals primarily
responsible for the High Yield Trust since the Trust's inception are Robert E.
Angevine, Thomas L. Bennett and Stephen F. Esser. Robert E. Angevine, Portfolio
Manager, joined Morgan Stanley in 1988 and came to the MAS High Yield Portfolio
Team in 1996, Thomas L. Bennett, Portfolio Manager, joined MAS in 1984, and
Stephen F. Esser, Portfolio Manager, joined MAS in 1988. Messrs. Angevine,
Bennett and Esser are also primarily responsible for the management of the High
Yield portfolios of MAS Funds and Morgan Stanley Universal Funds.
MORGAN STANLEY ASSET MANAGEMENT INC.
Morgan Stanley Asset Management Inc. ("Morgan Stanley"), with principal
offices at 1221 Avenue of the Americas, New York, New York 10020, has been the
Subadviser to the Global Equity Trust since October 1, 1996. Morgan Stanley, a
wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover & Co., conducts
a worldwide portfolio management business, providing a broad range of portfolio
management services to customers in the United States and abroad. At. December
31, 1997, Morgan Stanley and its institutional investment management affiliates
had approximately $146 billion of combined assets under management as investment
managers or as fiduciary advisers.
Morgan Stanley, Dean Witter, Discover & Co. is a global financial services
firm with three major businesses: securities, asset management and credit
services.
Frances Campion has been primarily responsible for the portfolio
management of the Global Equity Trust since January 1, 1997. Ms. Campion joined
Morgan Stanley in January 1990 as a global equity fund manager and is now a
Managing Director of Morgan Stanley & Co. Incorporated. Her responsibilities
include day to day management of the Global Equity Portfolio of Morgan Stanley
Institutional Fund, Inc. Prior to joining Morgan Stanley, Ms. Campion was a U.S.
equity analyst with Lombard Odler Limited where she had responsibility for the
management of global portfolios. Ms. Campion has eleven years global investment
experience. She is a graduate of University of College, Dublin.
OECHSLE INTERNATIONAL ADVISORS. L.P.
Oechsle International Advisors, L.P. ("Oechsle International"), the
Subadviser to the Global Government Bond Trust, founded in 1986, is a Delaware
limited partnership whose principal offices are located at One International
Place, Boston, Massachusetts 02110. Oechsle International, which also has
offices in London, England; Frankfurt, Germany and Tokyo, Japan, as of December
31, 1997 managed approximately $10 billion for institutional and private
investors. Oechsle International is a money manager providing management and
advisory services with respect to all primary international securities markets.
Astrid Vogler, Partner and Portfolio Manager, has been primarily
responsible for the day-to-day management of the Global Government Bond Trust
since March 1988. Ms. Vogler has been a Fixed-income Portfolio Manager at
Oechsle International in Frankfurt, Germany since 1988.
PILGRIM BAXTER & ASSOCIATES, LTD.
Pilgrim Baxter & Associates, Ltd. ("PBA"), the sub-adviser to the Pilgrim
Baxter Growth Trust, is a professional investment management firm that has been
in business since its founding in 1982. The controlling shareholder of PBA is
United Asset Management Corporation ("UAM"), a New York Stock Exchange listed
holding company principally engaged, through affiliated firms, in providing
institutional investment management services. UAM's corporate headquarters are
located at One International Place, Boston, Massachusetts 02110. PBA currently
has discretionary management authority with respect to approximately $15
billion. In addition to advising the Pilgrim Baxter Growth Trust, PBA provides
advisory services to the PBHG Family of Funds and to pension and profit sharing
plans, charitable institutions, corporations and other investment companies. The
principal business address for PBA is 825 Duportail Road, Wayne, Pennsylvania
19087.
Mr. Gary L. Pilgrim, CFA serves as portfolio manager of the Pilgrim Baxter
Growth Trust which commenced operations on January 1, 1997. Mr. Pilgrim has
served as the Chief Investment Officer of PBA for the past seven years and
President from 1993 through 1997. Mr. Pilgrim is also the portfolio manager of
the PBHG Growth Fund, a mutual fund available to the general public.
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<PAGE> 93
ROSENBERG INSTITUTIONAL EQUITY MANAGEMENT
Rosenberg Institutional Equity Management ("Rosenberg"), the Subadviser to
the Small Company Value Trust, is a professional investment management firm
which provides investment advisory services to a substantial number of
institutional investors. Rosenberg is a California limited partnership whose
principal business address is Four Orinda Way, Suite 300E, Orinda, CA 94563.
Rosenberg is part of a global group of investment adviser companies under common
ownership. The general partners of Rosenberg are Barr M. Rosenberg, Marlis S.
Fritz and Kenneth Reid. As of December 31, 1997, Rosenberg managed approximately
$5.6 billion of assets.
Management of the Small Company Value Trust is overseen by Dr. Rosenberg
and Dr. Reid who are responsible for design and maintenance of Rosenberg's
portfolio system, and by a portfolio manager who is responsible for research and
monitoring the Small Company Value Trust's performance against the relevant
benchmark and for monitoring cash balances.
Dr. Rosenberg, Dr. Reid and Floyd Coleman, the portfolio manager, are
responsible for the day-to-day management of the Small Company Value Trust.
Dr. Rosenberg has been employed by Rosenberg since the company's inception
in 1985. Dr. Rosenberg is Managing General Partner and Chief Investment Officer
for Rosenberg. As such, he has ultimate responsibility for Rosenberg's
securities valuation and portfolio optimization systems used to manage the Small
Company Value Trust and for the implementation of the decisions developed
therein. His area of special concentration is the design of Rosenberg's
proprietary securities valuation model. Dr. Rosenberg earned a B.A. degree for
the University of California, Berkeley, in 1963. Dr. Rosenberg earned an M.Sc.
from the London School of Economics in 1965, and a Ph.D. from Harvard
University, Cambridge, Massachusetts, in 1968.
Dr. Reid has been employed by Rosenberg for the past eleven years. Dr.
Reid is a General Partner and Director of Research for Rosenberg. His work is
focused on the design and estimation of Rosenberg's valuation models and he has
primary responsibility for analyzing the empirical evidence that validates and
supports the day-to-day recommendations of Rosenberg's securities valuation
models. Dr. Reid earned both a B.A. degree (1973) and an M.D.S. (1975) from
Georgia State University, Atlanta. In 1982, he earned a Ph.D. from the
University of California, Berkeley, where he was awarded the American Bankers
Association Fellowship.
Mr. Coleman has been a trader and portfolio manager for Rosenberg since
1988. He received a B.S. from Northwestern University in 1982, a M.S. from
Polytechnic Institute, Brooklyn in 1984 and a M.B.A. from Harvard Business
School in 1988.
ROWE PRICE-FLEMING INTERNATIONAL, INC.
Rowe Price-Fleming International, Inc. ("Price-Fleming") is Subadviser to
the International Stock Trust. Price Fleming's U.S. office is located at 100
East Pratt Street, Baltimore, Maryland 21202. Price-Fleming has offices in
Baltimore, London, Tokyo, Hong Kong, Singapore and Buenos Aires. Price-Fleming
was incorporated in Maryland in 1979 as a joint venture between T. Rowe Price
and Robert Fleming Holdings Limited ("Flemings").
T. Rowe Price, Flemings, and Jardine Fleming Group Limited ("Jardine
Fleming") are owners of Price-Fleming. The common stock of Price-Fleming is 50%
owned by a wholly owned subsidiary of T. Rowe Price, 25% by a subsidiary of
Flemings, and 25% by Jardine Fleming. (Half of Jardine Fleming is owned by
Flemings and half by Jardine Matheson Holdings Limited.) T. Rowe Price has the
right to elect a majority of the Board of Directors of Price-Fleming, and
Flemings has the right to elect the remaining directors, one of whom will be
nominated by Jardine Fleming.
An investment advisory group has day to day responsibility for managing
the portfolio and developing and executing its investment program. The members
of the advisory group are as follows: Martin G. Wade, Peter B. Askew, Mark J.T.
Edwards, John R. Ford, James B.M. Seddon and David J.L. Warren.
Martin Wade joined Price-Fleming in 1979 and has 27 years of experience
with the Fleming Group in research, client service, and investment management.
(Fleming Group included Robert Fleming and/or Jardine Fleming.) Peter Askew
joined Price-Fleming in 1988 and has 21 years of experience managing
multi-currency fixed-income portfolios. Mark Edwards joined Price-Fleming in
1986 and has 15 years of experience in financial analysis. John Ford joined
Price-Fleming in 1982 and has 16 years of experience with the Fleming Group in
research and portfolio management. James Seddon joined Price-Fleming in 1987 and
has 11 years of experience in portfolio management. David Warren joined
Price-Fleming in 1984 and has 16 years of experience in equity research,
fixed-income research, and portfolio management.
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SALOMON BROTHERS ASSET MANAGEMENT INC
Salomon Brothers Asset Management Inc ("SBAM"), the Subadviser to the U.S.
Government Securities Trust and Strategic Bond Trust is a wholly-owned
subsidiary of Salomon Smith Barney Holdings Inc, which is in turn a subsidiary
of Travelers Group Inc. ("Travelers"). SBAM was incorporated in 1987 and,
together with affiliates in London, Frankfurt and Hong Kong, provides a full
range of fixed-income and equity investment advisory services for individual and
institutional clients around the world, including European and Far East central
banks, pension funds, endowments, insurance companies, and services as
investment adviser to various investment companies. In providing such investment
advisory services, SBAM and it affiliates have access to Traveler's more than
400 economists, mortgage, bond, sovereign and equity analysts. As of December
31, 1997, SBAM and its worldwide investment advisory affiliates managed
approximately $26 billion in assets. SBAM's business offices are located at
Seven World Trade Center, New York, New York 10048.
In connection with SBAM's service as Subadviser to the Strategic Bond
Trust, SBAM's London-based affiliate, Salomon Brothers Asset Management Limited
("SBAM Limited"), whose business address is Victoria Plaza, 111 Buckingham
Palace Road, London SW1W OSB, England, provides certain advisory services to
SBAM with regard to currency transactions and investments in non-dollar
denominated debt securities for the benefit of the Strategic Bond Trust. SBAM
Limited is compensated by SBAM at no additional expense to the Strategic Bond
Fund. SBAM Limited is a subsidiary of Salomon Smith Barney Holdings Inc, which
is in turn a subsidiary of Travelers. SBAM Limited is a member of the Investment
Management Regulatory Organization Limited in the United Kingdom and is
registered as an investment adviser in the United States pursuant to the
Investment Advisers Act of 1940, as amended.
On November 28, 1997, Salomon Inc, the then ultimate parent to SBAM, and
SBAM Limited merged with and into, Smith Barney Holdings Inc., a subsidiary of
Travelers to form a new company, Salomon Smith Barney Holdings Inc. Upon
consummation of the transaction, Travelers became the ultimate parent of SBAM
and SBAM Limited. Travelers is a diversified financial services company engaged
in investment services, asset management, consumer finance and life and property
casualty insurance services.
Steven Guterman and Roger Lavan have been jointly responsible for the
day-to-day management of the U.S. Government Securities Trust portfolio since
December 1991 and the Strategic Bond Trust portfolio since February 1993. Mr.
Guterman, who joined SBAM in 1990, is a Managing Director of Salomon Brothers
Inc and a Managing Director and Senior Portfolio Manager of SBAM, responsible
for SBAM's investment company and institutional portfolios which invest in U.S.
investment grade debt securities. Mr. Guterman joined Salomon Brothers Inc in
1983 working initially in the mortgage research group where he became a Research
Director and later traded derivative mortgage-backed securities.
Mr. Lavan joined SBAM in 1990 and is a Director in the fixed income
department. Mr. Lavan is a Portfolio Manager responsible for SBAM's investment
company and institutional portfolios which invest primarily in mortgage-backed
and U.S. government debt securities. Prior to joining SBAM, Mr. Lavan spent four
years analyzing portfolios for Salomon Brothers Fixed Income Sales and Product
Support departments.
Messrs. Guterman and Lavan have been assisted in the management of the
Strategic Bond Trust by Peter Wilby since February 1993 and David Scott since
January 1995. Mr. Wilby, who joined SBAM in 1989, is a Managing Director of
Salomon Brothers Inc and SBAM and a Senior Portfolio Manager of SBAM,
responsible for investment company and institutional portfolio investments in
high yield U.S. corporate debt securities and high yield foreign sovereign debt
securities. From 1984 to 1989, Mr. Wilby was employed by Prudential Capital
Management Group ("Prudential"), where he served as Director of Prudential's
credit research unit and as a corporate and sovereign credit analyst. Mr. Wilby
also managed high yield bonds and leveraged equities for Prudential mutual funds
and institutional portfolios.
David Scott is a Senior Portfolio Manager with SBAM Limited in London with
primary responsibility for managing long-term global bond portfolios. He also
plays an integral role in developing strategy. Mr. Scott manages currency
transactions and investments in non-dollar denominated securities for the
Strategic Bond Trust. Prior to joining SBAM in April 1994, Mr. Scott worked at
J.P. Morgan from 1990 to 1994 where he had responsibility for global and
non-dollar portfolios for clients including departments of various governments,
pension funds and insurance companies.
T. ROWE PRICE ASSOCIATES, INC.
T. Rowe Price Associates, Inc. ("T. Rowe Price"), whose address is at 100
East Pratt Street, Baltimore, Maryland 21202, is the Subadviser for the Blue
Chip Growth, Equity-Income and Science & Technology Trusts. Founded in 1937 by
the late Thomas Rowe Price, Jr., T. Rowe Price and its affiliates managed over
$126 billion for over 4.5 million individual and institutional investor accounts
as of December 31, 1997.
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<PAGE> 95
The Blue Chip Growth Trust has an investment advisory committee composed
of the following members: Larry J. Puglia, Chairman, Brian W.H. Berghuis, Thomas
H. Broadus, Jr., Robert W. Smith, Thomas J. Huber, and William J. Stromberg. The
committee chairman has day-to-day responsibility for managing the portfolio and
works with the committee in developing and executing the portfolio's investment
program. Mr. Puglia joined T. Rowe Price in 1990 and has been managing
investments since 1993. He became chairman of the Blue Chip Growth Trust
investment advisory committee on October 1, 1996.
The investment advisory committee for the Science and Technology Trust is
composed of the following members: Charles A. Morris, Chairman, Jill L. Hauser,
Joseph Klein III, and Brian D. Stansky. Mr. Morris joined T. Rowe Price in 1987,
and has been managing investments since 1991. He has been chairman of the
investment advisory committee of T. Rowe Price Science & Technology Fund, Inc.
since 1991.
The investment advisory committee for the Equity-Income Trust is comprised
of the following members: Brian C. Rogers, Chairman, Stephen W. Boesel, Richard
P. Howard, Michael F. Sola and William J. Stromberg. Mr. Rogers joined T. Rowe
Price in 1982 and has been managing investments since 1983. He has been chairman
of the Equity-Income Trust investment advisory committee since October 1, 1996.
WARBURG PINCUS ASSET MANAGEMENT, INC.
Warburg Pincus Asset Management, Inc. ("Warburg"), the Subadviser of the
Emerging Growth Trust, is a professional investment advisory firm which provides
investment services to investment companies, employee benefit plans, endowment
funds, foundations and other institutions and individuals. As of December 31,
1997, Warburg managed approximately $19.7 billion of assets, including
approximately $11.3 billion of investment company assets. Incorporated in 1970,
Warburg is indirectly controlled by Warburg, Pincus & Co. ("WP & Co."), which
has no business other than being a holding company of Warburg and its
affiliates. Lionel I. Pincus, the managing partner of WP & Co., may be deemed to
control both WP & Co. and Warburg. Warburg's address is 466 Lexington Avenue,
New York, New York 10017-3147.
The co-portfolio managers of the Emerging Growth Trust are Elizabeth B.
Dater and Stephen J. Lurito (both have managed the Trust since its inception on
January 1, 1997). Ms. Dater has been portfolio manager of the Warburg Pincus
Emerging Growth Fund since its inception on January 21, 1988. She is a senior
managing director of Warburg and has been a portfolio manager of Warburg since
1978. Mr. Lurito has been a portfolio manager of the that Fund since 1990. He is
a managing director of Warburg and has been with Warburg since 1987, before
which time he was a research analyst at Sanford C. Bernstein & Company, Inc.
WELLINGTON MANAGEMENT COMPANY, LLP
Wellington Management Company, LLP ("Wellington Management"), is
Subadviser to the Growth and Income and Investment Quality Bond Trusts. Founded
in 1933, Wellington Management is a Massachusetts limited liability partnership
whose principal business address is 75 State Street, Boston, Massachusetts
02109. Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations and other institutions and individuals. As of December
31, 1997, Wellington Management had investment management authority with respect
to approximately $174.5 billion of client assets. The managing partners of
Wellington Management are Robert W. Doran, Duncan M. McFarland and John R. Ryan.
Matthew E. Megargel, Senior Vice President of Wellington Management, has
served as portfolio manager to the Growth and Income Trust since February 1992.
Mr. Megargel joined Wellington Management in 1983 as a research analyst and took
on additional responsibilities as a portfolio manager in 1988. In 1991, he
became solely a portfolio manager with Wellington Management.
Thomas L. Pappas, Senior Vice President of Wellington Management, has
served as portfolio manager to the Investment Quality Bond Trust since March
1994. Mr. Pappas has been a portfolio manager with Wellington Management since
1987.
* * *
Under the terms of each of the Subadvisory Agreements, the Subadviser
manages the investment and reinvestment of the assets of the assigned
portfolios, subject to the supervision of the Trustees of the Trust. The
Subadviser formulates a continuous investment program for each such portfolio
consistent with its investment objectives and policies outlined in this
Prospectus. Each Subadviser implements such programs by purchases and sales of
securities and regularly reports to the Adviser and the Trustees of the Trust
with respect to the implementation of such programs.
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<PAGE> 96
As compensation for their services, the Subadvisers receive fees from the
Adviser computed separately for each portfolio. The fee for each portfolio is
stated as an annual percentage of the current value of the net assets of such
portfolio. The fees are calculated on the basis of the average of all valuations
of net assets of each portfolio made at the close of business on each business
day of the Trust during the period for which such fees are paid. Once the
average net assets of a portfolio exceed specified amounts, the fee is reduced
with respect to such excess. The following is a schedule of the management fees
the Adviser currently is obligated to pay the Subadvisers out of the advisory
fee it receives from each portfolio as specified above:
<TABLE>
<CAPTION>
BETWEEN BETWEEN
$50,000,000 $200,000,000
FIRST AND AND EXCESS OVER
PORTFOLIO $50,000,000 $200,000,000 $500,000,000 $500,000,000
- --------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging
Markets Trust................ .400% .350% .275% .225%
Science & Technology Trust... .600% .600% .600% .600%
International Small Cap Trust .650% .600% .500% .400%
Emerging Growth Trust........ .550% .550% .550% .550%
Pilgrim Baxter Growth Trust.. .600% .600% .500% .500%
Small/Mid Cap Trust.......... .525% .500% .475% .450%
International Stock Trust.... .750%* .500% .500%* .450%*
Worldwide Growth Trust....... .600% .550% .450% .350%
Global Equity Trust.......... .500% .450% .375% .325%
Small Company Value Trust.... .600% .575% .525% .475%
Equity Trust................. .375% .325% .275% .200%
Growth Trust................. .450% .450% .350% .300%
Quantitative Equity Trust.... .275% .225% .175% .150%
Equity Index Trust........... .100% .100% .100% .100%
Blue Chip Growth Trust....... .500% .450% .400% .325%
Real Estate Securities Trust. .275% .225% .175% .150%
Value Trust.................. .400% .300% .200% .200%
International Growth and
Income Trust ................ .500% .450% .400% .350%
Growth and Income Trust...... .325% .275% .225% .150%
Equity-Income Trust.......... .400% .300% .200% .200%
Balanced Trust............... .375% .325% .275% .225%
Aggressive Asset Allocation
Trust ....................... .400% .350% .300% .225%
High Yield Trust............. .350% .300% .250% .200%
Moderate Asset Allocation
Trust ....................... .375% .325% .275% .200%
Conservative Asset
Allocation Trust ............ .350% .300% .250% .175%
Strategic Bond Trust**....... .350% .300% .250% .200%
Global Government Bond Trust. .375% .350% .300% .250%
Capital Growth Bond Trust.... .225% .225% .150% .100%
Investment Quality Bond Trust .225% .225% .150% .100%
U.S. Government Securities
Trust ....................... .225% .225% .150% .100%
Money Market Trust........... .075% .075% .075% .020%
Lifestyle Trusts............. no subadvisory fee
</TABLE>
*.750% UP TO $20 MILLION, .600% FROM $20 MILLION UP TO $50 MILLION, .50% FROM
$50 MILLION UP TO $200 MILLION OF THE CURRENT VALUE OF THE NET ASSETS OF THE
PORTFOLIO. WHEN THE CURRENT VALUE OF THE NET ASSETS OF THE PORTFOLIO EQUALS OR
EXCEEDS $200 MILLION, THE FEE IS .500% OF THE CURRENT VALUE OF THE NET ASSETS OF
THE PORTFOLIO. WHEN THE CURRENT VALUE OF THE NET ASSETS OF THE PORTFOLIO EQUALS
OR EXCEEDS $500 MILLION, THE FEE IS .450% OF THE CURRENT VALUE OF THE NET ASSETS
OF THE PORTFOLIO.
** IN CONNECTION WITH THE SUBADVISORY CONSULTING AGREEMENT BETWEEN SBAM AND SBAM
LIMITED, SBAM WILL PAY SBAM LIMITED, AS FULL COMPENSATION FOR ALL SERVICES
PROVIDED UNDER THE SUBADVISORY CONSULTING AGREEMENT, A PORTION OF ITS
SUBADVISORY FEE, SUCH AMOUNT BEING AN AMOUNT EQUAL TO THE FEE PAYABLE UNDER
SBAM'S SUBADVISORY AGREEMENT MULTIPLIED BY THE CURRENT VALUE OF THE NET ASSETS
OF THE PORTION OF THE ASSETS OF THE STRATEGIC BOND TRUST THAT SBAM LIMITED HAS
BEEN DELEGATED TO MANAGE DIVIDED BY THE CURRENT VALUE OF THE NET ASSETS OF THE
PORTFOLIO.
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For the year ended December 31, 1997, the Adviser paid aggregate
subadvisory fees of $26,369,969, allocated among the portfolios as follows:
<TABLE>
<CAPTION>
$ AMOUNT % OF AVERAGE NET ASSETS
-------- -----------------------
<S> <C> <C>
Pacific Rim Emerging Markets Trust $ 107,828 0.400%
Science & Technology Trust 201,450 0.600%
International Small Cap Trust 760,136 0.620%
Emerging Growth Trust 1,221,387 0.550%
Pilgrim Baxter Growth Trust 286,942 0.600%
Small/Mid Cap Trust 1,078,894 0.500%
International Stock Trust 487,128 0.590%
Worldwide Growth Trust 74,971 0.600%
Global Equity Trust 3,045,314 0.380%
Small Company Value Trust* 76,634 0.600%
Equity Trust 3,354,190 0.240%
Growth Trust 495,015 0.450%
Quantitative Equity Trust 318,784 0.240%
Equity Index Trust 16,885 0.100%
Blue Chip Growth Trust 2,298,963 0.412%
Real Estate Securities Trust 292,169 0.250%
Value Trust 233,286 0.360%
International Growth and Income Trust 951,446 0.460%
Growth and Income Trust 2,507,394 0.190%
Equity-Income Trust 1,785,490 0.230%
Balanced Trust 537,310 0.340%
Aggressive Asset Allocation Trust 831,665 0.350%
High Yield Trust 138,181 0.341%
Moderate Asset Allocation Trust 1,722,433 0.280%
Conservative Asset Allocation Trust 631,791 0.310%
Strategic Bond Trust** 847,735 0.293%
Global Government Bond Trust 801,544 0.350%
Capital Growth Bond 109,281 0.220%
Investment Quality Bond Trust 362,694 0.230%
U.S. Government Securities Trust 473,424 0.220%
Money Market Trust 319,605 0.075%
</TABLE>
* For the period October 1, 1997 (commencement of operations) to December
31, 1997.
** $211,934 of this amount was paid to SBAM Limited
Above are brief summaries of the advisory agreement with The Adviser
("Advisory Agreement") and the subadvisory agreements with the Subadvisers
("Subadvisory Agreements"). A more comprehensive statement of the terms of such
agreements appears in the Statement of Additional Information under the caption
"Investment Management Arrangements."
All or a portion of Trust brokerage commissions may be paid to affiliates
of SBAM, J.P. Morgan, Alger, Fidelity, Morgan Stanley and Oechsle International.
Information on the amount of these commissions is set forth in the Statement of
Additional Information under "Portfolio Brokerage."
EXPENSES
Subject to the expense limitations discussed above, the Trust is
responsible for the payment of all expenses of its organization, operations and
business, except for those expenses the Adviser or Subadvisers have agreed to
pay pursuant to the Advisory or Subadvisory Agreements. Among the expenses to be
borne by the Trust are charges and expenses of the custodian, independent
accountants and transfer, bookkeeping and dividend disbursing agents appointed
by the Trust; brokers' commissions and issue and transfer taxes on securities
transactions to which the Trust is a party; taxes payable by the Trust; and
legal fees and expenses in connection with the affairs of the Trust, including
registering and qualifying its shares with regulatory authorities and in
connection with any litigation.
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<PAGE> 98
For the year ended December 31, 1997, the expenses, including the
Adviser's fee but excluding portfolio brokerage commissions, expressed as a
percentage of average net assets, for each of the Trust's portfolios were as
follows:
<TABLE>
<CAPTION>
PORTFOLIO EXPENSES
--------- --------
<S> <C>
Pacific Rim Emerging Markets Trust 1.420%
Science & Technology Trust 1.260%
International Small Cap Trust 1.310%
Emerging Growth Trust 1.110%
Pilgrim Baxter Growth Trust 1.180%
Small/Mid Cap Trust 1.050%
International Stock Trust 1.380%
Worldwide Growth Trust 1.320%
Global Equity Trust 1.010%
Small Company Value Trust* 1.190%
Equity Trust 0.800%
Growth Trust 0.950%
Quantitative Equity Trust** 0.500%
Equity Index Trust 0.400%
Blue Chip Growth Trust 0.975%
Real Estate Securities Trust*** 0.500%
Value Trust 0.960%
International Growth and Income Trust 1.120%
Growth and Income Trust 0.790%
Equity-Income Trust 0.850%
Balanced Trust 0.880%
Aggressive Asset Allocation Trust 0.900%
High Yield Trust 0.890%
Moderate Asset Allocation Trust 0.850%
Conservative Asset Allocation Trust 0.890%
Strategic Bond Trust 0.870%
Global Government Bond Trust 0.930%
Capital Growth Bond**** 0.500%
Investment Quality Bond Trust 0.740%
U.S. Government Securities Trust 0.720%
Money Market Trust 0.540%
</TABLE>
* Annualized
** The ratio of operating expenses, before reimbursement from Adviser, was 0.77%
for the year ended December 31, 1997.
*** The ratio of operating expenses, before reimbursement from Adviser, was
0.77% for the year ended December 31, 1997.
**** The ratio of operating expenses, before reimbursement from Adviser, was
0.73% for the year ended December 31, 1997.
For the year ended December 31, 1996, the expenses, excluding the
Adviser's fee and portfolio brokerage commissions, expressed as a percentage of
average net assets, for each of the Trust's portfolios were as follows:
<TABLE>
<CAPTION>
PORTFOLIO EXPENSES
--------- --------
<S> <C>
Pacific Rim Emerging Markets Trust 0.570%
Science & Technology Trust 0.160%
International Small Cap Trust 0.210%
Emerging Growth Trust 0.060%
Pilgrim Baxter Growth Trust 0.130%
Small/Mid Cap Trust 0.050%
International Stock Trust 0.330%
Worldwide Growth Trust 0.320%
Global Equity Trust 0.110%
Small Company Value Trust* 0.140%
Equity Trust 0.050%
</TABLE>
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<TABLE>
<CAPTION>
PORTFOLIO EXPENSES
--------- --------
<S> <C>
Growth Trust 0.100%
Quantitative Equity Trust 0.000%
Equity Index Trust 0.150%
Blue Chip Growth Trust 0.050%
Real Estate Securities Trust 0.000%
Value Trust 0.160%
International Growth and Income Trust 0.170%
Growth and Income Trust 0.040%
Equity-Income Trust 0.050%
Balanced Trust* 0.080%
Aggressive Asset Allocation Trust 0.150%
High Yield Trust 0.110%
Moderate Asset Allocation Trust 0.100%
Conservative Asset Allocation Trust 0.140%
Strategic Bond Trust 0.100%
Global Government Bond Trust 0.130%
Capital Growth Bond 0.000%
Investment Quality Bond Trust 0.090%
U.S. Government Securities Trust 0.070%
Money Market Trust 0.040%
</TABLE>
* Annualized
Each of the portfolios, except the Global Equity, Blue Chip Growth,
Equity, Equity-Income and Growth and Income Trusts, anticipates that its annual
portfolio turnover rate will exceed 100%. A high portfolio turnover rate
generally involves correspondingly greater brokerage commission expenses, which
must be borne directly by the portfolio. The portfolio turnover rate of each of
the Trust's portfolios may vary from year to year, as well as within a year. See
"Portfolio Turnover" in the Statement of Additional Information.
PERFORMANCE DATA
From time to time the Trust may publish advertisements containing
performance data relating to its portfolios. Performance data will consist of
total return quotations which will always include quotations for recent one-year
and, when applicable, five-year and ten-year periods and where less than five or
ten years, for the period since the date the portfolio, including its
predecessor prior to the reorganization of the Fund on December 31, 1988, became
available for investment. In the case of the Pacific Rim Emerging Markets, Real
Estate Securities, Quantitative Equity, Capital Growth Bond and Equity Index
Trusts, such quotations will be for periods that include the performance of the
predecessor portfolios of Manulife Series Fund, Inc. Such quotations for such
periods will be the average annual rates of return required for an initial
investment of $1,000 to equal the market value of such investment on the last
day of the period, after reflection of all Trust charges and expenses and
assuming reinvestment of all dividends and distributions. Performance figures
used by the Trust are based on the actual historical performance of its
portfolios for specified periods, and the figures are not intended to indicate
future performance. Moreover, the Trust's performance figures are not comparable
to those for public mutual funds. Trust shares are only available as the
underlying investment medium for contracts which provide for certain charges, as
described in the accompanying contract Prospectus. The impact of such charges is
not reflected in the Trust's performance figures. More detailed information on
the computations is set forth in the Statement of Additional Information. The
Trust's annual report, which is available without charge upon request, contains
further discussions of Trust performance.
The Trust may also from time to time advertise the performance of certain
portfolios relative to that of unmanaged indices, including but not limited to
the Dow Jones Industrial Average, the Lehman Brothers Bond, Government
Corporate, Corporate and Aggregate Indices, the S&P 500 Index, the Value Line
Composite and the Morgan Stanley Capital International Europe, Australia and Far
East ("EAFE") and World Indices. The Trust may also advertise the performance
rankings assigned certain portfolios or their investment Subadvisers by various
statistical services, including but not limited to SEI, Lipper Analytical
Services, Inc.'s Mutual Fund Performance Analysis and Variable Insurance
Products Performance Analysis, Variable Annuity Research and Data Service,
Intersec Research Survey of Non-U.S. Equity Fund Returns and Frank Russell
International Universe, and any other data which may be presented from time to
time by such analysts as Dow Jones, Morning Star, Chase International
Performance, Wilson Associates, Stanger, CDA Investment Technology, the Consumer
Price Index ("CPI"), The Bank Rate Monitor National Index, IBC/Donaghue's
Average U.S. Government and Agency, or as they appear in various publications,
including The Wall Street Journal, New York Times, Forbes, Barrons, Fortune,
Money Magazine, Financial World and Financial Services Week.
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<PAGE> 100
GENERAL INFORMATION
SHARES OF THE TRUST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest having a
par value of $.01 per share, to divide such shares into an unlimited number of
series of shares and to designate the relative rights and preferences thereof,
all without shareholder approval. In addition, the Trustees are authorized to
divide any series of shares into separate classes, also without shareholder
approval. The Trust currently has thirty-six series of shares, one for each
portfolio. Shares of each portfolio have equal rights with regard to
redemptions, dividends, distributions and liquidations with respect to that
portfolio. When issued, shares are fully paid and non-assessable and do not have
preemptive or conversion rights or cumulative voting rights. All shares are
entitled to one vote and are voted by series, except that when voting for the
election of Trustees and when otherwise permitted by the 1940 Act, shares are
voted in the aggregate. Only shares of a particular portfolio are entitled to
vote on matters determined by the Trustees to affect only the interests of that
portfolio.
The Trust currently has four shareholders, Manulife North America,
Manulife New York, Manufacturers America and Manufacturers USA. Manulife North
America provided the Trust with its initial capital. Currently, Manulife North
America owns Trust shares attributable to the initial capitalization of the
Growth and Income Trust. Each shareholder owns the Trust shares attributable to
contracts participating in its separate accounts and will vote such shares and,
in the case of Manulife North America, Trust shares owned beneficially by
Manulife North America in accordance with instructions received from contract
owners.
Shares of the Trust may be sold to both variable annuity separate accounts
and variable life insurance separate accounts of affiliated insurance companies.
The Trust currently does not foresee any disadvantages to the owners of variable
annuity or variable life insurance contracts arising from the fact that the
interests of those owners may differ. Nevertheless, the Trust's Board of
Trustees will monitor events in order to identify any material irreconcilable
conflicts which may possibly arise due to differences of tax treatment or other
considerations and to determine what action, if any, should be taken in response
thereto. Such an action could include the withdrawal of a separate account from
participation in the Trust.
TAXES
TAX STATUS. The Trust intends to take the steps necessary to qualify each
portfolio as a regulated investment company under Subchapter M of the Code and
believes that each portfolio will so qualify. As a result of qualifying as a
regulated investment company, each portfolio will not be subject to U.S. Federal
income tax on its net investment income (i.e., its investment company taxable
income, as that term is defined in the Code, determined without regard to the
deduction for dividends paid) and net capital gain (i.e., the excess of its net
realized long-term capital gain over its net realized short-term capital loss),
if any, that it distributes to its shareholders in each taxable year, provided
that it distributes to its shareholders at least 90% of its net investment
income for such taxable year. Each portfolio is subject to a nondeductible 4%
excise tax calculated as a percentage of certain undistributed amounts of
ordinary income and capital gain net income. To the extent possible, each
portfolio intends to make sufficient distributions to avoid the application of
both corporate income and excise taxes. Under current law, distributions of net
investment income and net capital gain are not taxed to a life insurance company
to the extent applied to increase the reserves for the company's variable
annuity and life insurance contracts.
SOURCES OF GROSS INCOME. To qualify as a regulated investment company, a
portfolio must, among other things, derive its income from certain sources.
Specifically, in each taxable year a portfolio must derive at least 90% of its
gross income from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including, but not limited to, gains from options,
futures or forward contracts) derived with respect to its business of investing
in stock, securities or currencies.
DIVERSIFICATION OF ASSETS. To qualify as a regulated investment company, a
portfolio must also satisfy certain requirements with respect to the
diversification of its assets. A portfolio must have, at the close of each
quarter of the taxable year, at least 50% of the value of its total assets
represented by cash, cash items, United States Government securities, securities
of other regulated investment companies, and other securities which, in respect
of any one issuer, do not represent more than 5% of the value of the assets of
the portfolio nor more than 10% of the voting securities of that issuer. In
addition, at those times not more than 25% of the value of the portfolio's
assets may be invested in securities (other than United States Government
securities or the securities of other regulated investment companies) of any one
issuer, or of two or more issuers which the portfolio controls and which are
engaged in the same or similar trades or businesses or related trades or
businesses.
Because only insurance company separate accounts will own shares in the
portfolios, each insurance company separate account will be treated as owning
its proportionate share of the assets of any portfolio in which it invests,
provided that the portfolio qualifies as a regulated investment company.
Therefore, each portfolio intends to meet the additional diversification
requirements that are applicable to insurance company separate accounts under
Subchapter L of the Code. These
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<PAGE> 101
requirements generally provide that no more than 55% of the value of the assets
of a portfolio 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.
FOREIGN INVESTMENTS. Portfolios investing in foreign securities or
currencies may be required to pay withholding or other taxes to foreign
governments. Foreign tax withholding from dividends and interest, if any, is
generally imposed at a rate between 10% and 35%. The investment yield of any
portfolio that invests in foreign securities or currencies will be reduced by
these foreign taxes. A portfolio investing in securities of a passive foreign
investment company may be subject to U.S. Federal income taxes and interest
charges (and the investment yield of a portfolio making such an investment will
be reduced by these taxes and interest charges) on a portion of its
distributions on and gain with respect to shares of the passive foreign
investment company even if such amounts are paid as a dividend to its
shareholders. Shareholders will bear the cost of these taxes and interest
charges. Alternatively, a portfolio may elect to (i) treat the passive foreign
investment company as a "qualified electing fund" (assuming the company agrees
to provide certain information to the Internal Revenue Service) and include
annually in income its proportionate share of the company's ordinary earnings
and capital gains (whether or not distributed) or (ii) mark to market its stock
in the passive foreign investment company and thereby recognize as ordinary
income any increase in the value of such shares, and as ordinary loss any
decrease in such value to the extent of prior increases.
ADDITIONAL TAX CONSIDERATIONS. If a portfolio failed to qualify as a
regulated investment company, owners of contracts based on the portfolio (i)
would be treated as owning shares of the portfolio (rather than their
proportionate share of the assets of such portfolio) for purposes of the
diversification requirements under Subchapter L of the Code, and as a result
might be taxed currently on the investment earnings under their contracts and
thereby lose the benefit of tax deferral, and (ii) the portfolio would incur
regular corporate federal income tax on its taxable income for that year and be
subject to certain distribution requirements upon requalification. In addition,
if a portfolio failed to comply with the diversification requirements of the
regulations under Subchapter L of the Code, owners of contracts based on the
portfolio might be taxed on the investment earnings under their contracts and
thereby lose the benefit of tax deferral. Accordingly, compliance with the above
rules is carefully monitored by the Adviser and the Subadvisers and it is
intended that the portfolios will 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 portfolio,
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
that Subadvisers might otherwise believe to be desirable.
OTHER INFORMATION. For more information regarding the tax implications for
the purchaser of a variable annuity or life insurance contracts who allocates
investments to a portfolio of the Trust, please refer to the prospectus for the
contract.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury Regulations currently in effect. It is not
intended to be a complete explanation or a substitute for consultation with
individual tax advisors. For the complete provisions, reference should be made
to the pertinent Code sections and the Treasury Regulations promulgated
thereunder. The Code and Regulations are subject to change, possibly with
retroactive effect.
DIVIDENDS
The Trust intends to declare as dividends substantially all of the net
investment income, if any, of each portfolio. Dividends from the net investment
income and the net capital gain, if any, for each portfolio except the Money
Market Trust will be declared not less frequently than annually and reinvested
in additional full and fractional shares of that portfolio or paid in cash.
Dividends from net investment income and net capital gain, if any, for the Money
Market Trust will be declared and reinvested, or paid in cash, daily.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Trust are offered continuously, without sales charge, at
prices equal to the respective net asset values of the portfolio. The Trust
sells its shares directly without the use of any underwriter. Shares of the
Trust are sold and redeemed at their net asset value next computed after a
purchase payment or redemption request is received by the shareholder from the
contract owner or after any other purchase or redemption order is received by
the Trust. Depending upon the net asset values at that time, the amount paid
upon redemption may be more or less than the cost of the shares redeemed.
Payment for shares redeemed will be made as soon as possible, but in any event
within seven days after receipt of a request for redemption.
The net asset value of the shares of each portfolio is determined once
daily as of the close of regularly scheduled trading of the New York Stock
Exchange, Monday through Friday, except that no determination is required on (i)
days on which changes in the value of such portfolio's portfolio securities will
not materially affect the current net asset value of the shares of the
portfolio, (ii) days during which no shares of such portfolio are tendered for
redemption and no order to purchase or sell such shares is received by the
Trust, or (iii) the following business holidays or the days on which such
holidays are observed by the
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<PAGE> 102
New York Stock Exchange: New Year's Day, Martin Luther King, Jr.'s Birthday,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Generally, trading in non-U.S. securities,
as well as U.S. Government securities and money market instruments, is
substantially completed each day at various times prior to the close of
regularly scheduled trading of the New York Stock Exchange. The values of such
securities used in computing the net asset value of a portfolio's shares are
generally determined as of such times. Occasionally, events which affect the
values of such securities may occur between the times at which they are
generally determined and the close of the New York Stock Exchange and would
therefore not be reflected in the computation of a portfolio's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as determined
in good faith by the Subadvisers under procedures established and regularly
reviewed by the Trustees.
The net asset values per share of all portfolios other than the Money
Market Trust are computed by adding the sum of the value of the securities held
by each portfolio plus any cash or other assets it holds, subtracting all its
liabilities, and dividing the result by the total number of shares outstanding
of that portfolio at such time. Securities held by each of the portfolios other
than the Money Market Trust, except for money market instruments with remaining
maturities of 60 days or less and Underlying Portfolio shares held by the
Lifestyle Trusts, are valued at their market value if market quotations are
readily available. Otherwise, such securities are valued at fair value as
determined in good faith by the Trustees although the actual calculations may be
made by persons acting pursuant to the direction of the Trustees.
All instruments held by the Money Market Trust and money market
instruments with a remaining maturity of 60 days or less held by the other
portfolios are valued on an amortized cost basis.
CUSTODIAN
State Street Bank and Trust Company, ("State Street") 225 Franklin Street,
Boston, Massachusetts 02110, currently acts as custodian and bookkeeping agent
of all the Trust assets. State Street has selected various banks and trust
companies in foreign countries to maintain custody of certain foreign
securities. State Street is authorized to use the facilities of the Depository
Trust Company, the Participants Trust Company and the book-entry system of the
Federal Reserve Banks.
YEAR 2000 ISSUES
Like other business organizations and individuals, Manulife North America
would be adversely affected if its computer systems and those of its service
providers do not properly process and calculate date-related information and
data from and after January 1, 2000. Manulife North America is completing an
assessment of the Year 2000 impact on its systems and business processes.
Management believes that Manulife North America will complete its Year 2000
project for all critical systems and processes by September 30, 1998, prior to
any anticipated impact on the critical systems and processes.
The date on which Manulife North America believes it will complete the
Year 2000 project is based on management's best estimates, which were derived
utilizing numerous assumptions of future events. However, there can be no
guarantee that these estimates will be achieved and actual results could differ
materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to, the availability and cost
of personnel trained in this area, the ability to locate and correct all
relevant computer code, and other similar uncertainties.
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APPENDIX I
DEBT SECURITY RATINGS
STANDARD & POOR'S RATINGS GROUP ("S&P")
COMMERCIAL PAPER:
A-1 The rating A-1 is the highest rating assigned by S&P to commercial
paper. This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high for
issuers designated "A-1."
BONDS:
AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.
A Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
debt in higher rated categories.
BBB Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher rated categories.
BB-B-CCC
-CC Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and CC
the highest degree of speculation. While such bonds will likely have
some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
D Bonds rated D are in default. The D category is used when interest
payments or principal payments are not made on the date due even if
the applicable grace period has not expired. The D rating is also
used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
The ratings set forth above may be modified by the addition of a
plus or minus to show relative standing within the major rating
categories.
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
COMMERCIAL PAPER:
P-1 The rating P-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated P-1 (or related supporting institutions) have
a superior capacity for repayment of short-term promissory
obligations. P-1 repayment capacity will normally be evidenced by
the following characteristics: (1) leading market positions in
established industries; (2) high rates of return on funds employed;
(3) conservative capitalization structures with moderate reliance on
debt and ample asset protection; (4) broad margins in earnings
coverage of fixed financial charges and high internal cash
generation; and (5) well established access to a range of financial
markets and assured sources of alternate liquidity.
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P-2 Issuers rated P-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage ratios,
while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
BONDS:
Aaa Bonds which are rated Aaa by Moody's are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
Aa Bonds which are rated Aa by Moody's are judged to be of high quality
by all standards. Together with the Aaa group, they comprise what
are generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large as
in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A Bonds which are rated A by Moody's possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa by Moody's are considered as medium grade
obligations, that is, they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact
have speculative characteristics as well.
B Bonds which are rated B generally lack characteristics of a
desirable investment. Assurance of interest and principal payments
or of maintenance and other terms of the contract over any long
period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect
to principal or interest.
Ca Bonds which are rated Ca represent obligations which are speculative
in high degree. Such issues are often in default or have other
marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects
of ever attaining any real investment standing.
Moody's applies numerical modifiers "1," "2" and "3" to certain of its
rating classifications. The modifier "1" indicates that the security ranks in
the higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category.
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APPENDIX II
STRATEGIC BOND TRUST DEBT RATINGS
The average distribution of investments in corporate and government bonds
by ratings for the fiscal year ended December 31, 1997, calculated monthly on a
dollar-weighted basis, for the Strategic Bond Trust, are as follows:
<TABLE>
<CAPTION>
UNRATED BUT OF
MOODY'S STANDARD & POOR'S COMPARABLE QUALITY PERCENTAGE
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Aaa AAA 0% 0%
Aa AA 0% 2%
A A 0% 4%
Baa BBB 0% 2%
Ba BB 0% 13%
B B 7% 28%
Caa CCC 0% 1%
Ca CC 0% 0%
C C 0% 0%
D 0% 0%
Unrated as a Group 7%
U.S. Government Securities* 45%
100%
</TABLE>
*Obligations issued or guaranteed by the U.S. Government or its agencies,
authorities or instrumentalities.
The actual distribution of the Strategic Bond Trust's corporate and
government bond investments by ratings on any given date will vary. In addition,
the distribution of the Trust's investments by ratings as set forth above should
not be considered as representative of the Trust's future portfolio composition.
INVESTMENT QUALITY BOND TRUST DEBT RATINGS
The average distribution of investments in corporate and government bonds
by ratings for the fiscal year ended December 31, 1997, calculated monthly on a
dollar-weighted basis, for the Investment Quality Bond Trust, are as follows:
<TABLE>
<CAPTION>
UNRATED BUT OF
MOODY'S STANDARD & POOR'S COMPARABLE QUALITY PERCENTAGE
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Aaa AAA 0% 6%
Aa AA 0% 3%
A A 0% 10%
Baa BBB 0% 8%+
Ba BB 0% 6%
B B 0% 6%
Caa CCC 0% 0%
Ca CC 0% 0%
C C 0% 0%
D 0% 0%
Unrated as a Group 0%
U.S. Government Securities* 61%
100%
</TABLE>
*Obligations issued or guaranteed by the U.S. Government or its agencies,
authorities or instrumentalities.
+ Includes 2% split-rated issues.
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The actual distribution of the Investment Quality Bond Trust's corporate
and government bond investments by ratings on any given date will vary. In
addition, the distribution of the Trust's investments by ratings as set forth
above should not be considered as representative of the Trust's future portfolio
composition.
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APPENDIX III
STANDARD & POOR'S CORPORATION DISCLAIMERS
The Equity Index Trust is not sponsored, endorsed, sold or promoted by
Standard & Poor's ("S&P"). S&P makes no representation or warranty, express or
implied, to the shareholders of the Equity Index Trust or any member of the
public regarding the advisability of investing in securities generally or in the
Equity Index Trust particularly or the ability of the S&P 500 Index to track
general stock market performance. S&P's only relationship to the Trust is the
licensing of certain trademarks and trade names of S&P and of the S&P 500 Index
which is determined, composed and calculated by S&P without regard to the Trust
or the Equity Index Trust. S&P has no obligation to take the needs of the Trust
or the shareholders of the Equity Index Trust into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the prices and amount of shares of the
Equity Index Trust or the timing of the issuance or sale of the shares of the
Equity Index Trust or in the determination or calculation of the equation by
which shares of the Equity Index Trust are to be converted into cash. S&P has no
obligation or liability in connection with the administration, marketing or
trading of the Equity Index Portfolio.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by the Trust, shareholders of the Equity
Index Trust, or any other person or entity from the use of the S&P 500 Index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect, or consequential damages
(including lost profits), even if notified of the possibility of such damages.
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<PAGE> 1
Exhibit 17(c)
Semi-Annual Report of the Trust for the six months ended June 30, 1998.
<PAGE> 2
MANUFACTURERS INVESTMENT TRUST
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
August 24, 1998
Dear Investors:
It is once again my pleasure to present the semi-annual financial statements of
the Manufacturers Investment Trust (the "Trust"), the mutual fund which is the
underlying investment vehicle for your variable insurance product or retirement
plan. The financial statements that follow reflect the results of operations for
the six months ended June 30, 1998. During that period, total net assets of the
Trust grew from $10.45 billion on December 31, 1997 to $12.32 billion on June
30, 1998. This 18% increase in net assets reflects strong asset appreciation and
the continued demand for variable insurance products as vehicles for retirement
and estate planning.
For the six month period ended June 30, 1998, US stock and bond markets
continued to provide strong returns for investors. The Dow Jones Industrial
Index rose 14.1% and the S&P 500 Index was up 17.7% over this period, reflecting
the strong performance of the largest US companies. US bond prices also rose
with the Lehman Brothers Aggregate Bond Index up 3.9% for that period. These
markets have been supported by solid economic growth, accommodative credit, low
inflation and low interest rates. International stock markets were also stronger
as seen in the 16.1% rise in the first half of this year for the MSCI EAFE
Index. Overall, the performance of our active managers reflected the performance
of their asset classes and investment styles, with two-thirds outperforming the
average of their Morningstar mutual fund peer groups.
Since the end of June, stock markets have been more volatile than at any time in
the past three years. The S&P 500 peaked on July 17th and has since fallen off
by over 10%. The ongoing market volatility reinforces our belief that long-term
investors will benefit from a diversified investment program reviewed
periodically with a financial advisor. The Trust, with its many investment
options and multiple managers specializing in a broad array of investment
disciplines, is designed to offer you the opportunity to create such a
diversified investment program. No matter how efficient an investment portfolio
you might build, your degree of success in achieving your financial goals will
still depend, in part, on the quality of investment management you choose. The
management team we have assembled today offers an exceptional level of
expertise, industry knowledge and diversity of investment styles.
We will continue to work to offer you the best investment management services
available. The investment services industry, however, continues to experience
rapid change. In the first half of 1998, a large number of consolidations,
mergers and acquisitions reshaped the industry. Part of our commitment to you is
on-going review of performance and other events that impact our investment
managers. As a result, this was a particularly active time for us. Among our
investment managers, Salomon Brothers Asset Management, Oechsle International
Advisors, and Founders Asset Management all experienced ownership changes. We
have been in close consultation with each manager during these changes and are
working with each one to assess any possible impact that these transactions may
have in view of the high standards we have set for the management of your
assets. If warranted, we would anticipate that any changes be implemented in
May, 1999. We are also considering the addition of more high quality portfolios
and managers to further enhance the investment offerings at that time.
We are confident that our innovative products and services along with our
outstanding investment management team will provide you with a solid framework
for planning your financial future. Thank you for choosing Manulife Financial.
Sincerely,
/s/ John D. DesPrez III
John D. DesPrez III
President
<PAGE> 3
MANUFACTURERS INVESTMENT TRUST
INDEX TO SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Statements of Assets and Liabilities....................................... 1
Statements of Operations................................................... 8
Statements of Changes in Net Assets........................................ 15
Financial Highlights....................................................... 27
Portfolio of Investments:
Pacific Rim Emerging Markets Trust.................................. 63
Science & Technology Trust.......................................... 66
International Small Cap Trust....................................... 68
Emerging Growth Trust............................................... 70
Pilgrim Baxter Growth Trust......................................... 72
Small/Mid Cap Trust................................................. 75
International Stock Trust........................................... 77
Worldwide Growth Trust.............................................. 81
Global Equity Trust................................................. 83
Small Company Value Trust........................................... 86
Equity Trust........................................................ 93
Growth Trust........................................................ 99
Quantitative Equity Trust........................................... 101
Equity Index Trust.................................................. 103
Blue Chip Growth Trust.............................................. 111
Real Estate Securities Trust........................................ 114
Value Trust......................................................... 115
International Growth and Income Trust............................... 117
Growth and Income Trust............................................. 121
Equity-Income Trust................................................. 123
Balanced Trust...................................................... 126
Aggressive, Moderate and Conservative Asset Allocation Trusts....... 129
High Yield Trust.................................................... 159
Strategic Bond Trust................................................ 163
Global Government Bond Trust........................................ 171
Capital Growth Bond Trust........................................... 172
Investment Quality Bond Trust....................................... 174
U.S. Government Securities Trust.................................... 180
Money Market Trust.................................................. 181
Lifestyle Aggressive 1000 Trust..................................... 182
Lifestyle Growth 820 Trust.......................................... 182
Lifestyle Balanced 640 Trust........................................ 182
Lifestyle Moderate 460 Trust........................................ 183
Lifestyle Conservative 280 Trust.................................... 183
Notes to Financial Statements.............................................. 184
</TABLE>
ii
<PAGE> 4
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM PILGRIM
EMERGING SCIENCE & INTERNATIONAL EMERGING BAXTER
MARKETS TECHNOLOGY SMALL CAP GROWTH GROWTH
ASSETS TRUST TRUST TRUST TRUST TRUST
----------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value
(Includes a repurchase agreement
of $28,469,000 in the International
Small Cap Trust) (See accompanying
portfolio of investments) .................... $24,082,180 $140,777,157 $166,591,744 $360,222,477 $155,322,210
Forward foreign currency contracts to
buy, at value (Cost $536,861)
(Notes 2 and 8) .............................. -- -- 537,482 -- --
Receivable for forward foreign currency
contracts to sell (Notes 2 and 8) ............ -- -- 1,257,475 -- --
Cash ........................................... 722 819 241 435 77
Foreign currency (Cost: $3,392,009,
$1,763 and $1,145,976 in the Pacific
Rim Emerging Markets, Science &
Technology and International Small Cap
Trusts, respectively) (Note 2) ............... 3,323,710 1,746 1,517,998 -- --
Receivables:
Investments sold ........................ 2,383 68,026 1,261,372 1,428,221 568,323
Dividends and interest .................. 57,041 9,117 102,563 16,011 697
Foreign tax withholding reclaims ........ 2,580 388 100,165 -- --
Other assets ................................... 192 656 1,010 2,091 817
----------- ------------ ------------ ------------ ------------
Total assets ........................ 27,468,808 140,857,909 171,370,050 361,669,235 155,892,124
----------- ------------ ------------ ------------ ------------
LIABILITIES
Forward foreign currency contracts to
sell at value (Cost: $1,257,475)
(Notes 2 and 8) .............................. -- -- 1,261,372 -- --
Payables:
Forward foreign currency contracts
to buy (Notes 2 and 8) ................. -- -- 536,861 -- --
Investments purchased ................... 116,546 3,440,987 763,870 2,556,777 509,273
Dividend and interest withholding tax ... 5,412 477 17,537 -- --
Custodian fee ........................... 13,712 -- 24,226 6,979 2,236
Securities lending ...................... 3,203,518 27,572,460 11,635,753 54,175,553 31,537,857
Other accrued expenses .................. 1,026 4,817 660 15,539 10,468
----------- ------------ ------------ ------------ ------------
Total liabilities ................... 3,340,214 31,018,741 14,240,279 56,754,848 32,059,834
----------- ------------ ------------ ------------ ------------
NET ASSETS ..................................... $24,128,594 $109,839,168 $157,129,771 $304,914,387 $123,832,290
=========== ============ ============ ============ ============
Net assets consist of:
Undistributed net investment income
(loss) (Note 2) ....................... $ 54,795 $ (367,002) $ 462,127 $ (757,213) $ (371,306)
Accumulated undistributed net
realized gain (loss) on investments,
foreign currency and forward foreign
currency contracts .................... (4,301,340) 1,412,505 (1,385,614) 12,557,430 3,057,033
Unrealized appreciation (depreciation)
on:
Investments ........................... (9,561,414) 9,277,014 32,890,119 48,389,366 5,318,452
Foreign currency and forward foreign
currency contracts .................. (65,963) (25) (22,004) -- --
Capital shares at par value of $.01
(Note 4) ............................ 39,830 68,779 94,591 120,684 94,542
Additional paid-in capital .............. 37,962,686 99,447,897 125,090,552 244,604,120 115,733,569
----------- ------------ ------------ ------------ ------------
Net assets ........................ $24,128,594 $109,839,168 $157,129,771 $304,914,387 $123,832,290
=========== ============ ============ ============ ============
Capital shares outstanding (Note 4) ............ 3,982,976 6,877,851 9,459,083 12,068,384 9,454,164
----------- ------------ ------------ ------------ ------------
Net asset value, offering price and
redemption price per share ................... $ 6.06 $ 15.97 $ 16.61 $ 25.27 $ 13.10
=========== ============ ============ ============ ============
Investments in securities, at
identified cost (Note 2) ..................... $33,643,594 $131,500,143 $133,701,625 $311,833,111 $150,003,758
=========== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 5
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
SMALL/MID INTERNATIONAL WORLDWIDE GLOBAL COMPANY
CAP STOCK GROWTH EQUITY VALUE
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value
(Includes a repurchase agreement of
$7,220,000 in the Worldwide Growth
Trust) (See accompanying portfolio
of investments) ............................. $421,572,415 $230,762,741 $41,226,808 $1,088,509,412 $144,217,886
Receivable for forward foreign currency
contracts to sell (Notes 2 and 8) ........... -- -- -- 52,882,650 --
Forward foreign currency contracts to
buy, at value (Cost: $98,404) (Notes 2
and 8) ...................................... -- -- 98,682 -- --
Cash .......................................... -- 315 9 556 --
Foreign currency (Cost: $530,095,
$150,620 and $2,457,573 in the
International Stock, Worldwide Growth
and Global Equity Trusts, respectively)
(Note 2) .................................... -- 532,470 150,235 2,458,980 --
Receivables:
Investments sold ....................... 4,854,161 69,429 -- 10,118,407 1,508,441
Dividends and interest ................. 105,834 260,285 41,912 2,256,465 149,097
Foreign tax withholding reclaims ....... -- 106,754 14,529 441,897 --
Other assets .................................. 2,204 1,254 212 6,838 14,381
------------ ------------ ----------- -------------- ------------
Total assets ....................... 426,534,614 231,733,248 41,532,387 1,156,675,205 145,889,805
------------ ------------ ----------- -------------- ------------
LIABILITIES
Forward foreign currency contracts to
sell, at value (Cost: $52,882,650)
(Notes 2 and 8) ............................. -- -- -- 53,582,237 --
Payables:
Forward foreign currency contracts
to buy (Notes 2 and 8) ............... -- -- 98,404 -- --
Investments purchased .................. 11,340,297 -- 266,807 -- 1,218,593
Dividend and interest withholding
tax .................................. -- 28,036 5,131 107,869 --
Due to custodian ....................... -- -- -- -- 13,623
Custodian fee .......................... 5,602 23,026 3,229 65,940 --
Securities lending ..................... 77,319,495 28,566,612 6,576,592 130,224,090 17,449,045
Other accrued expenses ................. 20,113 13,603 2,069 40,182 7,686
------------ ------------ ----------- -------------- ------------
Total liabilities .................. 88,685,507 28,631,277 6,952,232 184,020,318 18,688,947
------------ ------------ ----------- -------------- ------------
NET ASSETS .................................... $337,849,107 $203,101,971 $34,580,155 $ 972,654,887 $127,200,858
============ ============ =========== ============== ============
Net assets consist of:
Undistributed net investment
income (loss) (Note 2) ............... $ (550,468) $ 1,207,033 $ 186,232 $ 5,156,770 $ 114,327
Accumulated undistributed net
realized gain (loss) on
investments, foreign currency
and forward foreign currency
contracts ............................ 28,442,066 (1,669,213) 580,086 41,671,937 (1,923,008)
Unrealized appreciation
(depreciation) on:
Investments .......................... 58,843,112 19,394,766 3,334,403 198,985,944 2,074,865
Foreign currency and forward
foreign currency contracts ......... -- 3,619 (6) (645,773) --
Capital shares at par value of
$.01 (Note 4) ...................... 182,761 155,940 21,830 475,939 102,141
Additional paid-in capital ............. 250,931,636 184,009,826 30,457,610 727,010,070 126,832,533
------------ ------------ ----------- -------------- ------------
Net assets ....................... $337,849,107 $203,101,971 $34,580,155 $ 972,654,887 $127,200,858
============ ============ =========== ============== ============
Capital shares outstanding (Note 4) ........... 18,276,105 15,593,977 2,183,020 47,593,856 10,214,105
------------ ------------ ----------- -------------- ------------
Net asset value, offering price and
redemption price per share .................. $ 18.49 $ 13.02 $ 15.84 $ 20.44 $ 12.45
============ ============ =========== ============== ============
Investments in securities, at identified
cost (Note 2) ............................... $362,729,303 $211,367,975 $37,892,405 $ 889,523,468 $142,143,021
============ ============ =========== ============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 6
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE EQUITY BLUE CHIP
EQUITY GROWTH EQUITY INDEX GROWTH
ASSETS TRUST TRUST TRUST TRUST TRUST
-------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value
(Includes a repurchase agreement of
$7,167,000 in the Equity Index Trust)
(See accompanying portfolio of
investments) ............................... $1,891,455,283 $263,861,377 $232,635,719 $47,707,736 $979,022,645
Cash ......................................... 927 602 884 307 476
Foreign currency (Cost: $148,511,
$100,083 and $38 in the Equity, Growth
and Blue Chip Growth Trusts, respectively)
(Note 2) ................................... 147,683 99,654 -- -- 38
Receivables:
Investments sold ...................... 11,037,734 808,258 956,333 -- --
Dividends and interest ................ 1,266,973 163,886 156,895 39,459 609,547
Foreign tax withholding reclaims ...... 147,550 4,037 -- 196 2,577
Other assets ................................. 11,629 1,450 1,386 259 5,858
-------------- ------------ ------------ ----------- ------------
Total assets ...................... 1,904,067,779 264,939,264 233,751,217 47,747,957 979,641,141
-------------- ------------ ------------ ----------- ------------
LIABILITIES
Payables:
Investments purchased ................. 11,569,626 289,206 4,969,399 -- 5,533,421
Dividend and interest withholding
tax ................................ 10,008 -- 473 3 6,937
Variation margin for open futures
contracts .......................... -- -- -- 57,375 --
Custodian fee ......................... 11,214 5,584 4,163 -- 5,489
Securities lending .................... 242,870,601 24,122,903 14,232,456 3,122,824 79,909,800
Other accrued expenses ................ 91,523 11,900 9,863 1,160 49,074
-------------- ------------ ------------ ----------- ------------
Total liabilities .................. 254,552,972 24,429,593 19,216,354 3,181,362 85,504,721
-------------- ------------ ------------ ----------- ------------
NET ASSETS ................................... $1,649,514,807 $240,509,671 $214,534,863 $44,566,595 $894,136,420
============== ============ ============ =========== ============
Net assets consist of:
Undistributed net investment income
(Note 2) ............................ $ 2,779,192 $ 492,977 $ 904,804 $ 330,131 $ 1,711,657
Accumulated undistributed net
realized gain on investments,
futures, foreign currency and
forward foreign currency contracts .. 114,793,361 10,967,238 25,500,484 977,050 37,504,251
Unrealized appreciation
(depreciation) on:
Investments ......................... 123,450,926 37,558,409 18,547,399 4,264,077 239,519,212
Futures contracts ................... -- -- -- 270,571 --
Foreign currency and forward
foreign currency contracts ........ (1,895) (501) -- -- (6)
Capital shares at par value of
$.01 (Note 4) ..................... 829,443 122,114 93,738 30,942 518,270
Additional paid-in capital ............ 1,407,663,780 191,369,434 169,488,438 38,693,824 614,883,036
-------------- ------------ ------------ ----------- ------------
Net assets ...................... $1,649,514,807 $240,509,671 $214,534,863 $44,566,595 $894,136,420
============== ============ ============ =========== ============
Capital shares outstanding (Note 4) .......... 82,944,313 12,211,438 9,373,815 3,094,226 51,826,958
-------------- ------------ ------------ ----------- ------------
Net asset value, offering price and
redemption price per share ................. $ 19.89 $ 19.70 $ 22.89 $ 14.40 $ 17.25
============== ============ ============ =========== ============
Investments in securities, at
identified cost (Note 2) ................... $1,768,004,357 $226,302,968 $214,088,320 $43,443,659 $739,503,433
============== ============ ============ =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 7
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
REAL ESTATE GROWTH AND GROWTH AND EQUITY-
SECURITIES VALUE INCOME INCOME INCOME
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value
(Includes a repurchase agreement of
$30,499,000 in the Value Trust)
(See accompanying portfolio of
investments) .................................. $204,132,182 $242,143,272 $269,909,907 $2,075,696,946 $1,093,887,035
Receivable for forward foreign
currency contracts to sell (Notes 2
and 8) ........................................ -- -- 61,341,145 -- --
Forward foreign currency contracts to
buy, at value (Cost: $28,642,883)
(Notes 2 and 8) ............................... -- -- 28,292,738 -- --
Cash ............................................ 13 998 829 905 470
Foreign currency (Cost: $1,246,711,
$12,125 and and $1,630 in the
International Growth and Income,
Growth and Income and Equity-Income
Trusts, respectively) (Note 2) ................ -- -- 1,249,083 9,300 1,614
Receivables:
Investments sold ......................... 1,443,758 651,256 2,909,473 -- 92,863
Dividends and interest ................... 1,153,156 274,924 581,940 1,887,869 2,153,193
Foreign tax withholding reclaims ......... -- 1,197 284,096 -- 16,728
Deferred organization expenses (Note 2) ......... -- -- 14,860 -- --
Other assets .................................... 1,200 1,396 1,471 13,132 7,328
------------ ------------ ------------ -------------- --------------
Total assets ......................... 206,730,309 243,073,043 364,585,542 2,077,608,152 1,096,159,231
------------ ------------ ------------ -------------- --------------
LIABILITIES
Forward foreign currency contracts to
sell, at value (Cost: $61,341,145)
(Notes 2 and 8) ............................... -- -- 60,601,013 -- --
Payables:
Forward foreign currency
contracts to buy (Notes 2
and 8) ................................. -- -- 28,642,883 -- --
Investments purchased .................... 1,825,311 109,990 4,529,905 14,408,006 643,536
Dividend and interest withholding
tax .................................... -- 2,847 66,649 -- 20,474
Custodian fee ............................ 6,238 10,239 21,937 7,299 8,511
Securities lending ....................... 27,603,151 11,154,359 32,407,075 59,138,837 40,756,854
Other accrued expenses ................... 10,148 13,482 9,869 82,453 48,508
------------ ------------ ------------ -------------- --------------
Total liabilities .................... 29,444,848 11,290,917 126,279,331 73,636,595 41,477,883
------------ ------------ ------------ -------------- --------------
NET ASSETS ...................................... $177,285,461 $231,782,126 $238,306,211 $2,003,971,557 $1,054,681,348
============ ============ ============ ============== ==============
Net assets consist of:
Undistributed net investment
income (Note 2) ........................ $ 4,298,188 $ 1,374,813 $ 481,478 $ 7,678,988 $ 10,675,100
Accumulated undistributed net
realized gain on investments,
foreign currency and forward
foreign currency contracts ............. 5,058,517 5,004,099 8,581,858 26,662,983 31,681,881
Unrealized appreciation
(depreciation) on:
Investments ............................ (4,269,646) 6,217,966 12,491,000 705,868,925 186,732,126
Foreign currency and forward
foreign currency contracts ........... -- -- 419,360 (2,825) 1,155
Capital shares at par value of
$.01 (Note 4) ........................ 105,230 148,741 201,111 765,573 608,871
Additional paid-in capital ............... 172,093,172 219,036,507 216,131,404 1,262,997,913 824,982,215
------------ ------------ ------------ -------------- --------------
Net assets ......................... $177,285,461 $231,782,126 $238,306,211 $2,003,971,557 $1,054,681,348
============ ============ ============ ============== ==============
Capital shares outstanding (Note 4) ............. 10,522,965 14,874,143 20,110,958 76,557,302 60,887,052
------------ ------------ ------------ -------------- --------------
Net asset value, offering price and
redemption price per share .................... $ 16.85 $ 15.58 $ 11.85 $ 26.18 $ 17.32
============ ============ ============ ============== ==============
Investments in securities, at
identified cost (Note 2) ...................... $208,401,828 $235,925,306 $257,418,907 $1,369,828,021 $ 907,154,909
============ ============ ============ ============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 8
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
ASSET ASSET ASSET HIGH
BALANCED ALLOCATION ALLOCATION ALLOCATION YIELD
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value
(Includes repurchase agreements of
$27,077,000 and $20,293,000 in the
Balanced and Conservative Asset
Allocation Trusts, respectively)
(See accompanying portfolio of
investments) .................................... $226,622,011 $289,423,785 $679,830,039 $201,348,028 $174,414,638
Receivable for forward foreign
currency contracts to sell (Notes 2
and 8) .......................................... -- 139,574 286,791 59,417 5,755,066
Forward foreign currency contracts to
buy, at value (Cost: $402,797)
(Notes 2 and 8) ................................. 401,518 -- -- -- --
Cash .............................................. 599 887 841 10,703 115
Foreign currency (Cost: $171,703,
$69,237, $194,032,
$43,564 and $32,860 in the Balanced,
Aggressive, Moderate and Conservative
Asset Allocation and High Yield
Trusts, respectively) (Note 2) .................. 169,841 68,915 191,818 43,172 32,856
Receivables:
Investments sold ........................... 2,944,244 720,936 1,731,780 209,024 1,486,117
Variation margin for open futures
contracts ................................ -- 6,375 12,750 2,125 14,031
Dividends and interest ..................... 1,064,456 856,524 3,651,914 1,261,127 2,380,463
Foreign tax withholding reclaims ........... 41,141 38,632 64,986 11,907 --
Other assets ...................................... 1,398 1,829 4,412 1,878 862
------------ ------------ ------------ ------------ ------------
Total assets ........................... 231,245,208 291,257,457 685,775,331 202,947,381 184,084,148
------------ ------------ ------------ ------------ ------------
LIABILITIES
Forward foreign currency contracts to
sell, at value (Cost: $139,574,
$286,791, $59,417 and $5,755,066 in
the Aggressive, Moderate and
Conservative Asset Allocation and
High Yield Trusts, respectively)
(Notes 2 and 8).................................. -- 140,144 289,179 59,659 5,735,009
Payables:
Forward foreign currency contracts
to buy (Notes 2 and 8) ................... 402,797 -- -- -- --
Investments purchased ...................... 2,877,023 999,817 3,607,089 214,702 2,609,055
Variation margin for open futures
contracts ................................ -- 34,682 -- -- --
Dividend and interest withholding
tax ...................................... 7,091 8,907 17,238 3,488 21,287
Custodian fee .............................. 10,217 34,789 39,385 25,038 555
Securities lending ......................... 14,916,924 29,889,882 50,973,414 6,707,621 11,692,053
Other accrued expenses ..................... 8,479 10,496 24,190 8,427 8,102
------------ ------------ ------------ ------------ ------------
Total liabilities ....................... 18,222,531 31,118,717 54,950,495 7,018,935 20,066,061
------------ ------------ ------------ ------------ ------------
NET ASSETS ........................................ $213,022,677 $260,138,740 $630,824,836 $195,928,446 $164,018,087
============ ============ ============ ============ ============
Net assets consist of:
Undistributed net investment
income (Note 2) .......................... $ 2,702,866 $ 2,164,860 $ 9,568,701 $ 4,199,825 $ 5,009,701
Accumulated undistributed net
realized gain on investments,
futures, foreign currency and
forward foreign currency
contracts ................................ 12,051,013 12,807,961 27,573,979 5,583,931 1,351,822
Unrealized appreciation
(depreciation) on:
Investments ............................. 13,606,974 59,394,053 105,969,789 17,607,817 (820,315)
Futures contracts ....................... -- 321,546 (72,787) (12,131) (1,969)
Foreign currency and forward
foreign currency contracts .............. (3,828) 521 (3,064) (726) 20,022
Capital shares at par value of
$.01 (Note 4) ............................ 114,528 178,250 491,928 171,967 116,300
Additional paid-in capital ................. 184,551,124 185,271,549 487,296,290 168,377,763 158,342,526
------------ ------------ ------------ ------------ ------------
Net assets ........................... $213,022,677 $260,138,740 $630,824,836 $195,928,446 $164,018,087
============ ============ ============ ============ ============
Capital shares outstanding (Note 4) ............... 11,452,816 17,825,011 49,192,836 17,196,677 11,630,003
------------ ------------ ------------ ------------ ------------
Net asset value, offering price and
redemption price per share ...................... $ 18.60 $ 14.59 $ 12.82 $ 11.39 $ 14.10
============ ============ ============ ============ ============
Investments in securities, at
identified cost (Note 2) ........................ $213,015,037 $230,029,732 $573,860,250 $183,740,211 $175,234,953
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 9
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL CAPITAL INVESTMENT U.S.
STRATEGIC GOVERNMENT GROWTH QUALITY GOVERNMENT
BOND BOND BOND BOND SECURITIES
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value
(Includes repurchase agreements of
$8,774,000 and $76,539,000 in the
Capital Growth Bond and U.S.
Government Securities Trusts,
respectively) (See accompanying
portfolio of investments) .................... $504,827,141 $206,917,986 $59,033,529 $303,758,821 $394,506,203
Receivable for forward foreign
currency contracts to sell (Notes 2
and 8) ....................................... 23,864,932 216,293,725 -- -- --
Forward foreign currency contracts to
buy, at value (Cost: $16,090,394 and
$181,403,412 in the Strategic Bond
and Global Government Bond Trusts,
respectively) (Notes 2 and 8) ................ 15,854,820 180,936,090 -- -- --
Cash ........................................... -- 15,471 108 383 32
Foreign currency (Cost: $14,713 and
$8,005,316 in the Strategic Bond and
Global Government Bond Trusts,
respectively) (Note 2) ....................... 14,564 8,217,300 -- -- --
Receivables:
Investments sold ........................ -- 684,606 -- -- --
Dividends and interest .................. 6,599,025 4,719,779 869,922 4,485,559 2,229,814
Foreign tax withholding reclaims ........ -- -- -- -- --
Other assets ................................... 2,725 1,443 382 1,422 1,874
------------ ------------ ----------- ------------ ------------
Total assets ........................ 551,163,207 617,786,400 59,903,941 308,246,185 396,737,923
------------ ------------ ----------- ------------ ------------
LIABILITIES
Forward foreign currency contracts to
sell, at value (Cost: $23,864,932 and
$216,293,725 in the Strategic Bond
and Global Government Bond Trust,
respectively) (Notes 2 and 8) ................ 23,432,330 213,637,395 -- -- --
Payables:
Forward foreign currency
contracts to buy (Notes 2 and 8) ...... 16,090,394 181,403,412 -- -- --
Investments purchased ................... 58,573,266 1,574,368 -- 184,229 71,935,302
Dividend and interest withholding
tax ................................... 3,769 -- -- 297 --
Due to custodian ........................ 45,579 -- -- -- --
Custodian fee ........................... 19,485 29,628 2,718 5,510 1,942
Securities lending ...................... 31,987,817 20,698,000 1,270,000 61,573,772 39,208,651
Other accrued expenses .................. 21,703 7,622 3,052 9,651 13,989
Deferred mortgage dollar roll income ........... 25,914 -- -- -- 30,062
------------ ------------ ----------- ------------ ------------
Total liabilities .................... 130,200,257 417,350,425 1,275,770 61,773,459 111,189,946
------------ ------------ ----------- ------------ ------------
NET ASSETS ..................................... $420,962,950 $200,435,975 $58,628,171 $246,472,726 $285,547,977
============ ============ =========== ============ ============
Net assets consist of:
Undistributed net investment
income (Note 2) ....................... $ 14,435,526 $ 4,692,678 $ 1,609,693 $ 7,417,531 $ 8,311,846
Accumulated undistributed net
realized gain (loss) on
investments, foreign currency
and forward foreign currency
contracts ............................. 2,690,671 200,702 (940,353) (2,361,931) (2,831,090)
Unrealized appreciation
(depreciation) on:
Investments ........................... 722,737 (4,387,906) 2,141,657 4,408,576 3,529,223
Foreign currency and forward
foreign currency contracts .......... 184,161 2,193,023 -- -- --
Capital shares at par value of
$.01 (Note 4) ....................... 354,552 155,166 50,560 206,413 214,882
Additional paid-in capital .............. 402,575,303 197,582,312 55,766,614 236,802,137 276,323,116
------------ ------------ ----------- ------------ ------------
Net assets ........................ $420,962,950 $200,435,975 $58,628,171 $246,472,726 $285,547,977
============ ============ =========== ============ ============
Capital shares outstanding (Note 4) ............ 35,455,243 15,516,606 5,055,965 20,641,355 21,488,200
------------ ------------ ----------- ------------ ------------
Net asset value, offering price and
redemption price per share ................... $ 11.87 $ 12.92 $ 11.60 $ 11.94 $ 13.29
============ ============ =========== ============ ============
Investments in securities, at
identified cost (Note 2) ..................... $504,104,404 $211,305,892 $56,891,872 $299,350,245 $390,976,980
============ ============ =========== ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 10
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE
MONEY AGGRESSIVE GROWTH BALANCED MODERATE CONSERVATIVE
MARKET 1000 820 640 460 280
ASSETS TRUST TRUST TRUST TRUST TRUST TRUST
------------ ----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investments in securities,
at value (See accompanying
portfolio of investments) ................ $497,234,248 $70,178,574 $321,612,502 $310,543,892 $97,117,271 $44,252,542
Cash ....................................... 237 2,427 -- 1,823 -- 72
Receivables:
Dividends and interest............... 4,060,148 -- -- -- 1,349 1,231
From adviser ........................ -- 1,486 15,054 10,577 2,477 1,286
Other assets ............................... 2,990 421 1,942 1,774 505 219
------------ ----------- ------------ ------------ ----------- -----------
Total assets .................... 501,297,623 70,182,908 321,629,498 310,558,066 97,121,602 44,255,350
------------ ----------- ------------ ------------ ----------- -----------
LIABILITIES
Payables:
Dividends ........................... 69,765 -- -- -- 1,349 1,231
Custodian fee ....................... 1,682 -- -- -- -- --
Other accrued expenses .............. 19,069 1,687 16,289 12,352 2,981 1,505
------------ ----------- ------------ ------------ ----------- -----------
Total liabilities ................ 90,516 1,687 16,289 12,352 4,330 2,736
------------ ----------- ------------ ------------ ----------- -----------
NET ASSETS ................................. $501,207,107 $70,181,221 $321,613,209 $310,545,714 $97,117,272 $44,252,614
============ =========== ============ ============ =========== ===========
Net assets consist of:
Accumulated undistributed net
realized gain on investments ...... -- $ 1,173,751 $ 3,464,813 $ 2,295,967 $ 750,492 $ 115,105
Unrealized appreciation
on investments .................... -- 1,960,187 9,146,808 4,546,249 2,120,945 327,243
Capital shares at par value
of $.01 (Note 4) .................. $ 501,207 50,529 227,427 226,752 70,986 34,017
Additional paid-in capital .......... 500,705,900 66,996,754 308,774,161 303,476,746 94,174,849 43,776,249
------------ ----------- ------------ ------------ ----------- -----------
Net assets .................... $501,207,107 $70,181,221 $321,613,209 $310,545,714 $97,117,272 $44,252,614
============ =========== ============ ============ =========== ===========
Capital shares outstanding (Note 4) ........ 50,120,711 5,052,923 22,742,694 22,675,211 7,098,605 3,401,715
------------ ----------- ------------ ------------ ----------- -----------
Net asset value, offering price and
redemption price per share ............... $ 10.00 $ 13.89 $ 14.14 $ 13.70 $ 13.68 $ 13.01
============ =========== ============ ============ =========== ===========
Investments in securities,
at identified cost (Note 2) .............. $497,234,248 $68,218,387 $312,465,694 $305,997,643 $94,996,326 $43,925,299
============ =========== ============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 11
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM PILGRIM
EMERGING SCIENCE & INTERNATIONAL EMERGING BAXTER
MARKETS TECHNOLOGY SMALL CAP GROWTH GROWTH
TRUST TRUST TRUST TRUST TRUST
----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $325 withholding
tax in the Pacific Rim Emerging
Markets Trust) ........................... $ 113,893 $ 129,157 $ 715,395 $ 620,162 $ 234,356
Dividends (Net of $25,870, $2,415,
$101,171 and $73 withholding tax
in the Pacific Rim Emerging Markets,
Science & Technology, International
Small Cap and Pilgrim Baxter Growth
Trusts, respectively) .................... 194,180 35,157 622,170 201,646 14,891
----------- ----------- ----------- ----------- -----------
Total income ....................... 308,073 164,314 1,337,565 821,808 249,247
----------- ----------- ----------- ----------- -----------
Expenses:
Investment adviser fee (Note 6) ............ 107,866 487,213 781,163 1,513,395 579,493
Custodian fee .............................. 50,497 35,570 86,115 39,165 30,644
Audit and legal fees ....................... 1,157 3,001 7,358 11,014 3,479
Registration and filing fees ............... 900 3,882 4,832 9,884 4,982
Trustees fees and expenses (Note 7) ........ 383 1,237 1,980 4,140 1,374
Miscellaneous .............................. 215 413 691 1,423 581
----------- ----------- ----------- ----------- -----------
Total expenses ..................... 161,018 531,316 882,139 1,579,021 620,553
----------- ----------- ----------- ----------- -----------
Net investment income (loss) ....... 147,055 (367,002) 455,426 (757,213) (371,306)
----------- ----------- ----------- ----------- -----------
Realized and unrealized gain (loss) on
investments, foreign currency and forward
foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ................... (3,522,649) 2,469,151 3,257,394 12,657,678 7,147,217
Foreign currency and forward foreign
currency contracts ...................... (284,374) (991) (139,080) -- 5
Change in unrealized appreciation
(depreciation) on:
Investments ............................... (510,646) 10,887,983 24,259,611 5,300,299 (1,447,223)
Translation of foreign currency and
forward foreign currency contracts ...... 25,055 (25) 15,218 -- --
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments,
foreign currency and forward
foreign currency contracts ....... (4,292,614) 13,356,118 27,393,143 17,957,977 5,699,999
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations ................................. $(4,145,559) $12,989,116 $27,848,569 $17,200,764 $ 5,328,693
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 12
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
SMALL/MID INTERNATIONAL WORLDWIDE GLOBAL COMPANY
CAP STOCK GROWTH EQUITY VALUE
TRUST TRUST TRUST TRUST TRUST
----------- ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest ............................... $ 474,784 $ 225,682 $ 157,427 $ 384,407 $ 73,649
Dividends (Net of $292,122, $26,914,
$976,501 and $1,608 withholding
tax in the International Stock,
Worldwide Growth, Global Equity
and Small Company Value Trusts,
respectively) ........................ 536,923 2,070,051 213,038 9,966,885 628,810
----------- ----------- ---------- ------------ -----------
Total income ................... 1,011,707 2,295,733 370,465 10,351,292 702,459
----------- ----------- ---------- ------------ -----------
Expenses:
Investment adviser fee (Note 6) ........ 1,497,809 919,380 147,898 4,238,674 514,225
Custodian fee .......................... 36,941 152,372 26,057 383,095 66,218
Audit and legal fees ................... 11,012 5,625 1,075 39,465 3,008
Registration and filing fees ........... 10,318 5,813 1,348 31,514 3,083
Trustees fees and expenses (Note 7) .... 4,426 2,211 371 13,927 1,185
Miscellaneous .......................... 1,669 3,292 124 7,707 333
----------- ----------- ---------- ------------ -----------
Total expenses ................. 1,562,175 1,088,693 176,873 4,714,382 588,052
----------- ----------- ---------- ------------ -----------
Net investment income (loss) ... (550,468) 1,207,040 193,592 5,636,910 114,407
----------- ----------- ---------- ------------ -----------
Realized and unrealized gain on investments,
foreign currency and forward foreign currency
contracts:
Net realized gain (loss) on:
Investment transactions ............... 29,621,911 (714,203) 701,359 42,160,747 (1,161,580)
Foreign currency and forward foreign
currency contracts .................. -- (60,382) (33,736) (488,807) --
Change in unrealized appreciation
(depreciation) on:
Investments ........................... 26,089,821 20,587,381 2,562,556 62,035,268 3,317,577
Translation of foreign currency and
forward foreign currency contracts .. -- 12,809 422 (526,201) --
----------- ----------- ---------- ------------ -----------
Net gain on investments, foreign
currency and forward foreign
currency contracts ........... 55,711,732 19,825,605 3,230,601 103,181,007 2,155,997
----------- ----------- ---------- ------------ -----------
Net increase in net assets resulting
from operations ............................. $55,161,264 $21,032,645 $3,424,193 $108,817,917 $ 2,270,404
=========== =========== ========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 13
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE EQUITY BLUE CHIP
EQUITY GROWTH EQUITY INDEX GROWTH
TRUST TRUST TRUST TRUST TRUST
------------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest ................................ $ 788,091 $ 566,152 $ 346,022 $ 183,559 $ 1,419,045
Dividends (Net of $83,369, $2,178,
$473, $1,681 and $29,218 withholding
tax in the Equity, Growth,
Quantitative Equity, Equity Index
and Blue Chip Growth Trusts,
respectively) ......................... 8,350,685 840,496 1,285,823 222,462 4,154,549
------------ ----------- ----------- ---------- ------------
Total income .................... 9,138,776 1,406,648 1,631,845 406,021 5,573,594
------------ ----------- ----------- ---------- ------------
Expenses:
Investment adviser fee (Note 6) ......... 5,976,489 858,799 672,433 44,873 3,689,816
Custodian fee ........................... 207,318 37,032 36,247 51,578 88,051
Audit and legal fees .................... 67,922 7,261 7,224 1,309 31,906
Registration and filing fees ............ 75,053 6,738 6,495 1,553 36,811
Trustees fees and expenses (Note 7) ..... 23,862 2,771 2,688 493 11,648
Miscellaneous ........................... 8,939 1,070 1,954 4,233 3,705
------------ ----------- ----------- ---------- ------------
Expenses before reimbursement by
investment adviser ................... 6,359,583 913,671 727,041 104,039 3,861,937
Reimbursement of expenses by
investment adviser (Note 6) .......... -- -- -- 28,149 --
------------ ----------- ----------- ---------- ------------
Net expenses .................... 6,359,583 913,671 727,041 75,890 3,861,937
------------ ----------- ----------- ---------- ------------
Net investment income ........... 2,779,193 492,977 904,804 330,131 1,711,657
------------ ----------- ----------- ---------- ------------
Realized and unrealized gain on investments,
futures, foreign currency and forward
foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ................ 116,872,854 11,156,130 25,509,149 11,369 37,732,243
Futures contracts ...................... -- -- -- 1,031,469 --
Foreign currency and forward foreign
currency contracts ................... 61,002 (209) -- -- (16,676)
Change in unrealized appreciation
(depreciation) on:
Investments ............................ 55,503,876 23,715,584 (383,680) 3,948,845 86,060,758
Futures contracts ...................... -- -- -- 204,937 --
Translation of foreign currency and
forward foreign currency contracts ... (1,919) (680) -- -- (6)
----------- ----------- ---------- ------------
Net gain on investments, futures,
foreign currency and forward
foreign currency contracts .... 172,435,813 34,870,825 25,125,469 5,196,620 123,776,319
------------ ----------- ----------- ---------- ------------
Net increase in net assets resulting
from operations .............................. $175,215,006 $35,363,802 $26,030,273 $5,526,751 $125,487,976
============ =========== =========== ========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE> 14
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL
REAL ESTATE GROWTH AND GROWTH AND EQUITY-
SECURITIES VALUE INCOME INCOME INCOME
TRUST TRUST TRUST TRUST TRUST
------------ ---------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $331 withholding tax in the
International Growth and Income Trust) ................. $ 55,995 $ 595,584 $ 244,499 $ 1,013,624 $ 2,071,688
Dividends (Net of $7,920 $316,030, $98,350
and $79,682 withholding tax in the Value,
International Growth and Income, Growth
and Income and Equity-Income Trusts,
respectively) .......................................... 4,780,950 1,605,464 2,375,537 13,759,023 12,831,077
------------ ---------- ----------- ------------ -----------
Total income ........................................ 4,836,945 2,201,048 2,620,036 14,772,647 14,902,765
------------ ---------- ----------- ------------ -----------
Expenses:
Investment adviser fee (Note 6) .......................... 591,122 770,544 1,068,996 6,779,315 4,024,045
Custodian fee ............................................ 28,805 40,024 188,542 146,863 108,979
Audit and legal fees ..................................... 6,403 6,116 9,566 73,539 41,216
Registration and filing fees ............................. 5,746 6,304 7,739 60,159 34,510
Amortization of deferred organization
expenses (Note 2) ...................................... -- -- 4,820 -- 275
Trustees fees and expenses (Note 7) ...................... 1,824 2,346 3,285 26,566 14,936
Miscellaneous ............................................ 2,350 901 8,600 8,452 4,750
------------ ---------- ----------- ------------ -----------
Total expenses ...................................... 636,250 826,235 1,291,548 7,094,894 4,228,711
------------ ---------- ----------- ------------ -----------
Net investment income ............................... 4,200,695 1,374,813 1,328,488 7,677,753 10,674,054
------------ ---------- ----------- ------------ -----------
Realized and unrealized gain (loss) on investments,
foreign currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ................................ 5,288,196 5,603,153 10,823,618 26,662,983 32,204,701
Foreign currency and forward foreign
currency contracts ................................... -- -- (1,514,574) -- 356
Change in unrealized appreciation (depreciation) on:
Investments ............................................ (17,596,152) 897,491 16,165,391 238,748,286 18,106,592
Translation of foreign currency and
forward foreign currency contracts ................... -- -- (663,657) (544) 1,095
------------ ---------- ----------- ------------ -----------
Net gain (loss) on investments, foreign currency
and forward foreign currency contracts ............ (12,307,956) 6,500,644 24,810,778 265,410,725 50,312,744
------------ ---------- ----------- ------------ -----------
Net increase (decrease) in net assets resulting
from operations ............................................ ($8,107,261) $7,875,457 $26,139,266 $273,088,478 $60,986,798
============ ========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE> 15
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE MODERATE CONSERVATIVE
ASSET ASSET ASSET HIGH
BALANCED ALLOCATION ALLOCATION ALLOCATION YIELD
TRUST TRUST TRUST TRUST TRUST
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest .............................................. $ 2,259,515 $ 1,711,963 $ 9,326,566 $ 4,669,558 $ 5,390,820
Dividends (Net of $30,884, $83,088, $144,819
and $9,993 withholding tax in the Balanced,
Aggressive, Moderate and Conservative Asset
Allocation Trusts, respectively) .................... 1,294,046 1,564,707 2,847,278 427,357 193,853
----------- ----------- ----------- ----------- -----------
Total income ..................................... 3,553,561 3,276,670 12,173,844 5,096,915 5,584,673
----------- ----------- ----------- ----------- -----------
Expenses:
Investment adviser fee (Note 6) ....................... 789,075 956,370 2,334,788 745,483 490,270
Custodian fee ......................................... 42,938 130,760 209,563 111,729 29,087
Audit and legal fees .................................. 8,134 10,918 27,302 8,985 4,002
Registration and filing fees .......................... 6,694 8,617 21,005 6,724 4,037
Trustees fees and expenses (Note 7) ................... 2,913 3,844 9,435 3,064 1,599
Miscellaneous ......................................... 941 1,301 3,050 828 2,476
----------- ----------- ----------- ----------- -----------
Total expenses ................................... 850,695 1,111,810 2,605,143 876,813 531,471
----------- ----------- ----------- ----------- -----------
Net investment income ............................ 2,702,866 2,164,860 9,568,701 4,220,102 5,053,202
----------- ----------- ----------- ----------- -----------
Realized and unrealized gain (loss) on investments,
futures, foreign currency and forward foreign
currency contracts:
Net realized gain (loss) on:
Investment transactions ............................. 12,172,382 13,197,630 28,555,711 5,764,155 1,318,341
Futures contracts ................................... -- 244,031 (17,824) (52,875) --
Foreign currency and forward foreign
currency contracts ................................. (55,474) (32,696) (55,263) (3,701) 34,029
Change in unrealized appreciation (depreciation) on:
Investments ......................................... 2,716,300 17,104,676 25,108,666 2,867,761 (1,794,919)
Futures contracts -- 428,825 (47,881) (13,905) (1,969)
Translation of foreign currency and
forward foreign currency contracts ................. (3,667) 6,404 9,840 1,589 (23,141)
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments, futures, foreign
currency and forward foreign currency
contracts....................................... 14,829,541 30,948,870 53,553,249 8,563,024 (467,659)
----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations ......................................... $17,532,407 $33,113,730 $63,121,950 $12,783,126 $ 4,585,543
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 16
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
GLOBAL CAPITAL INVESTMENT U.S.
STRATEGIC GOVERNMENT GROWTH QUALITY GOVERNMENT
BOND BOND BOND BOND SECURITIES
TRUST TRUST TRUST TRUST TRUST
----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $2,367, $21,468 and $297
withholding tax in the Strategic Bond, Global
Government Bond and Investment Quality
Bond Trusts, respectively) ................................ $16,111,869 $ 7,102,280 $1,809,966 $8,165,783 $8,870,982
Mortgage dollar rolls ....................................... 335,866 -- -- -- 406,843
Dividends ................................................... 941 -- -- 15,188 --
----------- ----------- ---------- ---------- ----------
Total income ............................................ 16,448,676 7,102,280 1,809,966 8,180,971 9,277,825
----------- ----------- ---------- ---------- ----------
Expenses:
Investment adviser fee (Note 6) ............................. 1,533,527 837,114 181,151 691,242 868,869
Custodian fee ............................................... 111,691 129,999 13,035 53,100 56,910
Audit and legal fees ........................................ 15,506 9,735 2,388 8,319 10,771
Registration and filing fees ................................ 13,389 7,129 2,597 6,763 8,844
Trustees fees and expenses (Note 7) ......................... 5,597 3,228 841 3,014 3,765
Miscellaneous ............................................... 2,379 1,072 261 1,002 1,228
----------- ----------- ---------- ---------- ----------
Net expenses ............................................ 1,682,089 988,277 200,273 763,440 950,387
----------- ----------- ---------- ---------- ----------
Net investment income ................................... 14,766,587 6,114,003 1,609,693 7,417,531 8,327,438
----------- ----------- ---------- ---------- ----------
Realized and unrealized gain (loss) on investments,
foreign currency and forward foreign currency
contracts:
Net realized gain (loss) on:
Investment transactions ................................... 3,086,917 6,147,698 (83,289) 752,071 564,876
Foreign currency and forward foreign
currency contracts ...................................... (213,618) (5,899,970) -- -- --
Change in unrealized appreciation (depreciation) on:
Investments ............................................... (7,455,266) (3,350,167) 450,757 697,766 (28,745)
Translation of foreign currency and
forward foreign currency contracts ...................... (174,083) (126,093) -- -- --
----------- ----------- ---------- ---------- ----------
Net gain (loss) on investments, foreign currency
and forward foreign currency contracts ................ (4,756,050) (3,228,532) 367,468 1,449,837 536,131
----------- ----------- ---------- ---------- ----------
Net increase in net assets resulting
from operations ............................................... $10,010,537 $ 2,885,471 $1,977,161 $8,867,368 $8,863,569
=========== =========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE> 17
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE
MONEY AGGRESSIVE GROWTH BALANCED MODERATE CONSERVATIVE
MARKET 1000 820 640 460 280
TRUST TRUST TRUST TRUST TRUST TRUST
----------- ---------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest ..................................... $13,713,259 -- -- -- -- --
Income distributions received ................ -- $ 228,455 $ 3,192,876 $ 4,453,311 $1,879,193 $ 1,069,988
----------- ---------- ----------- ----------- ---------- -----------
Total income ............................. 13,713,259 228,455 3,192,876 4,453,311 1,879,193 1,069,988
----------- ---------- ----------- ----------- ---------- -----------
Expenses:
Investment adviser fee (Note 6) .............. 1,209,263 -- -- -- -- --
Custodian fee ................................ 47,278 -- -- -- -- --
Audit and legal fees ......................... 19,810 1,971 9,036 8,329 2,399 1,022
Registration and filing fees ................. 14,944 2,627 11,715 10,698 3,072 1,285
Trustee fees and expenses (Note 7) ........... 6,668 849 3,799 3,463 987 410
Miscellaneous ................................ 4,074 241 1,061 939 266 107
----------- ---------- ----------- ----------- ---------- -----------
Expenses before reimbursement
by investment adviser ...................... 1,302,037 5,688 25,611 23,429 6,724 2,824
Reimbursement of expenses by
investment adviser (Note 6) ................ -- 5,688 25,611 23,429 6,724 2,824
----------- ---------- ----------- ----------- ---------- -----------
Net expenses ............................. 1,302,037 -- -- -- -- --
----------- ---------- ----------- ----------- ---------- -----------
Net investment income .................... 12,411,222 228,455 3,192,876 4,453,311 1,879,193 1,069,988
----------- ---------- ----------- ----------- ---------- -----------
Realized and unrealized gain on investments:
Net realized gain on investments ............. -- 1,222,573 3,555,998 2,361,160 781,027 135,085
Capital gain distributions received .......... -- 1,360,505 5,597,174 6,239,232 889,965 510,860
Change in unrealized appreciation
(depreciation) on investments .............. -- 1,730,260 6,947,961 1,071,618 857,071 (143,901)
----------- ---------- ----------- ----------- ---------- -----------
Net gain on investments .................. -- 4,313,338 16,101,133 9,672,010 2,528,063 502,044
----------- ---------- ----------- ----------- ---------- -----------
Net increase in net assets resulting
from operations ................................ $12,411,222 $4,541,793 $19,294,009 $14,125,321 $4,407,256 $ 1,572,032
=========== ========== =========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE> 18
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
PACIFIC RIM SCIENCE & INTERNATIONAL
EMERGING MARKETS TECHNOLOGY SMALL CAP
TRUST TRUST TRUST
-------------------------- -------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED 1/01/1997* ENDED YEAR
6/30/98 ENDED 6/30/98 TO 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
----------- ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ............. $ 147,055 $ 174,510 $ (367,002) $ (182,355) $ 455,426 $ 767,426
Net realized gain (loss) on:
Investment transactions ................ (3,522,649) (338,181) 2,469,151 187,775 3,257,394 (3,601,942)
Foreign currency and
forward foreign
currency contracts ................... (284,374) (386,822) (991) -- (139,080) (318,266)
Change in unrealized appreciation
(depreciation) on:
Investments ............................ (510,646) (10,316,270) 10,887,983 (1,610,969) 24,259,611 3,451,228
Foreign currency and
forward foreign
currency contracts ................... 25,055 (85,137) (25) -- 15,218 (37,787)
----------- ------------ ------------ ----------- ------------ ------------
Net increase (decrease) in
net assets resulting
from operations ........................ (4,145,559) (10,951,900) 12,989,116 (1,605,549) 27,848,569 260,659
Distribution to
shareholders from:
Net investment income .................. -- -- -- -- (437,568) (56,628)
Net realized gains on
investments and foreign
currency transactions ............... -- -- -- (187,775) -- --
Distribution to shareholders:
In excess of net realized
gains on investments
and foreign currency
transactions ........................ -- (72,382) -- (873,300) -- --
Increase in net assets
from capital share
transactions (Note 4) .................. 4,423,829 11,633,402 29,502,476 70,014,200 1,143,060 31,153,786
----------- ------------ ------------ ----------- ------------ ------------
Increase in net assets ................... 278,270 609,120 42,491,592 67,347,576 28,554,061 31,357,817
Net assets at beginning
of period ............................... 23,850,324 23,241,204 67,347,576 -- 128,575,710 97,217,893
----------- ------------ ------------ ----------- ------------ ------------
Net assets at end
of period ............................... $24,128,594 $ 23,850,324 $109,839,168 $67,347,576 $157,129,771 $128,575,710
=========== ============ ============ =========== ============ ============
Undistributed net
investment income (loss) ............... $ 54,795 $ (92,260) $ (367,002) -- $ 462,127 $ 444,269
=========== ============ ============ =========== ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
15
<PAGE> 19
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
PILGRIM
EMERGING GROWTH BAXTER GROWTH SMALL/MID CAP
TRUST TRUST TRUST
--------------------------- -------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED 1/01/1997* ENDED 1/01/1997* ENDED YEAR
6/30/98 TO 6/30/98 TO 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment loss .................... $ (757,213) $ (279,938) $ (371,306) $ (221,842) $ (550,468) $ (710,421)
Net realized gain (loss) on:
Investment transactions .............. 12,657,678 4,042,230 7,147,217 (4,090,189) 29,621,911 5,771,995
Foreign currency and
forward foreign
currency contracts ................. -- -- 5 -- -- --
Change in unrealized appreciation
(depreciation) on:
Investments .......................... 5,300,299 32,648,479 (1,447,223) 6,765,675 26,089,821 22,179,663
------------ ------------ ------------ ----------- ------------ ------------
Net increase in net assets
resulting from operations ............ 17,200,764 36,410,771 5,328,693 2,453,644 55,161,264 27,241,237
Distribution to
shareholders from:
Net investment income ................ (4,130,364) -- -- -- -- --
Increase in net assets
from capital share
transactions (Note 4) ................ 16,069,906 239,363,310 25,168,451 90,881,502 14,311,331 65,073,710
------------ ------------ ------------ ----------- ------------ ------------
Increase in net assets ................. 29,140,306 275,774,081 30,497,144 93,335,146 69,472,595 92,314,947
Net assets at beginning
of period ............................ 275,774,081 -- 93,335,146 -- 268,376,512 176,061,565
------------ ------------ ------------ ----------- ------------ ------------
Net assets at end
of period ............................ $304,914,387 $275,774,081 $123,832,290 $93,335,146 $337,849,107 $268,376,512
============ ============ ============ =========== ============ ============
Undistributed net
investment loss ...................... $ (757,213) -- $ (371,306) $ (221,842) $ (550,468) --
============ ============ ============ =========== ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 20
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
INTERNATIONAL WORLDWIDE GLOBAL
STOCK GROWTH EQUITY
TRUST TRUST TRUST
--------------------------- ------------------------- ----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED 1/01/1997* ENDED 1/01/1997* ENDED YEAR
6/30/98 TO 6/30/98 TO 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ................. $ 1,207,040 $ 456,533 $ 193,592 $ 75,736 $ 5,636,910 $ 8,211,359
Net realized gain (loss) on:
Investment transactions ............. (714,203) 798,600 701,359 63,299 42,160,747 48,944,044
Foreign currency and
forward foreign
currency contracts ................ (60,382) (160,401) (33,736) (26,045) (488,807) 7,211,837
Change in unrealized appreciation
(depreciation) on:
Investments ......................... 20,587,381 (4,119,284) 2,562,556 771,847 62,035,268 85,480,417
Foreign currency and
forward foreign
currency contracts ................ 12,809 (5,560) 422 (428) (526,201) 703,851
------------ ------------ ----------- ----------- ------------ -------------
Net increase (decrease) in
net assets resulting
from operations ..................... 21,032,645 (3,030,112) 3,424,193 884,409 108,817,917 150,551,508
Distribution to
shareholders from:
Net investment income .............. (9,935) (355,257) -- (57,051) (16,146,782) (10,702,845)
Net realized gains on
investments and foreign
currency transactions ............ -- (638,199) -- (37,254) (48,191,144) (62,223,834)
Distribution to shareholders:
In excess of net
investment income ................ -- -- -- (809) -- --
In excess of net realized
gains on investments
and foreign currency
transactions ..................... -- (993,554) -- (113,582) -- --
Increase in net assets
from capital share
transactions (Note 4) ............... 36,826,364 150,270,019 6,893,927 23,586,322 59,762,149 63,945,517
------------ ------------ ----------- ----------- ------------ -------------
Increase in net assets ................ 57,849,074 145,252,897 10,318,120 24,262,035 104,242,140 141,570,346
Net assets at beginning
of period ........................... 145,252,897 -- 24,262,035 -- 868,412,747 726,842,401
------------ ------------ ----------- ----------- ------------ -------------
Net assets at end
of period ........................... $203,101,971 $145,252,897 $34,580,155 $24,262,035 $972,654,887 $ 868,412,747
============ ============ =========== =========== ============ =============
Undistributed net
investment income (loss) ............ $ 1,207,033 $ 9,928 $ 186,232 $ (7,360) $ 5,156,770 $ 15,666,642
============ ============ =========== =========== ============ =============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
17
<PAGE> 21
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
SMALL
COMPANY
VALUE EQUITY GROWTH
TRUST TRUST TRUST
-------------------------- ------------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED 10/01/1997* ENDED YEAR ENDED YEAR
6/30/98 TO 6/30/98 ENDED 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ----------- -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income .............. $ 114,407 $ 69,004 $ 2,779,193 $ 4,967,526 $ 492,977 $ 818,315
Net realized gain (loss) on:
Investment transactions .......... (1,161,580) (762,160) 116,872,854 288,434,853 11,156,130 8,261,706
Foreign currency and
forward foreign
currency contracts ............ -- -- 61,002 (79,750) (209) (32,648)
Change in unrealized
appreciation
(depreciation) on:
Investments ...................... 3,317,577 (1,242,712) 55,503,876 (49,085,206) 23,715,584 11,548,165
Foreign currency and
forward foreign
currency contracts ............ -- -- (1,919) 2 (680) 188
------------ ----------- -------------- -------------- ------------ ------------
Net increase(decrease)
in net assets resulting
from operations .................. 2,270,404 (1,935,868) 175,215,006 244,237,425 35,363,802 20,595,726
Distribution to
shareholders from:
Net investment income ............ (56,195) -- (4,882,009) (8,208,495) (785,667) (2,288)
Net realized gains on
investments and foreign
currency transactions ......... -- -- (288,587,683) (250,024,832) (7,656,124) --
Increase in net assets
from capital share
transactions (Note 4) ............ 57,895,565 69,026,952 246,387,393 189,916,612 46,199,494 89,987,989
------------ ----------- -------------- -------------- ------------ ------------
Increase in net assets ............. 60,109,774 67,091,084 128,132,707 175,920,710 73,121,505 110,581,427
Net assets at beginning
of period ........................ 67,091,084 -- 1,521,382,100 1,345,461,390 167,388,166 56,806,739
------------ ----------- -------------- -------------- ------------ ------------
Net assets at end
of period ........................ $127,200,858 $67,091,084 $1,649,514,807 $1,521,382,100 $240,509,671 $167,388,166
============ =========== ============== ============== ============ ============
Undistributed net
investment income ................ $ 114,327 $ 56,115 $ 2,779,193 $ 4,882,008 $ 492,977 $ 785,667
============ =========== ============== ============== ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
18
<PAGE> 22
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
QUANTITATIVE BLUE CHIP
EQUITY EQUITY INDEX GROWTH
TRUST TRUST TRUST
---------------------------- ------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
6/30/98 ENDED 6/30/98 ENDED 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ................. $ 904,804 $ 1,960,998 $ 330,131 $ 614,519 $ 1,711,657 $ 4,123,096
Net realized gain(loss) on:
Investment transactions ............. 25,509,149 21,256,016 11,369 111,548 37,732,243 11,907,336
Futures contracts ................... -- -- 1,031,469 3,580,341 -- --
Foreign currency and
forward foreign
currency contracts ............... -- -- -- -- (16,676) (94)
Change in unrealized appreciation
(depreciation) on:
Investments ......................... (383,680) 9,038,807 3,948,845 292,487 86,060,758 112,919,340
Futures contracts ................... -- -- 204,937 (201,241) -- --
Foreign currency and
forward foreign
currency contracts ............... -- -- -- -- (6) --
------------ ------------ ----------- ----------- ------------ ------------
Net increase in net
assets resulting from
operations .......................... 26,030,273 32,255,821 5,526,751 4,397,654 125,487,976 128,949,678
Distribution to
shareholders from:
Net investment income .............. (1,960,998) -- -- (614,519) (4,121,547) (898,962)
Net realized gains on
investments, futures
and foreign currency
transactions ..................... (21,211,052) -- (707,255) (2,783,548) (11,715,253) (76,558,164)
Increase in net assets
from capital share
transactions (Note 4) ............... 44,146,935 43,374,187 12,672,497 18,257,484 75,677,787 234,744,078
------------ ------------ ----------- ----------- ------------ ------------
Increase in net assets ................ 47,005,158 75,630,008 17,491,993 19,257,071 185,328,963 286,236,630
Net assets at beginning
of period ........................... 167,529,705 91,899,697 27,074,602 7,817,531 708,807,457 422,570,828
------------ ------------ ----------- ----------- ------------ ------------
Net assets at end
of period ........................... $214,534,863 $167,529,705 $44,566,595 $27,074,602 $894,136,420 $708,807,458
============ ============ =========== =========== ============ ============
Undistributed net
investment income ................... $ 904,804 $ 1,960,998 $ 330,131 -- $ 1,711,657 $ 4,121,547
============ ============ =========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE> 23
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
REAL ESTATE INTERNATIONAL
SECURITIES VALUE GROWTH AND INCOME
TRUST TRUST TRUST
--------------------------- -------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED 1/01/1997* ENDED YEAR
6/30/98 ENDED 6/30/98 TO 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ............... $ 4,200,695 $ 6,435,099 $ 1,374,813 $ 979,426 $ 1,328,488 $ 4,301,075
Net realized gain (loss) on:
Investment transactions ........... 5,288,196 15,106,323 5,603,153 2,848,645 10,823,618 6,819,325
Foreign currency and
forward foreign
currency contracts ............. -- -- -- -- (1,514,574) (7,637)
Change in unrealized
appreciation
(depreciation) on:
Investments ....................... (17,596,152) 1,710,688 897,491 5,320,474 16,165,391 (11,806,866)
Foreign currency and
forward foreign
currency contracts ............. -- -- -- -- (663,657) 594,255
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
in net assets resulting
from operations .................... (8,107,261) 23,252,110 7,875,457 9,148,545 26,139,266 (99,848)
Distribution to
shareholders from:
Net investment income ............. (4,711,304) -- -- (979,426) (5,087,750) (3,640,170)
Net realized gains on
investments and foreign
currency transactions .......... (16,427,838) -- -- (2,848,645) (6,913,043) (8,342,784)
Distribution to shareholders:
In excess of net realized
gains on investments
and foreign currency
transactions ................... -- -- -- (599,054) -- --
Increase in net assets
from capital share
transactions (Note 4) ............. 44,772,671 62,287,429 79,235,045 139,950,204 20,391,284 26,849,179
------------ ------------ ------------ ------------ ------------ ------------
Increase in net assets .............. 15,526,268 85,539,539 87,110,502 144,671,624 34,529,757 14,766,377
Net assets at beginning
of period ......................... 161,759,193 76,219,654 144,671,624 -- 203,776,454 189,010,077
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end
of period ......................... $177,285,461 $161,759,193 $231,782,126 $144,671,624 $238,306,211 $203,776,454
============ ============ ============ ============ ============ ============
Undistributed net
investment income ................. $ 4,298,188 $ 4,808,797 $ 1,374,813 -- $ 481,478 $ 4,240,740
============ ============ ============ ============ ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
20
<PAGE> 24
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
GROWTH AND INCOME EQUITY-INCOME BALANCED
TRUST TRUST TRUST
------------------------------- ----------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED 1/01/1997*
6/30/98 ENDED 6/30/98 ENDED 6/30/98 TO
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
-------------- -------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ........... $ 7,677,753 $ 15,322,986 $ 10,674,054 $ 18,962,919 $ 2,702,866 $ 4,677,007
Net realized gain (loss) on:
Investment transactions ....... 26,662,983 99,563,470 32,204,701 40,834,683 12,172,382 20,430,952
Foreign currency and
forward foreign
currency contracts ......... -- 1,285 356 (76,448) (55,474) (95,635)
Change in unrealized
appreciation
(depreciation) on:
Investments ................... 238,748,286 247,910,751 18,106,592 138,364,867 2,716,300 400,364
Foreign currency and
forward foreign
currency contracts ......... (544) (1,256) 1,095 245 (3,667) (161)
-------------- -------------- -------------- ------------ ------------ ------------
Net increase in net
assets resulting from
operations ..................... 273,088,478 362,797,236 60,986,798 198,086,266 17,532,407 25,412,527
Distribution to
shareholders from:
Net investment income ......... (15,313,773) (13,165,084) (18,698,833) (8,655,530) (4,637,642) --
Net realized gains on
investments, futures
and foreign currency
transactions ............... (99,563,470) (66,257,481) (40,844,225) (80,825,124) (20,360,461) --
Increase in net assets
from capital share
transactions (Note 4) ......... 240,373,044 288,274,613 111,533,021 233,613,354 43,443,730 151,632,116
-------------- -------------- -------------- ------------ ------------ ------------
Increase in net assets .......... 398,584,279 571,649,284 112,976,761 342,218,966 35,978,034 177,044,643
Net assets at beginning
of period ..................... 1,605,387,278 1,033,737,994 941,704,587 599,485,621 177,044,643 --
-------------- -------------- -------------- ------------ ------------ ------------
Net assets at end
of period ..................... $2,003,971,557 $1,605,387,278 $1,054,681,348 $941,704,587 $213,022,677 $177,044,643
============== ============== ============== ============ ============ ============
Undistributed net
investment income ............. $ 7,678,988 $ 15,315,008 $ 10,675,100 $ 18,699,879 $ 2,702,866 $ 4,637,642
============== ============== ============== ============ ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
21
<PAGE> 25
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
ASSET ALLOCATION ASSET ALLOCATION ASSET ALLOCATION
TRUST TRUST TRUST
--------------------------- --------------------------- --------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
6/30/98 ENDED 6/30/98 ENDED 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease)
in net assets:
Operations:
Net investment income ............... $ 2,164,860 $ 4,678,266 $ 9,568,701 $ 20,624,457 $ 4,220,102 $ 8,909,268
Net realized gain (loss) on:
Investment transactions ........... 13,197,630 21,787,441 28,555,711 44,169,728 5,764,155 9,545,017
Futures contracts ................. 244,031 2,190,877 (17,824) 2,745,819 (52,875) 38,629
Foreign currency and
forward foreign
currency contracts ............. (32,696) (128,171) (55,263) (177,501) (3,701) (36,148)
Change in unrealized
appreciation
(depreciation) on:
Investments ....................... 17,104,676 12,435,747 25,108,666 22,649,867 2,867,761 3,370,336
Futures contracts ................. 428,825 (63,205) (47,881) 92,982 (13,905) 20,122
Foreign currency and
forward foreign
currency contracts ............. 6,404 (10,440) 9,840 (16,641) 1,589 (2,821)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ......... 33,113,730 40,890,515 63,121,950 90,088,711 12,783,126 21,844,403
Distribution to
shareholders from:
Net investment income ............. (4,765,263) (6,081,059) (20,941,772) (26,584,959) (8,864,663) (10,062,867)
Net realized gains on
investments, futures
and foreign currency
transactions ................... (24,329,301) (16,445,138) (47,173,913) (34,563,767) (9,705,964) (8,097,771)
Increase (decrease) in net
assets from capital share
transactions (Note 4) ............. 12,586,344 (1,530,327) 26,676,931 (44,619,393) (2,632,175) (7,801,297)
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease)
in net assets ..................... 16,605,511 16,833,991 21,683,196 (15,679,408) (8,419,676) (4,117,532)
Net assets at beginning
of period ......................... 243,533,229 226,699,238 609,141,640 624,821,048 204,348,122 208,465,654
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end
of period ......................... $260,138,740 $243,533,229 $630,824,836 $609,141,640 $195,928,446 $204,348,122
============ ============ ============ ============ ============ ============
Undistributed net
investment income ................. $ 2,164,860 $ 4,765,263 $ 9,568,701 $ 20,941,772 $ 4,199,825 $ 8,844,386
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE> 26
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
STRATEGIC GLOBAL
HIGH YIELD BOND GOVERNMENT BOND
TRUST TRUST TRUST
-------------------------- --------------------------- ----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED 1/01/1997* ENDED YEAR ENDED YEAR
6/30/98 TO 6/30/98 ENDED 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease)
in net assets:
Operations:
Net investment income ................ $ 5,053,202 $ 3,000,344 $ 14,766,587 $ 21,794,258 $ 6,114,003 $ 13,484,526
Net realized gain (loss) on:
Investment
transactions .................... 1,318,341 731,169 3,086,917 4,357,008 6,147,698 13,533,542
Foreign currency and
forward foreign
currency contracts .............. 34,029 20,337 (213,618) 474,566 (5,899,970) (8,569,143)
Change in unrealized
appreciation
(depreciation) on:
Investments ........................ (1,794,919) 974,604 (7,455,266) 2,884,064 (3,350,167) (14,618,789)
Futures contracts .................. (1,969) -- -- -- -- --
Foreign currency and
forward foreign
currency contracts .............. (23,141) 43,163 (174,083) 556,273 (126,093) 2,134,019
------------ ----------- ------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations ......................... 4,585,543 4,769,617 10,010,537 30,066,169 2,885,471 5,964,155
Distribution to
shareholders from:
Net investment income .............. (69,760) (2,994,422) (22,915,842) (14,436,515) (14,017,074) (19,668,247)
Net realized gains on
investments, futures and
foreign currency
transactions .................... (274,005) (457,712) (3,897,165) (1,809,273) (5,897,775) (512,991)
Increase (decrease) in net
assets from capital share
transactions (Note 4) .............. 67,028,654 91,430,172 72,175,212 130,492,346 1,348,230 (19,459,104)
------------ ----------- ------------ ------------ ------------ ------------
Increase (decrease)
in net assets ...................... 71,270,432 92,747,655 55,372,742 144,312,727 (15,681,148) (33,676,187)
Net assets at beginning
of period .......................... 92,747,655 -- 365,590,208 221,277,481 216,117,123 249,793,310
------------ ----------- ------------ ------------ ------------ ------------
Net assets at end
of period .......................... $164,018,087 $92,747,655 $420,962,950 $365,590,208 $200,435,975 $216,117,123
============ =========== ============ ============ ============ ============
Undistributed net
investment income .................. $ 5,009,701 $ 26,259 $ 14,435,526 $ 22,584,781 $ 4,692,678 $ 12,595,749
============ =========== ============ ============ ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
23
<PAGE> 27
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
CAPITAL INVESTMENT U.S. GOVERNMENT
GROWTH BOND QUALITY BOND SECURITIES
TRUST TRUST TRUST
------------------------- -------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
6/30/98 ENDED 6/30/98 ENDED 6/30/98 ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
----------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ............... $ 1,609,693 $ 3,061,428 $ 7,417,531 $ 11,518,010 $ 8,327,438 $ 13,511,297
Net realized gain (loss) on:
Investment transactions ........... (83,289) 48,206 752,071 560,958 564,876 (1,285,791)
Change in unrealized
appreciation
(depreciation) on:
Investments ....................... 450,757 1,026,927 697,766 3,072,046 (28,745) 5,453,837
----------- ----------- ------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations ........................ 1,977,161 4,136,561 8,867,368 15,151,014 8,863,569 17,679,343
Distribution to
shareholders from:
Net investment income ............ (3,103,100) -- (11,620,376) (10,368,425) (13,043,750) (13,118,502)
Increase in net assets
from capital share
transactions (Note 4) ............. 5,764,165 4,459,955 60,680,791 30,801,522 38,450,823 42,663,878
----------- ----------- ------------ ------------ ------------ ------------
Increase in net assets .............. 4,638,226 8,596,516 57,927,783 35,584,111 34,270,642 47,224,719
Net assets at beginning
of period ......................... 53,989,945 45,393,429 188,544,943 152,960,832 251,277,335 204,052,616
----------- ----------- ------------ ------------ ------------ ------------
Net assets at end
of period ......................... $58,628,171 $53,989,945 $246,472,726 $188,544,943 $285,547,977 $251,277,335
=========== =========== ============ ============ ============ ============
Undistributed net
investment income ................. $ 1,609,693 $ 3,103,100 $ 7,417,531 $ 11,620,376 $ 8,311,846 $ 13,028,158
=========== =========== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE> 28
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE
MONEY MARKET AGGRESSIVE 1000 GROWTH 820
TRUST TRUST TRUST
--------------------------- ------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED 1/07/1997* ENDED 1/07/1997*
6/30/98 ENDED 6/30/98 TO 6/30/98 TO
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ............... $ 12,411,222 $ 21,497,529 $ 228,455 $ 40,644 $ 3,192,876 $ 1,638,443
Capital gain
distributions received ............ -- -- 1,360,505 234,940 5,597,174 623,851
Net realized gain on
investment transactions ........... -- -- 1,222,573 1,526,530 3,555,998 5,455,773
Change in unrealized
appreciation on
investments ....................... -- -- 1,730,260 229,927 6,947,961 2,198,847
------------ ------------ ----------- ----------- ------------ ------------
Net increase in net assets
resulting from operations ......... 12,411,222 21,497,529 4,541,793 2,032,041 19,294,009 9,916,914
Distribution to
shareholders from:
Net investment income ............. (12,411,222) (21,497,529) (228,455) (40,644) (3,192,876) (1,638,443)
Capital gain
distributions received .......... -- -- (1,360,505) (234,940) (5,597,174) (623,851)
Net realized gains on
investments ..................... -- -- (1,575,352) -- (5,546,958) --
Increase in net assets
from capital share
transactions (Note 4) ............. 61,493,569 76,147,741 19,699,213 47,348,070 99,498,551 209,503,037
------------ ------------ ----------- ----------- ------------ ------------
Increase in net assets .............. 61,493,569 76,147,741 21,076,694 49,104,527 104,455,552 217,157,657
Net assets at beginning
of period ......................... 439,713,538 363,565,797 49,104,527 -- 217,157,657 --
------------ ------------ ----------- ----------- ------------ ------------
Net assets at end
of period ......................... $501,207,107 $439,713,538 $70,181,221 $49,104,527 $321,613,209 $217,157,657
============ ============ =========== =========== ============ ============
Undistributed net
investment income ................. -- -- -- -- -- --
============ ============ =========== =========== ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
25
<PAGE> 29
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE
BALANCED 640 MODERATE 460 CONSERVATIVE 280
TRUST TRUST TRUST
--------------------------- ------------------------- -------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED 1/07/1997* ENDED 1/07/1997* ENDED 1/07/1997*
6/30/98 TO 6/30/98 TO 6/30/98 TO
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ................. $ 4,453,311 $ 1,923,233 $ 1,879,193 $ 692,090 $ 1,069,988 $ 255,536
Capital gain
distributions received .............. $ 6,239,232 519,499 889,965 141,843 510,860 52,417
Net realized gain on
investment transactions ............. 2,361,160 2,682,201 781,027 341,434 135,085 115,432
Change in unrealized appreciation
(depreciation) on:
Investments ......................... 1,071,618 3,474,631 857,071 1,263,874 (143,901) 471,143
------------ ------------ ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations ........... 14,125,321 8,599,564 4,407,256 2,439,241 1,572,032 894,528
Distribution to
shareholders from:
Net investment income ............... (4,453,311) (1,923,233) (1,879,193) (692,090) (1,069,988) (255,536)
Capital gain
distributions received ............ (6,239,232) (519,499) (889,965) (141,843) (510,860) (52,417)
Net realized gains on
investments ....................... (2,747,394) -- (371,969) -- (135,411) --
Increase in net assets
from capital share
transactions (Note 4) ............... 123,207,028 180,496,470 43,105,513 51,140,322 24,646,821 19,163,445
------------ ------------ ----------- ----------- ----------- -----------
Increase in net assets ................ 123,892,412 186,653,302 44,371,642 52,745,630 24,502,594 19,750,020
Net assets at beginning
of period ........................... 186,653,302 -- 52,745,630 -- 19,750,020 --
------------ ------------ ----------- ----------- ----------- -----------
Net assets at end
of period ........................... $310,545,714 $186,653,302 $97,117,272 $52,745,630 $44,252,614 $19,750,020
============ ============ =========== =========== =========== ===========
Undistributed net
investment income ................... -- -- -- -- -- --
============ ============ =========== =========== =========== ===========
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
26
<PAGE> 30
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------------------------------------------
PACIFIC RIM EMERGING MARKETS TRUST
------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31, 10/01/1994*
06/30/1998 ------------------------------- TO
(UNAUDITED) 1997 1996** 1995 12/31/1994
----------- --------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.......................................... $ 7.16 $ 10.90 $ 10.36 $ 9.41 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income........................... 0.04 0.05 0.07 0.12 0.04
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions.................................. (1.14) (3.77) 0.94 0.96 (0.59)
------- ------- ------- ------- ------
Total from investment operations............. (1.10) (3.72) 1.01 1.08 (0.55)
LESS DISTRIBUTIONS:
Dividends from net investment income............ --- --- (0.07) (0.09) (0.04)
Dividends in excess of net investment income.... --- --- (0.01) --- ---
Distributions from capital gains................ --- --- (0.39) (0.04) ---
Distributions in excess of capital gains........ --- (0.02) --- --- ---
------- ------- ------- ------- ------
Total distributions.......................... --- (0.02) (0.47) (0.13) (0.04)
------- ------- ------- ------- ------
Net asset value, end of period....................... $ 6.06 $ 7.16 $ 10.90 $ 10.36 $ 9.41
======= ======= ======= ======= ======
Total return................................. (15.36%)+ (34.12%) 9.81% 11.47% (5.63%)+
Net assets, end of period (000's).................... $24,129 $23,850 $23,241 $13,057 $7,657
Ratio of operating expenses to
average net assets................................. 1.26%(A) 1.42% 1.50% 1.50% 1.50%(A)
Ratio of net investment income to
average net assets................................. 1.15%(A) 0.65% 0.78% 1.01% 1.84%(A)
Portfolio turnover rate.............................. 64%(A) 63% 48% 55% 0%(A)
</TABLE>
- -----------------------
* Commencement of operations
** Effective December 31, 1996, the Portfolio changed its name from the Pacific
Rim Emerging Markets Fund.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
27
<PAGE> 31
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (For A Share Outstanding Throughout The Period)
- -----------------------------------------------------------------------
SCIENCE &
TECHNOLOGY TRUST
--------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
------------ -----------
<S> <C> <C>
Net asset value, beginning
of period................................... $ 13.62 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss........................ (0.05) (0.04)
Net realized and unrealized gain
on investments and foreign currency
transactions.............................. 2.40 1.38
-------- -------
Total from investment operations..... 2.35 1.34
LESS DISTRIBUTIONS:
Distributions from capital gains........... --- (0.04)
Distributions in excess of capital gains... --- (0.18)
-------- -------
Total distributions.................. --- (0.22)
-------- -------
Net asset value, end of period................ $ 15.97 $ 13.62
======== =======
Total return......................... 17.25%+ 10.71%
Net assets, end of period (000's)............. $109,839 $67,348
Ratio of operating expenses to
average net assets.......................... 1.19%(A) 1.26%
Ratio of net investment loss to
average net assets.......................... (0.82%(A) (0.54%)
Portfolio turnover rate....................... 112%(A) 121%
</TABLE>
- ------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
28
<PAGE> 32
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -------------------------------------------------------------------------------------
INTERNATIONAL
SMALL CAP TRUST
--------------------------------------
SIX MONTHS
ENDED YEAR 03/04/1996*
06/30/1998 ENDED TO
(UNAUDITED) 1997 12/31/1996
------------ --------- -----------
<S> <C> <C> <C>
Net asset value, beginning
of period.................................. $ 13.70 $ 13.60 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.05 0.08 0.06
Net realized and unrealized gain
on investments and foreign
currency transactions.................. 2.91 0.03 1.09
-------- -------- -------
Total from investment operations.... 2.96 0.11 1.15
LESS DISTRIBUTIONS:
Dividends from net investment income.... (0.05) (0.01) (0.05)
-------- -------- -------
Net asset value, end of period............... $ 16.61 $ 13.70 $ 13.60
======== ======== =======
Total return........................ 21.60%+ 0.79% 9.20%+
Net assets, end of period (000's)............ $157,130 $128,576 $97,218
Ratio of operating expenses to
average net assets......................... 1.23%(A) 1.31% 1.29%(A)
Ratio of net investment income to
average net assets......................... 0.64%(A) 0.63% 0.93%(A)
Portfolio turnover rate...................... 54%(A) 74% 50%(A)
</TABLE>
- ------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
29
<PAGE> 33
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------
EMERGING GROWTH TRUST
---------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
------------- -----------
<S> <C> <C>
Net asset value, beginning of period.......... $ 24.13 $ 20.60
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss...................... (0.06) (0.02)
Net realized and unrealized gain
on investments......................... 1.56 3.55
-------- --------
Total from investment operations..... 1.50 3.53
LESS DISTRIBUTIONS:
Distributions from capital gains......... (0.36) ---
-------- --------
Net asset value, end of period................ $ 25.27 $ 24.13
======== ========
Total return......................... 6.16%+ 17.14%
Net assets, end of period (000's)............. $304,914 $275,774
Ratio of operating expenses to
average net assets.......................... 1.09%(A) 1.11%
Ratio of net investment loss to
average net assets.......................... (0.52%)(A) (0.13%)
Portfolio turnover rate....................... 78%(A) 120%
</TABLE>
- --------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
30
<PAGE> 34
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -----------------------------------------------------------------------
PILGRIM BAXTER
GROWTH TRUST
--------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
------------ -----------
<S> <C> <C>
Net asset value, beginning of period........ $ 12.50 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss.................... (0.04) (0.03)
Net realized and unrealized gain
on investments....................... 0.64 0.03
-------- -------
Total from investment operations... 0.60 ---
Net asset value, end of period.............. $ 13.10 $ 12.50
======== =======
Total return................. 4.80%+ 0.00%
Net assets, end of period (000's)........... $123,832 $93,335
Ratio of operating expenses to
average net assets........................ 1.12%(A) 1.18%
Ratio of net investment loss to
average net assets........................ (0.67%)(A) (0.46%)
Portfolio turnover rate..................... 257%(A) 63%
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
31
<PAGE> 35
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -------------------------------------------------------------------------------------------
SMALL/MID CAP TRUST
------------------------------------------
SIX MONTHS
ENDED YEAR 03/04/1996*
06/30/1998 ENDED TO
(UNAUDITED) 12/31/1997 12/31/1996
------------- ---------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period......... $ 15.41 $ 13.37 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss........................ (0.03) (0.04) ---
Net realized and unrealized gain
on investments and foreign currency
transactions............................. 3.11 2.08 0.87
-------- -------- --------
Total from investment operations..... 3.08 2.04 0.87
Net asset value, end of period................ $ 18.49 $ 15.41 $ 13.37
======== ======== ========
Total return......................... 19.99%+ 15.26% 6.96%+
Net assets, end of period (000's)............. $337,849 $268,377 $176,062
Ratio of operating expenses to
average net assets.......................... 1.03%(A) 1.05% 1.10%(A)
Ratio of net investment loss to
average net assets.......................... (0.36%)(A) (0.33%) (0.02%)(A)
Portfolio turnover rate....................... 144%(A) 151% 67%(A)
</TABLE>
- ------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
32
<PAGE> 36
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------
INTERNATIONAL STOCK
TRUST
---------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
------------ -----------
<S> <C> <C>
Net asset value, beginning of period ............. $ 11.47 $ 11.47
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.08 0.04
Net realized and unrealized gain
on investments and foreign currency
transactions .............................. 1.47 0.12
-------- --------
Total from investment operations ........ 1.55 0.16
LESS DISTRIBUTIONS
Dividends from net investment income ........ -- (0.03)
Distributions from capital gains ............ -- (0.05)
Distributions in excess of capital gains .... -- (0.08)
Total Distributions ..................... -- (0.16)
-------- --------
Net asset value, end of period ................... $ 13.02 $ 11.47
======== ========
Total return ............................ 13.52%+ 1.38%
Net assets, end of period (000's) ................ $203,102 $145,253
Ratio of operating expenses to
average net assets ............................. 1.23%(A) 1.38%
Ratio of net investment income to
average net assets ............................. 1.37%(A) 0.56%
Portfolio turnover rate .......................... 25%(A) 43%
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
33
<PAGE> 37
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
WORLDWIDE GROWTH
TRUST
--------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ............ $ 14.04 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.09 0.04
Net realized and unrealized gain
on investments and foreign
currency transactions ..................... 1.71 1.62
------- -------
Total from investment operations ........ 1.80 1.66
LESS DISTRIBUTIONS:
Dividends from net investment income ........ -- (0.03)
Distributions from capital gains ............ -- (0.02)
Distributions in excess of capital gains .... -- (0.07)
Total distributions ..................... -- (0.12)
------- -------
Net asset value, end of period ................... $ 15.84 $ 14.04
======= =======
Total return ............................ 12.82%+ 13.29%
Net assets, end of period (000's) ................ $34,580 $24,262
Ratio of operating expenses to
average net assets ............................. 1.19%(A) 1.32%
Ratio of net investment income to
average net assets ............................. 1.30%(A) 0.61%
Portfolio turnover rate .......................... 92%(A) 84%
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
34
<PAGE> 38
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------------------------------------------------
GLOBAL EQUITY TRUST
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/1998 -------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..................... $ 19.38 $ 17.84 $ 16.10 $ 15.74 $ 15.73 $ 12.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(B) ........ 0.12 0.19 0.12 0.29 0.05 0.12
Net realized and unrealized
gain(loss) on investments
and foreign currency
transactions .......................... 2.38 3.16 1.89 0.84 0.22 3.79
-------- -------- -------- -------- -------- --------
Total from investment operations .... 2.50 3.35 2.01 1.13 0.27 3.91
LESS DISTRIBUTIONS:
Dividends from net
investment income ..................... (0.36) (0.27) (0.27) (0.08) (0.02) (0.18)
Distributions from
capital gains ......................... (1.08) (1.54) -- (0.69) (0.24) --
-------- -------- -------- -------- -------- --------
Total distributions ................. (1.44) (1.81) (0.27) (0.77) (0.26) (0.18)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 20.44 $ 19.38 $ 17.84 $ 16.10 $ 15.74 $ 15.73
======== ======== ======== ======== ======== ========
Total return ........................ 12.57%+ 20.80% 12.62% 7.68% 1.74% 32.89%
Net assets, end of period (000's) ........ $972,655 $868,413 $726,842 $648,183 $616,138 $377,871
Ratio of operating expenses to
average net assets(C) ................... 0.99%(A) 1.01% 1.01% 1.05% 1.08% 1.16%
Ratio of net investment income
to average net assets ................... 1.19%(A) 1.02% 0.78% 0.61% 0.44% 0.77%
Portfolio turnover rate .................. 28%(A) 33% 169% 63% 52% 52%
GLOBAL EQUITY TRUST
----------------------------------------------------------------
YEARS ENDED DECEMBER 31, 03/18/1988*
------------------------------------------------ TO
1992 1991 1990 1989 12/31/1988
---------- -------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..................... $ 12.24 $ 11.00 $ 12.57 $ 10.15 $10.03
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(B) ........ 0.10 0.16 0.12 0.10 (0.05)
Net realized and unrealized
gain(loss) on investments
and foreign currency
transactions .......................... (0.19) 1.23 (1.41) 2.32 0.17
-------- ------- ------- ------- ------
Total from investment operations .... (0.09) 1.39 (1.29) 2.42 0.12
LESS DISTRIBUTIONS:
Dividends from net
investment income ..................... (0.15) (0.15) (0.04) -- --
Distributions from
capital gains ......................... -- -- (0.24) -- --
-------- ------- ------- ------- ------
Total distributions ................. (0.15) (0.15) (0.28) -- --
-------- ------- ------- ------- ------
Net asset value, end of period ........... $ 12.00 $ 12.24 $ 11.00 $ 12.57 $10.15
======== ======= ======= ======= ======
Total return ........................ (0.72%) 12.80% (10.43%) 23.84% 1.20%+
Net assets, end of period (000's) ........ $116,731 $89,003 $63,028 $26,223 $2,143
Ratio of operating expenses to
average net assets(C) ................... 1.16% 1.23% 1.28% 1.62% 3.98%(A)
Ratio of net investment income
to average net assets ................... 1.12% 1.47% 1.97% 1.82% (1.71%)(A)
Portfolio turnover rate .................. 69% 74% 67% 109% 81%(A)
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After expense reimbursement per share of $0.02 in 1988.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 4.53% in 1988.
The accompanying notes are an integral part of the financial statements.
35
<PAGE> 39
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -----------------------------------------------------------------------------
SMALL COMPANY
VALUE TRUST
--------------------------
SIX MONTHS
ENDED 10/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
------------ -----------
<S> <C> <C>
Net asset value, beginning of period ........ $ 11.94 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.01 0.01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................. 0.51 (0.57)
-------- -------
Total from investment operations ....... 0.52 (0.56)
-------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ...... (0.01) --
-------- -------
Ret asset value, end of period .............. $ 12.45 $ 11.94
======== =======
Total return ........................... 4.33%+ (4.48%)+
Net assets, end of period (000's) ........... 127,201 67,091
Ratio of operating expenses to
average net assets ......................... 1.19%(A) 1.19%(A)
Ratio of net investment income to
average net assets ......................... 0.23%(A) 0.54%(A)
Portfolio turnover rate ..................... 106%(A) 81%(A)
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
36
<PAGE> 40
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -------------------------------------------------------------------------------------------------------------------------------
EQUITY TRUST
----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/1998 -----------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993*
-------------- ----------- ----------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..................... $ 21.50 $ 22.62 $ 20.79 $ 14.66 $ 15.57 $ 13.97
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................. 0.03 0.08 0.13 0.10 0.11 0.07
Net realized and unrealized
gain(loss) on investments
and foreign currency
transactions ......................... 2.59 3.31 3.77 6.14 (0.18) 2.11
---------- ---------- ---------- -------- -------- --------
Total from investment operations ... 2.62 3.39 3.90 6.24 (0.07) 2.18
LESS DISTRIBUTIONS:
Dividends from net
investment income ..................... (0.07) (0.14) (0.09) (0.11) (0.05) (0.58)
Distributions from
capital gains ......................... (4.16) (4.37) (1.98) -- (0.79) --
---------- ---------- ---------- -------- -------- --------
Total distributions ................ (4.23) (4.51) (2.07) (0.11) (0.84) (0.58)
---------- ---------- ---------- -------- -------- --------
Net asset value, end of period ........... $ 19.89 $ 21.50 $ 22.62 $ 20.79 $ 14.66 $ 15.57
========== ========== ========== ======== ======== ========
Total return ....................... 11.71%+ 19.25% 20.14% 42.79% (0.53%) 16.31%
Net assets, end of period (000's) ........ $1,649,515 $1,521,382 $1,345,461 $988,800 $534,562 $387,842
Ratio of operating expenses to
average net assets ..................... 0.79%(A) 0.80% 0.80% 0.80% 0.84% 0.88%
Ratio of net investment
income to average net assets ........... 0.35%(A) 0.35% 0.71% 0.63% 0.88% 0.50%
Portfolio turnover rate .................. 85%(A) 224% 223% 88% 132% 173%
</TABLE>
<TABLE>
<CAPTION>
EQUITY TRUST
-------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------
1992 1991 1990 1989 1988
--------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..................... $ 13.12 $ 11.33 $ 19.14 $ 15.17 $ 12.57
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................. 0.64 0.14 0.24 0.29 0.15
Net realized and unrealized
gain(loss) on investments
and foreign currency
transactions ......................... 0.38 1.88 (1.95) 3.87 2.45
-------- -------- -------- -------- --------
Total from investment operations ... 1.02 2.02 (1.71) 4.16 2.60
LESS DISTRIBUTIONS:
Dividends from net
investment income ..................... (0.17) (0.23) (0.29) (0.12) --
Distributions from
capital gains ......................... -- -- (5.81) (0.07) --
-------- -------- -------- -------- --------
Total distributions ................ (0.17) (0.23) (6.10) (0.19) --
-------- -------- -------- -------- --------
Net asset value, end of period ........... $ 13.97 $ 13.12 $ 11.33 $ 19.14 $ 15.17
======== ======== ======== ======== ========
Total return ....................... 7.93% 17.94% (11.79%) 27.70% 20.71%
Net assets, end of period (000's) ........ $192,626 $ 88,235 $ 36,564 $ 32,108 $133,852
Ratio of operating expenses to
average net assets ..................... 0.95% 0.89% 0.97% 1.02% 1.08%
Ratio of net investment
income to average net assets ........... 7.31% 2.23% 2.74% 1.90% 1.80%
Portfolio turnover rate .................. 782% 172% 95% 111% 49%
</TABLE>
- -------------------
* Net investment income per share was calculated using the average shares
method for fiscal year 1993.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
37
<PAGE> 41
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ---------------------------------------------------------------------------------------------
GROWTH TRUST
-----------------------------------------
SIX MONTHS
ENDED YEAR 07/15/1996*
06/30/1998 ENDED TO
(UNAUDITED) 12/31/1997 12/31/1996
------------ ---------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ........ $ 17.21 $ 13.73 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................... 0.03 0.08 0.09
Net realized and unrealized gain
on investments and foreign currency
transactions .......................... 3.23 3.40 1.23
-------- -------- -------
Total from investment operations .... 3.26 3.48 1.32
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.07) -- (0.09)
Distribution from capital gains ......... (0.70) -- --
-------- -------- -------
Total distributions ................. (0.77) -- --
-------- -------- -------
Net asset value, end of period ............... $ 19.70 $ 17.21 $ 13.73
======== ======== =======
Total return ........................ 19.11%+ 25.35% 10.53%+
Net assets, end of period (000's) ............ $240,510 $167,388 $56,807
Ratio of operating expenses to
average net assets ......................... 0.90%(A) 0.95% 1.01%(A)
Ratio of net investment income to
average net assets ......................... 0.48%(A) 0.74% 2.57%(A)
Portfolio turnover rate ...................... 97%(A) 179% 215%(A)
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
38
<PAGE> 42
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ---------------------------------------------------------------------------------------------------------------
QUANTITATIVE EQUITY TRUST
--------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/1998 -----------------------------------------------------
(UNAUDITED) 1997 1996** 1995 1994 1993
------------ --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period .................... $ 22.50 $ 17.33 $ 17.27 $ 13.36 $ 14.68 $ 13.73
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(B) .............. 0.08 0.26 0.26 0.24 0.20 0.19
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions ......................... 3.21 4.91 2.83 3.67 (0.81) 1.64
-------- -------- ------- ------- ------- -------
Total from investment operations .. 3.29 5.17 3.09 3.91 (0.61) 1.83
LESS DISTRIBUTIONS:
Dividends from net
investment income .................... (0.25) -- (0.50) -- (0.20) (0.19)
Distributions from
capital gains ........................ (2.65) -- (2.51) -- (0.51) (0.69)
Distributions in excess of
capital gains ........................ -- -- (0.02) -- -- --
-------- -------- ------- ------- ------- -------
Total distributions ............... (2.90) -- (3.03) -- (0.71) (0.88)
-------- -------- ------- ------- ------- -------
Net asset value, end of period .......... $ 22.89 $ 22.50 $ 17.33 $ 17.27 $ 13.36 $ 14.68
======== ======== ======= ======= ======= =======
Total return ...................... 14.68%+ 29.83% 17.92 29.23% (4.19%) 13.39%
Net assets, end of period (000's) ....... $214,535 $167,530 $91,900 $60,996 $34,829 $21,651
Ratio of operating expenses to
average net assets(C) .................. 0.75%(A) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 0.93%(A) 1.50% 1.81% 1.76% 1.53% 1.39%
Portfolio turnover rate ................. 253%(A) 114% 105% 109% 85% 88%
QUANTITATIVE EQUITY TRUST
--------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------
1992 1991 1990 1989 1988
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period .................... $13.33 $10.48 $11.25 $ 8.91 $ 8.36
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(B) .............. 0.18 0.21 0.32 0.36 0.28
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions ......................... 0.61 2.94 (0.77) 2.34 0.56
------ ------ ------ ------ ------
Total from investment operations .. 0.79 3.15 (0.45) 2.70 0.84
LESS DISTRIBUTIONS:
Dividends from net
investment income .................... (0.18) (0.21) (0.32) (0.36) (0.29)
Distributions from
capital gains ........................ (0.21) (0.09) -- -- --
Distributions in excess of
capital gains ........................ -- -- -- -- --
------ ------ ------ ------ ------
Total distributions ............... (0.39) (0.30) (0.32) (0.36) (0.29)
------ ------ ------ ------ ------
Net asset value, end of period .......... $13.73 $13.33 $10.48 $11.25 $ 8.91
====== ====== ====== ====== ======
Total return ...................... 6.07% 30.18% (4.06%) 30.66% 9.86%
Net assets, end of period (000's) ....... $9,708 $5,480 $2,872 $2,138 $1,176
Ratio of operating expenses to
average net assets(C) .................. 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 1.51% 1.78% 3.06% 3.48% 3.16%
Portfolio turnover rate ................. 48% 53% 121% 121% 172%
</TABLE>
- ------------------------
** Effective December 31, 1996, the Portfolio changes its name from the Common
Stock Fund.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.05 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser and subadviser, was 0.77% for the year ended December 31, 1997.
Effective January 1, 1998, this voluntary expense reimbursement is no longer
in effect.
The accompanying notes are an integral part of the financial statements.
39
<PAGE> 43
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -----------------------------------------------------------------------------------------------
EQUITY INDEX TRUST
---------------------------------------
SIX MONTHS
ENDED YEAR 02/14/1996*
06/30/1998 ENDED TO
(UNAUDITED) 12/31/1997 12/31/1996**
------------ ---------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period ............ $ 12.48 $ 10.69 $10.00
Income from investment operations:
Net investment income (B) ................... 0.11 0.32 0.19
Net realized and unrealized gain
on investments ............................ 2.08 3.26 1.29
-------- ------- ------
Total from investment operations ......... 2.19 3.58 1.48
LESS DISTRIBUTIONS:
Dividends from net investment income ........ -- (0.32) (0.19)
Distributions from capital gains ............ (0.27) (1.47) (0.21)
Distributions in excess of capital gains .... -- -- (0.39)
Total distributions ...................... (0.27) (1.79) (0.79)
-------- ------- ------
Net asset value, end of period ................... $ 14.40 $ 12.48 $10.69
======== ======= ======
Total return ............................. 17.57%+ 33.53% 14.86%+
Net assets, end of period (000's) ................ $ 44,567 $27,075 $7,818
Ratio of operating expenses to
average net assets(C) .......................... 0.40%(A) 0.40% 0.40%(A)
Ratio of net investment income to
average net assets ............................. 1.82%(A) 3.64% 4.74%(A)
Portfolio turnover rate .......................... 1%(A) 7% 27%(A)
</TABLE>
- -------------------
* Commencement of operations
** Effective December 31, 1996, the Portfolio changed its name from the Equity
Index Fund.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.01 for the
six months ended June 30, 1998 and the year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.57% for the six months ended June 30, 1998 and the year ended
December 31, 1997.
The accompanying notes are an integral part of the financial statements.
40
<PAGE> 44
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
BLUE CHIP GROWTH TRUST
----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31, 12/11/1992*
06/30/1998 ----------------------------------------------------------- TO
(UNAUDITED) 1997 1996** 1995 1994 1993 12/31/1992
-------------- --------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $ 15.00 $ 14.31 $ 11.40 $ 9.05 $ 9.55 $ 9.93 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(B) .............. 0.03 0.09 0.03 0.03 0.04 0.05 --
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ......................... 2.54 3.13 2.92 2.36 (0.50) (0.42) (0.07)
-------- -------- -------- -------- -------- -------- --------
Total from investment operations .. 2.57 3.22 2.95 2.39 (0.46) (0.37) (0.07)
LESS DISTRIBUTIONS:
Dividends from net investment income .. (0.08) (0.03) (0.04) (0.04) (0.04) (0.01) --
Distributions from capital gains ...... (0.24) (2.50) -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total distributions ............... (0.32) (2.53) (0.04) (0.04) (0.04) (0.01) --
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period .......... $ 17.25 $ 15.00 $ 14.31 $ 11.40 $ 9.05 $ 9.55 $ 9.93
======== ======== ======== ======== ======== ======== ========
Total return ...................... 17.15%+ 26.94% 25.90% 26.53% (4.80%) (3.80%) (0.70%)+
Net assets, end of period (000's) ....... $894,136 $708,807 $422,571 $277,674 $151,727 $104,966 $31,118
Ratio of operating expenses to
average net assets(C) ................. 0.96%(A) 0.975% 0.975% 0.975% 0.975% 0.975% 1.06%(A)
Ratio of net investment income to
average net assets .................... 0.43%(A) 0.74% 0.26% 0.42% 0.65% 0.75% 1.04%(A)
Portfolio turnover rate ................. 44%(A) 37% 159% 57% 33% 12% 0%(A)
</TABLE>
- ----------------------------------
* Commencement of operations
** Effective October 1, 1996, the Portfolio changed its name from the Pasadena
Growth Trust.
+ Non-annualized
(A) Annualized
(B) After investment adviser and subadviser expense reimbursement per share of
$0.006, $0.004, $0.006 and $0.01 for the years ended December 31, 1996,
1995, 1994 and 1993, respectively.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser and subadviser, was 1.02%, 1.03%, 1.06% and 1.09% for the years
ended December 31, 1996,1995, 1994 and 1993, respectively.
The accompanying notes are an integral part of the financial statements.
41
<PAGE> 45
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -----------------------------------------------------------------------------------------------------------------------
REAL ESTATE SECURITIES TRUST
---------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/98 ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 20.07 $ 16.95 $ 15.10 $ 13.34 $ 14.07 $ 12.75
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ................. 0.34 0.80 0.74 0.67 0.55 0.47
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................. (1.19) 2.32 4.31 1.35 (0.93) 2.38
-------- -------- ------- ------- ------- -------
Total from investment operations ....... (0.85) 3.12 5.05 2.02 (0.38) 2.85
LESS DISTRIBUTIONS:
Dividends from net investment income ...... (0.53) -- (1.39) (0.26) (0.27) (0.47)
Distributions from capital gains .......... (1.84) -- (1.77) -- (0.08) (1.06)
Distributions in excess of capital gains .. -- -- (0.04) -- -- --
-------- -------- ------- ------- ------- -------
Total distributions .................... (2.37) -- (3.20) (0.26) (0.35) (1.53)
-------- -------- ------- ------- ------- -------
Net asset value, end of period ............... $ 16.85 $ 20.07 $ 16.95 $ 15.10 $ 13.34 $ 14.07
======== ======== ======= ======= ======= =======
Total return ........................... (4.68%)+ 18.41% 34.69% 15.14% (2.76%) 22.61%
Net assets, end of period (000's) ............ $177,285 $161,759 $76,220 $52,440 $42,571 $24,106
Ratio of operating expenses to
average net assets(C) ...................... 0.75%(A) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ......................... 4.93%(A) 5.42% 5.22% 5.06% 4.26% 3.93%
Portfolio turnover rate ...................... 92%(A) 148% 231% 136% 36% 143%
REAL ESTATE SECURITIES TRUST
------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------
1992 1991 1990 1989 1988
------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $10.92 $ 8.16 $ 9.24 $ 9.12 $ 8.76
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ................. 0.45 0.53 0.67 0.68 0.70
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................. 1.83 2.76 (1.09) 0.15 0.37
------ ------ ------ ------ ------
Total from investment operations ....... 2.28 3.29 (0.42) 0.83 1.07
LESS DISTRIBUTIONS:
Dividends from net investment income ...... (0.45) (0.53) (0.66) (0.71) (0.71)
Distributions from capital gains .......... -- -- -- -- --
Distributions in excess of capital gains .. -- -- -- -- --
------ ------ ------ ------ ------
Total distributions .................... (0.45) (0.53) (0.66) (0.71) (0.71)
------ ------ ------ ------ ------
Net asset value, end of period ............... $12.75 $10.92 $ 8.16 $ 9.24 $ 9.12
====== ====== ====== ====== ======
Total return ........................... 21.29% 41.10% (4.53%) 9.23% 11.72%
Net assets, end of period (000's) ............ $7,273 $4,120 $2,774 $2,874 $2,490
Ratio of operating expenses to
average net assets(C) ...................... 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ......................... 4.13% 5.40% 7.74% 7.29% 7.18%
Portfolio turnover rate ...................... 71% 40% 24% 15% 23%
</TABLE>
- ---------------------------------
+ Non-annualized
(A) Annualized
(B) After investment adviser and subadviser expense reimbursement per share of
$0.04 for the year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser and subadviser, was 0.77% for the year ended December 31, 1997.
Effective January 1, 1998, this voluntary expense reimbursement is no longer
in effect.
The accompanying notes are an integral part of the financial statements.
42
<PAGE> 46
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
VALUE TRUST
----------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
------------ -----------
<S> <C>
Net asset value, beginning of period .......... $ 14.81 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.09 0.10
Net realized and unrealized gain
on investments and foreign currency
transactions ............................ 0.68 2.67
-------- --------
Total from investment operations ...... 0.77 2.77
LESS DISTRIBUTIONS:
Dividends from net investment income ...... -- (0.10)
Distributions from capital gains .......... -- (0.30)
Distributions in excess of capital gains .. -- (0.06)
-------- --------
Total distributions ................... -- (0.46)
-------- --------
Net asset value, end of period ................. $ 15.58 $ 14.81
======== ========
Total return .......................... 5.27%+ 22.14%
Net assets, end of period (000's) .............. $231,782 $144,672
Ratio of operating expenses to
average net assets ........................... 0.85%(A) 0.96%
Ratio of net investment income to
average net assets ........................... 1.42%(A) 1.50%
Portfolio turnover rate ........................ 41%(A) 43%
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
43
<PAGE> 47
<TABLE>
<CAPTION>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ---------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH & INCOME TRUST
--------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31, 01/09/1995*
06/30/1998 ------------------------ TO
(UNAUDITED) 1997 1996 12/31/1995
------------ ---------- --------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 11.01 $ 11.77 $ 10.47 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................... 0.06 0.23 0.17 0.11
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .......................... 1.40 (0.26) 1.15 0.59
-------- -------- -------- -------
Total from investment operations .... 1.46 (0.03) 1.32 0.70
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.26) (0.22) (0.02) (0.12)
Distributions from capital gains ........ (0.36) (0.51) -- (0.11)
-------- -------- -------- -------
Total distributions ................. (0.62) (0.73) (0.02) (0.23)
-------- -------- -------- -------
Net asset value, end of period ............... $ 11.85 $ 11.01 $ 11.77 $ 10.47
======== ======== ======== =======
Total return ........................ 13.00%+ (0.08%) 12.61% 6.98%+
Net assets, end of period (000's) ............ $238,306 $203,776 $189,010 $88,638
Ratio of operating expenses to
average net assets ......................... 1.14%(A) 1.12% 1.11% 1.47%(A)
Ratio of net investment income to
average net assets ......................... 1.17%(A) 2.08% 1.82% 0.71%(A)
Portfolio turnover rate ...................... 205%(A) 166% 148% 112%(A)
</TABLE>
- -------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
44
<PAGE> 48
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
================================================================================
<TABLE>
<CAPTION>
GROWTH AND INCOME TRUST
------------------------------------------------------------------------------------------------------
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED 04/23/1991*
6/30/1998 ------------------------------------------------------------------------ TO
(UNAUDITED) 1997 1996 1995 1994 1993 1992 12/31/1991
----------- ---------- ---------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................. $ 23.89 $ 19.38 $ 16.37 $ 13.04 $ 13.05 $ 12.10 $ 11.08 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ..... 0.09 0.22 0.22 0.27 0.25 0.17 0.20 0.13
Net realized and
unrealized gain on
investments and foreign
currency transactions ... 3.83 5.73 3.41 3.45 0.11 0.98 0.92 0.95
---------- ---------- ---------- -------- -------- -------- -------- -------
Total from
investment
operations ...... 3.92 5.95 3.63 3.72 0.36 1.15 1.12 1.08
LESS DISTRIBUTIONS:
Dividends from net
investment income ....... (0.22) (0.24) (0.26) (0.26) (0.19) (0.18) (0.10) --
Distributions from
capital gains ........... (1.41) (1.20) (0.36) (0.13) (0.18) (0.02) -- --
---------- ---------- ---------- -------- -------- -------- -------- -------
Total
distributions ... (1.63) (1.44) (0.62) (0.39) (0.37) (0.20) (0.10) --
---------- ---------- ---------- -------- -------- -------- -------- -------
Net asset value,
end of period ............. $ 26.18 $ 23.89 $ 19.38 $ 16.37 $ 13.04 $ 13.05 $ 12.10 $ 11.08
========== ========== ========== ======== ======== ======== ======== =======
Total return ..... 16.51%+ 32.83% 22.84% 29.20% 2.85% 9.62% 10.23% 10.80%+
Net assets,
end of period (000's) ..... $2,003,972 $1,605,387 $1,033,738 $669,387 $409,534 $288,765 $130,984 $57,404
Ratio of operating
expenses to average
net assets ............... 0.78%(A) 0.79% 0.80% 0.80% 0.82% 0.85% 0.85% 0.98%(A)
Ratio of net investment
income to average
net assets................ 0.84%(A) 1.14% 1.56% 2.23% 2.40% 2.29% 2.78% 2.92%(A)
Portfolio turnover
rate...................... 9%(A) 34% 49% 39% 42% 39% 44% 62%(A)
</TABLE>
- -------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
45
<PAGE> 49
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
================================================================================
<TABLE>
<CAPTION>
EQUITY-INCOME TRUST
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31, 02/19/1993*
06/30/1998 -------------------------------------------------- TO
(UNAUDITED) 1997 1996** 1995 1994# 12/31/1993
---------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................... $ 17.24 $ 15.41 $ 13.81 $ 11.33 $ 11.31 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............. 0.17 0.34 0.21 0.17 0.12 0.07
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions .................... 0.97 3.68 2.39 2.49 (0.03) 1.24
---------- -------- -------- -------- -------- -------
Total from investment
operations ................. 1.14 4.02 2.60 2.66 0.09 1.31
LESS DISTRIBUTIONS:
Dividends from net investment
income .......................... (0.33) (0.21) (0.16) (0.08) (0.05) --
Distributions from capital gains .. (0.73) (1.98) (0.84) (0.10) (0.02) --
---------- -------- -------- -------- -------- -------
Total distributions .......... (1.06) (2.19) (1.00) (0.18) (0.07) --
---------- -------- -------- -------- -------- -------
Net asset value, end of period ....... $ 17.32 $ 17.24 $ 15.41 $ 13.81 $ 11.33 $ 11.31
========== ======== ======== ======== ======== =======
Total return .......... 6.39%+ 29.71% 19.85% 23.69% 0.79% 13.10%+
Net assets, end of period (000's) .... $1,054,681 $941,705 $599,486 $396,827 $221,835 $86,472
Ratio of operating expenses to
average net assets .................. 0.83%(A) 0.85% 0.85% 0.85% 0.87% 0.94%(A)
Ratio of net investment income
to average net assets ............... 2.10%(A) 2.47% 1.78% 1.63% 1.08% 1.30%(A)
Portfolio turnover rate .............. 22%(A) 25% 158% 52% 26% 33%(A)
</TABLE>
- ----------
* Commencement of operations
** Effective October 1, 1996, the Portfolio changed its name from the Value
Equity Trust.
# Net investment income per share was calculated using the average shares
method for fiscal year 1994.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
46
<PAGE> 50
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
================================================================================
<TABLE>
<CAPTION>
BALANCED TRUST
------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/97
---------- -----------
<S> <C> <C>
Net asset value, beginning
of period ..................................... $ 19.33 $ 16.41
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................... 0.21 0.51
Net realized and unrealized gain
on investments and foreign currency
transactions ............................. 1.63 2.41
-------- --------
Total from investment
operations .................. 1.84 2.92
-------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income ....... (0.48) --
Distributions from capital gains ........... (2.09) --
-------- --------
Total distributions .............. (2.57) --
-------- --------
Net asset value, end of period .................. $ 18.60 $ 19.33
======== ========
Total return ..................... 9.38%+ 17.79%
Net assets, end of period (000's) ............... $213,023 $177,045
Ratio of operating expenses to
average net assets ............................ 0.86%(A) 0.88%
Ratio of net investment income to
average net assets ............................ 2.72%(A) 2.97%
Portfolio turnover rate ......................... 201%(A) 219%
</TABLE>
- ----------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
47
<PAGE> 51
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AGGRESSIVE ASSET ALLOCATION TRUST
-------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31, 08/03/1989*
06/30/1998 ------------------------------------------------------------------------- TO
(UNAUDITED) 1997 1996 1995 1994 1993 1992 1991 1990 12/31/1989
----------- ------- -------- -------- -------- -------- ------- ------- ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................ $ 14.36 $ 13.45 $ 12.85 $ 11.17 $ 12.03 $ 11.25 $ 10.72 $ 9.08 $ 9.88 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........... 0.13 0.29 0.36 0.35 0.31 0.34 0.30 0.36 0.36 0.08
Net realized and unrealized
gain (loss) on investments and
foreign currency transactions.. 1.87 2.01 1.21 2.07 (0.41) 0.79 0.55 1.69 (1.07) (0.20)
-------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Total from investment
operations ............. 2.00 2.30 1.57 2.42 (0.10) 1.13 0.85 2.05 (0.71) (0.12)
LESS DISTRIBUTIONS:
Dividends from net investment
income ........................ (0.29) (0.38) (0.33) (0.33) (0.31) (0.30) (0.32) (0.41) (0.07) --
Distributions from capital
gains ......................... (1.48) (1.01) (0.64) (0.41) (0.45) (0.05) -- -- (0.02) --
-------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Total distributions ...... (1.77) (1.39) (0.97) (0.74) (0.76) (0.35) (0.32) (0.41) (0.09) --
-------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Net asset value, end of period .... $ 14.59 $ 14.36 $ 13.45 $ 12.85 $ 11.17 $ 12.03 $ 11.25 $ 10.72 $ 9.08 $ 9.88
======== ======== ======== ======== ======== ======== ======== ======== ======= =======
Total return ............. 13.89%+ 19.09% 13.00% 22.77% (0.69%) 10.30% 8.24% 22.96% (7.27%) (1.20%)+
Net assets, end of period (000's).. $260,139 $243,533 $226,699 $211,757 $184,662 $174,448 $151,627 $124,632 $91,581 $87,301
Ratio of operating expenses to
average net assets .............. 0.86%(A) 0.90% 0.90% 0.91% 0.89% 0.86% 0.89% 0.88% 0.78% 0.89%(A)
Ratio of net investment income to
average net assets .............. 1.68%(A) 1.99% 2.73% 2.76% 2.90% 2.96% 3.08% 3.63% 4.08% 3.32%(A)
Portfolio turnover rate ........... 57%(A) 91% 75% 111% 136% 92% 123% 172% 82% 22%(A)
</TABLE>
- --------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements
48
<PAGE> 52
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
MODERATE ASSET ALLOCATION TRUST
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
6/30/98 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994
------------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $ 12.95 $ 12.49 $ 12.39 $ 10.79 $ 11.76
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. 0.21 0.48 0.54 0.50 0.45
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ......................... 1.16 1.29 0.60 1.65 (0.65)
----------- ----------- ----------- ----------- -----------
Total from investment
operations ........................ 1.37 1.77 1.14 2.15 (0.20)
LESS DISTRIBUTIONS:
Dividends from net investment income .. (0.46) (0.57) (0.52) (0.40) (0.39)
Distributions from capital gains ...... (1.04) (0.74) (0.52) (0.37) (0.07)
----------- ----------- ----------- ----------- -----------
Total distributions ................ (1.50) (1.31) (1.04) (0.77) (0.46)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period .......... $ 12.82 $ 12.95 $ 12.49 $ 12.39 $ 10.79
=========== =========== =========== =========== ===========
Total return ....................... $ 10.61%+ 15.87% 9.96% 20.68% (1.61%)
Net assets, end of period (000's) ....... $ 630,825 $ 609,142 $ 624,821 $ 650,136 $ 604,491
Ratio of operating expenses to
average net assets ..................... 0.83%(A) 0.85% 0.84% 0.84% 0.85%
Ratio of net investment income to
average net assets ..................... 3.05%(A) 3.37% 4.17% 4.09% 4.01%
Portfolio turnover rate ................. 2%(A) 78% 78% 129% 180%
</TABLE>
<TABLE>
-----------------------------------------------------------------------------------
<CAPTION>
08/03/1989 *
----------------------------------------------------------------- TO
1993 1992 1991 1990 12/31/1989
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................................ $ 11.14 $ 10.72 $ 9.29 $ 10.03 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. 0.41 0.41 0.42 0.48 0.11
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ........................ 0.67 0.43 1.50 (1.10) (0.08)
----------- ----------- ----------- ---------- ----------
Total from investment
operations ............. 1.08 0.84 1.92 (0.62) 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income .. (0.39) (0.42) (0.49) (0.10) --
Distributions from capital gains ...... (0.07) -- -- (0.02) --
----------- ----------- ----------- ---------- ----------
Total distributions ......... (0.46) (0.42) (0.49) (0.12) --
----------- ----------- ----------- ---------- ----------
Net asset value, end of period ............. $ 11.76 $ 11.14 $ 10.72 $ 9.29 $ 10.03
=========== =========== =========== ========== ==========
Total return ................ 10.06% 8.30% 21.23% (6.23%) 0.30%+
Net assets, end of period (000's) .......... $ 644,257 $ 505,967 $ 420,074 $ 327,328 $ 318,439
Ratio of operating expenses to
average net assets ....................... 0.84% 0.87% 0.86% 0.73% 0.79%(A)
Ratio of net investment income to
average net assets ....................... 4.02% 4.21% 4.38% 5.10% 4.51%(A)
Portfolio turnover rate .................... 135% 169% 168% 76% 41%(A)
</TABLE>
- --------------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
49
<PAGE> 53
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CONSERVATIVE ASSET ALLOCATION TRUST
---------------------------------------------------------------------------------------
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
06/30/1998 ------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $ 11.78 $ 11.64 $ 11.59 $ 10.34 $ 11.26
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. 0.28 0.54 0.57 0.54 0.55
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ......................... 0.48 0.67 0.20 1.26 (0.76)
--------- --------- --------- --------- ---------
Total from investment
operations ........................ 0.76 1.21 0.77 1.80 (0.21)
LESS DISTRIBUTIONS:
Dividends from net investment income .. (0.55) (0.59) (0.56) (0.55) (0.46)
Distributions from capital gains ...... (0.60) (0.48) (0.16) --- (0.25)
--------- --------- --------- --------- ---------
Total distributions ................ (1.15) (1.07) (0.72) (0.55) (0.71)
--------- --------- --------- --------- ---------
Net asset value, end of period .......... $ 11.39 $ 11.78 $ 11.64 $ 11.59 $ 10.34
========= ========= ========= ========= =========
Total return ....................... 6.56%+ 11.44% 7.03% 18.07% (1.84%)
Net assets, end of period (000's) ....... $ 195,928 $ 204,348 $ 208,466 $ 224,390 $ 216,716
Ratio of operating expenses to
average net assets ..................... 0.87%(A) 0.89% 0.87% 0.87% 0.87%
Ratio of net investment income to
average net assets ..................... 4.21%(A) 4.39% 4.59% 4.68% 4.86%
Portfolio turnover rate ................. 146%(A) 86% 73% 110% 220%
</TABLE>
<TABLE>
<CAPTION>
CONSERVATIVE ASSET ALLOCATION TRUST
--------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 08/03/1989*
------------------------------------------------------------- TO
1993 1992 1991 1990 12/31/1989
--------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $ 10.78 $ 10.63 $ 9.56 $ 10.11 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. 0.50 0.47 0.58 0.62 0.15
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ......................... 0.44 0.26 1.15 (1.01) (0.04)
--------- --------- --------- --------- ---------
Total from investment
operations ........................ 0.94 0.73 1.73 (0.39) 0.11
LESS DISTRIBUTIONS:
Dividends from net investment income .. (0.46) (0.58) (0.66) (0.13) ---
Distributions from capital gains ...... --- --- --- (0.03) ---
--------- --------- --------- --------- ---------
Total distributions ................ (0.46) (0.58) (0.66) (0.16) ----
--------- --------- --------- --------- ---------
Net asset value, end of period .......... $ 11.26 $ 10.78 $ 10.63 $ 9.56 $ 10.11
========= ========= ========= ========= =========
Total return ....................... 8.99% 7.36% 18.80% (3.84%) 1.10%+
Net assets, end of period (000's) ....... $ 250,117 $ 201,787 $ 165,167 $ 149,901 $ 141,191
Ratio of operating expenses to
average net assets ..................... 0.86% 0.89% 0.88% 0.76% 0.82%(A)
Ratio of net investment income to
average net assets ..................... 4.78% 4.99% 5.65% 6.68% 6.00%(A)
Portfolio turnover rate ................. 170% 252% 211% 78% 85%(A)
</TABLE>
- -----------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
50
<PAGE> 54
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -------------------------------------------------------------------------------
<CAPTION>
HIGH YIELD TRUST
-----------------------------
SIX MONTHS
ENDED 01/01/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
<S> <C> <C>
Net asset value, beginning
of period ..................................... $ 13.56 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................ 0.44 0.46
Net realized and unrealized gain
on investments and foreign currency
transactions ............................... 0.14 1.13
-------- -------
Total from investment
operations ......................... 0.58 1.59
LESS DISTRIBUTIONS:
Dividends from net investment income ......... (0.01) (0.46)
Distributions from capital gains ............. (0.03) (0.07)
-------- -------
Total distributions .................. (0.04) (0.53)
-------- -------
Net asset value, end of period .................. $ 14.10 $ 13.56
======== =======
Total return ......................... 4.25%+ 12.68%
Net assets, end of period (000's) ............... $164,018 $92,748
Ratio of operating expenses to
average net assets ............................ 0.83%(A) 0.89%
Ratio of net investment income to
average net assets ............................ 7.92%(A) 7.40%
Portfolio turnover rate ......................... 109%(A) 75%
</TABLE>
- --------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
51
<PAGE> 55
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
STRATEGIC BOND TRUST
--------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31, 2/19/1993*
06/30/1998 ---------------------------------------------------- TO
(UNAUDITED) 1997 1996 1995 1994 12/31/93
----------- -------- -------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................................. $ 12.38 $ 11.94 $ 11.26 $ 9.91 $ 10.88 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.36 0.67 0.62 0.78 0.57 0.33
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................ (0.03) 0.57 0.92 1.04 (1.22) 0.55
-------- -------- -------- -------- ------- -------
Total from investment
operations ....................... 0.33 1.24 1.54 1.82 (0.65) 0.88
LESS DISTRIBUTIONS:
Dividends from net investment income ...... (0.72) (0.71) (0.86) (0.47) (0.28) --
Distributions from capital gains .......... (0.12) (0.09) -- -- (0.04) --
-------- -------- -------- -------- ------- -------
Total distributions ................ (0.84) (0.80) (0.86) (0.47) (0.32) --
-------- -------- -------- -------- ------- -------
Net asset value, end of period ............... $ 11.87 $ 12.38 $ 11.94 $ 11.26 $ 9.91 $ 10.88
======== ======== ======== ======== ======= =======
Total return ....................... 2.61%+ 10.98% 14.70% 19.22% (5.99%) 8.8%+
Net assets, end of period (000's) ............ $420,963 $365,590 $221,277 $122,704 $84,433 $53,640
Ratio of operating expenses to
average net assets ......................... 0.84%(A) 0.87% 0.86% 0.92% 0.91% 1.00%(A)
Ratio of net investment income to
average net assets ......................... 7.40%(A) 7.54% 8.20% 8.76% 7.49% 6.56%(A)
Portfolio turnover rate ...................... 154%(A) 131% 165% 181% 197% 356%(A)
</TABLE>
- ---------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
52
<PAGE> 56
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
GLOBAL GOVERNMENT BOND TRUST
----------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/1998
------------------------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ....................... $ 14.07 $ 14.97 $ 14.56 $ 12.47 $ 13.93 $ 12.47
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......... 0.43 0.93 0.93 1.16 0.74 0.59
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions .................. (0.23) (0.57) 0.79 1.62 (1.54) 1.67
-------- -------- -------- -------- -------- --------
Total from investment
operations ................. 0.20 0.36 1.72 2.78 (0.80) 2.26
LESS DISTRIBUTIONS:
Dividends from net
investment income ............ (0.95) (1.23) (1.31) (0.69) (0.30) (0.70)
Distributions from capital
gains ........................ (0.40) (0.03) ---- ---- (0.36) (0.10)
-------- -------- -------- -------- -------- --------
Total distributions ......... (1.35) (1.26) (1.31) (0.69) (0.66) (0.80)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ... $ 12.92 $ 14.07 $ 14.97 $ 14.56 $ 12.47 $ 13.93
======== ======== ======== ======== ======== ========
Total return ................ 1.26% + 2.95% 13.01% 23.18% (5.75%) 18.99%
Net assets, end of period
(000's) ......................... $200,436 $216,117 $249,793 $235,243 $208,513 $196,817
Ratio of operating expenses to
average net assets .............. 0.94% (A) 0.93% 0.90% 0.93% 0.96% 1.06%
Ratio of net investment income to
average net assets .............. 5.79% (A) 5.87% 6.38% 6.83% 6.10% 5.61%
Portfolio turnover rate .......... 104% (A) 160% 167% 171% 157% 154%
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
03/18/1988*
-------------------------------------------------------- TO
1992 1991 1990 1989 12/31/1988
-------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ....................... $ 12.88 $ 11.59 $ 10.50 $ 10.21 $ 10.03
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......... 0.42 0.55 0.25 0.45 0.14
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions .................. (0.16) 1.21 1.13 ---- 0.04
-------- -------- -------- -------- --------
Total from investment
operations ................. 0.26 1.76 1.38 0.45 0.18
LESS DISTRIBUTIONS:
Dividends from net
investment income ............ (0.43) (0.46) (0.24) (0.09) ----
Distributions from capital
gains ........................ (0.24) (0.01) (0.05) (0.07) ----
-------- -------- -------- -------- --------
Total distributions ......... (0.67) (0.47) (0.29) (0.16) ----
-------- -------- -------- -------- --------
Net asset value, end of period ... $ 12.47 $ 12.88 $ 11.59 $ 10.50 $ 10.21
======== ======== ======== ======== ========
Total return ................ 2.27% 15.86% 13.49% 4.49% 1.79% +
Net assets, end of period
(000's) ......................... $ 67,859 $ 28,251 $ 11,582 $ 4,065 $ 1,355
Ratio of operating expenses to
average net assets .............. 1.05% 1.14% 1.21% 1.50% 3.39% (A)
Ratio of net investment income to
average net assets .............. 6.71% 17.28% 6.62% 7.15% 3.74% (A)
Portfolio turnover rate .......... 132% 164% 142% 50% 234% (A)
</TABLE>
- ------------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
53
<PAGE> 57
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CAPITAL GROWTH BOND TRUST
-----------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/1998
---------------------------------------------------------------------------
(UNAUDITED) 1997 1996 * 1995 1994 1993
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ....................... $ 11.85 $ 10.90 $ 11.30 $ 10.10 $ 11.33 $ 11.12
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ...... 0.30 0.67 0.68 0.72 0.72 0.65
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions .................. 0.11 0.28 (0.40) 1.32 (1.22) 0.51
------- ------- ------- ------- ------- -------
Total from investment
operations .................. 0.41 0.95 0.28 2.04 (0.50) 1.16
LESS DISTRIBUTIONS:
Dividends from net
investment income ............. (0.66) ---- (0.68) (0.72) (0.72) (0.65)
Distributions from capital gains ---- ---- ---- (0.12) (0.01) (0.30)
------- ------- ------- ------- ------- -------
Total distributions .......... (0.66) ---- (0.68) (0.84) (0.73) (0.95)
------- ------- ------- ------- ------- -------
Net asset value, end of period ... $ 11.60 $ 11.85 $ 10.90 $ 11.30 $ 10.10 $ 11.33
======= ======= ======= ======= ======= =======
Total return ................. 3.57% + 8.72% 2.48% 20.24% (4.49%) 10.56%
Net assets, end of period (000's) $58,628 $53,990 $45,393 $42,694 $33,618 $41,183
Ratio of operating expenses to
average net assets (C) .......... 0.71%(A) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets .............. 5.7%(A) 36.30% 6.15% 6.36% 6.29% 5.69%
Portfolio turnover rate .......... 26%(A) 73% 58% 85% 79% 95%
</TABLE>
<TABLE>
<CAPTION>
CAPITAL GROWTH BOND TRUST
-----------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------
1992 1991 1990 1989 1988
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ....................... $ 11.47 $ 10.62 $ 10.82 $ 10.32 $ 10.53
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ...... 0.77 0.83 0.88 0.90 0.92
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions .................. (0.11) 0.85 (0.21) 0.50 (0.17)
------- ------- ------- ------- -------
Total from investment
operations .................. 0.66 1.68 0.67 1.40 0.75
LESS DISTRIBUTIONS:
Dividends from net
investment income ............. (0.78) (0.83) (0.87) (0.90) (0.93)
Distributions from capital gains (0.23) ---- ---- ---- (0.03)
------- ------- ------- ------- -------
Total distributions .......... (1.01) (0.83) (0.87) (0.90) (0.96)
------- ------- ------- ------- -------
Net asset value, end of period ... $ 11.12 $ 11.47 $ 10.62 $ 10.82 $ 10.32
======= ======= ======= ======= =======
Total return ................. 5.89% 16.38% 6.58% 13.88% 7.14%
Net assets, end of period (000's) $30,695 $29,326 $24,808 $22,768 $19,732
Ratio of operating expenses to
average net assets (C) .......... 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets .............. 6.76% 7.54% 8.25% 8.34% 8.48%
Portfolio turnover rate .......... 153% 20% 41% 69% 29%
</TABLE>
- -------------------------------
* Effective December 31, 1996, the Portfolio changed its name from the
Capital Growth Bond Fund.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.02 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser and subadviser, was 0.77% for the year ended December 31, 1997.
Effective January 1, 1998, this voluntary expense reimbursement is no
longer in effect.
The accompanying notes are an integral part of the financial statements.
54
<PAGE> 58
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
INVESTMENT QUALITY BOND TRUST
------------------------------------------------------------------------------
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
06/30/1998 ------------------------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................ $ 12.13 $ 11.89 $ 12.32 $ 11.01 $ 12.12 $ 11.58
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........... 0.30 0.77 0.77 0.77 0.66 0.60
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions ................... 0.20 0.30 (0.50) 1.28 (1.23) 0.53
-------- -------- -------- -------- -------- --------
Total from investment
operations ................... 0.50 1.07 0.27 2.05 (0.57) 1.13
LESS DISTRIBUTIONS:
Dividends from net
investment income .......... (0.69) (0.83) (0.70) (0.74) (0.54) (0.59)
-------- -------- -------- -------- -------- --------
Net asset value, end of period .... $ 11.94 $ 12.13 $ 11.89 $ 12.32 $ 11.01 $ 12.12
======== ======== ======== ======== ======== ========
Total return ....... 4.19% + 9.75% 2.58% 19.49% (4.64%) 10.01%
Net assets, end of period (000's).. $246,473 $188,545 $152,961 $143,103 $111,423 $ 99,474
Ratio of operating expenses to
average net assets .............. 0.71% (A) 0.74% 0.73% 0.74% 0.76% 0.77%
Ratio of net investment income to
average net assets .............. 6.92% (A) 7.15% 6.95% 6.91% 6.49% 6.03%
Portfolio turnover rate ........... 37% (A) 47% 68% 137% 140% 33%
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
-------------------------------------------------------------------------
1992 1991 * 1990 1989 1988
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ......................... $ 11.33 $ 10.74 $ 12.37 $ 11.55 $ 10.79
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............ 0.63 0.76 1.12 0.75 0.57
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions .................... 0.15 0.85 (1.50) 0.51 0.19
-------- -------- -------- -------- --------
Total from investment
operations .................... 0.78 1.61 (0.38) 1.26 0.76
LESS DISTRIBUTIONS:
Dividends from net
investment income ........... (0.53) (1.02) (1.25) (0.44) ----
-------- -------- -------- -------- --------
Net asset value, end of period ..... $ 11.58 $ 11.33 $ 10.74 $ 12.37 $ 11.55
======== ======== ======== ======== ========
Total return ........ 7.21% 16.07% (2.73%) 11.34% 7.09%
Net assets, end of period (000's)... $ 60,185 $ 38,896 $ 20,472 $ 26,965 $114,221
Ratio of operating expenses to
average net assets ............... 0.80% 0.85% 0.70% 0.83% 0.89%
Ratio of net investment income to
average net assets ............... 6.96% 7.47% 8.41% 8.77% 7.97%
Portfolio turnover rate ............ 59% 115% 120% 351% 94%
</TABLE>
- ----------------------------------------
* The Investment Quality Bond Trust is the successor to the Bond Trust
effective April 23, 1991.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
55
<PAGE> 59
<TABLE>
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
U.S. GOVERNEMENT SECURITIES TRUST
-------------------------------------------------------------------------------------------
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
06/30/98 ---------------------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 13.50 $ 13.32 $ 13.65 $ 12.64 $ 13.48 $ 13.05
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ......... 0.34 0.75 0.83 0.89 0.77 0.48
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions ..................... 0.10 0.31 (0.41) 0.99 (0.95) 0.49
-------- -------- -------- -------- -------- --------
Total from investment
operations .................. 0.44 1.06 0.42 1.88 (0.18) 0.97
LESS DISTRIBUTIONS:
Dividends from net
investment income ............ (0.65) (0.88) (0.75) (0.87) (0.51) (0.46)
Distributions from capital gains ---- ---- ---- ---- (0.15) (0.08)
-------- -------- -------- -------- -------- --------
Total distributions ........... (0.65) (0.88) (0.75) (0.87) (0.66) (0.54)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ...... $ 13.29 $ 13.50 $ 13.32 $ 13.65 $ 12.64 $ 13.48
======== ======== ======== ======== ======== ========
Total return .................. 3.37% + 8.47% 3.38% 15.57% (1.25%) 7.64%
Net assets, end of period (000's) ... $285,548 $251,277 $204,053 $216,788 $188,813 $222,072
Ratio of operating expenses to
average net assets (C) ............. 0.71% (A) 0.72% 0.71% 0.71% 0.73% 0.75%
Ratio of net investment income to
average net assets ................. 6.18% (A) 6.27% 6.36% 6.46% 5.68% 5.05%
Portfolio turnover rate ............. 194% (A) 110% 178% 212% 387% 213%
</TABLE>
<TABLE>
-------------------------------------------------------------------------
03/18/1988*
------------------------------------------------------- TO
1992 1991 1990 1989** 12/31/1988
-------- ------- ------- ------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 12.85 $ 11.83 $ 10.98 $ 9.81 $10.03
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B) ......... 0.10 0.19 1.07 0.20 0.07
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions ..................... 0.65 1.40 (0.13) 1.08 (0.29)
-------- ------- ------- ------ ------
Total from investment
operations .................. 0.75 1.59 0.94 1.28 (0.22)
LESS DISTRIBUTIONS:
Dividends from net
investment income ............ (0.38) (0.53) (0.08) (0.11) ----
Distributions from capital gains (0.17) (0.04) (0.01) ---- ----
-------- ------- ------- ------ ------
Total distributions ........... (0.55) (0.57) (0.09) ---- ----
-------- ------- ------- ------ ------
Net asset value, end of period ...... $ 13.05 $ 12.85 $ 11.83 $10.98 $ 9.81
======== ======= ======= ====== ======
Total return .................. 6.19% 14.01% 8.63% 13.16% (2.19%) +
Net assets, end of period (000's) ... $125,945 $29,246 $10,469 $5,905 $ 344
Ratio of operating expenses to
average net assets (C) ............. 0.76% 0.87% 1.04% 0.90% 5.16% (A)
Ratio of net investment income to
average net assets ................. 6.12% 7.09% 7.70% 6.66% 1.16% (A)
Portfolio turnover rate ............. 141% 233% 284% 330% 156% (A)
</TABLE>
- ----------------------------------------
* Commencement of operations
** The U.S. Government Securities Trust is the successor to the Convertible
Securities Trust effective May 1, 1989.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.01 and $0.06
for the years ended December 31, 1989 and 1988, respectively.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 1.62% and 6.16% for the years ended December 31, 1989 and
1988, respectively.
The accompanying notes are an integral part of the financial statements.
56
<PAGE> 60
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET TRUST
------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
06/30/1998 ---------------------------------------------
(UNAUDITED) 1997 1996 1995 1994
----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period........................... $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............ 0.25 0.50 0.49 0.55 0.38
LESS DISTRIBUTIONS:
Dividends from net
investment income.............. (0.25) (0.50) (0.49) (0.55) (0.38)
-------- -------- -------- -------- --------
Net asset value, end of period........ $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
======== ======== ======== ======== ========
Total return........... 2.58%+ 5.15% 5.05% 5.62% 3.78%
Net assets, end of period (000's)..... $501,207 $439,714 $363,566 $258,117 $276,674
Ratio of operating expenses to
average net assets.................. 0.53%(A) 0.54% 0.55% 0.54% 0.57%
Ratio of net investment income to
average net assets.................. 5.09%(A) 5.03% 4.97% 5.48% 3.93%
<CAPTION>
MONEY MARKET TRUST
------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1993 1992 1991 1990 1989 1988
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period........................... $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............ 0.27 0.33 0.56 0.75 0.72 0.57
LESS DISTRIBUTIONS:
Dividends from net
investment income.............. (0.27) (0.33) (0.56) (0.75) (0.72) (0.57)
-------- ------- ------- ------- ------- -------
Net asset value, end of period........ $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
======== ======= ======= ======= ======= =======
Total return........... 2.69% 3.36% 5.71% 7.76% 8.56% 6.77%
Net assets, end of period (000's)..... $132,274 $89,535 $79,069 $85,040 $19,403 $12,268
Ratio of operating expenses to
average net assets.................. 0.59% 0.60% 0.60% 0.57% 0.79% 0.99%
Ratio of net investment income to
average net assets.................. 2.66% 3.28% 5.65% 7.27% 8.26% 6.68%
</TABLE>
- ----------------------------------
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
57
<PAGE> 61
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
AGGRESSIVE 1000 TRUST
----------------------------
SIX MONTHS
ENDED 01/07/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
Net asset value, beginning
of period.................................... $ 13.47 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)................. 0.37 0.05
Net realized and unrealized gain
on investments.......................... 0.79 1.26
------- -------
Total from investment
operations................. 1.16 1.31
LESS DISTRIBUTIONS:
Dividends from net investment income...... (0.37) (0.05)
Distributions from capital gains.......... (0.37) (0.29)
------- -------
Total distributions............. (0.74) (0.34)
------- -------
Net asset value, end of period................. $ 13.89 $ 13.47
======= =======
Total return.................... 8.53%+ 10.89%+
Net assets, end of period (000's).............. $70,181 $49,105
Ratio of operating expenses to
average net assets (C)....................... 0.00%(A) 0.00%(A)
Ratio of net investment income to
average net assets........................... 0.76%(A) 1.29%(A)
Portfolio turnover rate........................ 48%(A) 67%(A)
- -----------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.009 for the
six months ended June 30, 1998 and $0.007 for the year ended December 31,
1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.02% for the six months ended June 30, 1998 and 0.03% for the
year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
58
<PAGE> 62
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
GROWTH 820 TRUST
----------------------------
SIX MONTHS
ENDED 01/07/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
Net asset value, beginning
of period.................................... $ 13.77 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)................. 0.45 0.30
Net realized and unrealized gain
on investments.......................... 0.66 1.38
-------- --------
Total from investment
operations................. 1.11 1.68
LESS DISTRIBUTIONS:
Dividends from net investment income...... (0.45) (0.30)
Distributions from capital gains.......... (0.29) (0.11)
-------- --------
Total distributions............. (0.74) (0.41)
-------- --------
Net asset value, end of period................. $ 14.14 $ 13.77
======== ========
Total return.................... 7.98%+ 13.84%+
Net assets, end of period (000's).............. $321,613 $217,158
Ratio of operating expenses to
average net assets (C)....................... 0.00%(A) 0.00%(A)
Ratio of net investment income to
average net assets........................... 2.34%(A) 2.44%(A)
Portfolio turnover rate........................ 28%(A) 51%(A)
- -----------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.004 for the
six months ended June 30, 1998 and $0.004 for the year ended December 31,
1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.02% for the six months ended June 30, 1998 and 0.03% for the
year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
59
<PAGE> 63
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
BALANCED 640 TRUST
----------------------------
SIX MONTHS
ENDED 01/07/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
Net asset value, beginning
of period.................................. $ 13.56 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)............... 0.59 0.50
Net realized and unrealized gain
on investments........................ 0.29 1.19
------- --------
Total from investment
operations............... 0.88 1.69
LESS DISTRIBUTIONS:
Dividends from net investment income.... (0.59) (0.50)
Distributions from capital gains........ (0.15) (0.13)
------- --------
Total distributions........... (0.74) (0.63)
------- --------
Net asset value, end of period............... $ 13.70 $ 13.56
======= ========
Total return.................. 6.47%+ 14.11%+
Net assets, end of period (000's)............ 310,546 186,653
Ratio of operating expenses to
average net assets (C)..................... 0.00%(A) 0.00%(A)
Ratio of net investment income to
average net assets......................... 3.57%(A) 3.24%(A)
Portfolio turnover rate...................... 34%(A) 44%(A)
- ---------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.003 for the
six months ended June 30, 1998 and $0.005 for the year ended December 31,
1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.02% for the six months ended June 30, 1998 and 0.03% for the
year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
60
<PAGE> 64
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
MODERATE 460 TRUST
----------------------------
SIX MONTHS
ENDED 01/07/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
Net asset value, beginning
of period................................... $ 13.35 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)................ 0.51 0.65
Net realized and unrealized gain
on investments......................... 0.40 0.98
------- -------
Total from investment
operations................ 0.91 1.63
LESS DISTRIBUTIONS:
Dividends from net investment income..... (0.51) (0.65)
Distributions from capital gains......... (0.07) (0.13)
------- -------
Total distributions............ (0.58) (0.78)
------- -------
Net asset value, end of period................ $ 13.68 $ 13.35
======= =======
Total return................... 6.79%+ 13.7%+
Net assets, end of period (000's)............. $97,117 $52,746
Ratio of operating expenses to
average net assets (C)...................... 0.00%(A) 0.00%(A)
Ratio of net investment income to
average net assets.......................... 5.09%(A) 3.91%(A)
Portfolio turnover rate....................... 36%(A) 39%(A)
- ----------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.002 for the
six months ended June 30, 1998 and $0.005 for the year ended December 31,
1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.02% for the six months ended June 30, 1998 and 0.03% for the
year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
61
<PAGE> 65
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
CONSERVATIVE 280 TRUST
----------------------------
SIX MONTHS
ENDED 01/07/1997*
06/30/1998 TO
(UNAUDITED) 12/31/1997
----------- -----------
Net asset value, beginning
of period................................... $ 13.01 $ 12.50
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (B)................ 0.80 0.76
Net realized and unrealized gain
on investments......................... 0.06 0.67
------- -------
Total from investment
operations................ 0.86 1.43
LESS DISTRIBUTIONS:
Dividends from net investment income..... (0.80) (0.76)
Distributions from capital gains......... (0.06) (0.16)
------- -------
Total distributions............ (0.86) (0.92)
------- -------
Net asset value, end of period................ $ 13.01 $ 13.01
======= =======
Total return................... 5.47%+ 12.15%+
Net assets, end of period (000's)............. $44,253 $19,750
Ratio of operating expenses to
average net assets (C)...................... 0.00%(A) 0.00%(A)
Ratio of net investment income to
average net assets.......................... 6.8%(A) 3.95%(A)
Portfolio turnover rate....................... 37%(A) 38%(A)
- ----------------------------------------------
* Commencement of operations
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.002 for the
six months ended June 30, 1998 and $0.006 for the year ended December 31,
1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.02% for the six months ended June 30, 1998 and 0.03% for the
year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
62
<PAGE> 66
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM EMERGING MARKETS TRUST
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 71.65%
AGRICULTURAL OPERATIONS - 0.46%
Austral Enterprises BHD 67,700 $ 57,093
United Plantation Berhad 70,900 53,642
----------
110,735
AIR TRAVEL - 0.47%
Singapore Airlines, Ltd. 23,800 111,585
----------
APPAREL & TEXTILES - 1.41%
Esprit Holdings, Ltd. 116,000 35,183
Glorious Sun Enterprises 128,000 23,459
Mitsubishi Rayon Company, Ltd. 40,000 112,244
Onward Kashiyama 12,000 150,575
PT Indorama Synthetics 223,000 17,505
----------
338,966
AUTOMOBILES - 0.10%
Qingling Motors Company 90,000 24,974
----------
BANKING - 12.39%
Australia & New Zealand Bank Group 47,100 325,704
Bangkok Bank* 38,800 47,810
Dao Heng Bank Group, Ltd. 30,000 42,592
Hang Seng Bank 35,000 197,858
Housing & Commercial Bank, Korea, GDR 39,551 126,563
HSBC Holdings - HKD 28,000 684,822
Krung Thai Bank PLC 216,774 28,766
Macquarie Bank, Ltd. 35,900 322,017
Malayan Bank BHD 51,200 51,567
National Australia Bank, Ltd. 19,300 255,184
Overseas Chinese Bank 61,080 208,433
Sanwa Bank 24,000 215,405
Thai Farmers Bank 34,000 30,012
The Industrial Bank of Japan, Ltd. 33,000 207,637
The Joyo Bank, Ltd. 9,000 33,326
The Mitsui Trust & Banking Company, Ltd. 9,000 21,284
United Overseas Bank 55,300 172,300
----------
2,971,280
BROADCASTING - 0.54%
BEC World Public Company, Ltd. 13,100 50,600
Television Broadcast 30,000 79,375
----------
129,975
BUILDING MATERIALS & CONSTRUCTION - 0.30%
Citra Marga Nusaphala Persada 136,700 2,800
Henry Walker Group, Ltd. 64,400 68,759
----------
71,559
BUSINESS SERVICES - 0.82%
Benesse Corporation 3,000 $ 105,229
Matichon Public Company, Ltd. 28,000 26,540
Toppan Forms Company, Ltd. 5,000 65,524
----------
197,293
CHEMICALS - 1.52%
Dainippon Ink & Chemical, Incorporated 40,000 122,948
Orica, Ltd. 9,900 58,689
Toray Industries, Incorporated 35,000 182,252
----------
363,889
COMPUTERS & BUSINESS EQUIPMENT - 1.57%
PT Multipolar Corporation 3,398,000 23,195
Ricoh Company, Ltd. 26,000 274,723
Shinawatra C. Communications 21,500 78,460
----------
376,378
CONGLOMERATES - 4.81%
Boustead Holdings BHD 76,600 46,880
CSR, Ltd. 47,200 136,535
Hutchison Whampoa, Ltd. 100,000 527,878
Japan Airport Terminal Company, Ltd 5,000 27,844
Lung Kee Metal Holdings, Ltd. 267,600 78,942
Sime Darby Bhd 175,000 120,595
Singapore Technologies
Engineering, Ltd.* 278,806 196,902
Wheelock & Company, Ltd. 30,000 17,714
----------
1,153,290
CONSTRUCTION MATERIALS - 0.02%
Keppel International Engineering, Ltd. 12,900 2,986
Nikko Company 1,000 2,784
----------
5,770
CONSTRUCTION & MINING EQUIPMENT - 0.14%
Cahya Mata Sarawak Berhad 70,600 32,661
----------
CONTAINERS & GLASS - 0.56%
Kian Joo Can Factory BHD 48,000 43,949
Rengo Company 35,000 89,607
----------
133,556
CRUDE PETROLEUM & NATURAL GAS - 0.45%
Fletcher Challenge Energy 46,200 107,545
----------
DRUGS & HEALTH CARE - 0.71%
Fujisawa Pharmaceutical Company, Ltd. 18,000 168,974
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
63
<PAGE> 67
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRICAL EQUIPMENT - 1.50%
Matsushita Communication
Industrial Company, Ltd. 6,000 $ 158,820
NEC Corporation 21,000 196,377
Sumitomo Densetsu Company, Ltd. 1,000 4,534
----------
359,731
ELECTRIC UTILITIES - 1.41%
Alsons Consolidated Resources,
Incorporated* 2,742,000 65,755
China Light & Power Company, Ltd. 30,000 136,681
Hong Kong & China Gas Company, Ltd. 38,500 43,727
Hongkong Electric Holdings, Ltd. 30,000 92,927
----------
339,090
ELECTRONICS - 5.06%
Hosiden Corporation* 30,000 323,280
K.R. Precision Public Company* 25,000 16,588
LG Information & Communication, Ltd. 3,818 54,503
Malaysian Pacific Industries Berhad 27,000 31,878
Taiyo Yuden Company 11,000 117,422
TDK Corporation 5,000 370,652
Thakral Corporation 271,600 114,072
Tokyo Electron, Ltd. 6,000 184,422
----------
1,212,817
FINANCIAL SERVICES - 3.10%
China Resources Enterprises, Ltd. 28,000 28,911
Daiwa Securities Company, Ltd. 15,000 64,765
New World Infrastructure, Ltd.* 40,045 45,999
Nomura Securities Company, Ltd. 22,000 256,961
Promise Company, Ltd.* 3,400 140,406
Shohkoh Fund & Company, Ltd. 700 172,633
Singapore Finance, Ltd. 71,400 33,899
----------
743,574
FOOD & BEVERAGES - 1.85%
Fraser & Neave, Ltd. 48,600 130,946
Goodman Fielder, Ltd. 126,800 184,971
KFC Holdings 40,000 21,204
Tokuyama Corporation 30,000 78,976
Vitasoy International Holdings, Ltd. 80,000 26,329
----------
442,426
HOTELS & RESTAURANTS - 0.71%
CDL Hotels International, Ltd. 65,000 19,295
Royal Company 11,000 150,358
----------
169,653
HOUSEHOLD APPLIANCES - 0.31%
Guangdong Kelon Electrical
Holdings Company, Ltd. 95,000 $ 74,793
----------
INDUSTRIAL MACHINERY - 6.24%
Amada Company, Ltd. 75,000 366,131
Keppel Corporation 78,125 117,767
Mitsubishi Heavy Industries, Ltd. 45,000 170,536
Mori Seiki Company 21,000 258,039
Reliance Industries, Ltd., GDR 74,000 473,600
Thai Engine Manufacturing Public
Company, Ltd.* 27,500 9,612
THK Company, Ltd 9,000 100,239
----------
1,495,924
INSURANCE - 2.19%
Mitsui Marine and Fire Insurance
Company, Ltd. 70,000 352,860
Reinsurance Australia Corporation, Ltd. 67,400 172,459
----------
525,319
INVESTMENT COMPANIES - 1.35%
Korea 1990 Trust* 105 168,000
Korea Europe Fund 125 107,812
Seoul International Trust 4 47,000
----------
322,812
LEISURE TIME - 1.33%
Aristocrat Leisure, Ltd. 79,500 187,529
Berjaya Sports Toto BHD 26,000 38,528
Guangdong Investment, Ltd. 110,000 24,703
Tanjong PLC 49,000 67,887
----------
318,647
METAL & METAL PRODUCTS - 0.62%
Amtek Engineering, Ltd. 148,000 35,134
Kitagawa Industries Companies, Ltd. 3,400 27,540
Simsmetal, Ltd. 21,700 85,536
----------
148,210
MINING - 0.64%
Lanna Lignite Public Company, Ltd.* 51,500 35,391
PT Tambang Timah 56,800 25,686
PT Tambang Timah, GDR 6,000 26,100
Savage Resources, Ltd. 184,900 66,570
----------
153,747
NON-FERROUS METALS - 0.95%
MIM Holdings, Ltd. 80,500 38,977
MNI Holdings, BHD 36,000 34,870
WMC, Ltd. 50,900 153,557
----------
227,404
</TABLE>
The accompanying notes are an integral part of the financial statements.
64
<PAGE> 68
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
OFFICE FURNISHINGS & SUPPLIES - 0.04%
Catena Corporation 3,000 $ 10,393
-----------
PAPER - 0.18%
Oji Paper Company 10,000 43,683
-----------
PETROLEUM SERVICES - 1.25%
Broken Hill Proprietary Company 23,500 199,121
Novus Petroleum PLC 80,500 99,941
-----------
299,062
PUBLISHING - 0.95%
Singapore Press Holdings, Ltd. 34,000 228,012
-----------
REAL ESTATE - 6.90%
Amoy Properties, Ltd. 68,000 43,882
Cheung Kong Holdings, Ltd. 40,000 196,696
China Resources Beijing Land 35,000 11,293
City Developments 48,600 136,138
DBS Land, Ltd. 110,600 91,893
Great Eagle Holdings, Ltd. 15,000 13,165
Henderson Investment, Ltd. 50,000 25,974
Henderson Land Development 30,000 98,929
Hongkong Land Holdings, Ltd. 35,000 43,750
Hysan Development Company, Ltd. 40,000 33,041
Mitsubishi Estate Company, Ltd. 16,000 141,173
Mitsui Fudosan Company 20,000 158,530
New World Development Company 59,000 114,223
Parkway Holdings, Ltd. 99,400 172,844
PT Pakuwon Jati 219,500 749
Singapore Land, Ltd. 83,800 176,055
Sun Hung Kai Properties, Ltd. 30,000 127,388
United Overseas Land, Ltd. 128,800 69,560
-----------
1,655,283
RETAIL GROCERY - 0.88%
Uny Company, Ltd. 13,000 211,543
-----------
RETAIL TRADE - 1.55%
Circle K Japan Company 78 2,725
Marui Company, Ltd. 6,000 89,824
Mitsubishi Corporation 43,000 267,448
Sa Sa International Holdings, Ltd. 69,000 11,577
-----------
371,574
SANITARY SERVICES - 0.11%
Puncak Niaga Holdings BHD * 78,400 27,202
-----------
SOFTWARE - 1.36%
NTT Data Communication Systems Company 9 326,101
-----------
TELECOMMUNICATIONS SERVICES - 2.38%
China Telecom, Ltd.* 40,000 $69,437
Hong Kong Telecommunications, Ltd. 150,000 281,685
Jasmine International Public
Company, Ltd.* 67,000 21,434
Keppel Telecommunication &
Transportation, Ltd. 202,000 95,905
Singapore Telecommunications, Ltd. 20,000 28,487
Smartone Telecommunications 30,000 73,180
-----------
570,128
TELEPHONE - 2.52%
Nippon Telegraph & Telephone Corporation 47 390,902
PT Telekomunikasi Indonesia, Series B 175,000 49,872
Telecom Corporation of New Zealand 39,300 162,371
-----------
603,145
TOTAL COMMON STOCKS
(Cost: $26,585,777) $17,178,703
-----------
PREFERRED STOCK - 0.00%
BANKING - 0.00%
AB International Cayman Trust 16,000,000 106,459
-----------
TOTAL PREFERRED STOCK
(Cost: $108,874) $ 106,459
-----------
WARRANTS - 0.66%
BANKING - 0.00%
Bank International Indonesia,
(Expiration date 01/17/2000;
strike price IDR 1,000)* 19,796 92
-----------
CHEMICALS - 0.18%
Shin Etsu Chemical Company,
(Expiration date 08/01/2000;
strike price Y1,917)* 40 43,500
-----------
COMPUTERS & BUSINESS EQUIPMENT - 0.17%
Nippon Comsys Corporation,
(Expiration date 08/31/1999;
strike price Y1,353)* 275 39,226
-----------
ELECTRIC UTILITIES - 0.00%
Hong Kong & China Gas Company, Ltd.,
(Expiration date 09/30/1999;
strike price HKD 8.20)* 1,750 120
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
65
<PAGE> 69
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
FINANCIAL SERVICES - 0.30%
Credit Saison Company, Ltd.,
(Expiration date 02/15/2000;
strike price Y2,094.80)* 36 $46,800
Promise-Tamporo Company,
(Expiration date 02/08/2000;
strike price Y4,556.40)* 21 25,725
-----------
72,525
LEISURE TIME - 0.00%
Guangdong Investment, Ltd.,
(Expiration date 07/30/1999;
strike price HKD 8.00)* 11,000 59
-----------
MINING - 0.00%
Savage Resources, Ltd.,
(Expiration date 11/30/1998;
strike price AUD 1.25)* 12,900 24
-----------
REAL ESTATE - 0.00%
Great Eagle Holdings, Ltd.,
(Expiration date 11/30/1998;
strike price HKD 15.00)* 3,000 4
Hysan Development Company, Ltd.,
(Expiration date 04/30/1999;
strike price HKD 16.00)* 4,000 33
-----------
37
RETAIL TRADE - 0.01%
Elpis, Ltd., (Expiration date
07/01/1999; strike price Y2,367)* 10 2,000
Takashimaya Cayman, (Expiration
date 01/18/2000; strike price Y1,569)* 7 525
-----------
2,525
TOTAL WARRANTS
(Cost: $207,840) $ 158,108
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- -----
<S> <C> <C>
CONVERTIBLE BONDS - 4.97%
AUTOMOBILES - 0.04%
Qingling Motors Company,
3.50% due 01/22/2002 20,000 $ 10,400
-----------
COMPUTERS & BUSINESS EQUIPMENT - 0.19%
Ricoh Company, Ltd.,
00.35% due 03/31/2003 5,000,000 46,142
-----------
DRUGS & HEALTH CARE - 1.75%
Takeda Chemical Industries,
1.90% due 09/30/1998 34,000,000 418,023
-----------
ELECTRONICS - 1.43%
Sony Corporation,
1.40% due 03/31/2005 20,000,000 $222,029
Tokyo Electron,
00.90% due 09/30/2003 12,000,000 120,373
-----------
342,402
FINANCIAL SERVICES - 1.02%
MTI Capital, Ltd.,
00.50% due 10/01/2007 22,000,000 126,094
New World Infrastructure,
Ltd., 1.00% due 04/15/2003 50,000 36,000
Shangai Industrial Investment
Treasury Company, 1.00% due
02/24/2003 25,000 22,938
STB Cayman Capital,
00.50% due 10/01/2007 10,000,000 60,027
-----------
245,059
MINING - 0.54%
Mitsui Mining & Smelting,
00.25% due 09/30/2001 15,000,000 129,366
-----------
TOTAL CONVERTIBLE BONDS
(Cost: $1,293,585) $ 1,191,392
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 13.36%
$3,203,518 Navigator Securities Lending
Trust, 5.54% $ 3,203,518
-----------
REPURCHASE AGREEMENTS - 9.36%
$2,244,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $2,244,312 on
07/01/1998, collateralized by
$1,680,000 U.S. Treasury Bonds at,
8.50% due 02/15/2020 (valued at
$2,292,116, including interest) $ 2,244,000
-----------
TOTAL INVESTMENTS (Pacific Rim Emerging
Markets Trust) (Cost: $33,643,594)
$24,082,180
===========
SCIENCE AND TECHNOLOGY TRUST
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 72.28%
BUSINESS SERVICES - 10.71%
America Online, Incorporated 20,000 $ 2,120,000
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
66
<PAGE> 70
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BUSINESS SERVICES - CONTINUED
Atlantic Data Services, Incorporated 2,800 $ 53,725
Automatic Data Processing, Incorporated 11,000 801,625
BISYS Group, Incorporated 9,500 389,500
Envoy Corporation 5,500 260,563
First Data Corporation 97,000 3,231,312
Gartner Group, Incorporated, Class A 54,000 1,890,000
Legato Systems, Incorporated 8,500 331,500
N2K, Incorporated 5,500 107,937
National Data Corporation 18,000 787,500
Nokia Corporaton, ADR 9,500 689,344
Renaissance Worldwide, Incorporated 5,500 119,625
SunGuard Data Systems, Incorporated 22,000 844,250
Sterling Commerce, Incorporated 71,000 3,443,500
-----------
15,070,381
COMPUTERS & BUSINESS EQUIPMENT - 10.22%
Affiliated Computer Services,
Incorporated 11,000 423,500
Avant Corporation 27,500 680,625
Cisco Systems, Incorporated 41,500 3,820,594
Dell Computer Corporation 13,000 1,206,562
E*Trade Group, Incorporated 48,500 1,112,469
EMC Corporation 58,500 2,621,531
HBO & Company 6,900 243,225
Hewlett-Packard Company 16,500 987,937
National Instruments Corporation 7,000 250,250
Natural Microsystems Corporation 5,500 88,000
PSINet, Incorporated 11,000 143,000
Security Dynamics Technologies 41,500 767,750
Sun Microsystems, Incorporated 22,500 977,344
Tech Data Corporation 16,500 707,437
Veritas Software Corporation 8,500 351,688
-----------
14,381,912
DRUGS & HEALTH CARE - 0.07%
HCIA, Incorporated 7,500 96,563
-----------
ELECTRICAL EQUIPMENT - 2.34%
Anixter International, Incorporated 55,500 1,057,969
Level One Communications, Incorporated 12,500 293,750
Microchip Technology, Incorporated 43,000 1,123,375
Sanmina Corporation 14,000 607,250
Sawtek, Incorporated 8,000 118,000
ELECTRICAL EQUIPMENT - CONTINUED
Speedfam International, Incorporated 5,500 $101,406
-----------
3,301,750
ELECTRONICS - 19.12%
Altera Corporation 48,500 1,433,781
Analog Devices, Incorporated 126,500 3,107,156
Applied Materials, Incorporated 39,000 1,150,500
Applied Micro Circuits Corporation 11,000 284,625
Brooks Automation, Incorporated 7,500 97,500
Burr-Brown Corporation 19,500 409,500
Celestica, Incorporated 9,500 178,125
Checkfree Holdings Corporation 14,000 412,125
Electronics For Imaging, Incorporated 59,500 1,256,937
Galileo Technology, Ltd. 9,700 130,950
Glenayre Technologies, Incorporated 11,000 118,250
Intel Corporation 7,000 518,875
KLA-Tencor Corporation 43,000 1,190,562
Lam Research Corporation 44,500 851,062
Lattice Semiconductor Corporation 11,000 312,469
Linear Technology Corporation 16,500 995,156
Lucent Technologies, Incorporated 6,200 515,763
Marshall Industries 7,100 193,475
Maxim Integrated Products, Incorporated 96,000 3,042,000
Micrel, Incorporated 8,500 276,250
PMC-Sierra, Incorporated 2,000 93,750
Qlogic Corporation 2,400 85,650
SCI Systems, Incorporated 19,500 733,688
Solectron Corporation 32,000 1,346,000
Synopsys, Incorporated 69,500 3,179,625
Technology Solutions Company 11,000 348,563
Tellabs, Incorporated 5,500 393,938
Texas Instruments, Incorporated 27,700 1,615,256
Xilinx, Incorporated 78,000 2,652,000
-----------
26,923,531
INDUSTRIAL MACHINERY - 0.16%
Cognex Corporation 12,000 222,000
-----------
SOFTWARE - 17.30%
Adobe Systems, Incorporated 55,500 2,355,281
Axent Technologies, Incorporated 7,500 229,688
BMC Software, Incorporated 41,500 2,155,406
Cadence Design Systems, Incorporated 14,000 437,500
Caere Corporation 8,700 114,188
CBT Group Public, PLC, ADR 28,500 1,524,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
67
<PAGE> 71
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
SOFTWARE - CONTINUED
Computer Associates
International, Incorporated 8,500 $ 472,281
Concentric Network Corporation 2,800 84,875
Electronic Arts 9,500 513,000
Great Plains Software, Incorporated 5,300 179,538
Integrated Systems,
Incorporated, Class A 11,000 169,125
Learning Company, Incorporated 27,500 814,687
Microsoft Corporation 32,000 3,468,000
Networks Associates, Incorporated 78,000 3,734,250
Oracle Corporation 93,000 2,284,312
Parametric Technology Corporation 145,500 3,946,687
Peerless Systems Corporation 1,300 26,975
PeopleSoft, Incorporated 11,000 517,000
Phoenix Technology, Ltd. 1,100 14,025
Platinum Technology, Incorporated 13,000 371,313
Transaction Systems Architects,
Incorporated 7,000 269,500
Vantive Corporation 19,500 399,750
VIASOFT, Incorporated 16,500 267,094
------------
24,349,225
TELECOMMUNICATIONS SERVICES - 9.57%
ADC Telecommunications, Incorporated 55,500 2,027,484
Advanced Fibre Communications 23,500 941,469
Ascend Communications, Incorporated 65,000 3,221,562
CIENA Corporation 27,500 1,914,687
Paging Network, Incorporated 37,500 525,000
PanAmSat Corporation 11,000 625,625
Premisys Communications, Incorporated 22,500 559,688
QUALCOMM, Incorporated 62,500 3,511,719
Transaction Network Services,
Incorporated 7,000 147,438
------------
13,474,672
TELEPHONE - 2.80%
Airtouch Communications, Incorporated 8,000 467,500
Vodafone Group PLC, ADR 4,100 516,856
WorldCom, Incorporated 61,000 2,954,688
------------
3,939,044
TOTAL COMMON STOCKS
(Cost: $92,690,303) $101,759,078
------------
PREFERRED STOCK - 0.39%
SOFTWARE - 0.39%
SAP AG 800 $ 543,403
------------
TOTAL PREFERRED STOCK
(Cost: $335,164) $ 543,403
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 27.33%
$ 483,000 Federal Home Loan Banks
5.55% due 07/01/1998 $ 483,000
Federal Home Loan Mortgage
Corporaiton
3,312,000 5.45% due 08/05/1998 3,294,451
Federal National Mortgage
Association
4,170,000 5.45% due 08/10/1998 4,144,748
3,000,000 5.45% due 08/14/1998 2,980,017
27,572,460 Navigator Securities Lending
Trust, 5.54% 27,572,460
------------
$ 38,474,676
TOTAL INVESTMENTS (Science and
Technology Trust) (Cost: $131,500,143) $140,777,157
============
INTERNATIONAL SMALL CAP TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 75.93%
AGRICULTURAL MACHINERY - 0.31%
Kverneland Gruppen AS 19,500 $ 508,839
------------
AIR TRAVEL - 1.43%
Ryanair Holdgs PLC 54,150 1,929,094
Virgin Express Holdings PLC, ADR*
34,650 448,284
------------
2,377,378
APPAREL & TEXTILES - 0.82%
Tefron, Ltd.* 62,450 1,373,900
------------
AUTO PARTS - 0.61%
Haldex AB* 56,490 1,019,880
------------
AUTOMOBILES - 3.55%
KTM Motorradhldg* 12,900 1,006,581
Porsche AG 1,700 4,901,716
------------
5,908,297
BROADCASTING - 1.26%
Flextech* 226,600 2,096,081
------------
BUSINESS SERVICES - 3.42%
Brunel International* 35,275 1,466,357
Kobenhavn Lufthavne 17,850 2,167,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
68
<PAGE> 72
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BUSINESS SERVICES - CONTINUED
Select Appointments Holdings PLC 144,925 $ 2,068,940
-----------
5,703,047
COMPUTERS & BUSINESS EQUIPMENT - 8.06%
BTG PLC 90,775 1,262,553
Bulgari Spa 381,250 1,999,859
Dassault Systemes 68,300 3,219,727
Fuji S Ware ABC 26,500 904,607
Misys 39,321 2,235,528
Psion 352,750 3,798,964
-----------
13,421,238
CONGLOMERATES - 1.58%
Hunter Douglas 48,350 2,628,299
-----------
4,863,827
CONTAINERS & GLASS - 0.47%
Compania Cervecerias Unidas SA, ADR 36,725 775,816
-----------
DRUGS & HEALTH CARE - 2.33%
Orvitus* 55,800 874,498
Schwarz Pharmaceuticals AG 38,400 3,002,246
-----------
3,876,744
ELECTRICAL EQUIPMENT - 0.42%
Vesta Wind Systems* 17,925 708,441
-----------
ELECTRONICS - 7.81%
Altran Technologie 25,850 5,870,627
ARM Holdings* 10,075 193,456
Gold Peak Industry* 250,000 5,163
Meitec Corporation 12,000 416,576
Rofin Sinar Technologies,
Incorporated * 77,650 1,378,287
Toolex Alpha N.V.* 83,850 1,563,357
VTech Holdings, Ltd. 961,800 3,581,302
-----------
13,008,768
FINANCIAL SERVICES - 4.16%
Icon Public, Ltd.* 15,500 391,375
JBA Holdings 224,450 2,323,538
Marschollek Lautenschlaeger und
Partner AG 8,630 4,211,040
-----------
6,925,953
FOOD & BEVERAGES - 9.12%
Doutor Coffee Company* 32,000 819,267
Nutreco Holding NV 43,550 1,525,402
Raisio Tehtaat Oy PLC 291,000 5,256,110
Telepizza 716,000 7,587,218
-----------
15,187,997
HOTELS & RESTAURANTS - 3.41%
Grupo Posadas SA* 1,702,125 $ 1,038,077
Pizza Express 322,200 4,637,365
-----------
5,675,442
HOUSEHOLD APPLIANCES - 1.73%
Dorel Industry, Incorporated* 31,700 1,023,241
Industrie Natuzzi SPA, ADR 71,425 1,857,050
-----------
2,880,291
INDUSTRIAL MACHINERY - 3.32%
IHC Caland 26,225 1,477,192
Konecranes International* 33,075 1,677,571
Tomra Systems AS 78,925 2,368,420
-----------
5,523,183
INTERNATIONAL OIL - 0.66%
Cairn Energy, PLC* 239,400 1,097,248
-----------
LEISURE TIME - 2.66%
Capital Radio 152,575 1,810,667
Cinar Films, Incorporated, Class B* 134,350 2,619,825
-----------
4,430,492
MISCELLANEOUS - 0.14%
Semcon AB* 23,000 226,367
-----------
NEWSPAPERS - 0.40%
Gruppo Editoriale L'Espresso 80,000 664,134
-----------
OFFICE FURNISHINGS & SUPPLIES - 0.68%
Turbon International AG 52,600 1,140,403
-----------
PAPER - 2.58%
Schmalbach Lubeca 17,025 4,295,309
-----------
PETROLEUM SERVICES - 2.88%
British Borneo Petroleum 299,900 1,499,725
Coflexip SA, ADR 31,350 1,916,269
Petroleum Geological Services AS, ADR* 45,100 1,375,550
-----------
4,791,544
PHOTOGRAPHY - 0.62%
Metromedia International Group,
Incorporated* 86,000 1,026,625
-----------
RETAIL GROCERY - 0.24%
Distribucion Y Servicio D&S 26,650 399,750
-----------
RETAIL TRADE - 4.30%
Beter Bed Holding NV 24,800 902,816
Ceteco Holding N.V. 6,525 354,698
Douglas Holding AG 35,275 1,879,690
</TABLE>
The accompanying notes are an integral part of the financial statements.
69
<PAGE> 73
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
RETAIL TRADE - CONTINUED
Narvesen ASA 16,000 $ 334,008
Sixt Ag 10,525 1,622,418
Wetherspoon JD 431,965 2,077,206
------------
7,170,836
SOFTWARE - 1.67%
Eidos PLC, ADR 51,875 693,828
New Dimension Software Ltd.* 11,000 369,188
Nippon System Development 39,000 930,788
Smallworld PLC* 27,100 789,287
------------
2,783,091
TELECOMMUNICATIONS SERVICES - 3.56%
Energis PLC 109,625 1,670,395
Global Telesystems Group
Incorporated 37,400 1,823,250
Grupo Iusacell S A De C V 119,675 1,645,531
Nice System, Ltd 21,000 787,500
------------
5,926,676
TELEPHONE - 1.76%
Netcom Systems AB * 76,625 2,934,922
------------
TOTAL COMMON STOCKS
(Cost: $93,596,872) $126,486,991
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 6.98%
$11,635,753 Navigator Securities Lending
Trust, 5.54% $ 11,635,753
------------
REPURCHASE AGREEMENTS - 17.09%
$28,469,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $28,472,954 on
07/01/1998, collateralized by
$19,075,000 U.S. Treasury Bonds,
12.00% due 08/15/2013 (valued at
$29,045,884, including interest)
$ 28,469,000
------------
TOTAL INVESTMENTS (International Small
Cap Trust) (Cost: $133,701,625) $166,591,744
============
EMERGING GROWTH TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 80.64%
AEROSPACE - 1.68%
Gulfstream Aerospace Corporation
66,000 $ 3,069,000
AEROSPACE - CONTINUED
Tristar Aerospace Company 191,300 $ 2,965,150
------------
6,034,150
APPAREL & TEXTILES - 1.19%
Interface, Incorporated 212,800 4,295,900
------------
BANKING - 2.13%
Bank United Corporation 52,200 2,499,075
City National Corporation 70,500 2,604,094
Cullen Frost Bankers, Incorporated 47,400 2,571,450
------------
7,674,619
BROADCASTING - 2.69%
Central European Media
Enterprises, Ltd., Class A 115,500 2,497,687
Heftel Broadcasting Corporation 84,100 3,763,475
Metro Networks, Incorporated 79,800 3,441,375
------------
9,702,537
BUSINESS SERVICES - 14.04%
Assisted Living Concepts, Incorporated 178,000 3,070,500
BISYS Group, Incorporated 76,900 3,152,900
Central Garden & Pet Company 96,200 2,994,225
Devry, Incorporated 168,000 3,685,500
Hypercom Corporation 181,200 1,812,000
ITT Educational Services, Incorporated 106,000 3,418,500
Kroll O'Gara Company 102,700 2,195,213
Outdoor Systems, Incorporated 189,112 5,295,136
PMT Services, Incorporated 218,500 5,558,094
Pre- Paid Legal Services, Incorporated 81,800 2,581,812
Protection One, Incorporated 257,600 2,817,500
Robert Half International, Incorporated 127,199 7,107,244
Sterling Commerce, Incorporated 68,000 3,298,000
SunGuard Data Systems, Incorporated 93,400 3,584,225
------------
50,570,849
COMPUTERS & BUSINESS EQUIPMENT - 4.08%
Avant Corporation 156,000 3,861,000
National Instruments Corporation 107,400 3,839,550
Network Appliance, Incorporated 92,800 3,613,400
QRS Corporation 89,900 3,382,487
------------
14,696,437
CRUDE PETROLEUM & NATURAL GAS - 1.47%
Chieftain International, Incorporated 133,500 3,162,281
</TABLE>
The accompanying notes are an integral part of the financial statements.
70
<PAGE> 74
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
CRUDE PETROLEUM & NATURAL GAS - CONTINUED
Forcenergy, Incorporated 119,000 $ 2,119,688
-----------
5,281,969
DOMESTIC OIL - 0.37%
KCS Energy, Incorporated 117,900 1,348,481
-----------
DRUGS & HEALTH CARE - 13.00%
Alternative Living Services,
Incorporated 102,600 2,770,200
Ameripath, Incorporated 219,700 2,595,206
Aviron 120,000 3,742,500
Chirex, Incorporated 125,000 2,195,313
Gilead Sciences, Incorporated 65,400 2,096,888
Mentor Corporation Minnesota 76,400 1,852,700
Micro Therapeutics, Incorporated 250,000 2,750,000
Mid Atlantic Med Services, Incorporated 207,200 2,382,800
Minimed, Incorporated 42,000 2,199,750
National Surgery Centers, Incorporated 108,400 3,150,375
Novacare, Incorporated 228,300 2,682,525
Pharmerica, Incorporated 253,000 3,051,812
Renal Care Group, Incorporated 83,300 3,670,406
Sangstat Med Corporation 90,600 2,842,575
Sepracor, Incorporated 63,100 2,618,650
Sunrise Assisted Living, Incorporated 45,300 1,557,188
VWR Scientific Products Corporation 51,400 1,265,725
Watson Pharmaceuticals, Incorporated 73,000 3,408,187
-----------
46,832,800
ELECTRICAL EQUIPMENT - 0.16%
Cable Design Technologies Corporation 28,700 591,938
-----------
ELECTRONICS - 6.06%
Aavid Thermal Technologies,
Incorporated 88,000 2,574,000
Burr-Brown Corporation 69,500 1,459,500
Cambridge Technology Partners,
Incorporated 62,300 3,403,137
Maxim Integrated Products, Incorporated 71,200 2,256,150
Radiant Systems, Incorporated 160,400 2,325,800
Technology Solutions Company 107,850 3,417,497
Tecnomatix Technologies Limited 101,000 2,020,000
Uniphase Corporation 69,500 $ 4,363,297
-----------
21,819,381
FINANCIAL SERVICES - 2.00%
Allmerica Financial Corporation 67,190 $ 4,367,350
Legg Mason, Incorporated 49,132 2,828,161
-----------
7,195,511
FOOD & BEVERAGES - 1.63%
Bob Evans Farms, Incorporated 137,500 2,913,281
Suiza Foods Corporation 49,300 2,942,594
-----------
5,855,875
HOTELS & RESTAURANTS - 0.58%
Signature Resorts, Incorporated 126,300 2,083,950
-----------
HOUSEHOLD APPLIANCES - 1.38%
United States Home and Garden,
Incorporated 310,000 1,995,625
Westpoint Stevens, Incorporated 89,900 2,966,700
-----------
4,962,325
INSURANCE - 1.39%
Amerin Corporation 87,700 2,559,744
Life Re Corporation 30,000 2,460,000
-----------
5,019,744
LEISURE TIME - 2.79%
Family Golf Centers, Incorporated 85,400 2,161,687
Premier Parks, Incorporated 73,000 4,863,625
Vistana, Incorporated 164,800 3,028,200
-----------
10,053,512
METAL & METAL PRODUCTS - 0.86%
Metals USA, Incorporated 180,000 3,105,000
-----------
OFFICE FURNISHINGS & SUPPLIES - 1.07%
Miller Herman, Incorporated 159,100 3,868,119
-----------
OTHER UTILITIES - 0.94%
Casella Waste Systems, Incorporated 125,000 3,375,000
-----------
PETROLEUM SERVICES - 2.36%
Global Industries, Incorporated 167,000 2,818,125
Petroleum Geological Services AS, ADR 144,200 4,398,100
Pride International, Incorporated 76,100 1,288,944
-----------
8,505,169
PUBLISHING - 0.73%
Jostens, Incorporated 109,900 2,623,863
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
71
<PAGE> 75
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
RAILROADS & EQUIPMENT - 0.70%
Swift Transportation, Incorporated
127,000 $ 2,516,188
------------
REAL ESTATE - 2.43%
CB Richard Ellis Services,
Incorporated 84,900 2,838,844
Fairfield Communities, Incorporated 152,000 2,916,500
Trammell Crow Company 89,700 2,999,343
------------
8,754,687
RETAIL TRADE - 4.40%
Borders Group, Incorporated 97,200 3,596,400
Genesis Direct, Incorporated 125,000 1,390,625
Payless ShoeSource, Incorporated 38,700 2,851,706
Staples, Incorporated 165,700 4,794,944
Wilmar Industry, Incorporated 126,000 3,213,000
------------
15,846,675
SOFTWARE - 5.20%
Arbor Software Corporation 67,200 2,112,600
Boole & Babbage, Incorporated 44,700 1,067,212
Check Point Software Tech, Ltd. 65,000 2,128,750
Great Plains Software, Incorporated 81,000 2,743,875
JDA Software Group, Incorporated 75,200 3,290,000
PeopleSoft, Incorporated 62,100 2,918,700
Transaction Systems Architects,
Incorporated 115,800 4,458,300
------------
18,719,437
TELECOMMUNICATIONS SERVICES - 0.40%
Teledata Communications, Ltd. 131,000 1,449,188
------------
TELEPHONE - 2.53%
Intermedia Communications,
Incorporated 120,000 5,032,500
McLeodUSA, Incorporated 105,100 4,085,762
------------
9,118,262
TRANSPORTATION - 2.39%
Coach USA, Incorporated 92,200 4,206,625
Greyhound Lines, Incorporated 355,200 2,153,400
Heartland Express, Incorporated 110,600 2,239,650
------------
8,599,675
------------
TOTAL COMMON STOCKS
(Cost: $242,113,558) $290,501,241
------------
WARRANTS - 0.00%
REAL ESTATE - 0.00%
Security Capital Group,
Incorporated (Expiration date
09/18/1998; strike price $28.00) 4,897 $ 1,683
------------
TOTAL WARRANTS
(Cost: $0) $ 1,683
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 15.04%
$54,175,553 Navigator Securities Lending
Trust, 5.54% $ 54,175,553
------------
REPURCHASE AGREEMENTS - 4.32%
$15,544,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.75%, to be
repurchased at $15,546,483 on
07/01/1998, collateralized
by$11,415,000 U.S. Treasury Bonds,
8.875% due 08/15/17 (valued at
$15,859,396, including interest)
$ 15,544,000
------------
TOTAL INVESTMENTS (Emerging Growth
Trust) (Cost: $311,833,111) $360,222,477
============
PILGRIM BAXTER GROWTH TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 76.47%
AEROSPACE - 0.19%
Kellstrom Industry, Incorporated 10,300 $ 298,378
------------
APPAREL & TEXTILES - 2.21%
American Eagle Outfitters* 16,300 628,569
Finish Line, Incorporated* 18,900 531,563
Goodys Family Clothing, Incorporated* 19,500 1,070,062
Pacific Sunwear Of California* 15,000 525,000
Stage Stores, Incorporated 15,000 678,750
------------
3,433,944
AUTO PARTS - 0.23%
Gentex Corporation 20,100 364,313
------------
AUTO SERVICES - 0.69%
United Rentals, Incorporated* 25,600 1,075,200
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
72
<PAGE> 76
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BUSINESS SERVICES - 11.46%
Apollo Group, Incorporated * 91,750 $ 3,033,484
Computer Horizons Corporation* 19,300 715,306
Computer Task Group, Incorporated 21,300 713,550
Devry, Incorporated * 37,000 811,688
Express Scripts, Incorporated* 26,400 2,128,500
International Telecomm Systems,
Incorporated 18,300 530,700
Lamar Advertising Company* 47,900 1,718,412
Legato Systems, Incorporated* 33,100 1,290,900
Medquist, Incorporated* 6,200 179,025
Memberworks, Incorporated* 15,500 499,875
Metamor Worldwide, Incorporated* 31,800 1,118,962
Metzler Group, Incorporated* 15,750 576,844
MMC Networks, Incorporated* 15,300 487,688
Pre-Paid Legal Services, Incorporated 21,100 665,969
ROMAC International, Incorporated* 21,200 643,950
Systems & Computer Technology
Corporation 45,300 1,223,100
Transition Systems, Incorporated* 8,200 87,125
Whittman Hart, Incorporated 11,900 575,663
World Access, Incorporated 26,500 795,000
-----------
17,795,741
COMPUTERS & BUSINESS EQUIPMENT - 9.50%
Citrix Systems, Incorporated* 55,900 3,822,162
Complete Busines Solutions, Incorporated* 20,400 733,125
Engineering Animation, Incorporated* 14,500 884,500
Gilat Satellite Networks, Ltd.* 15,500 518,281
Mastech Corporation* 19,200 540,000
Network Solutions, Incorporated* 14,500 652,500
Saville Systems PLC, ADR* 73,200 3,669,150
Star Telecommunications, Incorporated* 31,845 712,532
Syntel, Incorporated 20,250 632,813
Veritas Software Corporation 51,700 2,139,087
Xeikon NV 10,700 228,044
Xylan Corporation 23,000 685,688
-----------
15,217,882
CRUDE PETROLEUM & NATURAL GAS - 0.56%
National Oilwell, Incorporated* 32,200 863,363
-----------
DRUGS & HEALTH CARE - 10.92%
ABR Information Services, Incorporated* 18,000 427,500
Access Health, Incorporated* 30,100 767,550
DRUGS & HEALTH CARE - CONTINUED
Agouron Pharmaceuticals, Incorporated* 18,900 $ 572,906
Alternative Living Services,
Incorporated* 11,200 302,400
Arterial Vascular Engineering,
Incorporated* 29,000 1,036,750
Cooper Company, Incorporated* 20,500 746,969
ESC Medical Systems, Ltd.* 3,800 128,250
General Nutrition Companies,
Incorporated * 48,900 1,522,012
International Network Services 13,700 561,700
Minimed, Incorporated* 5,500 288,063
Omnicare, Incorporated 26,700 1,017,937
Pediatrix Med Group* 13,400 498,313
Prime Hospitality Corporation* 74,600 1,300,837
Renal Care Group, Incorporated* 18,900 832,781
Resources Care, Incorporated* 35,300 650,844
Rexall Sundown, Incorporated* 54,400 1,917,600
Safeskin Corporation 23,500 966,438
Theragenics Corporation 39,800 1,037,287
Total Renal Care Holdings, Incorporated 50,166 1,730,727
Twinlab Corporation* 15,000 655,313
-----------
16,962,177
ELECTRICAL EQUIPMENT - 2.60%
Artisan Components, Incorporated* 20,100 271,350
Cable Design Technologies Corporation* 17,100 352,688
Level One Communications, Incorporated* 29,050 682,675
Sanmina Corporation* 19,000 824,125
SLI, Incorporated 20,700 540,787
Waters Corporation 23,300 1,373,244
-----------
4,044,869
ELECTRONICS - 6.17%
Applied Micro Circuits Corporation* 20,000 517,500
Ase Test, Ltd.* 21,100 654,100
Avid Technology, Incorporated* 14,300 479,050
Cambridge Technology Partners,
Incorporated* 22,400 1,223,600
Flextronics International* 18,300 796,050
Gemstar Group, Ltd. 40,500 1,516,219
Input/Output, Incorporated* 63,600 1,132,875
Intermediate Telephone, Incorporated 13,400 214,400
Micrel, Incorporated* 20,500 666,250
Neomagic Corporation* 16,100 249,550
Uniphase Corporation 20,600 1,293,294
</TABLE>
The accompanying notes are an integral part of the financial statements.
73
<PAGE> 77
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRONICS - CONTINUED
Vitesse Semiconductor Corporation 27,000 $ 833,625
----------
9,576,513
FINANCIAL SERVICES - 1.51%
Amresco, Incorporated 30,000 873,750
Concord EFS, Incorporated* 56,550 1,477,369
----------
2,351,119
FOOD & BEVERAGES - 1.03%
American Italian Pasta Company 13,500 502,875
Suiza Foods Corporation 18,300 1,092,281
----------
1,595,156
HOMEBUILDERS - 0.44%
Fairfield Communities, Incorporated* 35,900 688,831
----------
HOTELS & RESTAURANTS - 0.38%
ShowBiz Pizza Time, Incorporated* 14,700 592,594
----------
INDUSTRIAL MACHINERY - 1.84%
Applied Power, Incorporated 41,100 1,412,812
Core Laboratories N.V. 49,100 1,061,787
Wabash National Corporation 14,800 381,100
----------
2,855,699
INSURANCE - 0.64%
CenturyBusiness Services, Incorporated* 17,100 342,000
Mutual Risk Management, Ltd.* 18,000 655,875
----------
997,875
LEISURE TIME - 0.56%
Family Golf Centers, Incorporated* 18,550 469,547
Party City Corporation* 11,200 329,000
Vistana, Incorporated 4,100 75,337
----------
873,884
PETROLEUM SERVICES - 0.95%
Cal Dive International, Incorporated* 11,100 305,944
Varco International, Incorporated 58,900 1,166,956
----------
1,472,900
POLLUTION CONTROL - 0.57%
Eastern Environmental Services,
Incorporated* 15,800 537,200
US Liquids, Incorporated* 15,700 341,475
----------
878,675
PUBLISHING - 0.65%
Mail-Well Holdings, Incorporated* 46,200 $1,001,963
----------
RETAIL GROCERY - 1.64%
Whole Foods Market, Incorporated 42,200 2,553,100
----------
RETAIL TRADE - 4.38%
Buckle, Incorporated* 14,150 417,425
Central Garden & Pet Comnpany* 26,500 824,812
Dollar Tree Stores, Incorporated* 60,075 2,440,547
Fossil, Incorporated 31,250 777,344
Linens'n Things, Incorporated* 17,700 540,956
MSC Industrial Direct, Incorporated* 36,400 1,037,400
Proffitt's, Incorporated 19,100 771,162
----------
6,809,646
SOFTWARE - 14.81%
Arbor Software Corporation* 23,500 738,781
Aspect Development, Incorporated* 15,000 1,134,375
CBT Group Public, PLC, ADR* 62,800 3,359,800
Cerner Corporation* 26,400 747,450
Check Point Software Tech, Ltd.* 24,700 808,925
CIBER, Incorporated 47,300 1,797,400
Dialogic Corporation* 1,400 41,650
Filenet Corporation* 29,700 857,587
Genesys Telecommunications Laboratory* 13,400 443,038
Geotel Communications Corporation* 9,000 366,750
Henry Jack & Associates, Incorporated 10,500 360,938
Hyperion Software Corporation* 17,600 501,600
I2 Technologies, Incorporated* 36,400 1,278,550
IDT Corporation* 18,600 559,162
Information Management
Resources, Incorporated 30,600 1,034,662
JDA Software Group, Incorporated 15,900 695,625
Medical Manager Corporation* 14,300 395,038
Mercury Interactive Corporation* 20,400 910,350
Pinnacle Systems, Incorporated* 11,500 372,313
Progress Software Corporation 15,900 651,900
Sapient Corporation* 20,200 1,065,550
Software AG Systems, Incorporated* 24,400 713,700
Transaction Systems Architects,
Incorporated* 42,600 1,640,100
Vantive Corporation* 13,200 270,600
Veritas DGC, Incorporated 45,100 2,252,181
----------
22,998,025
</TABLE>
The accompanying notes are an integral part of the financial statements.
74
<PAGE> 78
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
TELECOMMUNICATIONS SERVICES - 1.17%
Advanced Fibre Communications* 11,000 $ 440,688
DSP Communications, Incorporated* 10,000 137,500
Excel Switching Corporation 18,300 455,212
Premisys Communications, Incorporated* 31,800 791,025
------------
1,824,425
TELEPHONE - 0.45%
Pacific Gateway Exchange, Incorporated* 17,300 693,081
------------
TRANSPORTATION - 0.61%
Coach USA, Incorporated 20,800 949,000
------------
TOTAL COMMON STOCKS
(Cost: $113,449,901) $118,768,353
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 20.30%
$31,537,857 Navigator Securities Lending
Trust, 5.54% $ 31,537,857
------------
REPURCHASE AGREEMENTS - 3.23%
$5,016,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $5,016,697 on
07/01/1998, collateralized by
$3,565,000 U.S. Treasury Bonds,
12.75% due 11/15/2010 (valued at
$5,120,787, including interest) $ 5,016,000
------------
TOTAL INVESTMENTS (Pilgrim Baxter
Growth Trust) (Cost: $150,003,758) $155,322,210
============
SMALL/MID CAP TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 77.85%
AIR TRAVEL - 3.80%
Alaska Air Group * 104,000 $ 5,674,500
Continental Airlines,
Incorporated, Class B* 169,600 10,324,400
------------
15,998,900
APPAREL & TEXTILES - 0.91%
Tommy Hilfiger Corporation* 61,100 3,818,750
------------
AUTOMOBILES - 0.62%
Wabash National Corporation 101,300 $2,608,475
------------
BANKING - 3.54%
Dime Bancorp, Incorporated 171,700 5,140,269
Sovereign Bancorp, Incorporated 316,960 5,180,315
Star Banc Corporation 33,200 2,120,650
State Street Boston Corporation 35,800 2,488,100
------------
14,929,334
BUILDING MATERIALS & CONSTRUCTION - 0.36%
Consolidated Capital Corporation* 66,700 1,499,708
------------
BUSINESS SERVICES - 6.70%
America Online, Incorporated 91,500 9,699,000
Cognizant Corporation 187,200 11,793,600
Paychex, Incorporated 165,750 6,743,953
------------
28,236,553
COMPUTERS & BUSINESS EQUIPMENT - 2.56%
Citrix Systems, Incorporated 50,100 3,425,587
HBO & Company 208,400 7,346,100
------------
10,771,687
CONSTRUCTION MATERIALS - 3.23%
Masco Corporation 151,700 9,177,850
Royal Group Technologies, Ltd.* 153,500 4,451,500
------------
13,629,350
CONTAINERS & GLASS - 1.25%
Owens-Illinois, Incorporated * 118,000 5,280,500
------------
DRUGS & HEALTH CARE - 14.01%
Alza Corporation* 98,000 4,238,500
AmeriSource Health Corporation, Class A* 45,200 2,969,075
Bergen Brunswig Corporation, Class A 35,200 1,632,400
Biomatrix, Incorporated* 51,500 2,111,500
Biomet, Incorporated 140,800 4,655,200
Cardinal Health, Incorporated 72,200 6,768,750
Elan PLC, ADR* 102,400 6,585,600
Forest Labs, Incorporated* 179,500 6,462,000
Fred Meyer, Incorporated* 132,100 5,614,250
McKesson Corporation 76,400 6,207,500
Omnicare, Incorporated 203,500 7,758,437
DRUGS & HEALTH CARE - CONTINUED
Quorum Health Group, Incorporated* 153,250 4,061,125
------------
59,064,337
ELECTRONICS - 0.32%
Amkor Technology, Incorporated* 143,800 1,343,631
------------
FINANCIAL SERVICES - 1.83%
Finova Group, Incorporated 64,800 3,669,300
Paine Webber Group, Incorporated 94,500 4,051,687
------------
7,720,987
</TABLE>
The accompanying notes are an integral part of the financial statements.
75
<PAGE> 79
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
FOOD & BEVERAGES - 5.43%
Aurora Foods, Incorporated* 157,600 $ 3,329,300
Outback Steakhouse, Incorporated* 124,200 4,843,800
Suiza Foods Corporation* 171,800 10,254,312
United States Foodservice* 127,000 4,452,938
------------
22,880,350
HOMEBUILDERS - 1.25%
Champion Enterprises, Incorporated* 179,400 5,269,875
------------
HOTELS & RESTAURANTS - 1.22%
ShowBiz Pizza Time, Incorporated* 127,300 5,131,781
------------
HOUSEHOLD APPLIANCES - 2.89%
Furniture Brands International,
Incorporated* 166,200 4,663,987
Leggett & Platt, Incorporated 244,200 6,105,000
Pillowtex Corporation 35,700 1,432,463
------------
12,201,450
HOUSEHOLD PRODUCTS - 0.39%
Black & Decker Corporation 27,100 1,653,100
------------
INDUSTRIAL MACHINERY - 1.73%
AES Corporation* 139,000 7,306,188
------------
INSURANCE - 3.09%
Fremont General Corporation 63,800 3,457,162
MGIC Investment Corporation 97,500 5,563,594
SunAmerica, Incorporated 69,750 4,006,266
------------
13,027,022
LEISURE TIME - 3.57%
International Game Technology 330,600 8,017,050
Premier Parks, Incorporated* 105,400 7,022,275
------------
15,039,325
POLLUTION CONTROL - 2.59%
USA Waste Services, Incorporated* 221,450 10,934,094
------------
RAILROADS & EQUIPMENT - 1.44%
Kansas City Southern Industries,
Incorporated 122,100 6,059,213
------------
REAL ESTATE - 0.37%
IndyMac Mortgage Holdings, Incorporated 68,900 $1,567,475
------------
RETAIL GROCERY - 1.09%
Food Lion Incorporated, Class A 200,000 2,125,000
Starbucks Corporation* 46,500 2,484,844
------------
4,609,844
RETAIL TRADE - 5.78%
Bed Bath & Beyond, Incorporated* 50,000 2,590,625
Borders Group, Incorporated* 181,000 6,697,000
CVS Corporation 80,200 3,122,787
Family Dollar Stores, Incorporated 90,000 1,665,000
Office Depot, Incorporated* 49,000 1,546,563
Staples, Incorporated* 301,950 8,737,678
------------
24,359,653
SOFTWARE - 3.97%
Compuware Corporation* 132,100 6,753,613
Intuit, Incorporated* 53,600 3,283,000
Networks Associates, Incorporated* 139,950 6,700,106
------------
16,736,719
TELECOMMUNICATIONS SERVICES - 1.62%
Ascend Communications, Incorporated* 31,900 1,581,044
CIENA Corporation* 75,600 5,263,650
------------
6,844,694
TIRES & RUBBER - 0.93%
Safeskin Corporation* 95,600 3,931,550
------------
TRANSPORTATION - 1.36%
Coach USA, Incorporated* 125,400 5,721,375
------------
TOTAL COMMON STOCKS
(Cost: $269,332,807) $328,175,920
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 22.15%
$5,000,000 General Motors Corporation,
5.59% due 07/13/1998 $ 4,990,683
4,000,000 Lexington Parker Capital
Corporation, 5.57% due 07/02/1998 3,999,381
5,000,000 Merrill Lynch & Company,
Incorporated, 5.60% due 07/13/1998 4,990,667
</TABLE>
The accompanying notes are an integral part of the financial statements.
76
<PAGE> 80
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - CONTINUED
$77,319,495 Navigator Securities Lending
Trust, 5.54% $ 77,319,495
2,096,269 Seven Seas Money Market Fund,
5.30% due 07/01/1998 2,096,269
------------
$ 93,396,495
TOTAL INVESTMENTS (Small/Mid Cap
Trust) (Cost: $362,729,302) $421,572,415
============
INTERNATIONAL STOCK TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 85.33%
ALUMINUM - 0.01%
Granges AB 1,695 $ 31,027
------------
APPAREL & TEXTILES - 0.10%
Gucci Group NV 4,352 230,656
------------
AUTO PARTS - 0.64%
Denso Corporation 89,000 1,480,437
------------
AUTOMOBILES - 0.40%
Buderus AG 250 124,775
Honda Motor Company 5,000 178,636
Rolls Royce 40,000 165,300
Volkswagen AG 466 450,380
------------
919,091
BANKING - 12.96%
ABN AMRO Holdings 48,100 1,126,336
Argentaria Corporation 19,760 443,263
Banca Commerciale Italiana 41,000 245,296
Banca di Roma 529,000 1,101,618
Banca Di Roma 6,413 546,997
Banco Bilbao Vizcaya SA 8,140 417,749
Banco De Galicia Buenos Aires SA, ADR 5,299 96,707
Banco Frances Del Rio De La Plata, ADR 4,590 105,283
Banco Latinoamericano De
Exportaciones, S.A. 857 26,353
Banco Santander SA 54,650 1,398,769
Bayerische Hypotheken und
Wechsel Bank AG 15,355 974,029
Bayerische Vereinsbank AG 11,478 973,764
Commerzbank AG 4,640 176,755
Commonwealth Bank 32,077 375,138
Credit Commercial de France 8,551 719,926
Credit Suisse Group 6,016 1,340,818
Credito Italiano 231,538 1,212,585
Den Danske Bank 2,515 $ 302,042
Deutsche Bank AG 17,368 1,469,604
Dexia France 975 131,275
Dresdner Bank AG 22,132 964,248
Generale De Banque 1,520 1,129,067
Grupo Financiero Banamex Accival
SA, Series B 46,000 89,589
Hang Seng Bank 29,000 163,939
Imi 46,000 724,919
Kredietbank NV 31,200 2,793,654
National Australia Bank, Ltd. 11,013 145,614
National Westminster 272,000 4,864,036
Nordbanken AB 146,131 1,071,798
Royal Bank Canada 2,970 178,618
Schweizerischer Bankverein 3,708 1,381,042
Societe Generale 4,589 954,128
Thai Farmers Bank 126,000 111,220
Unibanco Uniao De Barncos Bras, GDR 8,000 236,000
Unidanmark 1,915 172,279
Union Bank of Switzerland/
Schweizerische Bankgesellschaft 3,750 1,396,685
Westpac Banking Corporation, Ltd. 57,000 348,520
------------
29,909,663
BROADCASTING - 0.71%
Canal Plus 1,720 321,485
Grupo Televisa SA, ADR 7,800 293,475
News Corporation 51,021 417,427
Publishing & Broadcasting, Ltd. 51,000 220,025
Sangetsu Company 3,000 38,837
TV Azteca, SA, ADR 10,200 110,288
TV Francaise 1,570 243,328
------------
1,644,865
BUILDING MATERIALS & CONSTRUCTION - 0.66%
Bilfinger& Berger
Bauaktiengesellschaft AG 3,390 116,261
Cemex SA 28,000 208,768
Cie de Staint Gobain 5,815 1,078,224
Fletcher Challenge, Ltd. 29,027 69,479
National House Industrial 5,000 38,439
------------
1,511,171
BUSINESS SERVICES - 2.13%
Adecco SA 2,960 1,337,014
Brambles Industries, Ltd. 12,000 236,059
Eaux (Cie Generale Des) 11,545 2,465,322
Esselte AB 2,690 62,393
Kokuyo Company 22,000 373,906
Toppan Printing Company 42,000 450,770
------------
4,925,464
</TABLE>
The accompanying notes are an integral part of the financial statements.
77
<PAGE> 81
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
CHEMICALS - 1.51%
AKZO Nobel NV, ADS 970 $ 215,783
Bayer AG 19,161 992,341
Hoechst AG 6,467 325,421
Kuraray Company 51,000 434,867
Sekisui Chemical Company, Ltd. 87,000 446,735
Shin-Etsu Chemical Company, Ltd. 50,000 867,867
UCB SA 40 207,636
-----------
3,490,650
COMPUTERS & BUSINESS EQUIPMENT - 0.08%
Fujitsu, Ltd. 17,000 179,504
-----------
CONGLOMERATES - 1.24%
Hutchison Whampoa, Ltd. 174,000 918,508
Kon PTT Netherland 5,710 219,945
Tomkins 318,500 1,729,678
-----------
2,868,131
CONSTRUCTION MATERIALS - 0.62%
Caradon 156,300 480,192
Cemex SA 20,000 87,919
Cemex Sa 600 2,254
Fletcher Challenge 35,019 43,733
Heywood Williams 5,000 21,706
Hornbach Holding Ag 2,250 205,855
Hornback Baummarkt 570 28,035
Inax Corporation 10,000 34,498
Lafarge 2,643 273,231
Lapeyre 2,770 257,954
-----------
1,435,377
CONSTRUCTION & MINING EQUIPMENT - 0.23%
Atlas Copco AB 19,690 536,933
-----------
CONTAINERS & GLASS - 0.02%
Compania Cervecerias Unidas SA, ADR 2,094 44,236
-----------
CRUDE PETROLEUM & NATURAL GAS - 1.18%
Elf Aquitaine SA 6,541 919,637
ENI SPA 213,873 1,402,347
Gas Natural Sdg 5,536 399,993
-----------
2,721,977
DOMESTIC OIL - 0.03%
Primagaz 870 76,413
-----------
DRUGS & HEALTH CARE - 8.00%
Astra AB 102,916 2,051,610
Companhia Siderurgica National, ADR 4,000 96,835
Daiichi Pharmaceutical Company 42,000 555,869
Fresenius AG 740 140,331
Gehe AG 22,720 1,218,864
Glaxo Wellcome PLC 94,000 $ 2,823,563
L'Oreal 645 358,790
Novartis AG 1,420 2,366,823
Rhon Klinikum AG 3,070 303,859
Roche Holdings AG 163 1,603,305
Sankyo Company 63,000 1,439,792
Sanofi Company SA 9,912 1,165,693
Shiseido Company 26,000 296,348
SmithKline Beecham PLC 330,100 4,031,793
-----------
18,453,475
ELECTRICAL EQUIPMENT - 3.40%
ABB AB SEK 38,010 538,507
ABB AG CHF 720 1,065,046
Alcatel Alsthom Cie Generale D'Electric 7,565 1,540,353
Centrais Eletricas Brasileiras, ADR 2,000 28,964
Hitachi, Ltd. 105,000 687,242
Legrand 1,470 389,037
Makita Corporation 35,000 404,752
NEC Corporation 148,000 1,383,988
Otra NV 1,490 22,503
Samsung Electronics Company 1,541 47,700
Siemens AG 6,240 381,123
Sumitomo Electric Industries, Ltd. 134,000 1,359,673
-----------
7,848,888
ELECTRIC UTILITIES - 2.14%
Austrailia Gas and Light 51,198 320,990
Centrica 30,000 50,717
Chilectra SA, ADR 4,004 85,831
China Light & Power Company, Ltd. 89,000 405,485
Companhia Energeticade Minas Gerais, ADR 22,027 681,791
Endesa SA 33,754 738,472
Enersis SA, ADR 3,399 83,063
Hong Kong & China Gas Company, Ltd. 173,700 197,284
Huaneng Power International,
Incorporated, ADR 23,000 309,063
Iberdrola SA 34,126 554,116
VEBA AG 22,350 1,503,880
-----------
4,930,692
ELECTRONICS - 3.29%
Advantest 2,580 139,197
Alps Electric Company 28,000 334,129
Dainippon Screen 30,000 123,237
Electrocomponents 47,000 368,837
Fanuc, Ltd. 8,400 291,603
Kyocera Corporation 20,000 980,690
Murata Manufacturing Company, Ltd. 28,000 911,261
</TABLE>
The accompanying notes are an integral part of the financial statements.
78
<PAGE> 82
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRONICS - CONTINUED
Nokia (AB) OY, Series A 13,368 $ 984,116
Schneider SA 16,632 1,326,279
SGS Thomson Microelectronics,
Incorporated 2,100 148,841
TDK Corporation 22,000 1,630,867
Tokyo Electron, Ltd. 11,200 344,254
-----------
7,583,311
FINANCIAL SERVICES - 2.95%
Colonial Limited 58,000 175,697
Credicorp, Ltd. 1,947 28,597
Dexia Credit Company 1,278 192,439
Fomento Economico Mexico 7,800 246,531
Fortis Amev NV 22,140 1,297,195
International Nederlanded Groep NV 52,859 3,463,691
Lend Lease Corporation 11,232 227,644
Nomura Securities Company, Ltd. 86,000 1,004,484
TABCORP Holdings, Ltd. 35,000 179,242
-----------
6,815,520
FOOD & BEVERAGES - 4.67%
Ahold Kon NV 16,021 514,658
Cadbury Schweppes 105,000 1,626,079
CSM NV 18,310 880,033
Danone 2,500 689,333
Goodman Fielder, Ltd. 98,000 142,959
Gruma SA de CV 30,907 67,348
Gruma SA de CV, ADR 7,163 63,132
Hillsdown Holdings 37,000 100,700
Kao Corporation 46,000 711,940
Nestle SA 1,628 3,489,723
Numico Kon NV 13,030 408,319
Orkla SA 71,910 1,674,726
Panamerican Beverages,
Incorporated, Class A 13,000 408,688
-----------
10,777,638
FOREST PRODUCTS - 0.05%
Sumitomo Forestry 20,000 112,678
-----------
GAS & PIPELINE UTILITIES - 0.06%
Italgas 35,000 142,620
-----------
HOMEBUILDERS - 0.43%
Daiwa House Industry Company, Ltd. 53,000 469,552
Groupe GTM 1,620 168,278
Sekisui House 44,000 342,085
-----------
979,915
HOTELS & RESTAURANTS - 0.27%
Ladbroke Group 112,000 615,251
-----------
HOUSEHOLD APPLIANCES - 1.92%
Industrie Natuzzi SPA, ADR 5,000 $ 130,000
Matsushita Electric Industrial
Company, Ltd. 77,000 1,241,846
Philips Electronics NV 12,080 1,016,200
Pioneer Electronic 15,000 287,481
Sharp Corporation 15,000 121,935
Sony Corporation 18,800 1,624,792
-----------
4,422,254
HOUSEHOLD PRODUCTS - 0.98%
Kimberly-Clark de Mexico, SA de CV 65,000 229,676
Laing John 20,000 131,906
Unilever NV 23,966 1,902,896
-----------
2,264,478
INDUSTRIAL MACHINERY - 1.57%
Amada Company, Ltd. 34,000 165,979
Daifuku Company 4,000 14,956
Gkn 23,000 293,208
Grupo Ind Maseca 83,000 60,411
Hitachi Zosen Corporation 60,000 97,201
Komatsu 38,000 185,232
Komori Corporation 20,000 381,138
Mannesmann AG 13,370 1,375,217
Mitsubishi Heavy Industries, Ltd. 275,000 1,042,164
-----------
3,615,506
INSURANCE - 2.65%
Abbey National 77,000 1,369,237
Allianz AG Holding 3,240 1,080,629
AMP Limited 19,000 222,911
Assicurazioni Generali 25,360 824,994
AXA-UAP 10,851 1,220,484
Ing Groep NV 7,179 132,437
Istituto Nazionale delle Assicurazioni 133,000 378,022
Mediolanum 22,074 700,703
Tokio Marine & Fire Insurance Company 19,000 195,950
-----------
6,125,367
INTERNATIONAL OIL - 3.97%
Oil Company Lukoil, ADR 550 18,386
Royal Dutch Petroleum Company - NLG 80,088 4,444,190
Saga Petroleum 2,590 36,664
The British Petroleum Company PLC 65,000 948,557
The Shell Transport and Trading
Company PLC 406,500 2,864,253
YPF Sociedad Anonima, ADR 27,994 841,570
-----------
9,153,620
</TABLE>
The accompanying notes are an integral part of the financial statements.
79
<PAGE> 83
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
LEISURE TIME - 1.65%
Accor SA 1,190 $ 333,043
Compass Group PLC 100,000 1,150,423
Pathe SA 880 172,486
Rank Group PLC 121,500 667,438
Sodexho Alliance SA 7,440 1,406,606
Star City Holdings 138,600 80,874
-----------
3,810,870
LIQUOR - 1.37%
Diageo 239,240 2,836,159
Fosters Brewing Group 42,000 99,072
Grupo Modelo SA, Series C 26,000 220,778
-----------
3,156,009
MINING - 0.02%
Usinas Siderurgicas de Minas, ADR 9,882 49,725
-----------
MISCELLANEOUS - 0.46%
Centrais Geradoras Sul Do Bras 200 1,357
Colonial, Ltd. 5,800 1,332
Electrolux AB 57,200 982,498
Rao Gazprom 6,547 73,981
-----------
1,059,168
MUTUAL FUNDS - 0.01%
Brazil Fund Incorporated 1,000 18,125
-----------
NEWSPAPERS - 0.69%
United News & Media PLC 113,000 1,581,106
-----------
NON-FERROUS METALS - 0.71%
Alcan Aluminum, Ltd. 9,300 255,955
Rio Tinto 78,150 880,788
Sandvik AB, A Shares 1,440 39,809
Sandvik AB, B Shares 17,120 470,070
-----------
1,646,622
OFFICE FURNISHINGS & SUPPLIES - 0.01%
Scribona AB 1,130 13,601
-----------
PAPER - 0.12%
David S. Smith Holdings 83,000 267,469
-----------
PETROLEUM SERVICES - 2.15%
BG PLC ADS 70,764 409,406
Broken Hill Proprietary Company 38,159 323,330
Norsk Hydro AS 33,363 1,469,113
Perez Companc SA 46,440 233,163
Repsol SA 8,249 454,542
Total SA, B Shares 14,679 1,908,413
Woodside Petroleum, Ltd. 33,000 165,107
-----------
4,963,074
PHOTOGRAPHY - 0.74%
Canon, Incorporated 75,000 $ 1,708,613
-----------
PUBLISHING - 3.66%
ASM Lithography Holdings NV 25,430 753,111
Elsevier NV 90,452 1,366,069
Fairfax John 88,000 153,335
Reed International PLC 269,300 2,437,104
Singapore Press Holdings, Ltd. 21,900 146,866
Wolters Kluwer NV 26,139 3,590,215
-----------
8,446,700
RAILROADS & EQUIPMENT - 0.30%
East Japan Railway 149 702,596
-----------
REAL ESTATE - 0.53%
Henderson Land Development 83,000 273,703
Mitsui Fudosan Company 121,000 959,109
-----------
1,232,812
RETAIL GROCERY - 1.71%
ASDA Group 249,000 855,416
Jeronimo Martins Sgps 22,750 1,093,627
Seven Eleven Japan Company, Ltd. 7,000 418,167
Tesco 122,500 1,196,549
Uny Company, Ltd. 23,000 374,268
-----------
3,938,027
RETAIL TRADE - 4.94%
Carrefour SA 1,032 652,927
Cifra SA ADR 3,916 57,350
Citizen Watch Company 24,000 198,742
Fielmann AG 930 32,514
Hennes & Mauritz AB 28,110 1,793,880
Ito-Yokado Company, Ltd. 25,000 1,180,661
Kingfisher 161,000 2,594,129
Marui Company, Ltd. 64,000 958,125
Mitsubishi Corporation 55,000 342,084
Pin Printemps Redo 2,601 2,176,929
Rinascente La 7,000 69,734
Safeway 140,000 917,500
Sumitomo Corporation 90,000 434,151
-----------
11,408,726
SOFTWARE - 0.85%
Baan Company * 4,520 161,590
SAP AG 2,970 1,803,294
-----------
1,964,884
STEEL - 0.04%
Tokyo Steel Manufacturing 18,200 93,981
-----------
TELECOMMUNICATIONS SERVICES - 1.15%
Cable & Wireless ADS 151,500 1,841,545
</TABLE>
The accompanying notes are an integral part of the financial statements.
80
<PAGE> 84
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
TELECOMMUNICATIONS SERVICES - CONTINUED
Hong Kong Telecommunications, Ltd. 154,800 $ 290,700
Mahanagar Telep Ni 13,000 131,950
Singapore Telecommunications, Ltd. 77,000 109,674
Telecom Corporation of New Zealand 16,000 34,301
Telstra Corporation, Ltd. * 93,060 239,155
------------
2,647,325
TELEPHONE - 4.84%
Compania Anonima Nacional
Telefonos de Venezuela, ADR 4,001 100,025
DDI Corporation 113 394,728
Deutsche Telekom AG 28,677 785,519
Nippon Telegraph & Telephone Corporation 64 532,292
Tele Danmark A/S 305 29,303
Telecom Corporation of New Zealand 55,000 227,237
Telecom Italia Mobile 254,162 1,554,941
Telecom Italia SPA 266,177 1,960,279
Telecomunicacoes Brasileiras, ADR 26,000 2,838,875
Telefonica de Argentina SA, ADR 10,850 351,947
Telefonica del Peru SA, ADR 1,520 31,065
Telefonica SA 31,258 1,445,186
Telefonos De Mexico SA, ADR 19,000 913,187
------------
11,164,584
TOYS, AMUSEMENTS & SPORTING GOODS - 0.44%
Polygram 18,155 927,064
SEGA Enterprises 5,200 90,070
------------
1,017,134
TRANSPORTATION - 0.06%
TNT Post Group NV 5,710 146,068
------------
TRUCKING & FREIGHT - 0.01%
Bergesen ASA 1,640 31,240
------------
TOTAL COMMON STOCKS
(Cost: $177,960,119) $196,915,267
------------
PREFERRED STOCK - 0.63%
BROADCASTING - 0.13%
News Corporation 42,608 302,575
------------
CONGLOMERATES - 0.04%
Companhia Brasileira de Destribuicao
Grupo Pao de Acucar, ADR 4,000 90,500
------------
SOFTWARE - 0.46%
SAP AG 1,572 1,067,787
------------
<CAPTION>
VALUE
-----
<S> <C>
TOTAL PREFERRED STOCK
(Cost: $1,021,244) $ 1,460,862
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 12.38%
$28,566,612 Navigator Securities Lending
Trust, 5.54% $ 28,566,612
------------
REPURCHASE AGREEMENTS - 1.66%
$3,820,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $3,820,531 on
07/01/1998, collateralized by
$2,715,000 U.S. Treasury Bonds,
12.75% due 11/15/2010 (valued at
$3,899,842, including interest) $ 3,820,000
------------
TOTAL INVESTMENTS (International Stock
Trust) (Cost: $211,367,975) $230,762,741
============
WORLDWIDE GROWTH TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 64.71%
AIR FREIGHT - 0.39%
Sas Danmark A/S 7,950 $ 159,706
------------
AIR TRAVEL - 1.22%
Deutsche Lufthansa AG 19,850 500,254
------------
APPAREL & TEXTILES - 4.39%
Adidas-Salomon AG 3,125 544,962
Gucci Group NV 7,525 398,825
Warnaco Group, Incorporated, Class A 11,600 492,275
Wolverine World Wide, Incorporated 17,275 374,652
------------
1,810,714
BANKING - 4.26%
Banca di Roma* 199,325 415,085
Credito Italiano 39,425 206,472
Dresdner Bank AG 6,200 335,191
Merita PLC 121,000 799,154
------------
1,755,902
BROADCASTING - 3.60%
Jacor Communications,
Incorporated, Class A* 9,875 582,625
</TABLE>
The accompanying notes are an integral part of the financial statements.
81
<PAGE> 85
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BROADCASTING-CONTINUED
Pearson PLC 26,875 $ 492,708
Prosieben Media AG 7,900 409,576
------------
1,484,909
BUILDING MATERIALS & CONSTRUCTION - 0.80%
Brisa-Auto Estrada de Portugal, SA 7,700 329,523
------------
BUSINESS SERVICES - 2.57%
Konami Company 14,000 302,235
Manpower, Incorporated 14,450 414,534
Thomson Travel Group* 110,050 343,614
------------
1,060,383
CHEMICALS - 2.03%
Air Liquide 2,362 390,691
Imperial Chemical Industries PLC, ADR 6,900 445,050
------------
835,741
COMPUTERS & BUSINESS EQUIPMENT - 2.86%
Computacenter 28,050 352,668
Oce-Van Der Grinten 17,300 737,021
Saville Systems PLC, ADR* 1,800 90,225
------------
1,179,914
CONSTRUCTION MATERIALS - 0.58%
Hornbach Holding AG* 2,600 237,877
------------
CRUDE PETROLEUM & NATURAL GAS - 0.78%
Apache Corporation 10,225 322,088
------------
DRUGS & HEALTH CARE - 2.28%
Novartis AG 195 325,022
Quorum Health Group, Incorporated* 7,612 201,718
Schwarz Pharmaceuticals AG 5,300 414,372
------------
941,112
ELECTRICAL EQUIPMENT - 2.18%
Emerson Electric Company 6,800 410,550
Philips Electronics NV, ADR 5,750 488,750
------------
899,300
ELECTRONICS - 0.29%
Digital Microwave Corporation* 16,475 119,444
------------
FINANCIAL SERVICES - 5.97%
Green Tree Financial Corporation 14,575 623,992
International Nederlanded Groep NV 8,500 556,980
Marschollek Lautenschlaeger und
Partner AG 2,000 975,907
Takefuji Corporation 6,600 305,489
------------
2,462,368
FOOD & BEVERAGES - 5.17%
Danone 2,400 $ 661,759
Kao Corporation 23,000 355,970
Panamerican Beverages,
Incorporated, Class A 12,550 394,541
PepsiCo, Incorporated 17,450 718,722
------------
2,130,992
GAS & PIPELINE UTILITIES - 0.77%
Eni SPA 4,900 318,500
------------
HOTELS & RESTAURANTS - 1.74%
Ladbroke Group 130,675 717,839
------------
HOUSEHOLD APPLIANCES - 0.29%
Industrie Natuzzi SPA, ADR 4,600 119,600
------------
HOUSEHOLD PRODUCTS - 1.31%
Benckiser NV* 8,775 540,033
------------
INDUSTRIAL MACHINERY - 2.22%
Alstom* 9,900 325,868
Mannesmann AG 4,000 411,434
VA Technologie AG 750 93,399
Valmet Corporation 4,900 84,571
------------
915,272
INSURANCE - 2.37%
Royal & Sun Alliance Insurance
Group PLC 28,675 296,608
WPP Group PLC 103,675 679,875
------------
976,483
INTERNATIONAL OIL - 1.84%
Gulf Canada Resources Limited 42,000 207,375
YPF Sociedad Anonima, ADR 18,250 548,641
------------
756,016
LEISURE TIME - 1.82%
Compass Group PLC 65,250 750,651
------------
NEWSPAPERS - 1.65%
Ver Ned Uitgevers 18,750 681,650
------------
PAPER - 0.63%
Metsa Serla Oy 27,000 261,081
------------
PETROLEUM SERVICES - 1.93%
Aker Maritime ASA 5,425 95,554
Dresser Industries, Incorporated 3,700 163,031
Petroleim Geological Servicies AS, ADR* 4,700 143,350
</TABLE>
The accompanying notes are an integral part of the financial statements.
82
<PAGE> 86
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
PETROLEUM SERVICES - CONTINUED
Total SA, ADR 6,000 $ 392,250
-----------
794,185
RETAIL TRADE - 1.76%
Dixons Group 22,350 178,379
Guitar Center, Incorporated* 16,700 503,088
Wetherspoon JD 8,750 42,076
-----------
723,543
SOFTWARE - 1.53%
CBT Group Public, PLC, ADR* 6,800 363,800
Dr. Solomons Group, PLC* 5,000 174,375
Square Company, Ltd. 3,400 90,981
-----------
629,156
TELECOMMUNICATIONS SERVICES - 0.19%
China Telecom Hong Kong, Ltd.* 2,300 79,494
-----------
TELEPHONE - 5.29%
Nippon Telegraph & Telephone Corporation 50 415,853
Telecom Italia SPA 19,000 139,927
Telecom Italia SPA Risp. 30,000 145,293
Telecomunicacoes Brasileiras, ADR 3,070 335,206
Telefonica de Argentina SA, ADR 8,075 261,933
WorldCom, Incorporated* 18,250 883,984
-----------
2,182,196
TOTAL COMMON STOCKS
(Cost: $23,609,788) $26,675,926
-----------
PREFERRED STOCK - 1.83%
AUTOMOBILES - 1.13%
Volkswagen AG 675 465,607
-----------
SOFTWARE - 0.70%
SAP AG 425 288,683
-----------
TOTAL PREFERRED STOCK
(Cost: $486,025) $ 754,290
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 15.95%
$6,576,592 Navigator Securities Lending
Trust, 5.54% $ 6,576,592
-----------
REPURCHASE AGREEMENTS - 17.51%
$7,220,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $7,221,003 on
07/01/1998, collateralized by
$5,610,000 U.S. Treasury Bonds,
8.125% due 08/15/2019 (valued at
$7,369,195, including interest) $ 7,220,000
-----------
TOTAL INVESTMENTS (Worldwide Growth
Trust) (Cost: $37,892,405) $41,226,808
===========
GLOBAL EQUITY TRUST
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 87.92%
ALUMINUM - 0.68%
Aluminum Company of America 111,700 $7,365,219
-----------
AUTO PARTS - 1.07%
Borg- Warner Automotive, Incorporated 243,550 11,705,622
-----------
AUTOMOBILES - 1.74%
Volkswagen AG 19,615 18,957,523
-----------
BANKING - 7.26%
ABN AMRO Holdings 617,973 14,470,798
Bank of Ireland 649,886 13,325,200
First Chicago Corporation 146,000 12,939,250
Mellon Bank Corporation 164,650 11,463,756
Nordbanken AB 1,587,800 11,645,725
The Chase Manhattan Corporation 200,630 15,147,565
-----------
78,992,294
BROADCASTING - 0.78%
Mediaset SPA 1,323,479 8,450,749
-----------
BUSINESS SERVICES - 1.15%
Aggreko PLC* 662,222 2,200,367
Danka Business Systems, ADR 298,700 3,528,394
Intelidata Technologies Corporation* 963,600 933,488
NCR Corporation* 180,193 5,856,272
-----------
12,518,521
CHEMICALS - 5.27%
AKZO Nobel NV, ADS 54,300 12,079,429
BASF AG 217,700 10,351,146
Bayer AG 360,700 18,680,518
Rhone Poulenc SA 100,000 5,640,373
</TABLE>
The accompanying notes are an integral part of the financial statements.
83
<PAGE> 87
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
CHEMICALS - CONTINUED
The B.F. Goodrich Company 213,700 $10,604,863
-----------
57,356,329
COMPUTERS & BUSINESS EQUIPMENT - 1.04%
Data General Corporation * 756,750 11,303,953
-----------
CONGLOMERATES - 1.14%
CSR, Ltd. 1,939,000 5,608,934
Jardine Strategic Holdings, Ltd. 3,595,800 6,796,062
-----------
12,404,996
CONSTRUCTION MATERIALS - 1.99%
Cimpor-Cimentos de Portugual SA 59,050 2,076,026
Holderbank Financiere Glarus, Ltd. 9,100 11,598,098
Wolseley PLC 1,369,700 8,050,198
-----------
21,724,322
CONTAINERS & GLASS - 0.29%
Toyo Seikan Kaisha 254,100 3,124,105
-----------
CRUDE PETROLEUM & NATURAL GAS - 1.09%
Elf Aquitaine SA 84,200 11,838,166
-----------
DOMESTIC OIL - 0.77%
Tenneco, Incorporated 219,200 8,343,300
-----------
DRUGS & HEALTH CARE - 4.49%
Fujisawa Pharmaceutical
Company, Ltd. 569,000 5,341,448
Pharmacia & Upjohn,
Incorporated 475,700 21,941,663
Reckitt & Colman 1,131,767 21,618,297
-----------
48,901,408
ELECTRICAL EQUIPMENT - 1.05%
ABB AG 2,390 3,535,363
General Signal Corporation 94,500 3,402,000
Hitachi, Ltd. 680,000 4,450,712
-----------
11,388,075
ELECTRIC UTILITIES - 3.35%
Iberdrola SA 752,900 12,225,112
Southern Electric PLC 646,153 5,847,539
Unicom Corporation 152,400 5,343,525
VEBA AG 194,600 13,094,186
-----------
36,510,362
ELECTRONICS - 3.16%
Ascom Holding AG * 3,180 5,879,945
GenRad, Incorporated 558,100 11,022,475
Premier Farnell PLC, ADS 930,200 4,737,122
SGS Thomson Microelectronics,
Incorporated * 68,900 4,883,413
SHARES VALUE
------ -----
ELECTRONICS - CONTINUED
TDK Corporation 106,000 $ 7,857,814
-----------
34,380,769
FINANCIAL SERVICES - 5.28%
Enhance Financial Services
Group, Incorporated 252,600 8,525,250
International Nederlanded Groep NV 343,601 22,515,141
PennCorp Financial Group,
Incorporated 534,200 10,951,100
UST Corporation 585,800 15,523,700
-----------
57,515,191
FOOD & BEVERAGES - 4.72%
Danone 46,100 12,711,299
IBP, Incorporated 177,100 3,209,938
Kao Corporation 679,000 10,508,859
Lion Nathan, Ltd. 2,090,250 4,655,193
Nestle SA 8,900 19,077,726
Salvesen Christian 662,222 1,238,397
-----------
51,401,412
FOREST PRODUCTS - 0.85%
Georgia-Pacific Corporation 156,500 9,223,719
-----------
GAS & PIPELINE UTILITIES - 0.55%
Ocean Energy, Incorporated * 307,645 6,018,305
-----------
HOUSEHOLD APPLIANCES - 1.46%
Matsushita Electric Industrial
Company, Ltd. 404,000 6,515,657
Philips Electronics NV 111,700 9,396,483
-----------
15,912,140
HOUSEHOLD PRODUCTS - 1.39%
Benckiser NV 99,900 6,148,070
Tupperware Corporation 321,350 9,037,969
-----------
15,186,039
INDUSTRIAL MACHINERY - 2.09%
Bobst AG 2,500 4,606,089
Schindler Holding AG 3,400 5,186,555
Sumitomo Rubber Industries 174,000 941,289
Tecumseh Products Company,
Class A 133,700 7,061,031
United Dominion Industries, Ltd. 13,150 438,881
Valmet Corporation 260,220 4,491,258
-----------
22,725,103
INSURANCE - 6.51%
MBIA, Incorporated 230,600 17,266,175
Pohjola Insurance Group, Series B 6,000 298,848
Royal & SunAlliance Insurance
Group PLC 1,017,500 10,524,808
The accompanying notes are an integral part of the financial statements.
84
<PAGE> 88
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
INSURANCE-CONTINUED
SCOR 194,100 12,312,445
Sumitomo Marine & Fire 836,000 4,691,806
Terra Nova Bermuda Holdings, Ltd. 362,300 11,367,162
WPP Group PLC 2,197,400 14,409,992
-----------
70,871,236
MINING - 1.42%
English China Clay 897,010 3,100,317
Potash Corporation of
Saskatchewan, Incorporated 12,205 922,240
Potash Corporation of
Saskatchewan, Incorporated - CAD 151,795 11,429,368
-----------
15,451,925
PAPER - 1.34%
Boise Cascade Corporation 306,500 10,037,875
Clondalkin Group 513,400 4,543,287
-----------
14,581,162
PETROLEUM SERVICES - 1.15%
Burma Castrol PLC 369,200 6,583,720
Noble Drilling Corporation * 246,190 5,923,947
-----------
12,507,667
PHOTOGRAPHY - 1.39%
Fuji Photo Film Company 433,000 15,125,406
-----------
PUBLISHING - 2.48%
Aegis Group 2,495,700 4,042,058
Houghton Mifflin Company 724,950 23,017,163
-----------
27,059,221
RAILROADS & EQUIPMENT - 0.29%
BTR PCL 1,109,068 3,148,078
-----------
REAL ESTATE - 0.16%
Hysan Development Company, Ltd. 2,174,000 1,795,767
-----------
RETAIL GROCERY - 1.98%
Albertsons, Incorporated 240,100 12,440,181
American Stores Company 375,900 9,092,081
-----------
21,532,262
RETAIL TRADE - 5.78%
BJ's Wholesale Club,
Incorporated * 576,200 23,408,125
Delhaize-Le Lion SA 118,900 8,312,450
G.I.B. Holdings, Ltd. 80,600 4,551,224
Homebase, Incorporated * 576,200 4,573,587
Karstadt AG 38,300 18,635,532
Toys R Us, Incorporated * 144,200 3,397,712
-----------
62,878,630
SHARES VALUE
------ -----
TELECOMMUNICATIONS SERVICES - 2.57%
Comsat Corporation 692,850 $ 19,616,316
France Telecom, ADS 65,900 4,545,429
Telstra Corporation, Ltd. 1,471,800 3,782,385
------------
27,944,130
TELEPHONE - 4.68%
Nippon Telegraph & Telephone
Corporation 1,047 8,707,963
Telecom Italia SPA Risp. 3,650,000 17,677,360
Telefonica SA 385,418 17,819,456
Telus Corporation 259,509 6,710,147
------------
50,914,926
TOBACCO - 4.59%
BAT Industries PLC 501,498 5,024,107
Compagnie Financiere
Richemont AG 9,145 11,987,602
Imperial Tobacco 500,700 3,695,203
Japan Tobacco, Incorporated 680 4,617,921
Philip Morris Companies,
Incorporated 624,600 24,593,625
------------
45,300,537
TRUCKING & FREIGHT - 0.92%
Peninsular & Oriental Steam
Navigation Company 695,099 10,016,036
------------
TOTAL COMMON STOCKS
(Cost: $758,008,378) $956,992,526
------------
WARRANTS - 0.00%
REAL ESTATE - 0.00%
Hysan Development Company, Ltd.,
(Expiration date 04/30/1999;
strike price HKD 16.00) * 217,400 1,796
------------
TOTAL WARRANTS
(Cost: $0) $ 1,796
------------
PRINCIPAL
AMOUNT VALUE
- ------ -----
SHORT TERM INVESTMENTS - 11.96%
$130,224,090 Navigator Securities Lending
Trust, 5.54% $130,224,090
------------
The accompanying notes are an integral part of the financial statements.
85
<PAGE> 89
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------ -----
REPURCHASE AGREEMENTS - 0.12%
$1,291,000 Repurchase Agreement with
State Bank & Trust Company
dated 06/30/1998 at 5.00%, to
be repurchased at $1,291,179
on 07/01/1998 collateralized by
$1,005,000 U.S. Treasury
Bonds, 8.125% due 08/15/2019
(valued at $1,320,150, including
interest) $ 1,291,000
--------------
TOTAL INVESTMENTS (Global Equity
Trust) (Cost: $889,523,468) $1,088,509,412
==============
SMALL COMPANY VALUE TRUST
SHARES VALUE
------ -----
COMMON STOCKS - 87.90%
AEROSPACE - 0.56%
Aeroflex, Incorporated * 12,100 $125,537
Applied Signal Technology,
Incorporated * 10,600 125,875
Engineered Support Systems,
Incorporated 6,000 111,000
Primex Technologies,
Incorporated 5,400 276,750
Spacehab, Incorporated * 13,900 160,719
--------
799,881
AGRICULTURAL MACHINERY - 0.11%
Gehl Company * 7,500 151,875
--------
AIR TRAVEL - 0.66%
Alaska Air Group 12,100 660,206
Amtran, Incorporated * 12,100 297,963
--------
958,169
APPAREL & TEXTILES - 2.25%
Concord Fabrics, Incorporated * 3,800 35,150
Dixie Group, Incorporated 13,300 126,350
Drypers Corporation * 9,100 59,150
Fabri Centers America,
Incorporated 200 5,475
G III Apparel Group, Ltd. * 7,100 31,950
Goodys Family Clothing,
Incorporated 6,500 356,687
Guilford Mills, Incorporated 2,000 40,000
Haggar Corporation 8,900 113,475
Jan Bell Marketing Incorporated 17,500 113,750
Jos A Bank Clothiers,
Incorporated * 2,900 23,925
Kellwood Company 17,100 611,325
Maxwell Shoe, Incorporated * 10,400 206,700
SHARES VALUE
------ -----
APPAREL & TEXTILES - CONTINUED
Oneida, Ltd. 10,400 $ 318,500
Oshkosh B'Gosh, Incorporated 8,700 387,150
Quaker Fabric Corporation 6,100 88,069
Sirena Apparel Group,
Incorporated 5,500 37,125
Springs Industries, Incorporated 9,800 452,025
Supreme International
Corporation * 5,100 83,513
Tarrant Apparel Group * 8,200 154,775
----------
3,245,094
AUTO PARTS - 0.58%
Borg- Warner Automotive,
Incorporated 6,800 326,825
Discount Auto Parts,
Incorporated * 600 15,600
Excel Industries, Incorporated 7,600 108,775
Keystone Automotive Industry,
Incorporated 2,080 48,100
Raytech Corporation * 5,000 25,000
Safety Components
International Incorporated * 4,200 74,550
Standard Products Company 8,200 230,625
----------
829,475
BANKING - 3.86%
Ambanc Holding Company,
Incorporated 7,100 126,025
Bank United Corporation 900 43,088
Banknorth Group, Incorporated 2,600 96,200
BNC CORP, Incorporated * 1,900 33,725
Central Co-Operative Bank 1,600 42,400
Citizens Banking Corporation 300 10,088
Commercial Bank of New York 4,900 129,850
Corus Bankshares, Incorporated 9,400 378,350
Dime Community Bancorp,
Incorporated 16,800 466,200
Financial Bancorp, Incorporated 2,400 77,400
First Citizens Bancshares,
Incorporated 11,500 1,150,719
First Hawaiian, Incorporated 14,500 527,437
First Oak Brook Bancshares,
Incorporated 3,100 144,150
First Palm Beach Bancorp,
Incorporated 1,300 56,550
FNB Rochester Corporation 5,200 112,450
GBC Bancorp California 12,200 323,300
HF Bancorp, Incorporated * 2,300 40,681
Home Port Bancorp,
Incorporated 1,700 42,500
Hubco, Incorporated 1,200 42,975
Iroquois Bancorp, Incorporated 400 9,700
MAF Bancorp, Incorporated 400 14,550
The accompanying notes are an integral part of the financial statements.
86
<PAGE> 90
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
BANKING - CONTINUED
North City Bancorp * 525 $ 7,383
NSS Bancorp, Incorporated 3,300 184,800
Pacific Bank, N.A. 2,700 148,500
PONCEBANK 5,500 141,969
Professional Bancorp 1,900 35,506
Quaker City Bancorp Incorporated * 400 9,200
Riggs National Corporation 2,800 81,812
Sandwich Bancorp, Incorporated 1,800 114,300
Sierrawest Bancorp 3,300 104,362
Silicon Valley Bancshares * 19,200 683,400
Skaneateles Bancorp, Incorporated 1,200 21,150
Sterling Bancorp 3,100 80,600
Sumitomo Bank of California 2,200 83,050
Wainwright Bank & Trust
Company, Boston 500 4,688
----------
5,569,058
BROADCASTING - 0.03%
Andersen Group, Incorporated * 2,600 18,850
Datron Systems, Incorporated * 3,200 21,600
----------
40,450
BUILDING MATERIALS & CONSTRUCTION - 0.45%
Abrams Industries, Incorporated 4,200 28,875
American Buildings Company * 4,800 142,800
NCI Building Systems,
Incorporated 7,600 438,900
Perini Corporation * 5,000 42,813
----------
653,388
BUSINESS SERVICES - 8.12%
ACNielson Corporation * 51,900 1,310,475
Advanced Marketing Services,
Incorporated 6,400 108,800
ADVO, Incorporated * 25,800 727,237
Allied Research Corporation * 3,900 48,750
American Business Information,
Incorporated 12,700 203,200
Analysis & Technology,
Incorporated 2,100 43,050
Automobile Protection
Corporation * 14,700 146,081
Barra, Incorporated * 13,600 333,200
Bowne & Company, Incorporated 14,800 666,000
Cadmus Communications
Corporation 9,300 225,525
Complete Management,
Incorporated * 16,300 64,181
Dianon Systems, Incorporated * 5,700 52,725
Education Management
Corporation 4,900 161,087
Electro Rental * 3,800 85,263
Exponent, Incorporated 5,600 47,600
SHARES VALUE
------ -----
BUSINESS SERVICES - CONTINUED
Grey Advertising, Incorporated 1,800 $ 712,800
GTECH Holdings Corporation * 29,400 990,412
Harbinger Corporation * 10,650 257,597
Information Resources,
Incorporated * 33,700 623,450
Interim Services, Incorporated * 32,400 1,040,850
Intervoice, Incorporated 14,700 260,925
ITEX Corporation * 9,900 18,253
Kelly Services, Incorporated 13,300 470,487
LCS Industries, Incorporated 5,900 86,287
Marlton Technologies,
Incorporated * 3,600 23,400
Maxco, Incorporated * 4,500 36,563
Merrill Corporation 10,700 236,069
National Technical Systems,
Incorporated 9,400 72,850
Norrell Corporation Georgia 3,400 67,788
Norwood Promotional Products,
Incorporated * 3,800 76,000
Olsten Corporation 72,700 813,331
Opinion Research Corporation * 300 2,438
PCA International, Incorporated 9,400 237,350
Personal Group Of America,
Incorporated * 18,400 368,000
Refac Technology Development
Corporation * 4,800 59,100
Snyder Communications,
Incorporated * 1,400 61,600
Stone & Webster, Incorporated 5,700 225,862
Systems & Computer
Technology Corporation 26,800 723,600
Total Research Corporation * 1,500 5,438
Trio-Tech International * 2,600 11,213
-----------
11,704,837
CHEMICALS - 1.95%
American Vanguard Corporation 3,000 28,125
Cambrex Corporation 24,600 645,750
Dexter Corporation 12,000 381,750
Dtrex Corporation * 1,800 22,725
Farrel Corporation 5,300 20,040
Ferro Corporation 47,500 1,202,344
Fuller H B Company 9,200 510,025
-----------
2,810,759
COMPUTERS & BUSINESS EQUIPMENT - 4.15%
AMX Corporation * 11,900 89,994
BancTec, Incorporated * 23,200 536,500
Banyan Systems, Incorporated * 23,000 189,750
Boundless Corporation * 6,300 42,525
Dataram Corporation * 4,100 47,663
Digi International, Incorporated * 22,300 451,575
Equinox Systems, Incorporated * 6,900 57,356
The accompanying notes are an integral part of the financial statements.
87
<PAGE> 91
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMPUTERS & BUSINESS EQUIPMENT - CONTINUED
Evans & Sutherland Computer
Company * 1,000 $ 25,188
General Binding Corporation 4,800 176,700
Gerber Scientific, Incorporated 800 18,200
Gradco Systems, Incorporated * 6,525 44,044
Intergraph Corporation 51,100 437,544
ITI Technologies, Incorporated * 8,100 229,331
Microsemi Corporation * 14,200 131,350
National Computer Systems,
Incorporated 37,900 909,600
Powerhouse Technologies,
Incorporated * 13,800 135,412
Printronix Corporation * 9,200 147,200
Programmers Paradise,
Incorporated * 6,900 56,925
QMS, Incorporated * 3,300 11,756
Rainbow Technologies,
Incorporated * 7,800 159,900
Scan Optics, Incorporated * 7,000 36,750
SPSS, Incorporated * 800 18,600
Stratus Computer, Incorporated * 37,700 954,281
Thrustmaster, Incorporated * 3,200 25,600
Wang Labs, Incorporated * 41,100 1,045,481
----------
5,979,225
CONGLOMERATES - 0.46%
ACX Technologies, Incorporated * 14,700 319,725
Cooper Life Sciences,
Incorporated * 2,500 95,625
Griffon Corporation * 12,100 155,031
Triarc Companies, Incorporated,
Class A 4,100 89,944
----------
660,325
CONSTRUCTION MATERIALS - 0.58%
Florida Rock Industries,
Incorporated 7,400 215,988
Patrick Industries, Incorporated 5,400 82,350
Republic Group, Incorporated 1,000 21,000
TJ International, Incorporated 17,300 521,162
----------
840,500
CONSTRUCTION & MINING EQUIPMENT - 1.10%
ABT Building Prods Corporation * 8,400 144,375
Astec Industries, Incorporated * 12,200 420,900
CDI Corporation 12,600 337,050
Gencor Industries, Incorporated 12,000 241,500
Kaman Corporation 23,100 439,622
----------
1,583,447
SHARES VALUE
------ -----
COSMETICS & TOILETRIES - 0.13%
Block Drug, Incorporated 5,047 191,786
----------
DOMESTIC OIL - 0.17%
Houston Exploration Company * 10,200 233,962
Maynard Oil Company * 1,300 13,163
----------
247,125
DRUGS & HEALTH CARE - 5.20%
Acuson Corporation * 18,800 $ 341,925
ALPHARMA, Incorporated 17,100 376,200
ATL Ultrasound * 14,500 661,562
Beckman Coulter, Incorporated 4,900 285,425
Bio Logic Systems Corporation * 1,800 7,425
Bio Reference Laboratories,
Incorporated * 7,000 10,938
Chemed Corporation 5,000 170,312
CNS, Incorporated 10,300 47,959
Copley Pharmaceutical,
Incorporated * 14,800 90,650
Covance, Incorporated * 9,500 213,750
Datascope Corporation * 19,900 528,594
Drug Emporium, Incorporated * 13,800 53,475
Equimed, Incorporated * 4,700 25,263
Gamma Biologicals,
Incorporated 4,600 22,138
Hanger Orthopedic Group 18,700 381,012
Herbalife International,
Incorporated * 8,099 178,774
Horizon Health Corporation * 6,100 106,750
Integrated Health Services,
Incorporated 6,000 225,000
Invacare Corporation 40,300 1,032,687
Marquette Medical Systems,
Incorporated * 15,200 389,975
Maxxim Medical, Incorporated * 12,000 348,000
Meridian Medical Technologies,
Incorporated * 3,800 36,100
Minntech Corporation 4,900 60,638
Moore Medical Corporation * 2,400 29,400
Polymedica Corporation * 6,000 54,000
Quest Diagnostics, 43,000 940,625
Incorporated*
Roberts Pharmaceutical
Corporation * 17,400 400,200
Sheridan Healthcare,
Incorporated * 6,100 72,437
Sonosight, Incorporated * 4,200 30,713
Spacelabs, Incorporated * 12,300 206,025
Sunrise Medical, Incorporated * 1,700 25,500
Syncor International Corporation * 8,300 143,175
----------
7,496,627
ELECTRICAL EQUIPMENT - 1.26%
Amistar Corporation * 2,800 9,450
The accompanying notes are an integral part of the financial statements.
88
<PAGE> 92
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
ELECTRICAL EQUIPMENT -CONTINUED
Barnes Group, Incorporated 200 $ 5,413
Bel Fuse, Incorporated * 6,300 140,175
Belden, Incorporated 700 21,438
CMC Industry, Incorporated * 10,500 77,437
Cohu, Incorporated 7,400 179,912
Comdial Corporation * 10,400 126,100
Diodes, Incorporated * 4,700 32,313
Encore Wire Corporation 11,250 181,406
ESCO Electronics Corporation * 10,700 203,300
Fluke Corporation 11,700 384,637
Genlyte Group, Incorporated * 4,200 111,300
Kewaunee Scientific Corporation 2,500 28,125
PSC, Incorporated * 13,600 123,250
Relm Wireless Corporation * 5,700 17,456
Sl Industry, Incorporated 1,600 22,000
Twin Disc, Incorporated 2,700 81,675
Williams Clayton Energy,
Incorporated * 7,600 77,900
----------
1,823,287
ELECTRIC UTILITIES - 0.83%
Public Service Company 52,500 1,191,094
----------
ELECTRONICS - 3.05%
Activision, Incorporated 15,100 155,719
Alliant Techsystems,
Incorporated * 4,400 278,300
American Technical Ceramics * 3,100 28,869
Bairnco Corporation 3,000 27,000
Baldwin Technology,
Incorporated * 13,000 76,375
Cobra Electronics Corporation * 8,100 41,006
Cognitronics Corporation * 4,600 63,825
CP Clare Corporation 9,900 94,050
CTS Corporation 16,300 480,850
Dallas Semiconductor
Corporation 12,500 387,500
EG & G, Incorporated 56,800 1,704,000
Frequency Electronics,
Incorporated 3,200 40,200
General Microwave Corporation* 1,000 10,000
Genicom Corporation * 13,400 61,975
Herley Industries, Incorporated * 10,600 131,175
IEC Electronics Corporation 9,500 65,906
Integrated Circuit Systems,
Incorporated * 14,500 241,062
Optek Technology, Incorporated* 2,600 49,725
Reliability, Incorporated * 5,800 66,700
SDL, Incorporated * 400 9,550
Siliconix, Incorporated 4,400 107,800
Tech-Sym Corporation * 4,400 122,375
Vicon Industries, Incorporated * 3,300 25,988
Video Display Corporation * 4,700 51,700
Videonics, Incorporated * 1,800 3,150
Xeta Corporation * 3,900 78,000
----------
4,402,800
FINANCIAL SERVICES - 5.77%
Albank Final 13,800 973,762
Associated Banc Corporation 7,700 289,712
Atalanta/ Sosnoff Capital
Corporation 2,000 19,500
Carver Bancorp, Incorporated * 2,800 37,100
Cathay Bancorp Incorporated 700 32,550
CFI Proservices, Incorporated * 5,900 100,300
Commercial Assets,
Incorporated 1,500 9,938
Community Bank Systems,
Incorporated 4,900 153,431
Community Financial Group,
Incorporated 5,100 75,863
Contifinancial Corporation * 100 2,313
D & N Savings Financial
Corporation 550 14,747
Delphi Financial Group,
Incorporated * 1,800 101,362
Delta Financial Corporation * 1,700 31,238
Downey Financial Corporation 6,400 209,200
EVEREN Capital Corporation * 9,000 252,000
First Bancshares, Incorporated 1,700 22,525
First Republic Bank * 12,700 458,787
First Street Bancorporation 2,100 50,663
Firstbank Puerto Rico 20,800 540,800
Hallmark Capital Corporation 400 5,600
Hawthorne Financial Corporation * 5,900 100,300
Impac Mort Holdings
Incorporated 700 10,894
Jefferies Group, Incorporated 13,600 557,600
JSB Financial, Incorporated 9,800 573,912
JW Genesis Financial
Corporation 5,000 50,625
Lakeview Financial Corporation 5,300 148,400
Landamerica Financial Group,
Incorporated 12,800 732,800
McDonald Company
Investments, Incorporated 2,000 65,625
National R.V. Holdings,
Incorporated 6,000 270,750
North Central Bancshares,
Incorporated 2,500 52,969
Ottawa Financial Corporation 2,400 69,300
Pacific Crest Capital,
Incorporated * 2,400 42,300
PennFed Financial Services,
Incorporated 12,800 212,000
The accompanying notes are an integral part of the financial statements.
89
<PAGE> 93
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
FINANCIAL SERVICES - CONITNUED
Peoples Bancshares,
Incorporated 3,900 $ 90,431
Redwood Empire Bancorp 2,800 58,100
Reliance Bancorp, Incorporated 12,000 459,750
Southwest Securities Group,
Incorporated 8,900 200,250
TF Financial Corporation 2,600 66,625
Thornburg Mortgage Asset
Corporation 27,900 340,031
UST Corporation 31,500 834,750
WFS Financial, Incorporated * 1,000 7,000
----------
8,325,803
FOOD & BEVERAGES - 1.44%
Bob Evans Farms, Incorporated 6,300 133,481
Chock Full O' Nuts Corporation * 11,700 79,706
Earthgrains Company 22,500 1,257,187
Fresh Choice, Incorporated * 4,700 14,688
International Multifoods
Corporation 16,200 445,500
Taco Cabana, Incorporated * 19,000 119,938
United Natural Foods,
Incorporated * 800 22,800
----------
2,073,300
FOREST PRODUCTS - 0.16%
American Woodmark
Corporation 7,600 208,050
Baltek Corporation * 2,600 22,181
----------
230,231
GAS & PIPELINE UTILITIES - 0.48%
Eastern Enterprises 9,700 415,888
Louis Dreyfus Natural Gas
Corporation * 10,700 202,631
Mitchell Energy & Development
Corporation 1,600 30,800
Southwest Gas Corporation 2,000 48,875
----------
698,194
HOMEBUILDERS - 0.82%
Beazer Homes USA,
Incorporated * 8,100 210,094
Champion Enterprises,
Incorporated * 18,500 543,437
Crossmann Communities,
Incorporated * 8,000 243,000
Dominion Homes, Incorporated * 4,300 62,350
Kennedy Wilson, Incorporated * 4,200 47,250
Pulte Corporation 1,200 35,850
Walter Industries, Incorporated * 2,100 39,769
----------
1,181,750
SHARES VALUE
------ -----
HOTELS & RESTAURANTS - 2.05%
Ark Restaurants Corporation * 3,000 $ 36,000
Back Bay Restaurant Group * 4,100 33,313
Bertucci's, Incorporated 10,500 107,625
Buffets, Incorporated * 21,600 338,850
Foodmaker, Incorporated * 50,800 857,250
HOTELS & RESTAURANTS - CONTINUED
Garden Fresh Restaurant
Corporation * 5,900 106,200
Luby's Cafeterias, Incorporated 13,400 235,337
Main Street & Main Incorporated * 5,100 19,125
Ryan's Family Steak Houses,
Incorporated * 50,200 514,550
ShowBiz Pizza Time,
Incorporated 17,700 713,531
----------
2,961,781
HOUSEHOLD APPLIANCES - 0.56%
American Biltrite, Incorporated 4,100 121,975
Graham Corporation * 2,400 39,000
Ladd Furniture, Incorporated 10,300 309,000
Metatec Corporation * 7,000 40,688
Stanley Furniture, Incorporated* 10,200 258,825
Toro Company 1,200 41,100
----------
810,588
HOUSEHOLD PRODUCTS - 0.18%
Winsloew Furniture, Incorporated * 9,600 259,200
----------
INDUSTRIAL MACHINERY - 3.30%
Brown & Sharpe Manufacturing
Company * 10,600 127,200
Cameron Ashley Building
Product * 11,900 200,813
Chicago Rivet Machine Company 600 19,725
Gleason Corporation 12,300 345,937
Kennametal, Incorporated 26,000 1,085,500
Manitowoc, Incorporated 600 24,188
Moore Products Company 2,700 74,925
NACCO Industries,
Incorporated, Class A 8,400 1,085,700
Peerless Manufacturing
Company 1,000 12,625
Quipp, Incorporated * 2,600 52,000
Speizman Industries,
Incorporated * 4,400 23,100
SPX Corporation * 8,600 553,625
Tecumseh Prods Company 200 11,450
Triumph Group, Incorporated * 5,500 231,000
Unit Industries, Incorporated * 3,700 32,606
Unova, Incorporated * 41,000 881,500
----------
4,761,894
The accompanying notes are an integral part of the financial statements.
90
<PAGE> 94
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
INSURANCE - 3.56%
Acceptance Insurance Company * 10,700 $ 262,819
Fidelity National Financial
Corporation 23,500 935,593
First American Financial
Corporation 20,300 1,827,000
Foremost Corporation America 23,000 554,875
Highlands Insurance Group,
Incorporated 1,700 31,450
Intercontinental Life Corporation 5,100 131,325
*
Midland Company 800 18,300
Presidential Life Corporation 3,800 81,225
PXRE Corporation 9,400 282,000
Stewart Information Services
Corporation 8,700 422,494
Vesta Insurance Group,
Incorporated 1,100 23,444
Willis Corroon Group PLC, ADR 44,900 564,056
----------
5,134,581
INVESTMENT COMPANIES - 1.93%
Advest Group, Incorporated 2,000 57,750
Eaton Vance Corporation 15,200 703,950
John Nuveen Company 4,800 190,500
Pilgrim America Capital
Corporation * 7,600 183,350
Raymond James Financial,
Incorporated 48,250 1,444,484
Stifel Financial Corporation 7,245 110,034
Value Line, Incorporated 2,300 87,975
----------
2,778,043
LEISURE TIME - 1.39%
4Kids Entertainment,
Incorporated * 2,300 19,550
Anchor Gaming 1,900 147,487
Escalade, Incorporated * 3,400 79,050
Grand Casinos, Incorporated * 36,900 618,075
IlX Incorporated 3,500 20,563
Inland Entertainment Corporation * 6,500 22,750
Intrav, Incorporated 5,300 111,300
Movie Gallery, Incorporated * 15,200 110,200
Play By Play Toys & Novelties,
Incorporated 4,800 49,500
Players International,
Incorporated * 38,900 193,284
Quintel Entertainment,
Incorporated * 4,700 18,213
Transport World Entertainment
Corporation * 14,300 616,687
----------
2,006,659
SHARES VALUE
------ -----
LIQUOR - 0.81%
Adolph Coors Company, Class B 34,300 $1,166,200
----------
MINING - 0.64%
Cleveland-Cliffs, Incorporated 10,000 536,250
Lincoln Electric Holding,
Incorporated 12,000 258,000
Pittston Company 8,300 129,169
----------
923,419
MOBILE HOMES - 1.00%
Fleetwood Enterprises,
Incorporated 36,100 1,444,000
----------
NEWSPAPERS - 0.31%
Media General, Incorporated 9,200 448,500
----------
NON-FERROUS METALS - 1.60%
American Resources Delaware,
Incorporated * 10,500 24,609
Lindberg Corporation 4,900 95,550
Mueller Industry, Incorporated * 40,800 1,514,700
Wolverine Tube, Incorporated * 17,700 672,600
----------
2,307,459
OFFICE FURNISHINGS & SUPPLIES - 0.26%
Kimball International,
Incorporated 21,000 380,625
----------
PAPER - 0.85%
FiberMark, Incorporated * 11,400 182,400
Glatfelter P H Company 20,900 330,481
Rock-Tenn Company 36,900 463,556
Shorewood Packaging
Corporation * 16,050 254,794
----------
1,231,231
PETROLEUM SERVICES - 2.54%
Ceanic Corporation * 10,600 205,375
Dawson Geophysical Company * 7,200 136,800
Global Industries, Incorporated 4,700 79,313
Lufkin Industries, Incorporated 5,700 188,100
Oceaneering International,
Incorporated * 22,500 399,375
Petroleum Development
Corporation * 29,500 142,890
Pool Energy Services Company* 24,900 367,275
PS Group Holding, Incorporated 6,500 79,625
Seitel, Incorporated * 25,300 409,544
Varco International, 22,100 437,856
Incorporated
Veritas DGC, Incorporated * 24,500 1,223,469
----------
3,669,622
The accompanying notes are an integral part of the financial statements.
91
<PAGE> 95
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
PHOTOGRAPHY - 0.16%
CPI Corporation 5,600 $ 133,350
Optical Coating Laboratory,
Incorporated 4,900 93,713
----------
227,063
PLASTICS - 0.01%
China Resources Development* 4,800 7,800
----------
POLLUTION CONTROL - 1.66%
Allied Waste Industries,
Incorporated * 96,400 2,313,600
Emcon * 6,700 31,825
Harding Lawson Associates
Group * 5,300 48,031
----------
2,393,456
PUBLISHING - 0.23%
Courier Corporation 3,600 95,400
Plenum Publishing Corporation 3,300 241,725
----------
337,125
RAILROADS & EQUIPMENT - 0.24%
Greenbrier Company,
Incorporated 600 10,350
Johnstown AmericaI Industry,
Incorporated * 19,700 342,288
----------
352,638
REAL ESTATE - 5.80%
American General Hospitality
Corporation 6,100 129,625
Amrep Corporation * 6,800 66,300
Angeles Mortgage Investment
Trust 2,600 47,450
Arden Realty, Incorporated 68,600 1,775,025
Bluegreen Corporation * 28,200 248,512
Brandywine Realty Trust SBI 9,000 201,375
Capstone Capital Corporation 18,200 418,600
CB Richard Ellis Services,
Incorporated * 22,000 735,625
CBL & Associates Properties,
Incorporated 12,900 312,825
Dominion Resources Black
Warrior Trust 4,300 88,419
Essex Property Trust 14,200 440,200
Excel Realty Trust, Incorporated 25,600 737,600
Execl Legacy Corporation * 16,600 72,625
Facility Realty, Incorporated 2,600 20,800
FelCor Suite Hotels,
Incorporated 34,600 1,085,575
Glenborough Realty Trust,
Incorporated * 40,800 1,076,100
Healthcare Realty Trust * 200 5,450
SHARES VALUE
------ -----
REAL ESTATE - CONTINUED
Highwoods Properties,
Incorporated 6,700 $ 216,494
Hospitality Properties Trust SBI 5,700 183,112
LNR Property Corporation * 1,200 30,750
Security Capital Atlantic,
Incorporated 6,000 133,875
Taubman Centers, Incorporated,
REIT 19,700 280,725
TriNet Corporate Realty Trust,
Incorporated 1,200 40,800
Walden Residential Properties,
Incorporated 600 14,700
----------
8,362,562
RETAIL GROCERY - 0.06%
Foodarama Supermarkets * 1,600 54,200
Village Super Market,
Incorporated * 2,100 33,863
----------
88,063
RETAIL TRADE - 5.05%
Ames Department Stores,
Incorporated * 29,500 776,219
BJ's Wholesale Club,
Incorporated * 47,200 1,917,500
Bon-Ton Stores, Incorporated * 12,300 197,569
Brookstone, Incorporated * 10,400 156,000
Burlington Coat Factory
Warehouse 22,200 499,500
Catherines Stores Corporation * 8,300 81,444
Chicos Fas, Incorporated 4,700 72,850
Cole National Corporation * 19,600 784,000
Dress Barn,The 1,200 29,850
Family Bargain Corporation * 6,300 18,112
Finlay Enterprises, Incorporated* 13,100 316,037
Fossil, Incorporated 500 12,438
Mays J W, Incorporated * 3,800 47,500
Pamida Holdings Corporation * 10,800 75,600
Piercing Pagoda, Incorporated * 6,400 232,000
Sharper Image Corporation * 10,600 51,675
Shoe Carnival, Incorporated * 1,300 18,037
United Retail Group,
Incorporated * 4,700 74,612
Value City Department Stores,
Incorporated * 18,000 378,000
Video Update, Incorporated * 17,700 25,444
Zale Corporation * 47,500 1,511,094
----------
7,275,481
SHIPBUILDING - 0.22%
Avondale Industries,
Incorporated* 11,500 317,328
----------
The accompanying notes are an integral part of the financial statements.
92
<PAGE> 96
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
SOFTWARE - 4.58%
Adept Technology, Incorporated* 5,800 $ 43,863
American Software, Incorporated * 7,300 51,100
Ardent Software, Incorporated * 10,300 141,625
Artisoft, Incorporated * 10,500 28,875
Aspect Development,
Incorporated * 9,200 695,750
Boole & Babbage, Incorporated * 7,050 168,319
Discreet Logic, Incorporated * 28,900 335,962
Expert Software, Incorporated * 7,300 30,113
Imation Corporation * 33,400 553,187
Infinium Software, Incorporated * 12,200 169,275
International Microcomp
Software, Incorporated * 9,200 143,750
Intersolv, Incorporated * 16,600 266,637
Manugistics Group, Incorporated 13,100 324,225
Mentor Graphics Corporation * 57,200 604,175
Platinum Technology,
Incorporated 49,600 1,416,700
Policy Management Systems
Corporation * 11,400 447,450
Progress Software Corporation * 11,200 459,200
Quality Systems * 7,600 70,300
Software Spectrum, Incorporated * 4,200 85,050
Symix Systems, Incorporated * 11,800 243,375
Titan Corporation 19,500 117,000
Wall Data, Incorporated * 13,100 209,600
----------
6,605,531
STEEL - 2.01%
LTV Corporation 119,700 1,144,631
NS Group, Incorporated * 13,100 132,637
Pitt Desmoines, Incorporated 400 10,600
Steel of West Virginia,
Incorporated * 7,500 72,188
Texas Industries, Incorporated 21,800 1,155,400
Varlen Corporation 11,250 388,125
----------
2,903,581
TELECOMMUNICATIONS SERVICES - 0.82%
Atlantic Tele Network, Incorporated * 5,560 68,110
Comsat Corporation 11,500 325,594
Price Communications Corporation * 4,400 67,375
Superior Telecom, Incorporated 13,500 561,937
Teltrend, Incorporated * 9,400 161,563
----------
1,184,579
TELEPHONE - 0.02%
Hector Communications Corporation * 3,100 34,488
----------
TOYS, AMUSEMENTS & SPORTING GOODS - 0.17%
Coastcast Corporation * 11,600 208,800
Riddell Sports, Incorporated 6,700 33,500
----------
242,300
SHARES VALUE
------ -----
TRUCKING & FREIGHT - 1.71%
Airbourne Freight Corporation 55,000 $ 1,921,562
TRUCKING & FREIGHT - CONTINUED
Consolidated Freightways
Corporation * 36,000 501,750
Roadway Express, Incorporated 1,800 33,975
Travel Ports America,
Incorporated * 2,376 7,277
------------
2,464,564
TOTAL COMMON STOCKS
(Cost: $124,693,976) $126,768,841
------------
PRINCIPAL
AMOUNT VALUE
- ------ -----
SHORT TERM INVESTMENTS - 12.10%
$17,449,045 Navigator Securities Lending
Trust, 5.54% $ 17,449,045
------------
TOTAL INVESTMENTS (Small
Company Value Trust) (Cost:
$142,143,021) $144,217,886
============
EQUITY TRUST
SHARES VALUE
------ -----
COMMON STOCKS - 83.96%
AEROSPACE - 0.38%
GenCorp, Incorporated 74,500 $ 1,881,125
Gulfstream Aerospace
Corporation 112,300 5,221,950
-----------
7,103,075
AGRICULTURAL MACHINERY - 0.15%
Delta and Pine Land Company 62,100 2,763,450
-----------
AIR TRAVEL - 0.05%
Sealed Air Corporation* 600 22,050
Virgin Express Holdings PLC, ADR* 64,800 838,350
-----------
860,400
ALUMINUM - 1.01%
Aluminum Company of America 290,450 19,151,547
-----------
APPAREL & TEXTILES - 1.74%
Brylane, Incorporated* 71,100 3,270,600
Culp, Incorporated 57,100 738,731
Kellwood Company 65,600 2,345,200
Mohawk Industries, Incorporated* 148,000 4,689,750
Nike, Incorporated, Class B 115,700 5,633,144
Reebok International, Ltd. 281,800 7,802,337
Shaw Industries, Incorporated 82,800 1,459,350
Stage Stores, Incorporated 68,700 3,108,675
The accompanying notes are an integral part of the financial statements.
93
<PAGE> 97
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
APPAREL & TEXTILES - CONTINUED
Unifi, Incorporated 112,550 $ 3,854,838
-----------
32,902,625
AUTO PARTS - 0.44%
Danaher Corporation 113,700 4,171,369
Federal-Mogul Corporation 62,200 4,198,500
-----------
8,369,869
AUTOMOBILES - 0.53%
Federal Signal Corporation 50,000 1,215,625
Harley Davidson, Incorporated 205,100 7,947,625
Schawk, Incorporated, Class A 62,600 939,000
-----------
10,102,250
BANKING - 2.89%
Amsouth Bancorporation 83,400 3,278,663
Banc One Corporation 65,250 3,641,766
Comerica, Incorporated 139,800 9,261,750
Crestar Financial Corporation 51,000 2,782,688
M & T Bank Corporation 300 166,200
Marshall & Ilsley Corporation 52,800 2,696,100
National City Corporation 25,400 1,803,400
North Fork Bancorporation,
Incorporated 264,977 6,475,375
Providian Financial Corporation 20,500 1,610,531
Southwest Bancorporation of
Texas, Incorporated* 65,200 1,226,575
Star Banc Corporation 44,200 2,823,275
Texas Regional Bancshares,
Incorporated 11,200 366,800
U.S. Bancorp 241,875 10,400,625
Westamerica Bancorporation 89,800 2,884,825
Zions BanCorporation 99,300 5,275,312
-----------
54,693,885
BROADCASTING - 1.50%
CBS Corporation 77,900 2,473,325
Clear Channel Communications* 75,300 8,217,112
E.W. Scripps Company, Class A 25,800 1,414,163
Jacor Communications,
Incorporated, Class A * 52,200 3,079,800
MediaOne Group, Incorporated 264,700 11,630,256
Tele-Communications,
Incorporated* 74,700 1,498,669
-----------
28,313,325
BUILDING MATERIALS & CONSTRUCTION - 1.13%
Fluor Corporation 276,900 14,121,900
Harsco Corporation 160,100 7,334,581
-----------
21,456,481
BUSINESS SERVICES - 5.44%
AccuStaff, Incorporated * 90,600 2,831,250
SHARES VALUE
------ -----
BUSINESS SERVICES - CONTINUED
Administaff, Incorporated 30,600 $ 1,411,425
America Online, Incorporated 91,800 9,730,800
Banta Corporation 187,200 5,779,800
Deluxe Corporation 514,200 18,414,787
GTECH Holdings Corporation* 78,700 2,651,206
Harte Hanks Communications 64,800 1,672,650
Humana, Incorporated* 41,400 1,291,163
Interpublic Group Companies,
Incorporated 17,800 1,080,238
Jacobs Engineering Group,
Incorporated* 92,400 2,968,350
Laidlaw, Incorporated 120,000 1,447,453
OmniCom Group, Incorporated 256,400 12,787,950
Paychex, Incorporated 51,600 2,099,475
R.R. Donnelley & Sons Company 492,900 22,550,175
Service Corporation International 119,900 5,140,713
Stone & Webster, Incorporated 279,300 11,067,262
------------
102,924,697
CHEMICALS - 5.56%
Cabot Corporation 374,600 12,104,262
Cytec Industries, Incorporated 55,600 2,460,300
E.I. Du Pont De Nemours &
Company 40,000 2,985,000
Ferro Corporation 152,650 3,863,953
Great Lakes Chemical
Corporation 34,000 1,340,875
Hercules, Incorporated 482,900 19,859,262
IMC Global, Incorporated 68,100 2,051,513
Lawter International,
Incorporated 195,900 2,130,413
M.A. Hanna Company 267,800 4,904,087
Macdermid, Incorporated 59,400 1,678,050
Nalco Chemical Company 728,600 25,592,075
Olin Corporation 145,500 6,065,531
Union Carbide Corporation 90,800 4,846,450
VWR Scientific Products
Corporation 34,800 856,950
Waters Corporation 62,600 3,689,488
Witco Corporation 365,200 10,682,100
------------
105,110,309
COMPUTERS & BUSINESS EQUIPMENT - 2.66%
Computer Learning Centers,
Incorporated 113,200 2,815,850
CSG Systems International,
Incorporated* 40,600 1,903,125
E*Trade Group, Incorporated * 96,000 2,202,000
HBO & Company 171,000 6,027,750
Hutchinson Technology,
Incorporated* 38,900 1,060,025
The accompanying notes are an integral part of the financial statements.
94
<PAGE> 98
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMPUTERS & BUSINESS EQUIPMENT - CONTINUED
Ingram Micro, Incorporated,
Class A* 60,700 $ 2,685,975
Pixar* 38,300 2,312,362
Quantum Corporation* 40,300 836,225
Seagate Technology,
Incorporated 473,200 11,268,075
Tandy Corporation 82,700 4,388,269
Unisys Corporation* 522,500 14,760,625
-----------
50,260,281
CONGLOMERATES - 0.48%
Triarc Companies, Incorporated,
Class A 160,200 3,514,388
Tyco International, Ltd. 89,174 5,617,962
-----------
9,132,350
CONSTRUCTION MATERIALS - 0.73%
Armstrong World Industries,
Incorporated 86,600 5,834,675
Dayton Superior Corporation,
Class A* 93,900 1,690,200
Lone Star Industries,
Incorporated 46,700 3,598,819
Medusa Corporation 19,300 1,211,075
Owens-Corning 34,400 1,403,950
-----------
13,738,719
CONSTRUCTION & MINING EQUIPMENT - 0.22%
Harnischfeger Industries,
Incorporated 144,200 4,082,663
-----------
CONTAINERS & GLASS - 0.67%
Mark IV Industries, Incorporated 76,750 1,659,719
Owens-Illinois, Incorporated 179,050 8,012,487
Silgan Holdings, Incorporated 107,900 3,021,200
-----------
12,693,406
COSMETICS & TOILETRIES - 0.62%
Alberto Culver Company, Class A 290,000 7,358,750
International Flavors &
Fragrances, Incorporated 57,300 2,488,969
Revlon, Incorporated, Class A 37,400 1,921,425
-----------
11,769,144
CRUDE PETROLEUM & NATURAL GAS - 2.62%
Burlington Resources,
Incorporated 281,797 12,134,883
Elf Aquitaine SA 70,000 9,841,706
Enron Oil & Gas Company 107,300 2,172,825
Nuevo Energy Company 58,350 1,874,494
Occidental Petroleum Corporation 646,900 17,466,300
Valero Energy Corporation 183,700 6,108,025
-----------
49,598,233
SHARES VALUE
------ -----
DOMESTIC OIL - 1.30%
Amerada Hess Corporation 281,800 $ 15,305,262
Phillips Petroleum Company 80,000 3,855,000
Unocal Corporation 58,300 2,084,225
USX-Marathon Group 100,000 3,431,250
------------
24,675,737
DRUGS & HEALTH CARE - 6.36%
Bausch & Lomb, Incorporated 353,900 17,739,237
C.R. Bard, Incorporated 49,400 1,880,288
Cardinal Health, Incorporated 68,300 6,403,125
Columbia/HCA Healthcare
Corporation 220,900 6,433,712
Cyberonics, Incorporated 69,500 738,438
Cytyc Corporation 59,700 973,856
Fred Meyer, Incorporated* 60,300 2,562,750
Gilead Sciences, Incorporated 32,400 1,038,825
Guidant Corporation 69,600 4,963,350
Health Management
Association, Class A 225,150 7,528,453
HEALTHSOUTH Corporation* 244,750 6,531,766
Incontrol, Incorporated 20,200 53,025
McKesson Corporation 280,700 22,806,875
Medtronic, Incorporated 152,300 9,709,125
Rexall Sundown, Incorporated* 87,200 3,073,800
Sofamor/Danek Group,
Incorporated* 23,400 2,025,562
Steris Corporation* 10,400 661,375
Sybron International Corporation 173,450 4,379,612
Tenet Healthcare Corporation* 103,200 3,225,000
United Healthcare Corporation 265,600 16,865,600
Young Innovations Investor* 50,300 773,363
------------
120,367,137
ELECTRICAL EQUIPMENT - 0.90%
AMETEK, Incorporated 133,970 3,926,996
Cooper Industries, Incorporated 57,600 3,164,400
General Electric Company 48,300 4,395,300
Kuhlman Corporation 92,600 3,663,487
Raychem Corporation 60,000 1,773,750
------------
16,923,933
ELECTRIC UTILITIES - 0.45%
Duke Energy Company 50,700 3,003,975
Entergy Corporation 26,500 761,875
IPALCO Enterprises 54,600 2,426,287
LG & E Energy Corporation 28,400 768,575
PG&E Corporation 50,300 1,587,594
------------
8,548,306
ELECTRONICS - 4.42%
Alliant Techsystems, Incorporated 38,900 2,460,425
AMP, Incorporated 543,300 18,675,937
Apple Computer, Incorporated* 441,900 12,677,006
The accompanying notes are an integral part of the financial statements.
95
<PAGE> 99
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
ELECTRONICS - CONTINUED
Comverse Technology, Incorporated* 33,595 $ 1,742,741
EG & G, Incorporated 382,500 11,475,000
Electronic Data Systems
Corporation 270,300 10,812,000
Linear Technology Corporation 108,900 6,568,031
Loral Space & Communications* 79,900 2,257,175
Micron Technology, Incorporated 561,900 13,942,144
MIPS Technologies, Incorporated
1,800 24,188
Novellus Systems, Incorporated* 25,900 924,306
Synopsys, Incorporated * 21,100 965,325
Technology Solutions Company* 35,300 1,118,569
-----------
83,642,847
FINANCIAL SERVICES - 1.65%
Alcatel Alsthom ADR 171,700 6,986,044
Allmerica Financial Corporation 4,900 318,500
Association First Capital
Corporation, Class A 60,600 4,658,625
Borg-Warner Security
Corporation* 104,300 2,359,787
Capital Re Corporation 12,800 916,800
Compass Bancshares,
Incorporated 45,300 2,044,162
Heller Financial, Incorporated,
Class A 26,000 780,000
Household International,
Incorporated 123,300 6,134,175
Nationwide Financial Services,
Incorporated 28,400 1,448,400
ReliaStar Financial Corporation 54,400 2,611,200
Richmond County Financial
Corporation 47,700 891,394
Sterling Bancshares,
Incorporated 2,450 38,588
TCF Financial Corporation 15,400 454,300
Webster Financial Corporation 49,400 1,642,550
-----------
31,284,525
FOOD & BEVERAGES - 2.92%
Coca-Cola Bottling Company
Consolidated 17,500 1,157,188
Coca-Cola Enterprises,
Incorporated 61,100 2,398,175
Dean Foods Company 120,000 6,592,500
Dole Food, Incorporated 591,100 29,370,281
Flowers Industries, Incorporated 102,000 2,084,625
Interstate Bakeries Corporation 66,500 2,206,969
Michael Foods, Incorporated* 95,800 2,814,125
Northland Cranberries,
Incorporated 98,200 1,515,962
Pilgrims Pride Corporation 33,200 664,000
Sanderson Farms, Incorporated 17,500 258,125
SHARES VALUE
------ -----
FOOD & BEVERAGES - CONTINUED
Suiza Foods Corporation* 40,800 $ 2,435,250
United States Foodservice 57,562 2,018,268
Wm. Wrigley Jr. Company 17,000 1,666,000
-----------
55,181,468
FOREST PRODUCTS - 0.38%
American Disposal Services,
Incorporated* 76,600 3,590,625
Georgia-Pacific Corporation 62,100 3,660,019
-----------
7,250,644
FURNITURE & FIXTURES - 0.27%
Knoll, Incorporated 138,400 4,082,800
Steelcase, Incorporated 40,200 1,045,200
-----------
5,128,000
GAS & PIPELINE UTILITIES - 0.43%
Cooper Cameron Corporation* 26,400 1,346,400
Enron Corporation 25,900 1,400,219
Ocean Energy, Incorporated* 163,216 3,192,913
R & B Falcon Corporation* 95,904 2,169,828
-----------
8,109,360
GOLD - 0.18%
Newmont Mining Corporation 140,000 3,307,500
-----------
HOMEBUILDERS - 0.30%
Elcor Chemical Corporation 131,800 3,327,950
Lennar Corporation 35,038 1,033,621
Walter Industries, Incorporated 66,500 1,259,344
-----------
5,620,915
HOTELS & RESTAURANTS - 1.17%
CKE Restaurants, Incorporated 112,215 4,628,869
Cracker Barrel Old Country Store 93,200 2,959,100
Mirage Resorts, Incorporated 300,500 6,404,406
Papa Johns International,
Incorporated 61,400 2,421,462
Promus Hotel Corporation 148,500 5,717,250
-----------
22,131,087
HOUSEHOLD APPLIANCES - 2.26%
Bassett Furniture Industries,
Incorporated 58,700 1,654,606
Ethan Allen Interiors,
Incorporated 36,800 1,837,700
Furniture Brands International,
Incorporated 79,900 2,242,194
Leggett & Platt, Incorporated 500,600 12,515,000
Westpoint Stevens, Incorporated 77,600 2,560,800
Whirlpool Corporation 320,000 22,000,000
-----------
42,810,300
The accompanying notes are an integral part of the financial statements.
96
<PAGE> 100
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
HOUSEHOLD PRODUCTS - 2.34%
Black & Decker Corporation 50,000 $ 3,050,000
Church & Dwight, Incorporated 55,800 1,806,525
Rubbermaid, Incorporated 906,500 30,084,469
The Stanley Works 104,100 4,326,656
Tupperware Corporation 179,100 5,037,187
-----------
44,304,837
INDUSTRIAL MACHINERY - 1.46%
American Standard Companies,
Incorporated* 405,000 18,098,437
Gorman Rupp Company 63,600 1,152,750
Kaydon Corporation 27,300 964,031
PRI Automation, Incorporated 63,800 1,088,588
W.H. Brady Company, Class A 159,800 4,444,437
York International Corporation 41,500 1,807,844
-----------
27,556,087
INSURANCE - 1.93%
Aetna, Incorporated 73,500 5,595,187
AFLAC, Incorporated 185,200 5,613,875
Ambac Financial Group,
Incorporated 41,100 2,404,350
Chubb Corporation 15,500 1,245,813
Foundation Health System,
Incorporated* 82,700 2,181,212
Hartford Life, Incorporated, Class A 33,700 1,918,794
HCC Insurance Holdings,
Incorporated 75,100 1,652,200
Life Re Corporation 12,900 1,057,800
MBIA, Incorporated 26,600 1,991,675
MedPartners, Incorporated 134,100 1,072,800
PAULA Financial 65,700 1,322,213
Progressive Corporation 12,800 1,804,800
Protective Life Corporation 46,500 1,705,969
Provident Companies,
Incorporated 28,500 983,250
Travelers Property Casualty
Corporation, Class A 72,100 3,091,287
UNUM Corporation 50,400 2,797,200
-----------
36,438,425
LEISURE TIME - 1.67%
Action Performance Companies,
Incorporated 85,900 2,764,906
B Corporation 405,000 10,023,750
Carnival Corporation, Class A 74,400 2,948,100
Cinar Films, Incorporated 42,200 774,286
Cinar Films, Incorporated, Class B* 103,000 2,008,500
Premier Parks, Incorporated 115,500 7,695,187
Westwood One, Incorporated 212,300 5,353,941
-----------
31,568,670
SHARES VALUE
------ -----
LIQUOR - 0.19%
Adolph Coors Company, Class B 105,000 $ 3,570,000
-----------
MOBILE HOMES - 0.16%
Oakwood Homes Corporation 101,650 3,049,500
-----------
NEWSPAPERS - 0.06%
Tribune Company 17,500 1,204,219
-----------
OFFICE FURNISHINGS & SUPPLIES - 0.39%
Miller Herman, Incorporated 64,500 1,568,156
Reynolds & Reynolds Company,
Class A 322,100 5,858,194
-----------
7,426,350
PAPER - 1.18%
Champion International
Corporation 102,900 5,061,394
Chesapeake Corporation 102,800 4,002,775
Fort James Corporation 170,000 7,565,000
Ivex Packaging Corporation* 166,000 3,859,500
Stone Container Corporation 120,000 1,875,000
-----------
22,363,669
PETROLEUM SERVICES - 1.16%
EVI Weatherford, Incorporated 34,700 1,288,238
Halliburton Company 90,000 4,010,625
Tosco Corporation 302,300 8,880,062
TOTAL SA, B Shares 60,000 7,800,586
-----------
21,979,511
PHOTOGRAPHY - 1.01%
Polaroid Corporation 538,800 19,161,075
-----------
PLASTICS - 0.70%
First Brands Corporation 421,800 10,808,625
Spartech Corporation 114,400 2,452,450
-----------
13,261,075
POLLUTION CONTROL - 4.14%
Browning Ferris Industries,
Incorporated 786,600 27,334,350
Eastern Environmental Services,
Incorporated* 141,800 4,821,200
Republic Industries, Incorporated* 416,200 10,405,000
USA Waste Services,
Incorporated* 384,437 18,981,577
Waste Management,
Incorporated 479,800 16,793,000
-----------
78,335,127
PUBLISHING - 0.62%
Applied Graphics Technologies 36,800 1,683,600
Chum, Ltd., Class B* 25,600 968,122
The accompanying notes are an integral part of the financial statements.
97
<PAGE> 101
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
PUBLISHING - CONTINUED
John H. Harland Company 195,000 $ 3,302,813
Meredith Corporation 87,000 4,083,562
Times Mirror Company, Series A 28,100 1,766,788
------------
11,804,885
RAILROADS & EQUIPMENT - 0.05%
CSX Corporation 20,000 910,000
------------
REAL ESTATE - 0.22%
Bedford Property Investments,
Incorporated 25,900 472,675
Brandywine Realty Trust SBI 43,900 982,262
Duke Realty Investments,
Incorporated 22,900 541,013
Home Properties of New York,
Incorporated 15,600 416,325
LNR Property Corporation 59,800 1,532,375
Sl Green Realty Corporation 8,500 191,250
------------
4,135,900
RETAIL GROCERY - 1.23%
Dominicks Supermarkets,
Incorporated* 29,300 1,305,681
Hannaford Brothers Company 53,200 2,340,800
Safeway, Incorporated* 330,100 13,430,944
Starbucks Corporation* 94,300 5,039,156
The Great Atlantic & Pacific Tea
Company, Incorporated 35,900 1,186,944
------------
23,303,525
RETAIL TRADE - 6.87%
Abercrombie & Fitch Company,
Class A* 25,800 1,135,200
Ann Taylor Stores Corporation 276,700 5,862,581
Bon-Ton Stores, Incorporated* 145,400 2,335,488
Consolidated Stores Corporation* 275,729 9,995,176
CVS Corporation 384,858 14,985,408
Dollar Tree Stores, Incorporated* 142,650 5,795,156
Federated Department Stores,
Incorporated* 610,000 32,825,625
Fingerhut Companies, Incorporated 143,600 4,738,800
Haverty Furniture Companies,
Incorporated 18,100 400,463
Heilig-Meyers Company 474,900 5,847,206
Michael's Stores, Incorporated* 85,400 3,013,019
Pep Boys-Manny, Moe & Jack 50,800 962,025
Pier 1 Imports, Incorporated 46,100 1,100,638
Proffitt's, Incorporated* 197,600 7,978,100
The Limited, Incorporated 457,600 15,158,000
TJX Companies, Incorporated 471,100 11,365,287
Walgreen Company 74,100 3,061,256
Zale Corporation* 105,100 3,343,494
------------
129,902,922
SHARES VALUE
------ -----
SHIPBUILDING - 0.10%
Avondale Industries, Incorporated* 67,622 $ 1,865,945
-----------
SOFTWARE - 2.26%
BMC Software, Incorporated* 103,000 5,349,563
CIBER, Incorporated* 106,000 4,028,000
Compuware Corporation* 142,700 7,295,537
Dialogic Corporation* 68,000 2,023,000
Keane, Incorporated* 179,500 10,052,000
PeopleSoft, Incorporated 15,500 728,500
Shared Medical Systems
Corporation 300 22,031
Siebel Systems, Incorporated 180,550 5,822,737
Symantec Corporation* 100,300 2,620,338
USA Networks, Incorporated 191,200 4,803,900
-----------
42,745,606
STEEL - 0.63%
Nucor Corporation 245,500 11,293,000
Steel Dynamics, Incorporated 48,000 666,000
-----------
11,959,000
TELECOMMUNICATIONS SERVICES - 1.10%
Ascend Communications,
Incorporated* 90,400 4,480,450
Comsat Corporation* 139,600 3,952,425
Cox Communications,
Incorporated, Class A* 79,000 3,826,563
PanAmSat Corporation 40,400 2,297,750
RCN Corporation 50,200 972,625
Skytel Communications,
Incorporated 214,800 5,027,662
US LEC Corporation, Class A 15,400 321,475
-----------
20,878,950
TELEPHONE - 1.43%
Qwest Communications
International, Incorporated 35,755 1,246,955
U.S. West, Incorporated 11 517
WorldCom, Incorporated 531,195 25,729,758
-----------
26,977,230
TIRES & RUBBER - 0.12%
Carlisle Companies ,
Incorporated 51,300 2,209,106
-----------
TOBACCO - 0.21%
Philip Morris Companies,
Incorporated* 44,800 1,764,000
RJR Nabisco Holdings
Corporation 90,500 2,149,375
-----------
3,913,375
The accompanying notes are an integral part of the financial statements.
98
<PAGE> 102
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TOYS, AMUSEMENTS & SPORTING GOODS - 0.45%
Mattel, Incorporated 198,800 $ 8,411,725
--------------
TRUCKING & FREIGHT - 0.47%
CNF Transportation,
Incorporated 139,600 5,933,000
Pittston Brinks Group 79,200 2,920,500
--------------
8,853,500
TOTAL COMMON STOCKS
(Cost: $1,464,717,806) $1,588,098,682
--------------
WARRANTS - 0.04%
REAL ESTATE - 0.04%
Kimco Realty Corporation,
(Expiration date 10/08/1998;
strike price $39.438) 18,000 738,000
--------------
TOTAL WARRANTS
(Cost: $667,950) $ 738,000
--------------
PRINCIPAL
AMOUNT VALUE
- ------ -----
SHORT TERM INVESTMENTS - 12.84%
$242,870,601 Navigator Securities Lending
Trust, 5.54% $ 242,870,601
--------------
REPURCHASE AGREEMENTS - 3.16%
$59,748,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 06/30/1998 at 5.00%, to be
repurchase at $59,756,298 on
07/01/1998, collateralized by
$52,440,000 U.S. Treasury Bonds,
6.75% due 08/15/2026 (valued at
$60,945,978, including interest) $ 59,748,000
--------------
TOTAL INVESTMENTS (Equity Trust)
(Cost: $1,768,004,357) $1,891,455,283
==============
GROWTH TRUST
SHARES VALUE
------ -----
COMMON STOCKS - 83.07%
AIR TRAVEL - 2.02%
Deutsche Lufthansa AG 81,200 $2,046,378
Galileo International, Incorporated 72,925 3,286,183
----------
5,332,561
BANKING - 1.66%
Citicorp 29,300 4,373,025
----------
SHARES VALUE
------ -----
BROADCASTING - 4.34%
CBS Corporation* 112,150 $ 3,560,762
Jacor Communications,
Incorporated, Class A* 36,075 2,128,425
MediaOne Group, Incorporated* 31,000 1,362,063
Tele-Communications
Incorporated, Series A 114,550 4,403,016
-----------
11,454,266
BUSINESS SERVICES - 5.53%
America Online, Incorporated 19,100 2,024,600
Cognizant Corporation 40,600 2,557,800
Comdisco Incorporated 86,500 1,643,500
Computer Sciences Corporation* 56,650 3,625,600
Fiserv, Incorporated* 83,937 3,564,699
Viad Corporation 42,000 1,165,500
-----------
14,581,699
CHEMICALS - 2.73%
Monsanto Company 92,325 5,158,659
Sterling Commerce, Incorporated* 42,300 2,051,550
-----------
7,210,209
COMPUTERS & BUSINESS EQUIPMENT - 1.02%
Oce-Van Der Grinten 30,000 1,278,072
Veritas Software Corporation* 33,812 1,398,971
-----------
2,677,043
CONGLOMERATES - 1.17%
Cendant Corporation* 115,800 2,417,325
Hunter Douglas 12,050 655,036
-----------
3,072,361
DRUGS & HEALTH CARE - 10.85%
Alza Corporation* 18,650 806,613
Bristol-Myers Squibb Company 27,550 3,166,528
Eli Lilly & Company 25,600 1,691,200
Fred Meyer, Incorporated* 68,475 2,910,187
Medtronic, Incorporated 37,800 2,409,750
Merck & Company, Incorporated 10,300 1,377,625
Novartis AG 1,050 1,750,116
Pfizer, Incorporated 105,850 11,504,572
Warner-Lambert Company 43,200 2,997,000
-----------
28,613,591
ELECTRICAL EQUIPMENT - 2.61%
General Electric Company* 75,600 6,879,600
-----------
ELECTRONICS - 2.89%
Intel Corporation 65,575 4,860,747
Maxim Integrated Products,
Incorporated 30,450 964,884
Tellabs, Incorporated* 25,125 1,799,578
-----------
7,625,209
The accompanying notes are an integral part of the financial statements.
99
<PAGE> 103
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
FINANCIAL SERVICES - 13.31%
Association First Capital Corporation, Class A 67,958 $5,224,271
Beneficial Corporation 46,675 7,150,027
Capital One Financial Corporation 47,675 5,920,639
Federal National Mortgage Association 55,875 3,394,406
Golden West Financial Corporation 25,975 2,761,467
Green Tree Financial Corporation 115,700 4,953,406
Hartford Financial Services Group, Incorporated 26,450 3,025,219
Heller Financial, Incorporated, Class A* 11,500 345,000
SLM Holding Corporation 47,925 2,348,325
------------
35,122,760
FOOD & BEVERAGES - 2.96%
Coca-Cola Enterprises, Incorporated 74,125 2,909,406
Ralston Purina Company 19,850 2,318,728
Sara Lee Corporation 46,250 2,587,110
------------
7,815,244
HOTELS & RESTAURANTS - 2.59%
Hilton Hotels Corporation 149,300 4,255,050
Mirage Resorts, Incorporated* 120,875 2,576,148
------------
6,831,198
HOUSEHOLD APPLIANCES - 1.82%
Maytag Corporation 37,775 1,865,141
Newell Company 59,000 2,938,937
------------
4,804,078
HOUSEHOLD PRODUCTS - 5.15%
Black & Decker Corporation 20,500 1,250,500
Colgate-Palmolive Company 30,400 2,675,200
Dial Corporation 100,800 2,614,500
Gillette Company 72,000 4,081,500
Procter & Gamble Company 32,700 2,977,744
------------
13,599,444
INDUSTRIAL MACHINERY - 0.77%
Crane Company 41,900 2,034,769
------------
INSURANCE - 3.63%
Allstate Corporation 5,300 485,281
Conseco, Incorporated 43,200 2,019,600
Everest Reinsurance Holdings 33,225 1,277,086
Marsh & Mclennan Companies, Incorporated 50,700 3,064,181
Progressive Corporation 19,350 2,728,350
------------
9,574,498
LEISURE TIME - 0.91%
Grand Casinos, Incorporated 81,000 1,356,750
The Walt Disney Company 9,950 1,045,372
------------
2,402,122
NEWSPAPERS - 0.78%
News Corporation, Ltd.* 72,800 2,056,600
------------
OFFICE FURNISHINGS & SUPPLIES - 0.89%
Office Max Incorporated* 142,525 2,351,663
------------
PAPER - 0.63%
Fort James Corporation 37,250 1,657,625
------------
RETAIL TRADE - 3.66%
Circuit City Stores, Incorporated 69,100 3,239,062
Kmart Corporation* 96,050 1,848,963
Lowe's Companies, Incorporated 112,550 4,565,309
------------
9,653,334
SOFTWARE - 3.49%
Intuit, Incorporated* 45,500 2,786,875
Microsoft Corporation* 53,800 5,830,575
PeopleSoft, Incorporated* 12,650 594,550
------------
9,212,000
TELECOMMUNICATIONS SERVICES - 0.46%
Ascend Communications, Incorporated* 24,525 1,215,520
------------
TELEPHONE - 4.40%
Bell Atlantic Corporation* 63,100 2,878,938
MCI Communications Corporation 149,825 8,708,578
U.S. West, Incorporated* 559 26,273
------------
11,613,789
TOBACCO - 2.09%
Philip Morris Companies, Incorporated* 83,275 3,278,953
RJR Nabisco Holdings Corporation 94,200 2,237,250
------------
5,516,203
TOYS, AMUSEMENTS & SPORTING GOODS - 0.72%
Mattel, Incorporated 45,000 1,904,063
------------
TOTAL COMMON STOCKS
(Cost: $181,626,067) $219,184,474
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
100
<PAGE> 104
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------ -----
<S> <C>
SHORT TERM INVESTMENTS - 9.14%
$24,122,903 Navigator Securities Lending Trust, 5.54% $24,122,903
-----------
REPURCHASE AGREEMENTS - 7.79%
$20,554,000 Repurchase Agreement with State Street Bank
& Trust Company dated 06/30/1998 at 5.00%,
to be repurchased at $20,556,855 on 07/01/1998,
collateralized by $15,965,000 U.S. Treasury Bonds,
8.125% due 08/15/2019 (valued at $20,971,337,
including interest) $20,554,000
-----------
TOTAL INVESTMENTS (Growth Trust)
(Cost: $226,302,968) $263,861,377
============
</TABLE>
QUANTITATIVE EQUITY TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 86.57%
AIR TRAVEL - 1.72%
AMR Corporation* 48,000 $3,996,000
------------
ALUMINUM - 1.53%
Reynolds Metals Company 63,800 3,568,813
------------
APPAREL & TEXTILES - 0.45%
Jones Apparel Group, Incorporated* 28,600 1,045,688
------------
AUTOMOBILES - 3.29%
Ford Motor Company 71,400 4,212,600
General Motors Corporation 51,500 3,440,844
------------
7,653,444
BANKING - 11.84%
BancOne Corporation 67,120 3,746,135
Bankers Trust New York Corporation 30,000 3,481,875
First Union Corporation 67,000 3,902,750
Fleet Financial Group, Incorporated 45,100 3,765,850
Keycorp 97,600 3,477,000
National City Corporation 54,600 3,876,600
Northern Trust Corporation 13,700 1,044,625
PNC Bank Corporation 64,100 3,449,381
Washington Mutual, Incorporated 18,300 794,906
------------
27,539,122
BROADCASTING - 0.52%
Clear Channel Communications* 11,100 1,211,288
------------
BUSINESS SERVICES - 2.09%
OmniCom Group, Incorporated 20,400 1,017,450
Outsource International, Incorporated* 75,000 675,000
Paychex, Incorporated 16,750 681,516
Quintiles Transnational Corporation* 20,000 983,750
Robert Half International, Incorporated* 26,750 1,494,656
------------
4,852,372
CHEMICALS - 2.19%
Millennium Chemicals, Incorporated 21,000 711,375
PPG Industries, Incorporated 50,000 3,478,125
The B.F. Goodrich Company 18,300 908,137
------------
5,097,637
COMPUTERS & BUSINESS EQUIPMENT - 4.81%
Cisco Systems, Incorporated* 48,900 4,501,856
Dell Computer Corporation* 44,900 4,167,281
HBO & Company 43,600 1,536,900
Sundstrand Corporation 17,300 990,425
------------
11,196,462
CONGLOMERATES - 2.24%
Aeroquip-Vickers, Incorporated 17,300 1,009,887
Tyco International, Ltd. 66,800 4,208,400
------------
5,218,287
DOMESTIC OIL - 3.61%
Murphy Oil Corporation 27,500 1,393,906
Sun, Incorporated 87,100 3,380,569
USX-Marathon Group 105,800 3,630,262
------------
8,404,737
DRUGS & HEALTH CARE - 4.93%
Fred Meyer, Incorporated* 33,000 1,402,500
General Nutrition Companies, Incorporated* 29,000 902,625
Rexall Sundown, Incorporated* 30,500 1,075,125
Schering-Plough Corporation 44,300 4,058,987
Warner-Lambert Company 58,000 4,023,750
------------
11,462,987
ELECTRICAL EQUIPMENT - 0.44%
General Cable Corporation 35,400 1,022,175
------------
ELECTRIC UTILITIES - 2.20%
FPI Group, Incorporated 60,200 3,792,600
Pinnacle West Capital Corporation 29,400 1,323,000
------------
5,115,600
</TABLE>
The accompanying notes are an integral part of the financial statements.
101
<PAGE> 105
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRONICS - 2.81%
Lexmark International Group, Incorporated, Class A* 24,400 $1,488,400
LSI Logic Corporation* 30,500 703,406
Lucent Technologies, Incorporated 52,200 4,342,388
------------
6,534,194
FINANCIAL SERVICES - 3.64%
A.G. Edwards, Incorporated 19,800 845,212
Capital One Financial Corporation 13,700 1,701,369
Golden West Financial Corporation 11,600 1,233,225
H.F. Ahmanson & Company 12,100 859,100
Merrill Lynch & Company, Incorporated 41,400 3,819,150
------------
8,458,056
FOOD & BEVERAGES - 0.21%
Flowers Industries, Incorporated 23,500 480,281
------------
GAS & PIPELINE UTILITIES - 0.30%
Cooper Cameron Corporation* 13,600 693,600
------------
HOMEBUILDERS - 0.45%
Centex Corporation 27,800 1,049,450
------------
HOUSEHOLD APPLIANCES - 0.49%
Ethan Allen Interiors, Incorporated 22,900 1,143,569
------------
INSURANCE - 2.40%
Marsh & McLennan Companies, Incorporated 63,450 3,834,759
MGIC Investment Corporation 4,900 279,606
SunAmerica, Incorporated 25,800 1,481,888
------------
5,596,253
LEISURE TIME - 2.29%
Carnival Corporation, Class A 109,200 4,327,050
Royal Caribbean Cruises, Ltd. 12,500 993,750
------------
5,320,800
OFFICE FURNISHINGS & SUPPLIES - 0.24%
Miller Herman, Incorporated 23,100 561,619
------------
PAPER - 2.00%
International Paper Company 30,000 1,290,000
Union Camp Corporation 67,700 3,359,612
------------
4,649,612
PETROLEUM SERVICES - 1.40%
Baker Hughes, Incorporated 48,900 1,690,107
Halliburton Company 35,300 1,573,056
------------
3,263,163
PHOTOGRAPHY - 1.63%
Eastman Kodak Company 51,900 3,791,944
------------
REAL ESTATE - 1.55%
Simon DeBartolo Group, Incorporated 110,900 3,604,250
------------
RETAIL TRADE - 9.31%
CVS Corporation 16,600 646,362
Dayton Hudson Corporation 79,800 3,870,300
GAP, Incorporated 68,500 4,221,312
J.C. Penney, Incorporated 51,500 3,724,094
Staples, Incorporated* 118,900 3,440,669
The Limited, Incorporated 20,000 662,500
TJX Companies, Incorporated 42,200 1,018,075
Wal-Mart Stores, Incorporated 67,100 4,076,325
------------
21,659,637
SOFTWARE - 3.33%
BMC Software, Incorporated* 22,300 1,158,206
Computer Associates International, Incorporated 70,500 3,917,157
Informix Corporation 103,400 817,506
Keane, Incorporated* 14,900 834,400
PeopleSoft, Incorporated* 21,600 1,015,200
------------
7,742,469
TELEPHONE - 9.97%
Airtouch Communications, Incorporated* 64,700 3,780,906
American Telephone & Telegraph Corporation 52,300 2,987,638
Bell Atlantic Corporation 80,800 3,686,500
BellSouth Corporation 57,400 3,852,975
Qwest Communications International, Incorporated* 32,700 1,140,413
SBC Communications, Incorporated 95,200 3,808,000
WorldCom, Incorporated* 81,370 3,941,359
------------
23,197,791
TIRES & RUBBER - 0.48%
Safeskin Corporation* 27,200 1,118,600
------------
TOBACCO - 1.68%
Philip Morris Companies, Incorporated 99,000 3,898,125
------------
TRANSPORTATION - 0.11%
Dollar Thrifty Automotive Group* 20,000 265,000
------------
TRUCKING & FREIGHT - 0.42%
Airbourne Freight Corporation 28,200 985,238
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
102
<PAGE> 106
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
-----
<S> <C>
TOTAL COMMON STOCKS
(Cost: $182,850,864) $201,398,263
------------
PRINCIPAL
AMOUNT VALUE
- ------ -----
SHORT TERM INVESTMENTS - 6.12%
$14,232,456 Navigator Securities Lending Trust, 5.54% $14,232,456
------------
REPURCHASE AGREEMENTS - 7.31%
$17,005,000 Repurchase Agreement with State Street Bank
& Trust Company dated 06/30/1998 at 5.71% to
be repurchased at $17,007,697 on 07/01/1998
collateralized by $17,325,000 U.S. Treasury
Notes, 5.625% due 12/31/1999 (valued at
$17,346,656, including interest) $17,005,000
------------
TOTAL INVESTMENTS (Quantitative Equity Trust) (Cost: $214,088,320) $232,635,719
============
</TABLE>
EQUITY INDEX TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 77.16%
AEROSPACE - 1.34%
AlliedSignal, Incorporated 2,310 $102,506
Boeing Company 4,137 184,355
Computer Sciences Corporation* 636 40,704
General Dynamics Corporation 554 25,761
Lockheed Martin Corporation 751 79,512
Northrop Grumman Corporation 276 28,463
Rockwell International Corporation 901 43,304
TRW, Incorporated 554 30,262
United Technologies Corporation 973 90,003
---------
624,870
AGRICULTURAL MACHINERY - 0.11%
Deere & Company 1,022 54,038
---------
AGRICULTURAL OPERATIONS - 0.00%
Agribrands International, Incorporated 40 1,210
---------
AIR FREIGHT - 0.08%
FDX Corporation 615 38,591
---------
AIR TRAVEL - 0.34%
AMR Corporation* 720 59,940
Delta Air Lines, Incorporated 309 39,938
AIR TRAVEL - CONTINUED
Sealed Air Corporation 164 $6,027
Southwest Airlines Company 922 27,314
US Airways Group, Incorporated* 339 26,866
---------
160,085
ALUMINUM - 0.19%
Alcan Aluminum, Ltd. 946 26,133
Aluminum Company of America 695 45,826
Reynolds Metals Company 309 17,285
---------
89,244
APPAREL & TEXTILES - 0.27%
Fruit of The Loom, Incorporated, Class A* 314 10,421
Liz Claiborne, Incorporated 300 15,675
Nike, Incorporated, Class B 1,222 59,496
Reebok International, Ltd.* 260 7,199
Russell Corporation 104 3,139
Springs Industries, Incorporated 58 2,675
V. F. Corporation 562 28,943
---------
127,548
AUTO PARTS - 0.18%
Dana Corporation 395 21,133
Eaton Corporation 319 24,802
Echlin, Incorporated 278 13,639
Genuine Parts Company 712 24,609
---------
84,183
AUTO SERVICES - 0.00%
Midas, Incorporated 48 966
---------
AUTOMOBILES - 1.38%
Chrysler Corporation 2,741 154,524
Ford Motor Company 4,892 288,628
General Motors Corporation 2,975 198,767
PACCAR, Incorporated 321 16,772
---------
658,691
BANKING - 6.67%
Banc One Corporation 2,609 145,615
Bank of New York, Incorporated 1,592 96,615
BankAmerica Corporation 2,905 251,101
BankBoston Corporation 1,232 68,530
Bankers Trust New York Corporation 348 40,390
BB&T Corporation 367 24,818
Citicorp 1,912 285,366
Comerica, Incorporated 600 39,750
Fifth Third Bancorp 969 61,047
First Chicago Corporation 1,268 112,376
First Union Corporation 3,926 228,689
Fleet Financial Group, Incorporated 1,031 86,089
</TABLE>
The accompanying notes are an integral part of the financial statements.
103
<PAGE> 107
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BANKING - CONTINUED
Huntington Bancshares, Incorporated 434 $14,539
J. P. Morgan & Company, Incorporated 718 84,096
Keycorp 1,858 66,191
MBNA Corporation 2,026 66,858
Mellon Bank Corporation 1,028 71,575
Mercantile Bancorporation, Incorporated 200 10,075
National City Corporation 921 65,391
NationsBank Corporation 3,927 300,415
Northern Trust Corporation 500 38,125
Norwest Corporation 3,130 116,984
PNC Bank Corporation 1,297 69,795
Providian Financial Corporation 367 28,832
Republic New York Corporation 510 32,098
State Street Boston Corporation 396 27,522
Summit Bancorp 200 9,500
SunTrust Banks, Incorporated 919 74,726
Synovus Financial Corporation 621 14,749
The Chase Manhattan Corporation 3,436 259,418
U.S. Bancorp 2,988 128,484
Wachovia Corporation 768 64,896
Washington Mutual, Incorporated 1,518 65,938
Wells Fargo & Company 352 129,888
----------
3,180,481
BROADCASTING - 0.96%
CBS Corporation 2,795 88,741
Clear Channel Communications* 220 24,008
Comcast Corporation, Class A* 1,395 56,628
MediaOne Group, Incorporated* 2,526 110,986
Tele-Communications Incorporated, Series A 2,297 88,291
Viacom, Incorporated, Class B* 1,503 87,550
----------
456,204
BUILDING MATERIALS & CONSTRUCTION - 0.02%
Fluor Corporation 340 17,340
----------
BUSINESS SERVICES - 0.81%
Automatic Data Processing, Incorporated 1,233 89,855
Cognizant Corporation 673 42,399
Deluxe Corporation 334 11,961
Ecolab, Incorporated 568 17,608
First Data Corporation 1,770 58,963
H & R Block, Incorporated 396 16,682
Humana, Incorporated* 665 20,740
Interpublic Group Companies, Incorporated 552 33,499
Laidlaw, Incorporated 1,312 15,990
BUSINESS SERVICES - CONTINUED
OmniCom Group, Incorporated 200 $9,975
R.R. Donnelley & Sons Company 617 28,228
Service Corporation International 996 42,703
----------
388,603
CHEMICALS - 1.80%
Air Products & Chemicals, Incorporated 1,024 40,960
Dow Chemical Company 958 92,627
E.I. Du Pont De Nemours & Company 4,615 344,394
Eastman Chemical Company 323 20,107
FMC Corporation* 105 7,160
Great Lakes Chemical Corporation 270 10,648
Hercules, Incorporated 384 15,792
Monsanto Company 2,481 138,626
Morton International Industries, Incorporated 590 14,750
Nalco Chemical Company 290 10,186
Octel Corporation 67 1,332
PPG Industries, Incorporated 712 49,528
Praxair, Incorporated 649 30,381
Rohm & Haas Company 276 28,687
Sigma-Aldrich Corporation 386 13,558
The B.F. Goodrich Company 254 12,605
Union Carbide Corporation 556 29,676
----------
861,017
COMPUTERS & BUSINESS EQUIPMENT - 4.47%
3Com Corporation* 1,460 44,804
Bay Networks, Incorporated* 880 28,380
Cabletron Systems, Incorporated* 646 8,681
Ceridian Corporation* 323 18,976
Cisco Systems, Incorporated* 4,142 381,323
Compaq Computer Corporation 6,774 192,212
Data General Corporation* 224 3,346
Dell Computer Corporation* 2,696 250,223
EMC Corporation* 2,003 89,759
Gateway 2000, Incorporated* 700 35,438
HBO & Company 1,084 38,211
Hewlett-Packard Company 4,221 252,732
International Business Machines Corporation 4,013 460,743
Pitney Bowes, Incorporated 1,226 59,001
Seagate Technology, Incorporated* 997 23,741
Sun Microsystems, Incorporated* 1,550 67,328
Tandy Corporation 406 21,543
Unisys Corporation 798 22,544
Xerox Corporation 1,322 134,348
----------
2,133,333
</TABLE>
The accompanying notes are an integral part of the financial statements.
104
<PAGE> 108
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
CONGLOMERATES - 0.81%
Aeroquip-Vickers, Incorporated 79 $4,612
Cendant Corporation* 3,247 67,781
Fortune Brands, Incorporated 688 26,445
Harcourt General, Incorporated 301 17,910
ITT Industries, Incorporated 537 20,070
Raytheon Company, Class B 1,073 63,441
Textron, Incorporated 670 48,031
Tyco International, Ltd. 2,143 135,009
W. R. Grace & Company* 307 5,238
----------
388,537
CONSTRUCTION MATERIALS - 0.18%
Armstrong World Industries, Incorporated 216 14,553
Masco Corporation 664 40,172
Owens-Corning 251 10,244
Sherwin Williams Company 691 22,889
----------
87,858
CONSTRUCTION & MINING EQUIPMENT - 0.27%
Caterpillar, Incorporated 1,573 83,172
Dover Corporation 936 32,058
Foster Wheeler Corporation 216 4,631
Harnischfeger Industries, Incorporated 240 6,795
----------
126,656
CONTAINERS & GLASS - 0.15%
Ball Corporation 86 3,456
Bemis, Incorporated 251 10,260
Crown Cork & Seal, Incorporated 566 26,885
Owens-Illinois, Incorporated* 372 16,647
Temple-Inland, Incorporated 260 14,007
----------
71,255
COSMETICS & TOILETRIES - 0.15%
Alberto Culver Company, Class B 260 7,540
Avon Products, Incorporated 576 44,640
International Flavors & Fragrances, Incorporated 411 17,853
----------
70,033
CRUDE PETROLEUM & NATURAL GAS - 0.24%
Anadarko Petroleum Corporation 173 11,623
Apache Corporation 210 6,615
Burlington Resources, Incorporated 703 30,273
Occidental Petroleum Corporation 1,340 36,180
ONEOK Incorporated 83 3,310
Oryx Energy Company* 400 8,850
Santa Fe Energy Resources, Incorporated* 162 1,741
Union Pacific Resources Group, Incorporated 1,022 17,949
----------
116,541
DOMESTIC OIL - 0.69%
Amerada Hess Corporation 363 $19,716
Ashland, Incorporated 312 16,107
Atlantic Richfield Company 1,315 102,734
Kerr-McGee Corporation 236 13,659
Pennzoil Company 234 11,846
Phillips Petroleum Company 1,050 50,597
Sun, Incorporated 308 11,954
Tenneco, Incorporated 686 26,111
Unocal Corporation 1,007 36,000
USX-Marathon Group 1,219 41,827
----------
330,551
DRUGS & HEALTH CARE - 8.91%
Abbott Laboratories 6,394 261,355
Allergan Specialty Therapeutics, Incorporated, Class A 9 92
Allergan, Incorporated 285 13,217
Alza Corporation* 342 14,792
American Home Products Corporation 5,276 273,033
Amgen, Incorporated* 1,054 68,905
Bausch & Lomb, Incorporated 258 12,932
Baxter International, Incorporated 1,193 64,198
Becton Dickinson & Company 547 42,461
Biomet, Incorporated 417 13,787
Bristol-Myers Squibb Company 4,141 475,956
C.R. Bard, Incorporated 263 10,010
Cardinal Health, Incorporated 409 38,344
Columbia/HCA Healthcare Corporation 2,683 78,142
Crescendo Pharmaceuticals Corporation, Class A* 6 76
Eli Lilly & Company 4,564 301,509
Guidant Corporation 621 44,285
HEALTHSOUTH Corporation* 1,531 40,859
Johnson & Johnson 5,489 404,814
Mallinckrodt, Incorporated 309 9,173
Manor Care, Incorporated 281 10,801
Medtronic, Incorporated 1,946 124,057
Merck & Company, Incorporated 4,936 660,190
Pfizer, Incorporated 5,376 584,304
Pharmacia & Upjohn, Incorporated 2,045 94,326
Schering-Plough Corporation 2,984 273,409
St. Jude Medical, Incorporated* 360 13,253
Tenet Healthcare Corporation* 1,259 39,344
United Healthcare Corporation* 731 46,419
United States Surgical Corporation 309 14,098
Warner-Lambert Company 3,219 223,318
----------
4,251,459
</TABLE>
The accompanying notes are an integral part of the financial statements.
105
<PAGE> 109
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRICAL EQUIPMENT - 3.08%
Cooper Industries, Incorporated 541 $29,721
Emerson Electric Company 1,865 112,600
General Electric Company 13,528 1,231,048
General Signal Corporation 244 8,784
Hussmann International, Incorporated 144 2,673
Johnson Controls, Incorporated 338 19,329
Millipore Corporation 224 6,104
National Service Industries, Incorporated 228 11,600
Raychem Corporation 349 10,317
W.W. Grainger, Incorporated 490 24,408
----------
1,456,584
ELECTRIC UTILITIES - 1.85%
Ameren Corporation 491 19,517
American Electric Power, Incorporated 737 33,441
Baltimore Gas & Electric Company 620 19,259
Carolina Power & Light Company 630 27,326
Central & South West Corporation 904 24,295
CINergy Corporation 649 22,715
Consolidated Edison, Incorporated 969 44,635
Dominion Resources, Incorporated 726 29,584
DTE Energy Company 613 24,750
Duke Energy Company 1,523 90,238
Edison International 1,651 48,808
Entergy Corporation 981 28,204
FirstEnergy Corporation 829 25,492
FPI Group, Incorporated 719 45,297
GPU, Incorporated 544 20,570
Houston Industries, Incorporated 1,296 40,014
Niagara Mohawk Power Corporation* 611 9,127
Northern States Power Company 604 17,290
PacifiCorp 1,242 28,100
PECO Energy Company 933 27,232
PG&E Corporation 1,800 56,812
PP&L Resources, Incorporated 669 15,178
Public Service Enterprise Group, Incorporated 961 33,094
Southern Company 2,844 78,743
Texas Utilities Company 984 40,959
Unicom Corporation 915 32,082
----------
882,762
ELECTRONICS - 3.31%
Advanced Micro Devices, Incorporated* 600 $10,237
AMP, Incorporated 925 31,797
Andrew Corporation* 358 6,466
Apple Computer, Incorporated* 561 16,094
Applied Materials, Incorporated* 1,534 45,253
Boston Scientific Corporation* 753 53,934
DSC Communications Corporation* 535 16,050
EG & G, Incorporated 231 6,930
General Instrument Corporation* 618 16,802
Harris Corporation 327 14,613
Honeywell, Incorporated 562 46,962
Intel Corporation 6,755 500,714
KLA-Tencor Corporation* 202 5,593
LSI Logic Corporation* 603 13,907
Lucent Technologies, Incorporated 5,246 436,402
Micron Technology, Incorporated* 899 22,306
Motorola, Incorporated 2,493 131,038
National Semiconductor Corporation* 626 8,255
Scientific-Atlanta, Incorporated 321 8,145
Silicon Graphics, Incorporated* 703 8,524
TekTronix, Incorporated 242 8,561
Tellabs, Incorporated* 714 51,140
Texas Instruments, Incorporated 1,589 92,659
The Perkin-Elmer Corporation 225 13,992
Thomas & Betts Corporation 255 12,559
----------
1,578,933
FINANCIAL SERVICES - 3.66%
American Express Company 1,941 221,274
Association First Capital Corporation, Class A 1,282 98,554
Beneficial Corporation 252 38,603
Case Corporation 312 15,054
Charles Schwab Corporation 1,049 34,092
Countrywide Credit Industries, Incorporated 401 20,351
Federal Home Loan Mortgage Corporation 2,878 135,446
Federal National Mortgage Association 4,420 268,515
Franklin Resources, Incorporated 1,200 64,800
Golden West Financial Corporation 262 27,854
Green Tree Financial Corporation 587 25,131
H.F. Ahmanson & Company 382 27,122
Hartford Financial Services Group, Incorporated 535 61,191
</TABLE>
The accompanying notes are an integral part of the financial statements.
106
<PAGE> 110
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
FINANCIAL SERVICES - CONTINUED
Household International, Incorporated 1,212 $60,297
Lehman Brothers Holdings, Incorporated 100 7,756
Merrill Lynch & Company, Incorporated 1,343 123,892
Morgan Stanley Dean Witter & Company 2,447 223,594
Travelers Group, Incorporated 4,858 294,516
----------
1,748,042
FOOD & BEVERAGES - 4.59%
Archer-Daniels-Midland Company 2,294 44,446
Bestfoods 1,218 70,720
Campbell Soup Company 1,917 101,841
ConAgra, Incorporated 1,954 61,917
Corn Products International, Incorporated* 102 3,455
General Mills, Incorporated 657 44,922
H.J. Heinz Company 1,548 86,882
Hershey Foods Corporation 623 42,987
Kellogg Company 1,678 63,030
PepsiCo, Incorporated 6,259 257,793
Pioneer Hawaii Bred International, Incorporated 939 38,851
Quaker Oats Company 589 32,358
Ralston Purina Company 403 47,075
Sara Lee Corporation 1,967 110,029
Supervalu, Incorporated 271 12,026
Sysco Corporation 1,392 35,670
The Coca-Cola Company 10,257 876,974
Unilever NV 2,622 206,974
Vlasic Foods International, Incorporated 191 3,844
Whitman Corporation 289 6,629
Wm. Wrigley Jr. Company 431 42,238
----------
2,190,661
FOREST PRODUCTS - 0.16%
Georgia-Pacific Corporation 361 21,277
Georgia-Pacific Corporation (Timber Group) 261 6,019
Louisiana Pacific Corporation 411 7,501
Weyerhaeuser Company 866 39,998
----------
74,795
GAS & PIPELINE UTILITIES - 0.48%
Coastal Corporation 402 28,065
Columbia Energy Group 387 21,527
Consolidated Natural Gas Company 371 21,843
Eastern Enterprises 58 2,487
Enron Corporation 1,270 68,659
NICOR, Incorporated 238 9,550
Peoples Energy Corporation 100 $3,862
Sempra Energy 507 14,063
Sonat, Incorporated 345 13,326
Williams Companies, Incorporated 1,302 43,942
----------
227,324
GOLD - 0.17%
Barrick Gold Corporation 1,561 29,952
Battle Mountain Gold Company 954 5,664
Freeport Mcmoran Copper & Gold, Incorporated, Class B 768 11,664
Homestake Mining Company 618 6,412
Newmont Mining Corporation 644 15,214
Placer Dome, Incorporated 982 11,539
----------
80,445
HOMEBUILDERS - 0.04%
Centex Corporation 264 9,966
Kaufman & Broad Home Corporation 110 3,493
Pulte Corporation 120 3,585
----------
17,044
HOTELS & RESTAURANTS - 0.67%
Darden Restaurants, Incorporated 635 10,081
Hilton Hotels Corporation 1,011 28,813
Marriott International, Incorporated, Class A 1,124 36,389
McDonalds Corporation 2,861 197,409
Mirage Resorts, Incorporated* 419 8,930
Sodexho Marriott Services, Incorporated* 140 4,060
Tricon Global Restaurants, Incorporated* 600 19,013
Wendys International, Incorporated 574 13,489
----------
318,184
HOUSEHOLD APPLIANCES - 0.15%
Maytag Corporation 379 18,713
Newell Company 652 32,478
Whirlpool Corporation 312 21,450
----------
72,641
HOUSEHOLD PRODUCTS - 2.14%
Black & Decker Corporation 368 22,448
Clorox Company 394 37,578
Colgate-Palmolive Company 1,241 109,208
Corning, Incorporated 954 33,151
Gillette Company 4,578 259,515
Procter & Gamble Company 5,551 505,488
Rubbermaid, Incorporated 626 20,775
Snap-On, Incorporated 274 9,933
The Stanley Works 353 14,672
</TABLE>
The accompanying notes are an integral part of the financial statements.
107
<PAGE> 111
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
HOUSEHOLD PRODUCTS - CONTINUED
Tupperware Corporation 275 $7,734
----------
1,020,502
INDUSTRIAL MACHINERY - 0.24%
Briggs & Stratton Corporation 72 2,696
Cincinnati Milacron, Incorporated 214 5,203
Crane Company 230 11,169
Cummins Engine, Incorporated 109 5,586
Ingersoll-Rand Company 667 29,390
NACCO Industries, Incorporated, Class A 23 2,973
Pall Corporation 561 11,500
Parke-Hannifin Corporation 418 15,936
Thermo Electron Corporation* 628 21,470
Timken Company 278 8,566
----------
114,489
INSURANCE - 3.06%
Aetna, Incorporated 628 47,806
Allstate Corporation 1,748 160,051
American General Corporation 995 70,832
American International Group, Incorporated 2,900 423,400
Aon Corporation 674 47,348
Chubb Corporation 695 55,861
CIGNA Corporation 930 64,170
Cincinnati Financial Corporation 300 11,513
Conseco, Incorporated 727 33,987
Equifax, Incorporated 629 22,841
General Re Corporation 328 83,148
Jefferson-Pilot Corporation 453 26,246
Lincoln National Corporation 393 35,910
Loews Corporation 428 37,289
Marsh & McLennan Companies, Incorporated 1,013 61,193
MBIA, Incorporated 349 26,131
MGIC Investment Corporation 431 24,594
Progressive Corporation 188 26,508
SAFECO Corporation 575 26,127
St. Paul Companies, Incorporated 912 38,361
SunAmerica, Incorporated 756 43,423
Torchmark, Incorporated 595 27,221
Transamerica Corporation 285 32,811
UNUM Corporation 598 33,189
----------
1,459,960
INTERNATIONAL OIL - 4.16%
Amoco Corporation 4,004 166,667
Chevron Corporation 2,661 221,029
Exxon Corporation 10,256 731,381
Mobil Corporation 3,238 248,112
Royal Dutch Petroleum Company 8,802 482,460
Texaco, Incorporated 2,226 $132,864
----------
1,982,513
INVESTMENT COMPANIES - 0.95%
SPDR Trust, Series 1 3,990 452,366
----------
LEISURE TIME - 0.68%
B Corporation 382 9,454
Harrahs Entertainment, Incorporated* 390 9,068
King World Productions, Incorporated* 312 7,956
The Walt Disney Company 2,821 296,381
----------
322,859
LIQUOR - 0.38%
Adolph Coors Company, Class B 106 3,604
Anheuser-Busch Companies, Incorporated 2,006 94,658
Brown Forman Corporation, Class B 296 19,018
Seagram, Ltd. 1,555 63,658
----------
180,938
MINING - 0.04%
Cyprus Amax Minerals Company 366 4,849
Phelps Dodge Corporation 275 15,727
----------
20,576
MOBILE HOMES - 0.01%
Fleetwood Enterprises, Incorporated 102 4,080
----------
NEWSPAPERS - 0.41%
Dow Jones & Company, Incorporated 372 20,739
Gannett, Incorporated 1,206 85,702
Knight-Ridder, Incorporated 355 19,547
New York Times Company, Class A 372 29,481
Tribune Company 549 37,778
----------
193,247
NON-FERROUS METALS - 0.06%
ASARCO, Incorporated 221 4,917
Engelhard Corporation 610 12,353
Inco, Ltd. 674 9,183
----------
26,453
OFFICE FURNISHINGS & SUPPLIES - 0.07%
Avery Dennison Corporation 394 21,177
Ikon Office Solutions, Incorporated 577 8,403
Moore Corporation, Ltd. 351 4,651
----------
34,231
</TABLE>
The accompanying notes are an integral part of the financial statements.
108
<PAGE> 112
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
PAPER - 0.87%
Boise Cascade Corporation 247 $ 8,089
Champion International Corporation 372 18,298
Fort James Corporation 671 29,859
International Paper Company 1,258 54,094
Kimberly-Clark Corporation 2,289 105,008
Mead Corporation 398 12,636
Minnesota Mining & Manufacturing Company 1,684 138,404
Potlatch Corporation 82 3,444
Stone Container Corporation* 382 5,969
Union Camp Corporation 297 14,739
Westvaco Corporation 391 11,046
Willamette Industries, Incorporated 416 13,312
---------
414,898
PETROLEUM SERVICES - 0.59%
Baker Hughes, Incorporated 674 23,295
Dresser Industries, Incorporated 700 30,844
Halliburton Company 1,021 45,498
Helmerich & Payne, Incorporated 242 5,385
Mcdermott International, Incorporated 257 8,851
Rowan Companies, Incorporated* 345 6,706
Schlumberger, Ltd. 2,007 137,103
Western Atlas, Incorporated 253 21,473
---------
279,155
PHOTOGRAPHY - 0.22%
Eastman Kodak Company 1,332 97,319
Polaroid Corporation 229 8,144
---------
105,463
PLASTICS - 0.14%
Illinois Tool Works, Incorporated 1,010 67,354
---------
POLLUTION CONTROL - 0.19%
Browning Ferris Industries, Incorporated 570 19,808
Laidlaw Environmental Services, Incorporated 744 2,697
Waste Management, Incorporated 1,889 66,115
---------
88,620
PUBLISHING - 0.64%
American Greetings Corporation, Class A 314 15,994
Dun & Bradstreet Corporation 686 24,782
John H. Harland Company 88 1,491
Jostens, Incorporated 111 2,650
McGraw-Hill Companies, Incorporated 383 31,238
Meredith Corporation 252 11,828
Time Warner, Incorporated 2,292 195,823
Times Mirror Company, Series A 372 23,390
---------
307,196
RAILROADS & EQUIPMENT - 0.41%
Burlington Northern Santa Fe Corporation 640 62,840
CSX Corporation 919 41,815
Norfolk Southern Corporation 1,573 46,895
Union Pacific Corporation 1,003 44,257
---------
195,807
RETAIL GROCERY - 0.36%
Albertsons, Incorporated 1,007 52,175
American Stores Company 1,175 28,420
Giant Foods, Incorporated, Class A 270 11,627
Kroger Company* 1,023 43,861
The Great Atlantic & Pacific Tea Company, Incorporated 109 3,604
Winn-Dixie Stores, Incorporated 624 31,941
---------
171,628
RETAIL TRADE - 3.82%
Abercrombie & Fitch Company, Class A 14 616
AutoZone, Incorporated* 630 20,121
Charming Shoppes, Incorporated * 400 1,900
Circuit City Stores, Incorporated 379 17,766
Consolidated Stores Corporation * 100 3,625
Costco Companies, Incorporated* 903 56,945
CVS Corporation 1,362 53,033
Dayton Hudson Corporation 1,836 89,046
Dillards, Incorporated, Class A 421 17,445
Federated Department Stores, Incorporated* 894 48,108
GAP, Incorporated 1,658 102,174
Home Depot, Incorporated 2,975 247,111
J. C. Penney, Incorporated 1,005 72,674
Kmart Corporation* 1,982 38,154
Longs Drug Stores Corporation 111 3,205
Lowe's Companies, Incorporated 1,388 56,301
May Department Stores, Incorporated 969 63,470
Mercantile Stores, Incorporated 105 8,288
Nordstrom, Incorporated 323 24,952
Pep Boys-Manny, Moe & Jack 276 5,227
Rite Aid Corporation 998 37,487
Sears Roebuck & Company 1,615 98,616
The Limited, Incorporated 1,072 35,510
TJX Companies, Incorporated 1,304 31,459
Toys R Us, Incorporated* 1,213 28,581
Venator Group, Incorporated* 583 11,150
Wal-Mart Stores, Incorporated 9,346 567,769
</TABLE>
The accompanying notes are an integral part of the financial statements.
109
<PAGE> 113
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
RETAIL TRADE - CONTINUED
Walgreen Company 2,002 $82,708
-----------
1,823,441
SOFTWARE - 2.88%
Adobe Systems, Incorporated 305 12,943
Autodesk, Incorporated 237 9,154
Computer Associates International, Incorporated 2,252 125,127
Microsoft Corporation* 9,922 1,075,297
Novell, Incorporated* 1,390 17,722
Oracle Corporation* 4,089 100,436
Parametric Technology Corporation* 1,026 27,830
Shared Medical Systems Corporation 70 5,141
-----------
1,373,650
STEEL - 0.13%
Allegheny Teldyne, Incorporated 701 16,035
Armco, Incorporated* 405 2,582
Bethleham Steel Corporation* 420 5,224
Inland Steel Industries, Incorporated 239 6,737
Nucor Corporation 350 16,100
USX-United States Steel Group 344 11,352
Worthington Industries, Incorporated 375 5,648
-----------
63,678
TELECOMMUNICATIONS SERVICES - 0.34%
Ascend Communications, Incorporated* 800 39,650
Northern Telecom, Ltd. 2,184 123,942
-----------
163,592
TELEPHONE - 5.08%
Airtouch Communications, Incorporated* 2,033 118,803
Alltel Corporation 731 33,992
American Telephone & Telegraph Corporation 6,724 384,108
Ameritech Corporation 4,526 203,104
Bell Atlantic Corporation 6,418 292,821
BellSouth Corporation 4,123 276,756
Frontier Corporation 667 21,011
GTE Corporation 3,919 217,994
MCI Communications Corporation 2,861 166,296
SBC Communications, Incorporated 7,496 299,840
Sprint Corporation 1,825 128,663
U. S. West, Incorporated 2,032 95,504
WorldCom, Incorporated* 3,853 186,630
-----------
2,425,522
TIRES & RUBBER - 0.10%
Cooper Tire & Rubber Company 324 6,682
Goodyear Tire & Rubber Company 644 41,498
-----------
48,180
TOBACCO - 0.87%
Philip Morris Companies, Incorporated 10,005 393,947
UST, Incorporated 723 19,521
-----------
413,468
TOYS, AMUSEMENTS & SPORTING GOODS - 0.16%
Hasbro, Incorporated 563 22,133
Mattel, Incorporated 1,228 51,960
-----------
74,093
TRUCKING & FREIGHT - 0.04%
Navistar International Corporation, Incorporated 308 8,894
Ryder Systems, Incorporated 319 10,068
-----------
18,962
TOTAL COMMON STOCKS
(Cost: $32,547,826) $36,813,630
-----------
PREFERRED STOCK - 0.01%
AIR TRAVEL - 0.01%
Sealed Air Corporation, Series A 145 6,090
-----------
TOTAL PREFERRED STOCK
(Cost: $7,816) $6,090
-----------
PRINCIPAL
AMOUNT VALUE
- ------ -----
SHORT TERM INVESTMENTS - 7.80%
$3,122,824 Navigator Securities Lending Trust, 5.54% $3,122,824
600,000 United States Treasury Bills,
4.93% due 07/23/1998 **** 598,192
-----------
$3,721,016
REPURCHASE AGREEMENTS - 15.02%
$7,167,000 Repurchase Agreement with State Street Bank
& Trust Company dated 06/30/1998 at 5.71%, to
be repurchased at $7,168,137 on 07/01/1998,
collateralized by $5,265,000 U.S. Treasury Bonds,
8.875% due 08/15/2017 (valued at $7,311,769,
including interest) $7,167,000
-----------
TOTAL INVESTMENTS (Equity Index Trust) (Cost: $43,443,659) $47,707,736
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
110
<PAGE> 114
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
BLUE CHIP GROWTH TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 86.51%
AEROSPACE - 1.29%
AlliedSignal, Incorporated 282,200 $12,522,625
Boeing Company 2,700 120,319
------------
12,642,944
AIR TRAVEL - 0.54%
Galileo International, Incorporated 117,700 5,303,856
------------
APPAREL & TEXTILES - 0.93%
Unifi, Incorporated 65,800 2,253,650
Warnaco Group, Incorporated, Class A 160,700 6,819,706
------------
9,073,356
AUTO PARTS - 1.48%
Danaher Corporation 303,000 11,116,312
Federal-Mogul Corporation 50,600 3,415,500
------------
14,531,812
BANKING - 8.58%
Banc One Corporation 145,200 8,103,975
BankBoston Corporation 127,700 7,103,312
Citicorp 55,800 8,328,150
First Union Corporation 122,000 7,106,500
Mellon Bank Corporation 122,400 8,522,100
National City Corporation 29,300 2,080,300
NationsBank Corporation 127,800 9,776,700
Norwest Corporation 236,200 8,827,975
The Chase Manhattan Corporation 111,600 8,425,800
U.S. Bancorp 172,400 7,413,200
Washington Mutual, Incorporated 66,450 2,886,422
Wells Fargo & Company 14,600 5,387,400
------------
83,961,834
BROADCASTING - 0.90%
CBS Corporation 164,500 5,222,875
MediaOne Group, Incorporated 81,700 3,589,694
------------
8,812,569
BUSINESS SERVICES - 4.67%
America Online, Incorporated 28,200 2,989,200
Automatic Data Processing, Incorporated 90,100 6,566,037
First Data Corporation 196,700 6,552,569
H & R Block, Incorporated 112,600 4,743,275
Nokia Corporaton, ADR 81,800 5,935,612
OmniCom Group, Incorporated 121,000 6,034,875
R.R. Donnelley & Sons Company 29,300 1,340,475
Service Corporation International 132,100 5,663,788
SunGuard Data Systems, Incorporated 98,400 3,776,100
Valassis Communications, Incorporated 54,900 2,117,081
------------
45,719,012
CHEMICALS - 1.39%
E.I. Du Pont De Nemours & Company 44,800 3,343,200
Great Lakes Chemical Corporation 95,600 3,770,225
Hercules, Incorporated 43,900 1,805,388
Sterling Commerce, Incorporated 95,700 4,641,450
------------
13,560,263
COMPUTERS & BUSINESS EQUIPMENT - 2.93%
Ceridian Corporation 25,000 1,468,750
Cisco Systems, Incorporated 87,850 8,087,691
Compaq Computer Corporation 80,900 2,295,537
Dell Computer Corporation 34,500 3,202,031
EMC Corporation 93,500 4,189,969
Hewlett-Packard Company 73,100 4,376,862
International Business Machines Corporation 24,800 2,847,350
Sun Microsystems, Incorporated 35,700 1,550,719
Xerox Corporation 6,600 670,725
------------
28,689,634
CONGLOMERATES - 2.28%
Cendant Corporation 169,700 3,542,488
Raytheon Company, Class B 101,300 5,989,362
Tyco International, Ltd. 202,532 12,759,516
------------
22,291,366
CONSTRUCTION MATERIALS - 0.74%
Masco Corporation 119,600 7,235,800
------------
CONTAINERS & GLASS - 0.09%
Crown Cork & Seal, Incorporated 18,500 878,750
------------
DOMESTIC OIL - 0.441%
Atlantic Richfield Company 26,600 2,078,125
USX-Marathon Group 66,300 2,274,919
------------
4,353,044
DRUGS & HEALTH CARE - 12.93%
Abbott Laboratories 76,600 3,131,025
American Home Products Corporation 159,100 8,233,425
Arterial Vascular Engineering, Incorporated 49,800 1,780,350
Biogen Incorporated 86,800 4,253,200
Bristol-Myers Squibb Company 122,600 14,091,337
Eli Lilly & Company 50,000 3,303,125
Fred Meyer, Incorporated 145,600 6,188,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
111
<PAGE> 115
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
DRUGS & HEALTH CARE - CONTINUED
General Nutrition Companies, Incorporated 120,600 $3,753,675
Guidant Corporation 39,600 2,823,975
HEALTHSOUTH Corporation 257,700 6,877,369
Johnson & Johnson 87,500 6,453,125
Medtronic, Incorporated 40,500 2,581,875
Merck & Company, Incorporated 86,700 11,596,125
Pfizer, Incorporated 103,100 11,205,681
R.P. Scherer Corporation 700 62,038
Schering-Plough Corporation 81,100 7,430,787
Steris Corporation 28,200 1,793,344
Tenet Healthcare Corporation 89,800 2,806,250
United Healthcare Corporation 129,300 8,210,550
United States Surgical Corporation 171,200 7,811,000
Warner-Lambert Company 176,400 12,237,750
------------
126,624,006
ELECTRICAL EQUIPMENT - 1.34%
Cooper Industries, Incorporated 18,500 1,016,344
General Electric Company 110,400 10,046,400
Rentokil Initial 287,000 2,065,369
------------
13,128,113
ELECTRONICS - 2.97%
Boston Scientific Corporation 17,200 1,231,950
Honeywell, Incorporated 39,800 3,325,787
Intel Corporation 78,400 5,811,400
Linear Technology Corporation 54,700 3,299,094
Lucent Technologies, Incorporated 6,600 549,038
Maxim Integrated Products, Incorporated 95,900 3,038,831
Teleflex, Incorporated 123,800 4,704,400
Tellabs, Incorporated 93,900 6,725,587
Texas Instruments, Incorporated 6,700 390,694
------------
29,076,781
FINANCIAL SERVICES - 7.39%
American Express Company 83,700 9,541,800
Association First Capital Corporation, Class A 32,000 2,460,000
Capital One Financial Corporation 43,600 5,414,575
Fairfax Financial Holdings, Ltd. 4,100 1,599,266
Federal Home Loan Mortgage Corporation 277,100 13,041,019
Federal National Mortgage Association 157,900 9,592,425
Hartford Financial Services Group, Incorporated 6,600 754,875
Household International, Incorporated 113,400 5,641,650
Morgan Stanley Dean Witter & Company 49,900 4,559,613
SLM Holding Corporation 110,100 5,394,900
Travelers Group, Incorporated 236,100 14,313,562
------------
72,313,685
FOOD & BEVERAGES - 3.19%
Dean Foods Company 30,000 1,648,125
H.J. Heinz Company 65,000 3,648,125
Hershey Foods Corporation 44,000 3,036,000
Interstate Bakeries Corporation 18,500 613,969
PepsiCo, Incorporated 153,900 6,338,756
Ralston Purina Company 31,400 3,667,912
Sara Lee Corporation 109,100 6,102,781
Unilever NV 34,400 2,715,450
United States Foodservice 98,347 3,448,292
------------
31,219,410
GAS & PIPELINE UTILITIES - 0.28%
Cooper Cameron Corporation 53,200 2,713,200
------------
GOLD - 0.22%
Newmont Mining Corporation 90,500 2,138,063
------------
HOTELS & RESTAURANTS - 0.92%
Hilton Hotels Corporation 148,900 4,243,650
McDonalds Corporation 69,100 4,767,900
------------
9,011,550
HOUSEHOLD APPLIANCES - 0.45%
Newell Company 88,600 4,413,388
------------
HOUSEHOLD PRODUCTS - 1.47%
Colgate-Palmolive Company 68,700 6,045,600
Gillette Company 54,000 3,061,125
Procter & Gamble Company 42,600 3,879,262
The Stanley Works 34,200 1,421,438
------------
14,407,425
INDUSTRIAL MACHINERY - 0.20%
SPX Corporation 30,400 1,957,000
------------
INSURANCE - 3.48%
ACE, Ltd. 233,200 9,094,800
Allstate Corporation 6,600 604,313
American International Group, Incorporated 8,250 1,204,500
Equifax, Incorporated 71,300 2,589,081
EXEL, Ltd. 80,400 6,256,125
Mid Ocean, Ltd. 57,800 4,537,300
Travelers Property Casualty Corporation, Class A 128,300 5,500,862
</TABLE>
The accompanying notes are an integral part of the financial statements.
112
<PAGE> 116
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
INSURANCE - CONTINUED
UNUM Corporation 76,600 $4,251,300
-------------
34,038,281
INTERNATIONAL OIL - 1.56%
Chevron Corporation 26,900 2,234,381
Mobil Corporation 106,400 8,152,900
The British Petroleum Company PLC, ADR 55,800 4,924,350
-------------
15,311,631
LEISURE TIME - 1.55%
Carnival Corporation, Class A 207,800 8,234,075
The Walt Disney Company 66,000 6,934,125
-------------
15,168,200
NEWSPAPERS - 0.91%
Tribune Company 129,100 8,883,694
-------------
PAPER - 0.90%
Fort James Corporation 84,700 3,769,150
Kimberly-Clark Corporation 109,200 5,009,550
-------------
8,778,700
PETROLEUM SERVICES - 0.83%
Camco International Incorporated 47,600 3,706,850
Halliburton Company 98,100 4,371,581
-------------
8,078,431
POLLUTION CONTROL - 0.97%
USA Waste Services, Incorporated 192,200 9,489,875
-------------
PUBLISHING - 0.80%
Time Warner, Incorporated 92,100 7,868,794
-------------
RAILROADS & EQUIPMENT - 0.83%
Burlington Northern Santa Fe Corporation 35,200 3,456,200
Norfolk Southern Corporation 157,600 4,698,450
-------------
8,154,650
REAL ESTATE - 1.21%
Crescent Real Estate Equities 124,700 4,193,038
Starwood Hotels & Resorts Trust SBI 157,800 7,623,712
-------------
11,816,750
RETAIL GROCERY - 1.13%
Safeway, Incorporated 271,600 11,050,725
-------------
RETAIL TRADE - 4.09%
CVS Corporation 234,666 9,137,307
Dayton Hudson Corporation 61,500 2,982,750
Federated Department Stores, Incorporated * 55,200 2,970,450
Home Depot, Incorporated 70,350 5,843,447
Kohls Corporation 70,000 3,631,250
Neiman Marcus Group, Incorporated 79,800 3,466,313
Rite Aid Corporation 117,300 4,406,081
Wal-Mart Stores, Incorporated 124,500 7,563,375
-------------
40,000,973
SOFTWARE - 4.45%
Adobe Systems, Incorporated 59,000 2,503,813
BMC Software, Incorporated * 185,200 9,618,825
Cadence Design Systems, Incorporated 75,800 2,368,750
Microsoft Corporation 122,100 13,232,587
Networks Associates, Incorporated 116,700 5,587,012
Oracle Corporation 156,200 3,836,663
Parametric Technology Corporation 235,000 6,374,375
-------------
43,522,025
TELEPHONE - 4.38%
Airtouch Communications, Incorporated 82,200 4,803,563
Alltel Corporation 81,900 3,808,350
American Telephone & Telegraph Corporation 87,900 5,021,287
MCI Communications Corporation 127,900 7,434,187
SBC Communications, Incorporated 206,900 8,276,000
Telecomunicacoes Brasileiras, ADR 17,200 1,878,025
Vodafone Group PLC, ADR 10,600 1,336,263
WorldCom, Incorporated 212,800 10,307,500
-------------
42,865,175
TOBACCO - 0.87%
Philip Morris Companies, Incorporated 217,500 8,564,063
-------------
TOYS, AMUSEMENTS & SPORTING GOODS - 0.95%
Hasbro, Incorporated 149,700 5,885,081
Mattel, Incorporated 79,800 3,376,538
-------------
9,261,619
TOTAL COMMON STOCKS
(Cost: $607,391,236) $846,910,447
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
113
<PAGE> 117
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----
<S> <C>
SHORT TERM INVESTMENTS - 13.46%
$2,100,000 Aluminum Company of America,
5.55% due 07/28/1998 $2,091,259
12,800,000 Associates Finance
Services Company, 5.53% due 08/20/1998 12,701,689
2,655,000 Finova Capital Corporation,
5.54% due 07/07/1998 2,652,548
4,700,000 H.J. Heinz Company,
5.52% due 07/27/1998 4,681,263
2,000,000 Kellogg Company
5.52% due 07/28/1998 1,991,720
79,909,800 Navigator Securities Lending Trust, 5.54% 79,909,800
4,885,000 Nordstrom Credit Incorporated, 5.57% due 07/14/1998 4,875,174
23,000,000 Preferred Receivables Funding Corporation, 5.58% due 07/28/1998 22,903,745
------------
$131,807,198
REPURCHASE AGREEMENTS - 0.03%
$305,000 Repurchase Agreement with State Street
Bank & Trust Company dated 06/30/1998 at
5.00%, to be repurchased on 07/01/1999 at
$305,042, collateralized by $225,000 U.S.
Treasury Bonds, 9.125% due 07/31/1998
(valued at $358,116, including interest) $305,000
------------
TOTAL INVESTMENTS (Blue Chip Growth Trust) (Cost: $739,503,433) $979,022,645
============
</TABLE>
REAL ESTATE SECURITIES TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 85.13%
REAL ESTATE - 85.13%
Apartment Investment & Management Company, Class A 134,300 $5,304,850
Arden Realty, Incorporated 69,350 1,794,431
Avalon Bay Communities, Incorporated 90,627 3,443,826
Bedford Property Investments, Incorporated 130,600 2,383,450
Boston Properties, Incorporated 67,800 2,339,100
Brandywine Realty Trust SBI 120,200 2,689,475
BRE Properties, Incorporated 42,700 1,112,869
Burnham Pacific Properties, Incorporated 146,100 2,072,794
Camden Property Trust 148,600 4,420,850
CapStar Hotel Company 66,600 1,864,800
CarrAmerica Realty Corporation 70,300 1,994,762
CBL & Associates Properties, Incorporated 154,700 3,751,475
CCA Prison Realty Trust 51,000 1,561,875
CenterPoint Properties Trust 23,987 793,070
Chateau Communities, Incorporated 26,570 763,888
Chelsea GCA Realty, Incorporated 60,500 2,420,000
Colonial Properties Trust SBI 129,250 4,006,750
Cornerstone Properties, Incorporated 106,000 1,868,250
Cousins Properties, Incorporated 38,050 1,136,744
Crescent Real Estate Equities 215,770 7,255,266
Developers Diversified Realty 52,000 2,037,750
Duke Realty Investments, Incorporated 84,500 1,996,312
Equity Office Properties Trust 296,780 8,421,132
Equity Residential Properties Trust SBI 108,912 5,166,513
Essex Property Trust 23,550 730,050
Excel Realty Trust, Incorporated 26,200 754,888
Federal Realty Investment Trust SBI 43,100 1,037,094
FelCor Suite Hotels, Incorporated 126,600 3,972,075
First Industrial Realty Trust, Incorporated 43,000 1,367,937
Franchise Finance Corporation of America 51,800 1,343,563
Gables Residential Trust SBI 23,300 632,013
General Growth Properties, Incorporated 83,800 3,132,025
Glenborough Realty Trust, Incorporated 137,100 3,616,012
Glimcher Realty Trust 98,700 1,918,481
Highwoods Properties, Incorporated 156,300 5,050,444
Hospitality Properties Trust SBI 44,100 1,416,712
IRT Property Company 111,100 1,222,100
Irvine Apartment Communities, Incorporated 25,700 743,694
JDN Realty Corporation 24,700 787,313
Kilroy Realty Corporation 28,600 715,000
Liberty Property Trust SBI 164,000 4,192,250
Macerich Company, REIT 27,300 800,231
Mack-California Realty Corporation 74,000 2,543,750
Manufactured Home Communities, Incorporated 28,100 677,913
Merry Land & Investment Company 46,100 970,981
Mid-America Apartment Communities, Incorporated 86,800 2,283,925
</TABLE>
The accompanying notes are an integral part of the financial statements.
114
<PAGE> 118
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
REAL ESTATE - CONTINUED
Mills Corporation 26,200 $628,800
New Plan Realty Trust SBI 71,100 1,741,950
Patriot American Hospitality, Incorporated 128,871 3,084,850
Post Properties, Incorporated 41,091 1,582,003
Prentiss Properties Trust SBI 39,100 950,619
Public Storage, Incorporated 133,850 3,747,800
Reckson Associates Realty Corporation 42,700 1,008,788
Regency Realty Corporation 29,700 746,213
Rouse Company 73,700 2,316,944
Security Capital Atlantic, Incorporated 43,200 963,900
Security Capital Group, Incorporated, Class B 130,600 3,477,225
Security Capital Industrial Trust SBI 130,200 3,255,000
Security Capital Pacific Trust SBI 110,950 2,496,375
Shurgard Storage Centers, Incorporated, Class A 38,400 1,065,600
Simon DeBartolo Group, Incorporated 121,160 3,937,700
Spieker Properties, Incorporated 68,400 2,650,500
Starwood Hotels & Resorts Trust SBI 178,460 8,621,849
Storage USA, Incorporated 33,700 1,179,500
Sun Communities, Incorporated 104,500 3,461,562
Taubman Centers, Incorporated, REIT* 58,200 829,350
TriNet Corporate Realty Trust, Incorporated* 129,450 4,401,300
United Dominion Realty Trust, Incorporated 105,829 1,468,377
Urban Shopping Centers, Incorporated 22,700 715,050
Vornado Realty Trust 86,450 3,430,984
Walden Residential Properties, Incorporated 87,100 2,133,950
Weeks Corporation 18,500 585,063
Weingarten Realty Investors SBI 31,950 1,335,909
Westfield America, Incorporated 78,900 1,449,787
------------
TOTAL COMMON STOCKS
(Cost: $178,442,255) $173,775,631
------------
WARRANTS - 1.03%
REAL ESTATE - 1.03%
Kimco Realty Corporation,
(Expiration date 10/08/1998;
strike price $39.438) 51,400 2,107,400
------------
TOTAL WARRANTS
(Cost: $1,710,422) $2,107,400
------------
PRINCIPAL
AMOUNT VALUE
------ -----
SHORT TERM INVESTMENTS - 13.52%
$27,603,151 Navigator Securities Lending Trust, 5.54% $27,603,151
------------
REPURCHASE AGREEMENTS - 0.32%
$646,000 Repurchase Agreement with State Street Bank
& Trust Company dated 06/30/1998 at 5.71%,
to be repurchase at $646,102 on 07/01/1998,
collateralized by $680,000 U.S. Treasury Bills,
zero coupon due 12/24/1998 (valued at $662,993,
including interest) $646,000
------------
TOTAL INVESTMENTS (Real Estate
Securities Trust) (Cost: $208,401,828) $204,132,182
============
VALUE TRUST
SHARES VALUE
------ -----
COMMON STOCKS - 82.80%
AEROSPACE - 0.91%
TRW, Incorporated 40,400 $2,206,850
------------
AIR TRAVEL - 1.86%
AMR Corporation 23,300 1,939,725
Delta Air Lines, Incorporated 19,900 2,572,075
------------
4,511,800
APPAREL & TEXTILES - 2.74%
Russell Corporation 47,700 1,439,944
Springs Industries, Incorporated 36,500 1,683,562
V. F. Corporation 68,400 3,522,600
------------
6,646,106
AUTO PARTS - 1.41%
Dana Corporation 42,600 2,279,100
Eaton Corporation 14,700 1,142,925
------------
3,422,025
AUTOMOBILES - 5.49%
Ford Motor Company 117,700 6,944,300
General Motors Corporation 95,100 6,353,869
------------
13,298,169
BANKING - 9.14%
Banc One Corporation 41,900 2,338,544
Citicorp 18,200 2,716,350
Crestar Financial Corporation 10,700 583,819
First Union Corporation 84,520 4,923,290
</TABLE>
The accompanying notes are an integral part of the financial statements.
115
<PAGE> 119
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BANKING - CONTINUED
NationsBank Corporation 22,500 $1,721,250
Republic New York Corporation 35,000 2,202,812
The Chase Manhattan Corporation 82,300 6,213,650
Washington Mutual, Incorporated 32,700 1,420,406
------------
22,120,121
BUSINESS SERVICES - 0.61%
Olsten Corporation 132,200 1,478,988
------------
CHEMICALS - 6.07%
Air Products & Chemicals, Incorporated 33,500 1,340,000
Dow Chemical Company 22,100 2,136,794
E.I. Du Pont De Nemours & Company 30,100 2,246,212
FMC Corporation 23,400 1,595,588
Great Lakes Chemical Corporation 54,600 2,153,288
IMC Global, Incorporated 55,200 1,662,900
Lubrizol Corporation 33,700 1,019,425
Octel Corporation 5,025 99,872
Rohm & Haas Company 23,400 2,432,137
------------
14,686,216
COMPUTERS & BUSINESS EQUIPMENT - 3.41%
International Business Machines Corporation 58,100 6,670,606
Stratus Computer, Incorporated 62,400 1,579,500
------------
8,250,106
CONGLOMERATES - 2.37%
Aeroquip-Vickers, Incorporated 79,400 4,634,975
Raytheon Company, Class A 22 1,268
W. R. Grace & Company 64,500 1,100,531
------------
5,736,774
CONSTRUCTION MATERIALS - 1.23%
Owens-Corning 73,200 2,987,475
------------
CONSTRUCTION & MINING EQUIPMENT - 1.68%
Caterpillar, Incorporated 28,600 1,512,225
Harnischfeger Industries, Incorporated 90,400 2,559,450
------------
4,071,675
DOMESTIC OIL - 2.62%
Atlantic Richfield Company 30,100 2,351,563
Phillips Petroleum Company 46,300 2,231,081
Ultramar Diamond Shamrock 56,000 1,767,500
------------
6,350,144
DRUGS & HEALTH CARE - 4.53%
Beckman Coulter, Incorporated 62,600 3,646,450
Columbia/HCA Healthcare Corporation 84,300 $2,455,237
Foundation Health System, Incorporated 95,940 2,530,417
Mallinckrodt, Incorporated 24,400 724,375
Maxicare Health Plans, Incorporated 45,400 306,450
Tenet Healthcare Corporation 37,900 1,184,375
Vencor, Incorporated 15,300 110,925
------------
10,958,229
ELECTRICAL EQUIPMENT - 0.52%
Arrow Electronics, Incorporated 57,500 1,250,625
------------
ELECTRIC UTILITIES - 2.52%
CINergy Corporation 24,700 864,500
DTE Energy Company 40,000 1,615,000
Duke Energy Company 20,439 1,211,011
Entergy Corporation 41,500 1,193,125
GPU, Incorporated 32,000 1,210,000
------------
6,093,636
ELECTRONICS - 2.46%
Avnet, Incorporated 32,500 1,777,344
Electronic Data Systems Corporation 45,100 1,804,000
TekTronix, Incorporated 67,300 2,380,737
------------
5,962,081
FINANCIAL SERVICES - 4.69%
Association First Capital Corporation, Class A 28 2,153
Case Corporation 119,600 5,770,700
Hartford Financial Services Group, Incorporated 26,100 2,985,187
ReliaStar Financial Corporation 54,000 2,592,000
------------
11,350,040
FOOD & BEVERAGES - 1.40%
IBP, Incorporated 58,800 1,065,750
Universal Foods Corporation 104,200 2,311,937
------------
3,377,687
HOUSEHOLD PRODUCTS - 0.52%
Tupperware Corporation 45,000 1,265,625
------------
INDUSTRIAL MACHINERY - 4.02%
Cummins Engine, Incorporated 76,700 3,930,875
Kennametal, Incorporated 48,700 2,033,225
Parke-Hannifin Corporation 45,150 1,721,344
Tecumseh Products Company, Class A 39,000 2,059,687
------------
9,745,131
</TABLE>
The accompanying notes are an integral part of the financial statements.
116
<PAGE> 120
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
INSURANCE - 7.04%
Allstate Corporation 33,800 $3,094,812
American General Corporation 34,500 2,455,969
CIGNA Corporation 52,200 3,601,800
Everest Reinsurance Holdings 59,000 2,267,812
Loews Corporation 15,500 1,350,438
Old Republic International Corporation 80,550 2,361,122
Transatlantic Holdings, Incorporated 24,700 1,909,619
-------------
17,041,572
INTERNATIONAL OIL - 2.06%
Amoco Corporation 900 37,463
The British Petroleum Company PLC, ADR 29,800 2,629,850
YPF Sociedad Anonima, ADR 77,300 2,323,831
-------------
4,991,144
OFFICE FURNISHINGS & SUPPLIES - 0.36%
Standard Register 24,700 873,763
-------------
PAPER - 0.37%
Westvaco Corporation 31,500 889,875
-------------
PETROLEUM SERVICES - 0.50%
Nabors Industries, Incorporated 61,200 1,212,525
-------------
RAILROADS & EQUIPMENT - 0.80%
Burlington Northern Santa Fe Corporation 4,300 422,206
CSX Corporation 33,100 1,506,050
-------------
1,928,256
REAL ESTATE - 0.08%
Ventas, Incorporated 13,200 182,325
-------------
RETAIL TRADE - 5.08%
Dillards, Incorporated, Class A 69,600 2,884,050
Federated Department Stores, Incorporated * 37,400 2,012,587
Sears Roebuck & Company 44,600 2,723,387
Toys R Us, Incorporated * 128,300 3,023,069
Venator Group, Incorporated 86,300 1,650,488
-------------
12,293,581
STEEL - 0.74%
Inland Steel Industries, Incorporated 63,800 1,798,363
-------------
TELEPHONE - 0.81%
Bell Atlantic Corporation 42,800 1,952,750
-------------
Tires & Rubber - 1.92%
Goodyear Tire & Rubber Company 72,100 $4,645,944
-------------
TOBACCO - 2.85%
Philip Morris Companies, Incorporated 107,100 4,217,062
RJR Nabisco Holdings Corporation 113,400 2,693,250
-------------
6,910,312
TOTAL COMMON STOCKS
(Cost: $194,271,948) $200,489,913
-------------
PRINCIPAL
AMOUNT VALUE
------ -----
SHORT TERM INVESTMENTS - 4.61%
$11,154,359 Navigator Securities Lending Trust, 5.54% $11,154,359
-------------
REPURCHASE AGREEMENTS - 12.59%
$30,499,000 Repurchase Agreement with State Street Bank
& Trust Company dated 06/30/1998 at 5.00%,
to be repurchaseed at $30,503,236 on 07/01/1998,
collateralized by $21,660,000 U.S. Treasury Bonds,
12.75% due 11/15/2010 (valued at $31,112,554,
including interest $30,499,000
-------------
TOTAL INVESTMENTS (Value Trust) (Cost: $235,925,306) $242,143,272
=============
INTERNATIONAL GROWTH & INCOME TRUST
SHARES VALUE
------ -----
COMMON STOCKS - 81.71%
Aerospace - 0.72%
Lucas Varity PLC, ADS 491,300 $1,952,370
-------------
AGRICULTURAL MACHINERY - 0.79%
Kvaerner ASA, Series A 36,600 1,241,568
Kvaerner ASA, Series B 29,200 902,916
-------------
2,144,484
AIR TRAVEL - 0.07%
Deutsche Lufthansa AG 7,500 189,013
-------------
APPAREL & TEXTILES - 1.61%
Adidas-Salomon AG 12,300 2,144,972
Christian Dior SA 17,500 2,202,805
-------------
4,347,777
</TABLE>
The accompanying notes are an integral part of the financial statements.
117
<PAGE> 121
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
AUTO PARTS - 1.32%
Autoliv, Incorporated, ADR 111,492 $3,564,501
-----------
AUTOMOBILES - 1.51%
Honda Motor Company 45,000 1,607,724
Peugeot Sa 7,900 1,698,728
Tata Engineering & Locomotive Company, Ltd., GDR 2,300 9,037
Volkswagen AG 800 773,185
-----------
4,088,674
BANKING - 13.79%
Banco Totta & Acores, SA 46,090 1,397,930
Banque Paribas 31,510 3,372,144
Dao Heng Bank Group, Ltd. 1,103,000 1,565,953
Deutsche Bank AG 38,300 3,240,777
Dresdner Bank AG 66,800 3,611,412
Grupo Financiero Banamex Accival SA, Series B 1,086,000 2,115,074
Housing & Commercial Bank, Korea, GDR* 28,801 92,163
Lloyds TSB Group PLC 218,700 3,061,895
Sanwa Bank 29,000 260,281
Societe Generale 18,460 3,838,136
The Bank of Fukuoka, Ltd. 455,000 1,711,145
The Mitsui Trust & Banking Company, Ltd.* 478,000 1,130,440
Unibanco Uniao De Barncos Bras, GDR* 81,100 2,392,450
Union Bank of Switzerland/ Schweizerische Bankgesellschaft 17,050 6,350,261
Westpac Banking Corporation, Ltd. 302,600 1,850,213
Yapi ve Kredi Bankasi A.S. 20,369,249 358,243
Z Laenderbank Bank Austria AG 10,700 869,494
-----------
37,218,011
BROADCASTING - 0.31%
Central European Media Enterprises, Ltd., Class A* 38,100 823,912
-----------
BUILDING MATERIALS & CONSTRUCTION - 0.96%
ACS, Actividades de Construccion y Servicios SA* 46,000 1,381,350
Cie de Saint Gobain 6,500 1,205,237
-----------
2,586,587
BUSINESS SERVICES - 3.49%
Eaux (Cie Generale Des) 25,369 5,417,301
Vedior* 34,637 979,761
Wessex Water PLC 396,900 3,021,930
-----------
9,418,992
CHEMICALS - 3.72%
Air Liquide 10,350 $ 1,711,960
Bayer AG 27,400 1,419,036
Fauji Fertilizer Company, Ltd.* 416,600 451,795
Rhodia SA* 128,401 3,580,794
Sekisui Chemical Company, Ltd. 276,000 1,417,227
SGL Carbon AG 12,500 1,456,930
-----------
10,037,742
COMPUTERS & BUSINESS EQUIPMENT - 0.79%
Fujitsu, Ltd. 201,000 2,122,369
-----------
CONGLOMERATES - 0.68%
ABSA Group, Ltd. 134,300 837,960
First Phil Holdings 701,000 470,695
Hutchison Whampoa, Ltd. 100,000 527,878
-----------
1,836,533
CONSTRUCTION MATERIALS - 0.92%
Pioneer International, Ltd. 384,000 917,717
Tostem Corporation 120,000 1,560,425
-----------
2,478,142
CRUDE PETROLEUM & NATURAL GAS - 1.24%
Elf Aquitaine SA 23,753 3,339,572
-----------
DRUGS & HEALTH CARE - 7.31%
Incentive AB, Series A 68,500 1,245,299
Orion Yhtyma Oy, Series A 2,000 60,937
Ranbaxy Laboratories, Ltd., GDR 24,400 374,540
Roche Holdings AG 304 2,990,213
Sanofi Company SA 16,080 1,891,076
Schering AG 22,480 2,648,812
Smith & Nephew PLC 751,000 1,877,782
SmithKline Beecham PLC 199,500 2,436,664
Takeda Chemical Industries, Ltd. 65,000 1,734,650
Yamanouchi Pharmaceutical Company, Ltd. 96,000 2,006,509
Zeneca Group PLC 57,500 2,469,319
-----------
19,735,801
ELECTRICAL EQUIPMENT - 0.78%
ABB AG 1,160 1,715,908
Elektrim Spolka Akcyjina SA 30,893 376,528
-----------
2,092,436
ELECTRIC UTILITIES - 2.38%
Iberdrola SA 208,900 3,391,985
VEBA AG 44,900 3,021,218
-----------
6,413,203
ELECTRONICS - 1.95%
Fanuc, Ltd. 62,000 2,152,311
Nokia (AB) OY, Series A 22,400 1,649,027
</TABLE>
The accompanying notes are an integral part of the financial statements.
118
<PAGE> 122
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRONICS - CONTINUED
Samsung Electronics, Ltd., GDR* 2,656 $42,097
SGS Thomson Microelectronics, Incorporated 19,900 1,410,449
------------
5,253,884
FINANCIAL SERVICES - 1.22%
Credicorp, Ltd. 2,460 36,131
International Nederlanded Groep NV 49,800 3,263,245
------------
3,299,376
FOOD & BEVERAGES - 3.13%
Danisco A/S 16,300 1,096,237
Nestle SA 2,300 4,930,199
Panamerican Beverages, Incorporated, Class A 24,300 763,931
Tate & Lyle PLC 209,688 1,663,927
------------
8,454,294
GOLD - 0.63%
Anglogold, Ltd. 39,303 1,584,059
Eastvaal Gold Holdings, Ltd.* 121,200 110,368
------------
1,694,427
HOUSEHOLD APPLIANCES - 2.04%
Philips Electronics NV 34,150 2,872,783
Sony Corporation 30,500 2,635,966
------------
5,508,749
HOUSEHOLD PRODUCTS - 0.96%
Unilever PLC 243,000 2,588,603
------------
INDUSTRIAL MACHINERY - 0.64%
Tadano, Ltd. 102,000 295,075
Tokyo Ohka Kogyo 49,800 1,419,049
------------
1,714,124
INSURANCE - 4.60%
QBE Insurance Group, Ltd. 541,000 1,914,206
Royal & Sun Alliance Insurance Group PLC 239,000 2,472,166
Skandia Foersaekrings AB 221,400 3,164,444
Union Assurance, Ltd. 9,000 1,418,694
Zurich Versicherungs 5,400 3,451,892
------------
12,421,402
INTERNATIONAL OIL - 4.04%
Oil Company Lukoil, ADR 18,900 631,821
Pakistan State Oil Company, Ltd.* 17,060 27,363
Petrofina Sa 2,500 1,026,822
RWE AG 68,400 4,050,637
The Shell Transport and Trading Company PLC 462,000 3,255,314
YPF Sociedad Anonima, ADR 63,570 1,911,073
------------
10,903,030
LIQUOR - 0.50%
South Africa Brews 65,800 1,353,727
------------
MISCELLANEOUS - 0.69%
Orion, Series B 36,200 1,116,173
WBK STRYPES Trust 24,900 751,669
------------
1,867,842
NON-FERROUS METALS - 0.41%
Billiton PLC 548,800 1,113,343
------------
PAPER - 1.80%
Fletcher Challenge Paper 978,800 1,089,942
Stora Kopparbergs, Series A 146,500 2,305,134
UPM-Kymmene Oyj 53,500 1,473,897
------------
4,868,973
PETROLEUM SERVICES - 1.24%
TOTAL SA, B Shares 25,673 3,337,741
------------
PHOTOGRAPHY - 0.26%
Fuji Photo Film Company 20,000 698,633
------------
PUBLISHING - 1.51%
ASM Lithography Holdings N.V.* 51,454 1,523,813
Lagardere S.C.A. 39,100 1,627,846
Wolters Kluwer NV 6,700 920,251
------------
4,071,910
REAL ESTATE - 1.15%
Henderson Land Development 944,000 3,112,958
------------
RETAIL GROCERY - 0.52%
De Boer Unigro N.V. 26,700 1,412,003
------------
RETAIL TRADE - 2.88%
Carrefour SA 3,019 1,910,064
Edgars Stores 75,500 668,423
Ito-Yokado Company, Ltd. 23,000 1,086,208
Mitsubishi Corporation 447,000 2,780,213
Vendex NV 35,100 1,340,629
------------
7,785,537
SOFTWARE - 1.36%
Olicom A/S* 66,600 1,803,276
SAP AG 3,080 1,870,082
------------
3,673,358
</TABLE>
The accompanying notes are an integral part of the financial statements.
119
<PAGE> 123
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
STEEL - 0.57%
Acerinox SA 7,300 $972,064
Pohang Iron & Steel, Ltd., ADR 28,900 346,800
Tokyo Steel Manufacturing 40,000 206,552
------------
1,525,416
TELECOMMUNICATIONS SERVICES - 2.41%
Cable & Wireless ADS 143,200 1,740,656
Great Nordic Store Nord A/S 85,324 2,608,347
Portugal Telecom SA 35,000 1,856,175
Telstra Corporation, Ltd.* 114,700 294,768
------------
6,499,946
TELEPHONE - 3.91%
DDI Corporation 787 2,749,121
Philippine Long Distance Telephone Company, ADR 24,116 545,625
Telecom Italia SPA RISP 467,200 2,262,702
Telecomunicacoes Brasileiras, ADR 20,600 2,249,263
Telefonos De Mexico SA, ADR 16,358 786,206
Vodafone Group 155,300 1,972,010
------------
10,564,927
TOYS, AMUSEMENTS & SPORTING GOODS - 0.27%
Nintendo Company 7,800 724,886
------------
TRANSPORTATION - 0.63%
Evergreen Marine Corporation, GDR 74,675 575,916
Stolt-Nielsen S.A., ADR 64,440 1,119,645
------------
1,695,561
TOTAL COMMON STOCKS
(Cost: $210,672,683) $220,534,769
------------
PREFERRED STOCK - 4.54%
AUTOMOBILES - 0.26%
Volkswagen AG 1,000 689,789
------------
BROADCASTING - 1.69%
News Corporation 642,400 4,561,925
------------
CONGLOMERATES - 0.35%
Companhia Brasileira de Destribuicao Grupo Pao de Acucar, ADR 42,000 950,250
------------
ELECTRIC UTILITIES - 0.40%
Companhia Paranaense de Energia-Copel, ADR 116,400 1,076,700
------------
FINANCIAL SERVICES - 0.28%
Sanwa International Finance* 102,000,000 752,441
------------
INSURANCE - 1.56%
Munchener Ruckversicherungs-Gesellschaft AG 8,482 4,214,074
------------
TOTAL PREFERRED STOCK
(Cost: $9,958,749) $12,245,179
------------
PRINCIPAL
AMOUNT VALUE
--------- -----
CONVERTIBLE BONDS - 1.70%
FINANCIAL SERVICES - 0.15%
Mti Capital (Cayman), Ltd.,
00.50% due 10/01/2007 $71,000,000 $ 406,939
------------
FOOD & BEVERAGES - 1.08%
Compass Group PLC,
5.75% due 10/05/2007 985,000 2,929,130
------------
INDUSTRIALS - 0.47%
Beijing Enterprises*,
00.50% due 03/31/2003 1,279,000 1,259,815
------------
TOTAL CONVERTIBLE BONDS
(Cost: $4,253,400) $4,595,884
------------
PRINCIPAL
AMOUNT VALUE
------ -----
SHORT TERM INVESTMENTS - 12.00%
$32,407,075 Navigator Securities Lending Trust, 5.54% $32,407,075
------------
REPURCHASE AGREEMENTS - 0.05%
$127,000 Repurchase Agreement with State Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be repurchased at $127,018 on 07/01/1998,
collateralized by $95,000 U.S. Treasury Bonds, 8.75% due 05/15/2020
(valued at $130,759, including interest) $127,000
------------
TOTAL INVESTMENTS (International
Growth & Income Trust) (Cost: $257,418,907) $269,909,907
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
120
<PAGE> 124
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
GROWTH & INCOME TRUST
COMMON STOCKS - 94.56%
AEROSPACE - 3.35%
Boeing Company 400,000 $ 17,825,000
Computer Sciences Corporation* 310,000 19,840,000
Lockheed Martin Corporation 175,000 18,528,125
United Technologies Corporation 145,000 13,412,500
------------
69,605,625
AGRICULTURAL MACHINERY - 0.64%
Deere & Company 250,000 13,218,750
------------
AIR TRAVEL - 1.28%
Southwest Airlines Company 900,000 26,662,500
------------
ALUMINUM - 0.49%
Aluminum Company of America 155,000 10,220,313
------------
AUTO SERVICES - 0.30%
General Motors Corporation* 130,000 6,126,250
------------
BANKING - 8.026%
Citicorp 275,000 41,043,750
First Union Corporation 700,000 40,775,000
The Chase Manhattan Corporation 240,000 18,120,000
U.S. Bancorp 867,000 37,281,000
Wachovia Corporation 346,500 29,279,250
------------
166,499,000
BUSINESS SERVICES - 1.86%
Automatic Data Processing, Incorporated 290,000 21,133,750
First Data Corporation 525,000 17,489,062
------------
38,622,812
CHEMICALS - 2.14%
Dow Chemical Company 95,000 9,185,313
E.I. Du Pont De Nemours & Company 238,300 17,783,137
Zeneca Group PLC, ADR 399,900 17,545,612
------------
44,514,062
COMPUTERS & BUSINESS EQUIPMENT - 5.65%
3Com Corporation* 88,900 2,728,119
Cisco Systems, Incorporated* 320,000 29,460,000
EMC Corporation* 260,000 11,651,250
Hewlett-Packard Company 255,000 15,268,125
International Business Machines
Corporation 330,000 37,888,125
Xerox Corporation 200,000 20,325,000
------------
117,320,619
CONTAINERS & GLASS - 0.31%
Crown Cork & Seal, Incorporated 135,000 6,412,500
------------
DOMESTIC OIL - 0.64%
Unocal Corporation 370,000 13,227,500
------------
DRUGS & HEALTH CARE - 10.92%
Abbott Laboratories 640,000 26,160,000
American Home Products Corporation 330,500 17,103,375
Bristol-Myers Squibb Company 180,000 20,688,750
Columbia/HCA Healthcare Corporation 750,700 21,864,137
Johnson & Johnson 240,000 17,700,000
Merck & Company, Incorporated 165,000 22,068,750
Pfizer, Incorporated 374,000 40,649,125
Pharmacia & Upjohn, Incorporated 770,000 35,516,250
Warner-Lambert Company 360,000 24,975,000
------------
226,725,387
ELECTRICAL EQUIPMENT - 3.43%
General Electric Company 782,700 71,225,700
------------
ELECTRIC UTILITIES - 2.08%
DPL, Incorporated 667,500 12,098,437
Duke Energy Company 208,000 12,324,000
New England Electric Systems 195,000 8,433,750
Texas Utilities Company 250,000 10,406,250
------------
43,262,437
ELECTRONICS - 3.93%
AMP, Incorporated 300,000 10,312,500
Analog Devices, Incorporated* 245,000 6,017,812
Intel Corporation 360,000 26,685,000
Lucent Technologies, Incorporated 210,000 17,469,375
Motorola, Incorporated 269,500 14,165,594
Texas Instruments, Incorporated 120,000 6,997,500
------------
81,647,781
FINANCIAL SERVICES - 7.26%
American Express Company 330,000 37,620,000
Federal National Mortgage Association 550,000 33,412,500
Merrill Lynch & Company, Incorporated 189,700 17,499,825
Morgan Stanley Dean Witter & Company 232,200 21,217,275
Travelers Group, Incorporated 675,000 40,921,875
------------
150,671,475
FOOD & BEVERAGES - 4.26%
General Mills, Incorporated 170,000 11,623,750
H.J. Heinz Company 160,000 8,980,000
Nabisco Holdings Corporation 230,000 8,294,375
</TABLE>
The accompanying notes are an integral part of the financial statements.
121
<PAGE> 125
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
FOOD & BEVERAGES - CONTINUED
PepsiCo, Incorporated 423,500 $ 17,442,906
Sara Lee Corporation 410,000 22,934,375
The Coca-Cola Company 225,000 19,237,500
--------------
88,512,906
GAS & PIPELINE UTILITIES - 0.79%
KN Energy, Incorporated 100,000 5,418,750
National Fuel Gas Company 145,000 6,316,563
Peoples Energy Corporation 120,000 4,635,000
--------------
16,370,313
HOTELS & RESTAURANTS - 1.48%
McDonalds Corporation 445,000 30,705,000
--------------
HOUSEHOLD PRODUCTS - 2.77%
Colgate-Palmolive Company 150,000 13,200,000
Gillette Company 204,900 11,615,269
Procter & Gamble Company 360,000 32,782,500
--------------
57,597,769
INSURANCE - 4.70%
ACE, Ltd. 600,000 23,400,000
Allstate Corporation 280,000 25,637,500
American International Group, Incorporated 189,000 27,594,000
Marsh & Mclennan Companies, Incorporated 345,000 20,850,937
--------------
97,482,437
INTERNATIONAL OIL - 4.95%
Amoco Corporation 400,000 16,650,000
Chevron Corporation 330,000 27,410,625
Exxon Corporation 440,000 31,377,500
Royal Dutch Petroleum Company 500,000 27,406,250
--------------
102,844,375
LEISURE TIME - 0.46%
The Walt Disney Company 90,000 9,455,625
--------------
LIQUOR - 0.71%
Anheuser-Busch Companies, Incorporated 311,000 14,675,313
--------------
NEWSPAPERS - 1.51%
Gannett, Incorporated 440,000 31,267,500
--------------
PAPER - 2.04%
International Paper Company 230,000 9,890,000
Kimberly-Clark Corporation 385,000 17,661,875
Minnesota Mining & Manufacturing Company 180,000 14,793,750
--------------
42,345,625
PETROLEUM SERVICES - 1.50%
Diamond Offshore Drilling, Incorporated 170,000 6,800,000
Schlumberger, Ltd 355,000 24,250,938
--------------
31,050,938
RAILROADS & EQUIPMENT - 0.59%
Union Pacific Corporation 275,300 12,147,613
--------------
REAL ESTATE - 0.21%
Security Capital Pacific Trust SBI 190,000 4,275,000
--------------
RETAIL TRADE - 5.13%
Dayton Hudson Corporation 680,000 32,980,000
GAP, Incorporated 300,000 18,487,500
May Department Stores, Incorporated 254,600 16,676,300
Wal-Mart Stores, Incorporated 630,000 38,272,500
--------------
106,416,300
SOFTWARE - 3.31%
Microsoft Corporation* 540,000 58,522,500
PeopleSoft, Incorporated* 217,200 10,208,400
--------------
68,730,900
TELECOMMUNICATIONS SERVICES - 0.55%
Cox Communications, Incorporated, Class A* 235,000 11,382,813
--------------
TELEPHONE - 5.41%
Bell Atlantic Corporation 638,798 29,145,159
BellSouth Corporation 215,000 14,431,875
SBC Communications, Incorporated 780,000 31,200,000
U. S. West, Incorporated* 350,000 16,450,000
WorldCom, Incorporated* 435,000 21,070,312
--------------
112,297,346
TIRES & RUBBER - 0.50%
Goodyear Tire & Rubber Company 160,000 10,310,000
--------------
TOBACCO - 1.39%
Philip Morris Companies, Incorporated 735,000 28,940,625
--------------
TOTAL COMMON STOCKS
(Cost: $1,256,902,184) $1,962,771,109
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
122
<PAGE> 126
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------ -----
<S> <C>
SHORT TERM INVESTMENT - 2.85%
$59,138,837 Navigator Securities Lending
Trust, 5.54% $ 59,138,837
--------------
REPURCHASE AGREEMENTS - 2.59%
$53,787,000 Repurchase Agreement with Swiss Bank dated
06/30/1998 at 5.70%, to be repurchased at
$53,795,516 on 07/01/1998, collateralized by
$42,406,000 U.S. Treasury Bonds, 8.00% due
11/15/2021 (valued at $54,398,947,
including interest)
$ 53,787,000
--------------
TOTAL INVESTMENTS (Growth & Income Trust) (Cost: $1,369,828,021) $2,075,696,946
==============
</TABLE>
EQUITY-INCOME TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 90.01%
AEROSPACE - 1.16%
AlliedSignal, Incorporated 129,300 $ 5,737,688
TRW, Incorporated 127,900 6,986,537
--------------
12,724,225
ALUMINUM - 0.39%
Reynolds Metals Company 76,500 4,279,219
--------------
APPAREL & TEXTILES - 0.08%
Unifi, Incorporated 25,600 876,800
--------------
AUTO PARTS - 0.73%
Genuine Parts Company 230,950 7,982,209
--------------
AUTOMOBILES - 0.75%
General Motors Corporation 123,700 8,264,706
--------------
BANKING - 8.70%
Banc One Corporation 157,300 8,779,306
BankBoston Corporation 106,000 5,896,250
Bankers Trust New York Corporation 64,100 7,439,606
First Union Corporation 126,710 7,380,858
Fleet Financial Group, Incorporated 92,500 7,723,750
J. P. Morgan & Company, Incorporated 89,500 10,482,688
Mellon Bank Corporation 276,700 19,265,237
Mercantile Bankshares Corporation 97,250 3,385,516
National City Corporation 80,000 5,680,000
PNC Bank Corporation 72,400 3,896,025
The Chase Manhattan Corporation 118,100 8,916,550
Wells Fargo & Company 17,100 6,309,900
--------------
95,155,686
BUSINESS SERVICES - 1.36%
H & R Block, Incorporated 152,000 6,403,000
R.R. Donnelley & Sons Company 184,400 8,436,300
--------------
14,839,300
CHEMICALS - 7.01%
Dow Chemical Company 145,600 14,077,700
E.I. Du Pont De Nemours & Company 132,200 9,865,425
Eastman Chemical Company 38,000 2,365,500
Great Lakes Chemical Corporation 165,700 6,534,794
Hercules, Incorporated 197,200 8,109,850
Imperial Chemical Industries PLC, ADR 74,100 4,779,450
Lubrizol Corporation 96,900 2,931,225
Nalco Chemical Company 159,200 5,591,900
Octel Corporation 86,125 1,711,734
Olin Corporation 171,800 7,161,913
PPG Industries, Incorporated 113,200 7,874,475
Witco Corporation 194,700 5,694,975
--------------
76,698,941
COMPUTERS & BUSINESS EQUIPMENT - 0.42%
Hewlett-Packard Company 76,000 4,550,500
--------------
CONGLOMERATES - 1.39%
Fortune Brands, Incorporated 178,900 6,876,469
Lonrho 241,500 1,133,083
Lonrho Africa 161,100 197,707
Tomkins 1,298,500 7,051,763
--------------
15,259,022
CONSTRUCTION MATERIALS - 0.35%
Armstrong World Industries,
Incorporated 56,200 3,786,475
--------------
COSMETICS & TOILETRIES - 0.86%
International Flavors & Fragrances,
Incorporated 216,200 9,391,188
--------------
CRUDE PETROLEUM & NATURAL GAS - 0.47%
Occidental Petroleum Corporation 188,800 5,097,600
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
123
<PAGE> 127
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
DOMESTIC OIL - 3.16%
Amerada Hess Corporation 148,100 $ 8,043,681
Atlantic Richfield Company 181,600 14,187,500
Phillips Petroleum Company 90,200 4,346,512
Unocal Corporation 85,000 3,038,750
USX-Marathon Group 143,900 4,937,569
--------------
34,554,012
DRUGS & HEALTH CARE - 5.85%
Abbott Laboratories 151,600 6,196,650
American Home Products Corporation 303,200 15,690,600
Amgen, Incorporated 43,400 2,837,275
Bausch & Lomb, Incorporated 115,300 5,779,413
Baxter International, Incorporated 68,500 3,686,156
Johnson & Johnson 37,800 2,787,750
Pharmacia & Upjohn, Incorporated 291,900 13,463,887
Smith & Nephew PLC 1,267,200 3,168,476
United States Surgical Corporation 227,900 10,397,938
--------------
64,008,145
ELECTRICAL EQUIPMENT - 1.79%
Cooper Industries, Incorporated 92,500 5,081,719
General Electric Company 113,800 10,355,800
Hubbell, Incorporated 99,000 4,120,875
--------------
19,558,394
ELECTRIC UTILITIES - 6.76%
Baltimore Gas & Electric Company 106,100 3,295,731
Central & South West Corporation 98,000 2,633,750
Dominion Resources, Incorporated 140,800 5,737,600
DQE, Incorporated 128,200 4,615,200
Duke Energy Company 150,800 8,934,900
Entergy Corporation 145,900 4,194,625
FirstEnergy Corporation 240,775 7,403,831
GPU, Incorporated 103,600 3,917,375
Houston Industries, Incorporated 201,000 6,205,875
PacifiCorp 162,900 3,685,613
PECO Energy Company 165,900 4,842,206
Southern Company 274,900 7,611,294
TECO Energy, Incorporated 132,400 3,549,975
Unicom Corporation 209,400 7,342,087
--------------
73,970,062
ELECTRONICS - 0.62%
AMP, Incorporated 196,100 6,740,938
--------------
FINANCIAL SERVICES - 1.53%
Federal National Mortgage Association 156,500 9,507,375
Travelers Group, Incorporated 119,049 7,217,346
--------------
16,724,721
FOOD & BEVERAGES - 3.80%
General Mills, Incorporated 155,900 10,659,662
H.J. Heinz Company 123,200 6,914,600
Kellogg Company 134,000 5,033,375
McCormick & Company, Incorporated 226,000 8,072,437
Quaker Oats Company 159,700 8,773,519
Sara Lee Corporation 37,800 2,114,438
--------------
41,568,031
FOREST PRODUCTS - 0.36%
Georgia-Pacific Corporation 52,100 3,070,644
Georgia-Pacific Corporation (Timber
Group) 39,600 913,275
--------------
3,983,919
GOLD - 0.45%
Newmont Mining Corporation 208,400 4,923,450
--------------
HOTELS & RESTAURANTS - 0.34%
Hilton Hotels Corporation 132,500 3,776,250
--------------
HOUSEHOLD APPLIANCES - 0.72%
Whirlpool Corporation 114,700 7,885,625
--------------
HOUSEHOLD PRODUCTS - 0.34%
Tupperware Corporation 132,400 3,723,750
--------------
INDUSTRIAL MACHINERY - 0.49%
Pall Corporation 260,000 5,330,000
--------------
INSURANCE - 4.92%
American General Corporation 147,800 10,521,512
EXEL, Ltd. 89,300 6,948,656
Hilb Rogal & Hamilton Company 9,500 148,438
Lincoln National Corporation 58,000 5,299,750
SAFECO Corporation 191,600 8,705,825
St. Paul Companies, Incorporated 298,548 12,557,675
Transamerica Corporation 55,300 6,366,413
Willis Corroon Group PLC, ADR 260,820 3,276,551
--------------
53,824,820
INTERNATIONAL OIL - 7.43%
Amoco Corporation 337,100 14,031,787
Chevron Corporation 158,800 13,190,325
Exxon Corporation 226,400 16,145,150
Mobil Corporation 152,000 11,647,000
Royal Dutch Petroleum Company 141,600 7,761,450
Texaco, Incorporated 197,400 11,782,313
The British Petroleum Company PLC, ADR 76,000 6,707,000
--------------
81,265,025
LIQUOR - 1.57%
Anheuser-Busch Companies, Incorporated 230,900 10,895,594
</TABLE>
The accompanying notes are an integral part of the financial statements.
124
<PAGE> 128
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
Liquor - continued
Brown Forman Corporation, Class B 98,300 $ 6,315,775
--------------
17,211,369
MINING - 0.45%
Phelps Dodge Corporation 87,100 4,981,031
--------------
NEWSPAPERS - 1.42%
Dow Jones & Company, Incorporated 121,400 6,768,050
Knight-Ridder, Incorporated 158,600 8,732,912
--------------
15,500,962
NON-FERROUS METALS - 0.24%
Inco, Ltd. 192,300 2,620,088
--------------
PAPER - 3.18%
Consolidated Papers, Incorporated 189,200 5,155,700
International Paper Company 110,700 4,760,100
Kimberly-Clark Corporation 173,700 7,968,488
Minnesota Mining & Manufacturing
Company 105,400 8,662,562
Union Camp Corporation 165,200 8,198,050
--------------
34,744,900
PHOTOGRAPHY - 0.93%
Eastman Kodak Company 139,000 10,155,687
--------------
POLLUTION CONTROL - 1.32%
Browning Ferris Industries,
Incorporated 183,200 6,366,200
Waste Management, Incorporated 229,700 8,039,500
--------------
14,405,700
PUBLISHING - 0.92%
Dun & Bradstreet Corporation 151,700 5,480,163
Readers Digest Association,
Incorporated, Class A 171,000 4,638,375
--------------
10,118,538
RAILROADS & EQUIPMENT - 2.95%
Burlington Northern Santa Fe
Corporation 67,100 6,588,381
Gatx Corporation 75,000 3,290,625
Norfolk Southern Corporation 399,000 11,895,187
Union Pacific Corporation 238,100 10,506,163
--------------
32,280,356
REAL ESTATE - 2.95%
Crescent Real Estate Equities 165,100 5,551,487
Rouse Company 56,200 1,766,788
Security Capital Pacific Trust SBI 105,400 2,371,500
Simon DeBartolo Group, Incorporated 261,800 8,508,500
Starwood Hotels & Resorts Trust SBI 242,071 11,695,055
Weingarten Reality Investors SBI 57,700 2,412,581
--------------
32,305,911
RETAIL TRADE - 1.22%
J. C. Penney, Incorporated 114,000 8,243,625
May Department Stores, Incorporated 77,600 5,082,800
--------------
13,326,425
STEEL - 0.33%
USX-United States Steel Group 108,200 3,570,600
--------------
TELEPHONE - 7.78%
Alltel Corporation 318,500 14,810,250
American Telephone & Telegraph
Corporation 173,600 9,916,900
BCE, Incorporated 150,600 6,428,737
Bell Atlantic Corporation 180,000 8,212,500
BellSouth Corporation 105,600 7,088,400
Frontier Corporation 156,000 4,914,000
GTE Corporation 211,200 11,748,000
SBC Communications, Incorporated 285,458 11,418,320
Southern New England Telecommunications
Corporation 92,900 6,084,950
U. S. West, Incorporated 95,000 4,465,000
--------------
85,087,057
TOBACCO - 2.32%
Philip Morris Companies, Incorporated 314,500 12,383,437
RJR Nabisco Holdings Corporation 208,600 4,954,250
UST, Incorporated 297,400 8,029,800
--------------
25,367,487
TRUCKING & FREIGHT - 0.20%
Alexander & Baldwin, Incorporated 76,400 2,225,150
--------------
TOTAL COMMON STOCKS
(Cost: $797,912,149) $ 984,644,274
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------ -----
<S> <C>
SHORT TERM INVESTMENTS - 9.95%
$8,040,000 Aluminum Company of America,
5.55% due 07/28/1998 $ 8,006,534
3,900,000 CIESCO LP,
5.53% due 07/20/1998 3,888,617
18,000,000 Diageo Capital PLC,
5.51% due 07/28/1998 17,925,615
</TABLE>
The accompanying notes are an integral part of the financial statements.
125
<PAGE> 129
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------ -----
<S> <C>
SHORT TERM INVESTMENTS - CONTINUED
$3,985,000 Metlife Funding, Incorporated, 5.51% due
07/08/1998 $ 3,980,731
40,756,854 Navigator Securities Lending Trust, 5.54% 40,756,854
14,000,000 Preferred Receivables Funding, 5.58% due
07/28/1998 13,941,410
$18,400,000 Procter & Gamble Company,
5.50% due 07/31/1998 18,315,667
2,000,000 KFW International Finance, Incorporated,
5.50% due 07/13/1998 1,996,333
--------------
$ 108,811,761
REPURCHASE AGREEMENTS - 0.04%
$431,000 Repurchase Agreement with State Street Bank & Trust Company
dated 06/30/1998 at 5.00%, to be repurchased at $431,060 on
07/01/1998, collateralized by $335,000 U.S. Treasury Bonds,
8.125% due 08/15/2021 (valued at $444,237, including interest) $ 431,000
--------------
TOTAL INVESTMENTS (Equity-Income Trust)
(Cost: $907,154,909) $1,093,887,035
==============
</TABLE>
BALANCED TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 54.20%
AEROSPACE - 0.43%
Lockheed Martin Corporation 9,200 $ 974,050
--------------
BANKING - 1.13%
Mercantile Bancorporation, Incorporated 17,800 896,675
The Chase Manhattan Corporation 22,100 1,668,550
--------------
2,565,225
BROADCASTING - 0.55%
Tele-Communications Incorporated,
Series A 32,600 1,253,063
--------------
CHEMICALS - 2.85%
Arco Chemical Company 20,000 1,147,500
Bayer AG 70,100 3,630,453
E.I. Du Pont De Nemours & Company 22,500 1,679,062
--------------
6,457,015
COMPUTERS & BUSINESS EQUIPMENT - 1.55%
International Business Machines
Corporation 22,900 2,629,206
Sun Microsystems, Incorporated* 20,400 886,125
--------------
3,515,331
DOMESTIC OIL - 4.72%
Atlantic Richfield Company 100,000 7,812,500
Phillips Petroleum Company 59,600 2,871,975
--------------
10,684,475
DRUGS & HEALTH CARE - 16.23%
Abbott Laboratories 15,800 645,825
Alza Corporation* 81,100 3,507,575
Eli Lilly & Company 43,450 2,870,416
Glaxo Wellcome PLC 36,475 1,095,632
Glaxo Wellcome PLC, ADR 95,200 5,694,150
Johnson & Johnson 22,900 1,688,875
Merck & Company, Incorporated 13,100 1,752,125
Novartis AG 1,900 3,166,876
Pfizer, Incorporated 28,700 3,119,331
Schering AG 31,725 3,738,148
SmithKline Beecham PLC 168,425 2,057,119
Smithkline Beecham PLC 43,300 2,619,650
Synthelabo 12,000 2,024,579
Warner-Lambert Company 25,200 1,748,250
Zeneca Group PLC 24,500 1,052,145
--------------
36,780,696
ELECTRICAL EQUIPMENT - 0.95%
General Electric Company 23,700 2,156,700
--------------
ELECTRIC UTILITIES - 2.18%
Allegheny Energy, Incorporated 70,600 2,126,825
Baltimore Gas & Electric Company 38,100 1,183,481
Cinergy Corporation 46,875 1,640,625
--------------
4,950,931
ELECTRONICS - 0.66%
Intel Corporation 20,200 1,497,325
--------------
FINANCIAL SERVICES - 0.85%
Travelers Group, Incorporated 31,700 1,921,812
--------------
FOOD & BEVERAGES - 2.95%
Campbell Soup Company 17,200 913,750
Dean Foods Company 20,225 1,111,111
Dole Food, Incorporated 54,000 2,683,125
Nestle SA 500 1,071,782
Unilever NV 11,600 915,675
--------------
6,695,443
</TABLE>
The accompanying notes are an integral part of the financial statements.
126
<PAGE> 130
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
HOTELS & RESTAURANTS - 0.91%
Hilton Hotels Corporation 72,100 $ 2,054,850
--------------
HOUSEHOLD PRODUCTS - 2.82%
Colgate-Palmolive Company 24,100 2,120,800
Dial Corporation 85,200 2,209,875
Procter & Gamble Company 22,700 2,067,119
--------------
6,397,794
INDUSTRIAL MACHINERY - 0.45%
Thermo Electron Corporation 30,050 1,027,334
--------------
INSURANCE - 5.90%
Allstate Corporation 22,800 2,087,625
Berkley W R Corporation 36,037 1,443,732
Chubb Corporation 24,600 1,977,225
Marsh & Mclennan Companies,
Incorporated 62,325 3,766,767
Travelers Property Casualty
Corporation, Class A 95,600 4,098,850
--------------
13,374,199
INTERNATIONAL OIL - 1.78%
Amoco Corporation 25,000 1,040,625
Chevron Corporation 7,300 606,356
Mobil Corporation 18,000 1,379,250
Texaco, Incorporated 16,900 1,008,719
--------------
4,034,950
MINING - 1.12%
Potash Corporation of Saskatchewan,
Incorporated 33,700 2,546,456
--------------
PAPER - 1.89%
Fort James Corporation 69,900 3,110,550
International Paper Company 12,900 554,700
Kimberly-Clark Corporation 13,600 623,900
--------------
4,289,150
PUBLISHING - 0.25%
Time Warner, Incorporated 6,700 572,431
--------------
REAL ESTATE - 0.26%
Legacy Hotels Real Estate Investment 101,200 591,431
--------------
RETAIL GROCERY - 0.44%
Hannaford Brothers Company 22,400 985,600
--------------
SOFTWARE - 0.44%
Computer Associates International,
Incorporated 17,800 989,013
--------------
TELEPHONE - 2.21%
American Telephone & Telegraph
Corporation 40,300 $ 2,302,137
Ameritech Corporation 22,900 1,027,638
TELEPHONE - CONTINUED
U. S. West, Incorporated 35,500 1,668,500
--------------
4,998,275
TOBACCO - 0.67%
Philip Morris Companies, Incorporated 38,575 1,518,891
--------------
TOTAL COMMON STOCKS
(Cost: $111,979,953) $ 122,832,440
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 21.82%
U.S. TREASURY BONDS - 5.93%
6.00% due 02/15/2026 $ 470,000 $ 488,946
6.125% due 11/15/2027 1,000,000 1,071,560
6.25% due 08/15/2023 3,650,000 3,907,763
6.375% due 08/15/2027 1,600,000 1,756,992
6.50% due 11/15/2026 1,540,000 1,710,124
6.625% due 02/15/2027 1,760,000 1,987,427
6.75% due 08/15/2026 1,290,000 1,476,844
6.875% due 08/15/2025 895,000 1,036,517
-----------
13,436,173
U.S. TREASURY NOTES - 15.89%
5.75% due 10/31/2000 1,700,000 1,707,973
5.75% due 11/15/2000 1,700,000 1,708,500
5.875% due 02/15/2000 3,900,000 3,921,333
5.875% due 11/15/2005 5,650,000 5,690,623
6.00% due 08/15/2000 4,200,000 4,240,026
6.125% due 12/31/2001 1,600,000 1,628,992
6.25% due 08/31/2000 965,000 979,176
6.25% due 02/15/2007 4,635,000 4,853,726
6.625% due 03/31/2002 5,300,000 5,489,634
6.625% due 04/30/2002 1,100,000 1,140,392
6.875% due 05/15/2006 4,300,000 4,656,083
-----------
36,016,458
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $46,972,030) $49,452,631
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
127
<PAGE> 131
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.63%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.63%
6.00% due 05/15/2008 $ 4,100,000 $4,156,375
6.35% due 01/08/2003 1,800,000 1,798,596
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost: $5,903,234) $5,954,971
----------
CORPORATE BONDS - 1.99%
ELECTRICAL EQUIPMENT - 0.22%
Sonat Incorporated,
6.625% due 02/01/2008 $ 482,000 $ 491,120
----------
ELECTRIC UTILITIES - 0.22%
Commonwealth Edison Company,
7.625% due 01/15/2007 481,000 511,317
----------
TELEPHONE - 1.55%
New Jersey Bell Telephone Company,
5.875% due 12/01/2006 500,000 496,360
New York Telephone Company,
5.875% due 09/01/2003 2,000,000 1,987,340
New York Telephone Company,
7.00% due 12/01/2033 1,000,000 1,021,330
----------
3,504,030
TOTAL CORPORATE BONDS
(Cost: $4,284,319) $4,506,467
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------ -----
<S> <C>
SHORT TERM INVESTMENTS - 7.41%
$14,916,924 Navigator Securities Lending Trust, 5.54% $14,916,924
1,900,000 E.I. Dupont De Nemours & Company, 5.37%
due 09/04/1998 1,881,578
------------
$16,798,502
REPURCHASE AGREEMENTS - 11.95%
$27,077,000 Repurchase Agreement with State Street
Bank & Trust Company dated 06/30/1998 at
5.00%, to be repurchased at $27,080,761
on 07/01/1998, collateralized by
$21,925,000 U.S. Treasury Bonds, 10.375%
due 11/15/2009 (valued at $27,618,659,
including interest) $27,077,000
------------
TOTAL INVESTMENTS (Balanced Trust) (Cost:
$213,015,037) $226,622,011
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
128
<PAGE> 132
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
--------------------- -------------------- -------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION TRUSTS
COMMON STOCKS: 72.40% 53.00% 26.10%
AEROSPACE: 0.40% 0.40% 0.20%
BE Aerospace, Incorporated* 400 $ 11,650 600 $ 17,475 -- --
British Aerospace PLC* 40,592 311,094 73,380 562,379 12,968 $ 99,386
Gulfstream Aerospace Corporation* -- -- -- -- 1,300 60,450
Kellstrom Industry, Incorporated 5,50 159,328 6,100 176,709 900 26,072
Lockheed Martin Corporation 4,800 508,200 11,500 1,217,563 900 95,287
Northrop Grumman Corporation 900 92,813 2,000 206,250 300 30,938
Primex Technologies, Incorporated -- -- 5,500 281,875 300 15,375
United Technologies Corporation 1,800 166,500 1,200 111,000 300 27,750
--------- --------- --------
1,249,585 2,573,251 355,258
AIR TRAVEL: 0.80% 0.60% 0.20%
Alaska Air Group * 11,500 627,469 9,200 501,975 2,000 109,125
AMR Corporation* 6,500 541,125 11,100 924,075 1,500 124,875
ASA Holdings, Incorporated 8,600 426,775 17,400 863,475 -- --
Continental Airlines, Incorporated,
Class B* 900 54,787 1,500 91,312 -- --
Sealed Air Corporation* 10,317 379,150 18,532 681,051 2,447 89,927
US Airways Group, Incorporated* 4,200 332,850 11,100 879,675 600 47,550
--------- --------- --------
2,362,156 3,941,563 371,477
APPAREL & TEXTILES: 0.10% 0.00% 0.10%
Hugo Boss AG* 100 210,707 150 316,061 50 105,354
--------- --------- --------
AUTO PARTS: 0.30% 0.30% 0.10%
Borg-Warner Automotive, Incorporated -- -- 7,500 360,469 500 24,031
Eaton Corporation 5,600 435,400 9,300 723,075 1,300 101,075
Echlin, Incorporated -- -- 1,600 78,500 -- --
Federal-Mogul Corporation -- -- 8,800 594,000 -- --
Modine Manufacturing Company 9,700 335,863 -- -- 2,800 96,950
--------- --------- --------
771,263 1,756,044 222,056
AUTOMOBILES: 1.20% 0.90% 0.50%
Bayerische Motoren Werke - New* 14 11,295 24 19,363 4 3,227
Bayerische Motoren Werke AG* 150 151,792 250 252,987 50 50,597
Chrysler Corporation 13,100 738,512 22,200 1,251,525 3,400 191,675
Daimler Benz AG* 1,745 171,747 3,130 308,062 545 53,640
Ford Motor Company 22,900 1,351,100 33,700 1,988,300 4,900 289,100
Honda Motor Company 8,000 285,818 15,000 535,908 3,000 107,182
Spartan Motors, Incorporated -- -- 400 2,850 -- --
Tower Automotive, Incorporated* 7,400 317,275 11,700 501,638 2,100 90,038
Toyota Motor Corporation 21,000 545,238 42,000 1,090,475 7,000 181,746
--------- --------- --------
3,572,777 5,951,108 967,205
BANKING: 8.20% 6.10% 3.00%
Akita Bank, Ltd. 29,000 127,938 54,000 238,230 9,000 39,705
Astoria Financial Corporation 12,800 684,800 27,400 1,465,900 6,000 321,000
Banc One Corporation 26,180 1,461,171 30,690 1,712,886 5,500 306,969
Banco Bilbao Vizcaya SA* 6,100 313,055 11,000 564,526 2,200 112,905
Banco Santander SA* 2,600 66,547 5,000 127,975 1,200 30,714
Bank Of Ireland* 19,956 409,179 34,470 706,765 6,249 128,127
</TABLE>
The accompanying notes are an integral part of the financial statements.
129
<PAGE> 133
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
--------------------- -------------------- -------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
BANKING - CONTINUED
Bank of New York, Incorporated 42,300 $ 2,567,081 78,900 $ 4,788,244 10,900 $ 661,494
Bank of Tokyo-Mitsubishi, Ltd.* 35,000 371,845 67,000 711,817 11,000 116,866
Bank United Corporation 2,100 100,538 -- -- -- --
BankAmerica Corporation 24,400 2,109,075 45,400 3,924,262 6,000 518,625
Barclays 13,347 385,093 24,367 703,047 4,346 125,393
BHF-Bank AG* 14,700 559,977 26,150 996,149 4,450 169,517
Charter One Financial, Incorporated 20,800 700,700 57,276 1,929,485 4,630 155,973
Citicorp 11,300 1,686,525 21,900 3,268,575 1,600 238,800
Comerica, Incorporated 4,800 318,000 7,650 506,812 1,950 129,187
Commercial Federal Corporation 11,925 377,128 21,825 690,216 4,725 149,428
Credit Suisse Group 4,210 938,305 7,605 1,694,966 1,325 295,310
Credito Italiano 67,500 353,504 122,000 638,925 19,500 102,123
Dresdner Bank AG 1,200 64,876 2,500 135,158 500 27,032
First Chicago Corporation 8,093 717,242 16,431 1,456,197 2,515 222,892
Fleet Financial Group, Incorporated 3,898 325,483 7,345 613,307 759 63,376
ForeningsSparbanken AB, Series A* 5,000 150,451 10,000 300,903 1,700 51,153
Fuji Bank 20,000 89,535 37,000 165,640 6,000 26,860
Hang Seng Bank* 14,000 79,143 20,000 113,061 4,000 22,612
HSBC Holdings - pound sterling 24,866 602,852 45,710 1,108,195 7,442 180,424
HSBC Holdings - HKD 977 23,895 1,615 39,500 366 8,952
Lloyds TSB Group PLC 40,339 564,763 73,023 1,022,354 12,792 179,094
Long Islands Bancorp, Incorporated 3,000 182,250 -- -- 300 18,225
Mitsubishi Trust & Banking 8,000 68,214 28,000 238,750 2,000 17,054
National Australia Bank, Ltd.* 12,500 165,275 22,900 302,783 3,900 51,566
National City Corporation 9,200 653,200 15,300 1,086,300 1,200 85,200
NationsBank Corporation 17,596 1,346,094 30,260 2,314,890 4,528 346,392
North Fork Bancorporation, Incorporated 17,271 422,060 20,538 501,897 5,534 159,675
Providian Financial Corporation 1,400 109,988 1,900 149,269 600 47,137
Societe Generale* 3,842 798,815 6,727 1,398,653 1,113 231,411
Sumitomo Trust & Banking Company 14,000 62,776 25,000 112,100 4,000 17,936
Svenska Handelbanken, Series A 7,100 329,363 12,800 593,781 2,200 102,056
Toyo Trust & Banking Company, Ltd.* 8,000 39,748 18,000 89,434 2,000 9,937
U.S. Bancorp 24,900 1,070,700 24,900 1,070,700 7,200 309,600
Union Bank of Switzerland* -- -- 750 279,337 150 55,867
United Overseas Bank 17,800 55,460 32,600 101,573 6,200 19,317
Washington Federal, Incorporated 19,580 540,898 19,910 550,014 -- --
Washington Mutual, Incorporated 22,350 970,828 36,600 1,589,812 4,500 195,469
Wells Fargo & Company 2,000 738,000 2,900 1,070,100 133 49,077
Westpac Banking Corporation, Ltd. 6,600 40,335 11,900 72,761 2,100 12,840
Zions BanCorporation -- -- 2,000 106,250 -- --
----------- ----------- ----------
23,742,725 41,251,499 6,113,290
BROADCASTING: 0.70% 0.60% 0.30%
BET Holdings, Incorporated, Class A* 2,700 169,931 4,500 283,219 1,700 106,994
CBS Corporation 29,607 940,022 43,634 1,385,379 8,098 257,111
Clear Channel Communications* 776 84,681 3,149 343,635 268 29,245
Medialink Worldwide, Incorporated* 9,800 205,800 16,500 346,500 -- --
MediaOne Group, Incorporated* -- -- 27,200 1,195,100 -- --
News Corporation 20,822 170,355 34,039 278,489 6,307 51,601
Pearson PLC 8,600 157,667 15,100 276,833 1,800 33,000
Viacom, Incorporated, Class B* 4,400 256,300 -- -- 1,500 87,375
----------- ----------- ----------
1,984,756 4,109,155 565,326
</TABLE>
The accompanying notes are an integral part of the financial statements.
130
<PAGE> 134
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
--------------------- -------------------- -------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
BUILDING MATERIALS & CONSTRUCTION: 0.30% 0.10% 0.10%
Fluor Corporation 4,700 $ 239,700 10,000 $ 510,000 1,600 $ 81,600
Harsco Corporation 10,400 476,450 7,800 357,338 2,400 109,950
----------- ----------- ----------
716,150 867,338 191,550
BUSINESS SERVICES: 2.40% 1.60% 0.90%
ADVO, Incorporated* 4,400 124,025 5,000 140,938 2,200 62,012
Automatic Data Processing, Incorporated 2,500 182,187 4,300 313,362 700 51,012
Barra, Incorporated* 4,200 102,900 9,450 231,525 1,950 47,775
Brambles Industries, Ltd.* 3,000 59,015 5,500 108,194 1,100 21,639
Britax International PLC* 49,900 135,392 78,000 211,634 13,800 37,443
Cap Gemini SA* 2,611 410,283 4,666 733,199 722 113,453
Cognizant Corporation 10,100 636,300 365 22,990 2,165 136,390
Eaux (Cie Generale Des) 300 64,062 500 106,770 110 23,489
First Data Corporation -- -- 6,700 223,194 1,500 49,969
Fiserv, Incorporated* 3,802 161,466 10,248 435,220 918 38,986
ISS International Service System AS,
Series B* 7,450 433,802 13,450 783,172 2,350 136,837
Konami Company* 3,800 82,035 6,800 146,800 1,200 25,906
Market Facts Incorporated* -- -- -- -- 2,400 52,200
Nokia Corporaton, ADR* 10,000 725,625 17,200 1,248,075 2,400 174,150
Ogden Corporation 36,900 1,021,669 66,700 1,846,756 11,700 323,944
OmniCom Group, Incorporated 37,000 1,845,375 61,500 3,067,312 6,300 314,212
SABRE Group Holdings, Incorporated,
Class A* 10,700 406,600 5,000 190,000 1,200 45,600
Secom Company, Ltd. 1,000 57,930 2,000 115,860 1,000 57,930
Securitas AB, Series B* 1,200 58,751 2,200 107,711 400 19,584
SunGuard Data Systems, Incorporated* 11,800 452,825 18,000 690,750 2,600 99,775
----------- ----------- ----------
6,960,242 10,723,462 1,832,306
CHEMICALS: 2.70% 2.20% 1.10%
Air Products & Chemicals, Incorporated 2,000 80,000 -- -- -- --
AKZO Nobel NV, ADS 650 144,597 1,450 322,563 200 44,491
BASF AG* 4,300 204,455 7,700 366,118 1,300 61,812
Bayer AG* 2,600 134,653 4,700 243,411 1,000 51,790
Cytec Industries, Incorporated* 29,600 1,309,800 50,500 2,234,625 8,400 371,700
E.I. Du Pont De Nemours & Company 32,600 2,432,775 75,600 5,641,650 10,200 761,175
Geon Company 7,900 181,206 -- -- 1,500 34,406
Hexcel Corporation* 600 13,575 1,000 22,625 -- --
Hoechst AG 2,000 100,640 4,300 216,377 750 37,740
Imperial Chemical Industries PLC 10,200 163,838 18,300 293,944 3,200 51,400
Imperial Chemical Industries PLC, ADR 5,400 348,300 13,400 864,300 2,400 154,800
Monsanto Company 27,100 1,514,213 47,000 2,626,125 7,100 396,712
Olin Corporation -- -- 1,200 50,025 -- --
Om Group, Incorporated 2,700 111,375 4,350 179,438 -- --
Praxair, Incorporated 2,600 121,713 4,100 191,931 700 32,769
Shin-Etsu Chemical Company, Ltd. 6,000 104,144 10,000 173,573 2,000 34,715
Solutia, Incorporated 9,060 259,909 12,560 360,315 2,280 65,408
TETRA Technologies, Incorporated* 6,500 107,250 12,200 201,300 800 13,200
Wesfarmers, Ltd.* 10,065 74,943 14,072 104,779 3,145 23,417
Witco Corporation 17,800 520,650 33,100 968,175 3,500 102,375
----------- ----------- ----------
7,928,036 15,061,274 2,237,910
COMPUTERS & BUSINESS EQUIPMENT: 3.80% 2.60% 1.30%
3Com Corporation* 15,500 475,656 21,300 653,644 2,900 88,994
Avant Corporation* 3,800 94,050 6,900 170,775 1,900 47,025
</TABLE>
The accompanying notes are an integral part of the financial statements.
131
<PAGE> 135
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
--------------------- -------------------- -------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
COMPUTERS & BUSINESS EQUIPMENT-CONTINUED
Cisco Systems, Incorporated* 11,350 $ 1,044,909 20,350 $ 1,873,472 3,050 $ 280,791
Citrix Systems, Incorporated* 1,600 109,400 -- -- -- --
Compaq Computer Corporation 6,500 184,438 31,700 899,487 3,700 104,987
Dell Computer Corporation* 17,200 1,596,375 24,500 2,273,906 3,800 352,687
EMC Corporation* 35,200 1,577,400 59,600 2,670,825 8,200 367,462
Evans & Sutherland Computer Company* 6,700 166,756 5,000 125,938 1,800 45,338
FactSet Research Systems, Incorporated* 2,200 71,500 4,000 130,000 900 29,250
Fujitsu, Ltd. 12,000 126,709 22,000 232,299 7,000 73,913
Gateway 2000, Incorporated* 7,500 379,687 -- -- 700 35,438
General Binding Corporation 6,000 220,875 12,500 460,156 -- --
HBO & Company 5,600 197,400 15,200 535,800 1,200 42,300
Hutchinson Technology, Incorporated* -- -- 9,500 258,875 600 16,350
International Business Machines
Corporation 5,100 585,544 5,500 631,649 600 68,887
Pitney Bowes, Incorporated 23,200 1,116,500 36,400 1,751,750 7,400 356,125
Quantum Corporation* 14,900 309,175 5,400 112,050 -- --
Saville Systems PLC, ADR* -- -- -- -- 900 45,113
Security Dynamics Technologies* 7,700 142,450 9,400 173,900 -- --
Sun Microsystems, Incorporated* 900 39,094 3,400 147,688 800 34,750
Sundstrand Corporation 1,900 108,775 3,900 223,275 1,200 68,700
Tech Data Corporation* -- -- -- -- 500 21,438
Xerox Corporation 25,400 2,581,275 39,700 4,034,512 5,100 518,287
----------- ----------- ----------
11,129,968 17,359,821 2,597,835
CONGLOMERATES: 0.50% 0.40% 0.20%
Berjaya Group BHD 46,000 5,653 83,000 10,199 14,000 1,720
Corporation Financiera Reunida SA* 15,000 226,443 33,000 498,174 5,900 89,068
CSR, Ltd.* 18,700 54,094 33,800 97,773 5,900 17,067
Harcourt General, Incorporated 3,100 184,450 6,700 398,650 -- --
Hutchison Whampoa, Ltd. 35,000 184,757 64,000 337,842 13,000 68,624
Kon PTT Netherland 1,000 38,519 2,000 77,039 400 15,408
Ratin A/S* 650 137,674 1,100 232,986 225 47,656
Raytheon Company, Class B 1,800 106,425 6,200 366,575 -- --
Smith Howard, Ltd.* 6,500 38,331 11,700 68,996 2,000 11,794
Tyco International, Ltd. 9,000 567,000 12,600 793,800 2,600 163,800
W. R. Grace & Company* 800 13,650 1,800 30,713 -- --
----------- ----------- ----------
1,556,996 2,912,747 415,137
CONSTRUCTION MATERIALS: 0.40% 0.30% 0.10%
Boral, Ltd.* 14,779 27,797 26,500 49,843 4,586 8,625
CRH PLC* 3,883 55,109 6,057 85,964 924 13,114
Lafarge Corporation 1,100 43,244 -- -- -- --
Masco Corporation 10,100 611,050 21,500 1,300,750 3,500 211,750
Portland Valderrivas SA* 700 85,771 1,250 153,163 200 24,506
Sherwin Williams Company 10,300 341,188 16,300 539,937 -- --
Tarmac PLC* 38,300 68,426 69,200 123,631 12,000 21,439
Vulcan Materials Company -- -- 800 85,350 -- --
----------- ----------- ----------
1,232,585 2,338,638 279,434
CONSTRUCTION & MINING EQUIPMENT: 0.00% 0.00% 0.00%
Foster Wheeler Corporation 1,900 40,731 -- -- -- --
----------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
132
<PAGE> 136
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
CONTAINERS & GLASS: 0.10% 0.00% 0.00%
Silgan Holdings, Incorporated* 5,200 $ 145,600 3,000 $ 84,000 500 $ 14,000
---------- ---------- ----------
COSMETICS & TOILETRIES: 0.10% 0.00% 0.00%
Avon Products, Incorporated 2,200 170,500 3,900 302,250 500 38,750
---------- ---------- ----------
CRUDE PETROLEUM & NATURAL GAS: 0.50% 0.30% 0.20%
Anadarko Petroleum Corporation 6,000 403,125 5,200 349,375 1,100 73,907
Burlington Resources, Incorporated 5,500 236,884 6,300 271,294 1,200 51,675
Elf Aquitaine SA* 2,700 379,609 4,900 688,919 900 126,536
Monument Oil & Gas PLC* 136,500 134,469 246,375 242,710 41,875 41,252
Occidental Petroleum Corporation -- -- 7,000 189,000 1,300 35,100
Santa Fe Energy Resources, Incorporated* -- -- 14,400 154,800 -- --
Vastar Resources, Incorporated 8,600 375,712 8,300 362,606 -- --
---------- ---------- ----------
1,529,759 2,258,704 328,470
DOMESTIC OIL: 0.60% 0.40% 0.20%
Amerada Hess Corporation 4,000 217,250 5,900 320,444 1,100 59,744
Kerr-McGee Corporation 1,400 81,025 -- -- 600 34,725
USX-Marathon Group 44,500 1,526,906 74,700 2,563,144 10,000 343,125
---------- ---------- ----------
1,825,181 2,883,588 437,594
DRUGS & HEALTH CARE: 7.00% 5.60% 2.40%
Alkermes, Incorporated* 8,900 159,087 21,700 387,888 2,100 37,537
American Home Products Corporation 30,600 1,583,500 64,800 3,353,400 8,600 445,050
Amgen, Incorporated* -- -- 21,600 1,412,100 400 26,150
Anesta Corporation* 21,600 311,850 45,600 658,350 4,300 62,081
Astra AB, Series A* 10,533 215,256 17,766 363,071 3,100 63,353
AxyS Pharmaceuticals, Incorporated* 18,900 134,663 -- -- -- --
Baxter International, Incorporated 3,700 199,106 7,100 382,069 600 32,288
Bristol-Myers Squibb Company 10,500 1,206,844 14,700 1,689,581 2,800 321,825
Columbia/HCA Healthcare Corporation 20,700 602,887 34,150 994,619 4,150 120,869
CV Therapeutics, Incorporated* 21,800 188,025 12,100 104,363 5,100 43,987
Cytyc Corporation* -- -- 9,800 159,863 -- --
Elan PLC, ADR* -- -- -- -- 400 25,725
Eli Lilly & Company 8,400 554,925 4,400 290,675 2,200 145,337
Geltex Pharmaceuticals, Incorporated* 2,600 48,425 -- -- 1,100 20,488
Genentech, Incorporated* 22,000 1,493,250 64,600 4,384,725 3,900 264,712
Genzyme Corporation* -- -- 2,000 51,125 -- --
Glaxo Wellcome PLC 18,569 557,774 33,551 1,007,802 5,830 175,121
Health Management Association, Class A* 13,387 447,628 25,050 837,609 4,462 149,198
HEALTHSOUTH Corporation* 34,800 928,725 53,100 1,417,106 4,800 128,100
INCYTE Pharmacuticals, Incorporated* 2,200 75,075 5,200 177,450 -- --
Johnson & Johnson 10,200 752,250 19,200 1,416,000 2,400 177,000
Medimmune Incorporated* -- -- 1,900 118,513 -- --
Medtronic, Incorporated 2,400 153,000 -- -- 1,300 82,875
Merck & Company, Incorporated 22,600 3,022,750 41,800 5,590,750 5,900 789,125
Novartis AG 658 1,096,739 1,188 1,980,131 207 345,023
Sankyo Company 9,000 205,685 17,000 388,515 3,000 68,562
Sanofi Company SA 1,650 194,047 3,600 423,375 500 58,802
Schering-Plough Corporation 16,200 1,484,325 27,100 2,483,037 3,800 348,175
Sierra Health Services, Incorporated* 12,150 306,028 14,700 370,256 750 18,891
SmithKline Beecham PLC* 44,434 542,710 81,150 991,154 14,381 175,647
St. Jude Medical, Incorporated* 1,450 53,378 2,300 84,669 -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
133
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
DRUGS & HEALTH CARE-CONTINUED
Takeda Chemical Industries, Ltd. 10,000 $ 266,869 19,000 $ 507,051 3,000 $ 80,061
Tenet Healthcare Corporation* 16,400 512,500 26,800 837,500 3,700 115,625
Thermedics, Incorporated* 5,900 73,013 9,600 118,800 2,200 27,225
Total Renal Care Holdings, Incorporated* 1,177 40,607 1,960 67,620 -- --
United Healthcare Corporation 12,200 774,700 24,400 1,549,400 2,800 177,800
Universal Health Services, Incorporated, Class B* 4,900 286,037 10,600 618,775 1,200 70,050
ViroPharma, Incorporated* 2,800 65,100 11,900 276,675 1,500 34,875
Warner-Lambert Company 15,300 1,061,437 26,100 1,810,688 3,000 208,125
Wellpoint Health Networks, Incorporated* 4,600 340,400 7,200 532,800 -- --
Yamanouchi Pharmaceutical Company, Ltd. 2,000 41,802 3,000 62,703 -- --
Zeneca Group PLC* 3,600 154,601 6,400 274,846 1,100 47,239
----------- ----------- -----------
20,135,048 38,175,054 4,886,921
ELECTRICAL EQUIPMENT: 2.70% 2.20% 0.90%
ABB AG* 65 96,150 120 177,508 25 36,981
Alcatel Alsthom Cie Generale D'Electric 4,177 850,503 7,539 1,535,059 1,124 228,864
AVX Corporation 9,100 146,169 13,600 218,450 -- --
Baldor Electric Company 28,666 698,734 48,800 1,189,500 -- --
Emerson Electric Company 8,500 513,188 13,700 827,137 1,500 90,562
FLIR Systems, Incorporated* 4,500 77,625 16,200 279,450 3,800 65,550
General Electric Company 47,600 4,331,600 96,000 8,736,000 12,100 1,101,100
IFR Systems, Incorporated 13,000 234,000 21,950 395,100 -- --
Johnson Controls, Incorporated 8,300 474,656 13,600 777,750 1,800 102,937
Matsushita Communication Industrial Company, Ltd.* 1,000 26,470 1,000 26,470 -- --
Matsushita Electric Works 14,000 113,401 31,000 251,103 4,000 32,400
Mitsubishi Electric Corporation 80,000 184,566 144,000 332,220 19,000 43,835
NEC Corporation 6,000 56,108 14,000 130,918 2,000 18,703
Oki Electric Industry Company, Ltd.* 39,000 93,925 71,000 170,992 12,000 28,900
Raychem Corporation 1,300 38,431 2,200 65,037 300 8,869
Sanmina Corporation* -- -- 3,200 138,800 -- --
Sawtek, Incorporated* 400 5,900 -- -- -- --
----------- ----------- -----------
7,941,426 15,251,494 1,758,701
ELECTRIC UTILITIES: 0.90% 0.60% 0.30%
China Light & Power Company, Ltd. 16,000 72,896 28,500 129,846 7,000 31,892
Datacraft Asia, Ltd.* 15,000 36,000 27,000 64,800 5,000 12,000
DPL, Incorporated 10,500 190,312 8,850 160,406 1,200 21,750
DQE, Incorporated -- -- 2,600 93,600 500 18,000
Duke Energy Company 12,400 734,700 20,100 1,190,925 2,300 136,275
Electric De Portugal* 5,900 137,241 10,500 244,242 1,800 41,870
Energy East Corporation 8,100 337,162 5,300 220,613 500 20,813
Hong Kong & China Gas Company, Ltd.* 48,400 54,972 86,900 98,699 11,000 12,494
Iberdrola SA 8,400 136,394 15,150 245,996 2,650 43,029
IPALCO Enterprises -- -- 3,300 146,644 1,200 53,325
Kansai Electric Power 2,400 41,831 4,300 74,948 200 3,486
National Grid Group PLC* 41,990 283,247 75,735 510,877 15,045 101,487
Tenaga Nasional BHD* 11,000 13,252 26,000 31,323 5,000 6,024
VEBA AG 5,450 366,718 9,750 656,055 1,600 107,660
Yorkshire Water PLC* 18,646 140,100 34,495 259,183 6,008 45,142
----------- ----------- -----------
2,544,825 4,128,157 655,247
</TABLE>
The accompanying notes are an integral part of the financial statements.
134
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
ELECTRONICS: 2.30% 1.60% 0.90%
Alliant Techsystems, Incorporated* 4,900 $ 309,925 2,700 $ 170,775 1,000 $ 63,250
Altera Corporation* 1,000 29,563 1,400 41,388 200 5,913
AMP, Incorporated 2,400 82,500 5,500 189,062 800 27,500
Applied Materials, Incorporated* 4,200 123,900 2,900 85,550 800 23,600
Applied Micro Circuits Corporation* -- -- 3,100 80,213 1,300 33,638
Boston Scientific Corporation* 2,600 186,225 5,200 372,450 1,600 114,600
Brightpoint, Incorporated* 8,200 118,900 11,900 172,550 2,600 37,700
Cellstar Corporation* -- -- 11,900 153,956 -- --
DSC Communications Corporation* -- -- -- -- 200 6,000
Elec & Eltek International Holdings, Ltd.* 13,200 44,616 23,100 78,078 3,300 11,154
Electronic Data Systems Corporation 5,300 212,000 12,200 488,000 1,700 68,000
Electronics For Imaging, Incorporated* 11,400 240,825 13,800 291,525 1,500 31,688
Fanuc, Ltd. 1,000 34,715 3,000 104,144 500 17,357
Honeywell, Incorporated 2,700 225,619 4,800 401,100 -- --
Intel Corporation 18,700 1,386,137 23,100 1,712,287 4,100 303,912
Linear Technology Corporation 7,300 440,281 13,000 784,062 2,400 144,750
Lucent Technologies, Incorporated 4,962 412,776 11,984 996,919 848 70,543
Maxim Integrated Products, Incorporated* -- -- 8,400 266,175 1,200 38,025
Maxwell Technologies, Incorporated* -- -- 6,100 141,828 800 18,600
Micron Technology, Incorporated 16,900 419,331 10,500 260,531 3,000 74,437
Motorola, Incorporated 6,400 336,400 11,500 604,469 2,300 120,894
Nokia (AB) OY, Series A 5,600 412,257 10,100 743,535 1,600 117,788
REMEC, Incorporated* 2,800 31,850 9,400 106,925 -- --
Rohm Company 2,000 206,118 3,000 309,178 1,000 103,059
Scientific-Atlanta, Incorporated 13,900 352,712 15,700 398,387 2,500 63,437
Synopsys, Incorporated* 8,000 366,000 11,400 521,550 1,400 64,050
TDK Corporation 2,000 148,261 3,000 222,391 1,000 74,130
Texas Instruments, Incorporated 3,200 186,600 6,400 373,200 700 40,819
Thermoquest Corporation* 7,800 116,513 5,700 85,144 -- --
Tokyo Electron, Ltd. 2,000 61,474 4,000 122,948 1,000 30,737
Vitesse Semiconductor Corporation* 7,800 240,828 8,200 253,175 3,400 104,975
Xilinx, Incorporated* -- -- 1,500 51,000 -- --
---------- ---------- ----------
6,726,323 10,582,492 1,810,556
FINANCIAL SERVICES: 3.60% 2.40% 1.20%
A.G. Edwards, Incorporated 2,800 119,525 -- -- 600 25,613
Acom Company 3,700 176,343 5,000 238,302 1,400 66,725
American Express Company 9,200 1,048,800 14,000 1,596,000 2,600 296,400
Association First Capital Corporation, Class A 9,434 725,239 11,734 902,051 1,295 99,553
Bear Stearns Companies, Incorporated 1,900 108,063 -- -- -- --
Beneficial Corporation 2,800 428,925 6,500 995,719 700 107,231
Dain Rauscher Corporation -- -- 8,100 443,475 1,450 79,388
Enhance Financial Services Group, Incorporated 24,400 823,500 -- -- -- --
Federal Home Loan Mortgage Corporation 7,200 338,500 11,400 536,512 2,900 136,841
Federal National Mortgage Association 27,700 1,640,250 33,500 2,035,125 5,500 334,125
Green Tree Financial Corporation 8,700 372,469 21,200 907,625 2,500 107,031
Greenpoint Financial Corporation -- -- 3,000 112,875 -- --
Hartford Financial Services Group, Incorporated 7,600 869,250 9,300 1,063,687 1,500 171,563
Household International, Incorporated 12,300 611,925 23,400 1,164,150 4,500 223,875
International Nederlanded Groep NV* 4,162 272,723 7,522 492,894 1,405 92,065
Jafco Company, Ltd.* 1,000 26,759 3,000 80,278 1,000 26,759
Julius Baer Holdings AG* 70 219,342 125 391,683 15 47,002
Lehman Brothers Holdings, Incorporated 5,700 442,106 13,400 1,039,337 -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
135
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES-CONTINUED
McDonald Company Investments, Incorporated 4,800 $ 157,500 9,800 $ 321,563 1,600 $ 52,500
Morgan Stanley Dean Witter & Company 1,980 180,923 -- -- 1,320 120,615
Nomura Securities Company, Ltd. 10,000 116,800 18,000 210,241 3,000 35,040
Orix Corporation 2,000 135,532 3,000 203,298 -- --
Peoples Heritage Financial Group 12,800 302,400 24,400 576,450 4,800 113,400
Pioneer Group, Incorporated 10,400 273,650 13,400 352,588 1,100 28,944
SLM Holding Corporation 1,000 49,000 2,450 120,050 -- --
Takefuji Corporation* 2,000 92,573 3,000 138,859 1,000 46,286
TCF Financial Corporation 6,600 194,700 24,200 713,900 -- --
Travelers Group, Incorporated 12,447 754,599 25,047 1,518,474 4,047 245,349
----------- ----------- -----------
10,481,746 16,155,136 2,455,945
FOOD & BEVERAGES: 3.70% 2.70% 1.30%
Archer-Daniels-Midland Company 4,427 85,773 14,349 278,012 2,662 51,576
Asahi Breweries* 11,000 139,220 20,000 253,128 3,000 37,969
Campbell Soup Company 6,900 366,563 11,400 605,625 1,100 58,438
Dekalb Genetics Corporation, Class B 3,800 359,575 9,700 917,862 1,100 104,088
Devro PLC* 18,700 157,210 33,700 283,314 5,900 49,601
Dole Food, Incorporated 3,900 193,781 6,100 303,094 1,500 74,531
General Mills, Incorporated 6,088 416,267 11,879 812,227 1,974 134,972
H.J. Heinz Company 12,700 712,788 24,400 1,369,450 2,800 157,150
Hershey Foods Corporation 2,100 144,900 3,600 248,400 -- --
ITOEN, Ltd.* 3,000 93,296 6,000 186,591 1,000 31,099
Kao Corporation 8,000 123,816 11,000 170,247 3,000 46,431
Nestle SA 158 338,683 285 610,916 48 102,891
Nippon Suisan Kaisha, Ltd.* 80,000 91,994 131,000 150,640 16,000 18,399
PepsiCo, Incorporated 48,300 1,989,356 74,200 3,056,112 11,700 481,894
Pioneer Hawaii Bred International, Incorporated 1,000 41,375 1,700 70,338 -- --
Quaker Oats Company 700 38,456 -- -- -- --
Ralston Purina Company 6,300 735,919 10,800 1,261,575 1,800 210,262
Sara Lee Corporation 12,800 716,000 17,900 1,001,281 2,700 151,031
Scottish & Newcastle PLC 17,000 240,704 32,700 463,001 5,000 70,795
The Coca-Cola Company 41,000 3,505,500 69,500 5,942,250 9,800 837,900
Tyson Foods, Incorporated, Class A 3,650 79,159 6,000 130,125 850 18,434
Viscofan Industria Navarra De Envolturas
Celulosicas SA* 1,500 69,840 2,500 116,400 500 23,280
----------- ----------- -----------
10,640,175 18,230,588 2,660,741
FOREST PRODUCTS: 0.00% 0.00% 0.00%
Georgia-Pacific Corporation (Timber Group) 1,400 32,288 -- -- 200 4,612
Sumitomo Forestry 16,000 90,142 28,000 157,749 5,000 28,170
----------- ----------- -----------
122,430 157,749 32,782
GAS & PIPELINE UTILITIES: 1.20% 0.90% 0.40%
Coastal Corporation 23,800 1,661,537 40,500 2,827,406 5,600 390,950
Enron Corporation 4,200 227,063 7,600 410,875 1,100 59,469
MCN Energy Group, Incorporated* 1,100 27,363 1,900 47,262 -- --
Ocean Energy, Incorporated* 12,402 242,614 15,678 306,701 2,808 54,931
Osaka Gas Company, Ltd.* 20,000 51,493 35,000 90,114 6,000 15,448
Piedmont Natural Gas, Incorporated 7,900 265,638 14,200 477,475 3,200 107,600
Questar Corporation 600 11,775 1,000 19,625 -- --
Sempra Energy* 17,688 490,831 38,272 1,062,054 6,413 177,959
Tokyo Gas Company, Ltd.* 40,000 89,390 71,000 158,668 12,000 26,817
</TABLE>
The accompanying notes are an integral part of the financial statements.
136
<PAGE> 140
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
GAS & PIPELINE UTILITIES-CONTINUED
UGI Corporation 11,600 $ 288,550 16,700 $ 415,412 2,400 $ 59,700
---------- ---------- ----------
3,356,254 5,815,592 892,874
HOMEBUILDERS: 0.40% 0.30% 0.20%
Barratt Developments 15,000 66,120 27,000 119,016 4,800 21,158
Beazer Group* 59,800 184,719 107,800 332,988 18,800 58,072
Daiwa House Industry Company, Ltd. 9,900 79,735 17,000 150,611 3,000 26,578
Eiffage SA* 1,210 104,675 2,200 190,317 330 28,548
Elcor Chemical Corporation 6,300 159,075 16,100 406,525 2,650 66,912
George Wimpey PLC* 26,000 50,141 49,000 94,497 9,000 17,357
Sekisui House 22,000 171,042 36,000 279,887 7,000 54,423
Societe Generale d'Enterprises SA* 4,500 212,804 8,000 378,319 1,500 70,935
---------- ---------- ----------
1,028,311 1,952,160 343,983
HOTELS & RESTAURANTS: 0.40% 0.30% 0.20%
Louisiana Quinta Inns, Incorporated 1,225 28,878 -- -- -- --
McDonalds Corporation 10,500 724,500 17,800 1,228,200 2,400 165,600
Mirage Resorts, Incorporated* 2,800 59,675 5,100 108,694 800 17,050
Promus Hotel Corporation* -- -- 1,433 55,170 323 12,435
Thistle Hotels PLC* 73,100 264,859 132,000 478,269 23,000 83,335
Yoshinoya D&C Company, Ltd. 10 86,787 18 156,216 3 26,036
---------- ---------- ----------
1,161,699 2,026,549 304,456
HOUSEHOLD APPLIANCES: 0.40% 0.30% 0.20%
Fedders USA, Incorporated 700 4,681 1,100 7,356 -- --
Matsushita Electric Industrial Company, Ltd. 18,000 290,302 33,000 253,220 5,000 80,639
Philips Electronics NV 7,200 605,682 12,950 1,089,386 2,350 197,688
Sharp Corporation 12,000 97,548 22,000 178,839 4,000 32,516
Sony Corporation 2,600 224,705 4,500 388,913 700 60,498
---------- ---------- ----------
1,222,918 2,196,714 371,341
HOUSEHOLD PRODUCTS: 0.40% 0.20% 0.30%
Black & Decker Corporation -- -- -- -- 3,000 183,000
Gillette Company 6,600 374,138 6,400 362,800 2,800 158,725
Procter & Gamble Company 2,000 182,125 -- -- -- --
Unilever NV* 3,550 281,869 6,450 512,129 1,200 95,280
Unilever PLC* 37,300 397,345 69,300 738,231 12,100 128,897
---------- ---------- ----------
1,235,477 1,613,160 565,902
INDUSTRIAL MACHINERY: 0.70% 0.50% 0.30%
Alstom* 2,000 65,832 4,000 131,664 700 23,041
American Standard Companies, Incorporated * -- -- -- -- 500 22,344
Ingersoll-Rand Company 8,400 370,125 19,100 841,594 1,650 72,703
Mannesmann AG* 9,000 925,726 16,000 1,645,735 2,500 257,146
Minebea Company 17,000 169,791 29,000 289,643 5,000 49,939
SPX Corporation -- -- 2,500 160,937 400 25,750
Thermo Electron Corporation* 3,825 130,767 6,075 207,689 1,950 66,666
THK Company, Ltd.* 14,400 160,382 30,000 334,129 4,500 50,119
TSI, Incorporated 7,800 63,375 14,400 117,000 2,400 19,500
---------- ---------- ----------
1,885,998 3,728,391 587,208
INSURANCE: 2.80% 2.10% 1.00%
AFLAC, Incorporated 3,400 103,063 4,200 127,312 -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
137
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
INSURANCE-CONTINUED
Allstate Corporation 10,642 $974,408 17,944 $1,642,997 2,562 $234,583
American International Group, Incorporated 900 131,400 13,000 422,907 -- --
Assicurazioni Generali 6,960 226,418 1,500 168,715 2,320 75,473
AXA-UAP 800 89,981 6,904 128,879 300 33,743
CGU PLC* 3,822 71,346 500 127,723 1,233 23,017
Fortis AG* 300 76,634 5,800 130,738 100 25,544
General Accident PLC* -- -- 14,600 302,950 1,000 22,541
Harleysville Group, Incorporated 7,000 145,250 50,250 2,688,375 4,000 83,000
HSB Group, Incorporated 28,500 1,524,750 108,000 306,965 6,750 361,125
Istituto Nazionale delle Assicurazioni 60,000 170,536 44,100 2,665,294 19,000 54,003
Marsh & Mclennan Companies, Incorporated 21,600 1,305,450 2,500 187,187 6,300 380,756
MBIA, Incorporated -- -- 34,000 272,000 400 29,950
MedPartners, Incorporated* 24,400 195,200 -- -- 4,200 33,600
Mercury General Corporation 800 51,550 76,000 48,554 -- --
National Mutual Asia, Ltd.* 42,000 26,833 24,400 1,790,350 14,000 8,944
PMI Group, Incorporated 10,200 748,425 2,700 134,482 2,500 183,437
Pohjola Insurance Group, Series B 1,500 74,712 8,800 322,850 450 22,412
Protective Life Corporation 4,200 154,087 7,500 98,867 -- --
Prudential Corporation 4,200 55,366 25,600 573,600 1,300 17,137
Selective Insurance Group, Incorporated 13,400 300,244 56,000 800,401 3,800 85,144
Skandia Foersaekrings AB* 30,000 428,786 9,700 557,144 9,500 135,782
SunAmerica, Incorporated 16,900 970,694 1,900 218,737 2,400 137,850
Transamerica Corporation 1,100 126,637 1,500 236,449 -- --
Union Assurance, Ltd.* 500 78,816 500 10,656 300 47,290
Zurich Versicherungs 275 175,791 530 338,797 95 60,728
--------- --------- ---------
8,206,377 14,302,929 2,056,061
INTERNATIONAL OIL: 1.60% 1.00% 0.50%
Mobil Corporation 1,500 114,938 -- -- 600 45,975
Royal Dutch Petroleum Company 5,400 295,987 -- -- -- --
Royal Dutch Petroleum Company - NLG 12,300 682,543 22,200 1,231,908 3,850 213,642
Texaco, Incorporated 48,000 2,865,000 81,400 4,858,562 11,600 692,375
The British Petroleum Company PLC 22,148 323,210 39,975 583,362 6,915 100,912
The British Petroleum Company PLC, ADR* 900 79,425 2,200 194,150 -- --
The Shell Transport and Trading Company PLC 18,300 128,944 33,100 233,227 5,800 40,867
--------- --------- ---------
4,490,047 7,101,209 1,093,771
INVESTMENT COMPANIES: 0.00% 0.00% 0.00%
Eaton Vance Corporation -- -- -- -- 1,200 55,575
--------- --------- ---------
LEISURE TIME: 0.80% 0.50% 0.30%
Accor SA 400 111,947 700 195,908 100 27,987
American Skiing Company* 130 32,500 370 92,500 -- --
Berjaya Sports Toto BHD* 9,000 13,337 17,000 25,191 3,000 4,445
Hollywood Entertainment Corporation* -- -- 8,600 116,637 -- --
King World Productions, Incorporated* 21,600 550,800 22,800 581,400 3,800 96,600
Sodak Gaming, Incorporated* -- -- 600 3,750 -- --
Stakis PLC* 27,000 55,000 50,000 101,852 8,800 17,926
Tanjong PLC* 35,000 48,491 63,000 87,284 11,000 15,240
The Walt Disney Company 13,619 1,430,846 22,734 2,388,491 3,009 316,133
West Marine, Incorporated* 2,600 46,800 -- -- 1,400 25,200
--------- --------- ---------
2,289,721 3,593,013 503,831
</TABLE>
The accompanying notes are an integral part of the financial statements.
138
<PAGE> 142
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
LIQUOR: 0.00% 0.00% 0.00%
Carlsberg Brewery* 6,500 $19,734 11,000 $33,396 4,500 $13,662
--------- --------- ---------
MINING: 0.60% 0.30% 0.20%
Cookson Group 29,919 102,909 54,038 185,868 9,455 32,521
Crown Resources Corporation* 20,700 90,562 ---- ---- 5,100 22,313
Getchell Gold Corporation* 44,600 685,725 62,500 960,938 11,300 173,737
Stillwater Mining Company* 31,000 840,875 37,300 1,011,762 6,100 165,463
--------- --------- ---------
1,720,071 2,158,568 394,034
MOBILE HOMES: 0.00% 0.00% 0.00%
Coachmen Industries, Incorporated 4,900 128,013 ---- ---- 800 20,900
--------- --------- ---------
NEWSPAPERS: 0.10% 0.10% 0.10%
Ver Ned Uitgevers* 8,700 316,286 15,150 550,774 3,200 116,335
--------- --------- ---------
NON-FERROUS METALS: 0.10% 0.10% 0.00%
Pechiney 4,154 167,309 7,488 301,591 1,283 51,675
Ryerson Tull, Incorporated, Class A* ---- ---- 11,800 241,900 1,900 38,950
--------- --------- ---------
167,309 543,491 90,625
OFFICE FURNISHINGS & SUPPLIES: 0.00% 0.00% 0.00%
Ikon Office Solutions, Incorporated 2,200 32,038 3,900 56,794 600 8,738
--------- --------- ---------
PAPER: 1.30% 1.00% 0.50%
Boise Cascade Corporation 11,000 360,250 22,400 733,600 3,100 101,525
Bowater, Incorporated 8,500 401,625 14,000 661,500 2,100 99,225
Chesapeake Corporation 12,000 467,250 21,000 817,687 3,200 124,600
Domtar, Incorporated 5,400 36,450 ---- ---- ---- ----
Fort James Corporation 30,312 1,348,884 71,362 3,175,609 8,475 377,138
Jefferson Smurfit Corporation* ---- ---- ---- ---- 500 7,859
Kimberly-Clark Corporation 8,300 380,762 13,900 637,662 1,900 87,163
Minnesota Mining & Manufacturing Company 4,600 378,063 1,000 82,188 ---- ----
Stone Container Corporation 9,100 142,188 ---- ---- 2,400 37,500
UPM-Kymmene Oyj* 8,800 242,435 17,700 487,626 3,000 82,648
Willamette Industries, Incorporated 1,700 54,400 2,800 89,600 400 12,800
--------- --------- ---------
3,812,307 6,685,472 930,458
PETROLEUM SERVICES: 1.70% 1.30% 0.70%
BG PLC ADS* 14,000 80,997 25,200 145,795 4,400 25,456
Broken Hill Proprietary Company 8,114 68,752 14,357 121,650 3,205 27,157
Diamond Offshore Drilling, Incorporated 2,100 84,000 2,300 92,000 800 32,000
Dresser Industries, Incorporated 5,500 242,344 10,500 462,656 1,500 66,094
Halliburton Company 8,100 360,956 10,200 454,538 1,600 71,300
Noble Drilling Corporation * 6,000 144,375 15,200 365,750 1,300 31,281
Schlumberger, Ltd 4,100 280,081 7,300 498,681 1,100 75,144
TOTAL SA, ADR 30,346 1,983,870 46,628 3,048,305 8,089 528,818
TOTAL SA, B Shares 6,422 834,923 11,616 1,510,193 2,033 264,310
Transocean Offshore, Incorporated 5,600 249,200 23,700 1,054,600 1,400 62,300
Western Atlas, Incorporated* 6,000 509,250 7,900 670,513 1,500 127,312
Woodside Petroleum, Ltd. 13,700 68,544 22,400 112,073 4,300 21,514
--------- --------- ---------
4,907,292 8,536,804 1,332,686
</TABLE>
The accompanying notes are an integral part of the financial statements.
139
<PAGE> 143
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
PHOTOGRAPHY: 0.10% 0.10% 0.10%
Canon, Incorporated 8,000 $182,252 14,000 $318,941 2,000 $45,563
Fuji Photo Film Company 6,000 209,590 10,000 349,317 2,000 69,863
--------- --------- ----------
420,713 718,782 115,426
POLLUTION CONTROL: 0.40% 0.30% 0.10%
Republic Industries, Incorporated* 2,700 67,500 10,800 270,000 1,000 25,000
Sevenson Environmental Services 4,320 36,180 7,520 62,980 ---- ----
Stericycle, Incorporated* 23,100 334,950 ---- ---- ---- ----
USA Waste Services, Incorporated * 11,990 590,006 30,870 1,524,206 5,175 255,516
--------- --------- ----------
1,030,636 1,857,186 280,516
PUBLISHING: 0.90% 0.60% 0.20%
Meredith Corporation 900 42,244 ---- ---- ---- ----
Playboy Enterprises, Incorporated, Class B* 14,800 262,700 15,600 276,900 ---- ----
Time Warner, Incorporated 14,100 1,204,668 25,200 2,153,025 3,000 256,312
Times Mirror Company, Series A 16,200 1,018,575 26,900 1,691,337 2,500 157,188
--------- --------- ----------
2,528,187 4,121,262 413,500
RAILROADS & EQUIPMENT: 0.50% 0.30% 0.10%
Canadian National Railway Company 4,900 260,313 ---- ---- ---- ----
CSX Corporation 16,800 764,400 35,400 1,610,700 4,200 191,100
East Japan Railway 22 103,739 28 132,032 3 14,146
Norfolk Southern Corporation 5,600 166,950 9,400 280,237 1,300 38,757
Wisconsin Central Transportation Corporation* ---- ---- ---- ---- 800 17,500
--------- --------- ----------
1,295,402 2,022,969 261,503
REAL ESTATE: 0.20% 0.20% 0.10%
Cheung Kong Holdings, Ltd. 33,000 162,274 66,000 324,548 10,000 49,174
Mitsubishi Estate Company, Ltd. 14,000 123,526 25,000 220,583 4,000 35,293
Mitsui Fudosan Company 8,000 63,412 14,000 110,971 3,000 23,779
New World Development Company 16,609 32,155 28,584 55,583 6,631 12,315
Sumitomo Realty & Development Company, Ltd.* 20,000 88,523 46,000 203,602 7,000 30,983
Sun Hung Kai Properties, Ltd. 30,362 128,925 54,652 232,067 8,096 34,378
--------- --------- ----------
598,815 1,147,109 185,922
RETAIL GROCERY: 0.80% 0.50% 0.30%
Giant Foods, Incorporated, Class A 6,900 297,131 17,000 732,093 2,500 107,656
Safeway, Incorporated * 26,600 1,082,287 23,400 952,088 4,400 179,025
Somerfield PLC* 46,800 299,284 84,500 540,373 13,100 83,774
Starbucks Corporation * 9,800 523,688 16,700 892,406 2,500 133,594
--------- --------- ----------
2,202,390 3,116,930 504,049
RETAIL TRADE: 3.70% 2.70% 1.20%
Boots Company 14,300 237,096 25,800 427,767 4,500 74,611
Colruyt SA* 100 78,516 150 117,774 ---- ----
Consolidated Stores Corporation * 7,812 283,185 12,031 436,124 2,656 96,280
CVS Corporation 58,600 2,281,737 102,000 3,971,625 9,600 373,800
Dayton Hudson Corporation 10,800 523,800 24,000 1,164,000 1,800 87,300
Federated Department Stores, Incorporated* 2,400 129,150 5,100 274,444 600 32,288
Haverty Furniture Companies, Incorporated 5,600 123,900 ---- ---- ---- ----
Home Depot, Incorporated 22,050 1,831,528 40,950 3,401,409 5,250 436,078
</TABLE>
The accompanying notes are an integral part of the financial statements.
140
<PAGE> 144
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
RETAIL TRADE-CONTINUED
Isetan Company, Ltd.* 14,000 $117,451 25,000 $209,734 4,000 $33,558
Ito-Yokado Company, Ltd. 5,000 236,132 8,000 377,811 1,000 47,226
Kingfisher 14,189 228,622 25,691 413,949 4,449 71,685
Lowe's Companies, Incorporated 18,000 730,125 31,600 1,281,775 5,000 202,812
Marui Company, Ltd. 5,000 74,854 8,000 119,766 1,000 14,971
Mitsubishi Corporation 11,000 68,417 20,000 124,394 3,000 18,659
Moebel Walther AG* 2,000 82,065 3,500 143,614 600 24,619
Proffitt's, Incorporated * 10,452 421,999 17,480 705,755 980 39,567
TJX Companies, Incorporated 19,600 472,850 22,800 550,050 4,800 115,800
Wal-Mart Stores, Incorporated 45,000 2,733,750 76,600 4,653,450 12,700 771,525
---------- ---------- ---------
10,655,177 18,373,441 2,440,779
SHIPBUILDING: 0.00% 0.00% 0.00%
Avondale Industries, Incorporated * ---- ---- ---- ---- 3,100 85,541
--------- ---------- ---------
SOFTWARE: 3.00% 2.30% 1.10%
BMC Software, Incorporated * ---- ---- 3,600 186,975 ---- ----
Cadence Design Systems, Incorporated* ---- ---- ---- ---- 200 6,250
Electronic Arts* ---- ---- 1,000 54,000 ---- ----
Keane, Incorporated * ---- ---- ---- ---- 1,000 56,000
Micro Focus Group, Incorporated PLC, ADR* 1,500 50,438 ---- ---- ---- ----
Microsoft Corporation* 64,400 6,979,350 109,200 11,834,550 15,100 1,636,463
Oracle Corporation* 15,000 368,437 25,350 622,659 3,687 90,562
PeopleSoft, Incorporated* 11,900 559,300 21,600 1,015,200 2,200 103,400
SAP AG* 1,350 819,679 2,600 1,578,641 450 273,226
---------- ---------- ---------
8,777,204 15,292,025 2,165,901
STEEL: 0.10% 0.10% 0.00%
Amcast Industrial Corporation 5,400 100,575 6,500 121,062 ---- ----
Nippon Steel Corporation 38,000 67,057 70,000 123,526 12,000 21,176
Sumitomo Metal Industry 75,000 120,959 152,000 245,144 24,000 38,707
---------- ---------- ---------
288,591 489,732 59,883
TELECOMMUNICATIONS SERVICES: 0.70% 0.60% 0.20%
ADC Telecommunications, Incorporated* 1,900 69,409 3,500 127,859 400 14,613
Ascend Communications, Incorporated* 900 44,606 7,000 346,937 ---- ----
Cable & Wireless ADS 9,300 113,045 16,800 204,211 2,900 35,251
Comsat Corporation 22,700 642,694 51,500 1,458,094 7,500 212,344
Hong Kong Telecommunications, Ltd. 33,600 63,098 60,000 112,674 10,000 18,779
ICG Communications, Incorporated* 700 25,594 1,100 40,219 ---- ----
IXC Communications, Incorporated* 7,100 341,687 15,000 712,875 ---- ----
L.M. Ericsson Telefonaktiebolaget 11,200 327,182 20,200 590,095 3,600 105,165
Portugal Telecom SA* 1,300 68,944 2,300 121,977 400 21,213
Superior Telecom, Incorporated 3,475 144,647 8,975 373,584 750 31,219
Telstra Corporation, Ltd. * 29,400 75,555 57,300 147,256 9,200 23,643
USCS International, Incorporated* 3,700 76,544 2,600 53,788 ---- ----
---------- ---------- ---------
1,993,005 4,298,569 462,227
TELEPHONE: 5.00% 3.40% 1.80%
American Telephone & Telegraph Corporation 61,100 3,490,337 73,800 4,215,825 9,600 548,400
Ameritech Corporation 8,500 381,438 ---- ---- 900 40,388
BellSouth Corporation 400 26,850 2,000 134,250 ---- ----
</TABLE>
The accompanying notes are an integral part of the financial statements.
141
<PAGE> 145
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
TELEPHONE-CONTINUED
British Telecommunication 13,800 $170,510 24,900 $307,659 5,600 $69,192
Cellular Communications International 400 19,950 ---- ---- ---- ----
Cincinnati Bell, Incorporated ---- ---- ---- ---- 1,000 28,625
DDI Corporation 43 150,206 76 265,481 13 45,411
EXCEL Communications, Incorporated* 8,300 190,381 ---- ---- 3,400 77,988
GTE Corporation 10,700 595,188 16,000 890,000 2,100 116,812
MCI Communications Corporation 31,900 1,854,187 53,900 3,132,937 7,600 441,750
McLeodUSA, Incorporated* 7,600 295,450 13,500 524,813 1,700 66,088
Nippon Telegraph & Telephone Corporation 76 632,097 139 1,156,071 24 199,609
Qwest Communications International, Incorporated* 19,392 676,296 71,600 2,497,050 13,600 474,300
SBC Communications, Incorporated 3,086 123,440 4,696 187,840 ---- ----
Sprint Corporation 800 56,400 600 42,300 ---- ----
Telecom Corporation Of New Zealand 14,000 57,842 25,000 103,290 4,000 16,526
Telecom Italia Mobile* 53,500 327,308 100,500 614,850 17,200 105,228
Telecom Italia Mobile RISP* 102,100 344,787 186,400 629,464 27,800 93,879
Telecom Italia SPA RISP* 51,000 246,999 92,000 445,566 16,000 77,490
Telefonica SA* 11,000 508,575 19,800 915,435 3,450 159,508
Telephone Save Holdings, Incorporated 26,300 387,925 38,700 570,825 7,300 107,675
Teleport Communications Group Incorporated,
Class A* 3,400 184,450 8,000 434,000 1,300 70,525
U. S. West, Incorporated ---- ---- 742 34,874 ---- ----
Vodafone Group 64,231 815,610 76,002 965,079 13,200 167,614
WorldCom, Incorporated * 58,350 2,826,328 98,800 4,785,625 13,700 663,594
---------- ---------- ---------
14,362,554 22,853,234 3,570,602
TIRES & RUBBER: 0.00% 0.00% 0.00%
Bridgestone Corporation 4,000 94,887 7,000 166,052 1,000 23,722
TOBACCO: 0.80% 0.60% 0.30%
BAT Industries PLC 33,142 332,023 59,875 599,840 10,466 104,851
Philip Morris Companies, Incorporated 46,500 1,830,938 77,600 3,055,500 10,800 424,250
RJR Nabisco Holdings Corporation, Class A* 4,900 116,375 8,100 192,375 1,100 26,125
Rothmans Pall Mall* 3,000 20,782 6,000 41,564 1,000 6,927
Swedish Match Company 24,500 81,400 43,800 145,524 7,700 25,583
--------- --------- -------
2,381,518 4,034,803 588,736
TRANSPORTATION: 0.00% 0.00% 0.00%
TNT Post Group NV* 1,000 25,581 2,000 51,162 400 10,232
--------- --------- -------
TRUCKING & FREIGHT: 0.40% 0.50% 0.20%
Air Express International Corporation 11,850 316,987 31,350 838,613 3,000 80,250
Expeditores International of Washington,
Incorporated 6,600 290,400 29,400 1,293,600 2,000 88,000
Kirby Corporation* ---- ---- 600 15,150 ---- ----
Malaysia International Shipping BHD* 28,000 40,817 51,000 74,345 12,000 17,493
NCL Holdings AS* 52,355 258,889 84,111 415,918 14,666 72,521
Peninsular & Oriental Steam Navigation Company* 21,120 304,329 38,186 550,242 6,666 96,054
U.S. Freightways Corporation 2,000 65,688 3,000 98,531 ---- ----
--------- --------- -------
1,277,110 3,286,399 354,318
</TABLE>
The accompanying notes are an integral part of the financial statements.
142
<PAGE> 146
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
TOTAL COMMON STOCKS
(Cost: $152,215,756, $261,259,094 and
$37,317,339 respectively) $209,633,312 $360,095,844 $52,539,142
------------ ------------ -----------
PREFERRED STOCK: 2.10% 1.70% 0.20%
APPAREL & TEXTILES: 0.10% 0.10% 0.10%
Hugo Boss AG 150 $331,032 250 $551,720 50 $110,344
-------- --------- --------
AUTOMOBILES: 0.10% 0.00% 0.00%
Volkswagen AG 150 103,468 250 172,447 50 34,489
-------- --------- --------
BROADCASTING: 0.20% 0.20% 0.00%
CBS Radio, Incorporated, Series B* 586 69,588 325 38,594 ---- ----
Citadel Broadcasting Company, Series B* 1,811 214,151 3,782 447,221 ---- ----
EchoStar Communications Corporation* 211 235,792 409 457,057 ---- ----
Granite Broadcasting Corporation* ---- ---- 11 12,898 ---- ----
News Corporation 13,300 94,448 31,000 220,143 3,000 21,304
-------- --------- --------
613,979 1,175,913 21,304
COSMETICS & TOILETRIES: 0.10% 0.10% 0.10%
Wella AG* 300 336,023 550 616,041 100 112,008
-------- --------- --------
FINANCIAL SERVICES: 0.00% 0.00% 0.00%
BTI Capital Trust* 100 4,225 100 4,225 ---- ----
-------- --------- --------
INDUSTRIALS: 0.30% 0.30% 0.00%
CSC Holdings, Incorporated* 7,600 875,859 16,505 1,902,156 ---- ----
CSC Holdings, Incorporated, Series H* 339 39,624 690 80,693 ---- ----
-------- --------- --------
915,483 1,982,849
PUBLISHING: 0.30% 0.30% 0.00%
PRIMEDIA, Incorporated, Series D* 390 41,242 1,100 116,325 ---- ----
PRIMEDIA, Incorporated, Series F* 800 81,400 1,600 162,800 ---- ----
Time Warner, Incorporated, Series M 686 763,175 1,627 1,810,038 ---- ----
-------- --------- --------
885,817 2,089,163 ----
SOFTWARE: 0.00% 0.00% 0.00%
Concentric Network Corporation* 100 99,250 121 120,093 ---- ----
-------- --------- --------
TELECOMMUNICATIONS SERVICES: 0.70% 0.50% 0.00%
Benedek Communications Corporation* 100 98,250 398 391,035 ---- ----
Intermedia Communications, Incorporated, Series
B* 4,011 472,791 8,156 961,422 ---- ----
IXC Communications, Incorporated* 765 885,487 765 885,488 ---- ----
NEXTLINK Communications* 7,886 463,303 20,487 1,203,611 ---- ----
-------- --------- --------
1,919,831 3,441,556 ----
TELEPHONE: 0.30% 0.20% 0.00%
Adelphia Communications Corporation* 904 109,158 2,048 247,296 ---- ----
E. Spire Communications, Incorporated* ---- ---- 222 249,195 ---- ----
Hyperion Telecommunications, Incorporated,
Series B* 10 10,270 25 24,648 ---- ----
</TABLE>
The accompanying notes are an integral part of the financial statements.
143
<PAGE> 147
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
TELEPHONE-CONTINUED
NEXTEL Communications, Incorporated,
Series D* 511 $568,488 674 $749,825 ---- ----
Winstar Communications, Incorporated* 1,000 119,250 2,750 327,938 ---- ----
---------- ----------- --------
807,166 1,598,902 ----
TOTAL PREFERRED STOCK
(Cost: $5,053,380, $9,932,815 and
$194,446 respectively) $6,016,274 $11,752,909 $278,145
---------- ----------- --------
WARRANTS: 0.00% 0.00% 0.00%
BUSINESS SERVICES: 0.00% 0.00% 0.00%
Protection One, Incorporated, (Expiration date
06/30/05;strike price $6.60)* 960 10,560 3,200 35,200 ---- ----
---------- ----------- --------
CHEMICALS: 0.00% 0.00% 0.00%
Sterling Chemicals Holdings, Incorporated,
(Expiration date 08/05/2008; strike price 40 960 120 2,880 ---- ----
$0.01)*
---------- ----------- --------
INDUSTRIALS: 0.00% 0.00% 0.00%
McCaw International, Ltd., (Expiration date
04/15/2007; strike price $36.45)* 250 719 250 719 ---- ----
---------- ----------- --------
SOFTWARE: 0.00% 0.00% 0.00%
Loral Orion Network Systems, Incorporated,
(Expiration date 01/15/2007; strike price
$0.01)* 150 2,100 260 3,640 ---- ----
Orbital Imaging Corporation, (Expiration date
03/01/2005; strike price $1.00)* 270 12,150 570 25,650 ---- ----
---------- ----------- --------
14,250 29,290 ----
TELECOMMUNICATIONS SERVICES: 0.00% 0.00% 0.00%
Globalstar Telecommunications, (Expiration date
02/15/2004; strike price $17.39)* 200 24,600 ---- ---- ---- ----
Highwaymaster Communications, (Expiration date
09/15/2005; strike price $9.625)* 330 3,341 620 6,278 ---- ----
Microcell Telecommunications, Incorporated,
(Expiration date 06/15/2006; strike price $0.01)* 1,280 35,549 3,760 104,426 ---- ----
Powertel, Incorporated, (Expiration date
02/01/2006; strike price $18.15)* 1,312 12,464 3,488 33,136 ---- ----
---------- ----------- --------
75,954 143,840 ----
TELEPHONE: 0.00% 0.00% 0.00%
Hyperion Telecommunications, Incorporated,
(Expiration date 04/15/2001; strike price
$0.018)* 220 16,335 830 61,627 ---- ----
---------- ----------- --------
TOTAL WARRANTS
(Cost: $16,374, $42,369 and $0 respectively) $118,778 $273,556 ----
---------- ----------- --------
</TABLE>
The accompanying notes are an integral part of the financial statements.
144
<PAGE> 148
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS: 4.40% 5.10% 6.80%
U.S. TREASURY BONDS: 1.50% 4.00% 5.20%
6.50% due 11/15/2026 $360,000 $399,769 ---- ---- ---- ----
7.125% due 02/15/2023 770,000 910,887 $350,000 $414,039 $60,000 $70,978
7.625% due 02/15/2025 415,000 522,510 850,000 1,070,201 790,000 994,657
8.125% due 08/15/2019 **** ---- ---- ---- ---- 401,000 517,539
8.875% due 08/15/2017 - 02/15/2019 **** 759,000 1,044,628 9,200,000 12,641,440 4,956,000 6,820,965
9.00% due 11/15/2018 ---- ---- 1,845,000 2,564,255 320,000 444,749
10.75% due 05/15/2003 - 08/15/2005 617,000 763,420 7,800,000 10,020,627 705,000 859,106
12.75% due 11/15/2010 373,000 531,234 ---- ---- 517,000 736,322
13.875% due 05/15/2011 30,000 45,525 ---- ---- ---- ----
--------- ---------- ----------
4,217,973 26,710,562 10,444,316
U.S. TREASURY NOTES: 2.90% 1.10% 1.60%
5.75% due 10/31/2000 3,150,000 3,164,773 ---- ---- ---- ----
5.875% due 07/31/1999 ---- ---- 840,000 843,016 660,000 662,369
6.875% due 03/31/2000 2,305,000 2,356,148 ---- ---- ---- ----
7.00% due 07/15/2006 2,105,000 2,298,723 3,570,000 3,898,547 2,425,000 2,648,173
7.50% due 11/15/2001 ---- ---- 2,670,000 2,828,117 ---- ----
7.875% due 08/15/2001 600,000 639,372 ---- ---- ---- ----
--------- ---------- ----------
8,459,016 7,569,680 3,310,542
TOTAL US TREASURY OBLIGATIONS
(Cost: $12,185,883, $33,035,050, and
$12,954,143 respectively) $12,676,989 $34,280,242 $13,754,858
----------- ----------- -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS:
0.00% 8.30% 15.20%
FEDERAL AGRICULTURAL MORTGAGE CORPORATION: 0.10% 0.20%
7.04% due 08/10/2005 ---- ---- $800,000 $856,376 $300,000 $321,141
---------- ----------
FEDERAL HOME LOAN BANK: 0.00% 0.10%
7.59% due 03/10/2005 ---- ---- 280,000 307,213 120,000 131,663
---------- ----------
FEDERAL HOME LOAN MORTGAGE CORPORATION: 0.80% 1.60%
6.50% due 07/01/2006 ---- ---- ---- ---- 11,310 11,397
8.00% due 04/01/2023 - 07/01/2024 ---- ---- 1,864,290 1,929,002 1,152,318 1,194,774
9.50% due 09/01/2016 - 12/01/2022 ---- ---- 3,217,758 3,483,054 1,923,585 ----
---------- ----------
5,412,056 3,287,099
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 6.80% 12.10%
6.00% due 12/01/2008 - 04/01/2013 ---- ---- 11,091,774 10,991,748 6,885,687 6,818,809
6.50% due 01/01/2008 -02/01/2028 ---- ---- 13,716,295 13,711,729 6,053,201 6,061,412
7.00% due 12/01/2025 -03/01/2028 ---- ---- 12,876,449 13,058,292 6,053,201 6,139,353
7.49% due 03/02/2005 ---- ---- 470,000 513,917 200,000 218,688
7.50% due 12/01/2006 -03/01/2028 ---- ---- 6,980,790 7,161,261 4,460,404 4,575,148
8.50% due 11/01/2008 -07/01/2024 ---- ---- 491,404 515,556 633,453 662,910
---------- ----------
45,952,503 24,476,320
</TABLE>
The accompanying notes are an integral part of the financial statements.
145
<PAGE> 149
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION: 0.60% 1.20%
7.50% due 10/15/2022 - 05/15/2023 ---- ---- $2,825,205 $2,934,397 $1,870,193 $1,924,223
9.00% due 05/15/2017 - 01/15/2025 ---- ---- 1,123,090 1,208,257 469,967 505,528
----------- -----------
4,142,654 2,429,751
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost: $0, $55,608,841, and $30,096,929
respectively) ---- $56,670,802 $30,645,974
----------- -----------
FOREIGN BOND OBLIGATIONS: 0.00% 0.60% 0.50%
Deutsche Mortgage Asset Receiving
Corporation, Series 1998-C1, Class D,
7.231% due 06/15/2031 ---- ---- $700,000 $700,437 $360,000 $360,225
Government Backed Trust, Series T-3,
9.625% due 05/15/2002 ---- ---- 149,726 158,369 62,368 65,987
Government Loan Trusts, Series 1-B, 8.50%
due 04/01/2006 ---- ---- 1,120,000 1,235,113 ---- ----
Government Trust Certificates,
Class 1C, 9.25% due 11/15/2001 ---- ---- 381,151 404,195 447,836 474,912
Class 2E, 9.40% due 05/15/2002 ---- ---- 940,526 994,268 ---- ----
Israel Export Trust,
6.88% due 01/26/2003 ---- ---- 329,412 335,941 141,176 143,975
TOTAL FOREIGN BOND OBLIGATIONS
(Cost: $0, $3,854,384, and $1,058,545
respectively) ---- $3,828,323 $1,045,099
---------- ----------
CORPORATE BONDS: 6.60% 15.20% 17.20%
APPAREL & TEXTILES: 0.00% 0.10% 0.10%
Unifi, Incorporated,
6.50% due 02/01/2008 ---- ---- $500,000 $509,562 $280,000 $285,355
----------- -----------
BANKING: 0.00% 1.90% 3.50%
BankAmerica Capital II,
8.00% due 12/15/2026 ---- ---- 480,000 521,669 270,000 293,439
Banponce Corporation,
5.75% due 03/01/1999 ---- ---- 490,000 489,098 270,000 269,503
6.378% due 04/08/1999 ---- ---- 590,000 591,764 330,000 330,986
6.665% due 03/05/2001 ---- ---- 820,000 830,020 430,000 435,255
Capital One Bank,
6.375% due 02/15/2003 ---- ---- 600,000 600,540 340,000 340,306
6.42% due 11/12/1999 ---- ---- 3,380,000 3,389,802 1,600,000 1,604,640
Den Danske Bank Aktieselskab,
6.375% VR due 06/15/2008 ---- ---- 920,000 909,070 480,000 474,298
First Tennessee National Corporation, 6.75%
due 11/15/2005 ---- ---- 350,000 361,319 190,000 196,145
Firstar Corporation,
7.15% due 09/01/2000 ---- ---- 820,000 821,419 360,000 360,623
Fleet Financial Group, Incorporated, 7.625%
due 12/01/1999 ---- ---- 150,000 153,336 80,000 81,779
</TABLE>
The accompanying notes are an integral part of the financial statements.
146
<PAGE> 150
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ----- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
BANKING - CONTINUED
Kansallis Osake Pankki New York,
10.00% due 05/01/2002 ---- ---- $360,000 $405,896 $150,000 $169,123
Long Island Savings Bank,
6.20% due 04/02/2001 ---- ---- 600,000 600,918 250,000 250,383
7.00% due 06/13/2002 ---- ---- 600,000 613,386 350,000 357,808
Mellon Capital I, Series A,
7.72% due 12/01/2026 ---- ---- 320,000 341,082 180,000 191,858
Provident Bank,
6.125% due 12/15/2000 ---- ---- 1,040,000 1,040,801 520,000 520,400
Providian National Bank,
6.70% due 03/15/2003 ---- ---- 500,000 505,500 260,000 262,860
Shawmut National Corporation,
8.625% due 12/15/1999 ---- ---- ---- ---- 360,000 372,629
Union Planters Corporation,
6.75% due 11/01/2005 ---- ---- 850,000 864,875 450,000 457,875
---------- ---------
13,040,495 6,969,910
BROADCASTING: 0.40% 0.50% 0.20%
Ascent Entertainment Group, Incorporated.
Step up to 11.875% due 12/15/2002 $10,000 $6,450 10,000 6,450 ---- ----
Citadel Broadcasting Company, Series B,
10.25% due 07/01/2007 390,000 428,025 810,000 888,975 ---- ----
EchoStar Communications Corporation, Step
up to 12.875% due 06/01/2004 240,000 233,400 650,000 632,125 ---- ----
EchoStar Satellite Broadcast Corporation,
Step up to 13.125% due 03/15/2004 690,000 633,938 1,730,000 1,589,438 ---- ----
Hearst-Argyle Television, Incorporated,
7.50% due 11/15/2027 ---- ---- 560,000 596,534 290,000 308,920
--------- ---------- ---------
1,301,813 3,713,522 308,920
BUSINESS SERVICES: 0.20% 0.50% 0.50%
Comdisco, Incorporated,
5.75% due 02/15/2001 ---- ---- 1,700,000 1,682,677 1,000,000 989,810
Federal Data Corporation,
10.125% due 08/01/2005 170,000 172,550 370,000 375,550 ---- ----
Protection One Alarm, Incorporated,
Step up to 13.625% due 06/30/2005 195,000 222,300 650,000 741,000 ---- ----
Psinet, Incorporated,
10.00% due 02/15/2005 160,000 163,200 340,000 346,800 ---- ----
--------- --------- -------
558,050 3,146,027 989,810
CHEMICALS: 0.10% 0.10% 0.00%
Huntsman Corporation,
9.50% due 07/01/2007 210,000 210,000 540,000 540,000 ---- ----
--------- --------- -------
COMPUTERS & BUSINESS EQUIPMENT: 0.00% 0.00% 0.00%
Decisionone Corporation,
9.75% due 08/01/2007 20,000 19,300 30,000 28,950 ---- ----
--------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
147
<PAGE> 151
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------- -------- ------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ----- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
CONGLOMERATES: 0.00% 0.30% 0.50%
Raytheon Company,
5.95% due 03/15/2001 ---- ---- $860,000 $856,801 $430,000 $428,400
6.45% due 08/15/2002 ---- ---- 1,070,000 1,080,614 600,000 605,952
--------- ---------
1,937,415 1,034,352
COSMETICS & TOILETRIES: 0.00% 0.00% 0.00%
Revlon Consumer Products Corporation,
8.625% due 02/01/2008 $160,000 $160,000 340,000 340,000 ---- ----
--------- ---------
CRUDE PETROLEUM & NATURAL GAS: 0.00% 0.20% 0.30%
Occidental Petroleum Corporation,
5.93% due 11/09/1998 ---- ---- 470,000 469,704 270,000 269,830
Union Oil Company,
7.67% due 04/19/2002 ---- ---- 680,000 719,440 390,000 412,620
--------- ---------
1,189,144 682,450
DRUGS & HEALTH CARE: 0.10% 0.10% 0.00%
Integrated Health Services, Incorporated,
Series A, 9.25% due 01/15/2008 246,000 255,533 520,000 540,150 ---- ----
Oxford Health Plans, Incorporated,
11.00% due 05/15/2005 60,000 60,975 100,000 101,625 ---- ----
--------- ---------
316,508 641,775
ELECTRICAL EQUIPMENT: 0.10% 0.10% 0.00%
Hadco Corporation,
9.50% due 06/15/2008 75,000 74,625 160,000 159,200 ---- ----
SC International Services, Incorporated,
Series B, 9.25% due 09/01/2007 90,000 93,150 190,000 196,650 ---- ----
--------- ---------
167,775 355,850
ELECTRIC UTILITIES: 0.00% 0.50% 0.90%
Avon Energy Partners Holdings,
6.46% due 03/04/2008 ---- ---- 650,000 652,880 360,000 361,595
6.73% due 12/11/2002 ---- ---- 930,000 945,568 520,000 528,704
British Columbia Hydro & Power,
12.50% due 01/15/2014 ---- ---- 460,000 493,870 260,000 279,144
Israel Electric Corporation,
7.75% due 12/15/2027 ---- ---- 880,000 919,922 500,000 522,683
Niagara Mohawk Power Corporation,
Series H, Step up to 8.50% due 07/01/2010 20,000 13,700 30,000 20,550 ---- ----
Texas Utilities Company,
6.375% due 01/01/2008 ---- ---- 370,000 363,084 220,000 215,888
--------- --------- ---------
13,700 3,395,874 1,908,014
FINANCIAL SERVICES: 0.40% 3.20% 5.00%
Ahmanson Capital Trust 1, Series A, 8.36%
due 12/01/2026 ---- ---- 1,080,000 1,213,845 720,000 $809,230
</TABLE>
The accompanying notes are an integral part of the financial statements.
148
<PAGE> 152
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------------------- --------------------------- -------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ------- ------ ---------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - CONTINUED
American Telephone & Telegraph Capital
Corporation, 6.16% due 12/03/1999 ---- ---- $2,490,000 $2,492,714 $1,120,000 $1,121,221
6.25% due 05/15/2001 ---- ---- 900,000 901,026 360,000 360,410
Amvescap PLC,
6.375% due 05/15/2003 ---- ---- 350,000 351,033 200,000 200,590
APP FIN II Mauritius, Ltd., Series B,
Step up to 12.00% due 02/15/2004 $290,000 $200,100 710,000 489,900 ---- ----
Associates Corporation of North America,
6.00% due 04/15/2003 ---- ---- 550,000 547,228 300,000 298,488
BankBoston Capital Trust II, Series B,
7.75% due 12/15/2026 ---- ---- 1,610,000 1,692,835 910,000 956,819
Banponce Financial Corporation,
6.34% due 03/29/1999 ---- ---- 350,000 350,950 200,000 200,543
Beal Financial Corporation,
12.75% due 08/15/2000 120,000 128,400 380,000 406,600 ---- ----
CIT Group Holdings, Incorporated,
6.25% due 10/04/1999 ---- ---- 380,000 3,313,365 1,550,000 1,556,277
Countrywide Funding Corporation,
6.45% due 02/27/2003 ---- ---- 600,000 604,818 400,000 403,212
DTI Holdings, Incorporated,
Step up to 12.50% due 03/01/2008 460,000 248,400 960,000 518,400 ---- ----
EOP Operating LP,
6.375% due 02/15/2003 ---- ---- 590,000 587,492 330,000 328,598
6.75% due 02/15/2008 ---- ---- 210,000 209,742 120,000 119,852
FBS Capital I,
8.09% due 11/15/2026 ---- ---- 480,000 516,326 270,000 290,434
First Nationwide Parent Holdings,
12.50% due 04/15/2003 250,000 283,750 750,000 851,250 ---- ----
General Motors Acceptance Corporation,
6.75% due 07/10/2002 ---- ---- ---- 1,071,656 600,000 612,375
Globalstar LP,
11.50% due 06/01/2005 90,000 87,750 180,000 175,500 ---- ----
Great Western Financial Trust II, Series A,
8.206% due 02/01/2027 ---- ---- 730,000 797,364 410,000 447,835
GST Equipment Funding, Incorporated, 13.25%
due 05/01/2007 150,000 171,375 300,000 342,750 ---- ----
Heller Financial, Incorporated,
6.25% due 03/01/2001 ---- ---- 800,000 800,744 450,000 450,418
7.875% due 11/01/1999 ---- ---- 1,000,000 1,021,370 540,000 551,540
Home Savings of America,
6.50% due 08/15/2004 ---- ---- 510,000 514,457 290,000 292,535
Hydro Quebec Enterprises,
7.40% due 03/28/2025 ---- ---- 630,000 760,473 360,000 434,556
MCN Investment Corporation,
5.84% due 02/01/1999 ---- ---- 800,000 798,712 440,000 439,292
Weeks Realty LP,
6.875% due 03/15/2005 ---- ---- 450,000 451,187 250,000 250,659
---------- ---------- ----------
1,119,775 21,781,737 10,124,884
</TABLE>
The accompanying notes are an integral part of the financial statements.
149
<PAGE> 153
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------------------- --------------------------- -------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ------- ------ ---------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
FURNITURE & FIXTURES: 0.00% 0.00% 0.00%
Sealy Mattress Company,
Step up to 10.875% due 12/15/2007 $20,000 $13,200 $40,000 $26,400 ---- ----
9.875% due 12/15/2007 10,000 10,600 20,000 21,200 ---- ----
-------- -------
23,800 47,600
GAS & PIPELINE UTILITIES: 0.00% 0.00% 0.10%
Southwest Gas Corporation,
9.75% due 06/15/2002 ---- ---- 290,000 325,223 $170,000 $190,648
------- --------
HOTELS & RESTAURANTS: 0.00% 0.10% 0.30%
Darden Restaurants, Incorporated,
7.125% due 02/01/2016 ---- ---- 490,000 492,514 570,000 572,924
------- --------
INDUSTRIALS: 2.60% 2.80% 1.10%
AFC Enterprises, Incorporated,
10.25% due 05/15/2007 10,000 10,500 20,000 21,000 ---- ----
Amazon Common, Incorporated,
Step up to 10.00% due 05/01/2003 785,000 471,000 1,640,000 984,000 ---- ----
Atlantis Group, Incorporated,
11.00% due 02/15/2003 50,000 52,750 130,000 137,150 ---- ----
Bally Total Fitness Holding,
9.875% due 10/15/2007 220,000 226,600 458,000 471,740 ---- ----
Breed Technologies, Incorporated,
9.25% due 04/15/2008 60,000 58,650 200,000 195,500 ---- ----
Carson, Incorporated, Series B,
10.375% due 11/01/2007 160,000 159,600 340,000 339,150 ---- ----
CEX Holdings, Incorporated,
9.625% due 06/01/2008 60,000 61,200 125,000 127,500 ---- ----
Cinemark USA, Incorporated, Series B, 8.50%
due 08/01/2008 80,000 77,600 160,000 155,200 ---- ----
Compass Aerospace Corporation, 10.125% due
04/15/2005 320,000 324,800 680,000 690,200 ---- ----
Conagra, Incorporated,
7.125% due 10/01/2026 ---- ---- 1,000,000 1,065,840 575,000 612,858
Dobson Wireline Company,
12.25% due 06/15/2008 140,000 135,800 295,000 286,150 ---- ----
Falcon Holding Group LP,
Step up to 9.285% due 04/01/2003 195,000 123,337 400,000 253,000 ---- ----
8.375% due 04/15/2010 140,000 138,600 285,000 282,150 ---- ----
Frontiervision Holding LP
Step up to 11.875% due 09/15/2007 160,000 126,400 340,000 268,600 ---- ----
Global Health Sciences, Incorporated,
11.00% due 05/01/2008 735,000 725,812 1,540,000 1,520,750 ---- ----
High Voltage Engineering Corporation,
10.50% due 08/15/2004 320,000 329,600 680,000 700,400 ---- ----
Home Interiors & Gifts, Incorporated,
10.125% due 06/01/2008 190,000 194,038 400,000 408,500 ---- ----
Interep National Radio Sales, Incorporated,
10.00% due 07/01/2008 160,000 160,000 340,000 340,000 ---- ----
</TABLE>
The accompanying notes are an integral part of the financial statements.
150
<PAGE> 154
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------------------- --------------------------- -------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ------- ------ ---------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIALS - CONTINUED
Internorth, Incorporated,
9.625% due 03/15/2006 ---- ---- $590,000 $706,201 $330,000 $394,993
Jafra Cosmetics International,
Incorporated, 11.75% due 05/01/2008 $160,000 $160,000 340,000 340,000 ---- ----
Lin Holdings Corporation,
Step up to 10.00% due 03/01/2003 320,000 214,400 680,000 455,600 ---- ----
Livent, Incorporated,
9.375% due 10/15/2004 170,000 169,575 350,000 349,125 ---- ----
Marsulex, Incorporated,
9.625% due 07/01/2008 320,000 320,000 680,000 680,000 ---- ----
McCaw International, Ltd.,
Step up to 13.00% due 04/15/2007 250,000 162,625 250,000 165,625 ---- ----
MCMS, Incorporated,
9.75% due 03/01/2008 160,000 148,000 340,000 314,500 ---- ----
Motors & Gears, Incorporated, Series B,
10.75% due 11/15/2006 260,000 278,200 740,000 791,800 ---- ----
MSX International, Incorporated,
11.375% due 01/15/2008 360,000 370,800 750,000 772,500 ---- ----
Pathmark Stores, Incorporated,
9.625% due 05/01/2003 210,000 212,100 360,000 363,600 ---- ----
Petroleum Geological Services AS, 7.125%
due 03/30/2028 ---- ---- 850,000 860,234 450,000 455,418
Rhythms Netconnections, Incorporated, Step
up to 13.50% due 05/15/2003 285,500 139,650 600,000 294,000 ---- ----
Roller Bearing Company of America,
Incorporated, Step up to 13.00% due
06/15/2009 240,000 153,600 510,000 326,400 ---- ----
Sabreliner Corporation,
11.00% due 06/15/2008 140,000 140,000 360,000 360,000 ---- ----
Safelite Glass Corporation,
9.875% due 12/15/2006 250,000 262,500 ---- ---- ---- ----
Satelites Mexicanos SA,
10.125% due 11/01/2004 320,000 311,600 680,000 662,150 ---- ----
Stone Energy Corporation,
8.75% due 09/15/2007 160,000 162,400 340,000 345,100 ---- ----
Thermadyne Holdings,
Step up to 12.50% due 06/01/2008 30,000 16,350 50,000 27,250 ---- ----
Town Sports International, Incorporated,
Series B, 9.75% due 10/15/2004 190,000 190,000 410,000 410,000 ---- ----
Tri-State Outdoor Media Group,
11.00% due 05/15/2008 150,000 151,875 310,000 313,875 ---- ----
United Artists Theatre Company,
9.75% due 04/15/2008 190,000 189,525 400,000 399,000 ---- ----
Wesco International, Incorporated,
Step up to 11.125% due 06/01/2003 320,000 187,200 680,000 397,800 ---- ----
WMX Technologies, Incorporated,
6.25% due 10/15/2000 ---- ---- 345,000 345,524 190,000 190,289
7.10% due 08/01/2026 ---- ---- 830,000 863,698 470,000 489,082
</TABLE>
The accompanying notes are an integral part of the financial statements.
151
<PAGE> 155
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
---------------------- --------------------------- ---------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------ ------- ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIALS - CONTINUED
Young America Corporation,
11.625% due 02/15/2006 $160,000 $156,800 $340,000 $333,200 ---- ----
--------- ------------ ------------
7,476,487 19,124,012 2,142,640
INSURANCE: 0.00% 0.80% 1.40%
Metropolitan Life Insurance Company, 6.30%
due 11/01/2003 ---- ---- 2,350,000 2,347,908 $1,155,000 $1,153,972
Nationwide Life Insurance Company, 6.50%
due 02/15/2004 ---- ---- 2,760,000 2,790,940 1,630,000 1,648,272
------------ ------------
5,138,848 2,802,244
LEISURE TIME: 0.50% 0.40% 0.00%
AMC Entertainment, Incorporated,
9.50% due 03/15/2009 250,000 252,500 450,000 454,500 ---- ----
American Skiing Company, Series B, 12.00%
due 07/15/2006 500,000 560,000 900,000 1,008,000 ---- ----
Hollywood Entertainment Corporation,
10.625% due 08/15/2004 130,000 132,600 290,000 295,800 ---- ----
Premier Parks, Incorporated,
Step up to 10.00% due 04/01/2003 390,000 258,375 840,000 556,500 ---- ----
9.25% due 04/01/2006 10,000 10,350 20,000 20,700 ---- ----
SFX Entertainment, Incorporated,
9.125% due 02/01/2008 280,000 274,400 740,000 725,200 ---- ----
--------- ------------
1,488,225 3,060,700
MISCELLANEOUS: 0.10% 0.00% 0.00%
V2 Music Holdings PLC,
Step up to 14.00% due 10/15/2003 320,000 164,800 680,000 350,200 ---- ----
--------- ------------
PAPER: 0.20% 0.20% 0.00%
Advance Agro Public Company, Ltd., 13.00%
due 11/15/2007 490,000 504,700 1,010,000 1,040,300 ---- ----
--------- ------------
PUBLISHING: 0.30% 0.20% 0.00%
Sullivan Graphics, Incorporated,
12.75% due 08/01/2005 600,000 628,500 1,190,000 1,246,525 ---- ----
Von Hoffmann Press, Incorporated, 10.375%
due 05/15/2007 240,000 252,000 330,000 346,500 ---- ----
--------- ------------
880,500 1,593,025
RAILROADS & EQUIPMENT: 0.00% 0.10% 0.20%
CSX Corporation,
6.46% due 06/22/2005 ---- ---- 680,000 685,964 350,000 353,070
------------ ----------
REAL ESTATE: 0.00% 0.00% 0.10%
CenterPoint Properties Trust,
6.75% due 04/01/2005 ---- ---- 260,000 260,447 130,000 130,224
------------ ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
152
<PAGE> 156
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------- ------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
RETAIL GROCERY: 0.00% 0.10% 0.20%
Kroger Company,
6.00% VR due 07/01/2010 -- -- $ 750,000 $ 748,331 $ 400,000 $ 399,110
---------- ----------
RETAIL TRADE: 0.00% 0.50% 0.90%
Federated Department Stores, Incorporated,
6.79% due 07/15/2027 -- -- 550,000 562,678 350,000 358,067
7.00% due 02/15/2028 -- -- 660,000 671,741 370,000 376,582
Levi Strauss & Company,
7.00% due 11/01/2006 -- -- 1,980,000 2,011,324 1,080,000 1,097,086
---------- ----------
3,245,743 1,831,735
SOFTWARE: 0.10% 0.10% 0.00%
Orbital Imaging Corporation,
11.625% due 03/01/2005 $ 270,000 $ 283,500 570,000 598,500 -- --
---------- ----------
STEEL: 0.10% 0.10% 0.00%
Schuff Steel Company,
10.50% due 06/01/2008 160,000 158,400 340,000 336,600 -- --
Steel Heddle Manufacturing Company, 10.625%
due 06/01/2008 160,000 160,000 340,000 340,000 -- --
---------- ----------
318,400 676,600
TELECOMMUNICATIONS SERVICES: 0.40% 0.40% 0.20%
Adelphia Communications Corporation, Series
B, 9.875% due 03/01/2007 490,000 530,425 930,000 1,006,725 -- --
Cable & Wireless Communication,
6.375% due 03/06/2003 -- -- 830,000 -- 460,000 460,386
Diamond Cable Communications PLC, Step up
to 10.75% due 02/15/2007 30,000 22,200 40,000 29,600 -- --
Step up to 11.75% due 12/15/2005 10,000 8,300 40,000 33,200 -- --
GST Telecommunications, Incorporated,
12.75% due 11/15/2007 50,000 58,500 110,000 128,700 -- --
Highwaymaster Communications, Series B,
13.75% due 09/15/2005 325,000 243,750 610,000 457,500 -- --
NTL, Incorporated,
Step up to 9.75% due 04/01/2003 280,000 4,182,000 620,000 403,000 -- --
---------- ---------- ----------
1,045,175 2,889,422 460,386
TELEPHONE: 0.70% 0.70% 0.00%
Adelphia Communications Corporation,
8.375% due 02/01/2008 160,000 158,400 290,000 287,100 -- --
9.25% due 10/01/2002 100,000 103,500 200,000 207,000 -- --
Covad Communications Group, Incorporated,
Step up to 13.50% due 03/15/2003
330,000 171,600 730,000 379,600 -- --
GST Network Funding, Incorporated,
Step up to 10.50% due 05/01/2003 160,000 96,000 840,000 504,000 -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
153
<PAGE> 157
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
--------------------------- --------------------------- --------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
TELEPHONE - CONTINUED
Hyperion Telecommunications, Incorporated,
Series B 12.25% due 09/01/2004 $ 100,000 $ 108,000 $ 200,000 $ 216,000 -- --
13.00% due 04/15/2003 220,000 163,900 830,000 618,350 -- --
KMC Telecom Holdings, Incorporated,
Step up to 12.50% due 02/15/2008 40,000 23,200 80,000 46,400 -- --
McLeodUSA, Incorporated,
Step up to 10.50% due 03/01/2007 90,000 66,825 190,000 141,075 -- --
Millicom International Cellular SA,
Step up to 13.50% due 06/01/2006 310,000 241,800 630,000 491,400 -- --
Nextel International, Incorporated,
Step up to 12.125% due 04/15/2003 150,000 86,250 310,000 178,250 -- --
NEXTEL Communications, Incorporated,
Step up to 9.75% due 08/15/2004 60,000 58,350 140,000 136,150 -- --
Pathnet, Incorporated,
12.25% due 04/15/2008 240,000 254,400 505,000 535,300 -- --
Telecommunications Techniques Company,
9.75% due 05/15/2008 75,000 76,687 160,000 163,600 -- --
Winstar Communications, Incorporated,
Step up to 14.00% due 10/15/2005 320,000 265,600 680,000 564,400 -- --
11.00% due 03/15/2008 140,000 138,950 280,000 277,900 -- --
------------ ------------
2,013,462 4,746,525
TOBACCO: 0.00% 0.50% 0.90%
Philip Morris Companies, Incorporated,
6.95% due 06/01/2006 -- -- 1,400,000 1,450,204 $ 850,000 $ 880,481
7.00% due 07/15/2005 -- -- 850,000 869,593 480,000 491,064
7.25% due 09/15/2001 -- -- 850,000 871,870 520,000 533,380
------------ ------------
3,191,667 1,904,925
TRANSPORTATION: 0.30% 0.70% 0.80%
Burlington Northern Santa Fe,
7.29% due 06/01/2036 -- -- 1,070,000 1,182,446 610,000 674,105
Greyhound Lines, Incorporated, Series B,
11.50% due 04/15/2007 500,000 555,625 600,000 666,750 -- --
Norfolk Southern Corporation,
7.05% due 05/01/2037 -- -- 1,220,000 1,295,506 690,000 732,704
Transtar Holdings LP, Series B, --
Step up to 13.375% due 12/15/2003 270,000 251,100 730,000 678,900 --
United States Air, Incorporated,
9.625% due 02/01/2001 190,000 197,600 490,000 509,600 -- --
Wisconsin Central Transportation
Corporation, 6.625% due 04/15/2008 -- -- 250,000 249,520 125,000 124,760
------------ ------------ ------------
1,004,325 4,582,722 1,531,569
TOTAL CORPORATE BONDS
(Cost: $18,647,258, $103,418,694 and
$33,843,400, respectively) $ 19,070,295 $103,418,694 $ 34,623,170
------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
154
<PAGE> 158
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------- ------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS: 0.00% 0.00% 0.00%
TELECOMMUNICATIONS SERVICES: 0.00% 0.00% 0.00%
GST Telecommuncations, Incorporated,
Step up to 13.875% due 12/15/2005 $ 10,000 $ 8,063 $ 10,000 $ 8,062 -- --
---------- ----------
TOTAL CONVERTIBLE BONDS
(Cost: $11,045, $11,119 and $0,
respectively) $ 8,063 $ 8,062 --
---------- ----------
COLLATERALIZED MORTGAGE OBLIGATIONS: 0.00% 2.60% 4.90%
American Housing Trust, Series IV,
9.552% due 09/25/2020 -- -- $1,564,309 $1,627,523 $ 771,241 $ 802,407
Bankamerica Manufactured Housing Contract,
Series 1998-2, Class A5,
6.20% due 04/10/2009 -- -- 470,000 468,825 -- --
CBM Funding Corporation, Certificates 96
1B, Class A1, 7.55% due 07/01/2004 -- -- 46,196 45,460 26,398 25,977
1B, Class A2, 6.88% due 02/01/2013 -- -- 480,000 487,800 270,000 274,387
1B, Class A3, 7.08% due 02/01/2013 -- -- 480,000 518,250 270,000 291,516
1B, Class B, 7.48% due 02/01/2013 -- -- 380,000 408,067 210,000 225,511
Contimortage Home Equity Loan Trust, Series
1997-4, Class A3,
6.26% due 07/15/2012 -- -- 880,000 880,818 490,000 490,456
Credit Suisse First Boston Mortgage
Securities Corporation, Series 1997-C2,
Class D, 7.27% due 04/17/2011 -- -- 990,000 1,018,027 560,000 575,854
Series 1998-C1, Class D,
7.17% due 01/17/2012 -- -- 650,000 651,828 340,000 340,956
Series 1998-FL1A, Class E,
6.506% due 01/10/2001 -- -- 710,000 711,997 370,000 371,041
Edison Mission Energy Funding Corporation,
Series A 144A, 6.77% due 09/15/2003
-- -- 877,175 899,157 632,089 640,723
General Growth Property, Series 1,
Class A2, 6.602% due 11/15/2007 -- -- 710,000 727,528 400,000 409,875
Series 1, Class D2,
6.992% due 11/15/2007 -- -- 760,000 762,375 430,000 431,344
Series 1, Class E2,
7.224% due 11/15/2007 -- -- 450,000 449,438 260,000 259,675
Green Tree Financial Corporation, 96 8
Series Certificates, Class A2,
6.55% due 10/15/2027 -- -- 183,220 183,227 193,339 193,459
97 6 Series, 6.68% due 01/15/2029 -- -- 1,230,000 1,247,294 690,000 699,701
GS Mortgage Securities Corporation II,
Series 97-GL, Class A2B,
6.86% due 07/13/2030 -- -- 850,000 884,060 470,000 488,833
Series 98-GL II, Class D,
6.97% due 04/13/2031 -- -- 270,000 270,000 150,000 150,000
Series 98-GL II, Class E,
6.97% due 04/13/2031 -- -- 570,000 570,000 320,000 320,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
155
<PAGE> 159
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------- ------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
LTC Commercial Mortgage Certificates,
Series 1998-1, Class A, 6.029% due
05/28/2030 -- -- $ 528,367 $ 518,130 $ 269,168 $ 263,953
Morgan Stanley Capital I, Incorporated,
Series 1998-HF1, Class D, 7.10% due
02/15/2008 -- -- 870,000 882,615 450,000 456,525
NationsLink Funding Corporation,
Certificates 96 1, Class A1, 7.533% due
09/20/2002 -- -- 1,226,216 1,281,605 735,730 768,963
Nomura Asset Securities Corporation, Series
1994-MD2, Class A6,
6.933% due 07/07/2003 -- -- 1,092,469 1,093,278 702,302 702,821
Series 1998-D6, Class A4,
7.349% due 03/15/2030 -- -- 700,000 718,543 360,000 369,536
Overseas Private Investment Corporation,
Series 1995, 6.08% due 08/15/2004 -- -- 404,200 406,629 338,400 340,434
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost: $0,$17,493,482 and $9,779,916
respectively) -- $17,702,524 $ 9,893,947
----------- -----------
ASSET BACKED SECURITIES: 0.00% 1.40% 2.70%
Chevy Chase Auto Receivables Trust, Series
1998-2, Class A, 5.91% due 12/15/2004
-- -- $ 350,000 $ 349,563 $ 180,000 $ 179,775
CPS Auto Grantor Trust,
Series 1996 2 Certificates, Class A,
6.70% due 02/15/2002 -- -- 288,332 290,716 162,514 163,858
Series 1997 1 Certificates, Class A,
6.55% due 08/15/2002 -- -- 544,213 549,296 322,497 325,509
Series 1998 1 Certificates, Class A,
6.00% due 08/15/2003 -- -- 942,031 943,798 528,691 529,682
Series 1998 2 Certificates, Class A,
6.09% due 11/15/2003 -- -- 544,317 546,018 277,107 277,973
Dayton Hudson Credit Card Master
Certificates, Series 95 1, Class A, 6.25%
due 08/25/2005 -- -- 870,000 879,509 490,000 495,356
Discover Card Trust, 1992 B,
7.50% due 06/16/2000 -- -- 1,330,000 1,327,087 730,000 728,401
Ford Credit Grantor Trust, 1995 B,
Certificates, Class A, 5.90% due
10/15/2000 -- -- 660,854 661,680 288,373 288,733
Guaranteed Export Trust,
Series 1993 C, 5.20% due 10/15/2004 -- -- 183,733 178,635 81,467 79,206
Series 1993 D, 5.23% due 05/15/2005 -- -- 321,702 318,617 142,979 141,607
Series 1994 C, 6.61% due 09/15/1999 -- -- 52,245 52,582 21,373 21,511
MBNA Master Credit Card Trust II, Series 97
Certificates, Class A, 6.55% due
01/15/2007 -- -- 1,720,000 1,773,750 970,000 1,000,313
</TABLE>
The accompanying notes are an integral part of the financial statements.
156
<PAGE> 160
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
-------------------------- -------------------------- -------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSET BACKED SECURITIES - CONTINUED
Olympic Automobile Receivable, 1997 A,
6.40% due 09/15/2001 -- -- $ 1,080,000 $ 1,085,130 $ 440,000 $ 442,090
Railcar Trust, 1992 1,
7.75% due 06/01/2004 -- -- 580,162 610,760 723,822 761,997
----------- -----------
TOTAL ASSET BACKED SECURITIES:
(Cost: $0, $9,505,803 and $5,392,238
respectively) -- $ 9,567,141 $ 5,436,011
----------- -----------
SUPRANATIONAL OBLIGATIONS: 0.00% 0.10% 0.30%
Inter-American Development Bank,
6.29% due 07/16/2027 -- -- $ 800,000 $ 841,768 $ 480,000 $ 505,061
----------- ----------- -----------
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost: $0, $795,024 and $477,015
respectively) -- $ 841,768 $ 505,061
----------- -----------
SHORT TERM INVESTMENTS: 11.10% 8.50% 15.70%
Navigator Securities Lending Trust, 5.54% $29,889,882 $29,889,882 $50,973,414 $50,973,414 $ 6,707,621 $ 6,707,621
United States Treasury Bills
4.93% due 07/23/1998 **** 2,300,000 2,293,192 6,500,000 6,480,760 24,926,000 24,926,000
----------- ----------- -----------
$32,183,074 $57,454,174 $31,633,621
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
157
<PAGE> 161
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
--------------------------- --------------------------- --------------------------
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS: 3.40% 3.50% 10.40%
Repurchase Agreement with State Street
Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $9,718,350 on
07/01/1998, collateralized by
$9,790,000 U.S. Treasury Notes,
5.75% due 10/31/2000 (valued at
$9,912,375, including interest) $ 9,717,000 $ 9,717,000
------------
Repurchase Agreement with State Street
Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $23,939,324 on
07/01/1998, collateralized by
$17,740,000 U.S. Treasury Bonds,
8.75% due 05/15/2020 (valued at
$24,417,442, including interest) $ 23,936,000 $ 23,936,000
------------
Repurchase Agreement with State Street
Bank & Trust Company dated
06/30/1988 at 5.00%, to be
repurchased at $20,955,916 on
07/01/1998, collateralized by
$21,150,000 U.S. Treasury Notes,
5.75% due 10/31/2000 (valued at
$21,414,375, including interest) $ 20,993,000 $ 20,993,000
------------
TOTAL INVESTMENTS
(Aggressive,Moderate Conservative
Asset Allocation Trusts) Cost:
$230,029,732, $573,860,250 and
$183,740,211, respectively) $289,423,785 $679,830,039 $201,348,028
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
158
<PAGE> 162
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED)
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ----------
HIGH YIELD TRUST
<S> <C> <C>
PREFERRED STOCK - 3.53%
BROADCASTING - 0.78%
Paxson Communications Corporation
77 $ 756,525
Paxson Communications
Corporation, Convertible 26 259,350
Sinclair Capital 3,125 347,156
----------
1,363,031
PUBLISHING - 2.07%
Time Warner, Incorporated,
Series M 3,244 3,608,950
----------
SOFTWARE - 0.35%
Concentric Network Corporation 625 620,312
----------
TELECOMMUNICATIONS SERVICES - 0.33%
IXC Communications, Incorporated 491 568,333
----------
TOTAL PREFERRED STOCK
(Cost: $5,921,742) $6,160,626
----------
WARRANTS - 0.15%
BROADCASTING - 0.00%
Paxson Communications
Corporation, (Expiration date
06/30/03; strike price $16.00) 832 8
----------
SOFTWARE - 0.03%
Concentric Network Corporation,
(Expiration date 12/15/2007;
strike price $10.86) 520 49,400
----------
TELECOMMUNICATIONS SERVICES - 0.08%
Globalstar Telecommunications,
(Expiration date 02/15/2004;
strike price $17.39) 750 92,250
Iridium World Communications,
Ltd., (Expiration date
07/15/2005; strike price $20.90) 240 49,200
----------
141,450
TELEPHONE - 0.04%
Occidente y Caribe Cellular SA,
(Expiration date 03/15/2004;
strike price $1.00) 3,600 72,000
----------
TOTAL WARRANTS
(Cost: $0) $ 262,858
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 1.08%
U.S. TREASURY NOTES - 1.08%
6.50% due 10/15/2006 $1,775,000 $1,884,819
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $1,773,282) $1,884,819
----------
FOREIGN GOVERNMENT OBLIGATIONS - 0.78%
REPUBLIC OF ARGENTINA - 0.78%
FRN, Series L due
03/31/2005 $1,543,750 1,359,504
----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $1,398,699) $1,359,504
----------
CORPORATE BONDS - 73.69%
BROADCASTING - 4.27%
CSC Holdings, Incorporated,
7.875% due 12/15/2007 $1,955,000 $2,057,638
9.875% due 05/15/2006 585,000 640,575
Rogers Cablesystems, Ltd.,
10.00% due 03/15/2005 115,000 127,650
10.125% due 09/01/2012 650,000 706,875
Sinclair Broadcast Group,
Incorporated, 9.00% due
07/15/2007 1,080,000 1,117,800
TCI Satellite Entertainment,
Incorporated, Step up to
12.25% due 02/15/2007 1,685,000 1,137,375
TV Azteca SA DE CV, Series B,
10.50% due 02/15/2007 1,660,000 1,655,850
----------
7,443,762
BUSINESS SERVICES - 0.48%
Psinet, Incorporated,
10.00% due 02/15/2005 825,000 841,500
----------
COSMETICS & TOILETRIES - 0.82%
Revlon Consumer Products
Corporation, 8.125% due
02/01/2006 1,445,000 1,434,163
----------
CRUDE PETROLEUM & NATURAL GAS - 0.80%
Chesapeake Energy
Corporation, 9.625% due
05/01/2005 1,385,000 1,388,463
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
159
<PAGE> 163
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
DRUGS & HEALTH CARE - 6.38%
Columbia/HCA Healthcare
Corporation, 6.91% due
06/15/2005 $4,075,000 $ 3,957,925
Fresenius Medical Care
Capital Trust, 7.875% due
02/01/2008 1,120,000 1,092,000
Oxford Health Plans,
Incorporated, 11.00% due
05/15/2005 720,000 731,700
Tenet Healthcare Corporation,
8.125% due 12/01/2008 1,125,000 1,127,813
8.625% due 01/15/2007 2,125,000 2,178,125
Vencor, Incorporated,
9.875% due 05/01/2005 2,070,000 2,036,363
-----------
11,123,925
ELECTRIC UTILITIES - 2.74%
AES Corporation,
8.50% due 11/01/2007 1,630,000 1,646,300
Companhia Energetica de Sao
Paulo, Step up to 9.125%
due 06/26/2002 1,000,000 904,490
Korea Electric Power
Corporation, 7.75% due
04/01/2013 305,000 225,493
Niagara Mohawk Power
Corporation, Series G,
7.75% due 10/01/2008 430,000 440,539
Niagara Mohawk Power
Corporation, Series H, Step
up to 8.50% due 07/01/2010
759,000 519,915
Quezon Power Philippines
Company, 8.86% due
06/15/2017 1,220,000 1,049,444
-----------
4,786,179
ELECTRONICS - 1.27%
Hyundai Semiconductor
American, Incorporated,
8.625% due 05/15/2007 830,000 655,528
Samsung Electronics America,
Incorporated, 9.75% due
05/01/2003 1,235,000 1,154,725
Samsung Electronics, Ltd.,
7.45% due 10/01/2002 500,000 409,905
-----------
2,220,158
FINANCIAL SERVICES - 7.99%
APP FIN II Mauritius, Ltd.,
Series B, Step up to 12.00%
due 02/15/2004 860,000 593,400
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
FINANCIAL SERVICES - CONTINUED
CB Richards Ellis Services,
Incorporated, 8.875% due
06/01/2006 $1,170,000 $ 1,161,225
Fuji JGB Investment, LLC,
9.87% VR due 12/31/2049 due
12/31/2049 1,005,000 874,641
Indah Kiat Finance Mauritius,
Ltd., 10.00% due 07/01/2007
1,500,000 1,065,000
Iridium Capital Corporation,
Series A, 13.00% due
07/15/2005 490,000 521,850
K Mart Funding Corporation,
Series F, 8.80% due
07/01/2010 3,025,000 3,233,211
Navistar Financial
Corporation, 9.00% due
06/01/2002 1,510,000 1,579,837
Pindo Deli Finance Mauritius,
Ltd., 10.75% due 10/01/2007
2,195,000 1,536,500
PTC International Financial
BV, Step up to 10.75% due
07/01/2007 2,170,000 1,478,312
SB Treasury Company LLC,
9.40% VR due 12/29/2049 due
06/30/2008 990,000 983,902
Western Financial Savings,
8.875% due 08/01/2007 980,000 901,600
-----------
13,929,478
FOOD & BEVERAGES - 0.45%
Smithfield Foods,
Incorporated, 7.625% due
02/15/2008 785,000 777,150
-----------
HOTELS & RESTAURANTS - 0.95%
Host Marriott Travel Plazas,
Incorporated, Series B,
9.50% due 05/15/2005 1,560,000 1,663,350
-----------
INDUSTRIALS - 12.93%
Advanced Micro Devices,
Incorporated, 11.00% due
08/01/2003 890,000 938,950
American Commercial Lines
LLC/ACL, 10.25% due
06/30/2008 840,000 850,500
American Standard,
Incorporated, 7.375% due
02/01/2008 2,180,000 2,147,300
AST Research, Incorporated,
7.45% due 10/01/2002 1,440,000 1,291,163
</TABLE>
The accompanying notes are an integral part of the financial statements.
160
<PAGE> 164
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
INDUSTRIALS - CONTINUED
Cathay International, Ltd.,
13.00% due 04/15/2008 $1,250,000 $ 1,100,000
CEX Holdings, Incorporated,
9.625% due 06/01/2008 1,090,000 1,111,800
EES Coke Battery Company,
Incorporated, 9.382% due
04/15/2007 525,000 557,461
Geberit International SA,
5.63% due 10/15/1998 250,000 158,031
Globalstar LP,
11.375% due 02/15/2004 750,000 727,500
Hylsa SA De CV,
9.25% due 09/15/2007 750,000 697,500
ISP Holdings, Incorporated,
Series B, 9.00% due
10/15/2003 1,970,000 2,058,650
Multicanal SA,
10.50% due 02/01/2007 -
04/15/2018 1,830,000 1,761,650
Norampac, Incorporated,
9.50% due 02/01/2008 1,380,000 1,404,150
RBS Participacoes SA,
11.00% due 04/01/2007 855,000 769,500
RCN Corporation,
9.80% due 02/15/2008 1,125,000 675,000
Step up to 11.125% due
10/15/2007 1,335,000 857,737
Reliance Industry, Ltd.,
9.375% due 06/24/2026 500,000 488,600
RG Receivables, Ltd.,
9.60% due 02/10/2005 337,502 313,340
Rhythms Netconnections,
Incorporated, Step up to
13.50% due 05/15/2008 2,900,000 1,421,000
Satelites Mexicanos SA,
10.125% due 11/01/2004 1,825,000 1,777,094
Sirona Dental Systems,
9.125% due 07/15/2008 DEM 1,250,000 697,448
Wam ! Net, Incorporated,
Step up to 13.25% due
03/01/2005 1,200,000 756,000
-----------
22,560,374
LEISURE TIME - 1.38%
Grand Casino, Incorporated,
10.125% due 12/01/2003 1,320,000 1,438,800
Station Casinos, Incorporated,
9.75% due 04/15/2007 425,000 477,063
10.125% due 03/15/2006 450,000 500,062
-----------
2,415,925
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
METAL & METAL PRODUCTS - 0.61%
Impress Metal Packaging Holdings,
5.475% due 05/29/2007 $ 600,000 $ 352,657
9.875% due 05/29/2007 DEM 1,200,000 705,315
----------
1,057,972
MINING - 1.88%
Grupo Minero Mexico SA De
CV, Series A, 8.25% due
04/01/2008 780,000 739,050
Murrin Murrin Holdings
Property, 9.375% due
08/31/2007 2,590,000 2,538,200
----------
3,277,250
PETROLEUM SERVICES - 1.18%
Synder Oil Corporation,
8.75% due 06/15/2007 2,045,000 2,055,225
----------
POLLUTION CONTROL - 0.95%
Norcal Waste Systems,
Incorporated, Series B,
Step up to 13.50% due
11/15/2005 1,415,000 1,655,550
----------
PUBLISHING - 1.51%
Outdoor Systems,
Incorporated, 8.875% due
06/15/2007 1,535,000 1,598,319
S. D. Warren Company,
12.00% due 12/15/2004 935,000 1,033,175
----------
2,631,494
RETAIL GROCERY - 1.72%
Fleming Companies,
Incorporated, Series B,
10.50% due 12/01/2004 254,000 264,160
Southland Corporation,
5.00% due 12/15/2003 3,159,000 2,740,433
----------
3,004,593
RETAIL TRADE - 1.83%
Musicland Group,
Incorporated, 9.875% due
03/15/2008 1,635,000 1,606,387
Samsonite Corporation,
10.75% due 06/15/2008 1,595,000 1,579,050
----------
3,185,437
STEEL - 0.38%
NSM Steel, Incorporated,
12.25% due 02/01/2008 730,000 660,650
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
161
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C> <C>
TELECOMMUNICATIONS SERVICES - 9.73%
American Mobile Satellite
Corporation, 12.25% due
04/01/2008 $ 1,415,000 $ 1,315,950
Americian Cellular Corporation,
10.50% due 05/15/2008 1,240,000 1,240,000
Comcast Cellular Holdings,
Incorporated, Series B,
9.50% due 05/01/2007 975,000 1,011,563
Esprit Telecom Group, PLC,
6.099% due 07/01/1998 2,550,000 1,462,405
Globo Communicacoes,
10.50% due 12/20/2006 880,000 805,200
10.625% due 12/05/2008 100,000 89,000
HMV Media Group PLC,
10.875% due 05/15/2008 875,000 1,426,289
Level 3 Commerce,
Incorporated, 9.125% due
05/01/2008 1,605,000 1,560,862
Onepoint Communications
Corporation, 14.50% due
06/01/2008 1,200,000 1,128,000
Paramount Communications,
Incorporated, 8.25% due
08/01/2022**** 900,000 935,883
Rogers Cantel, Incorporated,
8.30% due 10/01/2007 1,820,000 1,788,150
Rogers Communications,
Incorporated,
8.875% due 07/15/2007 1,600,000 1,612,000
9.125% due 01/15/2006 460,000 468,050
RSL Communications PLC,
9.125% due 03/01/2008 1,225,000 1,188,250
10.00% due 03/15/2008 DEM 2,700,000 890,793
RSL Communications, Ltd.,
PLC, 12.25% due 11/15/2006 46,000 51,980
------------
16,974,375
TELEPHONE - 13.44%
CTI Holdings SA,
11.50% due 04/15/2008 1,325,000 735,375
Dial Callable Communications,
Incorporated, Series B, Step
up to 10.25% due 12/15/2005 650,000 645,125
Dolphin Telecom PLC,
Step up to 11.50% due
06/01/2008 1,500,000 847,500
Flag, Ltd.,
8.25% due 01/30/2008 800,000 806,000
Global Crossing Holdings,
Ltd., 9.625% due 05/15/2008 1,465,000 1,527,262
Hermes Europe Railtel BV,
11.50% due 08/15/2007 485,000 548,050
TELEPHONE - CONTINUED
Intermedia Communications,
Incorporated, Series B,
Step up to 11.25% due
07/15/2007 $ 2,700,000 $ 1,971,000
IXC Communications,
Incorporated, 9.00% due
04/15/2008 1,475,000 1,482,375
Lenfest Communications,
Incorporated,
7.625% due 02/15/2008 1,225,000 1,244,906
8.375% due 11/01/2005 1,165,000 1,237,813
NEXTEL Communications,
Incorporated,
Step up to 9.75% due
08/15/2004 2,725,000 2,650,062
Step up to 10.65% due
09/15/2007 4,035,000 2,723,625
Nextlink Communications,
Incorporated, 9.45% due
04/15/2008 2,100,000 1,291,500
Occidente y Caribe Celular,
Series B, Step up to 14.00%
due 03/15/2004 900,000 676,125
Philippine Long Distance
Telephone Company,
7.85% due 03/06/2007 880,000 784,420
9.25% due 06/30/2006 200,000 188,955
Primus Telecommunications
Group, 9.875% due 05/15/2008 1,150,000 1,127,000
Qwest Communications
International, Incorporated,
8.29% due 02/01/2008 1,300,000 936,000
10.875% due 04/01/2007 225,000 259,313
Teleport Communications
Group, Step up to 11.125%
due 07/01/2007 1,465,000 1,259,900
Viatel, Incorporated,
Step up to 12.50% due
04/15/2008 825,000 499,125
------------
23,441,431
TOTAL CORPORATE BONDS
(Cost: $129,975,793) $128,528,404
------------
CONVERTIBLE BONDS - 0.18%
TELECOMMUNICATIONS SERVICES - 0.18%
Total Access Communication
Public Company, Ltd., 2.00%
due 05/15/2006 $ 400,000 $ 312,000
------------
TOTAL CONVERTIBLE BONDS
(Cost: $402,000) $ 312,000
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
162
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ----------
<S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.31%
DLJ Mortgage Acceptance
Corporation, Series 1997-CF2,
Class S, IO, 0.317% due
10/15/2017 $20,884,861 $ 542,129
----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost: $534,327) $ 542,129
----------
ASSET BACKED SECURITIES- 4.20%
Aircraft Lease Portfolio
Securitization, Ltd., Series
1996-1, Class DX, 12.75% due
06/15/2006 $ 1,047,115 $1,047,115
CA FM Lease Trust,
8.50% due 07/15/2017 1,686,389 1,798,837
DR Structured Finance, Series
A-2, 8.375% due 08/15/2015 550,000 549,978
DR Structured Finance, Series
94K2, 9.35% due 08/15/2019 400,000 424,256
DR Structured Finance, Series
A-1, 6.66% due 08/15/2010 633,316 587,426
DR Structured Finance, Series
A-2, 7.43% due 08/15/2018 375,000 346,965
Jet Equipment Trust, Series C1,
11.79% due 06/15/2013 300,000 408,714
Long Beach Acceptance Auto
Business, 14.22% due 10/25/2003 1,113,552 1,112,230
OHA Auto Grantor Trust, Series
1997-1, Class A, 11.00% due
01/15/2004 492,525 485,320
Securitized Multiple Asset
Rated Trust, Series 1997,
Class 5, 7.72% due 04/15/2005 564,919 568,404
----------
TOTAL ASSET BACKED SECURITIES
(Cost: $7,194,055) $ 7,329,245
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C>
SHORT TERM INVESTMENTS - 6.70%
$11,692,053 Navigator Securities Lending
Trust, 5.54% $11,692,053
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C>
REPURCHASE AGREEMENTS - 9.37%
$16,343,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.00%, to be
repurchased at $16,345,270 on
07/01/1998, collateralized by
$11,610,000 U.S. Treasury Bonds,
12.75% due 11/15/2010 (valued at
$16,676,674, including interest) $16,343,000
-----------
TOTAL INVESTMENTS (High Yield Trust)
(Cost: $175,234,953) $174,414,638
============
</TABLE>
STRATEGIC BOND TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
PREFERRED STOCK - 0.21%
FOOD & BEVERAGES - 0.21%
Nebco Evans Holding Company 10,265 $1,049,596
----------
TOTAL PREFERRED STOCK
(Cost: $999,961) $1,049,596
----------
WARRANTS - 0.00%
FINANCIAL SERVICES - 0.00%
BPC Holdings Corporation,
(Expiration date 04/15/2004;
strike price $18.797) 1,000 $ 20,000
----------
TELEPHONE - 0.00%
Wireless One, Incorporated,
(Expiration date 10/19/2000;
strike price $11.50) 2,250 23
----------
TOTAL WARRANTS
(Cost: $0) $ 20,023
----------
RIGHTS - 0.02%
TRUCKING & FREIGHT - 0.02%
Terex Corporation, (Expiration
date 05/15/2002; strike price $20) 4,000 $ 92,500
----------
TOTAL RIGHTS
(Cost: $0) $ 92,500
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
163
<PAGE> 167
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 5.98%
U.S. TREASURY BONDS - 0.21%
6.375% due 08/15/2027*** $ 950,000 $ 1,043,214
-----------
U.S. TREASURY NOTES - 5.77%
3.375% due 01/15/2007 1,190,000 1,152,444
5.50% due 02/15/2008 1,150,000 1,149,275
5.625% due 12/31/2002*** 2,000,000 2,008,740
5.875% due 09/30/2002 5,000,000 5,062,500
6.125% due 08/15/2007*** 13,525,000 14,072,357
6.625% due 03/31/2002*** 5,500,000 5,696,790
-----------
29,142,106
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $29,895,656) $30,185,320
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 15.36%
FEDERAL HOME LOAN BANK - 0.34%
5.89% due 07/24/2000 1,200,000 1,205,808
5.94% due 06/13/2000 500,000 502,810
-----------
1,708,618
FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.25%
6.50% TBA** 1,250,000 1,246,475
8.00% due 05/01/2010 827,239 850,418
8.50% due 05/01/2008 450,431 469,484
10.00% due 05/15/2020 1,609,665 1,747,984
REMIC, Interest Only due
07/15/2006 1,296,528 158,177
REMIC, Interest Only due
02/17/2002 60,977,467 1,835,422
-----------
6,307,960
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 12.76%
6.50% due 12/01/2010 1,255,643 1,267,044
6.50% TBA** 15,900,000 15,835,287
7.00% TBA** 34,750,000 35,238,585
7.50% TBA** 4,075,000 4,179,402
8.80% due 01/25/2019 2,165,754 2,304,492
13.00% due 11/01/2015 239,779 288,260
Interest Only due 10/17/2036 51,077,436 1,547,646
REMIC, Interest Only due
03/17/2020 22,482,143 632,872
Interest Only due 02/25/2035 27,042,453 2,301,313
REMIC due 04/25/2019 743,154 823,273
-----------
64,418,174
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.77%
7.50% due 04/15/2022 - 02/15/2028 3,777,579 3,882,792
-----------
3,882,792
STUDENT LOAN MARKETING ASSOCIATION - 0.24%
7.20% due 11/09/2000 $ 1,200,000 $ 1,239,936
-----------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost: $76,552,597) $77,557,480
-----------
FOREIGN GOVERNMENT OBLIGATIONS - 17.33%
REPUBLIC OF ARGENTINA - 1.16%
5.75% due 03/31/2023 $ 7,900,000 5,876,020
-----------
COMMONWEALTH OF AUSTRALIA - 0.06%
7.375% due 02/21/2007 AUD 450,000 304,897
-----------
FEDERAL REPUBLIC OF BRAZIL - 2.09%
10.125% due 05/15/2027 $ 12,250,000 10,565,625
-----------
NATIONAL REPUBLIC OF BULGARIA - 0.85%
FRN due 07/28/2011 6,000,000 4,275,000
-----------
GOVERNMENT OF CANADA - 0.50%
6.50% due 09/01/1998 CAD 3,060,000 2,084,015
7.00% due 12/01/2006 590,000 445,121
-----------
2,529,136
GOVERNMENT OF COSTA RICA - 0.12%
Series B due 05/21/2015 $ 700,000 591,500
-----------
KINGDOM OF DENMARK - 2.41%
6.00% due 02/15/1999 DKK 49,190,000 7,237,973
8.00% due 05/15/2003 29,760,000 4,954,729
-----------
12,192,702
REPUBLIC OF ECUADOR - 0.24%
3.25% due 12/27/2015 $ 2,058,620 1,231,261
-----------
FEDERAL REPUBLIC OF GERMANY - 0.86%
5.625% due 01/04/2028 DEM 4,040,000 2,325,277
6.00% due 01/05/2006 510,000 305,697
6.50% due 07/04/2027 2,640,000 1,708,326
-----------
4,339,300
REPUBLIC OF GREECE - 0.27%
FRN due 02/25/2000 GRD 408,800,000 1,339,038
-----------
REPUBLIC OF ITALY - 0.69%
zero coupon
due 07/31/1998 ITL 6,200,000,000 3,473,116
-----------
GOVERNMENT OF MEXICO - 1.62%
11.50% due 05/15/2026 $ 2,400,000 2,700,000
Series W-A due 12/31/2019 2,900,000 2,399,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
164
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
GOVERNMENT OF MEXICO - CONTINUED
Series W-B due 12/31/2019 $ 1,000,000 $ 826,250
FRN, Series D due 12/31/2019 2,500,000 2,247,000
-----------
8,173,000
GOVERNMENT OF MOROCCO - 1.18%
FRN due 01/01/2009 7,000,000 5,967,500
-----------
GOVERNMENT OF NETHERLANDS - 0.77%
9.00% due 01/15/2001 NLG 7,120,000 3,898,443
-----------
GOVERNMENT OF NEW ZEALAND - 0.31%
6.50% due 02/15/2000 NZD 3,000,000 1,544,659
-----------
REPUBLIC OF PANAMA - 0.52%
3.75% due 07/12/2014 $ 3,500,000 2,603,300
-----------
REPUBLIC OF PERU - 0.45%
4.00% due 03/02/2017 3,700,000 2,280,310
-----------
GOVERNMENT OF RUSSIA - 1.66%
FRN due 12/15/2015 5,707,277 3,160,404
FRN due 12/15/2020 11,000,000 5,197,500
FRN due 12/15/2015 78,945 42,437
-----------
8,400,341
KINGDOM OF SWEDEN - 0.49%
11.00% due 01/21/1999 SEK 19,000,000 2,466,998
-----------
REPUBLIC OF VENEZUELA - 1.08%
6.625% due 03/31/20078 - 12/18/1998 $ 6,535,714 5,440,671
-----------
5,440,671
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $89,923,193) $87,492,817
-----------
CORPORATE BONDS - 35.63%
AEROSPACE - 0.24%
B E Aerospace,
8.00% due 03/01/2008 $ 1,225,000 $ 1,221,938
-----------
AGRICULTURAL OPERATIONS - 0.28%
Hines Horticulture,
11.75% due 10/15/2005 1,290,000 1,412,550
-----------
APPAREL & TEXTILES - 0.41%
Collins & Aikman
Floorcovering, 10.00% due
01/15/2007 1,250,000 1,296,875
APPAREL & TEXTILES - CONTINUED
Synthetic Industries,
Incorporated, 9.25% due
02/15/2007 $ 750,000 $ 776,250
-----------
2,073,125
BANKING - 1.63%
Banc One Corporation,
7.60% due 05/01/2007*** 3,300,000 3,580,830
Korea Development Bank,
9.60% due 12/01/2000 3,000,000 2,886,990
Malayan Banking BHD,
7.125% due 09/15/2005 2,100,000 1,776,579
-----------
8,244,399
BROADCASTING - 1.37%
Century Communications
Corporation, zero coupon due
01/15/2008 3,000,000 1,361,250
Chancellor Media Corporation,
9.375% due 10/01/2004 500,000 527,500
CSC Holdings, Incorporated,
10.50% due 05/15/2016 1,000,000 1,165,000
Fox Family Worldwide,
Incorporated, Step up to
10.25% due 11/01/2007 1,250,000 812,500
Granite Broadcasting
Corporation, 8.875% due
05/15/2008 1,000,000 1,011,250
Marcus Cable Company,
Step up to 14.25% due
12/15/2005 1,000,000 930,000
SFX Broadcasting,
Incorporated, 10.75% due
05/15/2006 1,000,000 1,102,500
-----------
6,910,000
BUILDING MATERIALS & CONSTRUCTION - 0.20%
Nortek, Incorporated,
9.125% due 09/01/2007 1,000,000 1,015,000
-----------
BUSINESS SERVICES - 1.46%
Borg Warner Security
Corporation, 9.125% due
05/01/2003*** 1,000,000 1,042,500
First Data Corporation,
6.375% due 12/15/2007 2,575,000 2,620,269
Jordan Industries,
Incorporated, Series B,
Series B, Step up to 11.75%
due 04/01/2009 2,412,580 1,544,051
Jordan Telecommunication
Products, 9.875% due
08/01/2007 1,000,000 1,020,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
165
<PAGE> 169
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
BUSINESS SERVICES - CONTINUED
Williams Scotsman,
Incorporated, 9.875% due
06/01/2007 $ 1,100,000 $ 1,144,000
-----------
7,370,820
CHEMICALS - 1.09%
Huntsman Packaging
Corporation, 9.125% due
10/01/2007 1,200,000 1,218,000
Norsk Hydro AS,
6.70% due 01/15/2018 2,050,000 2,091,758
PCI Chemicals Canada,
Incorporated, 9.25% due
10/15/2007 1,000,000 990,000
Texas Petro-Chemical
Corporation, 11.125% due
07/01/2006 1,085,000 1,182,650
-----------
5,482,408
COAL - 0.10%
P&L Coal Holdings Corporation,
9.625% due 05/15/2008
500,000 513,750
-----------
COMPUTERS & BUSINESS EQUIPMENT - 0.45%
Decisionone Corporation,
9.75% due 08/01/2007*** 1,030,000 993,950
Unisys Corporation,
7.875% due 04/01/2008 1,250,000 1,275,000
-----------
2,268,950
CONGLOMERATES - 0.47%
Dana Corporation,
6.50% due 03/15/2008 1,365,000 1,386,362
Raytheon Company,
5.95% due 03/15/2001 1,000,000 996,280
-----------
2,382,642
COSMETICS & TOILETRIES - 0.52%
American Safety Razor Company,
Series B, 9.875% due
08/01/2005 1,000,000 1,070,000
Revlon Worldwide Corporation
Series B, zero coupon due
03/15/2001 2,000,000 1,555,000
-----------
2,625,000
CRUDE PETROLEUM & NATURAL GAS - 0.50%
Dawson Production Services,
Incorporated, 9.375% due
02/01/2007*** 1,250,000 1,256,250
Wainoco Oil Corporation,
9.125% due 02/15/2006 1,250,000 1,259,375
-----------
2,515,625
DRUGS & HEALTH CARE - 2.10%
Cole National Group,
Incorporated, 8.625% due
08/15/2007 $ 1,275,000 $ 1,287,750
Dade International,
Incorporated, 11.125% due
05/01/2006 1,000,000 1,130,000
Dailey International,
Incorporated, 9.50% due
02/15/2008 1,000,000 977,500
Fisher Scientific
International, Incorporated,
9.00% due 02/01/2008 750,000 746,250
Integrated Health Services,
Incorporated, Series A,
9.25% due 01/15/2008 1,000,000 1,038,750
Maxxim Medical, Incorporated,
10.50% due 08/01/2006 1,000,000 1,097,500
Packard BioScience,
Incorporated, 9.375% due
03/01/2007 900,000 873,000
Prime Medical Services,
Incorporated, 8.75% due
04/01/2008 1,000,000 990,000
Universal Hospital Services,
10.25% due 03/01/2008 1,000,000 1,000,000
Vencor, Incorporated,
9.875% due 05/01/2005 1,500,000 1,475,625
-----------
10,616,375
EDUCATIONAL SERVICES - 0.25%
Kindercare Learning Centre,
Incorporated, 9.50% due
02/15/2009 1,250,000 1,256,250
-----------
ELECTRICAL EQUIPMENT - 0.21%
SC International Services,
Incorporated, Series B,
9.25% due 09/01/2007 1,000,000 1,035,000
-----------
ELECTRIC UTILITIES - 0.51%
AES Corporation,
8.50% due 11/01/2007 1,000,000 1,010,000
Transamerican Energy Corporation,
11.50% due 06/15/2002 750,000 690,000
Transamerican Energy Corporation,
Series B, Step up to 13.00% due
06/15/2002 1,050,000 861,000
-----------
2,561,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
166
<PAGE> 170
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
ELECTRONICS - 0.23%
Amphenol Corporation,
9.875% due 05/15/2007 $ 1,100,000 $ 1,171,500
-----------
FINANCIAL SERVICES - 2.63%
APP FIN II Mauritius, Ltd.,
Series B, Step up to 12.00%
due 02/15/2004 1,000,000 690,000
CB Richards Ellis Services,
Incorporated, 8.875% due
06/01/2006 1,250,000 1,240,625
DVI, Incorporated,
9.875% due 02/01/2004 1,000,000 1,060,000
Foamex Capital Corporation,
9.875% due 06/15/2007 750,000 825,000
Forest City Enterprises,
Incorporated, 8.50% due
03/15/2008 1,000,000 990,000
Intertek Finance PLC, Series
B, 10.25% due 11/01/2006 1,250,000 1,287,500
Medicom LLC/Mediacom Capital
Corporation, 8.50% due
04/15/2008 1,000,000 996,250
Merrill Lynch & Company,
Incorporated, 6.00% due
02/12/2003*** 2,025,000 2,017,143
Paine Webber Group,
Incorporated, 7.00% due
03/01/2000*** 1,700,000 1,721,454
United States Leasing
International, 8.45% due
01/25/2005*** 1,500,000 1,674,930
Venture Holdings Trust,
9.75% due 04/01/2004 781,000 788,810
-----------
13,291,712
FOOD & BEVERAGES - 1.26%
B & G Foods Incications
Corporation, 9.625% due
08/01/2007 500,000 505,000
CFP Holdings, Incorporated,
Series B, 11.625% due
01/15/2004 1,100,000 1,031,250
Delta Beverage Group,
Incorporated, 9.75% due
12/15/2003*** 1,250,000 1,303,125
Dole Foods, Incorporated,
6.75% due 07/15/2000*** 1,500,000 1,511,850
Imperial Holly Corporation,
9.75% due 12/15/2007 1,000,000 1,002,500
Specialty Foods Corporation,
11.125% due 10/01/2002 1,000,000 1,000,000
-----------
6,353,725
FOREST PRODUCTS - 0.19%
Doman Industries, Ltd.
8.75% due 03/15/2004 $ 1,000,000 $ 977,500
-----------
FURNITURE & FIXTURES - 0.21%
Sealy Mattress Company
9.875% due 12/15/2007 1,000,000 1,060,000
-----------
GAS & PIPELINE UTILITIES - 0.46%
Praxair, Incorporated
6.15% due 04/15/2003 2,300,000 2,300,943
-----------
HOTELS & RESTAURANTS - 0.21%
Prime Hospitality Corporation,
9.75% due 04/01/2007 1,000,000 1,062,500
-----------
HOUSEHOLD PRODUCTS - 0.31%
Ekco Group, Incorporated,
Series B, 9.25% due
04/01/2006 1,500,000 1,563,750
-----------
INDUSTRIAL MACHINERY - 0.71%
Harnischfeger Industries,
Incorporated, 6.875% due
02/15/2027*** 2,400,000 2,540,736
Insilco Corporation,
10.25% due 08/15/2007 1,000,000 1,030,000
-----------
3,570,736
INDUSTRIALS - 2.69%
Advance Stores Company,
10.25% due 04/15/2008 1,000,000 1,030,000
AEI Holdings Company,
10.00% due 11/15/2007 1,000,000 990,000
Falcon Holding Group LP,
8.375% due 04/15/2010 1,250,000 1,237,500
Furon Company,
8.125% due 03/01/2008 750,000 748,125
High Voltage Engineering
Corporation, 10.50% due
08/15/2004 1,000,000 1,030,000
Holt Group, Incorporated,
9.75% due 01/15/2006 1,000,000 1,000,000
Indesco International,
Incorporated, 9.75% due
04/15/2008 1,250,000 1,237,500
International Semi-Tech
Microelectronic, Step up to
11.50% due 08/15/2003 800,000 240,000
Lin Holdings Corporation,
Step up to 10.00% due
03/01/2008 1,750,000 1,172,500
Polymer Group, Incorporated,
8.75% due 03/01/2008 875,000 873,906
</TABLE>
The accompanying notes are an integral part of the financial statements.
167
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
INDUSTRIALS - CONTINUED
Polymer Group, Incorporated,
9.00% due 07/01/2007 $ 275,000 $ 278,094
Purina Mills, Incorporated,
9.00% due 03/15/2010 1,375,000 1,412,812
RG Receivables, Ltd.,
9.60% due 02/10/2005 1,446,429 1,342,879
Stellex Industries,
Incorporated, 9.50% due
11/01/2007 1,000,000 990,000
-----------
13,583,316
INSURANCE - 0.36%
Aetna Services, Incorporated,
7.625% due 08/15/2026*** 1,700,000 1,813,730
-----------
LEISURE TIME - 0.44%
Grand Casinos, Incorporated,
9.00% due 10/15/2004 1,000,000 1,085,000
Sun International Hotels,
Ltd., 8.625% due 12/15/2007 1,125,000 1,158,750
-----------
2,243,750
LIQUOR - 0.12%
Stroh Brewery Company,
11.10% due 07/01/2006 1,000,000 601,250
-----------
METAL & METAL PRODUCTS - 1.04%
Commonwealth Aluminum
Corporation, 10.75% due
10/01/2006 1,000,000 1,030,000
Envirosource, Incorporated,
9.75% due 06/15/2003 1,000,000 1,010,000
International Knife & Saw,
Incorporated, 11.375% due
11/15/2006 1,000,000 1,060,000
International Utility
Strucutures, Incorporated,
10.75% due 02/01/2008 1,075,000 1,096,500
Renco Metals, Incorporated,
11.50% due 07/01/2003 1,000,000 1,060,000
-----------
5,256,500
MINING - 0.19%
Murrin Murrin Holdings
Property, 9.375% due
08/31/2007 1,000,000 980,000
-----------
NEWSPAPERS - 0.45%
Garden State Newspapers,
Incorporated, 8.75% due
10/01/2009 1,000,000 1,015,000
Hollinger, Incorporated,
zero coupon due 10/05/2013 3,000,000 1,245,000
-----------
2,260,000
OFFICE FURNISHINGS & SUPPLIES - 0.61%
Staples, Incorporated,
7.125% due 08/15/2007*** 2,950,000 3,055,227
-----------
PAPER - 0.26%
Stone Container Corporation,
12.25% due 04/01/2002 1,250,000 1,293,750
-----------
PETROLEUM SERVICES - 1.67%
Bellwether Exploration
Company, 10.875% due
04/01/2007 1,000,000 1,055,000
Benton Oil & Gas Company,
11.625% due 05/01/2003 1,000,000 1,065,000
Cliffs Drilling Company,
10.25% due 05/15/2003*** 1,100,000 1,177,000
Costilla Energy, Incorporated,
10.25% due 10/01/2006 750,000 761,250
National Energy Group,
Incorporated, 10.75% due
11/01/2006 1,250,000 1,125,000
Occidental Petroleum
Corporation, 9.25% due
08/01/2019*** 2,225,000 2,770,748
United Refining Company,
10.75% due 06/15/2007 500,000 495,000
-----------
8,448,998
PLASTICS - 0.51%
Berry Plastics,
12.25% due 04/15/2004 1,150,000 1,247,750
Key Plastics, Incorporated,
10.25% due 03/15/2007 500,000 525,000
Plastic Containers,
Incorporated, 10.00% due
12/15/2006 750,000 798,750
-----------
2,571,500
POLLUTION CONTROL - 0.78%
Allied Waste Industries,
Incorporated, Step up to
11.30% due 06/01/2007 2,000,000 1,470,000
Loomis Fargo & Company,
10.00% due 01/15/2004 1,000,000 1,000,000
Norcal Waste Systems,
Incorporated, Series B, Step
up to 13.50% due 11/15/2005
1,250,000 1,462,500
-----------
3,932,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
168
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
PUBLISHING - 0.25%
American Media Operations,
Incorporated, 11.625% due
11/15/2004 $ 1,150,000 $ 1,242,000
-----------
REAL ESTATE - 0.26%
Radnor Holdings Corporation,
10.00% due 12/01/2003 1,250,000 1,300,000
-----------
RETAIL GROCERY - 0.70%
Carr Gottstein Foods Company,
12.00% due 11/15/2005 1,000,000 1,110,000
Fleming Companies,
Incorporated, 10.625% due
07/31/2007 750,000 791,250
Fleming Companies,
Incorporated,Series B,
10.50% due 12/01/2004 500,000 520,000
Jitney-Jungle Stores of
America, Incorporated,
12.00% due 03/01/2006 1,000,000 1,125,000
-----------
3,546,250
RETAIL TRADE - 1.30%
Finlay Enterprises,
Incorporated, 9.00% due
05/01/2008 500,000 501,250
Finlay Fine Jewelry
Corporation, 8.375% due
05/01/2008 1,000,000 1,005,000
French Fragrances,
Incorporated, Series B,
10.375% due 05/15/2007 840,000 894,600
Hills Stores Company,
12.50% due 07/01/2003 500,000 492,500
Maxim Group, Incorporated,
9.25% due 10/15/2007 500,000 513,750
Musicland Group, Incorporated,
9.875% due 03/15/2008
1,000,000 982,500
Selmer, Incorporated,
11.00% due 05/15/2005 1,000,000 1,090,000
Windy Hill Pet Food,
Incorporated, 9.75% due
05/15/2007 1,040,000 1,086,800
-----------
6,566,400
SOFTWARE - 0.16%
Alvey Systems, Incorporated,
11.375% due 01/31/2003 750,000 806,250
-----------
TELECOMMUNICATIONS SERVICES - 1.49%
Adelphia Communications
Corporation, Series B,
9.875% due 03/01/2007 $ 525,000 $ 568,312
10.50% due 07/15/2004 475,000 518,938
Comcast Cellular Holdings,
Incorporated, Series B,
9.50% due 05/01/2007 1,000,000 1,037,500
Diamond Cable Communications
PLC, Step up to 11.75% due
12/15/2005
750,000 622,500
ICG Holdings, Incorporated,
Step up to 13.50% due
09/15/2005 1,250,000 1,068,750
International Cabletel,
Incorporated, Series B, Step
up to 11.50% due 02/01/2006
1,500,000 1,237,500
Telewest Communication PLC,
Step up to 11.00% due
10/01/2007 1,500,000 1,237,500
United International Holdings,
Incorporated, 10.75% due
02/15/2008 2,000,000 1,235,000
-----------
7,526,000
TELEPHONE - 2.41%
British Telecom PLC,
7.00% due 05/23/2007 5,080,000 5,397,500
GST Network Funding,
Incorporated, Step up to
10.50% due 05/01/2008 1,500,000 900,000
GTE Corporation,
6.94% due 04/15/2028 1,800,000 1,814,040
Intermedia Communications,
Incorporated, Series B, Step
up to 11.25% due 07/15/2007
1,000,000 730,000
Mastec, Incorporated,
7.75% due 02/01/2008 750,000 716,250
NEXTEL Communications,
Incorporated,
Step up to 9.75% due
08/15/2004 1,000,000 972,500
Step up to 9.95% due
02/15/2008 1,000,000 637,500
Nextlink Communications,
Incorporated, 9.00% due
03/15/2008 1,000,000 1,000,000
-----------
12,167,790
</TABLE>
The accompanying notes are an integral part of the financial statements.
169
<PAGE> 173
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C> <C>
TOYS, AMUSEMENTS & SPORTING GOODS - 0.20%
Riddel Sports, Incorporated,
10.50% due 07/15/2007 $ 1,000,000 $ 1,007,500
------------
TRANSPORTATION - 1.74%
Atlantic Express
Transportation Corporation,
10.75% due 02/01/2004 1,250,000 1,331,250
Axiohm Transaction Solutions,
9.75% due 10/01/2007 1,000,000 1,012,500
Iron, Incorporated,
10.125% due 10/01/2006 1,000,000 1,085,000
LES Company, Incorporated,
9.25% due 06/01/2008 500,000 505,000
Navistar International
Corporation, 8.00% due
02/01/2008 1,000,000 1,005,000
Ryder Trucks, Incorporated,
10.00% due 12/01/2006 850,000 981,750
Stena AB,
10.50% due 12/15/2005 1,000,000 1,090,000
TFM S A De C V,
Step up to 11.75% due
06/15/2009 1,500,000 937,500
Trico Marine Services,
Incorporated, 8.50% due
08/01/2005 875,000 850,937
------------
8,798,937
TOTAL CORPORATE BONDS
(Cost: $178,578,103) $179,858,846
------------
CONVERTIBLE BONDS - 0.16%
DRUGS & HEALTH CARE - 0.16%
Fresenius Medical Care Capital
Trust, 9.00% due 12/01/2006 $ 750,000 $ 780,000
------------
TOTAL CONVERTIBLE BONDS
(Cost: $766,875) $ 780,000
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.58%
DLJ Commercial Mortgage
Corporation, Series 1998-CG1,
Class S, 0.709% due 05/10/2023 $ 47,378,006 $ 2,354,687
First Boston Mortgage Securities
Corporation Strip, Series D,
Class I-O, Interest Only due
05/25/2017 782,331 223,450
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
First Union Residential
Securitiation Trust, Series
1998-A, Class B2, REMIC due
08/25/2028 $ 1,123,016 $ 1,104,767
Green Tree Financial Corporation,
Series 1997-6, Class A8, 7.07%
due 09/15/2007*** 8,245,267 8,551,826
PNC Mortgage Securities
Corporation, Series 1998-4,
Class 3B3, 6.75% due 05/25/2028 1,576,325 1,539,534
PNC Mortgage Securities
Corporation, Series 1998-4,
Class CB3, 6.838% due 05/25/2028 2,301,882 2,247,212
PNC Mortgage Securities
Corporation, Series 1998-5,
Class CB3, 6.734% due 07/25/2028 2,122,356 2,056,032
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost: $17,773,138) $ 18,077,508
------------
ASSET BACKED SECURITIES - 1.26%
Mid State Trust VI,
7.34% due 07/01/2035*** $ 6,097,244 $ 6,337,292
------------
TOTAL ASSET BACKED SECURITIES
(Cost: $6,096,317) $ 6,337,292
------------
SUPRANATIONAL OBLIGATIONS - 0.34%
European Investment Bank, 4.25%
due 07/16/1998 (Yen) 240,000,000 $ 1,738,338
------------
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost: $1,881,144) $ 1,738,338
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C>
SHORT TERM INVESTMENTS - 20.13%
$15,000,000 Bausch & Lomb, Incorporated
5.77% due 07/08/1998 $14,983,171
15,000,000 Levi Strauss & Company
6.00% due 07/08/1998 14,982,500
31,987,817 Navigator Securities Lending Trust,
5.54% 31,987,817
</TABLE>
The accompanying notes are an integral part of the financial statements.
170
<PAGE> 174
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Principal
Amount Amount Value
------ -------- -----
<S> <C> <C>
SHORT TERM INVESTMENTS - CONTINUED
$15,000,000 Norfolk Southern Corporation
5.72% due 07/09/1998 $ 14,980,933
11,986,000 Rayonier, Incorporated
7.25% due 07/01/1998 11,986,000
12,717,000 Raytheon Company
5.70% due 07/01/1998 12,717,000
------------
101,637,421
------------
TOTAL INVESTMENTS (Strategic Bond
Trust) (Cost: $504,104,404) $504,827,141
============
</TABLE>
GLOBAL GOVERNMENT BOND TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS - 40.27%
FOREIGN BONDS - 6.86%
Province of Ontario
6.00% due 02/21/2006 $ 10,000,000 $ 9,995,000
Province of Quebec
7.00% due 01/30/2007 4,000,000 4,207,500
------------
14,202,500
COMMONWEALTH OF AUSTRALIA - 2.50%
6.50% due 06/14/2005 AUD 8,000,000 5,177,053
------------
GOVERNMENT OF CANADA - 3.91%
6.125% due 07/15/2002 $ 8,000,000 8,095,000
------------
KINGDOM OF DENMARK - 4.84%
5.00% due 08/15/2005 DKK 38,000,000 5,606,376
7.00% due 11/10/2024 25,000,000 4,415,532
------------
10,021,908
REPUBLIC OF ITALY - 8.69%
5.75% due 07/10/2007 DEM 10,000,000 5,877,624
zero coupon due 01/10/2001 $ 14,000,000 12,101,250
------------
17,978,874
REPUBLIC OF SOUTH AFRICA - 1.43%
12.50% due 12/21/2006 ZAR 10,000,000 1,467,049
13.00% due 08/31/2010 10,000,000 1,488,513
------------
2,955,562
KINGDOM OF SWEDEN - 11.44%
5.50% due 04/12/2002 SEK 50,000,000 6,484,284
6.00% due 02/09/2005 50,000,000 6,702,106
6.50% due 10/25/2006 50,000,000 6,935,996
zero coupon due 07/31/2000 4,000,000 3,557,500
------------
23,679,886
GOVERNMENT OF UNITED KINGDOM - 0.59%
zero coupon due 06/07/2021 pound sterling 2,500,000 $ 1,224,157
------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $83,311,938) $ 83,334,940
------------
CORPORATE BONDS - 32.83%
BANKING - 7.75%
Baden-Wurttemberg L Finance,
5.125% due 03/05/2004 ECU 5,500,000 $ 6,167,050
Baden-Wurttemberg L Finance,
5.375% due 02/05/2010 DEM 10,000,000 5,666,916
Bank Nederlandse Gemeenten,
zero coupon due
12/29/2017 ZAR 180,000,000 2,143,761
Schweiz Bankgesellschaft,
zero coupon due
03/31/2006 pound sterling 2,000,000 2,062,079
------------
16,039,806
FINANCIAL SERVICES - 20.63%
Credit Local Dexia France,
5.25% due 04/25/2008 ECU 5,500,000 6,087,791
DEPFA Finance NV,
7.125% due 11/11/2003 pound sterling 5,000,000 8,405,896
Federal National Mortgage Association,
6.375% due 08/15/2007 AUD 10,000,000 6,443,383
7.00% due 09/26/2000 NZD 10,000,000 5,107,236
Ford Credit Canada, Ltd.,
14.00% due 11/13/2002 ZAR 18,000,000 2,864,671
Helaba International Finance
PLC, 7.375% due
12/30/2002 pound sterling 4,000,000 6,745,588
Swiss Bank Corporation
Finance (C.I.), Ltd., zero
coupon due 02/28/2001 pound sterling 4,000,000 5,543,404
Westdeutsche Landesbank
Finance Curacao, 15.25% due
02/07/2000 ZAR 9,000,000 1,483,558
------------
42,681,528
TOBACCO - 4.45%
Philip Morris Company,
Incorporated, 7.00% due
07/15/2005 9,000,000 9,211,500
------------
TOTAL CORPORATE BONDS
(Cost: $69,112,841) $ 67,932,834
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
171
<PAGE> 175
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C> <C>
ASSET BACKED SECURITIES- 4.18%
Citibank Credit Card Master Trust,
5.75% due 07/16/2007 DEM 15,000,000 $ 8,645,928
------------
TOTAL ASSET BACKED SECURITIES
(Cost: $8,523,593) $ 8,645,928
------------
SUPRANATIONAL OBLIGATIONS - 12.71%
Asian Development Bank, zero
coupon due 08/31/2004 $ 14,000,000 $ 9,861,250
Eurofima, 15.50% due
02/07/2002 ZAR 9,000,000 1,491,905
European Investment Bank,
13.50% due 11/11/2002 18,000,000 2,932,968
14.75% due 06/13/2002 9,000,000 1,508,221
International Bank for Reconstruction and
Development (World Bank)
7.00% due 09/18/2000 NZD 10,000,000 5,135,205
zero coupon due 08/20/2007 12,000,000 3,395,284
zero coupon due 07/14/2027 ZAR 400,000,000 1,981,450
------------
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost: $29,659,519) $ 26,306,284
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C>
SHORT TERM INVESTMENTS - 10.00%
$20,698,000 Navigator Securities Lending
Trust, 5.54% $20,698,000
------------
TOTAL INVESTMENTS (Global Government
Bond Trust) (Cost: $211,305,892) $206,917,986
============
</TABLE>
CAPITAL GROWTH BOND TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 24.31%
U.S. TREASURY BONDS - 5.46%
6.375% due 08/15/2027 $ 1,595,000 $ 1,751,502
6.625% due 02/15/2027 1,065,000 1,202,619
6.75% due 08/15/2026 235,000 269,037
-----------
3,223,158
U.S. TREASURY NOTES - 18.85%
5.875% due 02/28/1999 $ 3,000,000 $ 3,007,980
6.125% due 08/15/2007 4,700,000 4,890,209
6.375% due 05/15/1999 360,000 362,588
6.50% due 08/31/2001 2,000,000 2,054,380
7.25% due 05/15/2004 750,000 813,750
-----------
11,128,907
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $14,088,490) $14,352,065
-----------
FOREIGN GOVERNMENT OBLIGATIONS - 1.87%
FOREIGN BONDS - 1.87%
Province of Quebec,
8.80% due 04/15/2003 $ 1,000,000 $ 1,104,380
-----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $1,098,025) $ 1,104,380
-----------
CORPORATE BONDS - 48.23%
AUTOMOBILES - 5.46%
Chrysler Corporation,
7.45% due 02/01/2097 $ 2,000,000 $ 2,214,520
Ford Motor Credit Company,
6.375% due 04/15/2000 1,000,000 1,007,380
-----------
3,221,900
BANKING - 7.44%
Bank New York, Incorporated,
6.625% due 06/15/2003 1,000,000 1,019,180
Bank Nova Scotia Halifax,
9.00% due 10/01/1999 1,000,000 1,035,870
Citicorp,
7.125% due 06/01/2003 1,000,000 1,039,850
Republic New York
Corporation, 9.50% due
04/15/2014 1,000,000 1,296,050
-----------
4,390,950
CONGLOMERATES - 1.65%
ITT Corporation,
6.25% due 11/15/2000 1,000,000 974,600
-----------
ELECTRIC UTILITIES - 5.14%
Baltimore Gas & Electric
Company, 6.125% due
07/01/2003 1,000,000 1,005,840
Northern States Power Company
of Minnesota, 6.375% due
04/01/2003 1,000,000 1,015,770
</TABLE>
The accompanying notes are an integral part of the financial statements.
172
<PAGE> 176
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
ELECTRIC UTILITIES - CONTINUED
Pacific Gas & Electric
Company, 6.25% due
08/01/2003 $ 1,000,000 $ 1,010,470
-----------
3,032,080
FINANCIAL SERVICES - 10.62%
Bear Stearns Capital Trust,
Incorporated, 7.00% due
07/15/1998 1,000,000 1,019,903
Commercial Credit Group,
Incorporated, 7.375% due
04/15/2005 1,000,000 1,068,380
Donaldson Lufkin & Jenrette,
5.625% due 02/15/2016 1,000,000 989,910
Fifth Third Capital Trust,
Incorporated, Series A,
8.136% due 03/15/2027 1,000,000 1,092,200
Household Finance
Corporation, 7.75% due
06/01/1999 1,000,000 1,016,610
Southern Company Capital
Trust I, 8.19% due
02/01/2037 1,000,000 1,081,660
-----------
6,268,663
FUNERAL SERVICES - 1.72%
Service Corporation
International, 6.75% due
06/01/2001 1,000,000 1,014,450
-----------
GAS & PIPELINE UTILITIES - 1.73%
Columbia Gas Systems,
Incorporated, 7.05% due
11/28/2007 1,000,000 1,023,190
-----------
HOUSEHOLD PRODUCTS - 2.24%
Procter & Gamble-ESOP, Series
A, 9.36% due 01/01/2021 1,000,000 1,321,810
-----------
INSURANCE - 1.77%
Zurich Reinsurance Centre
Holdings, Incorporated,
7.125% due 10/15/2023 1,000,000 1,048,310
-----------
NEWSPAPERS - 1.88%
News America Holdings,
Incorporated, 8.50% due
02/15/2005 1,000,000 1,107,750
-----------
PETROLEUM SERVICES - 1.83%
Ultramar Corporation,
8.00% due 03/15/2005 $ 1,000,000 $ 1,083,350
-----------
REAL ESTATE - 1.78%
MEPCO Finance, Incorporated,
7.50% due 05/01/2003 1,000,000 1,049,890
-----------
TELEPHONE - 3.21%
Bellsouth Savings, ESOT,
9.19% due 07/01/2003 623,625 671,844
GTE Corporation,
8.75% due 11/01/2021 1,000,000 1,222,790
-----------
1,894,634
TOYS, AMUSEMENTS & SPORTING GOODS - 1.76%
Brunswick Corporation,
7.125% due 08/01/2027 1,000,000 1,037,790
-----------
TOTAL CORPORATE BONDS
(Cost: $26,681,927) $28,469,367
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.43%
Residential Funding Mortgage
Security I, Incorporated,
Series 1996-S1, Class A12,
7.25% due 01/25/2026 $ 1,000,000 $ 1,024,565
Residential Funding Mortgage
Security I, Incorporated,
Series 1996-S3, Class A5,
7.25% due 01/25/2026 976,506 1,000,002
-----------
2,024,567
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost: $1,979,438) $ 2,024,567
-----------
ASSET BACKED SECURITIES - 5.15%
Carco Auto Loan Master Trust,
Series 1997 1, Class A, 6.689%
due 06/15/1998 $ 1,000,000 $ 1,015,420
Discover Card Master Trust 1,
Series 97 2, Class A, 6.792%
due 04/16/2010 1,000,000 1,018,730
Mortgage Index Amortizing Trust,
1997 1, Class A1, 6.682% due
08/25/2004 1,000,000 1,005,000
-----------
TOTAL ASSET BACKED SECURITIES
(Cost: $2,999,992) $ 3,039,150
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
173
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C>
SHORT TERM INVESTMENTS - 2.15%
$1,270,000 Navigator Securities Lending
Trust, 5.54% $ 1,270,000
-----------
REPURCHASE AGREEMENTS - 14.86%
$8,774,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.71%, to be
repurchased at $8,775,392 on
07/01/1998, collateralized by
$6,620,000 U.S. Treasury Bonds,
8.75% due 05/15/2017 (valued at
$8,953,550, including interest) $8,774,000
-----------
TOTAL INVESTMENTS (Capital Growth Bond
Trust) (Cost: $56,891,872) $59,033,529
===========
</TABLE>
INVESTMENT QUALITY BOND TRUST
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 0.09%
INDUSTRIALS - 0.05%
Sinking Fund Holdings Group,
Incorporated 17 $ 151,725
------------
PUBLISHING - 0.04%
Primedia, Incorporated 1,380 134,205
------------
TOTAL COMMON STOCKS
(Cost: $290,172) $ 285,930
------------
PREFERRED STOCK - 0.10%
MINING - 0.10%
Fairfield Manufacturing,
Incorporated 270 $ 289,575
------------
TOTAL PREFERRED STOCK
(Cost: $279,450) $ 289,575
------------
WARRANTS - 0.00%
SOFTWARE - 0.00%
Concentric Network Corporation,
(Expiration date 12/15/2007;
strike price $10.86) 40 $ 3,800
------------
TOTAL WARRANTS
(Cost: $0) $ 3,800
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------ -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 37.22%
U.S. TREASURY BONDS - 37.22%
7.50% due 11/15/2016 $ 4,000,000 $ 4,801,880
8.125% due 05/15/2021 1,800,000 2,343,654
11.875% due 11/15/2003 25,800,000 33,249,750
12.00% due 08/15/2013 49,000,000 72,650,340
------------
113,045,624
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $111,462,702) $113,045,624
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 9.19%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.17%
6.00% due 02/01/2003 - 07/01/2003 $ 610,135 $ 608,784
6.30% due 03/15/2023 400,000 404,624
6.50% due 08/17/2011 -
06/25/2019 1,400,000 1,410,772
7.00% due 06/01/2023 -
01/01/2026 3,291,861 3,342,317
7.50% due 06/01/2010 -
04/01/2011 808,756 833,053
------------
6,599,550
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.29%
5.90% due 10/25/2019 1,000,000 998,120
6.00% due 06/01/2028 3,000,000 2,920,290
------------
3,918,410
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.73%
6.50% due 07/15/2008 -
05/15/2009 170,214 172,378
7.00% due 04/15/2023 -
02/15/2024 7,183,067 7,308,688
7.50% due 04/15/2002 -
01/15/2024 6,282,961 6,463,195
8.00% due 06/15/2023 -
10/15/2023 1,866,148 1,940,216
8.50% due 09/15/2016 -
04/15/2022 1,420,594 1,505,673
9.50% due 10/15/2009 798 898
------------
17,391,048
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost: $27,240,920) $ 27,909,008
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
174
<PAGE> 178
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS - 1.38%
FOREIGN BONDS - 0.75%
Province of Quebec,
8.625% due 01/19/2005 $ 2,000,000 $ 2,286,580
-----------
REPUBLIC OF ARGENTINA - 0.63%
11.00% due 10/09/2006 1,800,000 1,908,000
-----------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS
(Cost: $4,238,000) $ 4,194,580
-----------
CORPORATE BONDS - 28.63%
AIR TRAVEL - 0.33%
Argo-Tech Corporation,
8.625% due 10/01/2007 150,000 150,000
Continental Airlines,
6.648% due 09/15/2017 840,000 857,119
-----------
1,007,119
APPAREL & TEXTILES - 0.09%
Clark-Schwebel, Incorporated,
10.50% due 04/15/2006 95,000 105,925
Collins & Aikman Products
Company, 11.50% due
04/15/2006 150,000 166,500
-----------
272,425
AUTOMOBILES - 0.06%
LDM Technologies,
Incorporated, 10.75% due
01/15/2007 160,000 168,000
-----------
BANKING - 3.47%
BankAmerica Corporation,
9.625% due 02/13/2001 1,475,000 1,598,959
Credit National,
7.00% due 11/14/2005 1,300,000 1,326,000
Export-Import Bank of Korea,
6.375% due 02/15/2006 1,550,000 1,173,288
First Financial Caribbean
Corporation, 7.84% due
10/10/2006 530,000 559,378
First Republic Bank San Francisco,
7.75% due 09/15/2012 825,000 862,546
Korea Development Bank,
7.125% due 09/17/2001 715,000 635,470
National Westminster Bank PLC,
9.45% due 05/01/2001 1,000,000 1,085,510
NBD Bancorp,
8.25% due 11/01/2024 2,000,000 2,402,060
Norwest Corporation,
6.00% due 03/15/2000 900,000 901,701
----------
10,544,912
BROADCASTING - 0.11%
Century Communications
Corporation, zero coupon
due 01/15/2008 $ 225,000 $ 102,094
Granite Broadcasting
Corporation, 8.875% due
05/15/2008 150,000 151,687
Jacor Communications Company,
8.00% due 02/15/2010 20,000 20,000
8.75% due 06/15/2007 60,000 62,400
-----------
336,181
BUILDING MATERIALS & CONSTRUCTION - 0.04%
Grove Worldwide, LLC,
9.25% due 05/01/2008 120,000 117,600
-----------
BUSINESS SERVICES - 0.07%
Psinet, Incorporated,
10.00% due 02/15/2005 140,000 142,800
Silgan Holdings,
Incorporated, 9.00% due
06/01/2009 65,000 67,275
-----------
210,075
CHEMICALS - 0.14%
Huntsman Corporation,
9.50% due 07/01/2007 135,000 135,000
Pioneer Amers Acquisition
Corporation, 9.25% due
06/15/2007 75,000 74,250
Sovereign Speciality
Chemicals, 9.50% due
08/01/2007 75,000 76,875
Texas Petro-Chemical
Corporation, 11.125% due
07/01/2006 120,000 130,800
-----------
416,925
COAL - 0.12%
P&L Coal Holdings
Corporation, 9.625% due
05/15/2008 350,000 359,625
-----------
COMPUTERS & BUSINESS EQUIPMENT - 0.10%
Concentric Network
Corporation, 12.75% due
12/15/2007 100,000 105,750
Decisionone Corporation,
9.75% due 08/01/2007 100,000 96,500
Verio, Incorporated,
10.375% due 04/01/2005 100,000 103,000
-----------
305,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
175
<PAGE> 179
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
COSMETICS & TOILETRIES - 0.04%
Revlon Worldwide Corporation
Series B, zero coupon due
03/15/2001 $ 160,000 $ 124,400
-----------
DRUGS & HEALTH CARE - 2.14%
Allegiance Corporation,
7.00% due 10/15/2026 2,830,000 2,892,062
Beckman Instruments,
Incorporated, 7.10% due
03/04/2003 240,000 241,656
Dailey International,
Incorporated, 9.50% due
02/15/2008 100,000 97,750
Healthsouth Corporation,
6.875% due 06/15/2005 2,000,000 2,000,740
Owens & Minor, Incorporated,
10.875% due 06/01/2006 250,000 272,500
Tenet Healthcare Corporation,
7.875% due 01/15/2003 850,000 864,875
Universal Hospital Services,
10.25% due 03/01/2008 120,000 120,000
-----------
6,489,583
ELECTRICAL EQUIPMENT - 0.23%
Costilla Energy, Incorporated,
10.25% due 10/01/2006 225,000 228,375
Energy Corporation of
America, Incorporated,
9.50% due 05/15/2007 200,000 195,500
Tesoro Petroleum Corporation,
9.00% due 07/01/2008 135,000 134,229
Wesco Distribution,
Incorporated, 9.125% due
06/01/2008 150,000 148,500
-----------
706,604
ELECTRIC UTILITIES - 0.89%
Cleveland Electric
Illuminating Company, 7.19%
due 07/01/2000 1,010,000 1,025,463
Duke Energy Company,
7.50% due 04/01/1999 700,000 707,812
Empresa Nacional De Electric,
7.325% due 02/01/2037 1,000,000 977,050
-----------
2,710,325
ELECTRONICS - 0.04%
Fairchild Semiconductor
Corporation, 10.125% due
03/15/2007 120,000 123,600
-----------
FINANCIAL SERVICES - 10.32%
Allstate Financing,
7.83% due 12/01/2045 $ 530,000 $ 561,747
American General Finance
Corporation, 8.00% due
02/15/2000 1,270,000 1,308,443
Amerus Capital,
8.85% due 02/01/2027 900,000 956,502
Amresco Commerce Mortgage,
9.875% due 03/15/2005 100,000 101,000
Amvescap PLC,
6.60% due 05/15/2005 2,000,000 2,021,900
Associates Corporation North
America, 9.125% due
04/01/2000 300,000 315,597
BanPonce Financial
Corporation, 6.75% due
08/09/2001 2,150,000 2,182,185
Beneficial Corporation,
8.40% due 05/15/2008 350,000 403,372
Cigna Corporation,
7.875% due 05/15/2027 740,000 830,332
Dime Capital Trust,
9.33% due 05/06/2027 1,200,000 1,405,512
Equitable Companies,
Incorporated, 7.00% due
04/01/2028 770,000 786,663
Equitable Life Assured
Society, 7.70% due
12/01/2015 680,000 750,162
General Electric Capital
Corporation, 8.88% due
06/18/2003 600,000 677,226
Globalstar LP/Globalstar
Capital, 10.75% due
11/01/2004 205,000 194,750
Iridium Operating LLC/Iridium Capital,
10.875% due 07/15/2005 285,000 285,113
Japan Finance Corporation,
8.70% due 07/30/2001 1,500,000 1,611,150
9.125% due 10/11/2000 500,000 533,050
Liberty Mutual Insurance Company,
8.20% due 05/04/2007 550,000 620,406
8.50% due 05/15/2025 700,000 836,780
Lumbermans Mutual Casualty
Company, 9.15% due
07/01/2026 675,000 813,274
Olympic Financial, Ltd.,
11.50% due 03/15/2007 100,000 100,250
Pindo Deli Finance Mauritius,
Ltd., 10.75% due
10/01/2007 100,000 70,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
176
<PAGE> 180
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
FINANCIAL SERVICES - CONTINUED
Private Export Funding Corporation,
6.49% due 07/15/2007 $1,175,000 $ 1,232,645
6.62% due 10/01/2005 2,000,000 2,101,240
6.90% due 01/31/2003 3,650,000 3,823,375
7.30% due 01/31/2002 200,000 210,312
Rifkin Acquisitions
Participation LP, 11.125%
due 01/15/2006 80,000 88,000
Sun Canada Financial Company,
7.25% due 12/15/2015 1,500,000 1,625,655
Tembec Finance Corporation,
9.875% due 09/30/2005 115,000 121,325
United States Bancorp,
7.50% due 06/01/2026 2,300,000 2,572,044
United States West Capital
Funding, Incorporated,
6.25% due 07/15/2005 2,035,000 2,030,564
Western Financial Savings,
8.875% due 08/01/2007 200,000 184,000
-----------
31,354,573
FOOD & BEVERAGES - 0.08%
Aurora Foods, Incorporated,
8.75% due 07/01/2008 50,000 50,550
Delaware Monte Foods Company,
Step up to 12.50%
due 12/15/2007 275,000 178,750
-----------
229,300
HOMEBUILDERS - 0.09%
Engle Homes, Incorporated,
9.25% due 02/01/2008 150,000 147,000
Standard Pacific Corporation,
8.50% due 06/15/2007 115,000 116,725
-----------
263,725
INDUSTRIALS - 1.76%
Advanced Micro Devices,
Incorporated, 11.00% due
08/01/2003 275,000 290,125
Cincinnati Milacron,
Incorporated, 7.875% due
05/15/2000 870,000 889,084
Falcon Building Products,
Incorporated, 9.50% due
06/15/2007 165,000 161,700
Gaylord Container
Corporation, 9.375% due
06/15/2007 95,000 91,438
Laroche Industry,
Incorporated, 9.50% due
09/15/2007 85,000 82,875
INDUSTRIALS - CONTINUED
Lin Holdings Corporation,
Step up to 10.00% due
03/01/2008 $ 300,000 $ 201,000
Moog, Incorporated,
10.00% due 05/01/2006 150,000 160,500
Neenah Corporation,
11.125% due 05/01/2007 85,000 92,650
News America Holdings,
Incorporated, 9.25% due
02/01/2013 1,800,000 2,189,232
Numatics, Incorporated,
9.625% due 04/01/2008 25,000 25,250
YPF Sociedad Anonima,
8.00% due 02/15/2004 1,150,000 1,158,395
-----------
5,342,249
INSURANCE - 1.50%
Amerus Life Holdings
Incorporated, 6.95% due
06/15/2005 715,000 713,938
Jackson National Life
Insurance Company, 8.15%
due 03/15/2027 1,000,000 1,168,240
Ohio National Life Insurance
Company, 8.50% due
05/15/2026 1,150,000 1,332,390
Security Benefit Life
Company, 8.75% due
05/15/2016 1,150,000 1,344,073
-----------
4,558,641
LEISURE TIME - 0.46%
Argosy Gaming Company,
13.25% due 06/01/2004 105,000 117,862
Hollywood Casino,
Incorporated, 12.75% due
11/01/2003 150,000 164,250
Viacom, Incorporated,
7.75% due 06/01/2005 1,035,000 1,102,741
-----------
1,384,853
NON-BANK FINANCE - 0.36%
KFW International Finance,
Incorporated, 9.125% due
05/15/2001 1,000,000 1,082,450
-----------
OFFICE FURNISHINGS & SUPPLIES - 0.90%
Boise Cascade Office Products
Company, 7.05% due
05/15/2005 2,700,000 2,726,190
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
177
<PAGE> 181
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ----------
<S> <C> <C>
PAPER - 0.58%
American Pad & Paper Company,
13.00% due 11/15/2005 $ 185,000 $ 185,925
Boise Cascade Corporation,
9.90% due 10/01/2001 1,000,000 1,103,200
Domtar, Incorporated,
9.50% due 08/01/2016 75,000 81,687
Grupo Industrial Durango
GIDUSA, 12.625% due
08/01/2003 120,000 127,800
Repap New Brunswick,
Incorporated, 10.625% due
04/15/2005 275,000 277,750
----------
1,776,362
PETROLEUM SERVICES - 0.41%
Abraxas Pee Corporation,
11.50% due 11/01/2004 100,000 103,500
Cross Timbers Oil Company,
8.75% due 11/01/2009 55,000 55,275
9.25% due 04/01/2007 150,000 154,500
Great Lakes Carbon Corporation,
10.25% due 05/15/2008 65,000 66,300
Newfield Exploration Company,
7.45% due 10/15/2007 445,000 452,472
Petroleos Mexicanos,
8.85% due 09/15/2007 250,000 240,000
Plains Resources,
Incorporated, 10.25% due
03/15/2006 170,000 181,475
----------
1,253,522
PUBLISHING - 0.17%
Scholastic Corporation,
7.00% due 12/15/2003 300,000 309,744
Sullivan Graphics,
Incorporated, 12.75% due
08/01/2005 210,000 219,975
----------
529,719
RETAIL TRADE - 0.77%
Duane Reade, Incorporated,
9.25% due 02/15/2008 100,000 101,250
Guitar Center Management
Company, Incorporated,
11.00% due 07/01/2006 120,000 132,600
JC Penney, Incorporated,
7.40% due 04/01/2037 1,900,000 2,119,013
----------
2,352,863
STEEL - 0.18%
Accuride Corporation,
9.25% due 02/01/2008 $ 95,000 $ 95,000
Acindar Industria, Argentina,
11.25% due 02/15/2004 75,000 75,188
Bayou Steel Corporation
Louisiana Place, 9.50% due
05/15/2008 150,000 148,687
CSN Iron SA,
9.125% due 06/01/2007 140,000 112,000
Weirton Steel Corporation,
11.375% due 07/01/2004 100,000 106,500
----------
537,375
TELECOMMUNICATIONS SERVICES - 1.30%
American Mobile Satellite Corporation,
12.25% due 04/01/2008 35,000 32,550
BTI Telecom Corporation,
10.50% due 09/15/2007 150,000 150,750
EchoStar DBS Corporation,
12.50% due 07/01/2002 60,000 67,350
Facilicom International,
Incorporated, 10.50% due
01/15/2008 70,000 68,950
GCI, Incorporated,
9.75% due 08/01/2007 250,000 261,250
GST Telecommunications,
Incorporated, 12.75% due
11/15/2007 210,000 245,700
Innova S De R L,
12.875% due 04/01/2007 200,000 203,000
ITC Deltacom, Incorporated,
8.875% due 03/01/2008 105,000 107,100
Level 3 Commerce,
Incorporated, 9.125% due
05/01/2008 245,000 238,262
RSL Communications PLC,
9.125% due 03/01/2008 170,000 164,900
Tele-Communications, Incorporated,
9.25% due 04/15/2002 1,500,000 1,653,480
9.65% due 10/01/2003 533,000 581,690
Viatel, Incorporated
11.25% due 04/15/2008 158,000 165,900
----------
3,940,882
TELEPHONE - 1.57%
Allbritton Communications
Company, 8.875% due
02/01/2008 160,000 172,800
Comcast Cable Communications
8.50% due 05/01/2027 1,000,000 1,132,990
E Spire Communications
Insurance, Step up to
12.75% due 04/01/2006 200,000 157,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
178
<PAGE> 182
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<S> <C> <C>
TELEPHONE - CONTINUED
Intermedia Communications,
Incorporated, 8.875% due
11/01/2007 $ 250,000 $ 255,625
Intermedia Communications
Incorporated, 8.60% due
06/01/2008 80,000 80,600
IXC Communications,
Incorporated, 9.00% due
04/15/2008 185,000 185,925
KMC Telecom Holdings,
Incorporated, Step up to
12.50% due 02/15/2008 425,000 246,500
McLeodUSA, Incorporated,
8.375% due 03/15/2008 35,000 35,088
MobileMedia Communications,
Incorporated, 9.375% due
11/01/2007[Superior carat] 250,000 77,500
NEXTEL Communications,
Incorporated, Step up to
9.75% due 10/31/2007 660,000 430,650
Nextlink Communications,
Incorporated, 9.45% due
04/15/2008 250,000 153,750
Paging Network, Incorporated,
10.125% due 08/01/2007 150,000 155,250
Telecommunications Techniques
Company, 9.75% due
05/15/2008 160,000 163,600
World Common, Incorporated,
7.55% due 04/01/2004 1,450,000 1,535,579
-----------
4,782,857
TRANSPORTATION - 0.31%
Johnstown America Industry,
Incorporated, 11.75% due
08/15/2005 195,000 215,962
K & F Industry, Incorporated,
9.25% due 10/15/2007 105,000 106,050
MTL, Incorporated,
10.00% due 06/15/2006 100,000 99,000
Southern Railway Company,
8.75% due 10/15/2003 470,000 527,467
-----------
948,479
TOTAL CORPORATE BONDS
(Cost: $84,882,495) $86,956,664
-----------
MUNICIPAL BONDS - 0.56%
ALABAMA - 0.33%
Huntsville, Alabama Solid
Waste Disposal, 5.95% due
10/01/2003 $ 1,000,000 $ 991,020
-----------
MARYLAND - 0.23%
Baltimore, Maryland, Series B,
6.375% due 10/15/2002 705,000 716,125
-----------
TOTAL MUNICIPAL BONDS
(Cost: $1,710,168) $ 1,707,145
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.66%
First Union-Lehman Brothers
Commercial, 6.60% due
07/18/1998 $ 1,950,000 $ 1,989,975
-----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost: $1,960,094) $ 1,989,975
-----------
ASSET BACKED SECURITIES- 1.56%
American Express Master Trust,
6.60% due 05/15/2000 $ 1,500,000 $ 1,508,895
Asset Securitization
Corporation, 6.66% due
02/14/2041 2,110,000 2,174,081
Credit Suisse First Boston,
6.52% due 07/17/2007 400,000 409,372
Green Tree Financial
Corporation, 5.98% due
08/01/2008 500,000 500,155
Premier Auto Trust,
4.65% due 11/02/1999 142,781 142,245
-----------
TOTAL ASSET BACKED SECURITIES
(Cost: $4,644,472) $ 4,734,748
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<S> <C>
SHORT TERM INVESTMENTS - 20.27%
$61,573,772 Navigator Securities
Lending Trust, 5.54% $61,573,772
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
179
<PAGE> 183
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- ------------
<S> <C>
REPURCHASE AGREEMENTS - 0.35%
$1,068,000 Swiss Bank Repo Repurchase
Agreement with Swiss Bank dated
06/30/1998 at 5.70%, to be
repurchased at $1,068,169 on
07/01/1998, collateralized by
$843,000 U.S. Treasury Bonds,
8.00% due 11/15/2021 (valued at
$1,081,411, including interest) $ 1,068,000
------------
TOTAL INVESTMENTS (Investment Quality
Bond Trust) (Cost: $299,350,245) $303,758,821
============
U.S. GOVERNMENT SECURITIES TRUST
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 10.47%
U.S. TREASURY BONDS - 0.73%
6.375% due 08/15/2027 $ 2,100,000 $ 2,306,052
6.625% due 02/15/2027 500,000 564,610
------------
2,870,662
U.S. TREASURY NOTES - 9.74%
5.50% due 02/15/2008 2,500,000 2,498,425
5.625% due 12/31/2002 -
05/15/2008 9,500,000 9,597,757
5.75% due 04/30/2003 4,400,000 4,443,296
5.875% due 09/30/2002 3,000,000 3,037,500
6.125% due 08/15/2007 14,650,000 15,242,885
6.25% due 08/31/2002 2,750,000 2,821,748
6.625% due 05/15/2007 750,000 805,545
------------
38,447,156
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $40,600,795) $ 41,317,818
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 55.73%
FEDERAL HOME LOAN BANK - 0.84%
5.94% due 06/13/2000 $ 3,300,000 $ 3,318,546
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 15.26%
6.00% due 10/01/2010 928,331 926,874
6.247% due 07/01/1998 11,000,000 11,018,810
6.50% due 07/01/2006 - 12/01/2010 3,526,061 3,556,557
7.00% due 12/01/2004 - 04/15/2021 29,374,443 29,984,334
7.50% due 05/01/2007 $ 3,070,117 $ 3,164,493
8.25% due 07/01/2006 116,478 120,154
9.00% due 10/01/2017 - 11/01/2020 2,518,405 2,666,556
9.50% due 08/01/2020 2,056,445 2,205,948
10.00% due 05/01/2005 895,097 928,457
10.50% due 06/01/2020 4,325,616 4,835,216
11.75% due 07/01/2006 -
12/01/2013 129,549 146,884
12.00% due 07/01/2020 543,360 626,728
------------
60,181,011
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 30.89%
6.50% TBA** 24,900,000 24,798,657
6.50% due 12/01/2003 - 04/01/2026 21,410,543 21,379,135
6.527% due 07/01/1998 9,500,000 9,737,500
7.00% TBA** 45,925,000 46,570,706
7.50% TBA** 500,000 512,810
8.00% due 08/01/2004 - 10/01/2024 18,615 19,066
8.25% due 09/01/2008 208,569 216,918
8.50% due 02/01/2009 42,413 44,348
8.75% due 08/01/2009 - 10/01/2011 1,736,694 1,822,074
10.00% due 04/01/2016 3,365 3,690
10.50% due 03/01/2016 6,992 7,242
11.50% due 09/01/2013 -
09/01/2019 1,819,414 2,078,695
11.75% due 09/01/2011 -
12/01/2015 116,517 134,438
12.00% due 01/01/2013 -
04/01/2016 4,531,247 5,224,969
12.50% due 01/01/2013 -
09/01/2015 3,126,938 3,633,229
13.00% due 11/01/2015 1,605,435 1,930,034
13.50% due 11/01/2014 766,020 928,560
14.50% due 11/01/2014 642,824 790,473
VR due 01/17/2003 2,001,991 2,024,354
------------
121,856,898
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 7.62%
7.50% due 02/15/2007 - 12/15/2027 23,293,566 23,941,735
8.00% due 10/15/2005 10,460 10,780
9.00% due 02/20/2016 - 10/20/2017 5,456,362 5,827,793
9.50% due 09/15/2020 235,000 254,326
11.00% due 09/15/2015 27,359 30,810
------------
30,065,444
</TABLE>
The accompanying notes are an integral part of the financial statements.
180
<PAGE> 184
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C>
STUDENT LOAN MARKETING ASSOCIATION - 1.12%
7.50% due 03/08/2000 $ 4,300,000 $ 4,425,646
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost: $216,990,485) $219,847,545
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.70%
OTHER COLLATERALIZED MORTGAGE OBLIGATIONS - 1.70%
Vendee Mortgage Trust, Series
1995-3, Class 1B, Remic, 7.25%
due 10/15/2010 $ 6,674,434 $ 6,693,189
------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS
(Cost: $6,738,049) $ 6,693,189
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- ------------
<S> <C>
SHORT TERM INVESTMENTS - 12.70%
$39,208,651 Navigator Securities Lending
Trust, 5.54% $ 39,208,651
10,900,000 Federal Home Loan Bank,
5.40% due 07/01/1998 10,900,000
------------
$ 50,108,651
REPURCHASE AGREEMENTS - 19.40%
$38,270,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.70%, to be
repurchased at $38,276,059 on
07/01/1988, collateralized by
$32,440,000 U.S. Treasury Bonds,
7.50% due 11/15/2016 (valued at
$39,039,529, including interest)*** 38,270,000
38,269,000 Repurchase Agreement with J.P.
Morgan, dated 06/30/1998 at 5.48%, to
be repurchased at $38,274,825 on
07/01/1998, collateralized by
$39,330,000 U.S. Treasury Notes,
5.375% due 06/30/2003 (valued at
$39,035,025, including interest)*** 38,269,000
------------
$ 76,539,000
------------
TOTAL INVESTMENTS (U.S. Government
Securities Trust) (Cost: $390,976,980) $394,506,203
============
MONEY MARKET TRUST
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 0.96%
U.S. TREASURY BILLS - 0.96%
5.153% due 05/27/1999 $ 5,000,000 $ 4,763,844
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $4,763,844) $ 4,763,844
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 44.73%
FEDERAL HOME LOAN BANK - 15.08%
5.64% due 01/21/1999 25,000,000 25,000,000
FRN due 04/01/1999 50,000,000 49,983,110
------------
74,983,110
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 16.08%
FRN due 02/04/1999 - 03/16/1999
80,000,000 79,975,113
------------
79,975,113
STUDENT LOAN MARKETING ASSOCIATION - 13.57%
3.60% due 09/28/1998 9,000,000 9,000,000
4.30% due 02/22/1998 7,900,000 7,900,166
5.74% due 11/16/1998 21,550,000 21,568,365
FRN due 08/20/1998 29,000,000 28,989,908
------------
67,458,439
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost: $222,416,662) $222,416,662
------------
COMMERCIAL PAPER - 53.37%
Abbey National Treasury Services
PLC, 5.50% due 02/05/1999 $10,000,000 $9,997,052
Anheuser-Busch, Incorporated,
5.53% due 07/07/1998 5,000,000 4,995,392
Bell Atlantic Financial
Services, 5.50% due 07/16/1998 10,000,000 9,977,083
BellSouth Capital Funding
Corporation, 5.50% due
07/27/1998 24,000,000 23,904,667
Canadian Imperial Bank Commerce,
5.94% due 10/23/1998 15,000,000 15,014,529
General Motors Acceptance
Corporation, 8.375% due
02/03/1999 9,960,000 10,227,725
Goldman Sachs Group LP,
5.51% due 08/10/1998 25,000,000 24,846,722
</TABLE>
The accompanying notes are an integral part of the financial statements.
181
<PAGE> 185
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMERICAL PAPER -CONTINUED
J.P. Morgan & Company,
Incorporated, FRN, 5.61%, due
04/05/1999 $ 15,000,000 $ 14,996,647
Merrill Lynch Company,
Incorporated, FRN, 5.61%, due
04/14/1999 20,000,000 20,000,000
Peoples Security Life Insurance
Company, 5.58% due 08/20/1998 10,000,000 10,000,000
Pfizer, Incorporated,
5.50% due 07/06/1998 14,125,000 14,114,210
RC Willey Home Furnishings,
5.52% due 07/15/1998 10,000,000 9,978,533
Salomon Smith Barney Holdings,
Incorporated, 5.53% due
07/06/1998 20,000,000 19,984,639
Sharp Electronics Corporation,
5.53% due 08/06/1998 18,000,000 17,900,460
Strategic Money Market Trust,
5.625% due 03/05/1998 20,000,000 20,000,000
The Coca-Cola Company,
5.49% due 08/10/1998 20,000,000 19,878,000
Xerox Capital Corporation,
5.50% due 07/16/1998 19,600,000 19,555,083
------------
265,370,742
TOTAL COMMERCIAL PAPER
(Cost: $265,370,742) $265,370,742
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- ------------
<S> <C>
REPURCHASE AGREEMENTS - 0.94%
$4,683,000 Repurchase Agreement with State
Street Bank & Trust Company dated
06/30/1998 at 5.71%, to be
repurchased at $4,683,743 on
07/01/1998, collateralized by
$3,535,000 U.S. Treasury Bonds,
8.75% due 05/15/2017 (valued at
$4,781,088, including interest) $ 4,683,000
------------
TOTAL INVESTMENTS (Money Market Trust)
(Cost: $497,234,248) $497,234,248
============
LIFESTYLE AGGRESSIVE 1000 TRUST
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 202,434 $ 3,491,991
Emerging Growth Trust 277,854 7,021,373
Equity Trust 175,932 3,499,293
Growth Trust 176,376 3,474,614
International Small Cap Trust 419,702 6,971,243
International Stock Trust 813,823 10,595,982
Pilgrim Baxter Growth Trust 1,069,324 14,008,142
Real Estate Securities Trust 421,728 7,106,115
Small Company Value Trust 1,125,287 14,009,821
------------
TOTAL INVESTMENTS (Lifestyle Aggressive
1000 Trust) (Cost: $68,218,387) $ 70,178,574
============
LIFESTYLE GROWTH 820 TRUST
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 928,636 $ 16,018,971
Emerging Growth Trust 637,308 16,104,774
Equity Trust 807,061 16,052,449
Equity-Income Trust 925,954 16,037,521
Growth Trust 809,101 15,939,297
High Yield Trust 1,138,375 16,051,083
International Small Cap Trust 962,657 15,989,726
International Stock Trust 3,733,234 48,606,702
Pilgrim Baxter Growth Trust 2,452,694 32,130,293
Real Estate Securities Trust 967,308 16,299,133
Small Company Value Trust 2,581,046 32,134,020
Strategic Bond Trust 2,705,192 32,110,623
U.S. Government Securities Trust 1,206,949 16,040,356
Value Trust 2,060,177 32,097,554
------------
TOTAL INVESTMENTS (Lifestyle Growth 820
Trust) (Cost: $312,465,694) $321,612,502
============
LIFESTYLE BALANCED 640 TRUST
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Emerging Growth Trust 615,529 $ 15,554,425
Equity Trust 779,484 15,503,946
Equity-Income Trust 894,313 15,489,504
Growth Trust 781,452 15,394,602
High Yield Trust 1,099,472 15,502,551
</TABLE>
The accompanying notes are an integral part of the financial statements.
182
<PAGE> 186
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - JUNE 30, 1998 (UNAUDITED) - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
INVESTMENT COMPANIES - CONTINUED
International Stock Trust 2,403,814 $ 31,297,656
Investment Quality Bond Trust 2,595,232 30,987,075
Pilgrim Baxter Growth Trust 1,184,435 15,516,094
Quantitative Equity Trust 678,080 15,521,246
Real Estate Securities Trust 934,252 15,742,152
Small Company Value Trust 2,492,844 31,035,908
Strategic Bond Trust 2,612,753 31,013,378
U.S. Government Securities Trust 2,331,410 30,984,437
Value Trust 1,989,789 31,000,918
------------
TOTAL INVESTMENTS (Lifestyle Balanced
640 Trust) (Cost: $305,997,643) $310,543,892
============
LIFESTYLE MODERATE 460 TRUST
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 561,647 $ 9,688,417
Equity-Income Trust 560,025 9,699,634
High Yield Trust 344,248 4,853,902
International Stock Trust 752,642 9,799,403
Investment Quality Bond Trust 1,218,864 14,553,239
Money Market Trust 969,403 9,694,033
Quantitative Equity Trust 212,309 4,859,755
Strategic Bond Trust 818,062 9,710,395
U.S. Government Securities Trust 1,094,959 14,552,000
Value Trust 623,010 9,706,493
------------
TOTAL INVESTMENTS (Lifestyle Moderate
460 Trust) (Cost: $94,996,326) $ 97,117,271
============
LIFESTYLE CONSERVATIVE 280 TRUST
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 128,095 $ 2,209,635
Equity-Income Trust 255,450 4,424,386
Investment Quality Bond Trust 926,620 11,063,844
Money Market Trust 884,368 8,843,676
Quantitative Equity Trust 193,685 4,433,452
Strategic Bond Trust 186,575 2,214,647
U.S. Government Securities Trust 832,423 11,062,902
------------
TOTAL INVESTMENTS (Lifestyle
Conservative 280 Trust) (Cost:
$43,925,299) $ 44,252,542
============
</TABLE>
Key to Currency Abbreviations
AUD - Australian Dollar
BEF - Belgian Franc
CAD - Canadian Dollar
DKK - Danish Krone
ECU - European Currency Unit
FIM - Finnish Markka
FRF - French Franc
DEM - German Deustche Mark
(pound
sterling) - Great British Pound
HKD - Hong Kong Dollar
IDR - Indonesian Rupiah
IEP - Irish Punt
ITL - Italian Lira
KRW - Korean Wan
(YEN) - Japanese Yen
MYR - Malaysian Ringgit
NLG - Netherland Guilder
NZD - New Zealand Dollar
SGD - Singapore Dollar
ZAR - South African Rand
ESP - Spanish Peseta
SEK - Swedish Krone
CHF - Swiss Franc
THB - Thailand Baht
Key to Security Abbreviations and Legend
ADR - American Depository Receipt
ADS - American Depository Shares
FRN - Floating Rate Note (Rate effective as of June 30, 1998).
GDR - Global Depository Receipt
GTD - Guaranteed
IO - Interest Only (Carries notional principal amount)
REIT - Real Estate Investment Trust
REMIC - Real Estate Mortgage Investment Conduit
TBA - To Be Announced
VR - Variable Rate Demand Note (Rate effective as of June 30, 1998)
(SUPERIOR
CARET) - Non-Income producing, issuer is in bankruptcy and is in default of
interest payments.
* - Non-Income producing
** - Purchased on a forward commitment (Note 2)
*** - At June 30, 1998 a portion of this security was pledged to cover
forward commitments purchased.
**** - At June 30, 1998 a portion of this security was pledged to cover
margin requirements for open futures contracts.
The accompanying notes are an integral part of the financial statements.
183
<PAGE> 187
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. ORGANIZATION OF THE TRUST. The Manufacturers Investment Trust (the "Trust"),
formerly NASL Series Trust, is a no-load, open-end management investment company
organized as a Massachusetts business trust. It is a series company, which means
that it has several portfolios, each with a stated investment objective which it
pursues through separate investment policies. The Trust currently offers the
following thirty six Portfolios: The Pacific Rim Emerging Markets Trust
("Pacific Rim Emerging Markets"), the Science & Technology Trust ("Science &
Technology"), the International Small Cap Trust ("International Small Cap"), the
Emerging Growth Trust ("Emerging Growth"), the Pilgrim Baxter Growth Trust
("Pilgrim Baxter Growth"), the Small/Mid Cap Trust ("Small/Mid Cap"), the
International Stock Trust ("International Stock"), the Worldwide Growth Trust
("Worldwide Growth"), the Global Equity Trust ("Global Equity"), the Small
Company Value Trust ("Small Company Value"), the Equity Trust ("Equity"), the
Growth Trust ("Growth"), the Quantitative Equity Trust ("Quantitative Equity"),
the Equity Index Trust ("Equity Index"), the Blue Chip Growth Trust ("Blue Chip
Growth"), the Real Estate Securities Trust ("Real Estate Securities"), the Value
Trust ("Value"), the International Growth and Income Trust ("International
Growth and Income"), the Growth and Income Trust ("Growth and Income"), the
Equity-Income Trust ("Equity-Income"), the Balanced Trust ("Balanced"), the
Aggressive Asset Allocation Trust ("Aggressive Asset Allocation"), the Moderate
Asset Allocation Trust ("Moderate Asset Allocation"), the Conservative Asset
Allocation Trust ("Conservative Asset Allocation"), the High Yield Trust ("High
Yield"), the Strategic Bond Trust ("Strategic Bond"), the Global Government Bond
Trust ("Global Government Bond"), the Capital Growth Bond Trust ("Capital Growth
Bond"), the Investment Quality Bond Trust ("Investment Quality Bond"), the U.S.
Government Securities Trust ("U.S. Government Securities"), the Money Market
Trust ("Money Market"), the Lifestyle Aggressive 1000 Trust ("Lifestyle
Aggressive 1000"), the Lifestyle Growth 820 Trust ("Lifestyle Growth 820"), the
Lifestyle Balanced 640 Trust ("Lifestyle Balanced 640"), the Lifestyle Moderate
460 Trust ("Lifestyle Moderate 460") and the Lifestyle Conservative 280 Trust
("Lifestyle Conservative 280"). Each of the Portfolios with the exception of
Emerging Growth, Global Government Bond, Lifestyle Aggressive 1000, Lifestyle
Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle
Conservative 280 is diversified for purposes of the Investment Company Act of
1940, as amended.
Shares of the Portfolios are presently offered only to Separate Accounts A, B
and C, separate accounts of The Manufacturers Life Insurance Company of North
America ("MNA"), to Separate Accounts A, D and E, separate accounts of The
Manufacturers Life Insurance Company of New York ("MNY"), to Separate Accounts
One, Two, Three, and Four, separate accounts of The Manufacturers Life Insurance
Company of America ("Manulife America") and in the case of certain Portfolios,
to unregistered separate accounts issued by The Manufacturers Life Insurance
Company (U.S.A.) ("Manulife USA"). MNA is controlled by The Manufacturers Life
Insurance Company ("Manulife"), a mutual life insurance company based in
Toronto, Canada. MNY is a wholly-owned subsidiary of MNA. Manulife America and
Manulife USA are wholly-owned subsidiaries of Manulife.
At June 30, 1998, Manulife America owned seed money shares in Pacific Rim
Emerging Markets, International Stock, and Equity Index. Manulife USA owned seed
money shares in Science & Technology, Pilgrim Baxter Growth, Worldwide Growth,
Value and High Yield.
Manufacturers Securities Services, LLP ("MSS"), formerly NASL Financial
Services, a wholly-owned subsidiary of MNA, serves as investment adviser for the
Trust (See Note 6). MSS is also the principal underwriter of the variable
contracts issued by MNA and MNY.
NAME CHANGE. Effective October 1, 1997, the Trustees, including a majority of
Trustees who are not interested persons of the Trust, voted to approve a name
change for the Trust from NASL Series Trust to Manufacturers Investment Trust.
NEW PORTFOLIOS. On January 1, 1997, Science & Technology, Pilgrim Baxter Growth,
Worldwide Growth, Value and High Yield commenced operations. In addition, also
effective January 1, 1997, Emerging Growth, International Stock and Balanced
were reorganized whereby all assets and liabilities of these existing Portfolios
were transferred to form new Portfolios of the Trust. Concurrent with this
reorganization, the subadvisers to these Portfolios were changed. T. Rowe Price
Associates, Inc. ("T. Rowe Price") is the subadviser to Science & Technology,
Warburg Pincus Asset Management, Inc. ("Warburg Pincus") is the subadviser to
Emerging Growth, Pilgrim Baxter & Associates ("PBHG") is the subadviser to
Pilgrim Baxter Growth, Rowe Price-Fleming International, Inc. ("Price-Fleming")
is the subadviser to International Stock, Founders Asset Management, Inc.
("Founders") is the subadviser to Worldwide Growth and Balanced and Miller
Anderson & Sherrerd, LLP ("MAS") is the subadviser to Value and High Yield. On
January 7, 1997, Lifestyle Aggressive 1000, Lifestyle Growth 820, Lifestyle
Balanced 640, Lifestyle Moderate 460 and Lifestyle Conservative 280 commenced
operations. Manufacturers Adviser Corporation ("MAC") is the subadviser to
Lifestyle Aggressive 1000, Lifestyle Growth 820, Lifestyle Balanced 640,
Lifestyle Moderate 460 and Lifestyle Conservative 280. Small Company Value,
managed by Rosenberg Institutional Equity Management ("Rosenberg") commenced
operations on October 1, 1997.
184
<PAGE> 188
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES. The policies described below are followed by
the Trust in the preparation of the financial statements.
BASIS OF PRESENTATION. The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, all
adjustments necessary for a fair presentation of the financial position and the
results of operations have been included. Results for the six months ended June
30, 1998 are not necessarily indicative of annual results. Certain prior year
balances have been reclassified to conform with current year presentation.
SECURITY VALUATION. Securities held by Money Market and short term instruments
with remaining maturities of 60 days or less held by the other Portfolios of the
Trust are valued at amortized cost basis, which approximates market value. All
other securities held by the Portfolios are valued at the last sale price as of
the close of business on a principal securities exchange (domestic or foreign)
or, lacking any sales, at the closing bid price. Securities traded only in the
over-the-counter market are valued at the last bid price quoted by brokers
making markets in the securities at the close of trading.
Portfolio securities for which there are no such quotations, principally debt
securities, are valued on the basis of the valuation provided by a pricing
service which utilizes both dealer-supplied and electronic data processing
techniques. Other assets and securities for which no such quotations are readily
available are valued at their fair value as determined in good faith under
consistently applied procedures established by and under the general supervision
of the Board of Trustees.
FOREIGN CURRENCY TRANSLATIONS. The accounting records of the Trust are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of securities, other assets and other liabilities at
the current rate of exchange of such currencies against U.S.
dollars; and
(ii) purchases and sales of securities, income and expenses at the rate
of exchange quoted on the respective dates of such transactions.
Gains and losses that arise from changes in foreign exchange rates have been
segregated from gains and losses that arise from changes in the market prices of
investments. These gains and losses are included with gains and losses on
foreign currency and forward foreign currency contracts in the Statements of
Operations.
FORWARD FOREIGN CURRENCY CONTRACTS. All portfolios with the exception of Equity
Index, Real Estate Securities, Investment Quality Bond, U.S. Government
Securities, Money Market, Lifestyle Aggressive 1000, Lifestyle Growth 820,
Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle Conservative 280
may purchase and sell forward foreign currency contracts in order to hedge a
specific transaction or portfolio position. Forward foreign currency contracts
are valued at forward foreign currency exchange rates and marked to market
daily.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held at the end of the period, the resulting net unrealized
appreciation (depreciation) and related net receivable or payable amount are
determined using forward foreign currency exchange rates supplied by a quotation
service. The Portfolios could be exposed to risks if the counterparties to the
contracts are unable to meet the terms of their contracts or if the value of the
forward foreign currency contract changes unfavorably.
Net realized gains (losses) on foreign currency and forward foreign currency
contracts shown in the Statements of Operations, include net gains or losses
realized by a Portfolio on contracts which have matured or which the Portfolio
has terminated by entering into an offsetting commitment with the same broker.
FUTURES. All Portfolios with the exception of Real Estate Securities, Investment
Quality Bond, Money Market, Lifestyle Aggressive 1000, Lifestyle Growth 820,
Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle Conservative 280
may purchase and sell financial futures contracts and options on those
contracts. The Portfolios invest in contracts based on financial instruments
such as U.S. Treasury Bonds or Notes or on securities indices such as the S&P
500 Index, in order to hedge against a decline in the value of securities owned
by the Portfolios.
When a Portfolio sells a futures contract based on a financial instrument, the
Portfolio becomes obligated to deliver that kind of instrument at an agreed upon
date for a specified price. The Portfolio realizes a gain or loss depending on
whether the price of an offsetting purchase is less or more than the price of
the initial sale or on whether the price of an offsetting sale is more or less
than the price of the initial purchase . The Portfolios could be exposed to
risks if it could not close out futures positions because of an illiquid
secondary market or the inability of counterparties to meet the terms of their
contracts. Upon entering into futures contracts, the Portfolio is required to
deposit with a broker an amount, initial margin, which typically represents 5%
of the purchase price indicated in the futures contract.
185
<PAGE> 189
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Payments to and from the broker, known as variation margin, are required to be
made on a daily basis as the price of the futures contract fluctuates, making
the long or short positions in the contract more or less valuable. If the
position is closed out by taking an opposite position prior to the settlement
date of the futures contract, a final determination of variation margin is made,
cash is required to be paid to or released by the broker, and the Portfolio
realizes a gain or loss.
The following is a summary of open futures contracts at June 30, 1998:
<TABLE>
<CAPTION>
SALES OF FUTURES CONTRACTS
----------------------------------------------------------------
NUMBER AGGREGATE
EXPIRATION OF OPEN MARKET VALUE UNREALIZED
DATE CONTRACTS OF CONTRACTS LOSS
------------ ---------- --------------- ------------
<S> <C> <C> <C> <C>
EQUITY INDEX:
S&P 500 Futures.............. September 1998 -- --
AGGRESSIVE ASSET ALLOCATION:
S&P 500 Futures.............. September 1998 3 $857,250 ($36,393)
CAC 40 Futures............... September 1998 -- --
DAX 30 Futures............... September 1998 -- --
FTSE 100 Futures............. September 1998 -- --
NIKKEI 300 Futures........... September 1998 -- --
MODERATE ASSET ALLOCATION:
S&P 500 Futures.............. September 1998 6 1,714,500 (72,787)
CONSERVATIVE ASSET ALLOCATION:
S&P 500 Futures.............. September 1998 1 285,756 (12,131)
HIGH YIELD
Long Gilt.................... September 1998 8 POUND STERLING 869,440 (1,969)
</TABLE>
<TABLE>
<CAPTION>
PURCHASES OF FUTURES CONTRACTS
----------------------------------
NUMBER AGGREGATE
OF OPEN MARKET VALUE UNREALIZED
CONTRACTS OF CONTRACTS GAIN/LOSS
--------- -------------------------- ------------
<S> <C> <C> <C>
EQUITY INDEX:
S&P 500 Futures............. 27 $ 7,715,250 $270,571
AGGRESSIVE ASSET ALLOCATION:
S&P 500 Futures............. -- --
CAC 40 Futures.............. 8 FRF 6,789,600 123,367
DAX 30 Futures.............. 5 DEM 2,937,500 258,996
FTSE 100 Futures............ 12 POUND STERLING 706,920 (8,942)
NIKKEI 300 Futures.......... 39 YEN 94,848,000 (15,482)
MODERATE ASSET ALLOCATION:
S&P 500 Futures............. -- --
CONSERVATIVE ASSET ALLOCATION:
S&P 500 Futures............. -- --
HIGH YIELD
Long Gilt................... -- --
</TABLE>
FORWARD COMMITMENTS. All Portfolios with the exception of Lifestyle Aggressive
1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 may purchase debt securities on a when issued or
forward delivery basis, which means that the obligations will be delivered to
the Portfolios of the Trust at a future date, which may be a month or more after
the date of commitment. The price of the underlying securities and the date when
the securities will be delivered and paid for are fixed at the time the
transaction is negotiated. The value of the securities underlying a forward
commitment to purchase securities, and the subsequent fluctuations in their
value, are taken into account when determining the Portfolio's net asset value
starting on the day the Portfolio agrees to purchase the securities. At June 30,
1998, the forward commitments in Strategic Bond and U.S. Government Securities
were valued at $56,499,749 and $71,882,173, respectively.
SECURITIES LENDING. All Portfolios with the exception of Lifestyle Aggressive
1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 may lend securities in amounts up to 33 1/3% of its
total non-cash assets to brokers, dealers and other financial institutions,
provided such loans are callable at any time and are at all times fully secured
by cash, cash equivalents or securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, marked to market to the value
of the loaned securities on a daily basis. The Portfolios may bear the risk of
delay in recovery of, or even of rights in, the securities loaned should the
borrower of the securities fail financially. Consequently, loans of Portfolio
securities will only be made to firms deemed by the subadvisers to be
creditworthy. The Portfolios receive compensation for lending its securities
either in the form of fees or by retaining a portion of interest on the
investment of any cash received as collateral. Income generated from the
investment of cash collateral is included as interest income in the Statement of
Operations. All collateral received will be in an amount equal to at least 100%
of the market value of the loaned securities and must be maintained at that
level during the period of the loan. During the loan period, the Portfolio
continues to retain rights of ownership, including dividends and interest of the
loaned securities.
At June 30, 1998, the value of the securities loaned amounted to $3,029,088,
$26,688,712, $11,055,651, $51,889,250, $30,527,220, $75,059,246, $27,260,932,
$6,335,817, $123,879,536, $16,782,083, $234,286,271, $23,340,444, $13,720,368,
$3,027,476, $77,622,182, $26,600,788, $10,811,998, $29,473,614, $57,368,575,
$39,498,421, $14,350,244, $28,851,245, $49,164,089, $6,420,831, $11,424,219,
$31,299,967, $20,074,027, $1,234,163, $60,353,773 and $38,429,098 in Pacific Rim
Emerging Markets, Science & Technology, International Small Cap, Emerging
Growth, Pilgrim Baxter Growth, Small/Mid Cap, International Stock, Worldwide
Growth, Global Equity, Small Company Value, Equity, Growth, Quantitative Equity,
Equity Index, Blue Chip Growth, Real Estate Securities, Value, International
Growth and Income, Growth and Income, Equity-Income, Balanced, Aggressive Asset
Allocation,
186
<PAGE> 190
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Moderate Asset Allocation, Conservative Asset Allocation, High Yield, Strategic
Bond, Global Government Bond, Capital Growth Bond, Investment Quality Bond and
U.S. Government Securities, respectively.
At June 30, 1998, the value of collateral amounted to $3,203,518, $27,572,460,
$11,635,753, $54,175,553, $31,537,857, $77,319,495, $28,566,612, $6,576,592,
$130,224,090, $17,449,045, $242,870,601, $24,122,903, $14,232,456, $3,122,824,
$79,909,800, $27,603,151, $11,154,359, $32,407,075, $59,138,837, $40,756,854,
$14,916,924, $29,889,882, $50,973,414, $6,707,621, $11,692,053, $31,987,817,
$20,698,000, $1,270,000, $61,573,772 and $39,208,651 in Pacific Rim Emerging
Markets, Science & Technology, International Small Cap, Emerging Growth, Pilgrim
Baxter Growth, Small/Mid Cap, International Stock, Worldwide Growth, Global
Equity, Small Company Value, Equity, Growth, Quantitative Equity, Equity Index,
Blue Chip Growth, Real Estate Securities, Value, International Growth and
Income, Growth and Income, Equity-Income, Balanced, Aggressive Asset Allocation,
Moderate Asset Allocation, Conservative Asset Allocation, High Yield, Strategic
Bond, Global Government Bond, Capital Growth Bond, Investment Quality Bond and
U.S. Government Securities, respectively.
MORTGAGE DOLLAR ROLLS. Strategic Bond and U.S. Government Securities may enter
into mortgage dollar rolls in which they sell mortgage securities for delivery
currently and simultaneously contract to repurchase similar, but not identical,
securities at the same price on an agreed upon date. The Portfolios receive
compensation as consideration for entering into the commitment to repurchase.
The compensation is recorded as deferred income and amortized to income over the
roll period. As the holder, the counterparty receives all principal and interest
payments, including prepayments, made with respect to the similar security.
Mortgage dollar rolls may be renewed with a new sale and repurchase price with a
cash settlement made at renewal without physical delivery of the securities
subject to the contract.
ORGANIZATION COSTS. Costs incurred by a Portfolio in connection with its
organization, initial registration and public offering of shares are being
amortized on a straight-line basis for International Growth and Income, over a
five-year period beginning with the commencement of operations of each
Portfolio.
FEDERAL INCOME TAXES. The Trust's and Portfolios policy is to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code, as
amended, and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required. Each Portfolio of the
Trust is treated as a separate taxpayer for federal income tax purposes.
DISTRIBUTION OF INCOME AND GAINS. All of the net investment income of Money
Market, Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle
Conservative 280 is declared as a dividend to shareholders of record as of the
close of business each day and is reinvested daily. During any particular year,
net realized gains from investment transactions of each Portfolio, in excess of
available capital loss carryforwards of each Portfolio would be taxable to such
Portfolio if not distributed. Therefore, each Portfolio of the Trust intends to
distribute all of its investment company taxable income and any net realized
capital gains in order to avoid federal income tax. The Portfolios'
distributions are based on income amounts determined in accordance with federal
income tax regulations. The character of distributions made during the year from
net investment income and net realized gains may differ for tax purposes due to
various differences in recording net investment income and realized gains for
financial statement and tax purposes.
EXPENSE ALLOCATION. Expenses not directly attributable to a particular Portfolio
are allocated based on the relative share of net assets of each Portfolio at the
time the expense was incurred, except as discussed in footnote 6.
REPURCHASE AGREEMENTS. Each Portfolio of the Trust may enter into repurchase
agreements. When a Portfolio enters into a repurchase agreement through its
custodian, it receives delivery of securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value is generally at least 102% of the repurchase
amount. Each Portfolio will take constructive receipt of all securities
underlying the repurchase agreements it has entered into until such agreements
expire. If the seller defaults, a Portfolio would suffer a loss to the extent
that proceeds from the sale of underlying securities were less than the
repurchase amount.
CAPITAL ACCOUNTS. The Portfolios report the undistributed net investment income
and accumulated undistributed net realized gain (loss) accounts on a basis
approximating amounts available for future tax distributions (or to offset
future taxable realized gains when a capital loss carryforward is available).
Accordingly, each Portfolio of the Trust may periodically make reclassifications
among certain capital accounts without impacting its net asset value.
OTHER. Investment security transactions are accounted for on a trade date plus
one basis. Interest income is accrued as earned. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Foreign
dividends are recorded on the ex-date or as soon after the ex-date that the
Portfolio is aware of such dividends, net of all taxes. All original issue
discounts are accreted for financial and tax reporting purposes. The Portfolios
use the First In, First Out method for determining realized gain or loss on
187
<PAGE> 191
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
investments for both financial and federal income tax reporting purposes. 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 at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results may differ from these estimates.
3. CAPITAL LOSS CARRYFORWARDS. At December 31, 1997, capital loss carryforwards
available to offset future realized gains were approximately:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYFORWARD
EXPIRATION YEAR
-------------------------------------------------------------------------------
PORTFOLIO 2002 2003 2004 2005
- --------------- ---------- ---- ---------- ----------
<S> <C> <C> <C> <C>
International Small Cap ....... -- -- $ 426,000 $3,982,000
Pilgrim Baxter Growth ......... -- -- -- 4,038,000
Small/Mid Cap ................. -- -- 1,180,000 --
Small Company Value ........... -- -- -- 732,000
Capital Growth Bond ........... $ 644,000 -- 213,000 --
Investment Quality Bond ....... 3,114,000 -- -- --
U.S. Government Securities .... 2,529,000 -- -- 872,000
</TABLE>
4. CAPITAL SHARES. Share activity for the Trust for the six months ended June
30, 1998 was as follows:
<TABLE>
<CAPTION>
SHARES CAPITAL
---------- ------------
<S> <C> <C>
PACIFIC RIM EMERGING MARKETS
Sold ........................... 2,517,515 $ 17,452,828
Redeemed ....................... (1,864,492) (13,028,999)
---------- ------------
Net increase ................. 653,023 $ 4,423,829
========== ============
SCIENCE & TECHNOLOGY
Sold ........................... 2,502,403 $ 38,153,812
Redeemed ....................... (568,698) (8,651,336)
---------- ------------
Net increase ................. 1,933,705 $ 29,502,476
========== ============
INTERNATIONAL SMALL CAP
Sold ........................... 3,549,146 $ 53,988,220
Reinvestment of distributions .. 27,503 437,568
Redeemed ....................... (3,499,797) (53,282,728)
---------- ------------
Net increase ................. 76,852 $ 1,143,060
========== ============
EMERGING GROWTH
Sold ........................... 1,514,903 $ 37,139,606
Reinvestment of distributions .. 158,191 4,130,364
Redeemed ....................... (1,031,518) (25,200,064)
---------- ------------
Net increase ................. 641,576 $ 16,069,906
========== ============
PILGRIM BAXTER GROWTH
Sold ........................... 3,435,691 $ 43,762,403
Redeemed ....................... (1,448,232) (18,593,952)
---------- ------------
Net increase ................. 1,987,459 $ 25,168,451
========== ============
SMALL/MID CAP
Sold ........................... 2,747,027 $ 46,382,744
Redeemed ....................... (1,888,889) (32,071,413)
---------- ------------
Net increase ................. 858,138 $ 14,311,331
========== ============
</TABLE>
188
<PAGE> 192
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
---------- ------------
<S> <C> <C>
INTERNATIONAL STOCK
Sold ........................... 8,036,606 $ 101,812,647
Reinvestment of distributions .. 739 9,935
Redeemed ....................... (5,104,389) (64,996,218)
----------- -------------
Net increase .................. 2,932,956 $ 36,826,364
=========== =============
WORLDWIDE GROWTH
Sold ........................... 558,993 $ 8,498,345
Redeemed ....................... (103,751) (1,604,418)
----------- -------------
Net increase ................. 455,242 $ 6,893,927
=========== =============
GLOBAL EQUITY
Sold ........................... 2,182,502 $ 45,229,689
Reinvestment of distributions .. 3,005,041 64,337,927
Redeemed ....................... (2,406,921) (49,805,467)
----------- -------------
Net increase ................. 2,780,622 $ 59,762,149
=========== =============
SMALL COMPANY VALUE
Sold ........................... 5,172,290 $ 65,156,824
Reinvestment of distributions .. 4,241 56,194
Redeemed ....................... (580,445) (7,317,453)
----------- -------------
Net increase ................. 4,596,086 $ 57,895,565
=========== =============
EQUITY
Sold ........................... 3,277,485 $ 68,697,738
Reinvestment of distributions .. 14,385,769 293,469,692
Redeemed ....................... (5,476,473) (115,780,037)
----------- -------------
Net increase ................. 12,186,781 $ 246,387,393
=========== =============
GROWTH
Sold ........................... 2,246,562 $ 41,552,938
Reinvestment of distributions .. 443,371 8,441,791
Redeemed ....................... (206,171) (3,795,235)
----------- -------------
Net increase ................. 2,483,762 $ 46,199,494
=========== =============
QUANTITATIVE EQUITY
Sold ........................... 1,199,182 $ 27,749,856
Reinvestment of distributions .. 1,017,210 23,172,050
Redeemed ....................... (289,576) (6,774,971)
----------- -------------
Net increase ................. 1,926,816 $ 44,146,935
=========== =============
EQUITY INDEX
Sold ........................... 1,068,766 $ 14,493,526
Reinvestment of distributions .. 50,053 707,255
Redeemed ....................... (193,433) (2,528,284)
----------- -------------
Net increase ................. 925,386 $ 12,672,497
=========== =============
BLUE CHIP GROWTH
Sold ........................... 7,355,675 $ 120,867,949
Reinvestment of distributions .. 932,125 15,836,800
Redeemed ....................... (3,729,286) (61,026,962)
----------- -------------
Net increase ................. 4,558,514 $ 75,677,787
=========== =============
REAL ESTATE SECURITIES
Sold ........................... 1,789,828 $ 33,663,264
Reinvestment of distributions .. 1,208,641 21,139,142
Redeemed ....................... (534,683) (10,029,735)
----------- -------------
Net increase ................. 2,463,786 $ 44,772,671
=========== =============
</TABLE>
189
<PAGE> 193
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
---------- ------------
<S> <C> <C>
VALUE
Sold .......................... 5,399,547 $ 83,869,760
Redeemed ...................... (295,692) (4,634,715)
----------- -------------
Net increase ................ 5,103,855 $ 79,235,045
=========== =============
INTERNATIONAL GROWTH AND INCOME
Sold .......................... 10,241,349 $ 123,220,091
Reinvestment of distributions . 961,602 12,000,793
Redeemed ...................... (9,608,341) (14,829,600)
----------- -------------
Net increase ................ 1,594,610 $ 120,391,284
=========== =============
GROWTH AND INCOME
Sold .......................... 6,736,043 $ 172,606,058
Reinvestment of distributions . 4,443,994 114,877,243
Redeemed ...................... (1,823,246) (47,110,257)
----------- -------------
Net increase ................ 9,356,791 $ 240,373,044
=========== =============
EQUITY-INCOME
Sold .......................... 5,644,145 $ 99,886,888
Reinvestment of distributions . 3,319,011 59,543,058
Redeemed ...................... (2,701,156) (47,896,925)
----------- -------------
Net increase ................ 6,262,000 $ 111,533,021
=========== =============
BALANCED
Sold .......................... 1,156,752 $ 22,641,624
Reinvestment of distributions . 1,349,790 24,998,103
Redeemed ...................... (212,935) (4,195,997)
----------- -------------
Net increase ................ 2,293,607 $ 43,443,730
=========== =============
AGGRESSIVE ASSET ALLOCATION
Sold .......................... 307,583 $ 4,559,711
Reinvestment of distributions . 1,988,692 29,094,564
Redeemed ...................... (1,428,280) (21,067,931)
----------- -------------
Net increase ................ 867,995 $ 12,586,344
=========== =============
MODERATE ASSET ALLOCATION
Sold .......................... 107,483 $ 1,462,299
Reinvestment of distributions . 5,317,384 68,115,685
Redeemed ...................... (3,267,825) (42,901,053)
----------- -------------
Net increase ................ 2,157,042 $ 26,676,931
=========== =============
CONSERVATIVE ASSET ALLOCATION
Sold .......................... 265,705 $ 3,128,033
Reinvestment of distributions . 1,646,332 18,570,627
Redeemed ...................... (2,057,004) (24,330,835)
----------- -------------
Net decrease ................ (144,967) ($ 2,632,175)
=========== =============
HIGH YIELD
Sold .......................... 5,058,307 $ 70,793,273
Reinvestment of distributions . 24,312 343,765
Redeemed ...................... (294,025) (4,108,384)
----------- -------------
Net increase ................ 4,788,594 $ 67,028,654
=========== =============
STRATEGIC BOND
Sold .......................... 5,486,889 $ 67,698,760
Reinvestment of distributions . 2,251,302 26,813,006
Redeemed ...................... (1,820,015) (22,336,554)
----------- -------------
Net increase ................ 5,918,176 $ 72,175,212
=========== =============
</TABLE>
190
<PAGE> 194
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
---------- ------------
<S> <C> <C>
GLOBAL GOVERNMENT BOND
Sold ........................ 293,678 $ 4,151,115
Reinvestment of distributions 1,512,137 19,914,849
Redeemed .................... (1,651,397) (22,717,734)
----------- -------------
Net increase .............. 154,418 $ 1,348,230
=========== =============
CAPITAL GROWTH BOND
Sold ........................ 493,877 $ 5,815,395
Reinvestment of distributions 272,441 3,103,100
Redeemed .................... (268,292) (3,154,330)
----------- -------------
Net increase .............. 498,026 $ 5,764,165
=========== =============
INVESTMENT QUALITY BOND
Sold ........................ 5,277,147 $ 63,216,686
Reinvestment of distributions 990,654 11,620,376
Redeemed .................... (1,175,634) (14,156,271)
----------- -------------
Net increase .............. 5,092,167 $ 60,680,791
=========== =============
U.S. GOVERNMENT SECURITIES
Sold ........................ 4,207,264 $ 56,740,923
Reinvestment of distributions 996,467 13,043,750
Redeemed .................... (2,331,922) (31,333,850)
----------- -------------
Net increase .............. 2,871,809 $ 38,450,823
=========== =============
MONEY MARKET
Sold ........................ 49,467,106 $ 494,671,057
Reinvestment of distributions 1,234,146 12,341,457
Redeemed .................... (44,551,895) (445,518,945)
----------- -------------
Net increase .............. 6,149,357 $ 61,493,569
=========== =============
LIFESTYLE AGGRESSIVE 1000
Sold ........................ 1,665,286 $ 23,326,152
Reinvestment of distributions 221,591 3,164,313
Redeemed .................... (478,566) (6,791,252)
----------- -------------
Net increase .............. 1,408,311 $ 19,699,213
=========== =============
LIFESTYLE GROWTH 820
Sold ........................ 6,326,912 $ 90,146,778
Reinvestment of distributions 991,494 14,337,008
Redeemed .................... (343,607) (4,985,235)
----------- -------------
Net increase .............. 6,974,799 $ 99,498,551
=========== =============
LIFESTYLE BALANCED 640
Sold ........................ 8,211,376 $ 113,533,748
Reinvestment of distributions 963,401 13,439,938
Redeemed .................... (266,660) (3,766,658)
----------- -------------
Net increase .............. 8,908,117 $ 123,207,028
=========== =============
LIFESTYLE MODERATE 460
Sold ........................ 3,291,717 $ 45,023,256
Reinvestment of distributions 228,386 3,139,778
Redeemed .................... (372,774) (5,057,521)
----------- -------------
Net increase .............. 3,147,329 $ 43,105,513
=========== =============
</TABLE>
191
<PAGE> 195
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
---------- ------------
<S> <C> <C>
LIFESTYLE CONSERVATIVE 280
Sold ........................ 1,808,903 $ 23,685,460
Reinvestment of distributions 132,403 1,715,028
Redeemed .................... (57,116) (753,667)
---------- ------------
Net increase .............. 1,884,190 $ 24,646,821
========== ============
</TABLE>
5. PURCHASES AND SALES OF SECURITIES. The following summarizes the securities
transactions (except for short-term investments) for the Portfolios (with the
exception of Money Market) for the six months ended June 30, 1998:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------------- ----------------------------------
U.S. U.S.
PORTFOLIO GOVERNMENT OTHER ISSUES GOVERNMENT OTHER ISSUES
--------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets .. -- $ 11,234,047 -- $ 5,902,257
Science & Technology .......... -- 75,561,557 -- 47,814,293
International Small Cap ....... -- 34,844,155 -- 30,544,160
Emerging Growth ............... -- 117,954,029 -- 105,948,840
Pilgrim Baxter Growth ......... -- 154,721,484 -- 133,123,974
Small/Mid Cap ................. -- 235,616,905 -- 205,695,870
International Stock ........... -- 66,919,359 -- 21,246,732
Worldwide Growth .............. -- 15,925,564 -- 10,767,076
Global Equity ................. -- 128,154,077 -- 129,255,377
Small Company Value ........... -- 109,545,085 -- 51,187,787
Equity ........................ -- 667,322,307 -- 725,400,056
Growth ........................ -- 135,790,637 -- 87,643,559
Quantitative Equity ........... -- 253,366,331 -- 228,427,034
Equity Index .................. -- 11,469,992 -- 133,863
Blue Chip Growth .............. -- 232,696,087 -- 167,248,233
Real Estate Securities ........ -- 105,726,769 -- 78,215,460
Value ......................... -- 102,684,283 -- 35,068,417
International Growth and Income -- 239,857,149 -- 221,949,132
Growth and Income ............. -- 226,314,776 -- 80,688,407
Equity-Income ................. -- 170,502,125 -- 104,418,175
Balanced ...................... $ 33,873,359 144,058,294 $ 38,418,528 139,260,757
Aggressive Asset Allocation ... 6,373,463 63,103,698 1,319,769 78,832,936
Moderate Asset Allocation ..... 128,882,755 147,278,082 108,342,401 191,263,725
Conservative Asset Allocation . 104,423,583 28,133,396 57,453,531 95,083,757
High Yield .................... -- 126,261,436 -- 63,180,444
Strategic Bond ................ 378,627,050 188,887,705 370,971,725 138,433,754
Global Government Bond ........ -- 103,045,010 -- 119,533,487
Capital Growth Bond ........... 9,804,550 -- -- 6,003,121
Investment Quality Bond ....... 49,993,561 45,911,185 17,088,013 20,511,818
U.S. Government Securities .... 543,348,210 -- 495,993,087 --
Lifestyle Aggressive 1000 ..... -- 32,587,436 -- 14,463,574
Lifestyle Growth 820 .......... -- 132,688,928 -- 38,737,334
Lifestyle Balanced 640 ........ -- 162,582,395 -- 42,122,760
Lifestyle Moderate 460 ........ -- 55,961,290 -- 13,227,746
Lifestyle Conservative 280 .... -- 30,352,747 -- 5,841,408
</TABLE>
Purchases and sales for Money Market for the six months ended June 30, 1998 were
$5,514,370,347 and $5,457,161,942, respectively.
192
<PAGE> 196
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
PURCHASES AND SALES OF SECURITIES - CONTINUED
At June 30, 1998, tax basis net unrealized appreciation (depreciation) was equal
to the aggregate gross unrealized appreciation for all securities in which there
was an excess of market value over tax cost and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
market value as follows:
<TABLE>
<CAPTION>
TAX BASIS NET
UNREALIZED TAX BASIS TAX BASIS
TAX BASIS APPRECIATION UNREALIZED UNREALIZED
PORTFOLIO COST (DEPRECIATION) APPRECIATION DEPRECIATION
--------- ---- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $33,798,637 ($6,618,330) $3,713,780 $10,332,110
Science & Technology................ 133,092,376 35,257,254 41,573,849 6,316,595
International Small Cap............. 133,738,657 44,488,841 47,836,721 3,347,880
Emerging Growth..................... 311,928,085 102,469,955 117,918,398 15,448,443
Pilgrim Baxter Growth............... 150,123,027 5,199,192 12,035,548 6,836,356
Small/Mid Cap ...................... 362,729,304 136,162,613 138,706,926 2,544,313
International Stock................. 211,676,357 47,637,123 58,385,825 10,748,702
Worldwide Growth.................... 37,935,215 9,868,182 10,766,440 898,258
Global Equity....................... 889,523,472 329,210,034 378,373,512 49,163,478
Small Company Value................. 142,445,961 19,218,872 27,912,408 8,693,536
Equity.............................. 1,769,933,386 364,392,535 452,772,202 88,379,667
Growth.............................. 226,313,750 61,670,536 65,045,566 3,375,030
Quantitative Equity................. 214,131,611 32,736,570 36,383,418 3,646,848
Equity Index........................ 43,444,144 7,386,424 8,288,652 902,228
Blue Chip Growth.................... 740,076,096 243,978,582 250,175,191 6,196,609
Real Estate Securities.............. 208,348,737 23,102,847 31,219,637 8,116,790
Value............................... 236,383,631 16,914,015 28,873,350 11,959,335
International Growth and Income..... 258,004,867 44,312,114 58,809,659 14,497,545
Growth and Income................... 1,369,817,523 705,879,424 723,351,647 17,472,223
Equity-Income....................... 907,225,170 226,882,844 246,955,105 20,072,261
Balanced............................ 213,159,476 28,379,462 30,287,023 1,907,561
Aggressive Asset Allocation......... 230,375,602 88,978,866 95,837,950 6,859,084
Moderate Asset Allocation........... 574,300,838 156,507,973 168,454,923 11,946,950
Conservative Asset Allocation....... 183,808,273 24,315,470 26,150,038 1,834,568
High Yield.......................... 175,244,404 10,862,298 14,337,554 3,475,256
Strategic Bond...................... 504,268,264 32,546,698 41,676,031 9,129,333
Global Government Bond.............. 211,305,894 16,310,090 23,391,180 7,081,090
Capital Growth Bond................. 56,891,872 3,411,660 3,437,949 26,289
Investment Quality Bond............. 299,350,245 65,982,347 67,372,593 1,390,246
U.S. Government Securities.......... 390,982,053 42,732,805 43,118,433 385,628
Lifestyle Aggressive 1000........... 68,343,614 1,834,961 2,898,314 1,063,353
Lifestyle Growth 820................ 312,711,806 8,900,695 12,562,085 3,661,390
Lifestyle Balanced 640.............. 306,161,769 4,382,123 7,429,743 3,047,620
Lifestyle Moderate 460.............. 95,043,060 2,074,212 2,277,027 202,815
Lifestyle Conservative 280.......... 43,955,111 297,431 365,875 68,444
</TABLE>
193
<PAGE> 197
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
6. INVESTMENT ADVISORY AGREEMENTS. Effective March 20, 1987, the Trust entered
into an Investment Advisory Agreement with MSS (the "Adviser"), a wholly-owned
subsidiary of MNA and the principal underwriter of the variable annuity
contracts issued by MNA and MNY. The Adviser is responsible for managing the
corporate and business affairs of the Trust and for selecting and compensating
subadvisers to handle the investment and reinvestment of the assets of each
Portfolio of the Trust, subject to the supervision of the Trust's Board of
Trustees. As compensation for its services, the Adviser receives an advisory fee
from the Trust based on the average daily net assets of each Portfolio, except
for the Lifestyle Trusts for which the Adviser makes no charge. Advisory fees
charged to each Portfolio were as follows:
<TABLE>
<CAPTION>
PORTFOLIO FEE
--------- ---
<S> <C>
Pacific Rim Emerging Markets...................... .850%
Science & Technology.............................. 1.100%
International Small Cap........................... 1.100%
Emerging Growth................................... 1.050%
Pilgrim Baxter Growth............................. 1.050%
Small/Mid Cap..................................... 1.000%
International Stock............................... 1.050%
Worldwide Growth.................................. 1.000%
Global Equity..................................... .900%
Small Company Value............................... 1.050%
Equity............................................ .750%
Growth............................................ .850%
Quantitative Equity............................... .700%
Equity Index...................................... .250%
Blue Chip Growth.................................. .925%
Real Estate Securities............................ .700%
Value............................................. .800%
International Growth and Income................... .950%
Growth and Income................................. .750%
Equity-Income..................................... .800%
Balanced.......................................... .800%
Aggressive Asset Allocation....................... .750%
Moderate Asset Allocation......................... .750%
Conservative Asset Allocation..................... .750%
High Yield........................................ .775%
Strategic Bond.................................... .775%
Global Government Bond............................ .800%
Capital Growth Bond............................... .650%
Investment Quality Bond........................... .650%
U.S. Government Securities........................ .650%
Money Market...................................... .500%
</TABLE>
For the six months ended June 30, 1998, the Adviser paid aggregate subadvisory
fees of $16,887,202 and retained net investment advisory fees after payment of
subadvisory fees of $29,085,638, allocated among the portfolios as follows:
<TABLE>
<CAPTION>
FEE AS A % OF FEE AS A % OF
AVERAGE AVERAGE
FEE ANNUAL NET ASSETS FEE ANNUAL NET
PAID TO PAID TO RETAINED ASSETS RETAINED
PORTFOLIO SUBADVISER SUBADVISER BY ADVISER BY ADVISER
- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $50,761 .400% $57,105 .450%
Science & Technology................ 265,752 .600% 221,461 .500%
International Small Cap............. 438,486 .620% 342,677 .480%
Emerging Growth..................... 792,730 .550% 720,665 .500%
Pilgrim Baxter Growth............... 331,139 .600% 248,354 .450%
Small/Mid Cap....................... 742,452 .496% 755,357 .504%
International Stock................. 477,471 .545% 441,909 .505%
</TABLE>
194
<PAGE> 198
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS, CONTINUED
<TABLE>
<CAPTION>
FEE AS A % OF FEE AS A % OF
AVERAGE AVERAGE
FEE ANNUAL NET FEE ANNUAL NET
PAID TO ASSETS PAID TO RETAINED ASSETS RETAINED
PORTFOLIO SUBADVISER SUBADVISER BY ADVISER BY ADVISER
- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Worldwide Growth.................... $88,739 .600% $59,159 .400%
Global Equity....................... 1,741,386 .370% 2,497,288 .530%
Small Company Value................. 287,798 .588% 226,427 .462%
Equity.............................. 1,841,676 .231% 4,134,813 .519%
Growth.............................. 448,969 .444% 409,830 .406%
Quantitative Equity................. 227,747 .237% 444,686 .463%
Equity Index........................ 17,949 .100% 26,924 .150%
Blue Chip Growth.................... 1,643,464 .412% 2,046,352 .513%
Real Estate Securities.............. 202,401 .240% 388,721 .460%
Value............................... 309,263 .320% 461,281 .480%
International Growth and Income..... 517,619 .460% 551,377 .490%
Growth and Income................... 1,717,426 .190% 5,061,889 .560%
Equity-Income....................... 1,129,984 .225% 2,894,061 .575%
Balanced............................ 335,357 .340% 453,718 .460%
Aggressive Asset Allocation......... 444,535 .349% 511,835 .401%
Moderate Asset Allocation........... 870,556 .280% 1,464,232 .470%
Conservative Asset Allocation....... 310,085 .312% 435,398 .438%
High Yield.......................... 202,179 .320% 288,091 .455%
Strategic Bond...................... 556,672 .281% 976,855 .494%
Global Government Bond.............. 369,706 .353% 467,408 .447%
Capital Growth Bond................. 62,706 .225% 118,445 .425%
Investment Quality Bond............. 233,663 .220% 457,579 .430%
U.S. Government Securities.......... 274,891 .206% 593,978 .444%
Money Market........................ 175,289 .072% 1,033,974 .428%
</TABLE>
Of the total retained by the Adviser, $1,525,234 was paid to Manulife America
and $43,366 was paid to Manulife USA.
EXPENSE REIMBURSEMENT. Pursuant to the Advisory Agreement, the Adviser
reimburses the Trust for expenses (excluding advisory fees, taxes, portfolio
brokerage commissions and interest) incurred in excess, on an annualized basis,
of 0.15% of the average daily net assets of Equity Index, 0.50% of the average
daily net assets of Science & Technology, Emerging Growth, Pilgrim Baxter
Growth, Small/Mid Cap, Growth, Equity, Quantitative Equity, Blue Chip Growth,
Real Estate Securities, Value, Growth and Income, Equity-Income, Balanced,
Aggressive Asset Allocation, Moderate Asset Allocation, Conservative Asset
Allocation, High Yield, Strategic Bond, Capital Growth Bond, Investment Quality
Bond, U.S. Government Securities, Money Market, Lifestyle Aggressive 1000,
Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 and 0.75% of the average daily net assets of Pacific
Rim Emerging Markets, International Small Cap, International Stock, Worldwide
Growth, Global Equity, International Growth and Income and Global Government
Bond. In the case of the Lifestyle Trusts, the Adviser has agreed to pay the
expenses of the Lifestyle Trusts (other than the expenses of the underlying
Portfolios). This expense reimbursement may be terminated at any time. For the
six months ended June 30, 1998, the Adviser reimbursed Equity Index, Lifestyle
Aggressive 1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle
Moderate 460 and Lifestyle Conservative 280 the amounts of $28,149, $5,688,
$25,611, $23,429, $6,724 and $2,824 respectively, for expenses incurred in
excess of the applicable limitations.
7. TRUSTEES' FEES. The Trust pays each Trustee who is not an employee or
director of the Adviser or its affiliates a fee of $7,500 plus travel expenses
for each Board of Trustees meeting attended. The Trust also pays each Trustee
who is not an employee of the Adviser or its affiliates an annual retainer of
$30,000.
8. COMMITMENTS. At June 30, 1998, International Small Cap, Worldwide Growth,
Global Equity, International Growth and Income, Balanced, Aggressive Asset
Allocation, Moderate Asset Allocation, Conservative Asset Allocation, High
Yield, Strategic Bond and Global Government Bond had entered into forward
foreign currency contracts which contractually obligate the Portfolio to deliver
currencies at future dates. Open sale and purchase contracts at June 30, 1998
were as follows:
195
<PAGE> 199
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
COMMITMENTS, CONTINUED
<TABLE>
<CAPTION>
NET
UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE VALUE (DEPRECIATION)
---------- ---------------------- ---- ----- --------------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL SMALL CAP:
PURCHASES $ 111,011 ATS 1,412,057 07/01/1998 $ 111,295 $ 284
278,162 NOK 2,127,937 07/01/1998 277,635 (526)
POUND
147,688 STERLING 88,969 07/03/1998 148,551 863
----------- ----------- ---------
$ 536,861 $ 537,482 $ 621
=========== =========== =========
SALES
Great British Pounds.......... 274,116 $ 456,596 07/01/1998 $ 457,691 $ (1,095)
Great British Pounds.......... 373,539 621,943 07/02/1998 623,698 (1,756)
Great British Pounds.......... 107,793 178,936 07/03/1998 179,982 (1,046)
----------- ----------
$ 1,257,475 $ 1,261,372 ($3,897)
=========== =========== ---------
($3,276)
=========
WORLDWIDE GROWTH:
POUND
PURCHASES $ 98,404 STERLING 59,101 07/02/1998 $ 98,682 $278
=========== =========== =========
GLOBAL EQUITY:
SALES
Great British Pound........... 32,400,000 $52,882,650 12/16/1998 $53,582,237 ($699,587)
=========== =========== =========
.
INTERNATIONAL GROWTH AND INCOME:
PURCHASES $ 1,268,231 CHF 1,858,973 08/19/1998 $ 1,233,755 ($34,476)
22,758,127 DEM 40,361,344 08/19/1998 22,447,799 (310,329)
2,475,252 IEP 1,759,528 08/19/1998 2,455,404 (19,848)
1,041,635 NZD 2,050,489 08/19/1998 1,063,508 21,873
609,754 SGD 1,015,789 08/19/1998 600,991 (8,763)
------------ ----------- ---------
$28,152,999 $27,801,457 ($351,542)
=========== =========== ---------
SALES
Australian Dollar............. 7,860,522 $4,814,131 08/19/1998 $4,882,594 ($68,463)
Swiss Franc................... 9,302,567 6,337,047 08/19/1998 6,173,888 163,159
German Deutsche Mark.......... 66,465,522 37,441,260 08/19/1998 36,966,179 475,081
French Franc.................. 26,100,000 4,322,767 08/19/1998 4,330,196 (7,429)
Hong Kong Dollar.............. 15,040,000 1,913,931 08/19/1998 1,932,466 (18,535)
Irish Punt.................... 1,759,528 2,506,447 08/19/1998 2,455,404 51,043
New Zealand Dollar............ 3,936,733 2,086,240 08/19/1998 2,041,830 44,411
Singapore Dollar.............. 1,015,789 614,698 08/19/1998 600,991 13,708
South African Rand............ 4,400,000 814,739 08/19/1998 724,742 89,997
----------- ----------- -------
. $60,851,261 $60,108,289 $ 742,972
=========== =========== ---------
</TABLE>
<TABLE>
<CAPTION>
NET
CROSS CURRENCY: UNREALIZED
PAYABLE CONTRACTS RECEIVABLE IN EXCHANGE SETTLEMENT APPRECIATION
CURRENCY TO DELIVER VALUE CURRENCY FOR VALUE DATE (DEPRECIATION)
- -------- ----------- ------ -------- ---- ------ ---- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
POUND
STERLING 510,336 $851,081 SEK 6,395,971 $850,520 07/01/1998 ($561)
SGD 223,730 131,527 DKK 900,000 130,645 07/01/1998 (822)
-------- -------- --------
$982,608 $981,164 ($1,443)
======== ======== --------
$389,987
========
</TABLE>
196
<PAGE> 200
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
COMMITMENTS, CONTINUED
<TABLE>
<CAPTION>
NET
UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE VALUE (DEPRECIATION)
---------- --- ---- ----- --------------
<S> <C> <C> <C> <C> <C>
BALANCED:
PURCHASES .................... $ 402,797 FRF 2,427,458 07/31/1998 $ 401,518 ($ 1,279)
============ ============ =========
AGGRESSIVE ASSET ALLOCATION:
SALES
Italian Lira .............. 249,000,000 $ 139,574 07/02/1998 $ 140,144 ($ 570)
============ ============ =========
MODERATE ASSET ALLOCATION:
SALES
Japanese Yen .............. 8,000,000 $ 56,410 07/01/1998 $ 57,858 ($ 1,448)
Italian Lira .............. 411,000,000 230,381 07/02/1998 231,321 (940)
----------- ------------ ---------
$ 286,791 $ 289,179 ($ 2,388)
============ ============ =========
CONSERVATIVE ASSET ALLOCATION:
SALES
Italian Lira .............. 106,000,000 $ 59,417 07/02/1998 $ 59,659 ($ 242)
=========== ============ =========
HIGH YIELD:
SALES
German Deutsche Mark ...... 1,880,000 $ 1,060,351 08/31/1998 $ 1,046,278 $ 14,072
German Deutsche Mark ...... 1,115,000 622,905 09/18/1998 621,175 1,730
German Deutsche Mark ...... 2,120,000 1,188,105 09/22/1998 1,181,341 6,764
German Deutsche Mark ...... 1,350,000 759,707 09/24/1998 752,355 7,352
Great British Pounds ...... 865,000 1,430,710 10/02/1998 1,436,758 (6,048)
German Deutsche Mark ...... 1,250,000 693,289 10/06/1998 697,102 (3,813)
----------- ------------ ---------
$ 5,755,066 $ 5,735,009 $ 20,057
=========== ============ =========
STRATEGIC BOND:
SALES
Canadian Dollar ........... 6,492,884 $ 4,530,974 08/12/1998 $ 4,416,342 $ 114,632
German Deutsche Mark ...... 10,904,196 6,150,000 08/12/1998 6,062,096 87,904
Danish Krone .............. 34,024,770 5,048,185 08/12/1998 4,961,810 86,375
Japanese Yen .............. 258,054,286 1,972,892 08/12/1998 1,878,224 94,668
Netherland Guilder ........ 1,867,629 934,282 08/12/1998 921,191 13,091
New Zealand Dollar ........ 2,694,248 1,444,117 08/12/1998 1,398,021 46,097
----------- ------------ ---------
$20,080,449 $ 19,637,684 $ 442,766
=========== ============ ---------
PURCHASES
$ 1,910,594 CAD 2,760,809 08/12/1998 $ 1,877,852 ($ 32,742)
10,395,317 DEM 18,396,057 08/12/1998 10,227,134 (168,183)
------------ ------------ ---------
$ 12,305,911 $ 12,104,986 ($200,925)
============ ============ ---------
</TABLE>
<TABLE>
<CAPTION>
NET
CROSS CURRENCY: UNREALIZED
PAYABLE CONTRACTS RECEIVABLE IN EXCHANGE SETTLEMENT APPRECIATION
CURRENCY TO DELIVER VALUE CURRENCY FOR VALUE DATE (DEPRECIATION)
- -------- ---------- ------ -------- ---- ------ ---- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
DEM 5,140,000 $2,873,297 GRD 884,080,000 $2,887,264 08/12/1998 $13,966
DEM 3,480,000 1,949,050 NLG 3,922,134 1,948,990 08/12/1998 (60)
GRD 856,996,000 2,756,782 DEM 4,820,000 $2,698,063 08/12/1998 (58,719)
---------- ---------- --------
$7,579,129 $7,534,317 ($44,813)
========== ========== --------
$197,028
========
</TABLE>
197
<PAGE> 201
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
COMMITMENTS, CONTINUED
<TABLE>
<CAPTION>
NET
UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE VALUE (DEPRECIATION)
------------ ------------------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
GLOBAL GOVERNMENT BOND:
SALES
Japanese Yen ....... 341,100,000 $ 2,392,006 07/01/1998 $ 2,466,912 ($ 74,907)
South African Rand.. 79,352,400 15,200,000 07/02/1998 13,367,805 1,832,195
South African Rand.. 56,897,025 9,600,000 07/15/1998 9,521,519 78,481
Great British Pound. 14,022,841 22,900,000 07/28/1998 23,377,323 (477,323)
New Zealand Dollar.. 32,549,389 17,300,000 07/28/1998 16,904,725 395,275
South African Rand.. 37,770,150 6,050,000 08/03/1998 6,264,616 (214,616)
Australian Dollar... 21,661,694 14,600,000 10/02/1998 13,461,935 1,138,065
Danish Krone ....... 61,483,500 9,000,000 10/02/1998 8,986,107 13,893
Italian Lira ....... 40,578,400,000 23,000,000 10/02/1998 22,876,040 123,960
Swedish Krone ...... 235,256,400 29,200,000 10/02/1998 29,607,828 (407,828)
Australian Dollar... 21,635,263 13,800,000 12/02/1998 13,457,310 342,691
Danish Krone ....... 40,947,000 6,000,000 12/02/1998 6,001,662 (1,662)
Swedish Krone ...... 79,485,000 10,000,000 12/02/1998 10,030,412 (30,412)
--------------- ------------- -----------
$ 179,042,006 $ 176,324,194 $ 2,717,812
=============== ============= -----------
PURCHASES
$ 1,540,086 ZAR 9,336,000 07/03/1998 $ 1,574,368 $ 34,282
13,725,825 ZAR 79,352,400 07/02/1998 13,367,805 (358,020)
POUND
23,020,902 STERLING 14,022,841 07/28/1998 23,377,323 356,422
16,672,372 NZD 32,549,389 07/28/1998 16,904,725 232,353
14,118,551 AUD 21,661,694 10/02/1998 13,461,935 (656,616)
9,076,751 DKK 61,483,500 10/02/1998 8,986,107 (90,644)
22,899,101 ITL 40,578,400,000 10/02/1998 22,876,040 (23,060)
30,010,489 SEK 235,256,400 10/02/1998 29,607,828 (402,661)
13,087,619 AUD 21,635,263 12/02/1998 13,457,310 369,691
--------------- ------------- -----------
$ 144,151,693 $ 143,613,441 ($ 538,252)
=============== ============= -----------
</TABLE>
<TABLE>
<CAPTION>
CROSS CURRENCY: NET
UNREALIZED
PAYABLE CONTRACTS RECEIVABLE IN EXCHANGE SETTLEMENT APPRECIATION
CURRENCY TO DELIVER VALUE CURRENCY FOR VALUE DATE (DEPRECIATION)
- -------- ----------- ------ -------- ---- ------ ---- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
POUND
DEM 64,235,580 $36,163,487 STERLING 21,800,000 $36,234,938 12/02/1998 $ 71,451
GBP 23,374,716 38,401,433 DEM 68,927,840 38,339,430 12/02/1998 (62,303)
----------- ----------- -----------
$74,564,920 $74,574,368 $ 9,448
=========== =========== ----------
$2,189,008
==========
</TABLE>
198
<PAGE> 1
Exhibit 17(d)
Annual Report of the Trust for the year ended December 31, 1997.
<PAGE> 2
MANUFACTURERS INVESTMENT TRUST
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
February 25, 1998
Dear Fellow Contract Owners:
It is my pleasure to present the results of operations for 1997. The following
audited financial statements of the Manufacturers Investment Trust (the "Trust),
the mutual fund in which your variable insurance product contract values are
invested, reflect the results of operations for the period ending December 31,
1997.
The past twelve months will be remembered as a stellar year for the bond and
equity markets providing excellent returns for shareholders. The bond market was
marked by falling inflation, a relatively inactive Federal Reserve and rising
prices on almost all types of bonds. U.S. equity markets jumped more than 20%
for an unprecedented third straight year in 1997. Ongoing market volatility and
performance in the international markets reinforces our belief that long-term
investors will fare best with a diversified investment program reviewed
periodically with a professional financial advisor. During 1997, total net
assets of the Trust grew from $6.90 billion at December 31, 1996 to $10.45
billion at December 31, 1997. This 51% increase in net assets for the year
reflects the continued demand for variable insurance products as vehicles for
retirement and estate planning.
At the outset of 1997, we introduced a number of new investment portfolios which
provide you and your planner with access to the broadest range of asset classes
and investment styles from which to build your investment program. Underlying
the selection process for this and our entire group of elite managers is a
strategy based on Modern Portfolio Theory and the Nobel Prize winning Efficient
Frontier theory. In this way, we want to give you an opportunity to build the
strongest possible investment program and create a diversified portfolio of
investments that will help you achieve the maximum amount of long-term returns
at a risk level which is comfortable for you.
No matter how efficient an investment portfolio you might build, your degree of
success in achieving your financial goals will still depend, in part, on the
quality of investment management you choose. Our commitment to you as a Manulife
contract owner is to ensure that your investment with us gets the highest
possible level of attention. For this reason, every one of our professional
investment managers are hand-picked for their recognized expertise in particular
asset classes, such as stocks or bonds, and acknowledged for their distinctive
investment styles. In addition, we continuously monitor each portfolio
subadviser and measure its performance against rigorous criteria to ensure that
our managers meet your expectations.
We are confident that our innovative products and services, along with our
first-rate investment management team will provide you with a solid template for
your financial future. We thank you for choosing Manulife Financial and look
forward to serving you during 1998 and in the years to come.
Sincerely,
/s/ John D. DesPrez III
- ------------------------
John D. DesPrez III
President
<PAGE> 3
MANUFACTURERS INVESTMENT TRUST
INDEX TO ANNUAL REPORT
-------------------------------------------------------------------------------
PAGE
Portfolio Performance and Manager's Commentary....................... iii
Report of Independent Accountants.................................... 1
Statements of Assets and Liabilities................................. 2
Statements of Operations............................................. 9
Statements of Changes in Net Assets.................................. 16
Financial Highlights................................................. 27
Portfolio of Investments:
Pacific Rim Emerging Markets Trust.............................. 63
Science & Technology Trust...................................... 67
International Small Cap Trust................................... 68
Emerging Growth Trust........................................... 69
Pilgrim Baxter Growth Trust..................................... 71
Small/Mid Cap Trust............................................. 72
International Stock Trust....................................... 74
Worldwide Growth Trust.......................................... 78
Global Equity Trust............................................. 80
Small Company Value Trust....................................... 82
Equity Trust.................................................... 87
Growth Trust.................................................... 91
Quantitative Equity Trust....................................... 93
Equity Index Trust.............................................. 95
Blue Chip Growth Trust.......................................... 101
Real Estate Securities Trust.................................... 104
Value Trust..................................................... 105
International Growth and Income Trust........................... 107
Growth and Income Trust......................................... 110
Equity-Income Trust............................................. 112
Balanced Trust.................................................. 115
Aggressive, Moderate and Conservative Asset Allocation Trusts... 117
High Yield Trust................................................ 144
Strategic Bond Trust............................................ 147
Global Government Bond Trust.................................... 152
Capital Growth Bond Trust....................................... 153
Investment Quality Bond Trust................................... 154
U.S. Government Securities Trust................................ 158
Money Market Trust.............................................. 159
Lifestyle Aggressive 1000 Trust................................. 160
Lifestyle Growth 820 Trust...................................... 160
Lifestyle Balanced 640 Trust.................................... 160
Lifestyle Moderate 460 Trust.................................... 160
Lifestyle Conservative 280 Trust................................ 161
Notes to Financial Statements........................................ 162
ii
<PAGE> 4
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO PERFORMANCE AND MANAGER'S COMMENTARY
- --------------------------------------------------------------------------------
TRUST PERFORMANCE
In the following pages we have set forth information regarding the performance
of each Portfolio of the Manufacturers Investment Trust (the "Trust"), excluding
the Money Market Trust. There are several ways to evaluate a Portfolio's
historical performance. One can look at the total percentage change in value,
the average annual percentage change or the growth of a hypothetical $10,000
investment. WITH RESPECT TO ALL PERFORMANCE INFORMATION PRESENTED, IT IS
IMPORTANT TO UNDERSTAND THAT PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
RETURN AND PRINCIPAL FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
PERFORMANCE TABLES
The Performance Tables show two types of total return information: CUMULATIVE
AND AVERAGE ANNUAL TOTAL RETURNS. A CUMULATIVE TOTAL RETURN is an expression of
a Portfolio's total change in share value in percentage terms over a set period
of time -- one, five and ten years (or since the Portfolio's inception if less
than the applicable period). An AVERAGE ANNUAL TOTAL RETURN takes the
Portfolio's cumulative total return for a time period greater than one year and
shows what would have happened if the Portfolio had performed at a constant rate
each year. In addition, eight Portfolios have had portfolio management changes,
namely the Global Equity, Equity, Blue Chip Growth, Equity-Income, Aggressive
Asset Allocation, Moderate Asset Allocation, Conservative Asset Allocation and
U.S. Government Securities Trusts. For these Portfolios, the tables show an
average annual total return for the period since the current portfolio manager
assumed responsibility. THE TABLES SHOW ALL CUMULATIVE AND AVERAGE ANNUAL TOTAL
RETURNS, NET OF FEES AND EXPENSES OF THE TRUST, BUT DO NOT REFLECT THE INSURANCE
(SEPARATE ACCOUNT) EXPENSES (INCLUDING A POSSIBLE CONTINGENT DEFERRED SALES
CHARGE) OF THE VARIABLE ANNUITY AND VARIABLE LIFE PRODUCTS THAT INVEST IN THE
TRUST.
GRAPH -- CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
The performance graph for each Portfolio shows the change in value of a $10,000
investment over the life of each Portfolio. Each Portfolio's performance is
compared with the performance of one or more broad-based securities indices as a
"benchmark." All performance information includes the reinvestment of dividends
and capital gain distributions, as well as the deduction of ongoing management
fees and Portfolio operating expenses. The benchmarks used for comparison are
unmanaged and include reinvestment of dividends and capital gain distributions,
if any, but do not reflect any fees or expenses. Portfolios that invest in
multiple asset classes are compared with a customized benchmark. This benchmark
is comprised of a set percentage allocation from each of the asset classes in
which the Portfolio invests.
PORTFOLIO MANAGER'S COMMENTARY
Finally, we have provided a commentary by each portfolio manager regarding each
Portfolio's performance during the period ended December 31, 1997.
iii
<PAGE> 5
PACIFIC RIM EMERGING MARKETS TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To achieve long-term growth of capital by investing in a
diversified portfolio that is comprised primarily of common
stocks and equity-related securities of corporations
domiciled in countries in the Pacific Rim region.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGERS: Richard Cook, Stephen Hill, Emilia Panadero-Perez
INCEPTION DATE: October 4, 1994
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
PACIFIC RIM BLENDED FINANCIAL FINANCIAL TIMES
MEASUREMENT PERIOD EMERGING TIMES ACTUARIES PACIFIC EX JAPAN FINANCIAL TIMES
(FISCAL YEAR COVERED) MARKETS TRUST INDEX INDEX JAPAN INDEX
- --------------------- ------------- ----- ----- -----------
<S> <C> <C> <C> <C>
SEPTEMBER|1994 10000 10000 10000 10000
DECEMBER|1994 9473 9242 9091 9847
MARCH|1995 9303 9297 9220 9581
JUNE|1995 9748 9604 9743 8987
SEPTEMBER|1995 10097 9978 10122 9338
DECEMBER|1995 10548 10361 10455 9904
MARCH|1996 11184 11205 11520 9901
JUNE|1996 11289 11262 11549 10051
SEPTEMBER|1996 11422 11357 11863 9386
DECEMBER|1996 11582 11816 12829 8226
MARCH|1997 11284 11114 12261 7240
JUNE|1997 11964 12232 13084 8935
SEPTEMBER|1997 10328 10722 11510 7717
DECEMBER|1997 7630 7969 8409 6126
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year Inception Inception
<S> <C> <C> <C>
Blended Financial Times Actuaries Index+ -32.56% -6.75% -20.31%
Financial Times Actuaries Pacific ex Japan Index -34.45% -5.19% -15.91%
Financial Times Actuaries Japan Index -25.53% -14.00% -38.74%
Pacific Rim Emerging Markets Trust (at net asset value) -34.12% -8.01% -23.70%
+ Comprised of 80% Pacific ex Japan and 20% Japan
* All since inception returns for the indices begin on the month-end closest to the actual inception date of the
Trust.
</TABLE>
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the Pacific Rim Emerging Markets Trust returned
- -34.1%, below the -25.3% returns of the MSCI Pacific (Free) Index but
approximately in line with the -34.2% returns of the average Morningstar Asia ex
Japan funds. It bears noting that this trust is somewhat uniquely focused on the
developing Asian markets unlike the index and most of our peers. While it is
always a challenge reconciling the absolute size of the decline, 1997 was a
relatively respectable year for this trust given its mandate to invest in the
developing Asian countries most of whom experienced cataclysmic declines in
their local stock markets. The losses for these emerging tigers were further
exaggerated for US investors by the serious devaluation in the local currencies
versus the US dollar. For example, Thailand's market in US dollar terms lost
85%, Philippines lost 45% and Malaysia lost 55%.
ENVIRONMENT: To say the least, the Pacific Rim markets experienced a difficult
year. Japan's economy weakened as the year progressed initially due to the
introduction of a new sales tax and the ending of the benefits of a one-off
income tax reduction. In the latter part of the year, the banking and financial
sector crisis and the economic problems in Southeast Asia further worsened the
economic and financial situation in Japan. The currency crisis which started
with the Thai baht at the end of the second quarter, moved to smaller markets in
the third quarter. In the fourth quarter the focus switched to the Hong Kong
Dollar as speculators attacked the peg. The Hong Kong monetary authorities
defended the currency by raising interest rates to levels not justified on
fundamental grounds, causing panic not only in Hong Kong but in markets
worldwide. Even though some of the troubled Asian countries have received aid
from the International Monetary Fund, sentiment is likely to remain negative for
Asian markets, as there are concerns that Asian governments are being
insufficiently flexible in response to the crisis.
OUTLOOK: The size and character of the declines experienced in the developing
Asian markets may be seen as a potential selling climax that may have priced
much of the crisis into the market. However, even though some of the troubled
Asian countries have received aid from the International Monetary Fund,
sentiment is likely to remain negative for Asian markets for some time as
concerns continue that Asian governments are being insufficiently flexible in
response to the crisis.
iv
<PAGE> 6
SCIENCE & TECHNOLOGY TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks long-term growth of capital. Current income is
incidental to the portfolio's objective.
SUBADVISER: T. Rowe Price Associates, Inc.
PORTFOLIO MANAGERS: Charles A. Morris, Jill L. Hauser, Joseph Klein III, Brian
D. Stansky
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD LIPPER SCIENCE & TECH FUND
(FISCAL YEAR COVERED) SCIENCE & TECHNOLOGY TRUST INDEX
- --------------------- -------------------------- -----
<S> <C> <C>
DEC-96 10000 10000
JAN-97 10744 10780
FEB-97 9896 9805
MAR-97 9344 9067
APR-97 9704 9461
MAY-97 10840 10586
JUN-97 11040 10685
JUL-97 12336 12167
AUG-97 12168 12242
SEP-97 12616 12761
OCT-97 11680 11413
NOV-97 11632 11316
DEC-97 11071 10775
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
Lipper Science & Tech Fund Index* 7.75%
Science & Technology Trust (at net asset value) 10.71%
* All since inception returns for the indices begin on the month-end closest to the
actual inception date of the Trust.
</TABLE>
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the Science & Technology Trust returned 10.7%, ahead
of the 8.4% return generated by the average Morningstar Specialty Technology
funds. As we enter 1998 there are several challenges facing science and
technology companies. These challenges include slowing growth in key segments of
the science and technology sector, increasing pricing pressure across most
segments of the industry, intensified competition in select markets, and the
economic crisis in Southeast Asia.
ENVIRONMENT: Growth in the personal computer and wireless communications
industries -- the two primary drivers of sector expansion over the past several
years -- is slowing. Lower prices and the absence of breakthrough software
applications are depressing growth in the personal computer industry while
vendors' efforts to optimize cash flow and financing difficulties are limiting
growth in the wireless communications market. The economic crisis in Southeast
Asia is likely to exacerbate the current growth and pricing dynamics. While it
is difficult to quantify the precise impact on the technology sector from the
current economic and currency crises in Southeast Asia, turmoil in this region
should reduce the growth rate of worldwide technology spending and complicate
the sector's fragile pricing environment.
OUTLOOK: We believe the combination of several significant industry product
cycles, reasonable valuation levels, and waning investor sentiment toward this
sector position stocks of science and technology companies for a steady and
sustainable recovery as 1998 progresses. In the latter stages of 1998 and into
1999 new product cycles should include lower cost, higher performance
microprocessors from Intel, new computer operating systems from Microsoft,
digital cellular network deployment, a variety of broadband communications
technologies, and critical mass in electronic commerce. In addition, the sharp
correction in this sector since late October has resulted in more reasonable
valuation levels and subdued investor sentiment -- characteristics that usually
accompany meaningful recoveries in the stock prices of science and technology
companies. Accordingly, we will maintain our investment philosophy of managing a
diversified, yet concentrated, portfolio of science and technology stocks while
keeping modest levels of cash reserves to take advantage of any opportunities.
v
<PAGE> 7
INTERNATIONAL SMALL CAP TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide long-term capital appreciation by investing
primarily in securities issued by foreign companies which
have total market capitalization or annual revenue of $1
billion or less.
SUBADVISER: Founders Asset Management, Inc.
PORTFOLIO MANAGER: Michael W. Gerding
INCEPTION DATE: March 4, 1996
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD INTERNATIONAL SMALL CAP
(FISCAL YEAR COVERED) TRUST MSCI WORLD EX US INDEX
- --------------------- ----- ----------------------
<S> <C> <C>
FEB-96 10000 10000
MAR-96 10048 10212
10344 10513
10576 10333
JUN-96 10624 10378
10240 10074
10304 10112
SEP-96 10424 10386
10632 10317
10832 10745
DEC-96 10920 10599
11033 10271
11298 10429
MAR-97 11257 10443
10998 10510
11496 11205
JUN-97 11641 11806
11601 12026
11143 11143
SEP-97 11560 11771
11086 10886
11151 10766
DEC-97 11006 10872
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 Year 1 Inception Inception
<S> <C> <C> <C>
MSCI World ex US Index* 2.58% 4.67% 8.72%
International Small Cap Trust (at net asset value) 0.79% 5.40% 10.06%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the International Small Cap Trust rose 0.8% trailing
both the MSCI EAFE Index which gained 2.1% and the MSCI World ex US Index which
gained 2.6%. Although not directly comparable, the Trust's returns trailed the
4.8% return on the average Morningstar Foreign funds which typically invest in
international large cap stocks.
ENVIRONMENT: As we enter 1998, the Asian currency crisis and international
market volatility continue to dominate investors' attention around the world. In
response to the first warning signs of problems in Asia, we aggressively reduced
our exposure to but one company, a Hong Kong manufacturer with nearly all of
their sales outside Asia. We have limited exposure to Japan. In Europe we are
significantly overweight. We continue to expect improving economic conditions.
Small companies with more sensitivity to their local economies plus the
potential for lower interest rates and continued corporate restructuring should
provide superior earnings growth.
OUTLOOK: In spite of the difficult markets of the last several months, our
outlook for small growth companies around the world is very positive. During the
last year, we visited with nearly 1,000 companies from over 20 countries. Our
focus is the same -- build a portfolio of the most attractive, rapidly growing
small companies from around the world one company at a time, without the
constraints of indices or top-down models. We believe this focus has the Trust
well positioned to take advantage of the growth we see in Europe and the
eventual recovery in Asia.
vi
<PAGE> 8
EMERGING GROWTH TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks maximum capital appreciation by investing primarily in
a portfolio of equity securities of domestic companies. The
portfolio ordinarily will invest at least 65% of its total
assets in common stocks or warrants of emerging growth
companies that represent attractive opportunities for
maximum capital appreciation.
SUBADVISER: Warburg Pincus Asset Management, Inc.
PORTFOLIO MANAGERS: Elizabeth B. Dater, Stephen J. Lurito
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) EMERGING GROWTH TRUST RUSSELL 2000 GROWTH INDEX
- --------------------- --------------------- -------------------------
<S> <C> <C>
DECEMBER|1996 10000 10000
JANUARY|1997 10092 10242
FEBRUARY|1997 9641 9623
MARCH|1997 9049 8945
APRIL|1997 8995 8841
MAY|1997 10034 10170
JUNE|1997 10481 10515
JULY|1997 11087 11053
AUGUST|1997 11194 11385
SEPTEMBER|1997 12180 12293
OCTOBER|1997 11544 11554
NOVEMBER|1997 11408 11279
DECEMBER|1997 11714 11286
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
Russell 2000 Growth Index* 12.86%
Emerging Growth Trust (at net asset value) 17.14%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: 1997 was an exceptional year for the Emerging Growth Trust. For the
year, the Trust posted a cumulative return of 17.1% versus the 12.9% registered
by its comparative benchmark, the Russell 2000 Growth Index and the 14.4% return
for the average Morningstar Small Cap Growth fund.
ENVIRONMENT: Although small cap and emerging growth stocks faced numerous
problems throughout the year, this portfolio drew on the strength of its stock
selection across a number of industries including business services and
financial services. During the earlier part of the year, the managers found
value in sectors such as health care including pharmaceuticals and retail, and
in the financial sector in the later part of the year.
OUTLOOK: The portfolio managers and Warburg Pincus analysts believe that
aggressive stocks may have earnings growth nearly double that of large cap
stocks during 1998. These large companies are vulnerable both to a slowdown in
Asian demand and currency translation losses due to the strong dollar. Smaller
companies, which typically derive most of their revenues domestically (the
notable exception being the technology sector), are expected to be much less
affected by this aspect of Asia's difficulties. This combination of relatively
superior earnings growth and undemanding valuations should draw investor
attention back to the small cap group at some point over the next several
months, though the exact timing of events is hard to predict. Two other factors
that should lend incremental support to the stocks are the subdued IPO market
which is a limiting factor on new supply, and the recent reduction in the
capital gains tax which has increased the after-tax appeal of small company
shares. Combined, these elements all add up to a portfolio that is
well-positioned to take advantage of the rebound anticipated for the group.
vii
<PAGE> 9
PILGRIM BAXTER GROWTH TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks capital appreciation by investing in companies
believed by the subadviser to have an outlook for strong
earnings growth and the potential for significant capital
appreciation.
SUBADVISER: Pilgrim Baxter & Associates, Ltd.
PORTFOLIO MANAGERS: Bruce J. Muzina, Gary L. Pilgrim
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) PILGRIM BAXTER GROWTH TRUST RUSSELL 2000 GROWTH INDEX
- --------------------- --------------------------- -------------------------
<S> <C> <C>
DEC-96 10000 10000
JAN-97 10128 10242
FEB-97 9296 9623
MAR-97 8488 8945
APR-97 8504 8841
MAY-97 9384 10170
JUN-97 9792 10515
JUL-97 10584 11053
AUG-97 10256 11385
SEP-97 10704 12293
OCT-97 10088 11554
NOV-97 9872 11279
DEC-97 10000 11286
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
Russell 2000 Growth Index* 12.86%
Pilgrim Baxter Growth Trust (at net asset value) 0.00%
* All since inception returns for the indices begin on the month-end closest to the
actual inception date of the Trust.
</TABLE>
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the Trust was flat, underperforming the 23.1% return
on the Russell MidCap Growth Index and the 15.5% return of the average
Morningstar MidCap Growth fund significantly. Indeed, it would be difficult to
describe -- a priori -- a more arduous investment environment for our particular
style than the year just passed.
ENVIRONMENT: The first quarter of the year was marked by a severe relative
valuations correction in high growth smaller cap stocks. Investors' funds flowed
into large cap, stable growth companies. As a result, the higher the earnings
growth rate and price/earnings ratio and the smaller the market cap, the more
severe the underperformance. Given our portfolio's much higher earnings growth
characteristics we captured the greatest proportion of the negative impact.
In the middle part of the year the low relative valuations and strong relative
earnings growth produced a spectacular rally where the trust outperformed our
benchmarks by a considerable margin. However, the Asian crisis reversed the
recovery. Technology companies and many of our energy service companies do a
significant amount of business in the area and felt the market's swift and
severe retribution.
OUTLOOK: Masked in a disappointing year, however, is the fact that we firmly
believe that our style will continue to produce above average long-term returns.
Four of our five top holdings produced better than 50% appreciation in 1997. Our
portfolio characteristics remain remarkably unchanged from one year ago. We
continue to strive to assemble portfolios of the most rapidly growing mid cap
companies that we are able to find. We believe that the mid-year rally in 1997
demonstrates that the market still has an appetite for earnings growth companies
and that our style will in time reassert itself.
viii
<PAGE> 10
SMALL/MID CAP TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide long-term capital appreciation by investing
at least 65% of its assets in companies that at the time of
purchase have total market capitalization between $500
million and $5 billion.
SUBADVISER: Fred Alger Management, Inc.
PORTFOLIO MANAGER: David D. Alger
INCEPTION DATE: March 4, 1996
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SMALL/MID CAP RUSSELL 2000 S&P MIDCAP 400 50%/50%
(FISCAL YEAR COVERED) TRUST GROWTH INDEX INDEX COMPOSITE INDEX
- --------------------- ----- ------------ ----- ---------------
<S> <C> <C> <C> <C>
FEB-96 10000 10000 10000 10000
MAR-96 10312 10198 10120 10159
10824 10981 10429 10704
10976 11545 10569 11051
JUN-96 10504 10794 10411 10609
9368 9476 9706 9602
9904 10177 10266 10234
SEP-96 10456 10702 10714 10721
10248 10240 10745 10505
10864 10525 11350 10947
DEC-96 10696 10730 11362 11060
11232 10990 11788 11401
10584 10326 11692 11010
MAR-97 9984 9598 11194 10388
10064 9487 11483 10462
10848 10913 12487 11705
JUN-97 11448 11283 12838 12068
12520 11860 14109 12974
12384 12216 14092 13161
SEP-97 13264 13191 14902 14065
12544 12398 14254 13336
12576 12103 14465 13276
DEC-97 12328 12110 15026 13538
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year Inception Inception
<S> <C> <C> <C>
S&P MidCap 400 Index* 32.25% 24.87% 50.26%
Russell 2000 Growth Index* 12.86% 11.01% 21.10%
50%/50% Composite Index*+ 22.40% 17.96% 35.38%
Small/Mid Cap Trust (at net asset value) 15.26% 12.17% 23.28%
* All since inception returns for the indices begin on the month-end closest to the actual inception date of the Trust.
+ Comprised of 50% of the return of the S&P MidCap 400 Index and 50% of the return of the Russell 2000 Growth Index.
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: In a year when large caps outperformed small caps, value
significantly outperformed growth, and technology stocks underperformed while
defensive sectors such as utilities were strong, the Small/Mid Cap Trust posted
a satisfactory annual return of 15.3%. Relative performance was strong when
compared to the 12.9% returns of the small cap Russell 2000 Growth Index but
lagged the 23.1% returns of the Russell Mid Cap Growth Index. Performance was
also in line with the 15.5% returns of the average Morningstar Mid Cap Growth
fund.
ENVIRONMENT: For investors in small to mid cap growth equities, 1997 consisted
of two quarters of euphoric prosperity sandwiched between two quarters of acute
volatility. As speculative investments such as smaller cap growth stocks were
sold off amid fear that the Federal Reserve would raise interest rates, the
Trust began the year with a sizable negative return in the first quarter. The
second quarter marked the reversal of the defensive psychology that had plagued
the market since July of 1996. As fears of inflation and subsequent Fed action
ebbed, investors could no longer ignore the relative values of small to mid cap
growth stocks. The Trust came roaring back in the second quarter and maintained
its ascent in the third quarter when a sizable position in technology helped
fuel performance.
During the fourth quarter, incidents of international economic turbulence led to
a heightened sense of domestic uncertainty, which in turn triggered an abrupt
return to defensive equity investing. Technology stocks with considerable
business in Asia, particularly semiconductors, were among the hardest hit.
ix
<PAGE> 11
INTERNATIONAL STOCK TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks long-term growth of capital by investing primarily in
common stocks of established, non-U.S. companies.
SUBADVISER: Rowe Price-Fleming International, Inc.
PORTFOLIO MANAGERS: Martin G. Wade, Mark J.T. Edwards, John R. Ford, James B.M.
Seldon, David J.L. Warren
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) INTERNATIONAL STOCK TRUST MSCI EAFE INDEX
- --------------------- ------------------------- ---------------
<S> <C> <C>
DEC-96 10000 10000
JAN-97 9808 9652
FEB-97 9904 9813
MAR-97 9895 9850
APR-97 9974 9905
MAY-97 10602 10552
JUN-97 11046 11136
JUL-97 11334 11319
AUG-97 10296 10476
SEP-97 10950 11065
OCT-97 10122 10217
NOV-97 10105 10115
DEC-97 10138 10206
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
MSCI EAFE Index* 2.06%
International Stock Trust (at net asset value) 1.38%
* All since inception returns for the indices begin on the month-end closest to the
actual inception date of the Trust.
</TABLE>
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year ended December 31, 1997, the International Stock Trust
gained 1.4%, in line with the MSCI EAFE benchmark which rose 2.1% but lagging
the 4.8% returns for the average Morningstar Foreign funds.
ENVIRONMENT: The dollar had a strong year gaining some ground against the yen
and even more against European currencies, and this hampered portfolio
performance. European markets were generally good performers. Asian markets
performed poorly, with Japan's Nikkei falling back to its bear market lows. In
Latin America, markets rose sharply despite their Asia-induced stumble towards
year end.
Country allocation relative to the benchmark index was positive over the year.
Underweighting Japan and overweighting Latin America added value although this
was eroded by an underweight position in the UK and an overweight position in
the first half of the year in some smaller Asian markets. Stock selection was a
small negative during 1997. Over the year, underperformance in Europe,
particularly in the Netherlands and Germany, was the main culprit with our
favorite growth stocks starting the year poorly.
OUTLOOK: Looking forward, the outlook remains reasonable for European markets
with corporate profits growth likely to be strong, supported by good economic
growth and further restructuring. We believe that Latin American markets remain
attractive given continued commitment to political and economic reform in the
region. The relative resilience of these markets in recent months despite the
problems in the Pacific has been encouraging. The outlook for Asia is more
uncertain and we remain cautious about the prospects for the region's smaller
markets as we believe that their problems are more deep-seated than is generally
realized. Similarly, we remain cautious on the Japanese market despite recent
weakness -- the economic outlook there is poor and the problems of the banking
sector remain severe. Thus, we expect that 1998 performance is likely to be
driven by the European and Latin American equity markets, with Asia remaining
fragile. While there may be some bounces in markets which have fallen a long way
already, we believe it is a time to be particularly selective when looking at
stocks traded in Asia.
x
<PAGE> 12
WORLDWIDE GROWTH TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks long-term growth of capital by normally investing at
least 65% of its total assets in equity securities of growth
companies in a variety of markets throughout the world.
SUBADVISER: Founders Asset Management, Inc.
PORTFOLIO MANAGER: Michael W. Gerding
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) WORLDWIDE GROWTH TRUST MSCI WORLD INDEX
- --------------------- ---------------------- ----------------
<S> <C> <C>
DEC-96 10000 10000
JAN-97 10120 10122
FEB-97 10208 10240
MAR-97 10208 10040
APR-97 10320 10370
MAY-97 10912 11012
JUN-97 11176 11563
JUL-97 11624 12097
AUG-97 11176 11290
SEP-97 11696 11905
OCT-97 11288 11280
NOV-97 11224 11482
DEC-97 11329 11623
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
MSCI World Index* 16.23%
Worldwide Growth Trust (at net asset value) 13.29%
* All since inception returns for the indices begin on the month-end closest to the
actual inception date of the Trust.
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Worldwide Growth Trust rose 13.3%, ahead of the
10.1% returns from the average Morningstar World funds but trailing the MSCI
World Index which gained 16.2%.
ENVIRONMENT: As we enter 1998, the Asian currency crisis and international
market volatility continue to dominate investors' attention around the world. In
response to the first warning signs of problems, we aggressively reduced our
exposure to Asia because we no longer had any confidence in our earnings
estimated for our companies. Currently, with the exception of Japan, we have no
holdings in Asia. Our Japanese exposure is relatively limited, as we remain
concerned about the health of the economy and companies' ability to grow their
earnings in 1998.
We are finding the best opportunities in Europe where we expect improving
economic conditions for the third straight year. This coupled with the potential
for lower interest rates and corporate restructuring should lead to much better
earnings across Europe. We look for the same broad impact from these
restructurings that the US has already experienced. We are significantly
overweight in Europe and are finding very attractive companies across many
diverse industries.
OUTLOOK: In spite of the difficult markets of the last several months, our
outlook for growth companies around the world is very positive. During the last
year, we visited with nearly 1,000 companies from over 20 countries. Our focus
is the same -- build a portfolio of the most attractive, rapidly growing
companies from around the world one company at a time regardless of where they
are located.
xi
<PAGE> 13
GLOBAL EQUITY TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek long term capital appreciation by investing
primarily in equity securities throughout the world,
including U.S. issuers and emerging markets.
SUBADVISER: Morgan Stanley Asset Management Inc.
PORTFOLIO MANAGER: Frances Campion
INCEPTION DATE: March 18, 1988*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) GLOBAL EQUITY TRUST MSCI WORLD INDEX
- --------------------- ------------------- ----------------
<S> <C> <C>
FEB-88 10000 10000
9890 10000
10000 10128
9761 9927
9870 9915
9681 10103
9252 9549
9771 9956
10209 10621
10110 10992
DEC-88 10120 11093
10568 11497
10439 11427
10279 11355
10528 11619
10658 11337
10887 11211
11775 12480
11924 12179
12383 12525
12024 12104
12183 12595
DEC-89 12532 13001
12014 12397
11864 11867
11745 11153
11338 10995
12421 12155
12594 12071
12891 12183
11757 11045
10531 9882
11093 10807
11052 10632
DEC-90 11226 10856
11593 11256
12462 12299
12094 11939
12125 12034
12342 12309
11618 11551
12156 12098
12073 12062
12208 12380
12373 12583
11877 12037
DEC-91 12663 12916
12746 12679
12818 12463
12363 11878
12718 12046
13315 12527
12948 12110
12707 12144
12749 12442
12456 12330
12110 11998
12561 12215
DEC-92 12571 12317
12613 12360
12791 12655
13567 13392
14306 14014
15102 14339
14975 14222
15357 14518
16196 15186
16281 14908
16568 15321
15538 14457
DEC-93 16706 15166
17704 16169
17747 15962
17205 15277
17709 15752
17450 15795
17644 15754
18065 16056
18659 16543
17979 16111
18206 16572
17029 15856
DEC-94 16996 16013
16068 15776
16057 16001
16694 16769
17096 17371
17130 17523
17073 17521
18062 18400
17926 17994
18108 18521
17687 18232
17812 18868
DEC-95 18301 19423
18494 19778
18665 19903
19108 20233
19767 20713
19582 20734
19570 20842
18484 20108
18912 20343
19085 21143
18981 21295
20206 22492
DEC-96 20610 22136
20656 22406
21176 22668
21003 22224
21197 22955
22674 24376
23792 25595
24781 26778
23573 24992
24845 26354
23920 24970
24036 25417
DEC-97 24896 25730
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since* Since
Periods Ending December 31, 1997 1 Year 5 Years Inception Oct 1, 1996 5 Years Inception
<S> <C> <C> <C> <C> <C> <C>
MSCI World Index** 16.23% 15.87% 10.18% 17.01% 21.70% 157.30%
Global Equity Trust (at net asset value) 20.80% 14.64% 9.77% 23.75% 98.04% 148.96%
* Current subadviser assignment became effective 10/1/96.
** All since inception returns for the indices begin on the month-end closest to the actual inception date of the Trust.
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Global Equity Trust returned 20.8%, well above
both the 10.1% returns for the average Morningstar World fund and the 16.2%
increase in the MSCI World Index. Outperformance during 1997 came largely from
the combination of our heavily underweight position in Japan and Southeast Asia
and strong Japanese stock selection, notably the large exporters which continued
to benefit from yen weakness. Stock selection in many European markets,
particularly financials, also contributed, as did our overweighting in
continental Europe.
ENVIRONMENT: After beginning 1997 as perceivably one of the most 'at risk'
markets on a valuation basis, the US ended the year again among the strongest
developed markets. The 'Goldilocks' investment scenario prevailed: a firming
dollar, robust growth, benign inflation (despite full employment), shrinking
supply in both debt and equities and booming demand, despite a 0.25% rise in the
Fed Funds Rate in February and warnings from the Federal Reserve Chairman of
'irrational exuberance'.
In Europe, weaker currencies, lower yields, accelerating restructuring and
consolidation drove exceptional local currency returns. The UK lagged its
continental counterparts as the newly independent Bank of England hiked interest
rates 1.25% in an attempt to subdue the overheated domestic economy. In Japan, a
weak domestic economy following April's VAT hike, the spectre of deregulation,
and the deepening banking crisis brought a further loss of confidence. Some hope
was extended by year end tax cuts, increasing government willingness to
restructure its bulking system and the collapse of Yamaichi, Japan's 4th largest
broker, perhaps heralding a breakdown in the traditional keiretsu 'convoy'
system. Significant risks to Japan remain, however, not least the threat to
corporate earnings posed by Asian devaluations. Despite the IMF 'bail out' of
Korea, Indonesia and Thailand, the austerity programs, recessions and necessary
reforms in these economies have barely begun and the political willingness to
achieve this not yet demonstrated.
OUTLOOK: Given a projected slowdown in global growth, the US Treasury market is
now predicting the Fed will case rates. If mid single digit growth can be
maintained, and inflation remains quiescent, the US market is arguably fairly
valued with long bond yields at current levels. We remain slightly underweight
in the US, finding better relative value in Europe, particularly Ireland and the
UK. We have moved from market to over weight in the UK recently having found
several strong business franchises with management dedicated to maximizing
shareholder value. Despite continued underperformance, we still struggle to find
value in Japan, other than in selected sectors such as pharmaceuticals. Hence we
expect to remain underweight in the foreseeable future. We also remain cautious
about Asia as a whole despite the exceptionally steep sell off.
xii
<PAGE> 14
SMALL COMPANY VALUE TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek long term growth of capital by investing in equity
securities of smaller companies which are traded principally
in the markets of the United States.
SUBADVISER: Rosenberg Institutional Equity Management
PORTFOLIO MANAGERS: Barr M. Rosenberg, Kenneth Reid, Floyd Coleman, Stephen Dean
INCEPTION DATE: October 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) SMALL COMPANY VALUE TRUST RUSSELL 2000 INDEX
<S> <C> <C>
SEP-97 10000 10000
OCT-97 9512 9728
NOV-97 9496 9835
DEC-97 9552 9665
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
Russell 2000 Index* -3.35%
Small Company Value Trust (at net asset value) -4.48%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: Since inception in the fourth quarter, the Trust returned -4.5%,
below the return on the benchmark Russell 2000 Index.
ENVIRONMENT: The fourth quarter of 1997 marked the end of the strongest three
year period in the history of the US equity market with the S&P 500 posting a
return of 125% during this three-year period. The market moved down about 3% in
October as most equity markets in the world reacted to the problems in Asia.
However, the US market rebounded in November and December with the S&P 500 Index
ending up nearly 3% for the quarter. Small stocks substantially underperformed
larger stocks during the quarter with the Russell 2000 Index falling by 3.35%.
Over the quarter, our exposures to risk factors (value, growth, beta,
capitalization) generally helped our performance. Performance was hurt by
industry exposures (especially modest underweightings in drug and electric
utility stocks.)
OUTLOOK: Our sector, industry, and risk exposures will, on average, be in line
with the Russell 2000 except for a small persistent value bias, as we seek to
outperform the benchmark by picking undervalued stocks, not by betting on
factors or industries.
xiii
<PAGE> 15
EQUITY TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek growth of capital by investing primarily in common
stocks of United States issuers and securities convertible
into or carrying the right to buy stocks.
SUBADVISER: Fidelity Management Trust Company
PORTFOLIO MANAGERS: Katherine Collins, Richard B. Fentin
INCEPTION DATE: June 18, 1985*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) EQUITY TRUST S&P 500 INDEX BLENDED INDEX
- --------------------- ------------ ------------- -------------
<S> <C> <C> <C>
10000 10000 10000
10034 10000 10000
10077 9974 9974
9952 9913 9913
9549 9595 9595
9916 10024 10024
10452 10742 10742
DEC-85 10889 11243 11243
11153 11293 11293
11718 12152 12152
12121 12825 12825
11735 12666 12666
12179 13362 13362
12544 13583 13583
12598 12810 12810
13486 13769 13769
12808 12637 12637
13095 13340 13340
13191 13681 13681
DEC-86 12904 13320 13320
14730 15109 15109
16069 15733 15733
16487 16161 16161
16711 16018 16018
16966 16183 16183
17583 16991 16991
18465 17837 17837
18988 18524 18524
18552 18116 18116
13390 14218 14218
12559 13053 13053
DEC-87 13791 14017 14017
13963 14615 14615
15039 15302 15302
15381 14840 14840
15770 15000 15000
15748 15117 15117
16615 15819 15819
16329 15755 15755
15792 15234 15234
16450 15880 15880
16735 16313 16313
16274 16082 16082
DEC-88 16648 16373 16373
17921 17556 17556
17515 17119 17119
17649 17523 17523
18626 18427 18427
19526 19168 19168
19204 19065 19065
20736 20777 20777
22158 21178 21178
22014 21095 21095
20903 20604 20604
21070 21032 21032
DEC-89 21258 21529 21529
19526 20084 20084
19892 20343 20343
20525 20878 20878
20010 20362 20362
21483 22348 22348
21119 22191 22191
20622 22120 22120
18305 20123 20123
17328 19133 19133
17080 19062 19062
18040 20290 20290
DEC-90 18752 20846 20846
19546 21767 21767
20721 23325 23325
21119 23881 23881
21341 23947 23947
22218 24972 24972
21324 23831 23831
22100 24946 24946
22572 25533 25533
22184 25114 25114
22555 25450 25450
21290 24422 24422
DEC-91 22116 27214 27214
22690 26708 26708
22858 27049 27049
21729 26519 26519
21170 27291 27291
21119 27438 27438
20504 27040 27040
21239 28130 28130
20743 27562 27562
21051 27879 27879
21922 27979 27979
23238 28922 28922
DEC-92 23870 29301 29301
24519 29515 29515
23784 29913 29913
24588 30557 30557
24109 29808 29808
25856 30613 30613
26052 30714 30714
25571 30569 30569
26641 31734 31734
27532 31499 31499
27818 32139 32139
27104 31837 31837
DEC-93 27764 32228 32228
28798 33308 33308
28584 32409 32409
27407 30999 30999
27748 31402 31402
27409 31914 31914
26166 31125 31125
26750 32156 32156
28087 33464 33464
27447 32658 32658
28407 33406 33406
27428 32180 32180
DEC-94 27616 32650 32650
27409 33498 33498
28501 34798 34798
29594 35828 35828
30955 36871 36871
32112 38327 38327
34672 39228 39228
37442 40534 40534
37840 40644 40644
38997 42347 42347
38864 42198 42198
39832 44055 44055
DEC-95 39433 44870 44870
40439 46396 46396
41387 46827 46827
41785 47277 47277
43248 47972 47972
44589 49209 49209
43751 49396 49396
41007 47213 47213
42515 48209 48209
44756 50923 50923
45175 52329 52329
47688 56285 56285
DEC-96 47374 55170 55170
50181 58619 58619
48233 59076 59076
45217 56648 56648
47164 60030 60030
50659 63686 63686
52261 66539 66539
56071 71835 72088
55125 67812 71309
57700 71528 75381
54258 69139 72449
55283 72341 74173
DEC-97 56492 73585 76213
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since* Since
Periods Ending December 31, 1997 1 Year 5 Years 10 Years Inception Dec 13, 1991 5 Years 10 Years Inception
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Blended Index+** 38.14% 21.07% 18.45% 17.64% 20.57% 160.10% 443.73% 662.13%
S&P 500 Index** 33.38% 20.22% 18.04% 17.31% 19.88% 151.13% 424.98% 635.85%
Equity Trust (at net asset value) 19.25% 18.80% 15.14% 14.81% 17.20% 136.67% 309.63% 464.92%
</TABLE>
* Current subadviser assignment became effective 12/13/91.
** All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Blended Index reflects change from S&P 500 Index to the Russell MidCap Index
as primary benchmark, effective July 1997. This change was made to more
accurately reflect the investment style of the portfolio.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: The Equity Trust returned 19.3% versus gains of 24.1% for the
average Morningstar Mid-Cap Blend fund and 29.0% for the Russell Mid Cap Index.
ENVIRONMENT: 1997 was a transitional year for this trust. At the end of the
second quarter the Trust had a manager change with responsibility going to two
Fidelity managers -- Rich Fentin, one of Fidelity's most experienced value
managers who also manages Fidelity Value, and Catherine Collins, who also
manages Fidelity MidCap Growth. The resulting portfolio, a blend of 50% value
and 50% mid cap growth should leverage the traditional strengths of Fidelity's
stock-picking ability in the broadest range of medium sized companies where
Fidelity's research depth has historically added tremendous value.
For the six months ending December 31, 1997, the Trust's mid cap growth stocks
were up 15.5% compared to 17.1% for the S&P MidCap with strong performance
coming from retail, healthcare and a variety of technology holdings. The Trust's
mid cap value stocks significantly trailed the benchmark for the six months
ending December 31, 1997, returning 4.9% versus a gain of 13.4% for the
benchmark. Performance was hurt by intermediate, technology and consumer product
positions. Retail and energy holdings added to performance.
In 1997, investors were once again drawn to large-cap growth stocks, with
recognizable names and consistent earnings. Volatility in global markets in
October exacerbated this flight to large-cap quality, to the detriment of small
and mid cap growth stocks. As a result, the NASDAQ Composite and the Russell
2000 significantly trailed large cap indices, and large cap stocks recorded
their third consecutive year of over 20% returns. Because of investors' bent
towards a handful of large cap stocks, it has become increasingly difficult over
the past few years to beat the S&P 500, and it was no different in 1997. Last
year, only 10.3% of actively managed funds beat the S&P 500. In the small
capitalization arena, financial services led the market for the third
consecutive year. Consumer non-durables were also strong, followed closely by
utilities. Technology and healthcare were laggards for the year.
xiv
<PAGE> 16
GROWTH TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide long-term growth of capital by investing at
least 65% of its assets in common stocks of well-
established, high-quality growth companies that the
subadviser believes have the potential to increase earnings
faster than the rest of the market.
SUBADVISER: Founders Asset Management, Inc.
PORTFOLIO MANAGER: Edward F. Keely
INCEPTION DATE: July 15, 1996
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) GROWTH TRUST S&P 500 INDEX
- --------------------- ------------ -------------
<S> <C> <C>
JUN-96 10000 10000
JUL-96 9936 9558
AUG-96 10304 9760
SEP-96 10808 10309
OCT-96 10768 10594
NOV-96 11400 11395
DEC-96 11053 11169
JAN-97 11697 11867
FEB-97 11432 11960
MAR-97 11077 11468
APR-97 11593 12153
MAY-97 12293 12893
JUN-97 12937 13470
JUL-97 14056 14543
AUG-97 13412 13728
SEP-97 14081 14481
OCT-97 13485 13997
NOV-97 13598 14645
DEC-97 13855 14897
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average-Annual-Total-Return Cumulative-Total-Return
Since Since
Periods Ending December 31, 1997 1 Year Inception Inception
<S> <C> <C> <C>
S&P 500 Index* 33.38% 30.44% 48.97%
Growth Trust (at net asset value) 25.35% 25.03% 38.55%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Growth Trust rose 25.4%, a little behind the
average Morningstar Large Growth fund at 26.5% and also lagging the S&P Barra
500 Growth Index which rose 36.5%.
ENVIRONMENT: We have just been through a period of time where the classic growth
stocks, particularly technology, have been severely impacted by recent market
volatility. The technology sector has been most affected by the Asian turmoil
simply because many of these companies are heavily dependent on economic growth
in foreign markets. As a defensive strategy, we have sold many of our technology
stocks and brought our technology weighting down from October. The technology
stocks we continue to own are of the highest quality with little foreign
exposure. We have also scaled back the total number of companies in the
portfolio. This allows us to stay focused on a smaller group of companies while
maintaining a certain amount of liquidity in the Trust. The Growth Trust is
currently invested approximately 82% in equities with 17% in cash.
OUTLOOK: Companies in the Standard & Poor's Index of 500 Stocks will probably
see earnings growth around 5-7% this year in part due to Asia, and in part
because comparisons for earnings growth are more difficult than they have been
in the past. We remain focused in the Growth Trust on mid-to-large
capitalization growth companies with the fundamental strengths for growth in
earnings per share. With valuations at historically high levels, it is quite
challenging to find companies with good earnings and appreciation potential.
Many of our companies may be undergoing significant life cycle changes such as
restructuring or focusing on specific product lines.
We are also looking for companies with significant catalysts to accelerate
earnings growth as well as companies with low Asian exposure. We have positioned
the Trust for a volatile environment with companies that we hope will grow more
than the market grows. We have found good opportunities in pharmaceuticals,
consumer products, consumer finance companies and food & beverage firms.
xv
<PAGE> 17
QUANTITATIVE EQUITY TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: The investment objective of the Quantitative Equity Trust is
to achieve intermediate and long-term growth through capital
appreciation and current income by investing in common
stocks and other equity securities of well established
companies with promising prospects for providing an above
average rate of return.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGERS: Mark Schmeer, Rhonda Chang
INCEPTION DATE: April 30, 1987
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) QUANTITATIVE EQUITY TRUST S&P 500 INDEX
--------------------- ------------------------- -------------
<S> <C> <C>
10000 10000
9935 10103
10285 10607
10570 11135
11328 11564
11144 11310
8317 8876
7796 8149
DEC-87 8502 8750
8500 9124
8982 9553
8682 9264
8834 9364
8893 9437
9387 9875
9076 9836
8923 9510
9282 9913
9249 10184
9136 10039
DEC-88 9340 10221
9854 10960
9775 10687
10154 10939
10671 11504
11150 11966
10875 11902
11772 12971
11836 13221
12001 13169
11629 12862
11963 13130
DEC-89 12203 13440
11352 12538
11576 12700
11820 13034
11592 12712
12532 13951
12558 13854
12578 13809
11650 12562
11125 11944
10979 11900
11482 12666
DEC-90 11707 13013
12333 13589
13047 14562
13207 14908
13172 14950
13927 15590
13102 14877
14004 15574
14391 15940
14074 15678
14361 15888
13567 15246
DEC-91 15240 16989
15364 16673
15498 16886
14748 16555
14623 17037
14950 17129
14528 16881
15189 17561
14701 17206
15080 17404
15364 17467
16107 18056
DEC-92 16165 18292
16578 18426
16737 18674
16997 19076
16827 18609
17355 19111
17364 19174
17426 19084
18084 19811
18031 19664
18235 20064
18100 19875
DEC-93 18332 20119
19084 20793
18539 20232
17424 19352
17644 19604
17699 19923
17123 19431
17841 20074
18560 20891
18237 20388
18392 20855
17588 20089
DEC-94 17560 20382
17662 20912
18271 21724
18625 22367
18639 23018
19083 23927
19603 24489
20289 25305
20294 25373
21309 26436
21190 26344
22190 27503
DEC-95 22693 28012
23257 28964
23645 29233
23674 29514
24157 29948
24680 30720
24612 30837
23275 29474
24059 30096
25311 31791
26104 32668
27483 35138
DEC-96 26762 34442
28291 36595
28446 36880
27334 35364
28677 37475
30299 39758
31611 41539
34437 44845
33032 42334
34901 44654
33295 43162
34067 45161
DEC-97 34746 45938
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since
Periods Ending December 31, 1997 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
<S> <C> <C> <C> <C> <C> <C> <C>
S&P 500 Index* 33.38% 20.22% 18.04% 15.37% 151.13% 424.98% 359.38%
Quantitative Equity Trust (at net asset
value) 29.83% 16.54% 15.12% 12.38% 114.95% 308.71% 247.46%
</TABLE>
*All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the Quantitative Equity Trust returned 29.8%, better
than the 27.8% return posted by the average Morningstar Large Cap Blend fund but
less than the S&P 500 which posted an outstanding return of 33.4%
ENVIRONMENT: Over the course of the year, the largest cap (megacap) stocks
outperformed the rest of the market. At the start of 1997, investors believed
that the market was headed lower which prompted funds to flow into the safety of
the largest cap stocks. At the end of 1997, the Asian crisis accelerated this
trend based on investor desire for safety and liquidity.
On a relative basis the Trust's performance was held back by our 15% allocation
to more mid-sized, growth-oriented companies. Performance was also reduced by
the Trust's equal weighting of its holdings which results in an underweight
position relative to the index of megacap stocks. This past year represented the
third consecutive year and the only consecutive three year period since 1958 in
which a market-weighted S&P 500 outperformed an equal-weighted version of the
index. Truly a remarkable, rare year for the S&P 500.
OUTLOOK: Our portfolio will maintain its weighting of 30% in high dividend
paying stocks and 70% in growth momentum stocks. The high dividend yielding
stocks offer some protection in the event of a market correction while the
growth momentum stocks do well in rising markets. Our quantitative research
based on historical data strongly supports a combination of high yield stocks
and earnings momentum stocks as a portfolio structure that provides superior
risk-adjusted returns over the long-term.
xvi
<PAGE> 18
EQUITY INDEX TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To achieve investment results which approximate the total
return of publicly traded common stocks in the aggregate as
represented by the Standard & Poor's 500 Composite Stock
Price Index.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGERS: Les Grober, Brett Hryb
INCEPTION DATE: February 14, 1996
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) EQUITY INDEX TRUST S&P 500 INDEX
--------------------- ------------------ -------------
<S> <C> <C>
JAN-96 10000 10000
9740 10093
MAR-96 9895 10190
10038 10340
10283 10606
JUN-96 10369 10647
9888 10176
10069 10391
SEP-96 10633 10976
10951 11279
11749 12132
DEC-96 11486 11891
12206 12635
12303 12733
MAR-97 11733 12210
12475 12939
13281 13727
JUN-97 13807 14342
14946 15483
14130 14616
SEP-97 14871 15417
14441 14902
15054 15592
DEC-97 15337 15860
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year Inception Inception
<S> <C> <C> <C>
S&P 500 Index* 33.38% 27.21% 58.60%
Equity Index Trust (at net asset value) 33.53% 25.56% 53.37%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
The Equity Index Trust returned 33.5% for 1997 as compared with a total return
of 33.4% for the S&P 500 over the same period.
xvii
<PAGE> 19
BLUE CHIP GROWTH TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To achieve long-term growth of capital (current income is a
secondary objective) and many of the stocks in the portfolio
are expected to pay dividends.
SUBADVISER: T. Rowe Price Associates, Inc.
PORTFOLIO MANAGERS: Larry J. Puglia, Brian W.H. Berghuis, Thomas H. Broadus,
Jr., Robert W. Smith, Thomas J. Huber, William J. Strombeg
INCEPTION DATE: December 11, 1992*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) BLUE CHIP GROWTH TRUST S&P 500 INDEX
- --------------------- ---------------------- -------------
<S> <C> <C>
10000 10000
DEC-92 9930 10000
9930 10073
9530 10209
9590 10428
8832 10173
9112 10448
9052 10482
8782 10433
9102 10830
9102 10750
9332 10968
9393 10865
DEC-93 9553 10999
9663 11367
9473 11061
8962 10579
9114 10717
9064 10892
8702 10623
8933 10974
9476 11421
9275 11146
9365 11401
9164 10982
DEC-94 9094 11143
9305 11432
9506 11876
9787 12228
9922 12583
10235 13080
10659 13388
11103 13834
11093 13871
11416 14452
11244 14402
11577 15035
DEC-95 11507 15313
11890 15834
12173 15981
12264 16135
12756 16372
13252 16794
13120 16858
12260 16113
12725 16453
13728 17379
13677 17859
14689 19209
DEC-96 14487 18829
15094 20006
15115 20162
14426 19333
15067 20487
15937 21735
16599 22709
17850 24516
17040 23143
17862 24412
17445 23596
17984 24689
DEC-97 18389 25113
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total
Since Since* Return Since
Periods Ending December 31, 1997 1 Year 5 Years Inception Oct 1, 1996 5 Years Inception
<S> <C> <C> <C> <C> <C> <C>
S&P 500 Index** 33.38% 20.22% 20.22% 34.24% 151.13% 151.13%
Blue Chip Growth Trust (at net asset value) 26.94% 13.12% 12.81% 26.81% 85.19% 83.89%
</TABLE>
* Current subadviser assignment became effective 10/1/96.
** All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the Blue Chip Growth Trust returned 26.9%, somewhat
better than the returns from the average Morningstar Large Cap Growth Fund but
trailing the S&P 500. Overall, the Blue Chip Growth Trust continues to perform
reasonably well. For the six months ending December 3l, the Trust outperformed
the Lipper VA Underlying Growth Funds Average and Standard & Poor's 500 Stock
Index.
ENVIRONMENT: The US stock market again surprised many investors with its
consistent strength. Mounting problems in several Asian economies have caused
investors to begin to question the underpinnings of the long economic expansion
in the US and many of our trading partners. While the severity and the ultimate
effect of the problems in Asia should not be underestimated, the environment for
US equities continues to be favorable. Inflation and interest rate data, mutual
fund inflows, and corporate earnings are also positive.
Financial stocks performed well as interest rates moderated and investors
continue to focus on companies with consistent earnings growth and strong
capital generation (funding significant share repurchase). Consumer product,
consumer services and retailing stocks continued to play a key role in the
Trust's performance. Pharmaceuticals and media giants stocks have been the
standouts. Although the Blue Chip Growth Trust has less exposure to the
technology sector than the average growth fund, in general, our technology
holdings performed quite well for 1997. COMPAQ Computer, Cisco Systems, BMC
Software, and IBM were all performers, despite their market retreat later in the
year.
OUTLOOK: Stock valuations remain expensive by all conventional valuation
measures, particularly as evidenced by the historically low dividend yield on
the S&P 500. We are also cautious because the market has generated strong
results for several consecutive years, and the problems in Asia certainly have
the potential to hurt earnings growth for certain multinational companies. We
believe we can enhance returns and lower risk over time by investing in "all
season" growth companies (those that can generate earnings growth regardless of
the economic or interest rate environment), while striving to invest at
reasonable valuations. As always, we strive to seek out blue chip companies with
leading market positions, seasoned management, and strong financial fundamentals
as we continue to believe they will provide superior investment results.
xviii
<PAGE> 20
REAL ESTATE SECURITIES TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To achieve a combination of long-term capital appreciation
and satisfactory current income by investing in real estate
related equity and debt securities.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGERS: Mark Schmeer, Les Grober
INCEPTION DATE: April 30, 1987
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD REAL ESTATE SECURITIES MORGAN STANLEY REIT
(FISCAL YEAR COVERED) TRUST INDEX NAREIT INDEX
--------------------- ----- ----- ------------
<S> <C> <C> <C>
10000 10000
DECEMBER|1987 9158 8707
9694 9888
DECEMBER|1988 10231 9695
10704 10055
DECEMBER|1989 11176 9520
10923 8930
DECEMBER|1990 10670 7868
12862 9864
DECEMBER|1991 15054 10676
16657 11018
DECEMBER|1992 18260 11976
20325 13865
DECEMBER|1993 22389 14197
22079 14724
DECEMBER|1994 21770 21770 14311
23418 22611 15424
DECEMBER|1995 25066 24579 16931
26577 26198 18139
DECEMBER|1996 33761 33402 22984
35514 35126 24357
DECEMBER|1997 39975 39606 27322
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since
Periods Ending December 31, 1997 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
<S> <C> <C> <C> <C> <C> <C> <C>
Morgan Stanley REIT Index+* 18.57% n/a n/a 22.03% n/a n/a 81.93%
NAREIT Index* 18.87% 17.93% 12.12% 9.88% 128.15% 213.80% 173.22%
Real Estate Securities Trust (at
net asset value) 18.41% 15.97% 15.88% 13.87% 118.93% 336.51% 299.75%
</TABLE>
+ The Morgan Stanley REIT Index commenced on December 30, 1994, therefore the 5
year return period is not applicable for this index.
* The cumulative since inception return for the Morgan Stanley REIT Index is for
the period December 30, 1994 to December 31, 1997
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the Real Estate Securities Trust rose 18.4% lagging
the 18.9% returns of the NAREIT Index and the 22.0% returns of the average
Morningstar Specialty Real Estate fund. However, unlike many of its peers in the
Lipper universe that allow real estate stocks, this trust is a pure REIT fund
which, in our view, has similar or better long-term investment characteristics
particularly as it relates to a long-term asset diversification vehicle for
client accounts.
ENVIRONMENT: The year started off slowly for REIT investors as the market
digested the tremendous gains that were produced in 1996. While returns for the
first half of the year were less than the broader market, the general perception
was that REIT prices had bottomed and were headed higher. This was confirmed by
a firmer bond market which took the yield on the 10 year Treasury Bond down from
7.0% to 6.4% by mid-June.
REITs outperformed the S&P 500 Index by over 300 basis points in the second half
of the year. The relative outperformance came largely in the third quarter as
REIT prices advanced 11.7%. A number of large merger and acquisition
announcements helped kickstart the rally. Throughout the year, REIT earnings
remained strong and well ahead of expectations. Through the first nine months of
the year, REIT earnings grew in excess of 12.0%, a full 3% greater than
anticipated by analysts at the beginning of the year. Yet despite these rather
impressive earnings results, new supply in the form of initial public offerings
and follow-on offerings held back REIT performance in 1997. During the year,
office and hotel REITs were the only two sectors to come close to last year's
stellar performance, returning 22% and 32% respectively. All of the other
property sectors underperformed the REIT Index with self storage, shopping mall
and factory outlet REITs faring particularly poorly.
As of year end, the Trust's characteristics continue to be superior to that of
the market. Earnings growth, earnings revisions and relative price strength
remain greater than the benchmark average. The Trust's valuation characteristics
are superior to the benchmark, and the dividend yield, now at 6.2%, is higher
than the benchmark. Cash levels at the end of the year stood at less than 1% of
the portfolio.
xix
<PAGE> 21
VALUE TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to realize an above-average total return over a market
cycle of three to five years, consistent with reasonable
risk, by investing primarily in common and preferred stocks,
convertible securities, rights and warrants to purchase
common stocks, ADRs and other equity securities of companies
with equity capitalizations usually greater than $300
million.
SUBADVISER: Miller Anderson & Sherrerd, LLP
PORTFOLIO MANAGERS: Robert J. Marcin, Richard M. Behler
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) VALUE TRUST S&P 500 INDEX
--------------------- ----------- -------------
<S> <C> <C>
DEC-96 10000 10000
JAN-97 10328 10625
FEB-97 10464 10708
MAR-97 10144 10268
APR-97 10536 10881
MAY-97 11168 11543
JUN-97 11576 12061
JUL-97 12232 13021
AUG-97 12120 12291
SEP-97 12480 12965
OCT-97 11904 12532
NOV-97 12120 13112
DEC-97 12214 13338
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
S&P 500 Index* 33.38%
Value Trust (at net asset value) 22.14%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: The fourth quarter of 1997 was a difficult one for the Value Trust
with a total return of -2.2% versus 2.9% for the S&P 500. This single quarter's
variance produced the bulk of the year's underperformance. For the year, the
Value Trust rose 22.1% versus a 34.5% return for the S&P Mid Cap Value and 26.8%
returns for the average Morningstar Mid Cap Value fund.
ENVIRONMENT: Both sector allocation and stock selection contributed to the
performance shortfall. Significant underweightings in traditionally defensive
sectors of the stock market such as health care, beverages and personal care
products, telephone and consumer services, penalized relative returns while
fears of a global economic crisis in Asian financial markets generated strong
interest in defensive stocks and an equally strong aversion to our holdings of
economically sensitive sectors of the market. An increasingly expensive equity
market supported our case for a cash position in the midpoint of our 0-20% range
which impacted relative performance.
Our current portfolio characteristics reflect the commitment to value investing
in low price/earnings ratio stocks. Our projected P/E ratio for the next 12
months is 12.5 versus 18.1 for the S&P 500. Our price to sales ratio is 76%
against 151% for the index. Price/cash flow and price/ book value ratios are
also at significant discounts to the market. Growth has generally now become too
expensive for us to own and still adhere to our valuation restrictions.
OUTLOOK: We had thought that 1997 might well be the year when the market would
rectify the valuation imbalances in nonmegacap stocks. We remain cautious in
1998. The market in general appears quite pricey, but valuations in our low P/E
universe appear quite reasonable. Our portfolio includes many high quality
industrial franchises selling for less than 10 times 1998 estimated earnings. On
either a relative or absolute basis these valuations are cheap, and valuation
divergences between many economically sensitive companies and the broad market
have never been wider. The stock market may continue for some time to ignore the
type of businesses that dominate our portfolio, but in the long run we believe
that our commitment to value will reward our patience handsomely.
xx
<PAGE> 22
INTERNATIONAL GROWTH AND INCOME TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek long term growth of capital and income by investing,
under normal circumstances, at least 65% of its total assets
in equity securities of foreign issuers. The portfolio may
also invest in debt securities of corporate or sovereign
issuers rated A or higher by Moody's or S&P or, if unrated,
of equivalent credit quality as determined by J.P. Morgan.
Under normal circumstances, the portfolio will be invested
approximately 85% in equity securities and 15% in fixed
income securities.
SUBADVISER: J.P. Morgan Investment Management, Inc.
PORTFOLIO MANAGERS: Paul A. Quinsee, Dr. Massimo Fuggetta
INCEPTION DATE: January 9, 1995
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD INTERNATIONAL GROWTH CUSTOMIZED 85%/15% COMPOSITE
(FISCAL YEAR COVERED) AND INCOME TRUST BENCHMARK INDEX
- --------------------- ---------------- --------- -----
<S> <C> <C> <C>
DEC-94 10000 10000 10000
9820 9706 9706
9620 9735 9735
MAR-95 10060 10409 10409
10390 10773 10773
10190 10695 10695
JUN-95 10010 10543 10543
10480 11095 11095
10200 10628 10628
SEP-95 10270 10850 10850
10080 10598 10598
10280 10860 10860
DEC-95 10698 11238 11238
10810 11230 11230
10790 11263 11263
MAR-96 10984 11440 11440
11187 11638 11638
11177 11546 11546
JUN-96 11320 11609 11609
11054 11411 11411
11167 11544 11544
SEP-96 11453 11783 11783
11545 11828 11828
11955 12281 12281
DEC-96 12047 12220 12220
11791 11867 11867
11883 12051 12020
MAR-97 11976 12070 12071
11983 12093 12070
12485 12753 12768
JUN-97 12912 13366 13366
13054 13580 13567
12278 12696 12726
SEP-97 12715 13382 13446
11993 12453 12625
11829 12312 12500
DEC-97 12037 12423 12500
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year Inception Inception
<S> <C> <C> <C>
Customized Benchmark*+ 1.66% 7.50% 24.23%
85%/15% Composite Index*++ 2.30% 7.72% 25.00%
International Growth and Income Trust (at net asset value) -0.08% 6.43% 20.37%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Comprised of 75% of the return of the MSCI EAFE Index, 15% of the return of
the Salomon Brothers Non-$ WGBI 10 Index, and 10% of return of the MSCI
Emerging Markets Free ex Malaysia Index. In February of 1997, the 85%/15%
Composite Index was adjusted to reflect the addition of the MSCI Emerging
Markets Free ex Malaysia Index. This change was made to more accurately
reflect the investment objective of the International Growth and Income Fund.
++ Comprised of 85% of the return of the MSCI EAFE Index and 15% of the return
of the Salomon Brothers Non-$ WGBI 10 Index.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the International Growth & Income Trust had a return
of -0.08% lagging both the 4.8% return for the average Morningstar Foreign fund
and the 2.1% return of the MSCI EAFE Index of international stocks.
ENVIRONMENT: 1997 was a particularly challenging year for international managers
as returns from the world's major equity markets diverged widely. European
stocks surged, helped by falling long term interest rates and continued optimism
over the prospects for corporate profits as a result in part, of the
strengthening US dollar. Over the year, the Italian, German and Swiss markets
showed the strongest returns gaining 33.6%, 23.3% and 43.2% respectively.
However, Asian equity markets continued to struggle. In Japan, stocks suffered a
- -24.2% decline in 1997 with a string of disappointing economic statistics
emphasizing the poor outlook for corporate profits.
Country allocation decisions in the trust contributed positively throughout most
of the year. Overweight positions in Germany and France both proved beneficial
while underweighting Japan and Malaysia contributed favorably to performance.
However, the decision to underweight the very strong Swedish market that was up
11.6% for the year suppressed performance. During the year, stock selection in
the German auto sector had a notable impact. The French media sector and banking
sector also contributed positively.
On the currency side, the US dollar continued to strengthen against both the
Japanese Yen and major European currencies, as a robust US economy led to an
increase in both short and long term rates thus making the US currency
relatively more attractive to investors. The Trust's decision to partially hedge
its yen exposure back in the US dollar also enhanced performance in 1997.
xxi
<PAGE> 23
GROWTH AND INCOME TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek long-term growth of capital and income, consistent
with prudent investment risk, by investing primarily in a
diversified portfolio of common stocks of United States
issuers which the subadviser believes are of high quality.
SUBADVISER: Wellington Management Company, LLP
PORTFOLIO MANAGER: Matthew E. Megargel
INCEPTION DATE: April 23, 1991
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) GROWTH AND INCOME TRUST S&P 500 INDEX
- --------------------- ----------------------- -------------
<S> <C> <C>
10000 10000
9940 10000
10270 10428
9950 9951
10330 10417
10570 10662
10380 10487
10530 10628
10040 10198
DEC-91 11080 11364
10810 11153
10980 11295
10740 11074
10921 11396
10982 11458
10921 11292
11376 11747
11305 11509
11588 11642
11668 11684
11981 12077
DEC-92 12213 12236
12375 12325
12435 12491
12829 12760
12567 12447
12814 12783
12844 12826
12793 12765
13204 13252
13162 13154
13388 13421
13121 13294
DEC-93 13388 13458
13850 13909
13706 13533
13193 12945
13337 13113
13569 13327
13252 12997
13812 13428
14224 13974
13960 13637
14171 13950
13527 13438
DEC-94 13770 13634
13780 13988
14340 14531
14678 14961
15150 15397
15639 16005
15965 16381
16421 16926
16562 16972
17073 17683
16812 17621
17497 18397
DEC-95 17790 18737
18214 19374
18258 19554
18573 19742
18853 20032
19305 20549
19327 20627
18628 19715
19034 20131
20139 21265
20691 21852
22259 23504
DEC-96 21853 23038
23037 24478
23296 24669
22394 23655
23669 25067
25042 26594
26476 27785
28529 29997
26998 29317
28407 29869
27423 28871
28669 30208
DEC-97 29027 30728
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since
Periods Ending December 31, 1997 1 Year 5 Years Inception 5 Years Inception
<S> <C> <C> <C> <C> <C>
S&P 500 Index* 33.38% 20.22% 18.34% 151.13% 207.28%
Growth and Income Trust (at net asset value) 32.83% 18.90% 17.27% 137.67% 190.27%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Growth & Income Trust returned 32.8%, well ahead
of the 27.8% returns for the average Morningstar Large Cap Blend fund. The
Trust's performance was basically in line with the S&P 500 which registered a
robust total return of 33.4% for 1997, completing its third year in a row of
+20% gains!
ENVIRONMENT: Stocks continued to benefit from falling interest rates, positive
earnings growth, and a benign inflation environment. The market ended below its
mid-year high, however, due to growing investor concerns about stock valuation,
the Asian turmoil and slowing EPS growth. Strong industry groups for the year
included retail, media, financial services, energy services, and major
pharmaceuticals. Weak groups for the twelve months included electronics,
communications equipment, and materials. The portfolio was generally helped by
positions in financial services, major pharmaceuticals, energy services, and
retail. Positions in selected technology sectors and an underweighted bank
weighting detracted from returns.
OUTLOOK: Looking forward, decelerating earnings growth in 1998 may pose a
challenge to equity investors. We anticipate the financial and economic turmoil
in Asia will slow corporate profit growth here in the US, thereby removing an
important engine for positive stock price movement. Overall, we have cut our
profit growth estimates from 10% to 2% for 1998. One offsetting factor for
stocks, however, will be lower inflation and interest rates which tend to lead
to higher P/E valuations. We believe those companies able to continue to deliver
earnings growth may achieve even higher relative valuations in this
disinflationary environment.
xxii
<PAGE> 24
EQUITY-INCOME TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide substantial dividend income and also
long-term capital appreciation by investing primarily in
dividend-paying common stocks, particularly of established
companies with favorable prospects for both increasing
dividends and capital appreciation.
SUBADVISER: T. Rowe Price Associates, Inc.
PORTFOLIO MANAGERS: Brian C. Rogers, Stephen W. Boesel, Richard P. Howard,
William J. Stromberg, Michael F. Sola
INCEPTION DATE: February 19, 1993*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
<TABLE>
<S> <C>
10000 10000
10170 10000
10520 10215
10180 9965
10470 10234
10560 10288
10720 10219
10760 10609
10820 10830
10930 10744
10970 10643
11310 10774
11530 11135
11710 10834
11380 10383
11399 10498
11490 10669
11329 10405
11490 10750
12003 11187
11933 10917
11721 11167
11188 10758
11399 10915
11329 11195
12073 11633
12335 11977
12517 12326
12875 12813
13283 13114
13681 13550
13824 13587
13855 14156
13385 14107
13926 14728
14100 15000
14437 15510
14723 15654
14896 15805
15255 18037
15573 16451
15233 16513
14695 16783
15145 16116
15902 17024
16066 17493
17020 18816
18900 18443
17382 19596
17832 19749
17437 18937
17902 20068
18766 21290
19491 22244
20648 24014
20078 22670
21055 23912
20496 23113
21284 24183
21920 24599
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since* Since
Periods Ending December 31, 1997 1 Year Inception Oct. 1, 1996 Inception
<S> <C> <C> <C> <C>
S&P 500 Index** 33.38% 20.47% 34.24% 145.99%
Equity-Income Trust (at net asset value) 29.71% 17.50% 29.13% 119.20%
</TABLE>
* Current subadviser assignment became effective 10/1/96.
** All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the 12 months ending December 31, 1997, the Equity-Income Trust
rose 29.7% exceeding the 26.7% returns produced by the average Morningstar Large
Cap Value fund. Performance was in line with the Lipper Variable Annuity
Underlying Equity Income Funds Average, which returned 29.13%, and in line with
the S&P Barra 500 Value Index which had a total return of 30.0%.
ENVIRONMENT: The equity market performed well in 1997 as good corporate earnings
results, continued low inflation, and a supportive interest rate environment
provided ample ammunition to fuel the advance. The performance of stocks in the
second half was particularly impressive in light of the market's October jitters
and concern over the volatility of the Asian markets. Equity returns were
notably impressive coming on the heels of considerable market strength in 1995
and 1996. The 1995-1997 period, in fact, is the first time in modern history
that stock market returns have exceeded 20% in three consecutive years.
Electric utility and telephone company stocks performed well in the last six
months after a lengthy period of underperformance. Strong price appreciation in
stocks such as Bell Atlantic, BellSouth, BGE, and Unicom helped the Trust's
return in the latter part of the year.
OUTLOOK: The equity market has provided investors with three unprecedented years
of prosperity, and the investment environment has been exceptionally conducive
to good returns. As prices have advanced, the market's valuation appeal and
likely near-term upside potential have diminished. The volatility we experienced
in the opening weeks of 1998, due in part to the turmoil in Asia, is a reminder
that investing entails risks that sometimes get in the way of positive returns.
While our emphasis is solely on uncovering interesting investment values, we
believe it is prudent to have more modest expectations for equity market
performance in the year ahead.
xxiii
<PAGE> 25
BALANCED TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks current income and capital appreciation by investing
in a balanced portfolio of common stocks, U.S. and foreign
government obligations and a variety of corporate
fixed-income securities.
SUBADVISER: Founders Asset Management, Inc.
PORTFOLIO MANAGER: Brian F. Kelly
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
LEHMAN BROTHERS
MEASUREMENT PERIOD AGGREGATE BOND 50%/50%
(FISCAL YEAR COVERED) BALANCED TRUST S&P 500 INDEX INDEX COMPOSITE INDEX
- --------------------- -------------- ------------- ----- ---------------
<S> <C> <C> <C> <C>
DEC-96 10000 10000 10000 10000
10311 10625 10031 10328
10299 10708 10056 10381
MAR-97 10134 10268 9944 10110
10451 10881 10094 10488
10835 11543 10190 10857
JUN-97 11170 12081 10311 11165
11499 13021 10589 11760
11140 12291 10499 11381
SEP-97 11584 12965 10655 11777
11493 12532 10809 11665
11633 13112 10859 11962
DEC-97 11779 13338 10968 12126
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
S&P 500 Index* 33.38%
Lehman Brothers Aggregate Bond Index* 9.68%
50%/50% Composite Index*+ 21.26%
Balanced Trust (at net asset value) 17.79%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Comprised of 50% of the return of the S&P 500 Index and 50% of the return of
the Lehman Brothers Aggregate Bond Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Balanced Trust returned 18.5%, slightly ahead of
the 18.2% returns posted by the average manager in Morningstar's domestic hybrid
(balanced) category and lagging the 23.2% returns from a 60% S&P 500, 40% Lehman
Brothers Aggregate Bond mix.
ENVIRONMENT: Investors seem to be seeking conservatively positioned portfolios
as a by-product of the domestic market volatility and the currency crisis in
Southeast Asia. At the same time, there are some indications that the domestic
economy may be slowing, as evidenced by the number of companies revising their
earnings estimates downward. The recent low inflation figures and low bond rates
have raised some concern about the possibility of deflation. We believe
large-cap stocks in particular offer strong earnings potential and liquidity
going forward.
The Balanced Trust is conservatively invested with 59% of the portfolio in
large-cap equities, and the balance in US Treasuries. Approximately 4.5% of the
Trust is in cash. We maintain a flexible portfolio of equity and fixed income
holdings that seek to provide investors with both current income and capital
appreciation. The portfolio can be shifted on economic signals.
On the equity side our holdings are well-known growth companies in the chemical,
beverage and forest products area. Our biggest international holding is in
pharmaceuticals which we believe are poised for solid growth in earnings and
will benefit from the aging population. We also maintain positions in the
telecommunications sector where our regional Bell operating company which pays a
dividend of 4.5% -- the highest of any Baby Bell -- is also well situated to
capitalize on growth in its 14 state geographic region.
OUTLOOK: Our outlook for the near term is cautious as portrayed by the Trust's
conservative posture. Although the Southeast Asian crisis has boosted the
popularity of large-cap stocks, we are monitoring the situation carefully.
Valuations seem to be at the upper end of their range and we are looking for
appropriate buying opportunities within our guidelines.
xxiv
<PAGE> 26
AGGRESSIVE ASSET ALLOCATION TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek the highest total return consistent with an
aggressive level of risk tolerance. The Trust attempts to
limit the decline in portfolio value in very adverse market
conditions to 15% over any three year period.
SUBADVISER: Fidelity Management Trust Company
PORTFOLIO MANAGER: Scott D. Stewart
INCEPTION DATE: August 3, 1989*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
AGGRESSIVE ASSET WILSHIRE MSCI EAFE CUSTOMIZED
ALLOCATION TRUST 5000 INDEX INDEX BENCHMARK
- ---------------- ---------- ----- ---------
<S> <C> <C> <C>
10000 10000 10000 10000
10340 10227 9552 10179
10180 10210 9989 10229
9760 9911 9589 10184
9810 10085 10074 10434
9880 10270 10448 10697
9210 9516 10061 10196
9370 9667 9381 10306
9530 9909 8388 10510
9313 9623 8323 10291
9916 10502 9276 11120
9837 10451 9196 11106
9686 10350 9328 11118
8908 9376 8425 10328
8538 8881 7263 9986
8455 8742 8386 9972
8839 9338 7894 10507
9181 9835 8025 10764
9525 10103 8288 11155
10029 10889 9177 11777
10201 11221 8828 12008
10319 11288 8715 12065
10571 11707 8809 12470
10288 11185 8164 12041
10592 11710 8587 12508
10887 12033 8395 12794
10813 11895 8871 12701
10981 12114 8999 12864
10498 11651 8581 12504
11265 12930 9027 13669
11107 12905 8837 13428
11244 13082 8523 13578
11034 12758 7963 13359
11326 12929 8002 13673
11446 13008 8541 13787
11381 12743 8139 13684
11835 13259 7933 14190
11684 12978 8433 14004
11835 13133 8269 14175
11803 13293 7536 14158
12095 13844 7914 14517
12193 14080 7957 14712
12290 14263 7959 14876
12442 14322 8201 15093
12637 14690 8918 15348
12498 14264 9768 15096
12689 14732 9976 15404
12833 14800 9823 15508
12822 14798 10169 15483
13213 15389 10720 15991
13180 15399 10481 15909
13348 16856 10807 18171
13269 15402 9864 16021
13448 15680 10579 16188
13884 16173 11475 16858
13571 15810 11448 16244
13068 15095 10956 15812
13200 15240 11423 15731
13356 15389 11360 15924
13081 14977 11523 15623
13451 15422 11835 18088
13782 16103 11914 16488
13475 15791 11541 16188
13654 16049 11928 16418
13248 15461 11358 16998
13385 15889 11432 16138
13320 16008 10995 16259
13619 16646 10966 18848
13965 17084 11854 17085
14304 17509 12095 17471
14649 18106 11954 17873
14879 18683 11747 18120
15415 19452 12482 18718
15453 19641 12009 18712
15785 20391 12246 19178
15619 20186 11920 19038
16078 21041 12255 19592
16397 21385 12752 19976
16691 21958 12807 20300
16780 22343 12853 20440
16557 22586 13129 20616
17027 23144 13614 20970
17208 23776 13268 21180
17281 23581 13346 21182
16778 22307 12959 20545
16955 23021 12990 20558
17647 24246 13339 21623
17909 24586 13203 21522
18680 26213 13728 22780
18528 25917 13551 22591
18914 27303 13077 23040
18955 27290 13291 23153
18501 26084 13339 22537
19024 27221 13410 23343
20053 29148 14283 24711
20745 30488 15070 25712
21597 32830 16314 27162
21037 31596 14170 28184
22189 33460 14963 27478
21487 32346 13813 26609
21959 33404 13672 27171
22066 34021 13791 27578
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since* Since
Periods Ending December 31, 1997 1 Year 5 Years Inception Dec 13, 1991 5 Years Inception
<S> <C> <C> <C> <C> <C> <C>
Wilshire 5000 Index** 31.27% 19.28% 15.66% 19.26% 141.46% 240.21%
MSCI EAFE Index** 1.77% 11.63% 4.43% 9.78% 73.31% 37.91%
Customized Benchmark**+ 22.08% 13.39% 12.81% 13.89% 87.45% 175.78%
Aggressive Asset Allocation Trust (at net
asset value) 19.09% 12.60% 9.87% 12.79% 80.98% 120.66%
</TABLE>
* Current subadviser assignment became effective 12/13/91.
** All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Customized Benchmark is comprised of 47.5% of the return of the Wilshire
5000, 20% of the MSCI EAFE Index, 15% of the return of the Lehman Brothers
Aggregate Bond Index, 10% of the return of the 90 Day T-Bill, and 7.5% of the
return of the Merrill Lynch High Yield Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Aggressive Asset Allocation Trust was up 19.1%
well ahead of the 16.6% average return among asset allocation peers in the
Morningstar mutual fund universe but trailing the conventional 60% stock, 40%
bond mix that was up 23.17%, owing to the outstanding performance of a small
number of US large cap stocks.
ENVIRONMENT: US equity markets experienced another strong year, the third in a
row. The Wilshire 5000 Index returned 31.3% for the year. However, the
performance of different sectors within the market differed greatly. US large
cap stocks (S&P 500), supported by strong earnings growth and low inflation
returned 33.4% while smaller cap names trailed far behind with the Russell 2000
rising 22.4%.
International markets were quite another story. The Asian currency crisis which
started in Thailand in late summer soon spread over the entire east Asia region.
It caused a severe credit crunch in the region and equity markets crashed as a
result. For example, the Indonesian market in US Dollar terms dropped more than
80% of its value. On the other hand, the European market did much better. This
is further proof of the importance of diversification and risk control
principles at work in the asset allocation funds.
US inflation hit a 20-year low in 1997. The yield on 30-year treasury bonds
dropped below the psychologically important 6% level to as low as 5.70% in late
1997. Given the strong economy it is an astounding achievement.
OUTLOOK: Looking forward, we expect to see stable and low inflation and slower
earnings growth, but the US economy should remain fundamentally healthy.
xxv
<PAGE> 27
MODERATE ASSET ALLOCATION TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek the highest total return consistent with a moderate
level of risk tolerance. This Trust attempts to limit the
decline in portfolio value in very adverse market conditions
to 10% over any three year period.
SUBADVISER: Fidelity Management Trust Company
PORTFOLIO MANAGER: Scott D. Stewart
INCEPTION DATE: August 3, 1989*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
LEHMAN BROTHERS
MODERATE ASSET WILSHIRE AGGREGATE BOND CUSTOMIZED
ALLOCATION TRUST 5000 INDEX INDEX BENCHMARK
- ---------------- ---------- ----- ---------
<S> <C> <C> <C>
10000 10000 10000 10000
10210 10227 9352 10094
10120 10210 9902 10166
9910 9911 10148 10243
9970 10086 10242 10488
10030 10270 10270 10675
9450 9516 10148 10324
9570 9667 10180 10407
9570 9909 10157 10548
9365 9823 10094 10359
9561 10502 10392 11028
9851 10451 10560 11078
9770 10350 10705 11137
9142 9376 10562 10680
8839 8861 10650 10344
8758 8742 10785 10390
9112 9338 11017 10836
9405 9635 11189 11069
9719 10103 11327 11383
10155 10889 11424 11839
10286 11221 11502 12020
10392 11256 11627 12102
10551 11707 11694 12396
10317 11165 11888 12110
10594 11710 11851 12477
10871 12033 12107 12759
10871 11895 12352 12784
11051 12114 12490 12940
10828 11651 12604 12738
11402 12930 12979 13655
11276 12908 12802 13431
11392 13082 12885 13554
11222 12758 12813 13383
11439 12929 12908 13616
11595 13008 13149 13775
11617 12743 13331 13774
12027 13259 13603 14231
11950 12978 13740 14148
12104 13133 13904 14328
12038 13293 13719 14244
12237 13844 13722 14480
12348 14090 13940 14694
12492 14263 14207 14897
12670 14322 14456 15130
12825 14690 14517 15320
12746 14284 14818 15158
12855 14732 14637 15401
13047 14800 14902 15563
13070 14798 14987 15575
13417 15369 15250 16007
13408 15399 15291 15967
13544 18656 15347 16161
13440 15402 16217 16016
13590 15680 15299 16157
13937 16173 15508 16540
13648 15810 15238 16171
13209 15095 14659 15620
13248 15240 14741 15857
13347 15389 14739 15784
13149 14977 14707 15872
13483 15422 14999 15984
13681 16103 15017 16254
13421 15791 14797 15951
13658 18049 14783 16139
13273 15461 14751 15837
13372 15669 14853 15973
13421 16008 15147 18135
13694 16646 15507 16501
13967 17084 15602 16839
14261 17509 15820 17172
14639 18108 15432 17624
14834 18883 16552 17848
15147 19452 16515 18203
15238 19641 16716 18298
15499 20391 16875 18653
15473 20186 17097 18656
15837 21041 17354 19100
16137 21385 17597 19418
16397 21958 17716 19678
16371 22343 17408 19670
16354 22588 17288 19731
16438 23144 17189 19912
16551 23776 17155 20056
16651 23581 17385 20138
16381 22307 17432 17757
16523 23021 17402 19959
17034 24246 17705 20668
17318 24588 18098 20848
17901 26213 18408 21553
17745 25917 18236 21397
18029 27303 18293 21744
18071 27290 18339 21831
17702 26084 18135 21420
18148 27221 18407 21973
18862 29148 18582 22920
19386 30486 18803 23635
20243 32830 18311 24734
19658 31596 19147 24074
20486 33480 19430 24994
20101 32346 19712 24658
20418 33404 19602 24951
20561 34021 20002 25283
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since* Since
Periods Ending December 31, 1997 1 Year 5 Years Inception Dec 13, 1991 5 Years Inception
<S> <C> <C> <C> <C> <C> <C>
Wilshire 5000 Index** 31.27% 19.28% 15.66% 19.26% 141.46% 240.21%
Lehman Brothers Aggregate Bond Index** 9.68% 7.49% 9.80% 9.51% 43.49% 100.02%
Customized Benchmark**+ 18.16% 11.46% 11.65% 11.93% 72.06% 152.83%
Moderate Asset Allocation Trust (at net asset value) 15.87% 10.74% 8.95% 11.01% 66.51% 105.61%
</TABLE>
* Current subadviser assignment became effective 12/13/91.
** All since inception returns for the indexes begin on the month-end closest to
the actual inception date of the Trust.
+ Customized Benchmark comprised of 32.5% of the return of the Wilshire 5000,
10% of the return of the MSCI EAFE Index, 40% of the return of the Lehman
Brothers Aggregate Bond Index, 10% of the return of the 90 Day T-Bill, and
7.5% of the return of the Merrill Lynch High Yield Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Moderate Asset Allocation Trust was up 15.9%,
just behind the 16.6% average return among asset allocation peers in the
Morningstar mutual fund universe but trailing the conventional 60% stock, 40%
bond mix that was up 23.17% owing to the outstanding performance of a small
number of US large cap stocks.
ENVIRONMENT: US equity markets experienced another strong year, the third in a
row. The Wilshire 5000 Index returned 31.3% for the year. However, the
performance of different sectors within the market differed greatly. US large
cap stocks (S&P 500), supported by strong earnings growth and low inflation
returned 33.4% while smaller cap names trailed far behind with the Russell 2000
rising 22.4%.
International markets were quite another story. The Asian currency crisis which
started in Thailand in late summer soon spread over the entire east Asia region.
It caused a severe credit crunch in the region and equity markets crashed as a
result. For example, the Indonesian market in US Dollar terms dropped more than
80% of its value. On the other hand, the European market did much better. This
is further proof of the importance of diversification and risk control
principles at work in the asset allocation funds.
US inflation hit a 20-year low in 1997. The yield on 30-year treasury bonds
dropped below the psychologically important 6% level to as low as 5.70% in late
1997. Given the strong economy it is an astounding achievement.
OUTLOOK: Looking forward, we expect to see stable and low inflation and slower
earnings growth, but the US economy should remain fundamentally healthy.
xxvi
<PAGE> 28
CONSERVATIVE ASSET ALLOCATION TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek the highest total return consistent with a
conservative level of risk tolerance. This Trust attempts to
limit the decline in portfolio value in very adverse market
conditions to 5% over any three year period.
SUBADVISER: Fidelity Management Trust Company
PORTFOLIO MANAGER: Scott D. Stewart
INCEPTION DATE: August 3, 1989*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
LEHMAN BROTHERS
MEASUREMENT PERIOD CONSERVATIVE ASSET AGGREGATE BOND CUSTOMIZED
(FISCAL YEAR COVERED) ALLOCATION TRUST 90 DAY T-BILL INDEX BENCHMARK
- --------------------- ---------------- ------------- ----- ---------
<S> <C> <C> <C> <C>
JUL-89 10000 10000 10000 10000
10070 10071 9852 10030
10030 10137 9902 10126
10020 10207 10146 10306
10080 10275 10242 10495
DEC. 1989 10110 10345 10270 10657
8700 10414 10148 10475
9780 10476 10180 10536
9620 10647 10187 10618
9447 10615 10094 10495
9834 10687 10382 10960
9905 10757 10560 11063
9905 10830 10705 11181
9468 10903 10582 10819
8285 10972 10650 10751
9234 11043 10755 10837
9495 11110 11017 11170
DEC. 1990 9722 11179 11189 11368
9938 11246 11327 11590
10251 11304 11424 11868
10322 11365 11502 11998
10409 11422 11827 12097
10431 11479 11694 12278
10311 11533 11888 12139
10528 11588 11851 12397
10778 11644 12107 12650
10887 11698 12352 12770
11061 11752 12490 12911
11104 11802 12604 12864
DEC. 1991 11550 11851 12979 13485
11409 11596 12802 13293
11506 11932 12885 13384
11398 11972 12813 13274
11537 12011 12906 13428
11710 12052 13149 13612
11790 12091 13331 13694
12124 12128 13603 14065
12135 12168 13740 14079
12273 12200 13904 14249
12181 12232 13719 14124
12273 12282 13722 14238
DEC. 1992 12400 12294 13940 14445
12572 12327 14207 14656
12745 12357 14456 14876
12848 12389 14517 15000
12855 12419 14618 14961
12915 12460 14637 15098
13095 12481 14902 15291
13143 12513 14987 16335
13395 12546 15280 15660
13407 12577 15291 15662
13503 12610 15347 15788
13407 12641 15217 15664
DEC. 1993 13515 12674 15299 15771
13755 12709 15506 15048
13515 12739 15238 15782
13179 12773 14859 15343
13151 12808 14741 15317
13180 12848 14739 15383
13087 12889 14707 15272
13344 12934 14999 15601
13446 12980 15017 16753
13267 13027 14797 15588
13344 13078 14783 15653
13177 13130 14751 15501
DEC. 1994 13267 13189 14853 15621
13408 13251 15147 15833
13677 13310 15507 16184
13844 13376 15602 16389
14056 13442 15820 16615
14448 13509 16432 17058
14597 13574 16552 17234
14772 13640 16516 17431
14881 13708 16718 17556
15070 13767 16876 17812
15110 13831 17097 17891
15361 13892 17354 18222
DEC. 1995 15664 13956 17597 18486
15827 14016 17718 18851
15732 14072 17408 18578
15719 14131 17288 18591
15744 14189 17189 18678
16801 14248 17155 18764
15917 14308 17385 18884
16787 14388 17432 18599
16859 14430 17402 18826
16219 14491 17705 19239
16478 14551 18098 19516
16896 14611 18408 20002
DEC. 1996 16766 14672 18236 19872
16954 14734 18293 20102
16997 14797 18339 20162
16766 14881 18135 19896
17055 14923 18407 20245
17431 14983 18582 20720
17746 15045 18803 21112
18287 15114 19311 21755
18002 15179 19147 21453
18430 18243 18430 21951
18398 15308 19712 21902
18557 16374 19802 22108
DEC. 1997 18684 15442 20002 22336
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Periods Ending December 31, 1997 1 Year 5 Years Inception Dec 13, 1991 5 Years Inception
<S> <C> <C> <C> <C> <C> <C>
Lehman Brothers Aggregate Bond Index** 9.68% 7.49% 9.80% 9.51% 43.49% 100.02%
90 Day T-Bill** 5.24% 4.66% 5.30% 4.52% 25.60% 54.42%
Customized Benchmark**+ 12.40% 9.11% 10.02% 9.49% 54.63% 123.36%
Conservative Asset Allocation Trust (at net asset
value) 11.44% 8.55% 7.72% 8.83% 50.68% 86.84%
</TABLE>
* Current subadviser assignment became effective 12/13/91.
** All since inception returns for the indexes begin on the month-end closest to
the actual inception date of the Trust.
+ Customized Benchmark is comprised of 20% of the return of the Wilshire 5000,
5% of the return of the MSCI EAFE Index, 50% of the return of the Lehman
Brothers Aggregate Bond Index, and 25% of the return of the 90 Day T-Bill.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Conservative Asset Allocation Trust was up 11.4%.
This was an exceptional year for a portfolio designed to maximize protection of
capital. Performance was well ahead of the 9.7% returns for the Lehman
Government/Corp Bond Index but behind the 16.6% average return generated by the
much more aggressively managed asset allocation peers in the Morningstar mutual
fund universe.
ENVIRONMENT: US equity markets experienced another strong year, the third in a
row. The Wilshire 5000 Index returned 31.3% for the year. However, the
performance of different sectors within the market differed greatly. US large
cap stocks (S&P 500), supported by strong earnings growth and low inflation
returned 33.4% while smaller cap names trailed far behind with the Russell 2000
rising 22.4%.
International markets were quite another story. The Asian currency crisis which
started in Thailand in late summer soon spread over the entire east Asia region.
It caused a severe credit crunch in the region and equity markets crashed as a
result. For example, the Indonesian market in US Dollar terms dropped more than
80% of its value. On the other hand, the European market did much better. This
is further proof of the importance of diversification and risk control
principles at work in the asset allocation funds.
US inflation hit a 20-year low in 1997. The yield on 30-year treasury bonds
dropped below the psychologically important 6% level to as low as 5.70% in late
1997. Given the strong economy it is an astounding achievement.
OUTLOOK: Looking forward, we expect to see stable and low inflation and slower
earnings growth, but the US economy should remain fundamentally healthy.
xxvii
<PAGE> 29
HIGH YIELD TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to realize an above-average total return over a market
cycle of three to five years, consistent with reasonable
risk, by investing primarily in high yield debt securities,
including corporate bonds and other fixed-income securities.
SUBADVISER: Miller Anderson & Sherrerd, LLP
PORTFOLIO MANAGERS: Robert E. Angevine, Thomas L. Bennett, Stephen F. Esser
INCEPTION DATE: January 1, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
SALOMON BROTHERS HIGH
HIGH YIELD TRUST YIELD MARKET INDEX
- ---------------- ------------------
<S> <C>
10000 10000
10058 10075
10144 10246
9904 10141
10144 10213
10392 10419
10576 10595
10944 10856
10912 10888
11136 11056
11032 11144
11138 11201
11268 11319
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
Salomon Brothers High Yield Market Index* 13.19%
High Yield Trust (at net asset value) 12.68%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: For the year, the High Yield Trust increased in value by 12.7%
basically in line with the average Morningstar High Yield fund that returned
12.8% and the Salomon Brothers High Yield Index which returned 13.2%.
ENVIRONMENT: The high yield market was supported all year by the continuing
decline in interest rates. Ten year Treasury rates declined 67 basis points and
thirty year rates declined 77 basis points from the beginning to the end of the
year. The strong stock market also supported the high yield increasing
investors' confidence that earnings will continue upwards and that companies
will have ready access to capital. Merger and acquisition activity also
continued at a high pace. Stock for stock transactions and mergers into high
grade companies effectively delivered many high yield companies and boosted bond
prices. Our heaviest portfolio weight has been the telecommunications sector, by
far the best performer during 1997 benefiting from acquisition activity and the
fact that many of the securities in the industry tend to have a high duration.
We also avoided many landmines in 1997. For example, the supermarket industry,
generally a popular one in the market, had several high profile credit problems
which we avoided.
Emerging market debt performed spectacularly and as spreads narrowed
dramatically we cut our position by approximately a third. Our timing was
fortunate in that this was accomplished shortly before the Asian crisis. The
Trust was negatively impacted by the fact that this was a start-up portfolio,
and we were unable to take full advantage of all the opportunities available in
the first quarter when the high yield market performed strongly.
OUTLOOK: We are well positioned for 1998. We currently have little exposure to
cyclical credits. We maintain a high allocation to the telecommunications sector
where fundamentals continue to appear very positive. The emerging markets sector
is where we hope for more aggressive returns, but we acknowledge the potential
risks. We attempt to mitigate this risk by investing primarily in what we
consider world class companies or those that have very strong sponsorship and in
sovereign issues where we believe there is significant value.
xxviii
<PAGE> 30
STRATEGIC BOND TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek a high level of total return consistent with
preservation of capital by giving its subadviser broad
discretion to deploy the portfolio's assets among certain
segments of the fixed-income market as the subadviser
believes will best contribute to achievement of the
portfolio's investment objective.
SUBADVISER: Salomon Brothers Asset Management Inc
PORTFOLIO MANAGERS: Peter J. Wilby, David J. Scott, Steven Guterman
INCEPTION DATE: February 19, 1993
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
LEHMAN BROTHERS AGGREGATE
STRATEGIC BOND TRUST BOND INDEX
-------------------- ----------
<S> <C>
10000 10000
10050 10042
10080 10112
10150 10125
10400 10309
10460 10367
10550 10549
10560 10577
10760 10617
10760 10526
10880 10583
11050 10726
10820 10539
10440 10279
10372 10197
10393 10196
10383 10173
10403 10376
10414 10388
10445 10236
10424 10226
10383 10204
10228 10274
10207 10478
10290 10727
10300 10792
10710 10944
11154 11387
11284 11450
11360 11425
11436 11563
11620 11675
11706 11827
11912 12004
12194 12173
12651 12265
12464 12042
12475 11958
12640 11891
12745 11887
12886 12028
12979 12059
13155 12038
13576 12247
13893 12519
13939 12733
13986 12615
14126 12654
14302 12686
14056 12545
14205 12733
14531 12854
14731 13007
15120 13358
15082 13245
15371 13441
15170 13635
15346 13698
15521 13837
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year Inception Inception
<S> <C> <C> <C>
Lehman Brothers Aggregate Bond Index* 9.68% 6.95% 38.37%
Strategic Bond Trust (at net asset value) 10.98% 9.46% 55.21%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGERS' COMMENTARY
PERFORMANCE: The Strategic Bond Trust returned 10.98% for 1997 versus 9.53% for
the Lipper Annuity General Bond category and 9.68% for the Lehman Brothers
Aggregate Bond Index.
ENVIRONMENT: The US economy grew moderately with low inflation and falling
interest rates. Asian economies were mired in crisis for the latter part of 1997
with currencies and stock market values plummeting. That led to an increase of
credit risk premiums globally and pressured the emerging markets and high yield
sectors for most of the fourth quarter.
High yield returned 13.19% for the year led by strong flows into mutual funds,
and solid credit fundamentals bolstered the high yield sector. Falling inflation
rates, stable currencies, stable political environments and rising foreign
domestic investment all helped to support the case for an allocation to the
emerging market sector. In spite of a crash in October, emerging market bonds
rallied to a gain of 16.85% for the year. Strong price increases in ten year and
thirty year bonds heavily influenced the mortgage backed securities (MBS) sector
which returned 9.27%, based on the Salomon MBS index. This is a stellar return
relative to other sectors of the investment grade market when adjusted for the
relatively lower interest rate sensitivity of MBS. The Trust lowered its
allocation to the high yield and emerging markets sectors as they were viewed as
fully valued, with spreads having tightened dramatically throughout the year.
The investment grade portion was raised in the third quarter. The Trust also
extended duration in the third quarter and increased the commitment to the MBS
sector.
OUTLOOK: Our outlook for the investment grade markets is positive given our
sanguine inflation view and optimistic assumptions regarding the budget deficit.
Although we are positive on the fundamentals for the emerging markets and high
yield sectors, in the short run the market may experience some volatility as
Asian countries continue to try to resolve their economic problems. The problems
will take years to correct, but what the markets are looking for is a long term,
multi year strategy combined with a refinancing of short term obligations into
longer term obligations that would resolve the liquidity crisis in countries
such as Indonesia and Korea. Our current high yield and emerging markets
allocations remain at 35% and 15% respectively, below our long term targets of
40% and 20%. We will be monitoring the employment cost index for signs of rising
inflation pressures, progress on the US budget deficit, flows into bond mutual
funds, Asian economic reforms and credit fundamentals in both the US and
emerging market economies.
xxix
<PAGE> 31
GLOBAL GOVERNMENT BOND TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek a high level of total return by placing primary
emphasis on high current income and the preservation of
capital by investing primarily in a global portfolio of
high-quality, fixed-income securities of foreign and United
States governmental entities and supranational issuers.
SUBADVISER: Oechsle International Advisors, L.P.
PORTFOLIO MANAGER: Astrid Vogler
INCEPTION DATE: March 18, 1988
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
GLOBAL GOVERNMENT SALOMON BROTHERS
BOND TRUST WORLD GOV'T BOND INDEX
---------- ----------------------
<S> <C>
10000 10000
10100 10000
10130 9951
10040 9858
9840 9643
9761 9585
9651 9477
9761 9722
10150 10171
10130 10327
10179 10222
10100 10072
10080 10079
9988 9939
10059 10071
9887 9859
10028 10057
10322 10515
10150 10161
10413 10354
10434 10441
10494 10536
10838 10664
10656 10523
10616 10381
10585 10259
10602 10227
10842 10567
10998 10761
11258 11098
11373 11011
11425 11135
11842 11632
12008 11825
12071 11942
12373 12240
12435 12244
12008 11799
12118 11981
12172 11956
11965 11841
12237 12094
12541 12328
13030 12810
13160 12944
13268 13146
13985 13830
13703 13584
13703 13509
13572 13355
13615 13461
13982 13875
14315 14263
14590 14595
14519 15003
14567 15154
14383 14743
14074 14509
14303 14595
14635 14850
15026 15142
15175 15374
15457 15699
15614 16857
15712 15823
16017 15868
16787 15345
16677 16539
16872 16511
16579 16393
17019 16532
17398 16665
16775 16556
16384 16533
16259 16552
15822 16406
15822 16643
15041 16778
15925 16717
15963 16838
16452 17108
16028 16873
16041 16920
16169 17275
16542 17717
16967 18769
17384 19117
17845 19855
17845 19770
18171 19517
18252 19136
18584 19563
18836 19709
19297 19932
19759 20141
19813 19893
19636 19792
19664 19764
19884 19685
20018 19689
20287 19844
20480 20225
20764 20304
21226 20387
21853 20769
22390 21043
22330 20872
21793 20315
21778 20163
21599 20009
21746 19833
21926 20373
22289 20615
22335 20455
22155 20442
22710 20878
22694 21312
22743 20986
22988 20923
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Periods Ending December 31, 1997 1 Year 5 Years Inception 5 Years Inception
<S> <C> <C> <C> <C> <C>
Salomon Brothers World Government Bond Index* 0.24% 7.47% 7.87% 43.35% 109.23%
Global Government Bond Trust (at net asset value) 2.95% 9.95% 8.88% 60.72% 129.88%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Global Government Bond Trust returned 3.0%, well
ahead of the Salomon Brothers World Government Bond Index that was up 0.2% and
basically in line with the 3.6% return generated by the average Morningstar
Global Bond fund.
ENVIRONMENT: The year 1997 will probably go down in history as the year of the
Asian crisis. For more than six months, stories of Asian currency or asset
collapses, defaults, rescue packages or downgrades dominated headlines. For the
most part, the Global Government Bond Trust was a beneficiary of this turmoil in
the Far-East.
The Trust held a neutral position in the US, nothing in Japan, and an overweight
position in Europe. Most of our European holdings concentrated on the former
high yielding markets like Italy and Sweden and where we were long duration and
thus benefited from the continued European Monetary Union-induced yield
convergence. In addition, talk of possible deflation stemming from the Asian
situation, together with a flight to quality and liquidity were other factors
which helped push yields down even further. As the US Dollar continued its
strengthening trend we implemented hedging strategies to protect the value of
the Trust.
OUTLOOK: In 1998, we believe that there are very solid fundamental reasons why
bonds are attractive. The Asian meltdown is already having a dampening effect on
the global economy. Commodity prices are falling. Import price deflation will
keep the lid on domestic prices and profit growth will slow, business pricing
power will falter, profit margins will be squeezed, earnings will be
disappointing. Tighter fiscal policy on the part of Asian nations and among
European nations eager to participate in EMU, an almost balanced budget in the
US, a shrinking US Treasury issuance and higher real yields in the US than a
year ago lead us to conclude that bonds offer value. We will, for the time
being, continue to concentrate on the Dollar-bloc. Looking further ahead into
the new year, demand for the Euro, the new European single currency, could put a
cap on the Dollar's uptrend. This could then provide additional return
opportunities for foreign exchange appreciation.
xxx
<PAGE> 32
CAPITAL GROWTH BOND TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To achieve growth of capital by investing in medium-grade or
better debt securities, with income as a secondary
consideration.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGER: Cathy Addison
INCEPTION DATE: June 26, 1984
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
SALOMON BROTHERS LEHMAN BROTHERS
CAPITAL GROWTH BIG BOND AGGREGATE
BOND TRUST INDEX-CORPORATE BOND INDEX
---------- --------------- ----------
<S> <C> <C>
10000 10000 10000
11373 11926 11711
12859 13416 12995
14345 14906 14301
15949 16176 15595
17554 17445 16488
17405 17625 16461
17257 17806 16941
17873 18648 17755
18489 19490 18276
19772 20851 19958
21055 22211 20933
21747 23021 21524
22440 23830 22806
24278 26032 23824
26117 28234 26455
28885 29457 27173
27665 30739 28414
29115 32601 30376
30575 34484 31184
29889 33854 29977
29202 33244 30274
32157 36850 33739
35112 40455 35866
34307 39601 35429
35989 41798 37164
36881 43096 38319
39126 46049 40763
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
<S> <C> <C> <C> <C> <C> <C> <C>
Salomon Bros BIG Bond Index (Corporate)+ 10.17% 8.42% 9.97% 11.95% 49.81% 158.62% 360.49%
Lehman Brothers Aggregate Bond Index* 9.68% 7.49% 9.18% 10.97% 43.46% 140.62% 307.63%
Capital Growth Bond Trust (at net asset value) 8.72% 7.19% 8.53% 10.62% 41.48% 126.74% 291.26%
</TABLE>
+ Salomon Brothers Broad Investment Grade Bond Index-Corporate Component
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Capital Growth Bond Trust returned 8.7% right in
line with the 8.7% returns generated by the average Morningstar General Bond
fund but below the 9.6% return of the Salomon Broad Investment Grade Index.
ENVIRONMENT: The bond market rallied in 1997. The benchmark 30-year US Treasury
Bond began the year at 6.64% rising to a peak of 7.17% and falling to 5.92% by
the end of the year. The yield on the long bond fell 72 basis points and the
yield on the two year note fell 23 basis points causing the yield curve to
flatten. Early in the year interest rates rose largely due to investors' fears
that inflation would increase which in turn was fueled by economic indicators
showing that the economy had picked up speed. As a result, the Fed raised rates
by 25 basis points in order to slow economic growth. However, interest rates
began their downward move from April until the end of the year.
The rally was supported by a slowdown in the economy as GDP dropped from 4.9% in
the first quarter to 3.3% in the second quarter to 3.1% in the third quarter.
Bond yields were propelled even lower by technical factors such as continued
interest from foreign buyers and hedge fund managers, reallocation of funds by
equity managers, the need of mortgage back security traders to offset the
shortening in their portfolios with Treasuries, and decreased issuance of
Treasuries and corporate bonds.
In the latter part of the year, the meltdown in Asia caused a significant sell
in the Asian stock markets and a loss in foreign currency values. This began a
flight to quality with money flowing into US Treasuries. In addition the Asian
events have caused investors to anticipate slowdowns in growth and inflation in
the US.
xxxi
<PAGE> 33
INVESTMENT QUALITY BOND TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek a high level of current income consistent with the
maintenance of principal and liquidity, by investing
primarily in a diversified portfolio of investment grade
corporate bonds and U.S. Government bonds with intermediate
to longer term maturities. Up to 20% of the portfolio's
assets may be invested in non-investment grade fixed income
securities.
SUBADVISER: Wellington Management Company, LLP
PORTFOLIO MANAGER: Thomas L. Pappas
INCEPTION DATE: April 23, 1991
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
<S> <C> <C>
10000 10000 10000
10070 10000 10000
10110 10058 10054
10090 10053 10046
10181 10193 10179
10472 10413 10412
10753 10824 10626
10853 10742 10725
10944 10841 10832
11376 11163 11193
11155 11011 11036
11276 11083 11111
11195 11021 11065
11247 11100 11117
11521 11310 11344
11679 11465 11513
11984 11700 11812
12089 11818 11913
12216 11959 12069
12016 11800 11875
12016 11802 11874
12195 11990 12084
12469 12220 12353
12711 12434 12819
12795 12466 12662
12863 12573 12759
12863 12590 12760
13116 12817 13057
13173 12891 13143
13439 13116 13454
13494 13152 13495
13538 13200 13555
13350 13088 13397
13418 13158 13462
13594 13336 13685
13261 13104 13379
12574 12781 13023
12735 12678 12909
12724 12577 12877
12700 12649 12846
12933 12901 13126
12956 12916 13135
12758 12726 12920
12724 12715 12901
12689 12687 12879
12793 12775 12972
13028 13028 13230
13316 13338 13562
13409 13419 13561
13611 13607 13555
14170 14133 14472
14281 14237 14592
14232 14205 14533
14405 14377 14735
14554 14517 14893
14802 14705 15103
15038 14926 15355
15288 15135 15601
15361 15238 15699
15060 14973 15352
14926 14868 15223
14797 14785 15096
14758 14755 15070
14942 14953 15278
14982 14993 15311
14956 14988 15271
15233 15228 15559
15536 15565 15943
15839 15832 15252
15681 15685 16057
15721 15734 16077
15760 15773 16122
15562 15598 15911
15520 15832 16147
15961 15982 16307
16174 16172 16514
16885 16609 17051
16486 16486 16840
16756 16712 17114
16955 16964 17371
17040 17032 17484
17210 17204 17648
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since
Periods Ending December 31, 1997 1 Year 5 Years Inception 5 Years Inception
<S> <C> <C> <C> <C> <C>
Customized Benchmark*+ 9.91% 7.87% 8.89% 46.05% 76.48%
Lehman Brothers Aggregate Bond Index* 9.68% 7.49% 8.48% 43.49% 72.04%
Investment Quality Bond Trust (at net asset value) 9.75% 7.13% 8.46% 41.12% 72.10%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Customized Benchmark is comprised of 50% of the return of the Lehman Brothers
Government Bond Index and 50% of the return of the Lehman Brothers Corporate
Bond Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: For the year, the Investment Quality Bond Trust returned 9.75%, in
line with the 9.68% returns on the Lehman Brothers Aggregate Bond Index.
ENVIRONMENT: During 1997, Treasury yields declined and prices rose. Inflation
expectations dove as commodity prices deflated. Oil prices dove 14%, gold
plummeted by 24% and domestic inflation, as measured by CPI, finished at 1.7%.
In addition, with the deflationary implication of troubles in Asia, it was not
surprising to see long Treasuries fall by 70 basis points, breaking through the
6% level.
Treasuries finished the year with the most momentum; for the year, however, they
performed in line with both mortgages and high quality corporate bonds.
Meanwhile, high yield continued to outperform, generating an index total return
over 12%. The Trust benefited from the constructive rate outlook but was held
back by a small (under 2%) position in Southeast Asian bonds.
OUTLOOK: The current outlook for the US, despite robust current growth and
little slack in labor or manufacturing capacity, is materially different as a
result of the situation in Asia. The consensus has reduced growth and inflation
expectations each by one-half percent. Anecdotal evidence which has recently
surfaced suggests that these reductions may not be enough. With a continued
positive backdrop for bonds, our inclination is to add to Treasuries rather than
mortgages or corporate bonds, as the extra yield premium to own corporates and
mortgages leaves little room for error as we enter a riskier time for the
economy. Opportunities continue to surface in high yield, but we do not expect
to increase exposure to the high yield sector.
xxxii
<PAGE> 34
U.S. GOVERNMENT SECURITIES TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: To seek a high level of current income consistent with
preservation of capital and maintenance of liquidity by
investing in debt obligations and mortgage-backed securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and derivative securities such as
collateralized mortgage obligations backed by such
securities.
SUBADVISER: Salomon Brothers Asset Management Inc
PORTFOLIO MANAGER: Steven Guterman, Roger Lavan
INCEPTION DATE: May 1, 1989*
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
U.S. GOVERNMENT MERRILL LYNCH 1-10
SECURITIES TRUST YEAR GOV'T INDEX
---------------- ----------------
<S> <C>
10000 10000
10039 10211
10165 10471
10341 10686
10214 10538
10292 10590
10555 10807
10552 10913
10691 10940
10594 10878
10533 10905
10652 10927
10593 10589
10839 11119
10976 11264
11143 11425
11104 11378
11192 11480
11300 11639
11487 11813
11614 11981
11742 12102
11791 12164
11840 12230
11942 12357
12015 12428
12015 12441
12169 12575
12427 12810
12623 13027
12767 13175
12921 13329
13241 13654
13024 13516
13076 13567
12973 13512
13123 13535
13328 13830
13554 14030
13836 14291
13985 14458
14179 14555
13984 14475
13888 14411
14051 14601
14298 14874
14503 15098
14587 15155
14664 15275
14618 15229
14855 15448
14577 15481
15065 15717
15124 15785
15147 15812
15068 15738
15138 15797
15282 15955
15079 15729
14900 15509
14875 15403
14599 15418
14854 15429
15029 15621
15100 15669
14923 15544
14887 15547
14852 15469
14947 15528
15207 15788
15528 16087
15621 16176
15794 16362
16383 16830
16465 16939
16427 16951
16578 17090
16692 17204
16882 17400
17088 17614
17275 17794
17388 17945
17110 17753
17009 17873
16948 17619
16879 17610
17067 17784
17121 17839
17134 17859
17402 18088
17724 18417
17992 18641
17858 18544
17952 18615
18019 18637
17885 18544
18123 18752
18252 18898
18424 19061
18753 19415
18697 19336
18928 19548
19142 19773
19185 19816
19371 19987
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Average Annual Total Return Cumulative Total Return
Since Since* Since
Periods Ending December 31, 1997 1 Year 5 Years Inception Dec 13, 1991 5 Years Inception
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch 1-10yr Gov't Index** 7.78% 6.48% 8.32% 6.84% 36.88% 99.87%
U.S. Gov't Securities Trust (at net asset value) 8.47% 6.62% 7.93% 6.73% 37.77% 93.71%
</TABLE>
* Current subadviser assignment became effective 12/13/91.
** All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: The US Government Securities Trust posted an 8.47% return in 1997
which compares very favorably with the Merrill Lynch 1-10 Year Government Index
return of 7.78%.
ENVIRONMENT: Economic conditions in the US remained surprisingly favorable
throughout 1997. The combination of moderate growth and low inflation supported
the financial markets. The Federal Reserve's decision to raise interest rates in
March was widely anticipated, and since then, the market continued to be
comforted by the fact that strong growth did not translate into higher inflation
readings. The turmoil in Asian markets reverberated throughout the world later
in the year, and the resultant dampening effects are likely to keep the Fed on
hold for the near term.
The Trust's strong performance reflects the continued overweight position in
mortgage-backed securities. Indeed, mortgages (as measured by the Salomon
Brothers Mortgage Index) posted returns of 9.27% in 1997, which on a
duration-adjusted basis outdistanced benchmark Treasuries by approximately 132
basis points. The Trust's performance was also helped by the slightly longer
duration position relative to the benchmark since midyear.
OUTLOOK: As we move into 1998, the effects of the turmoil in Asia will continue.
While we believe that the direct impact on the US will be limited, the indirect
effects could be larger. The weakness in Asia should dampen US growth to
sustainable levels, offsetting strength in housing and other consumer sectors.
This should also serve to curb mounting pressure in the labor force. We believe
that the inflation picture will improve going forward, as price competition in
commodities and produced goods from countries such as Korea and Japan keep US
prices in check. This combination of slower growth and lower inflation should
benefit financial assets in 1998. Barring a significant decline in interest
rates, we believe that additional spreads from mortgages will lead to higher
returns versus Treasuries.
xxxiii
<PAGE> 35
LIFESTYLE AGGRESSIVE 1000 TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide long-term growth of capital (current income
is not a consideration) by investing 100% of the Lifestyle
Trust's assets in other portfolios of the Trust which invest
primarily in equity securities.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGER: Management Team
INCEPTION DATE: January 7, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD LIFESTYLE AGGRESSIVE 1000
(FISCAL YEAR COVERED) TRUST RUSSELL 2000 INDEX
- --------------------- ----- ------------------
<S> <C> <C>
DEC-96 10000 10000
10112 10200
9920 9952
MAR-97 9568 9483
9637 9509
10302 10567
JUN-97 10738 11020
11321 11533
10886 11797
SEP-97 11543 12660
10968 12104
10960 12026
DEC-97 11089 12236
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
Russell 2000 Index* 22.36%
Lifestyle Aggressive 1000 Trust (at net asset value) 10.89%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: Since inception on January 7, 1997, the Lifestyle Aggressive 1000
Trust was up 10.9%, below the full-year returns posted by the Morningstar
Aggressive Growth peers who averaged 16.4%. In context, the more aggressively
positioned the portfolio, the worse relative performance was produced. For
example, large cap growth stocks outperformed small cap growth stocks by over
2000 basis points, the biggest gap in 20 years.
ENVIRONMENT: Lifestyle portfolios are constructed as an optimal blend of asset
classes and investment styles based on Modern Portfolio Theory. They are
intended to be long-term investments designed to meet or better the risk-return
characteristics of their benchmarks. Over short periods of time, a few asset
classes and style groups may outperform or underperform the Lifestyle portfolio.
But, over the long-term this well-diversified mix is expected to provide strong,
long-term performance with a relatively low level of volatility. This portfolio
is heavily weighted in small and mid cap stocks (50%) and to international
markets (30%), asset classes that were particularly out of favor in 1997.
Small-cap growth stocks as measured by the Russell 2000 Growth Index returned
only 12.9% for the year and international stocks as measured by the MSCI EAFE
Index advanced only 2.1% for the year. While somewhat disappointing in relation
to the returns on US large caps this year, the assets in this portfolio have
historically demonstrated a tendency toward long-term superior performance.
The only positive contribution to relative performance was the Trust's exposure
to US large cap stocks (10%). All other asset classes, mid caps, small caps,
international fixed income and real estate produced lower relative returns. At
the end of the third quarter, the addition of the Small Company Value portfolio
allowed us to bring our small cap value weight in line with our long-term model.
Timing was less than fortunate as the Asian crisis escalated in the fourth
quarter producing setbacks in small cap stocks.
Relative to our peers who had the benefit of the full year, returns were
impacted by the S&P 500 posting strong returns in the first five days of 1997
prior to the launch of the Trust. Performance was also impacted by poor
performance of the Pilgrim Baxter Growth portfolio (20% allocation). The highly
volatile growth-oriented style of Pilgrim-Baxter has served up stunning returns
and equally breath-taking periods of underperformance. Over time, patience has
rewarded those who can live with the volatility with some of the highest
performance numbers among all growth managers.
OUTLOOK: As with all our Lifestyle Funds our strategy is to stay the course.
Across all investment styles, small and mid-cap stocks appear to offer better
value, i.e. lower Price Earnings ratios, Price to Cash flow ratios and Price to
Book values than US large caps. The flight to quality stemming from the Asian
crisis in the fourth quarter of 1997 served only to exacerbate the difference.
Yet the valuation risk in the US large caps is balanced by the positive economic
and fundamental factors that drove the market to such unexpectedly strong
returns in 1997. Over time, we expect the performance gap that currently exists
between US large caps and all other asset classes to shift and revert to more
historical levels. For example, we expect the high dividends and positive
fundamentals in the real estate segment to continue producing steady returns
with little or no relationship to the overall direction of the market.
xxxiv
<PAGE> 36
LIFESTYLE GROWTH 820 TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide long-term growth of capital with
consideration also given to current income by investing
approximately 20% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income
securities and approximately 80% of its assets in Underlying
Portfolios which invest primarily in equity securities.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGER: Management Team
INCEPTION DATE: January 7, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD LIFESTYLE GROWTH LEHMAN BROTHERS BLENDED
(FISCAL YEAR COVERED) 820 TRUST S&P 500 INDEX GOV'T/CORP INDEX BENCHMARK
<S> <C> <C> <C> <C>
DEC-96 10000 10000 10000 10000
JAN-97 10144 10412 10012 10332
FEB-97 10104 10496 10033 10403
MAR-97 9824 10060 9914 10032
APR-97 9967 10660 10058 10541
MAY-97 10517 11315 10152 11078
JUN-97 10894 11819 10274 11500
JUL-97 11420 12758 10588 12301
AUG-97 11132 12049 10470 11726
SEP-97 11641 12708 10634 12277
OCT-97 11173 12284 10804 11988
NOV-97 11247 12853 10861 12445
DEC-97 11384 13074 10975 12642
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative-Total-Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
S&P 500 Index 30.74%
Lehman Brothers Government/Corporate Bond Index* 9.75%
Blended Benchmark+ 26.42%
Lifestyle Growth 820 Trust (at net asset value) 13.84%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Blended Benchmark consists of 80% of the return of the S&P 500 Index and 20%
of the return of the Lehman Brothers Government/ Corporate Bond Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: Since inception on January 7, 1997, the Lifestyle Growth 820 Trust
was up 13.8%. Returns were in line with the 14.2% full-year returns for the
average of its peers in the Morningstar Asset Allocation and Multi-asset Global
categories. This peer group on average maintains a comparable mix of bonds,
international and domestic stocks.
ENVIRONMENT: Lifestyle portfolios are constructed as an optimal blend of asset
classes and investment styles based on Modern Portfolio Theory. They are
intended to be long-term investments designed to meet or better the risk-return
characteristics of their benchmarks. Over short periods of time, a few asset
classes and style groups may outperform or underperform the Lifestyle portfolio.
But, over the long-term this well-diversified mix is expected to provide strong,
long-term performance with a relatively low level of volatility. The Trust's
exposure to US large cap stocks produced a positive contribution. All other
asset classes, mid caps, small caps, international fixed income and real estate
produced lower relative returns. At the end of the third quarter, the addition
of the Small Company Value portfolio allowed us to bring our small cap value
weight in line with our long-term model.
Relative to our peers who had the benefit of the full year, returns were
impacted by the S&P 500 posting strong returns in the first five days of 1997
prior to the launch of the Trust. Performance was also impacted by poor
performance of the Pilgrim Baxter Growth portfolio (10% allocation). The highly
volatile growth-oriented style of Pilgrim-Baxter has served up stunning returns
and scary losses in the past. Over time, patience has rewarded those who can
live with the volatility with some of the highest performance numbers among all
growth managers.
OUTLOOK: As with all our Lifestyle Funds our strategy is to stay the course.
Across all investment styles, small and mid-cap stocks appear to offer better
value, i.e. lower Price Earnings ratios, Price to Cash flow ratios and Price to
Book values than US large caps. Yet the valuation risk in the US large caps is
balanced by the positive economic and fundamental factors that drove the market
to such unexpectedly strong returns in 1997. We are patient, long-term investors
and fully expect that the performance gap that currently exists between US large
caps and all other asset classes will shift and revert to more historical
levels.
xxxv
<PAGE> 37
LIFESTYLE BALANCED 640 TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide a balance between a high level of current
income and growth of capital with a greater emphasis given
to capital growth by investing approximately 40% of the
Lifestyle Trust's assets in Underlying Portfolios which
invest primarily in fixed income securities and
approximately 60% of its assets in Underlying Portfolios
which invest primarily in equity securities.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGER: Management Team
INCEPTION DATE: January 7, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD LIFESTYLE BALANCED LEHMAN BROTHERS BLENDED
(FISCAL YEAR COVERED) 640 TRUST S&P 500 INDEX GOV'T/CORP INDEX BENCHMARK
- --------------------- --------- ------------- ---------------- ---------
<S> <C> <C> <C> <C>
DEC-96 10000 10000 10000 10000
10147 10412 10012 10252
10151 10498 10033 10310
MAR-97 9907 10050 9914 10004
10099 10660 10058 10421
10528 11315 10152 10843
JUN-97 10842 11819 10274 11186
11330 12758 10588 11855
11127 12049 10470 11407
SEP-97 11541 12708 10634 11853
11176 12284 10804 11692
11261 12853 10861 12041
DEC-97 11411 13074 10975 12216
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
S&P 500 Index 30.74%
Lehman Brothers Government/Corporate Bond Index* 9.75%
Blended Benchmark+ 22.16%
Lifestyle Balanced 640 Trust (at net asset value) 14.11%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Blended Benchmark consists of 60% of the return of the S&P 500 Index and 40%
of the return of the Lehman Brothers Government/ Corporate Bond Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: Since inception on January 7, 1997, the Lifestyle Balance 640 Trust
was up 14.1%. Returns were somewhat below the full-year 16.6% average return
among asset allocation peers in the Morningstar mutual fund universe. Returns
were in line with the 14.2% full-year returns for the average of its peers in
the Morningstar Asset Allocation and Multi-asset Global categories. This peer
group on average maintains a comparable mix of bonds, international and domestic
stocks.
ENVIRONMENT: Lifestyle portfolios are constructed as an optional blend of asset
classes and investment styles based on Modern Portfolio Theory. They are
intended to be long-term investments designed to meet or better the risk-return
characteristics of their benchmarks. Over short periods of time, a few asset
classes and style groups may outperform or underperform the Lifestyle portfolio.
But, over the long-term this well-diversified mix is expected to provide strong,
long-term performance with a relatively low level of volatility.
The biggest contributor to overall performance was the Trust's 30% exposure to
US large and mid-cap stocks. At the end of the third quarter, the addition of
the Small Company Value portfolio allowed us to bring our small cap value weight
in line with our long-term model. Overall performance was enhanced by the active
fixed income managers all of whom produced at or above benchmark performance.
Particularly rewarding was the 10% allocation to the Salomon-managed Strategic
Bond portfolio (up 10.98% in 1997) which continues to provide access to
high-yielding asset classes and stellar risk-adjusted returns. On a relative
basis, returns were impacted by the S&P 500 posting strong returns in the first
five days of 1997 prior to the launch of the Trust. The poor performance of the
Pilgrim Baxter Growth portfolio (5%) was in part offset by the performance of
the Warburg Pincus-managed Emerging Growth portfolio (5%) which beat the Russell
2000 Growth Index by over 600 basis points. Overall allocations to anything
other than US large caps negatively impacted relative performance. Small caps,
for example suffered their worst performance relative to the S&P 500 in over 20
years.
OUTLOOK: As with all our Lifestyle Funds our strategy is to stay the course.
Small and mid-cap stocks now appear to offer better value, i.e. lower Price
Earnings ratios, Price to Cash flow ratios and Price to Book values than US
large caps. However, the valuation risk in the US large caps is balanced by the
positive economic and fundamental factors that drove the market to such
unexpectedly strong returns in 1997. Over time, we expect the performance gap
that currently exists between US large caps and all other asset classes to shift
and revert to more historical levels.
xxxvi
<PAGE> 38
LIFESTYLE MODERATE 460 TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide a balance between a high level of current
income and growth of capital with a greater emphasis given
to high income by investing approximately 60% of the
Lifestyle Trust's assets in Underlying Portfolios which
invest primarily in fixed income securities and
approximately 40% of its assets in Underlying Portfolios
which invest primarily in equity securities.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGER: Management Team
INCEPTION DATE: January 7, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
LIFESTYLE
MEASUREMENT PERIOD MODERATE 460 LEHMAN BROTHERS BLENDED
(FISCAL YEAR COVERED) TRUST S&P 500 INDEX GOV'T/CORP INDEX BENCHMARK
- --------------------- ----- ------------- ---------------- ---------
<S> <C> <C> <C> <C>
DEC-96 10000 10000 10000 10000
10134 10412 10012 10172
10206 10496 10033 10218
MAR-97 10046 10060 9914 9975
10253 10560 10058 10300
10548 11315 10152 10611
JUN-97 10785 11819 10274 10877
11182 12758 10588 11422
10998 12049 10470 11091
SEP-97 11285 12708 10634 11438
11082 12284 10804 11395
11232 12853 10861 11643
DEC-97 11370 13074 10975 11796
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
Since
Periods Ending December 31, 1997 Inception
<S> <C>
S&P 500 Index 30.74%
Lehman Brothers Government/Corporate Bond Index* 9.75%
Blended Benchmark+ 17.96%
Lifestyle Moderate 460 Trust (at net asset value) 13.70%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Blended Benchmark consists of 40% of the return of the S&P 500 Index and 60%
of the return of the Lehman Brothers Government/ Corporate Bond Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: Since inception on January 7, 1997, the Lifestyle Moderate 460
Trust was up 13.7%, roughly in line with the 14.2% full year returns for the
average of its peers in the Morningstar Asset Allocation and Multi-asset Global
categories. This peer group maintains a comparable, though somewhat more
aggressive asset mix. However, returns were below the extraordinary 18.9% full
year return to a 40% S&P 500/60% Lehman Brothers Government/Corporate Bond mix.
ENVIRONMENT: Clearly the biggest contributor to overall performance was the
Trust's 30% exposure to US stocks of which two-thirds were large caps. In
addition, all the active fixed income managers produced at or above benchmark
performance, particularly the 10% allocation to the Salomon-managed Strategic
Bond portfolio (up 10.98% in 1997) which continues to provide access to
high-yielding asset classes and stellar risk-adjusted returns. The returns
relative to the full year 40% stock/60% bond benchmark were impacted by the
strong first days of 1997 which accounted for nearly 100 basis points of the
performance gap. Our 10% allocation to international equities dragged on
performance particularly in the fourth quarter when the Asian crisis emerged as
front-page news.
OUTLOOK: Our strategy is to stay the course. At current levels, the US equity
market by most traditional valuation measures is above fair value. Yet, the
positive economic and fundamental factors that drove the market to such
unexpectedly strong returns in 1997 remain intact. We are confident that the
highly defensive, low P/E strategy that has worked so well for the MAS-managed
Value portfolio will provide strong equity exposure with considerable protection
should valuation become a significant negative factor for the market overall.
xxxvii
<PAGE> 39
LIFESTYLE CONSERVATIVE 280 TRUST
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE: Seeks to provide a high level of current income with some
consideration also given to growth of capital by investing
approximately 80% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income
securities and approximately 20% of its assets in Underlying
Portfolios which invest primarily in equity securities.
SUBADVISER: Manufacturers Adviser Corporation
PORTFOLIO MANAGER: Management Team
INCEPTION DATE: January 7, 1997
</TABLE>
CHANGE IN VALUE OF $10,000 INVESTMENT AND COMPARATIVE INDICES
[GRAPH]
<TABLE>
<CAPTION>
LIFESTYLE
MEASUREMENT PERIOD CONSERVATIVE 280 LEHMAN BROTHERS BLENDED
(FISCAL YEAR COVERED) TRUST S&P 500 INDEX GOV'T/CORP INDEX BENCHMARK
<S> <C> <C> <C> <C>
DEC-96 10000 10000 10000 10000
10115 10412 10012 10092
10176 10496 10033 10125
MAR-97 10071 10060 9914 9945
10236 10660 10058 10180
10422 11315 10152 10380
JUN-97 10591 11819 10274 10573
10890 12758 10588 10999
10787 12049 10470 10778
SEP-97 10991 12708 10634 11032
10983 12284 10804 11099
11089 12853 10861 11249
DEC-97 11215 13074 10975 11382
</TABLE>
PERFORMANCE TABLE
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------
Since
Periods Ending December 31, 1997 Inception
<S> <C>
S&P 500 Index 30.74%
Lehman Brothers Government/Corporate Bond Index* 9.75%
Blended Benchmark+ 13.82%
Lifestyle Conservative 280 Trust (at net asset value) 12.15%
</TABLE>
* All since inception returns for the indices begin on the month-end closest to
the actual inception date of the Trust.
+ Blended Benchmark consists of 20% of the return of the S&P 500 Index and 80%
of the return of the Lehman Brothers Government/ Corporate Bond Index.
PORTFOLIO MANAGER'S COMMENTARY
PERFORMANCE: Since inception, the Lifestyle Conservative 280 Trust was up 12.2%,
well above the 8.7% full year returns of its peers in the Morningstar Corporate
Bond -- General category or the 8.4% full year returns of the peers in the
Morningstar Multi-Sector Bond category.
ENVIRONMENT: Clearly the biggest contributor to overall performance was the
Trust's full 20% exposure to the strong domestic large cap stock rally. To
maintain a full equity weight, the allocation to equity funds was held at 25% of
the portfolio to account for all the cash in the underlying portfolios and bring
the net equity position to a full 20%. In addition, all of our active fixed
income managers produced at or above benchmark performance particularly the
Salomon-managed Strategic Bond portfolio (up 10.97% in 1997) which continues to
provide access to high-yielding asset classes and stellar risk-adjusted returns.
OUTLOOK: Our strategy is to stay the course. At current levels, the US equity
market by most traditional valuation measures is above fair value. Yet, the
positive economic and fundamental factors that drove the market to such
unexpectedly strong returns in 1997 remain intact. We continue to review the
asset mix in the portfolio, particularly the level of international equity
exposure in the underlying portfolios with a view to ensuring that this exposure
reaches about 6%, in line with the long-term asset model for this fund.
xxxviii
<PAGE> 40
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Manufacturers Investment Trust:
We have audited the accompanying statements of assets and liabilities of
Manufacturers Investment Trust (comprising, the Pacific Rim Emerging Markets,
Science & Technology, International Small Cap, Emerging Growth, Pilgrim
Baxter Growth, Small/Mid Cap, International Stock, Worldwide Growth, Global
Equity, Small Company Value, Equity, Growth, Quantitative Equity, Equity
Index, Blue Chip Growth, Real Estate Securities, Value, International Growth
and Income, Growth and Income, Equity-Income, Balanced, Aggressive Asset
Allocation, Moderate Asset Allocation, Conservative Asset Allocation, High
Yield, Strategic Bond, Global Government Bond, Capital Growth Bond,
Investment Quality Bond, U.S. Government Securities, Money Market, Lifestyle
Aggressive 1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle
Moderate 460 and Lifestyle Conservative 280 Trusts), including the portfolios
of investments, as of December 31, 1997, the related statements of operations
for the period then ended and the statements of changes in net assets for
each of the periods presented. In addition, we have audited the financial
highlights of Science & Technology, International Small Cap, Pilgrim Baxter
Growth, Small/Mid Cap, Worldwide Growth, Global Equity, Small Company Value,
Equity, Growth, Equity Index, Blue Chip Growth, Value, International Growth
and Income, Growth and Income, Equity-Income, Aggressive Asset Allocation,
Moderate Asset Allocation, Conservative Asset Allocation, High Yield,
Strategic Bond, Global Government Bond, Investment Quality Bond, U.S.
Government Securities, Money Market, Lifestyle Aggressive 1000, Lifestyle
Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle
Conservative 280 Trusts for each of the periods presented and the financial
highlights of Pacific Rim Emerging Markets, Emerging Growth, International
Stock, Quantitative Equity, Real Estate Securities, Balanced and Capital
Growth Bond Trusts for the periods ended December 31, 1997 and 1996. These
financial statements and financial highlights are the responsibility of the
Trusts' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
The financial highlights for the periods ended December 31, 1988 through
December 31, 1995, presented therein, for the Pacific Rim Emerging Markets,
Emerging Growth, International Stock, Quantitative Equity, Real Estate
Securities, Balanced and Capital Growth Bond Trusts were audited by other
auditors whose report dated February 2, 1996 expressed an unqualified opinion
on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
in the first paragraph above present fairly, in all material respects, the
financial position of each of the Trusts comprising Manufacturers Investment
Trust as of December 31, 1997, the results of their operations, the changes
in their net assets and the financial highlights for each of the periods
referred to above, in conformity with generally accepted accounting
principles.
Boston, Massachusetts
February 25, 1998
1
<PAGE> 41
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM PILGRIM
EMERGING SCIENCE & INTERNATIONAL EMERGING BAXTER
MARKETS TECHNOLOGY SMALL CAP GROWTH GROWTH
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value (Includes
repurchase agreements of $5,705,000 and
$30,113,000 in the Pacific Rim Emerging Markets
and International Small Cap Trusts, respectively)
(See accompanying portfolio of investments) ........ $24,313,646 $81,617,741 $134,997,447 $343,991,933 $96,348,849
Forward foreign currency contracts to buy, at value
(Cost $439,330) (Notes 2 and 8) .................... -- -- 432,527 -- --
Cash ................................................. 336,169 963 2,772,918 777 802
Foreign currency (Cost: $1,462,191 and $1,145,976 in
the Pacific Rim Emerging Markets and International
Small Cap Trusts, respectively) (Notes 2 and 8) .... 1,372,956 -- 1,110,812 -- --
Receivables:
Investments sold .............................. 3,968 -- 205,910 36,759 --
Fund shares sold .............................. 2,827 131,010 276,021 -- --
Dividends and interest ........................ 45,852 7,650 40,434 26,315 2,785
Foreign tax withholding reclaims .............. 1,909 -- 54,576 -- --
Other assets ......................................... 69 150 337 679 206
------------ ------------ ------------ ------------ ------------
Total assets .............................. 26,077,396 81,757,514 139,890,982 344,056,463 96,352,642
------------ ------------ ------------ ------------ ------------
LIABILITIES
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 8) ............................. -- -- 439,330 -- --
Investments purchased ......................... -- 477,956 622,317 210,479 2,607,764
Fund shares redeemed .......................... 1,070,660 -- 1,705 1,624,090 397,321
Dividend and interest withholding tax ......... 1,332 -- 5,724 -- --
Custodian fee ................................. 16,328 1,972 21,426 9,137 6,180
Securities lending ............................ 1,136,665 13,925,496 10,214,498 66,418,106 --
Other accrued expenses ........................ 2,087 4,514 10,272 20,570 6,231
------------ ------------ ------------ ------------ ------------
Total liabilities ......................... 2,227,072 14,409,938 11,315,272 68,282,382 3,017,496
------------ ------------ ------------ ------------ ------------
NET ASSETS ........................................... $23,850,324 $67,347,576 $128,575,710 $275,774,081 $93,335,146
============ ============ ============ ============ ============
Net assets consist of:
Undistributed net investment income
(loss) (Note 2) ............................. ($92,260) -- $444,269 -- --
Accumulated undistributed net realized
gain (loss) on investments, foreign currency
and forward foreign currency contracts ...... (494,317) ($1,055,655) (4,503,928) $4,030,117 ($4,090,189)
Unrealized appreciation (depreciation) on:
Investments ................................. (9,050,768) (1,610,969) 8,630,508 43,089,067 6,765,675
Foreign currency and forward foreign currency
contracts ................................. (91,018) -- (37,222) -- --
Capital shares at par value of $.01 (Note 4) .. 33,300 49,441 93,822 114,268 74,667
Additional paid-in capital .................... 33,545,387 69,964,759 123,948,261 228,540,629 90,584,993
------------ ------------ ------------ ------------ ------------
Net assets .............................. $23,850,324 $67,347,576 $128,575,710 $275,774,081 $93,335,146
============ ============ ============ ============ ============
Capital shares outstanding (Note 4) .................. 3,329,953 4,944,146 9,382,231 11,426,808 7,466,705
------------ ------------ ------------ ------------ ------------
Net asset value, offering price and redemption price
per share .......................................... $7.16 $13.62 $13.70 $24.13 $12.50
============ ============ ============ ============ ============
Investments in securities, at identified cost (Note 2) $33,364,414 $83,228,710 $126,366,939 $300,902,866 $89,583,174
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 42
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
SMALL/MID INTERNATIONAL WORLDWIDE GLOBAL COMPANY
CAP STOCK GROWTH EQUITY VALUE
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value (Includes a
repurchase agreement of $5,570,000 in the
Worldwide Growth Trust) (See accompanying
portfolio of investments) .......................... $313,019,389 $160,219,217 $29,609,825 $918,950,634 $69,525,010
Receivable for forward foreign currency contracts
to sell (Notes 2 and 8) ............................ -- 2,837 -- 83,499,358 --
Forward foreign currency contracts to buy, at value
(Cost: $423,768) (Notes 2 and 8) ................... -- -- -- 421,942 --
Cash ................................................. 725 928 1,307,481 419 55
Foreign currency (Cost: $752,596, $69,892 and
$4,257,204 in the International Stock, Worldwide
Growth and Global Equity Trusts, respectively)
(Notes 2 and 8) .................................... -- 745,526 68,940 4,217,581 --
Receivables:
Investments sold .............................. 5,165,532 43,779 -- 1,141,768 341,435
Fund shares sold .............................. 1,327,202 571,861 -- -- 65,922
Dividends and interest ........................ 108,698 99,519 8,105 1,912,588 92,623
Foreign tax withholding reclaims .............. -- 45,691 3,197 181,402 --
Other assets ......................................... 692 320 54 2,224 10,104
------------ ------------ ------------ ------------- ------------
Total assets .............................. 319,622,238 161,729,678 30,997,602 1,010,327,916 70,035,149
------------ ------------ ------------ ------------- ------------
LIABILITIES
Forward foreign currency contracts to sell, at
value (Cost: $2,837 and $83,499,358 in the
International Stock and Global Equity Trusts,
respectively) (Notes 2 and 8) ...................... -- 2,830 -- 83,577,896 --
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 8) ............................. -- -- -- 423,768 --
Investments purchased ......................... 12,788,500 8,173 1,618,145 3,033,994 2,704,459
Fund shares redeemed .......................... 724 892,005 81,699 1,272,257 239,606
Dividend and interest withholding tax ......... -- 5,211 493 107,457 --
Custodian fee ................................. 4,268 21,895 1,613 49,550 --
Securities lending ............................ 38,431,346 15,537,088 5,032,012 53,383,326 --
Other accrued expenses ........................ 20,888 9,579 1,605 66,921 --
------------ ------------ ------------ ------------- ------------
Total liabilities ......................... 51,245,726 16,476,781 6,735,567 141,915,169 2,944,065
------------ ------------ ------------ ------------- ------------
NET ASSETS ........................................... $268,376,512 $145,252,897 $24,262,035 $868,412,747 $67,091,084
============ ============ ============ ============= ============
Net assets consist of:
Undistributed net investment income
(loss) (Note 2) ............................. -- $9,928 ($7,360) $15,666,642 $56,115
Accumulated undistributed net realized
gain (loss) on investments, foreign currency
and forward foreign currency contracts ...... ($1,179,845) (894,628) (87,537) 48,191,141 (761,428)
Unrealized appreciation (depreciation) on:
Investments ................................. 32,753,291 (1,192,615) 771,847 136,950,676 (1,242,712)
Foreign currency and forward foreign currency
contracts ................................. -- (9,190) (428) (119,572) --
Capital shares at par value of $.01 (Note 4) .. 174,180 126,610 17,278 448,132 56,180
Additional paid-in capital .................... 236,628,886 147,212,792 23,568,235 667,275,728 68,982,929
------------ ------------ ------------ ------------- ------------
Net assets .............................. $268,376,512 $145,252,897 $24,262,035 $868,412,747 $67,091,084
============ ============ ============ ============= ============
Capital shares outstanding (Note 4) .................. 17,417,967 12,661,021 1,727,778 44,813,235 5,618,018
------------ ------------ ------------ ------------- ------------
Net asset value, offering price and redemption price
per share .......................................... $15.41 $11.47 $14.04 $19.38 $11.94
============ ============ ============ ============= ============
Investments in securities, at identified cost (Note 2) $280,266,098 $161,411,832 $28,837,978 $781,999,958 $70,767,722
============ ============ ============ ============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 43
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE EQUITY BLUE CHIP
EQUITY GROWTH EQUITY INDEX GROWTH
ASSETS TRUST TRUST TRUST TRUST TRUST
-------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value (Includes a
repurchase agreement of $33,923,000 in the
Growth Trust) (See accompanying portfolio
of investments) .................................... $1,696,085,710 $186,742,805 $180,436,025 $30,717,873 $765,629,273
Cash ................................................. 560 822 726 29,274 1,000
Foreign currency (Cost: $7, $32,718 and $12 in the
Equity, Growth and Blue Chip Growth Trusts,
respectively) (Notes 2 and 8) ...................... 6 32,886 -- -- 12
Receivables:
Investments sold .............................. 29,365,620 256,813 -- -- 439,371
Fund shares sold .............................. 1,797,715 676,383 143,384 26,515 351,008
Dividends and interest ........................ 1,243,419 138,325 259,637 25,838 851,491
Foreign tax withholding reclaims .............. -- 1,985 -- -- 2,092
Other assets ......................................... 3,924 377 388 56 1,662
-------------- ------------ ------------ ------------ ------------
Total assets .............................. 1,728,496,954 187,850,396 180,840,160 30,799,556 767,275,909
-------------- ------------ ------------ ------------ ------------
LIABILITIES
Payables:
Investments purchased ......................... 15,797,250 4,104,287 -- -- 2,358,937
Fund shares redeemed .......................... 253,697 -- 26,886 -- 85
Dividend and interest withholding tax ......... 972 903 -- 5 12,130
Variation margin for open futures contracts ... -- -- -- 1,100 --
Custodian fee ................................. 12,732 4,437 4,215 1,458 7,607
Securities lending ............................ 190,931,857 16,341,262 13,267,548 3,720,737 55,974,160
Other accrued expenses ........................ 118,346 11,341 11,806 1,654 115,532
-------------- ------------ ------------ ------------ ------------
Total liabilities .......................... 207,114,854 20,462,230 13,310,455 3,724,954 58,468,451
-------------- ------------ ------------ ------------ ------------
NET ASSETS ........................................... $1,521,382,100 $167,388,166 $167,529,705 $27,074,602 $708,807,458
============== ============ ============ ============ ============
Net assets consist of:
Undistributed net investment income (Note 2) .. $4,882,008 $785,667 $1,960,998 -- $4,121,547
Accumulated undistributed net realized
gain on investments, futures, foreign currency
and forward foreign currency contracts ...... 286,447,188 7,467,441 21,202,387 $641,467 11,503,937
Unrealized appreciation on:
Investments ................................. 67,947,050 13,842,825 18,931,078 315,232 153,458,456
Futures contracts ........................... -- -- -- 65,634 --
Foreign currency and forward foreign currency
contracts ................................. 24 179 -- -- --
Capital shares at par value of $.01 (Note 4) .. 707,575 97,277 74,470 21,688 472,684
Additional paid-in capital .................... 1,161,398,255 145,194,777 125,360,772 26,030,581 539,250,834
-------------- ------------ ------------ ------------ ------------
Net assets .............................. $1,521,382,100 $167,388,166 $167,529,705 $27,074,602 $708,807,458
============== ============ ============ ============ ============
Capital shares outstanding (Note 4) .................. 70,757,532 9,727,676 7,446,999 2,168,839 47,268,444
-------------- ------------ ------------ ------------ ------------
Net asset value, offering price and redemption price
per share .......................................... $21.50 $17.21 $22.50 $12.48 $15.00
============== ============ ============ ============ ============
Investments in securities, at identified cost (Note 2) $1,628,138,660 $172,899,980 $161,504,947 $30,402,641 $612,170,817
============== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 44
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
REAL ESTATE GROWTH AND GROWTH AND EQUITY-
SECURITIES VALUE INCOME INCOME INCOME
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value (Includes a
repurchase agreement of $17,338,000 in the Value
Trust) (See accompanying portfolio of investments) $184,435,661 $159,014,173 $227,575,065 $1,667,087,644 $981,112,571
Receivable for forward foreign currency contracts
to sell (Notes 2 and 8) ........................... -- -- 80,269,910 -- --
Forward foreign currency contracts to buy, at value
(Cost: $55,099,058) (Notes 2 and 8) ................ -- -- 53,548,182 -- --
Cash ................................................. 4 590 726 180,857 494
Foreign currency (Cost: $1,270,804, $12,125, and
and $453 in the International Growth and Income,
Growth and Income and Equity-Income Trusts,
respectively) (Notes 2 and 8) ...................... -- -- 1,245,682 9,844 451
Receivables:
Investments sold .............................. -- 483,304 2,764,050 4,652,417 289,259
Fund shares sold .............................. 183,329 161,273 -- 1,080 138,300
Dividends and interest ........................ 814,837 173,412 1,609,899 2,078,442 2,181,169
Foreign tax withholding reclaims .............. -- 1,025 285,300 -- 20,884
Deferred organization expenses (Note 2) .............. -- -- 19,680 -- 275
Other assets ......................................... 372 268 403 3,873 2,199
------------ ------------ ------------ -------------- ------------
Total assets .............................. 185,434,203 159,834,045 367,318,897 1,674,014,157 983,745,602
------------ ------------ ------------ -------------- ------------
LIABILITIES
Forward foreign currency contracts to sell, at value
(Cost: $80,269,910) (Notes 2 and 8) ............... -- -- 77,559,789 -- --
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 8) ............................. -- -- 55,099,058 -- --
Investments purchased ......................... 581,011 2,611,174 193,315 2,088,219 132,176
Fund shares redeemed .......................... 69,696 127 1,972,048 518,914 763,880
Dividend and interest withholding tax ......... -- 1,567 102,491 -- 20,009
Custodian fee ................................. 5,661 11,848 19,337 8,825 8,670
Securities lending ............................ 23,007,430 12,529,476 28,577,353 65,892,173 41,049,758
Other accrued expenses ........................ 11,212 8,229 19,052 118,748 66,522
------------ ------------ ------------ -------------- ------------
Total liabilities ......................... 23,675,010 15,162,421 163,542,443 68,626,879 42,041,015
------------ ------------ ------------ -------------- ------------
NET ASSETS ........................................... $161,759,193 $144,671,624 $203,776,454 $1,605,387,278 $941,704,587
============ ============ ============ ============== ============
Net assets consist of:
Undistributed net investment income (Note 2) .. $4,808,797 -- $4,240,740 $15,315,008 $18,699,879
Accumulated undistributed net realized
gain (loss) on investments, foreign currency
and forward foreign currency contracts ...... 16,198,159 ($599,054) 6,185,857 99,563,470 40,321,049
Unrealized appreciation (depreciation) on:
Investments ................................. 13,326,506 5,320,474 (3,674,391) 467,120,639 168,625,533
Foreign currency and forward foreign currency
contracts ................................. -- -- 1,083,017 (2,281) 60
Capital shares at par value of $.01 (Note 4) .. 80,592 97,703 185,164 672,005 546,250
Additional paid-in capital .................... 127,345,139 139,852,501 195,756,067 1,022,718,437 713,511,816
------------ ------------ ------------ -------------- ------------
Net assets .............................. $161,759,193 $144,671,624 $203,776,454 $1,605,387,278 $941,704,587
============ ============ ============ ============== ============
Capital shares outstanding (Note 4) ................. 8,059,178 9,770,288 18,516,347 67,200,511 54,625,052
------------ ------------ ------------ -------------- ------------
Net asset value, offering price and redemption price
per share .......................................... $20.07 $14.81 $11.01 $23.89 $17.24
============ ============ ============ ============== ============
Investments in securities, at identified cost (Note 2) $171,109,155 $153,693,699 $231,249,456 $1,199,967,005 $812,487,038
============ ============ ============ ============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 45
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
ASSET ASSET ASSET HIGH
BALANCED ALLOCATION ALLOCATION ALLOCATION YIELD
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value (Includes
repurchase agreements of $21,701,000 and
$11,531,000 in the Conservative Asset Allocation
and High Yield Trusts, respectively)
(See accompanying portfolio of investments) ........ $183,736,970 $265,184,316 $663,132,000 $210,882,641 $104,982,047
Receivable for forward foreign currency contracts
to sell (Notes 2 and 8) ............................ 169 16,539 29,883 5,208 2,274,104
Forward foreign currency contracts to buy, at value
(Cost: $32,467, $58,664, $10,225 and $28,468
in the Aggressive, Moderate and Conservative
Asset Allocation and High Yield Trusts,
respectively) (Notes 2 and 8) ...................... -- 32,774 59,218 10,322 27,885
Cash ................................................. 17,905 10,958 114,055 617 239
Foreign currency (Cost: $8,680, $848,245, $1,561,832
and $216,509 in the Balanced, Aggressive,
Moderate and Conservative Asset Allocation
Trusts, respectively) (Notes 2 and 8) .............. 8,680 842,957 1,550,679 214,284 --
Receivables:
Investments sold .............................. 6,826,124 227,907 194,055 29,324 --
Fund shares sold .............................. 87,428 63,331 54 -- 178,623
Variation margin for open futures contracts ... -- 4,787 2,672 100 --
Dividends and interest ........................ 1,118,835 856,343 3,748,673 1,536,435 1,465,834
Foreign tax withholding reclaims .............. 23,953 24,058 50,662 9,432 --
Other assets ......................................... 427 617 1,550 512 170
------------ ------------ ------------ ------------ ------------
Total assets .............................. 191,820,491 267,264,587 668,883,501 212,688,875 108,928,902
------------ ------------ ------------ ------------ ------------
LIABILITIES
Forward foreign currency contracts to sell, at value
(Cost: $169, $16,539, $29,883, $5,208 and
$2,274,104 in the Balanced, Aggressive, Moderate
and Conservative Asset Allocation and High Yield
Trusts, respectively) (Notes 2 and 8) .............. 170 16,387 29,609 5,161 2,230,020
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 8) ............................. -- 32,467 58,664 10,225 28,468
Investments purchased ......................... 4,426,008 16,387 5,776,970 3,231,750 3,412,618
Fund shares redeemed .......................... 27,124 -- 62,617 317,086 --
Variation margin for open futures contracts ... -- -- -- 75 --
Dividend and interest withholding tax ......... 1,756 6,815 13,739 2,724 14,277
Custodian fee ................................. 10,564 28,486 31,760 19,299 1,618
Securities lending ............................ 10,297,248 23,611,834 53,721,023 4,738,674 10,489,036
Other accrued expenses ........................ 12,978 18,982 47,479 15,759 5,210
------------ ------------ ------------ ------------ ------------
Total liabilities .......................... 14,775,848 23,731,358 59,741,861 8,340,753 16,181,247
------------ ------------ ------------ ------------ ------------
NET ASSETS ........................................... $177,044,643 $243,533,229 $609,141,640 $204,348,122 $92,747,655
============ ============ ============ ============ ============
Net assets consist of:
Undistributed net investment income (Note 2) .. $4,637,642 $4,765,263 $20,941,772 $8,844,386 $26,259
Accumulated undistributed net realized
gain on investments, futures, foreign currency
and forward foreign currency contracts ...... 20,294,566 23,728,297 46,265,268 9,582,317 273,457
Unrealized appreciation (depreciation) on:
Investments ................................ 10,890,674 42,289,376 80,861,123 14,740,056 974,604
Futures contracts .......................... -- (107,279) (24,906) 1,772 --
Foreign currency and forward foreign currency
contracts ................................ (161) (5,883) (12,904) (2,314) 43,163
Capital shares at par value of $.01 (Note 4) .. 91,592 169,570 470,358 173,416 68,414
Additional paid-in capital .................... 141,130,330 172,693,885 460,640,929 171,008,489 91,361,758
------------ ------------ ------------ ------------ ------------
Net assets .............................. $177,044,643 $243,533,229 $609,141,640 $204,348,122 $92,747,655
============ ============ ============ ============ ============
Capital shares outstanding (Note 4) .................. 9,159,210 16,957,017 47,035,794 17,341,644 6,841,409
------------ ------------ ------------ ------------ ------------
Net asset value, offering price and redemption price
per share .......................................... $19.33 $14.36 $12.95 $11.78 $13.56
============ ============ ============ ============ ============
Investments in securities, at identified cost (Note 2) $172,846,296 $222,894,940 $582,270,877 $196,142,585 $104,007,443
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 46
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL CAPITAL INVESTMENT U.S.
STRATEGIC GOVERNMENT GROWTH QUALITY GOVERNMENT
BOND BOND BOND BOND SECURITIES
ASSETS TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investments in securities, at value (Includes
repurchase agreements of $8,461,000
and $68,272,000 in the Capital Growth
Bond and U.S. Government Securities
Trusts, respectively) (See accompanying
portfolio of investments) .......................... $475,639,758 $207,979,689 $56,164,078 $233,996,126 $315,578,931
Receivable for forward foreign currency contracts
to sell (Notes 2 and 8) ............................ 23,064,790 161,544,240 -- -- --
Forward foreign currency contracts to buy, at value
(Cost: $4,400,798 and $68,893,676 in the Strategic
Bond and Global Government Bond Trusts,
respectively) (Notes 2 and 8) ...................... 4,327,103 66,730,638 -- -- --
Cash ................................................. 1,907 474 -- 839 213
Foreign currency (Cost: $129 and $1,438,425 in the
Strategic Bond and Global Government Bond Trusts,
respectively) (Notes 2 and 8) ...................... 127 1,427,543 -- -- --
Receivables:
Fund shares sold .............................. 327,215 57,006 6,224 77,769 1,770,693
Dividends and interest ........................ 6,091,249 4,246,100 781,411 3,412,921 1,946,657
Foreign tax withholding reclaims .............. 7,204 17,566 -- -- --
Deferred organization expenses (Note 2) .............. 413 -- -- -- --
Other assets ......................................... 842 547 124 428 574
------------ ------------ ------------ ------------ ------------
Total assets .............................. 509,460,608 442,003,803 56,951,837 237,488,083 319,297,068
------------ ------------ ------------ ------------ ------------
LIABILITIES
Forward foreign currency contracts to sell, at
value (Cost: $23,064,790 and $161,544,240 in the
Strategic Bond and Global Government Bond Trusts,
respectively) (Notes 2 and 8) ...................... 22,620,808 156,925,238 -- -- --
Payables:
Forward foreign currency contracts to buy
(Notes 2 and 8) ............................. 4,400,798 68,893,676 -- -- --
Investments purchased ......................... 41,020,970 -- -- 286,633 38,354,768
Fund shares redeemed .......................... 32 -- 94,754 -- 40,157
Dividend and interest withholding tax ......... 1,340 29,552 -- 773 --
Custodian fee ................................. 6,854 17,389 2,634 5,871 4,200
Securities lending ............................ 75,776,050 -- 2,860,600 48,636,883 29,590,565
Other accrued expenses ........................ 25,743 20,825 3,904 12,980 17,548
Deferred mortgage dollar roll income ................. 17,805 -- -- -- 12,495
------------ ------------ ------------ ------------ ------------
Total liabilities .......................... 143,870,400 225,886,680 2,961,892 48,943,140 68,019,733
------------ ------------ ------------ ------------ ------------
NET ASSETS ........................................... $365,590,208 $216,117,123 $53,989,945 $188,544,943 $251,277,335
============ ============ ============ ============ ============
Net assets consist of:
Undistributed net investment income (Note 2) .. $22,584,781 $12,595,749 $3,103,100 $11,620,376 $13,028,158
Accumulated undistributed net realized
gain (loss) on investments, foreign currency
and forward foreign currency contracts ...... 3,714,537 5,850,749 (857,064) (3,114,002) (3,395,966)
Unrealized appreciation (depreciation) on:
Investments ................................. 8,178,003 (1,037,739) 1,690,900 3,710,810 3,557,968
Foreign currency and forward foreign currency
contracts ................................. 358,245 2,319,116 -- -- --
Capital shares at par value of $.01 (Note 4) .. 295,371 153,622 45,580 155,492 186,164
Additional paid-in capital .................... 330,459,271 196,235,626 50,007,429 176,172,267 237,901,011
------------ ------------ ------------ ------------ ------------
Net assets .............................. $365,590,208 $216,117,123 $53,989,945 $188,544,943 $251,277,335
============ ============ ============ ============ ============
Capital shares outstanding (Note 4) .................. 29,537,067 15,362,187 4,557,940 15,549,187 18,616,392
------------ ------------ ------------ ------------ ------------
Net asset value, offering price and redemption price
per share .......................................... $12.38 $14.07 $11.85 $12.13 $13.50
============ ============ ============ ============ ============
Investments in securities, at identified cost (Note 2) $467,461,755 $209,017,428 $54,473,178 $230,285,316 $312,020,963
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 47
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE
MONEY AGGRESSIVE GROWTH BALANCED MODERATE CONSERVATIVE
MARKET 1000 820 640 460 280
ASSETS TRUST TRUST TRUST TRUST TRUST TRUST
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investments in securities,
at value (See accompanying
portfolio of investments) ....... $434,588,104 $49,101,880 $217,156,949 $186,651,479 $52,745,629 $19,750,019
Cash ............................... 380 2,428 709 1,823 -- --
Receivables:
Investments sold ............ -- 172,991 552,076 260,174 -- 90,257
Fund shares sold ............ 4,772,749 4,771 -- 427,702 391,618 847
Dividends and interest ...... 386,542 99,566 1,510,818 1,170,581 330,615 --
From adviser ................ -- 1,205 11,431 8,052 2,276 838
Other assets ....................... 1,072 98 427 349 101 33
------------ ------------ ------------ ------------ ------------ ------------
Total assets ............ 439,748,847 49,382,939 219,232,410 188,520,160 53,470,239 19,841,994
------------ ------------ ------------ ------------ ------------ ------------
LIABILITIES
Payables:
Investments purchased ....... -- 264,398 2,003,667 1,858,457 722,233 91,105
Fund shares redeemed ........ -- 12,931 -- -- -- 15
Dividends ................... -- -- 59,227 -- -- --
Custodian fee ............... 2,087 -- -- -- -- --
Other accrued expenses ...... 33,222 1,083 11,859 8,401 2,376 854
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities ........ 35,309 278,412 2,074,753 1,866,858 724,609 91,974
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS ......................... $439,713,538 $49,104,527 $217,157,657 $186,653,302 $52,745,630 $19,750,020
============ ============ ============ ============ ============ ============
Net assets consist of:
Undistributed net realized
gain on investments ....... -- $1,526,530 $5,455,773 $2,682,201 $341,434 $115,432
Unrealized appreciation
on investments ............ -- 229,927 2,198,847 3,474,631 1,263,874 471,143
Capital shares at par value
of $.01 (Note 4) .......... $439,714 36,446 157,679 137,671 39,513 15,175
Additional paid-in capital .. 439,273,824 47,311,624 209,345,358 180,358,799 51,100,809 19,148,270
------------ ------------ ------------ ------------ ------------ ------------
Net assets ............ $439,713,538 $49,104,527 $217,157,657 $186,653,302 $52,745,630 $19,750,020
============ ============ ============ ============ ============ ============
Capital shares outstanding (Note 4) 43,971,354 3,644,612 15,767,894 13,767,095 3,951,276 1,517,524
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, offering price and
redemption price per share ....... $10.00 $13.47 $13.77 $13.56 $13.35 $13.01
============ ============ ============ ============ ============ ============
Investments in securities,
at identified cost (Note 2) ...... $434,588,104 $48,871,953 $214,958,102 $183,176,848 $51,481,755 $19,278,876
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 48
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM PILGRIM
EMERGING SCIENCE & INTERNATIONAL EMERGING BAXTER
MARKETS TECHNOLOGY SMALL CAP GROWTH GROWTH
TRUST TRUST TRUST TRUST TRUST
------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $1,470 withholding tax in the
Pacific Rim Emerging Markets Trust) .................. $159,340 $204,735 $1,321,030 $1,709,880 $309,733
Dividends (Net of $34,517, $667 and $133,750
withholding tax in the Pacific Rim Emerging
Markets, Science & Technology and
International Small Cap Trusts, respectively) ........ 398,186 37,398 1,049,249 472,409 34,078
------------ ----------- ----------- ------------ -----------
Total income ................................... 557,526 242,133 2,370,279 2,182,289 343,811
------------ ----------- ----------- ------------ -----------
Expenses:
Investment adviser fee (Note 6) ........................ 229,135 369,324 1,347,708 2,331,739 502,149
Custodian fee .......................................... 148,535 48,296 234,838 96,298 55,101
Audit and legal fees ................................... 2,331 4,588 14,732 21,511 6,132
Registration and filing fees ........................... 404 762 335 3,613 657
Trustees fees and expenses (Note 7) .................... 840 1,182 3,855 7,063 1,267
Miscellaneous .......................................... 1,771 336 1,385 2,003 347
------------ ----------- ----------- ------------ -----------
Total expenses ................................. 383,016 424,488 1,602,853 2,462,227 565,653
------------ ----------- ----------- ------------ -----------
Net investment income (loss) ................... 174,510 (182,355) 767,426 (279,938) (221,842)
------------ ----------- ----------- ------------ -----------
Realized and unrealized gain (loss) on investments,
foreign currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ............................... (338,181) 187,775 (3,601,942) 4,042,230 (4,090,189)
Foreign currency and forward foreign
currency contracts .................................. (386,822) -- (318,266) -- --
Change in unrealized appreciation (depreciation) on:
Investments ........................................... (10,316,270) (1,610,969) 3,451,228 32,648,479 6,765,675
Translation of foreign currency and
forward foreign currency contracts .................. (85,137) -- (37,787) -- --
------------ ----------- ----------- ------------ -----------
Net gain (loss) on investments, foreign currency
and forward foreign currency contracts ....... (11,126,410) (1,423,194) (506,767) 36,690,709 2,675,486
------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets resulting
from operations ......................................... ($10,951,900) ($1,605,549) $260,659 $36,410,771 $2,453,644
============ =========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 49
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
SMALL/MID INTERNATIONAL WORLDWIDE GLOBAL COMPANY
CAP STOCK GROWTH EQUITY VALUE
TRUST TRUST TRUST TRUST TRUST*
------------ ----------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest ............................................... $781,193 $377,295 $150,908 $682,899 $58,234
Dividends (Net of $11,110, $153,973, $8,322,
$1,214,018 and $158 withholding tax in the
Small/Mid Cap, International Stock, Worldwide
Growth, Global Equity and Small Company Value
Trusts, respectively) ............................... 767,350 1,212,306 90,103 15,678,817 163,162
------------ ----------- --------- ------------ -----------
Total income ................................... 1,548,543 1,589,601 241,011 16,361,716 221,396
------------ ----------- --------- ------------ -----------
Expenses:
Investment adviser fee (Note 6) ....................... 2,145,327 860,656 124,952 7,256,254 134,688
Custodian fee .......................................... 71,100 259,094 37,911 731,440 14,599
Audit and legal fees ................................... 30,063 9,512 1,638 107,288 2,730
Registration and filing fees ........................... 1,113 1,062 271 12,252 20
Trustees fees and expenses (Note 7) ................... 7,150 2,117 423 25,356 255
Miscellaneous .......................................... 4,211 627 80 17,767 100
------------ ----------- --------- ------------ -----------
Total expenses ................................. 2,258,964 1,133,068 165,275 8,150,357 152,392
------------ ----------- --------- ------------ -----------
Net investment income (loss) ................... (710,421) 456,533 75,736 8,211,359 69,004
------------ ----------- --------- ------------ -----------
Realized and unrealized gain (loss) on investments, foreign
currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ............................... 5,771,995 798,600 63,299 48,944,044 (762,160)
Foreign currency and forward foreign
currency contracts .................................. -- (160,401) (26,045) 7,211,837 --
Change in unrealized appreciation (depreciation) on:
Investments ........................................... 22,179,663 (4,119,284) 771,847 85,480,417 (1,242,712)
Translation of foreign currency and
forward foreign currency contracts .................. -- (5,560) (428) 703,851 --
------------ ----------- --------- ------------ -----------
Net gain (loss) on investments, foreign currency
and forward foreign currency contracts ....... 27,951,658 (3,486,645) 808,673 142,340,149 (2,004,872)
------------ ----------- --------- ------------ -----------
Net increase (decrease) in net assets resulting
from operations ......................................... $27,241,237 ($3,030,112) $884,409 $150,551,508 ($1,935,868)
============ =========== ========= ============ ===========
</TABLE>
* For the period October 1, 1997 (commencement
of operations) to December 31, 1997.
The accompanying notes are an integral part of the financial statements.
10
<PAGE> 50
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE EQUITY BLUE CHIP
EQUITY GROWTH EQUITY INDEX GROWTH
TRUST TRUST TRUST TRUST TRUST
------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest ................................................. $3,180,530 $884,070 $403,368 $576,770 $2,916,575
Dividends (Net of $91,125, $10,961, $498 and
$45,810 withholding tax in the Equity, Growth, Equity
Index and Blue Chip Growth Trusts, respectively) ....... 13,270,385 974,453 2,211,869 105,779 6,647,074
------------- ----------- ----------- ---------- ------------
Total income ..................................... 16,450,915 1,858,523 2,615,237 682,549 9,563,649
------------- ----------- ----------- ---------- ------------
Expenses:
Investment adviser fee (Note 6) .......................... 10,703,211 935,029 913,996 42,212 5,156,008
Custodian fee ............................................ 509,881 84,752 67,196 51,041 179,163
Audit and legal fees ..................................... 192,851 14,465 12,326 1,728 73,598
Registration and filing fees ............................. 17,459 1,130 2,055 296 6,934
Amortization of deferred organization
expenses (Note 2) ...................................... -- -- -- -- 1,896
Trustees fees and expenses (Note 7) ...................... 44,799 3,448 3,967 525 17,541
Miscellaneous ............................................ 15,188 1,384 2,459 620 5,413
------------- ----------- ----------- ---------- ------------
Expenses before reimbursement by
investment adviser .................................... 11,483,389 1,040,208 1,001,999 96,422 5,440,553
Reimbursement of expenses by
investment adviser (Note 6) ........................... -- -- 347,760 28,392 --
------------- ----------- ----------- ---------- ------------
Net expenses ..................................... 11,483,389 1,040,208 654,239 68,030 5,440,553
------------- ----------- ----------- ---------- ------------
Net investment income ............................ 4,967,526 818,315 1,960,998 614,519 4,123,096
------------- ----------- ----------- ---------- ------------
Realized and unrealized gain on investments, futures,
foreign currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ................................. 288,434,853 8,261,706 21,256,016 111,548 11,907,336
Futures contracts ....................................... -- -- -- 3,580,341 (94)
Foreign currency and forward foreign
currency contracts .................................... (79,750) (32,648) -- -- --
Change in unrealized appreciation (depreciation) on:
Investments ............................................. (49,085,206) 11,548,165 9,038,807 292,487 112,919,340
Futures contracts ....................................... -- -- -- (201,241) --
Translation of foreign currency and
forward foreign currency contracts .................... 2 188 -- -- --
------------- ----------- ----------- ---------- ------------
Net gain on investments, futures, foreign currency
and forward foreign currency contracts ......... 239,269,899 19,777,411 30,294,823 3,783,135 124,826,582
------------- ----------- ----------- ---------- ------------
Net increase in net assets resulting
from operations ........................................... $244,237,425 $20,595,726 $32,255,821 $4,397,654 $128,949,678
============= =========== =========== ========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE> 51
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
REAL ESTATE GROWTH AND GROWTH AND EQUITY-
SECURITIES VALUE INCOME INCOME INCOME
TRUST TRUST TRUST TRUST TRUST
----------- ---------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $168 withholding tax in the
International Growth and Income Trust) ............... $113,172 $535,884 $2,881,953 $1,639,350 $4,022,775
Dividends (Net of $4,185 $496,461, $133,085
and $188,210 withholding tax in the Value,
International Growth and Income, Growth
and Income and Equity-Income Trusts,
respectively) ........................................ 6,917,965 1,069,802 3,746,368 24,298,831 21,480,364
----------- ---------- ------------ ------------- -------------
Total income ................................... 7,031,137 1,605,686 6,628,321 25,938,181 25,503,139
----------- ---------- ------------ ------------- -------------
Expenses:
Investment adviser fee (Note 6) ........................ 831,191 523,446 1,965,899 10,037,637 6,141,959
Custodian fee .......................................... 60,701 91,918 314,921 328,285 254,913
Audit and legal fees ................................... 11,600 8,041 26,913 176,061 99,915
Registration and filing fees ........................... 1,807 944 1,761 16,471 9,122
Amortization of deferred organization
expenses (Note 2) .................................... -- -- 6,153 -- 2,004
Trustees fees and expenses (Note 7) .................... 3,450 1,534 8,471 43,008 24,145
Miscellaneous .......................................... 3,314 377 3,128 13,733 8,162
----------- ---------- ------------ ------------- -------------
Expenses before reimbursement by
investment adviser .................................. 912,063 626,260 2,327,246 10,615,195 6,540,220
Reimbursement of expenses by
investment adviser (Note 6) ......................... 316,025 -- -- -- --
----------- ---------- ------------ ------------- -------------
Net expenses ................................... 596,038 626,260 2,327,246 10,615,195 6,540,220
----------- ---------- ------------ ------------- -------------
Net investment income .......................... 6,435,099 979,426 4,301,075 15,322,986 18,962,919
----------- ---------- ------------ ------------- -------------
Realized and unrealized gain (loss) on investments,
foreign currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ............................... 15,106,323 2,848,645 6,819,325 99,563,470 40,834,683
Foreign currency and forward foreign
currency contracts .................................. -- -- (7,637) 1,285 (76,448)
Change in unrealized appreciation (depreciation) on:
Investments ........................................... 1,710,688 5,320,474 (11,806,866) 247,910,751 138,364,867
Translation of foreign currency and
forward foreign currency contracts .................. -- -- 594,255 (1,256) 245
----------- ---------- ------------ ------------- -------------
Net gain (loss) on investments, foreign currency
and forward foreign currency contracts ....... 16,817,011 8,169,119 (4,400,923) 347,474,250 179,123,347
----------- ---------- ------------ ------------- -------------
Net increase (decrease) in net assets resulting
from operations ......................................... $23,252,110 $9,148,545 ($99,848) $362,797,236 $198,086,266
=========== ========== ============ ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 52
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
ASSET ASSET ASSET HIGH
BALANCED ALLOCATION ALLOCATION ALLOCATION YIELD
TRUST TRUST TRUST TRUST TRUST
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $679 and $16,035 withholding
tax in the Conservative Asset Allocation and High
Yield Trusts, respectively) ............................ $4,187,274 $4,157,072 $21,036,541 $9,935,599 $3,333,180
Dividends (Net of $48,602, $116,448, $201,136
and $34,328 withholding tax in the Balanced and
Aggressive, Moderate and Conservative Asset
Allocation Trusts, respectively) ....................... 1,875,262 2,649,322 4,762,828 780,796 26,874
----------- ----------- ----------- ----------- ----------
Total income ..................................... 6,062,536 6,806,394 25,799,369 10,716,395 3,360,054
----------- ----------- ----------- ----------- ----------
Expenses:
Investment adviser fee (Note 6) .......................... 1,261,070 1,766,662 4,584,121 1,521,047 314,373
Custodian fee ............................................ 99,333 314,581 469,614 246,778 37,975
Audit and legal fees ..................................... 13,901 33,308 84,971 28,060 5,159
Registration and filing fees ............................. 2,479 3,297 8,955 2,953 666
Trustees fees and expenses (Note 7) ...................... 5,099 7,242 18,460 6,076 1,128
Miscellaneous ............................................ 3,647 3,038 8,791 2,213 409
----------- ----------- ----------- ----------- ----------
Total expenses ................................... 1,385,529 2,128,128 5,174,912 1,807,127 359,710
----------- ----------- ----------- ----------- ----------
Net investment income ............................ 4,677,007 4,678,266 20,624,457 8,909,268 3,000,344
----------- ----------- ----------- ----------- ----------
Realized and unrealized gain on investments, futures,
foreign currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ................................. 20,430,952 21,787,441 44,169,728 9,545,017 731,169
Futures contracts ....................................... -- 2,190,877 2,745,819 38,629 --
Foreign currency and forward foreign
currency contracts .................................... (95,635) (128,171) (177,501) (36,148) 20,337
Change in unrealized appreciation (depreciation) on:
Investments ............................................. 400,364 12,435,747 22,649,867 3,370,336 974,604
Futures contracts ....................................... -- (63,205) 92,982 20,122 --
Translation of foreign currency and
forward foreign currency contracts .................... (161) (10,440) (16,641) (2,821) 43,163
----------- ----------- ----------- ----------- ----------
Net gain on investments, futures, foreign currency
and forward foreign currency contracts ......... 20,735,520 36,212,249 69,464,254 12,935,135 1,769,273
----------- ----------- ----------- ----------- ----------
Net increase in net assets resulting
from operations ............................................ $25,412,527 $40,890,515 $90,088,711 $21,844,403 $4,769,617
=========== =========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE> 53
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL CAPITAL INVESTMENT U.S.
STRATEGIC GOVERNMENT GROWTH QUALITY GOVERNMENT
BOND BOND BOND BOND SECURITIES
TRUST TRUST TRUST TRUST TRUST
----------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest (Net of $35,374 withholding tax
in the Global Government Bond Trust) ................. $23,904,254 $15,631,031 $3,304,323 $12,713,368 $14,161,329
Mortgage dollar rolls .................................. 396,169 -- -- -- 894,225
Dividends .............................................. 16,999 -- -- -- --
----------- ------------ ---------- ----------- ------------
Total income ................................... 24,317,422 15,631,031 3,304,323 12,713,368 15,055,554
----------- ------------ ---------- ----------- ------------
Expenses:
Investment adviser fee (Note 6) ....................... 2,240,478 1,837,451 315,701 1,047,782 1,401,568
Custodian fee .......................................... 228,126 255,765 30,794 117,680 102,724
Audit and legal fees ................................... 37,795 30,912 4,196 21,627 28,727
Registration and filing fees ........................... 2,808 2,836 754 1,961 2,991
Amortization of deferred organization
expenses (Note 2) ................................... 3,005 -- -- -- --
Trustees fees and expenses (Note 7) ................... 8,801 6,898 1,576 4,533 6,127
Miscellaneous .......................................... 2,151 12,643 478 1,775 2,120
----------- ------------ ---------- ----------- ------------
Expenses before reimbursement by
investment adviser .................................. 2,523,164 2,146,505 353,499 1,195,358 1,544,257
Reimbursement of expenses by
investment adviser (Note 6) ........................ -- -- 110,604 -- --
----------- ------------ ---------- ----------- ------------
Net expenses ................................... 2,523,164 2,146,505 242,895 1,195,358 1,544,257
----------- ------------ ---------- ----------- ------------
Net investment income .......................... 21,794,258 13,484,526 3,061,428 11,518,010 13,511,297
----------- ------------ ---------- ----------- ------------
Realized and unrealized gain (loss) on investments,
foreign currency and forward foreign currency contracts:
Net realized gain (loss) on:
Investment transactions ............................... 4,357,008 13,533,542 48,206 560,958 (1,285,791)
Foreign currency and forward foreign
currency contracts .................................. 474,566 (8,569,143) -- -- --
Change in unrealized appreciation (depreciation) on:
Investments ........................................... 2,884,064 (14,618,789) 1,026,927 3,072,046 5,453,837
Translation of foreign currency and
forward foreign currency contracts .................. 556,273 2,134,019 -- -- --
----------- ------------ ---------- ----------- ------------
Net gain (loss) on investments, foreign currency
and forward foreign currency contracts ....... 8,271,911 (7,520,371) 1,075,133 3,633,004 4,168,046
----------- ------------ ---------- ----------- ------------
Net increase in net assets resulting
from operations .......................................... $30,066,169 $5,964,155 $4,136,561 $15,151,014 $17,679,343
=========== ============ ========== =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE> 54
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE
MONEY AGGRESSIVE GROWTH BALANCED MODERATE CONSERVATIVE
MARKET 1000 820 640 460 280
TRUST TRUST* TRUST* TRUST* TRUST* TRUST*
----------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest .......................... $23,822,868 -- -- -- -- --
Income distributions received ..... -- $40,644 $1,638,443 $1,923,233 $692,090 $255,536
----------- ---------- ---------- ---------- ---------- --------
Total income ................ 23,822,868 40,644 1,638,443 1,923,233 692,090 255,536
----------- ---------- ---------- ---------- ---------- --------
Expenses:
Investment adviser fee (Note 6) ... 2,134,875 -- -- -- -- --
Custodian fee ..................... 113,860 1,220 5,321 4,284 1,214 441
Audit and legal fees .............. 52,106 3,012 13,154 10,562 3,003 1,091
Registration and filing fees ...... 4,749 496 2,158 1,745 493 178
Trustee fees and expenses
(Note 7) ........................ 12,486 775 3,324 2,558 749 275
Miscellaneous ..................... 7,263 124 527 415 120 46
----------- ---------- ---------- ---------- ---------- --------
Expenses before reimbursement
by investment adviser ........... 2,325,339 5,627 24,484 19,564 5,579 2,031
Reimbursement of expenses by
investment adviser (Note 6) ..... -- 5,627 24,484 19,564 5,579 2,031
----------- ---------- ---------- ---------- ---------- --------
Net expenses ................ 2,325,339 -- -- -- -- --
----------- ---------- ---------- ---------- ---------- --------
Net investment income ....... 21,497,529 40,644 1,638,443 1,923,233 692,090 255,536
----------- ---------- ---------- ---------- ---------- --------
Realized and unrealized
gain on investments:
Net realized gain on investments .. -- 1,526,530 5,455,773 2,682,201 341,434 115,432
Capital gain distributions received -- 234,940 623,851 519,499 141,843 52,417
Change in unrealized
appreciation on investments ..... -- 229,927 2,198,847 3,474,631 1,263,874 471,143
----------- ---------- ---------- ---------- ---------- --------
Net gain on investments ...... -- 1,991,397 8,278,471 6,676,331 1,747,151 638,992
----------- ---------- ---------- ---------- ---------- --------
Net increase in net assets resulting
from operations .................... $21,497,529 $2,032,041 $9,916,914 $8,599,564 $2,439,241 $894,528
=========== ========== ========== ========== ========== ========
</TABLE>
* For the period January 7, 1997 (commencement
of operations) to December 31, 1997.
The accompanying notes are an integral part of the financial statements.
15
<PAGE> 55
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM SCIENCE & INTERNATIONAL
EMERGING MARKETS TECHNOLOGY SMALL CAP
TRUST TRUST TRUST
----------------------------- ------------- -----------------------------
YEAR YEAR 1/01/97* YEAR 3/04/96*
ENDED ENDED TO ENDED TO
12/31/97 12/31/96 12/31/97 12/31/97 12/31/96
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ........ $174,510 $150,524 ($182,355) $767,426 $413,084
Net realized gain (loss) on:
Investment transactions ............ (338,181) 864,129 187,775 (3,601,942) (874,882)
Foreign currency and forward
foreign currency contracts ....... (386,822) (96,048) -- (318,266) (31,945)
Change in unrealized
appreciation (depreciation) on:
Investments ........................ (10,316,270) 640,822 (1,610,969) 3,451,228 5,179,280
Foreign currency and forward
foreign currency contracts ....... (85,137) (6,254) -- (37,787) 565
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations .......... (10,951,900) 1,553,173 (1,605,549) 260,659 4,686,102
Distribution to
shareholders from:
Net investment income ............. -- (151,471) -- (56,628) (356,506)
Net realized gains on
investments and foreign
currency transactions .......... -- (782,550) (187,775) -- --
Distribution to shareholders:
In excess of net investment income -- (19,701) -- -- --
In excess of net realized gains
on investments and foreign
currency transactions ........... (72,382) (4,884) (873,300) -- --
Increase in net assets from
capital share transactions (Note 4) 11,633,402 9,589,538 70,014,200 31,153,786 92,888,297
------------- ------------- ------------- ------------- -------------
Increase in net assets ............... 609,120 10,184,105 67,347,576 31,357,817 97,217,893
Net assets at beginning of period .... 23,241,204 13,057,099 -- 97,217,893 --
------------- ------------- ------------- ------------- -------------
Net assets at end of period .......... $23,850,324 $23,241,204 $67,347,576 $128,575,710 $97,217,893
============= ============= ============= ============= =============
Undistributed net
investment income (loss) .......... ($92,260) -- -- $444,269 ($4,890)
============= ============= ============= ============= =============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 56
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING PILGRIM SMALL/MID
GROWTH BAXTER GROWTH CAP
TRUST TRUST TRUST
------------- ------------- -----------------------------
1/01/97* 1/01/97* YEAR 3/04/96*
TO TO ENDED TO
12/31/97 12/31/97 12/31/97 12/31/96
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment loss ................. ($279,938) ($221,842) ($710,421) ($14,719)
Net realized gain (loss) on
investment transactions ........... 4,042,230 (4,090,189) 5,771,995 (6,951,840)
Change in unrealized
appreciation on investments ....... 32,648,479 6,765,675 22,179,663 10,573,628
------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations ......... 36,410,771 2,453,644 27,241,237 3,607,069
Increase in net assets from
capital share transactions (Note 4) 239,363,310 90,881,502 65,073,710 172,454,496
------------- ------------- ------------- -------------
Increase in net assets .............. 275,774,081 93,335,146 92,314,947 176,061,565
Net assets at beginning of period ... -- -- 176,061,565 --
------------- ------------- ------------- -------------
Net assets at end of period ......... $275,774,081 $93,335,146 $268,376,512 $176,061,565
============= ============= ============= =============
Undistributed net
investment loss ................... -- ($221,842) -- --
============= ============= ============= =============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
17
<PAGE> 57
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
INTERNATIONAL WORLDWIDE GLOBAL COMPANY
STOCK GROWTH EQUITY VALUE
TRUST TRUST TRUST TRUST
------------- ------------- ----------------------------- -------------
1/01/97* 1/01/97* YEAR YEAR 10/01/97*
TO TO ENDED ENDED TO
12/31/97 12/31/97 12/31/97 12/31/96 12/31/97
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ................ $456,533 $75,736 $8,211,359 $5,359,674 $69,004
Net realized gain (loss) on:
Investment transactions ............ 798,600 63,299 48,944,044 97,559,315 (762,160)
Foreign currency and forward
foreign currency contracts ....... (160,401) (26,045) 7,211,837 (12,440,807) --
Change in unrealized
appreciation (depreciation) on:
Investments ........................ (4,119,284) 771,847 85,480,417 (8,902,810) (1,242,712)
Foreign currency and forward
foreign currency contracts ....... (5,560) (428) 703,851 (955,166) --
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations .......... (3,030,112) 884,409 150,551,508 80,620,206 (1,935,868)
Distribution to
shareholders from:
Net investment income ............. (355,257) (57,051) (10,702,845) (11,270,400) --
Net realized gains on investments
and foreign currency transactions (638,199) (37,254) (62,223,834) -- --
Distribution to shareholders:
In excess of net investment income -- (809) -- -- --
In excess of net realized gains
on investments and foreign
currency transactions ........... (993,554) (113,582) -- -- --
Increase in net assets from
capital share transactions (Note 4) 150,270,019 23,586,322 63,945,517 9,309,957 69,026,952
------------- ------------- ------------- ------------- -------------
Increase in net assets ............... 145,252,897 24,262,035 141,570,346 78,659,763 67,091,084
Net assets at beginning of period .... -- -- 726,842,401 648,182,638 --
------------- ------------- ------------- ------------- -------------
Net assets at end of period .......... $145,252,897 $24,262,035 $868,412,747 $726,842,401 $67,091,084
============= ============= ============= ============= =============
Undistributed net
investment income .................. $9,928 ($7,360) $15,666,642 $10,924,122 $56,115
============= ============= ============= ============= =============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
18
<PAGE> 58
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE
EQUITY GROWTH EQUITY
TRUST TRUST TRUST
--------------------------------- ---------------------------- ---------------------------
YEAR YEAR YEAR 7/15/96* YEAR YEAR
ENDED ENDED ENDED TO ENDED ENDED
12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96
--------------- --------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ....... $4,967,526 $8,238,170 $818,315 $361,643 $1,960,998 $1,390,103
Net realized gain (loss) on:
Investment
transactions ............ 288,434,853 250,761,937 8,261,706 (791,177) 21,256,016 10,029,581
Foreign currency and
forward foreign
currency contracts ..... (79,750) (373,530) (32,648) (5,992) -- --
Change in unrealized
appreciation
(depreciation) on:
Investments ............... (49,085,206) (48,495,014) 11,548,165 2,294,660 9,038,807 1,171,645
Foreign currency and
forward foreign
currency contracts ..... 2 605 188 (9) -- --
--------------- --------------- ------------- ------------ ------------ ------------
Net increase in net
assets resulting from
operations ................ 244,237,425 210,132,168 20,595,726 1,859,125 32,255,821 12,591,329
Distribution to
shareholders from:
Net investment income ..... (8,208,495) (4,695,040) (2,288) (356,451) -- (2,224,864)
Net realized gains on
investments and foreign
currency transactions .. (250,024,832) (98,365,329) -- -- -- (11,536,168)
Distribution to shareholders:
In excess of net
realized gains on
investments and foreign
currency transactions . -- -- -- -- -- (97,061)
Increase in net assets
from capital share
transactions (Note 4) ..... 189,916,612 249,589,386 89,987,989 55,304,065 43,374,187 32,170,533
--------------- --------------- ------------- ------------ ------------ ------------
Increase in net assets ...... 175,920,710 356,661,185 110,581,427 56,806,739 75,630,008 30,903,769
Net assets at beginning
of period ................. 1,345,461,390 988,800,205 56,806,739 -- 91,899,697 60,995,928
--------------- --------------- ------------- ------------ ------------ ------------
Net assets at end
of period ................. $1,521,382,100 $1,345,461,390 $167,388,166 $56,806,739 $167,529,705 $91,899,697
=============== =============== ============= ============ ============ ============
Undistributed net
investment income ......... $4,882,008 $8,208,496 $785,667 $2,288 $1,960,998 --
=============== =============== ============= ============ ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
19
<PAGE> 59
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY BLUE CHIP REAL ESTATE
INDEX GROWTH SECURITIES
TRUST TRUST TRUST
-------------------------- ----------------------------- --------------------------
YEAR 2/14/96* YEAR YEAR YEAR YEAR
ENDED TO ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96
------------ ----------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income ....... $614,519 $132,398 $4,123,096 $898,962 $6,435,099 $3,069,357
Net realized gain (loss) on:
Investment
transactions ............ 111,548 3,717 11,907,336 86,714,103 15,106,323 6,093,674
Futures contracts ......... 3,580,341 139,955 -- -- -- --
Foreign currency and
forward foreign
currency contracts ..... -- -- (94) -- -- --
Change in unrealized
appreciation
(depreciation) on:
Investments ............... 292,487 22,745 112,919,340 (9,894,420) 1,710,688 10,015,576
Futures contracts ......... (201,241) 266,875 -- -- -- --
------------ ----------- ------------- ------------- ------------ ------------
Net increase in net
assets resulting from
operations ................ 4,397,654 565,690 128,949,678 77,718,645 23,252,110 19,178,607
Distribution to
shareholders from:
Net investment income .... (614,519) (132,206) (898,962) (908,877) -- (5,275,859)
Net realized gains on
investments, futures and
foreign currency
transactions .......... (2,783,548) (143,672) (76,558,164) -- -- (6,933,560)
Distribution to shareholders:
In excess of net realized
gains on investments,
futures and foreign
currency transactions . -- (267,066) -- -- -- (166,348)
Increase in net assets
from capital share
transactions (Note 4) ..... 18,257,484 7,794,785 234,744,078 68,086,867 62,287,429 16,976,697
------------ ----------- ------------- ------------- ------------ ------------
Increase in net assets ...... 19,257,071 7,817,531 286,236,630 144,896,635 85,539,539 23,779,537
Net assets at beginning
of period ................. 7,817,531 -- 422,570,828 277,674,194 76,219,654 52,440,117
------------ ----------- ------------- ------------- ------------ ------------
Net assets at end
of period ................. $27,074,602 $7,817,531 $708,807,458 $422,570,828 $161,759,193 $76,219,654
============ =========== ============= ============= ============ ============
Undistributed net
investment income ......... -- -- $4,121,547 $898,962 $4,808,797 --
============ =========== ============= ============= ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
20
<PAGE> 60
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
VALUE GROWTH AND INCOME GROWTH AND INCOME
TRUST TRUST TRUST
------------- ----------------------------- ---------------------------------
1/01/97* YEAR YEAR YEAR YEAR
TO ENDED ENDED ENDED ENDED
Increase in net assets: 12/31/97 12/31/97 12/31/96 12/31/97 12/31/96
------------- ------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income .............. $979,426 $4,301,075 $2,531,634 $15,322,986 $13,055,784
Net realized gain (loss) on:
Investment transactions .......... 2,848,645 6,819,325 13,800,418 99,563,470 66,608,198
Foreign currency and forward
foreign currency contracts ..... -- (7,637) (4,527,818) 1,285 (241,417)
Change in unrealized
appreciation (depreciation) on:
Investments ...................... 5,320,474 (11,806,866) 5,646,511 247,910,751 98,172,478
Foreign currency and forward
foreign currency contracts ..... -- 594,255 221,135 (1,256) (1,609)
------------- ------------- ------------- --------------- ---------------
Net increase (decrease) in net
assets resulting from operations .. 9,148,545 (99,848) 17,671,880 362,797,236 177,593,434
Distribution to
shareholders from:
Net investment income ............ (979,426) (3,640,170) (203,407) (13,165,084) (11,667,389)
Net realized gains on
investments and foreign
currency transactions ......... (2,848,645) (8,342,784) -- (66,257,481) (15,781,628)
Distribution to shareholders:
In excess of net realized gains
on investments and foreign
currency transactions ........ (599,054) -- -- -- --
Increase in net assets from
capital share transactions (Note 4) 139,950,204 26,849,179 82,903,570 288,274,613 214,206,333
------------- ------------- ------------- --------------- ---------------
Increase in net assets ............. 144,671,624 14,766,377 100,372,043 571,649,284 364,350,750
Net assets at beginning of period .. -- 189,010,077 88,638,034 1,033,737,994 669,387,244
------------- ------------- ------------- --------------- ---------------
Net assets at end of period ........ $144,671,624 $203,776,454 $189,010,077 $1,605,387,278 $1,033,737,994
============= ============= ============= =============== ===============
Undistributed net
investment income ................ -- $4,240,740 $3,194,285 $15,315,008 $13,165,084
============= ============= ============= =============== ===============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
21
<PAGE> 61
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE
EQUITY-INCOME BALANCED ASSET ALLOCATION
TRUST TRUST TRUST
----------------------------- ------------- -----------------------------
YEAR YEAR 1/01/97* YEAR YEAR
ENDED ENDED TO ENDED ENDED
Increase in net assets: 12/31/97 12/31/96 12/31/97 12/31/97 12/31/96
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income ................ $18,962,919 $8,744,645 $4,677,007 $4,678,266 $6,008,096
Net realized gain (loss) on:
Investment transactions ............ 40,834,683 80,310,064 20,430,952 21,787,441 17,873,805
Futures contracts .................. -- -- -- 2,190,877 (425,496)
Foreign currency and forward
foreign currency contracts ....... (76,448) (7,930) (95,635) (128,171) (871,980)
Change in unrealized
appreciation (depreciation) on:
Investments ........................ 138,364,867 395,472 400,364 12,435,747 4,719,321
Futures contracts .................. -- -- -- (63,205) (226,261)
Foreign currency and forward
foreign currency contracts ....... 245 (185) (161) (10,440) 2,798
------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations .......... 198,086,266 89,442,066 25,412,527 40,890,515 27,080,283
Distribution to
shareholders from:
Net investment income .............. (8,655,530) (5,009,152) -- (6,081,059) (5,427,633)
Net realized gains on
investments, futures and
foreign currency transactions ... (80,825,124) (25,904,015) -- (16,445,138) (10,578,038)
Increase (decrease) in net assets from
capital share transactions (Note 4) 233,613,354 144,130,166 151,632,116 (1,530,327) 3,867,674
------------- ------------- ------------- ------------- -------------
Increase in net assets ............... 342,218,966 202,659,065 177,044,643 16,833,991 14,942,286
Net assets at beginning of period .... 599,485,621 396,826,556 -- 226,699,238 211,756,952
------------- ------------- ------------- ------------- -------------
Net assets at end of period .......... $941,704,587 $599,485,621 $177,044,643 $243,533,229 $226,699,238
============= ============= ============= ============= =============
Undistributed net
investment income .................. $18,699,879 $8,655,530 $4,637,642 $4,765,263 $6,081,059
============= ============= ============= ============= =============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
22
<PAGE> 62
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATE CONSERVATIVE
ASSET ALLOCATION ASSET ALLOCATION HIGH YIELD
TRUST TRUST TRUST
----------------------------- ----------------------------- ------------
YEAR YEAR YEAR YEAR 1/01/97*
ENDED ENDED ENDED ENDED TO
Increase (decrease) in net assets: 12/31/97 12/31/96 12/31/97 12/31/96 12/31/97
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income ............... $20,624,457 $26,442,844 $8,909,268 $10,020,051 $3,000,344
Net realized gain (loss) on:
Investment transactions ........... 44,169,728 37,335,908 9,545,017 8,576,247 731,169
Futures contracts ................. 2,745,819 (1,002,713) 38,629 (168,117) --
Foreign currency and forward
foreign currency contracts ...... (177,501) (1,527,516) (36,148) (196,816) 20,337
Change in unrealized
appreciation (depreciation) on:
Investments ....................... 22,649,867 (926,299) 3,370,336 (3,354,448) 974,604
Futures contracts ................. 92,982 (487,106) 20,122 (80,347) --
Foreign currency and forward
foreign currency contracts ...... (16,641) (857) (2,821) 45 43,163
------------- ------------- ------------- ------------- ------------
Net increase in net assets
resulting from operations ......... 90,088,711 59,834,261 21,844,403 14,796,615 4,769,617
Distribution to
shareholders from:
Net investment income ............. (26,584,959) (26,460,562) (10,062,867) (10,622,367) (2,994,422)
Net realized gains on
investments, futures and
foreign currency transactions .. (34,563,767) (26,425,885) (8,097,771) (3,004,794) (457,712)
Increase in net assets from
capital share transactions (Note 4) (44,619,393) (32,262,903) (7,801,297) (17,093,800) 91,430,172
------------- ------------- ------------- ------------- ------------
Increase (decrease) in net assets ... (15,679,408) (25,315,089) (4,117,532) (15,924,346) 92,747,655
Net assets at beginning of period ... 624,821,048 650,136,137 208,465,654 224,390,000 --
------------- ------------- ------------- ------------- ------------
Net assets at end of period ......... $609,141,640 $624,821,048 $204,348,122 $208,465,654 $92,747,655
============= ============= ============= ============= ============
Undistributed net
investment income ................. $20,941,772 $26,584,959 $8,844,386 $10,062,867 $26,259
============= ============= ============= ============= ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
23
<PAGE> 63
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC GLOBAL CAPITAL GROWTH
BOND GOVERNMENT BOND BOND
TRUST TRUST TRUST
----------------------------- ----------------------------- -------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
Increase (decrease) in net assets: 12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96
------------- ------------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income ............. $21,794,258 $13,698,379 $13,484,526 $15,386,752 $3,061,428 $2,636,414
Net realized gain (loss) on:
Investment
transactions .................. 4,357,008 5,399,944 13,533,542 9,598,508 48,206 (211,323)
Foreign currency and
forward foreign
currency contracts ........... 474,566 748,978 (8,569,143) 3,414,227 -- --
Change in unrealized
appreciation
(depreciation) on:
Investments ..................... 2,884,064 3,229,720 (14,618,789) 1,954,903 1,026,927 (1,348,717)
Futures contracts
Foreign currency and
forward foreign
currency contracts ........... 556,273 (94,693) 2,134,019 (417,584) -- --
------------- ------------- ------------- ------------- ----------- ------------
Net increase in net
assets resulting from
operations ...................... 30,066,169 22,982,328 5,964,155 29,936,806 4,136,561 1,076,374
Distribution to
shareholders from:
Net investment income ........... (14,436,515) (10,621,746) (19,668,247) (21,062,640) -- (2,638,011)
Net realized gains on
investments, futures and
foreign currency
transactions ................ (1,809,273) -- (512,991) -- -- --
Increase (decrease) in net
assets from capital share
transactions (Note 4) ........... 130,492,346 86,212,723 (19,459,104) 5,676,210 4,459,955 4,261,280
------------- ------------- ------------- ------------- ----------- ------------
Increase (decrease)
in net assets ................... 144,312,727 98,573,305 (33,676,187) 14,550,376 8,596,516 2,699,643
Net assets at beginning
of period ....................... 221,277,481 122,704,176 249,793,310 235,242,934 45,393,429 42,693,786
------------- ------------- ------------- ------------- ----------- ------------
Net assets at end
of period ....................... $365,590,208 $221,277,481 $216,117,123 $249,793,310 $53,989,945 $45,393,429
============= ============= ============= ============= =========== ============
Undistributed net
investment income ............... $22,584,781 $14,378,392 $12,595,749 $19,668,247 $3,103,100 --
============= ============= ============= ============= =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE> 64
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT U.S. GOVERNMENT MONEY
QUALITY BOND SECURITIES MARKET
TRUST TRUST TRUST
----------------------------- ----------------------------- -----------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
Increase (decrease) in net assets: 12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income ............. $11,518,010 $10,291,383 $13,511,297 $13,679,653 $21,497,529 $15,645,674
Net realized gain (loss) on
investment transactions ......... 560,958 1,165,169 (1,285,791) (464,497) -- --
Change in unrealized
appreciation
(depreciation)
on investments ................. 3,072,046 (7,470,195) 5,453,837 (6,682,550) -- --
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net
assets resulting from
operations ...................... 15,151,014 3,986,357 17,679,343 6,532,606 21,497,529 15,645,674
Distribution to
shareholders from net
investment income .............. (10,368,425) (8,478,262) (13,118,502) (12,847,931) (21,497,529) (15,645,674)
Increase (decrease) in net
assets from capital share
transactions (Note 4) .......... 30,801,522 14,350,133 42,663,878 (6,420,478) 76,147,741 105,448,834
------------- ------------- ------------- ------------- ------------- -------------
Increase (decrease)
in net assets ................... 35,584,111 9,858,228 47,224,719 (12,735,803) 76,147,741 105,448,834
Net assets at beginning
of period ....................... 152,960,832 143,102,604 204,052,616 216,788,419 363,565,797 258,116,963
------------- ------------- ------------- ------------- ------------- -------------
Net assets at end
of period ....................... $188,544,943 $152,960,832 $251,277,335 $204,052,616 $439,713,538 $363,565,797
============= ============= ============= ============= ============= =============
Undistributed net
investment income ............... $11,620,376 $10,356,725 $13,028,158 $13,081,027 -- --
============= ============= ============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE> 65
MANUFACTURERS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE LIFESTYLE
AGGRESSIVE 1000 GROWTH 820 BALANCED 640 MODERATE 460 CONSERVATIVE 280
TRUST TRUST TRUST TRUST TRUST
------------ ------------- ------------- ------------ ------------
1/07/97* 1/07/97* 1/07/97* 1/07/97* 1/07/97*
TO TO TO TO TO
Increase in net assets: 12/31/97 12/31/97 12/31/97 12/31/97 12/31/97
------------ ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income ............... $40,644 $1,638,443 $1,923,233 $692,090 $255,536
Net realized gain on
investment transactions ........... 1,761,470 6,079,624 3,201,700 483,277 167,849
Change in unrealized
appreciation on investments ....... 229,927 2,198,847 3,474,631 1,263,874 471,143
------------ ------------- ------------- ------------ ------------
Net increase in net assets
resulting from operations ......... 2,032,041 9,916,914 8,599,564 2,439,241 894,528
Distribution to shareholders from:
Net investment income ............. (40,644) (1,638,443) (1,923,233) (692,090) (255,536)
Capital gain distributions received (234,940) (623,851) (519,499) (141,843) (52,417)
Increase in net assets from
capital share transactions (Note 4) 47,348,070 209,503,037 180,496,470 51,140,322 19,163,445
------------ ------------- ------------- ------------ ------------
Increase in net assets .............. 49,104,527 217,157,657 186,653,302 52,745,630 19,750,020
Net assets at beginning of period ... -- -- -- -- --
------------ ------------- ------------- ------------ ------------
Net assets at end of period ......... $49,104,527 $217,157,657 $186,653,302 $52,745,630 $19,750,020
============ ============= ============= ============ ============
Undistributed net
investment income ................. -- -- -- -- --
============ ============= ============= ============ ============
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
26
<PAGE> 66
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC RIM EMERGING MARKETS TRUST
-----------------------------------------------
YEARS ENDED DECEMBER 31, 10/04/94*
---------------------------------- TO
1997 1996** 1995 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................................. $10.90 $10.36 $9.41 $10.00
Income from investment operations:
Net investment income ...................... 0.05 0.07 0.12 0.04
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................ (3.77) 0.94 0.96 (0.59)
------ ------ ------ ------
Total from investment
operations .......................... (3.72) 1.01 1.08 (0.55)
Less distributions:
Dividends from net investment income ....... -- (0.07) (0.09) (0.04)
Dividends in excess of net investment
income ................................... -- (0.01) -- --
Distributions from capital gains ........... -- (0.39) (0.04) --
Distributions in excess of capital gains ... (0.02) -- -- --
------ ------ ------ ------
Total distributions ................... (0.02) (0.47) (0.13) (0.04)
------ ------ ------ ------
Net asset value, end of period ............... $7.16 $10.90 $10.36 $9.41
====== ====== ====== ======
Total return .......................... (34.12%) 9.81% 11.47% (5.63%)+
Net assets, end of period (000's) ............ $23,850 $23,241 $13,057 $7,657
Ratio of operating expenses to
average net assets ......................... 1.42% 1.50% 1.50% 1.50%(A)
Ratio of net investment income to
average net assets ......................... 0.65% 0.78% 1.01% 1.84%(A)
Portfolio turnover rate ...................... 63% 48% 55% 0%(A)
Average commission rate per share (B) ........ $0.013 $0.015 N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective December 31, 1996, the Portfolio changed its name from the Pacific
Rim Emerging Markets Fund.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
27
<PAGE> 67
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
SCIENCE &
TECHNOLOGY TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $12.50
Income from investment operations:
Net investment loss..................... (0.04)
Net realized and unrealized gain
on investments........................ 1.38
-----
Total from investment
operations....................... 1.34
Less distributions:
Distributions from capital gains....... (0.04)
Distributions in excess of
capital gains ....................... (0.18)
------
Total distributions................ (0.22)
------
Net asset value, end of period............ $13.62
======
Total return....................... 10.71%
Net assets, end of period (000's)......... $67,348
Ratio of operating expenses to
average net assets...................... 1.26%
Ratio of net investment loss to
average net assets...................... (0.54%)
Portfolio turnover rate................... 121%
Average commission rate per share......... $0.039
- ----------
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
28
<PAGE> 68
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
INTERNATIONAL
SMALL CAP TRUST
---------------------------
YEAR 03/04/96*
ENDED TO
12/31/97 12/31/96
------------ ------------
Net asset value, beginning
of period............................... $13.60 $12.50
Income from investment operations:
Net investment income................... 0.08 0.06
Net realized and unrealized gain
on investments and foreign currency
transactions......................... 0.03 1.09
----- -----
Total from investment
operations....................... 0.11 1.15
Less distributions:
Dividends from net investment income... (0.01) (0.05)
------ ------
Net asset value, end of period............ $13.70 $13.60
====== ======
Total return....................... 0.79% 9.20%+
Net assets, end of period (000's)......... $128,576 $97,218
Ratio of operating expenses to
average net assets...................... 1.31% 1.29%(A)
Ratio of net investment income to
average net assets...................... 0.63% 0.93%(A)
Portfolio turnover rate................... 74% 50%(A)
Average commission rate per share (B)..... $0.012 $0.015
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
29
<PAGE> 69
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
EMERGING GROWTH TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $20.60
Income from investment operations:
Net investment loss..................... (0.02)
Net realized and unrealized
gain on investments................... 3.55
-----
Total from investment
operations....................... 3.53
Net asset value, end of period............ $24.13
======
Total return....................... 17.14%
Net assets, end of period (000's)......... $275,774
Ratio of operating expenses to
average net assets...................... 1.11%
Ratio of net investment loss to
average net assets...................... (0.13%)
Portfolio turnover rate................... 120%
Average commission rate per share......... $0.057
- ----------
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
30
<PAGE> 70
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
PILGRIM BAXTER
GROWTH TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $12.50
Income from investment operations:
Net investment loss..................... (0.03)
Net realized and unrealized gain
on investments........................ 0.03
-----
Total from investment
operations....................... --
Net asset value, end of period............ $12.50
======
Total return....................... 0.00%
Net assets, end of period (000's)......... $93,335
Ratio of operating expenses to
average net assets...................... 1.18%
Ratio of net investment loss to
average net assets...................... (0.46%)
Portfolio turnover rate................... 63%
Average commission rate per share......... $0.047
- ----------
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
31
<PAGE> 71
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
SMALL/MID CAP TRUST
------------------------
YEAR 03/04/96*
ENDED TO
12/31/97 12/31/96
---------- ----------
Net asset value, beginning
of period............................... $13.37 $12.50
Income from investment operations:
Net investment loss..................... (0.04) --
Net realized and unrealized gain
on investments........................ 2.08 0.87
----- -----
Total from investment
operations....................... 2.04 0.87
Net asset value, end of period............ $15.41 $13.37
====== ======
Total return....................... 15.26% 6.96%+
Net assets, end of period (000's)......... $268,377 $176,062
Ratio of operating expenses to
average net assets...................... 1.05% 1.10%(A)
Ratio of net investment loss to
average net assets...................... (0.33%) (0.02%)(A)
Portfolio turnover rate................... 151% 67%(A)
Average commission rate per share......... $0.070 $0.069
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
32
<PAGE> 72
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
INTERNATIONAL
STOCK TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $11.47
Income from investment operations:
Net investment income................... 0.04
Net realized and unrealized gain
on investments and foreign currency
transactions......................... 0.12
-----
Total from investment
operations....................... 0.16
Less distributions:
Dividends from net investment income... (0.03)
Distributions from capital gains....... (0.05)
Distributions in excess of
capital gains ....................... (0.08)
------
Total distributions................ (0.16)
------
Net asset value, end of period............ $11.47
======
Total return....................... 1.38%
Net assets, end of period (000's)......... $145,253
Ratio of operating expenses to
average net assets...................... 1.38%
Ratio of net investment income to
average net assets...................... 0.56%
Portfolio turnover rate................... 43%
Average commission rate per share (A)..... $0.026
- ----------
* Commencement of operations.
(A) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
33
<PAGE> 73
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
WORLDWIDE
GROWTH TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $12.50
Income from investment operations:
Net investment income................... 0.04
Net realized and unrealized gain
on investments and foreign currency
transactions......................... 1.62
-----
Total from investment
operations....................... 1.66
Less distributions:
Dividends from net investment income... (0.03)
Distributions from capital gains....... (0.02)
Distributions in excess of
capital gains ....................... (0.07)
------
Total distributions................ (0.12)
------
Net asset value, end of period............ $14.04
======
Total return....................... 13.29%
Net assets, end of period (000's)......... $24,262
Ratio of operating expenses to
average net assets...................... 1.32%
Ratio of net investment income to
average net assets...................... 0.61%
Portfolio turnover rate................... 84%
Average commission rate per share (A)..... $0.032
- ----------
* Commencement of operations.
(A) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
34
<PAGE> 74
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL EQUITY TRUST
------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ............................... $17.84 $16.10 $15.74 $15.73 $12.00 $12.24
Income from investment operations:
Net investment income (loss) (B) ....... 0.19 0.12 0.29 0.05 0.12 0.10
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ........ 3.16 1.89 0.84 0.22 3.79 (0.19)
------ ------ ------ ------ ------ ------
Total from investment operations ..... 3.35 2.01 1.13 0.27 3.91 (0.09)
Less distributions:
Dividends from net investment income .... (0.27) (0.27) (0.08) (0.02) (0.18) (0.15)
Distributions from capital gains ........ (1.54) -- (0.69) (0.24) -- --
------ ------ ------ ------ ------ ------
Total distributions .................. (1.81) (0.27) (0.77) (0.26) (0.18) (0.15)
------ ------ ------ ------ ------ ------
Net asset value, end of period ............ $19.38 $17.84 $16.10 $15.74 $15.73 $12.00
====== ====== ====== ====== ====== ======
Total return ......................... 20.80% 12.62% 7.68% 1.74% 32.89% (0.72%)
Net assets, end of period (000's).. $868,413 $726,842 $648,183 $616,138 $377,871 $116,731
Ratio of operating expenses to
average net assets (C) .................. 1.01% 1.01% 1.05% 1.08% 1.16% 1.16%
Ratio of net investment income (loss) to
average net assets ...................... 1.02% 0.78% 0.61% 0.44% 0.77% 1.12%
Portfolio turnover rate ................... 33% 169% 63% 52% 52% 69%
Average commission rate per share (D) ..... $0.032 $0.015 N/A N/A N/A N/A
<CAPTION>
------------------------------------------------------
03/18/88*
---------------------------------------- TO
1991 1990 1989 12/31/88
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period ............................... $11.00 $12.57 $10.15 $10.03
Income from investment operations:
Net investment income (loss) (B) ....... 0.16 0.12 0.10 (0.05)
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ........ 1.23 (1.41) 2.32 0.17
------ ------ ------ ------
Total from investment operations ..... 1.39 (1.29) 2.42 0.12
Less distributions:
Dividends from net investment income .... (0.15) (0.04) -- --
Distributions from capital gains ........ -- (0.24) -- --
------ ------ ------ ------
Total distributions .................. (0.15) (0.28) -- --
------ ------ ------ ------
Net asset value, end of period ............ $12.24 $11.00 $12.57 $10.15
====== ====== ====== ======
Total return ......................... 12.80% (10.43%) 23.84% 1.20%+
Net assets, end of period (000's).. $89,003 $63,028 $26,223 $2,143
Ratio of operating expenses to
average net assets (C) .................. 1.23% 1.28% 1.62% 3.98%(A)
Ratio of net investment income (loss) to
average net assets ...................... 1.47% 1.97% 1.82% (1.71%)(A)
Portfolio turnover rate ................... 74% 67% 109% 81%(A)
Average commission rate per share (D) ..... N/A N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement per share of $0.02 in 1988.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 4.53% in 1988.
(D) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
35
<PAGE> 75
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
SMALL COMPANY
VALUE TRUST
-------------------------
10/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $12.50
Income from investment operations:
Net investment income................... 0.01
Net realized and unrealized loss
on investments and foreign currency
transactions......................... (0.57)
------
Total from investment
operations....................... (0.56)
Net asset value, end of period............ $11.94
======
Total return....................... (4.48%)+
Net assets, end of period (000's)......... $67,091
Ratio of operating expenses to
average net assets...................... 1.19%(A)
Ratio of net investment income to
average net assets...................... 0.54%(A)
Portfolio turnover rate................... 81%(A)
Average commission rate per share (B)..... $0.032
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets the
relationship between the translated U.S. dollar price per share and
commission paid per share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
36
<PAGE> 76
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY TRUST
------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993* 1992
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $22.62 $20.79 $14.66 $15.57 $13.97 $13.12
Income from investment operations:
Net investment income .............. 0.08 0.13 0.10 0.11 0.07 0.64
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 3.31 3.77 6.14 (0.18) 2.11 0.38
------ ------ ------ ------ ------ ------
Total from investment
operations .................... 3.39 3.90 6.24 (0.07) 2.18 1.02
Less distributions:
Dividends from net investment
income ........................... (0.14) (0.09) (0.11) (0.05) (0.58) (0.17)
Distributions from capital gains ... (4.37) (1.98) -- (0.79) -- --
------ ------ ------ ------ ------ ------
Total distributions ............. (4.51) (2.07) (0.11) (0.84) (0.58) (0.17)
------ ------ ------ ------ ------ ------
Net asset value, end of period ....... $21.50 $22.62 $20.79 $14.66 $15.57 $13.97
====== ====== ====== ====== ====== ======
Total return .................... 19.25% 20.14% 42.79% (0.53%) 16.31% 7.93%
Net assets, end of period (000's) .... $1,521,382 $1,345,461 $988,800 $534,562 $387,842 $192,626
Ratio of operating expenses to
average net assets ................. 0.80% 0.80% 0.80% 0.84% 0.88% 0.95%
Ratio of net investment income to
average net assets ................. 0.35% 0.71% 0.63% 0.88% 0.50% 7.31%
Portfolio turnover rate .............. 224% 223% 88% 132% 173% 782%
Average commission rate per
share (A) .......................... $0.043 $0.043 N/A N/A N/A N/A
<CAPTION>
-----------------------------------------------------------
1991 1990 1989 1988
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $11.33 $19.14 $15.17 $12.57
Income from investment operations:
Net investment income .............. 0.14 0.24 0.29 0.15
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .. 1.88 (1.95) 3.87 2.45
------ ------ ------ ------
Total from investment
operations .................... 2.02 (1.71) 4.16 2.60
Less distributions:
Dividends from net investment
income ........................... (0.23) (0.29) (0.12) --
Distributions from capital gains ... -- (5.81) (0.07) --
------ ------ ------ ------
Total distributions ............. (0.23) (6.10) (0.19) --
------ ------ ------ ------
Net asset value, end of period ....... $13.12 $11.33 $19.14 $15.17
====== ====== ====== ======
Total return .................... 17.94% (11.79%) 27.70% 20.71%
Net assets, end of period (000's) .... $88,235 $36,564 $32,108 $133,852
Ratio of operating expenses to
average net assets ................. 0.89% 0.97% 1.02% 1.08%
Ratio of net investment income to
average net assets ................. 2.23% 2.74% 1.90% 1.80%
Portfolio turnover rate .............. 172% 95% 111% 49%
Average commission rate per
share (A) .......................... N/A N/A N/A N/A
</TABLE>
- ----------
* Net investment income per share was calculated using the average shares
method for fiscal year 1993.
(A) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements.
37
<PAGE> 77
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
GROWTH TRUST
------------------------------
YEAR 07/15/96*
ENDED TO
12/31/97 12/31/96
------------ ------------
Net asset value, beginning
of period............................... $13.73 $12.50
Income from investment operations:
Net investment income................... 0.08 0.09
Net realized and unrealized gain
on investments and foreign currency
transactions......................... 3.40 1.23
----- -----
Total from investment
operations....................... 3.48 1.32
Less distributions:
Dividends from net investment income... -- (0.09)
------- ------
Net asset value, end of period............ $17.21 $13.73
====== ======
Total return....................... 25.35% 10.53%+
Net assets, end of period (000's)......... $167,388 $56,807
Ratio of operating expenses to
average net assets...................... 0.95% 1.01%(A)
Ratio of net investment income to
average net assets...................... 0.74% 2.57%(A)
Portfolio turnover rate................... 179% 215%(A)
Average commission rate per share......... $0.061 $0.048
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
38
<PAGE> 78
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITATIVE EQUITY TRUST
---------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1997 1996** 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $17.33 $17.27 $13.36 $14.68 $13.73 $13.33 $10.48
Income from investment operations:
Net investment income (A) .............. 0.26 0.26 0.24 0.20 0.19 0.18 0.21
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ...... 4.91 2.83 3.67 (0.81) 1.64 0.61 2.94
------ ------ ------ ------ ------ ------ ------
Total from investment
operations ........................ 5.17 3.09 3.91 (0.61) 1.83 0.79 3.15
Less distributions:
Dividends from net investment income ... -- (0.50) -- (0.20) (0.19) (0.18) (0.21)
Distributions from capital gains ....... -- (2.51) -- (0.51) (0.69) (0.21) (0.09)
Distributions in excess of
capital gains ........................ -- (0.02) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions ................. -- (3.03) -- (0.71) (0.88) (0.39) (0.30)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ........... $22.50 $17.33 $17.27 $13.36 $14.68 $13.73 $13.33
====== ====== ====== ====== ====== ====== ======
Total return ........................ 29.83% 17.92% 29.23% (4.19%) 13.39% 6.07% 30.18%
Net assets, end of period (000's) ........ $167,530 $91,900 $60,996 $34,829 $21,651 $9,708 $5,480
Ratio of operating expenses to
average net assets (B) ................. 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 1.50% 1.81% 1.76% 1.53% 1.39% 1.51% 1.78%
Portfolio turnover rate .................. 114% 105% 109% 85% 88% 48% 53%
Average commission rate per share (C) .... $0.059 $0.060 N/A N/A N/A N/A N/A
<CAPTION>
----------------------------------
----------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period .............................. $11.25 $8.91 $8.36
Income from investment operations:
Net investment income (A) .............. 0.32 0.36 0.28
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions ...... (0.77) 2.34 0.56
------ ------ ------
Total from investment
operations ........................ (0.45) 2.70 0.84
Less distributions:
Dividends from net investment income ... (0.32) (0.36) (0.29)
Distributions from capital gains ....... -- -- --
Distributions in excess of
capital gains ........................ -- -- --
------ ------ ------
Total distributions ................. (0.32) (0.36) (0.29)
------ ------ ------
Net asset value, end of period ........... $10.48 $11.25 $8.91
====== ====== ======
Total return ........................ (4.06%) 30.66% 9.86%
Net assets, end of period (000's) ........ $2,872 $2,138 $1,176
Ratio of operating expenses to
average net assets (B) ................. 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ..................... 3.06% 3.48% 3.16%
Portfolio turnover rate .................. 121% 121% 172%
Average commission rate per share (C) .... N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective December 31, 1996, the Portfolio changed its name from the Common
Stock Fund.
(A) After investment adviser expense reimbursement per share of $0.05 for the
year ended December 31, 1997.
(B) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.77% for the year ended December 31, 1997.
(C) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
39
<PAGE> 79
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
EQUITY INDEX TRUST
-----------------------------
YEAR 02/14/96*
ENDED TO
12/31/97 12/31/96**
---------- ------------
Net asset value, beginning
of period............................... $10.69 $10.00
Income from investment operations:
Net investment income (B)............... 0.32 0.19
Net realized and unrealized gain
on investments........................ 3.26 1.29
----- -----
Total from investment
operations....................... 3.58 1.48
Less distributions:
Dividends from net investment income... (0.32) (0.19)
Distributions from capital gains....... (1.47) (0.21)
Distributions in excess of
capital gains ...................... -- (0.39)
------ ------
Total distributions................ (1.79) (0.79)
------ ------
Net asset value, end of period............ $12.48 $10.69
====== ======
Total return....................... 33.53% 14.86%+
Net assets, end of period (000's)......... $27,075 $7,818
Ratio of operating expenses to
average net assets (C).................. 0.40% 0.40%(A)
Ratio of net investment income to
average net assets...................... 3.64% 4.74%(A)
Portfolio turnover rate................... 7% 27%(A)
Average commission rate per share......... $0.033 $0.041
- ----------
* Commencement of operations.
** Effective December 31, 1996, the Portfolio changed its name from the Equity
Index Fund.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.01 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.57% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
40
<PAGE> 80
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BLUE CHIP GROWTH TRUST
-------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 12/11/92*
------------------------------------------------------------ TO
1997 1996** 1995 1994 1993 12/31/92
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .. $14.31 $11.40 $9.05 $9.55 $9.93 $10.00
Income from investment operations:
Net investment income (B) .......... 0.09 0.03 0.03 0.04 0.05 0.00
Net realized and unrealized gain
(loss) on investments ............ 3.13 2.92 2.36 (0.50) (0.42) (0.07)
------ ------ ------ ------ ------ ------
Total from investment operations 3.22 2.95 2.39 (0.46) (0.37) (0.07)
Less distributions:
Dividends from net investment
income ........................... (0.03) (0.04) (0.04) (0.04) (0.01) --
Distributions from capital gains ... (2.50) -- -- -- -- --
------ ------ ------ ------ ------ ------
Total distributions ............ (2.53) (0.04) (0.04) (0.04) (0.01) --
------ ------ ------ ------ ------ ------
Net asset value, end of period ........ $15.00 $14.31 $11.40 $9.05 $9.55 $9.93
====== ====== ====== ====== ====== ======
Total return ................... 26.94% 25.90% 26.53% (4.80%) (3.80%) (0.70%)+
Net assets, end of period (000's) ..... $708,807 $422,571 $277,674 $151,727 $104,966 $31,118
Ratio of operating expenses to
average net assets (C) .............. 0.975% 0.975% 0.975% 0.975% 0.975% 1.06%(A)
Ratio of net investment income to
average net assets .................. 0.74% 0.26% 0.42% 0.65% 0.75% 1.04%(A)
Portfolio turnover rate ............... 37% 159% 57% 33% 12% 0%(A)
Average commission rate per
share (D) ........................... $0.043 $0.049 N/A N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective October 1, 1996, the Portfolio changed its name from the Pasadena
Growth Trust.
+ Non-annualized
(A) Annualized
(B) After investment adviser and subadviser expense reimbursement per share of
$0.006, $0.004, $0.006 and $0.01 for the years ended December 31, 1996,
1995, 1994 and 1993, respectively.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser and subadviser, was 1.02%, 1.03%, 1.06% and 1.09% for the years
ended December 31, 1996, 1995, 1994 and 1993, respectively.
(D) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
41
<PAGE> 81
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REAL ESTATE SECURITIES TRUST
-------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1997 1996** 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $16.95 $15.10 $13.34 $14.07 $12.75 $10.92 $8.16
Income from investment operations:
Net investment income (A) .......... 0.80 0.74 0.67 0.55 0.47 0.45 0.53
Net realized and unrealized gain
(loss) on investments ............ 2.32 4.31 1.35 (0.93) 2.38 1.83 2.76
------ ------ ------ ------ ------ ------ ------
Total from investment
operations .................... 3.12 5.05 2.02 (0.38) 2.85 2.28 3.29
Less distributions:
Dividends from net investment
income ........................... -- (1.39) (0.26) (0.27) (0.47) (0.45) (0.53)
Distributions from capital gains ... -- (1.77) -- (0.08) (1.06) -- --
Distributions in excess of
capital gains .................... -- (0.04 -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions ............. -- (3.20) (0.26) (0.35) (1.53) (0.45) (0.53)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ....... $20.07 $16.95 $15.10 $13.34 $14.07 $12.75 $10.92
====== ====== ====== ====== ====== ====== ======
Total return .................... 18.41% 34.69% 15.14% (2.76%) 22.61% 21.29% 41.10%
Net assets, end of period (000's) .... $161,759 $76,220 $52,440 $42,571 $24,106 $7,273 $4,120
Ratio of operating expenses to
average net assets (B) ............. 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ................. 5.42% 5.22% 5.06% 4.26% 3.93% 4.13% 5.40%
Portfolio turnover rate .............. 148% 231% 136% 36% 143% 71% 40%
Average commission rate per
share (C) .......................... $0.052 $0.059 N/A N/A N/A N/A N/A
<CAPTION>
----------------------------------
----------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $9.24 $9.12 $8.76
Income from investment operations:
Net investment income (A) .......... 0.67 0.68 0.70
Net realized and unrealized gain
(loss) on investments ............ (1.09) 0.15 0.37
------ ------ ------
Total from investment
operations .................... (0.42) 0.83 1.07
Less distributions:
Dividends from net investment
income ........................... (0.66) (0.71) (0.71)
Distributions from capital gains ... -- -- --
Distributions in excess of
capital gains .................... -- -- --
------ ------ ------
Total distributions ............. (0.66) (0.71) (0.71)
------ ------ ------
Net asset value, end of period ....... $8.16 $9.24 $9.12
====== ====== ======
Total return .................... (4.53%) 9.23% 11.72%
Net assets, end of period (000's) .... $2,774 $2,874 $2,490
Ratio of operating expenses to
average net assets (B) ............. 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ................. 7.74% 7.29% 7.18%
Portfolio turnover rate .............. 24% 15% 23%
Average commission rate per
share (C) .......................... N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations
** Effective December 31, 1996, the Portfolio changed its name from the Real
Estate Securities Fund.
(A) After investment adviser expense reimbursement per share of $0.04 for the
year ended December 31, 1997.
(B) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.77% for the year ended December 31, 1997.
(C) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
42
<PAGE> 82
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
VALUE TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $12.50
Income from investment operations:
Net investment income................... 0.10
Net realized and unrealized gain
on investments........................ 2.67
-----
Total from investment
operations....................... 2.77
Less distributions:
Dividends from net investment income... (0.10)
Distributions from capital gains....... (0.30)
Distributions in excess of
capital gains ....................... (0.06)
------
Total distributions................ (0.46)
------
Net asset value, end of period............ $14.81
======
Total return....................... 22.14%
Net assets, end of period (000's)......... $144,672
Ratio of operating expenses to
average net assets...................... 0.96%
Ratio of net investment income to
average net assets...................... 1.50%
Portfolio turnover rate................... 43%
Average commission rate per share......... $0.058
- ----------
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
43
<PAGE> 83
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH AND INCOME TRUST
----------------------------------------------
YEARS ENDED DECEMBER 31, 01/09/95*
----------------------------- TO
1997 1996 12/31/95
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value, beginning
of period .............................. $11.77 $10.47 $10.00
Income from investment operations:
Net investment income ................. 0.23 0.17 0.11
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ....................... (0.26) 1.15 0.59
------ ------ ------
Total from investment
operations ...................... (0.03) 1.32 0.70
Less distributions:
Dividends from net investment
income .............................. (0.22) (0.02) (0.12)
Distributions from capital gains ...... (0.51) -- (0.11)
------ ------ ------
Total distributions ............... (0.73) (0.02) (0.23)
------ ------ ------
Net asset value, end of period ........... $11.01 $11.77 $10.47
====== ====== ======
Total return ...................... (0.08%) 12.61% 6.98%+
Net assets, end of period (000's) ........ $203,776 $189,010 $88,638
Ratio of operating expenses to
average net assets ..................... 1.12% 1.11% 1.47%(A)
Ratio of net investment income to
average net assets ..................... 2.08% 1.82% 0.71%(A)
Portfolio turnover rate .................. 166% 148% 112%(A)
Average commission rate per share (B) .... $0.004 $0.028 N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
44
<PAGE> 84
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME TRUST
-------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 04/23/91*
------------------------------------------------------------------------- TO
1997 1996 1995 1994 1993 1992 12/31/91
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................... $19.38 $16.37 $13.04 $13.05 $12.10 $11.08 $10.00
Income from investment operations:
Net investment income ............... 0.22 0.22 0.27 0.25 0.17 0.20 0.13
Net realized and unrealized gain
on investments and foreign currency
transactions ..................... 5.73 3.41 3.45 0.11 0.98 0.92 0.95
------ ------ ------ ------ ------ ------ ------
Total from investment
operations ................... 5.95 3.63 3.72 0.36 1.15 1.12 1.08
Less distributions:
Dividends from net investment
income ............................ (0.24) (0.26) (0.26) (0.19) (0.18) (0.10) --
Distributions from capital gains .... (1.20) (0.36) (0.13) (0.18) (0.02) -- --
------ ------ ------ ------ ------ ------ ------
Total distributions ............ (1.44) (0.62) (0.39) (0.37) (0.20) (0.10) --
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ........ $23.89 $19.38 $16.37 $13.04 $13.05 $12.10 $11.08
====== ====== ====== ====== ====== ====== ======
Total return ................... 32.83% 22.84% 29.20% 2.85% 9.62% 10.23% 10.80%+
Net assets, end of period (000's) ..... $1,605,387 $1,033,738 $669,387 $409,534 $288,765 $130,984 $57,404
Ratio of operating expenses to
average net assets .................. 0.79% 0.80% 0.80% 0.82% 0.85% 0.85% 0.98%(A)
Ratio of net investment income to
average net assets .................. 1.14% 1.56% 2.23% 2.40% 2.29% 2.78% 2.92%(A)
Portfolio turnover rate ............... 34% 49% 39% 42% 39% 44% 62%(A)
Average commission rate per
share (B) ........................... $0.055 $0.055 N/A N/A N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
45
<PAGE> 85
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY-INCOME TRUST
-----------------------------------------------------------
YEARS ENDED DECEMBER 31, 02/19/93*
------------------------------------------------ TO
1997 1996** 1995 1994(1) 12/31/93
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ......................... $15.41 $13.81 $11.33 $11.31 $10.00
Income from investment operations:
Net investment income ............ 0.34 0.21 0.17 0.12 0.07
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions ........... 3.68 2.39 2.49 (0.03) 1.24
------ ------ ------ ------ ------
Total from investment
operations ................. 4.02 2.60 2.66 0.09 1.31
Less distributions:
Dividends from net investment
income ......................... (0.21) (0.16) (0.08) (0.05) --
Distributions from capital gains . (1.98) (0.84) (0.10) (0.02) --
------ ------ ------ ------ ------
Total distributions .......... (2.19) (1.00) (0.18) (0.07) --
------ ------ ------ ------ ------
Net asset value, end of period ...... $17.24 $15.41 $13.81 $11.33 $11.31
====== ====== ====== ====== ======
Total return ................. 29.71% 19.85% 23.69% 0.79% 13.10%+
Net assets, end of period (000's) ... $941,705 $599,486 $396,827 $221,835 $86,472
Ratio of operating expenses to
average net assets ................ 0.85% 0.85% 0.85% 0.87% 0.94%(A)
Ratio of net investment income to
average net assets ................ 2.47% 1.78% 1.63% 1.08% 1.30%(A)
Portfolio turnover rate ............. 25% 158% 52% 26% 33%(A)
Average commission rate per
share (B) ......................... $0.035 $0.052 N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
** Effective October 1, 1996, the Portfolio changed its name from the Value
Equity Trust.
(1) Net investment income per share was calculated using the average shares
method for fiscal year 1994.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
46
<PAGE> 86
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
BALANCED TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $16.41
Income from investment operations:
Net investment income................... 0.51
Net realized and unrealized
gain on investments................... 2.41
-----
Total from investment
operations....................... 2.92
Net asset value, end of period............ $19.33
======
Total return....................... 17.79%
Net assets, end of period (000's)......... $177,045
Ratio of operating expenses to
average net assets...................... 0.88%
Ratio of net investment income to
average net assets...................... 2.97%
Portfolio turnover rate................... 219%
Average commission rate per share......... $0.061
- ----------
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
47
<PAGE> 87
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE ASSET ALLOCATION TRUST
-------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................ $13.45 $12.85 $11.17 $12.03 $11.25 $10.72
Income from investment operations:
Net investment income ............ 0.29 0.36 0.35 0.31 0.34 0.30
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... 2.01 1.21 2.07 (0.41) 0.79 0.55
------ ------ ------ ------ ------ ------
Total from investment
operations .................. 2.30 1.57 2.42 (0.10) 1.13 0.85
Less distributions:
Dividends from net investment
income ......................... (0.38) (0.33) (0.33) (0.31) (0.30) (0.32)
Distributions from capital gains.. (1.01) (0.64) (0.41) (0.45) (0.05) --
------ ------ ------ ------ ------ ------
Total distributions ........... (1.39) (0.97) (0.74) (0.76) (0.35) (0.32)
------ ------ ------ ------ ------ ------
Net asset value, end of period ..... $14.36 $13.45 $12.85 $11.17 $12.03 $11.25
====== ====== ====== ====== ====== ======
Total return .................. 19.09% 13.00% 22.77% (0.69%) 10.30% 8.24%
Net assets, end of period (000's)... $243,533 $226,699 $211,757 $184,662 $174,448 $151,627
Ratio of operating expenses to
average net assets ............... 0.90% 0.90% 0.91% 0.89% 0.86% 0.89%
Ratio of net investment income to
average net assets ............... 1.99% 2.73% 2.76% 2.90% 2.96% 3.08%
Portfolio turnover rate ............ 91% 75% 111% 136% 92% 123%
Average commission rate per
share (B) ........................ $0.022 $0.025 N/A N/A N/A N/A
<CAPTION>
----------------------------------
08/03/89*
--------------------- TO
1991 1990 12/31/89
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period ........................ $9.08 $9.88 $10.00
Income from investment operations:
Net investment income ............ 0.36 0.36 0.08
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... 1.69 (1.07) (0.20)
------ ------ ------
Total from investment
operations .................. 2.05 (0.71) (0.12)
Less distributions:
Dividends from net investment
income ......................... (0.41) (0.07) --
Distributions from capital gains.. -- (0.02) --
------ ------ ------
Total distributions ........... (0.41) (0.09) --
------ ------ ------
Net asset value, end of period ..... $10.72 $9.08 $9.88
====== ====== ======
Total return .................. 22.96% (7.27%) (1.20%)+
Net assets, end of period (000's)... $124,632 $91,581 $87,301
Ratio of operating expenses to
average net assets ............... 0.88% 0.78% 0.89%(A)
Ratio of net investment income to
average net assets ............... 3.63% 4.08% 3.32%(A)
Portfolio turnover rate ............ 172% 82% 22%(A)
Average commission rate per
share (B) ........................ N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
48
<PAGE> 88
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATE ASSET ALLOCATION TRUST
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................ $12.49 $12.39 $10.79 $11.76 $11.14 $10.72
Income from investment operations:
Net investment income ............ 0.48 0.54 0.50 0.45 0.41 0.41
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... 1.29 0.60 1.65 (0.65) 0.67 0.43
------ ------ ------ ------ ------ ------
Total from investment
operations .................. 1.77 1.14 2.15 (0.20) 1.08 0.84
Less distributions:
Dividends from net investment
income ......................... (0.57) (0.52) (0.45) (0.40) (0.39) (0.42)
Distributions from capital gains.. (0.74) (0.52) (0.10) (0.37) (0.07) --
------ ------ ------ ------ ------ ------
Total distributions ........... (1.31) (1.04) (0.55) (0.77) (0.46) (0.42)
------ ------ ------ ------ ------ ------
Net asset value, end of period ..... $12.95 $12.49 $12.39 $10.79 $11.76 $11.14
====== ====== ====== ====== ====== ======
Total return .................. 15.87% 9.96% 20.68% (1.61%) 10.06% 8.30%
Net assets, end of period (000's)... $609,142 $624,821 $650,136 $604,491 $644,257 $505,967
Ratio of operating expenses to
average net assets ............... 0.85% 0.84% 0.84% 0.85% 0.84% 0.87%
Ratio of net investment income to
average net assets ............... 3.37% 4.17% 4.09% 4.01% 4.02% 4.21%
Portfolio turnover rate ............ 78% 78% 129% 180% 135% 169%
Average commission rate per
share (B) ........................ $0.022 $0.027 N/A N/A N/A N/A
<CAPTION>
-----------------------------------
08/03/89*
--------------------- TO
1991 1990 12/31/89
-------- -------- ---------
<S> <C> <C> <C>
Net asset value, beginning
of period ........................ $9.29 $10.03 $10.00
Income from investment operations:
Net investment income ............ 0.42 0.48 0.11
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... 1.50 (1.10) (0.08)
------ ------ ------
Total from investment
operations .................. 1.92 (0.62) 0.03
Less distributions:
Dividends from net investment
income ......................... (0.49) (0.10) --
Distributions from capital gains.. -- (0.02) --
------ ------ ------
Total distributions ........... (0.49) (0.12) --
------ ------ ------
Net asset value, end of period ..... $10.72 $9.29 $10.03
====== ====== ======
Total return .................. 21.23% (6.23%) 0.30%+
Net assets, end of period (000's)... $420,074 $327,328 $318,439
Ratio of operating expenses to
average net assets ............... 0.86% 0.73% 0.79%(A)
Ratio of net investment income to
average net assets ............... 4.38% 5.10% 4.51%(A)
Portfolio turnover rate ............ 168% 76% 41%(A)
Average commission rate per
share (B) ........................ N/A N/A N/A
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
49
<PAGE> 89
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONSERVATIVE ASSET ALLOCATION TRUST
---------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................ $11.64 $11.59 $10.34 $11.26 $10.78 $10.63 $9.56
Income from investment operations:
Net investment income ............ 0.54 0.57 0.54 0.55 0.50 0.47 0.58
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... 0.67 0.20 1.26 (0.76) 0.44 0.26 1.15
------ ------ ------ ------ ------ ------ ------
Total from investment
operations .................. 1.21 0.77 1.80 (0.21) 0.94 0.73 1.73
Less distributions:
Dividends from net investment
income ......................... (0.59) (0.56) (0.55) (0.46) (0.46) (0.58) (0.66)
Distributions from capital gains.. (0.48) (0.16) -- (0.25) -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions ........... (1.07) (0.72) (0.55) (0.71) (0.46) (0.58) (0.66)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ..... $11.78 $11.64 $11.59 $10.34 $11.26 $10.78 $10.63
====== ====== ====== ====== ====== ====== ======
Total return .................. 11.44% 7.03% 18.07% (1.84%) 8.99% 7.36% 18.80%
Net assets, end of period (000's)... $204,348 $208,466 $224,390 $216,716 $250,117 $201,787 $165,167
Ratio of operating expenses to
average net assets ............... 0.89% 0.87% 0.87% 0.87% 0.86% 0.89% 0.88%
Ratio of net investment income to
average net assets ............... 4.39% 4.59% 4.68% 4.86% 4.78% 4.99% 5.65%
Portfolio turnover rate ............ 86% 73% 110% 220% 170% 252% 211%
Average commission rate per
share (B) ........................ $0.021 $0.028 N/A N/A N/A N/A N/A
<CAPTION>
----------------------
08/03/89*
-------- TO
1990 12/31/89
-------- ---------
<S> <C> <C>
Net asset value, beginning
of period ........................ $10.11 $10.00
Income from investment operations:
Net investment income ............ 0.62 0.15
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... (1.01) (0.04)
------ ------
Total from investment
operations .................. (0.39) 0.11
Less distributions:
Dividends from net investment
income ......................... (0.13) --
Distributions from capital gains.. (0.03) --
------ ------
Total distributions ........... (0.16) --
------ ------
Net asset value, end of period ..... $9.56 $10.11
====== ======
Total return .................. (3.84%) 1.10%+
Net assets, end of period (000's)... $149,901 $141,191
Ratio of operating expenses to
average net assets ............... 0.76% 0.82%(A)
Ratio of net investment income to
average net assets ............... 6.68% 6.00%(A)
Portfolio turnover rate ............ 78% 85%(A)
Average commission rate per
share (B) ........................ N/A N/A
</TABLE>
- ---------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share of all security trades on
which commissions are charged. In certain foreign markets the relationship
between the translated U.S. dollar price per share and commission paid per
share may vary from that of domestic markets.
The accompanying notes are an integral part of the financial statements.
50
<PAGE> 90
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
HIGH YIELD TRUST
-------------------------
01/01/97*
TO
12/31/97
-------------------------
Net asset value, beginning
of period............................... $12.50
Income from investment operations:
Net investment income................... 0.46
Net realized and unrealized gain
on investments and foreign currency
transactions......................... 1.13
-----
Total from investment
operations....................... 1.59
Less distributions:
Dividends from net investment income... (0.46)
Distributions from capital gains....... (0.07)
------
Total distributions................ (0.53)
------
Net asset value, end of period............ $13.56
======
Total return....................... 12.68%
Net assets, end of period (000's)......... $92,748
Ratio of operating expenses to
average net assets...................... 0.89%
Ratio of net investment income to
average net assets...................... 7.40%
Portfolio turnover rate................... 75%
- ----------
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
51
<PAGE> 91
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC BOND TRUST
-------------------------------------------------------------
YEARS ENDED DECEMBER 31, 02/19/93*
----------------------------------------------- TO
1997 1996 1995 1994 12/31/93
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............................. $11.94 $11.26 $9.91 $10.88 $10.00
Income from investment operations:
Net investment income ................. 0.67 0.62 0.78 0.57 0.33
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ...................... 0.57 0.92 1.04 (1.22) 0.55
------ ------ ------ ------ ------
Total from investment
operations ...................... 1.24 1.54 1.82 (0.65) 0.88
Less distributions:
Dividends from net investment
income .............................. (0.71) (0.86) (0.47) (0.28) --
Distributions from capital gains ...... (0.09) -- -- (0.04) --
------ ------ ------ ------ ------
Total distributions ............... (0.80) (0.86) (0.47) (0.32) --
------ ------ ------ ------ ------
Net asset value, end of period ........... $12.38 $11.94 $11.26 $9.91 $10.88
====== ====== ====== ====== ======
Total return ...................... 10.98% 14.70% 19.22% (5.99%) 8.80%+
Net assets, end of period (000's) ........ $365,590 $221,277 $122,704 $84,433 $53,640
Ratio of operating expenses to
average net assets ..................... 0.87% 0.86% 0.92% 0.91% 1.00%(A)
Ratio of net investment income to
average net assets ..................... 7.54% 8.20% 8.76% 7.49% 6.56%(A)
Portfolio turnover rate .................. 131% 165% 181% 197% 356%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
52
<PAGE> 92
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GOVERNMENT BOND TRUST
--------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................ $14.97 $14.56 $12.47 $13.93 $12.47 $12.88 $11.59
Income from investment operations:
Net investment income ............ 0.93 0.93 1.16 0.74 0.59 0.42 0.55
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... (0.57) 0.79 1.62 (1.54) 1.67 (0.16) 1.21
------ ------ ------ ------ ------ ------ ------
Total from investment
operations .................. 0.36 1.72 2.78 (0.80) 2.26 0.26 1.76
Less distributions:
Dividends from net investment
income ......................... (1.23) (1.31) (0.69) (0.30) (0.70) (0.43) (0.46)
Distributions from capital gains.. (0.03) -- -- (0.36) (0.10) (0.24) (0.01)
------ ------ ------ ------ ------ ------ ------
Total distributions ........... (1.26) (1.31) (0.69) (0.66) (0.80) (0.67) (0.47)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ..... $14.07 $14.97 $14.56 $12.47 $13.93 $12.47 $12.88
====== ====== ====== ====== ====== ====== ======
Total return .................. 2.95% 13.01% 23.18% (5.75%) 18.99% 2.27% 15.86%
Net assets, end of period (000's)... $216,117 $249,793 $235,243 $208,513 $196,817 $67,859 $28,251
Ratio of operating expenses to
average net assets ............... 0.93% 0.90% 0.93% 0.96% 1.06% 1.05% 1.14%
Ratio of net investment income to
average net assets ............... 5.87% 6.38% 6.83% 6.10% 5.61% 6.71% 17.28%
Portfolio turnover rate ............ 160% 167% 171% 157% 154% 132% 164%
<CAPTION>
------------------------------------
03/18/88*
---------------------- TO
1990 1989 12/31/88
-------- -------- ---------
<S> <C> <C> <C>
Net asset value, beginning
of period ........................ $10.50 $10.21 $10.03
Income from investment operations:
Net investment income ............ 0.25 0.45 0.14
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions ............... 1.13 -- 0.04
------ ------ ------
Total from investment
operations .................. 1.38 0.45 0.18
Less distributions:
Dividends from net investment
income ......................... (0.24) (0.09) --
Distributions from capital gains.. (0.05) (0.07) --
------ ------ ------
Total distributions ........... (0.29) (0.16) --
------ ------ ------
Net asset value, end of period ..... $11.59 $10.50 $10.21
====== ====== ======
Total return .................. 13.49% 4.49% 1.79%+
Net assets, end of period (000's)... $11,582 $4,065 $1,355
Ratio of operating expenses to
average net assets ............... 1.21% 1.50% 3.39%(A)
Ratio of net investment income to
average net assets ............... 6.62% 7.15% 3.74%(A)
Portfolio turnover rate ............ 142% 50% 234%(A)
</TABLE>
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
The accompanying notes are an integral part of the financial statements.
53
<PAGE> 93
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL GROWTH BOND TRUST
-------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1997 1996* 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ......................... $10.90 $11.30 $10.10 $11.33 $11.12 $11.47 $10.62
Income from investment operations:
Net investment income (A) ......... 0.67 0.68 0.72 0.72 0.65 0.77 0.83
Net realized and unrealized gain
(loss) on investments ........... 0.28 (0.40) 1.32 (1.22) 0.51 (0.11) 0.85
------ ------ ------ ------ ------ ------ ------
Total from investment operations 0.95 0.28 2.04 (0.50) 1.16 0.66 1.68
Less distributions:
Dividends from net investment
income .......................... -- (0.68) (0.72) (0.72) (0.65) (0.78) (0.83)
Distributions from capital gains .. -- -- (0.12) (0.01) (0.30) (0.23) --
------ ------ ------ ------ ------ ------ ------
Total distributions ............ -- (0.68) (0.84) (0.73) (0.95) (1.01) (0.83)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ...... $11.85 $10.90 $11.30 $10.10 $11.33 $11.12 $11.47
====== ====== ====== ====== ====== ====== ======
Total return ................... 8.72% 2.48% 20.24% (4.49%) 10.56% 5.89% 16.38%
Net assets, end of period (000's) ... $53,990 $45,393 $42,694 $33,618 $41,183 $30,695 $29,326
Ratio of operating expenses to
average net assets (B) ............ 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ................ 6.30% 6.15% 6.36% 6.29% 5.69% 6.76% 7.54%
Portfolio turnover rate ............. 73% 58% 85% 79% 95% 153% 20%
<CAPTION>
----------------------------------
----------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period ......................... $10.82 $10.32 $10.53
Income from investment operations:
Net investment income (A) ......... 0.88 0.90 0.92
Net realized and unrealized gain
(loss) on investments ........... (0.21) 0.50 (0.17)
------ ------ ------
Total from investment operations 0.67 1.40 0.75
Less distributions:
Dividends from net investment
income .......................... (0.87) (0.90) (0.93)
Distributions from capital gains .. -- -- (0.03)
------ ------ ------
Total distributions ............ (0.87) (0.90) (0.96)
------ ------ ------
Net asset value, end of period ...... $10.62 $10.82 $10.32
====== ====== ======
Total return ................... 6.58% 13.88% 7.14%
Net assets, end of period (000's) ... $24,808 $22,768 $19,732
Ratio of operating expenses to
average net assets (B) ............ 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets ................ 8.25% 8.34% 8.48%
Portfolio turnover rate ............. 41% 69% 29%
</TABLE>
- ----------
* Effective December 31, 1996, the Portfolio changed its name from the Capital
Growth Bond Fund.
(A) After investment adviser expense reimbursement per share of $0.02 for the
year ended December 31, 1997.
(B) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.73% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
54
<PAGE> 94
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT QUALITY BOND TRUST
--------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991*
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ...................... $11.89 $12.32 $11.01 $12.12 $11.58 $11.33 $10.74
Income from investment operations:
Net investment income .......... 0.77 0.77 0.77 0.66 0.60 0.63 0.76
Net realized and unrealized gain
(loss) on investments ........ 0.30 (0.50) 1.28 (1.23) 0.53 0.15 0.85
------ ------ ------ ------ ------ ------ ------
Total from investment
operations ................ 1.07 0.27 2.05 (0.57) 1.13 0.78 1.61
Less distributions:
Dividends from net investment
income ....................... (0.83) (0.70) (0.74) (0.54) (0.59) (0.53) (1.02)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ... $12.13 $11.89 $12.32 $11.01 $12.12 $11.58 $11.33
====== ====== ====== ====== ====== ====== ======
Total return ................ 9.75% 2.58% 19.49% (4.64%) 10.01% 7.21% 16.07%
Net assets, end of period (000's) $188,545 $152,961 $143,103 $111,423 $99,474 $60,185 $38,896
Ratio of operating expenses to
average net assets ............. 0.74% 0.73% 0.74% 0.76% 0.77% 0.80% 0.85%
Ratio of net investment income to
average net assets ............. 7.15% 6.95% 6.91% 6.49% 6.03% 6.96% 7.47%
Portfolio turnover rate .......... 47% 68% 137% 140% 33% 59% 115%
<CAPTION>
----------------------------------
----------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period ...................... $12.37 $11.55 $10.79
Income from investment operations:
Net investment income .......... 1.12 0.75 0.57
Net realized and unrealized gain
(loss) on investments ........ (1.50) 0.51 0.19
------ ------ ------
Total from investment
operations ................ (0.38) 1.26 0.76
Less distributions:
Dividends from net investment
income ....................... (1.25) (0.44) --
------ ------ ------
Net asset value, end of period ... $10.74 $12.37 $11.55
====== ====== ======
Total return ................ (2.73%) 11.34% 7.09%
Net assets, end of period (000's) $20,472 $26,965 $114,221
Ratio of operating expenses to
average net assets ............. 0.70% 0.83% 0.89%
Ratio of net investment income to
average net assets ............. 8.41% 8.77% 7.97%
Portfolio turnover rate .......... 120% 351% 94%
</TABLE>
- ----------
* The Investment Quality Bond Trust is the successor to the Bond Trust
effective April 23, 1991.
The accompanying notes are an integral part of the financial statements.
55
<PAGE> 95
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES TRUST
-------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ......................... $13.32 $13.65 $12.64 $13.48 $13.05 $12.85 $11.83
Income from investment operations:
Net investment income (B) ......... 0.75 0.83 0.89 0.77 0.48 0.10 0.19
Net realized and unrealized gain
(loss) on investments ........... 0.31 (0.41) 0.99 (0.95) 0.49 0.65 1.40
------ ------ ------ ------ ------ ------ ------
Total from investment operations 1.06 0.42 1.88 (0.18) 0.97 0.75 1.59
Less distributions:
Dividends from net investment
income .......................... (0.88) (0.75) (0.87) (0.51) (0.46) (0.38) (0.53)
Distributions from capital gains .. -- -- -- (0.15) (0.08) (0.17) (0.04)
------ ------ ------ ------ ------ ------ ------
Total distributions ............ (0.88) (0.75) (0.87) (0.66) (0.54) (0.55) (0.57)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ...... $13.50 $13.32 $13.65 $12.64 $13.48 $13.05 $12.85
====== ====== ====== ====== ====== ====== ======
Total return ................... 8.47% 3.38% 15.57% (1.25%) 7.64% 6.19% 14.01%
Net assets, end of period (000's) ... $251,277 $204,053 $216,788 $188,813 $222,072 $125,945 $29,246
Ratio of operating expenses to
average net assets (C) ............ 0.72% 0.71% 0.71% 0.73% 0.75% 0.76% 0.87%
Ratio of net investment income to
average net assets ................ 6.27% 6.36% 6.46% 5.68% 5.05% 6.12% 7.09%
Portfolio turnover rate ............. 110% 178% 212% 387% 213% 141% 233%
<CAPTION>
-------------------------------------
03/18/88*
--------------------- TO
1990 1989** 12/31/88
-------- -------- ----------
<S> <C> <C> <C>
Net asset value, beginning
of period ......................... $10.98 $9.81 $10.03
Income from investment operations:
Net investment income (B) ......... 1.07 0.20 0.07
Net realized and unrealized gain
(loss) on investments ........... (0.13) 1.08 (0.29)
------ ------ ------
Total from investment operations 0.94 1.28 (0.22)
Less distributions:
Dividends from net investment
income .......................... (0.08) (0.11) --
Distributions from capital gains .. (0.01) -- --
------ ------ ------
Total distributions ............ (0.09) (0.11) --
------ ------ ------
Net asset value, end of period ...... $11.83 $10.98 $9.81
====== ====== ======
Total return ................... 8.63% 13.16% (2.19%)+
Net assets, end of period (000's) ... $10,469 $5,905 $344
Ratio of operating expenses to
average net assets (C) ............ 1.04% 0.90% 5.16%(A)
Ratio of net investment income to
average net assets ................ 7.70% 6.66% 1.16%(A)
Portfolio turnover rate ............. 284% 330% 156%(A)
</TABLE>
- ----------
* Commencement of operations.
** The U.S. Government Securities Trust is the successor to the Convertible
Securities Trust effective May 1, 1989.
+ Non-annualized
(A) Annualized
(B) After expense reimbursement per share of $0.01 and $0.06 in 1989 and 1988,
respectively.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 1.62% and 6.16% in 1989 and 1988, respectively.
The accompanying notes are an integral part of the financial statements.
56
<PAGE> 96
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET TRUST
--------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Income from investment operations:
Net investment income .............. 0.50 0.49 0.55 0.38 0.27 0.33 0.56
Less distributions:
Dividends from net investment
income (0.50) (0.49) (0.55) (0.38) (0.27) (0.33) (0.56)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ....... $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
====== ====== ====== ====== ====== ====== ======
Total return .................... 5.15% 5.05% 5.62% 3.78% 2.69% 3.36% 5.71%
Net assets, end of period (000's) .... $439,714 $363,566 $258,117 $276,674 $132,274 $89,535 $79,069
Ratio of operating expenses to
average net assets ................. 0.54% 0.55% 0.54% 0.57% 0.59% 0.60% 0.60%
Ratio of net investment income to
average net assets ................. 5.03% 4.97% 5.48% 3.93% 2.66% 3.28% 5.65%
<CAPTION>
----------------------------------
----------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning
of period .......................... $10.00 $10.00 $10.00
Income from investment operations:
Net investment income .............. 0.75 0.72 0.57
Less distributions:
Dividends from net investment
income (0.75) (0.72) (0.57)
------ ------ ------
Net asset value, end of period ....... $10.00 $10.00 $10.00
====== ====== ======
Total return .................... 7.76% 8.56% 6.77%
Net assets, end of period (000's) .... $85,040 $19,403 $12,268
Ratio of operating expenses to
average net assets ................. 0.57% 0.79% 0.99%
Ratio of net investment income to
average net assets ................. 7.27% 8.26% 6.68%
</TABLE>
The accompanying notes are an integral part of the financial statements.
57
<PAGE> 97
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
AGGRESSIVE 1000 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
Net asset value, beginning
of period............................ $12.50
Income from investment operations:
Net investment income (B)........... 0.05
Net realized and unrealized gain
on investments.................... 1.26
------
Total from investment
operations.................... 1.31
Less distributions:
Dividends from net investment
income ........................... (0.05)
Distributions from capital gains.... (0.29)
------
Total distributions............. (0.34)
-------
Net asset value, end of period......... $13.47
======
Total return.................... 10.89%+
Net assets, end of period (000's)...... $49,105
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 1.29%(A)
Portfolio turnover rate................ 67%(A)
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.007 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
58
<PAGE> 98
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
GROWTH 820 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
Net asset value, beginning
of period............................ $12.50
Income from investment operations:
Net investment income (B)........... 0.30
Net realized and unrealized gain
on investments.................... 1.38
------
Total from investment
operations.................... 1.68
Less distributions:
Dividends from net investment
income ........................... (0.30)
Distributions from capital gains.... (0.11)
------
Total distributions............. (0.41)
------
Net asset value, end of period......... $13.77
======
Total return.................... 13.84%+
Net assets, end of period (000's)...... $217,158
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 2.44%(A)
Portfolio turnover rate................ 51%(A)
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.004 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
59
<PAGE> 99
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
BALANCED 640 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
Net asset value, beginning
of period............................ $12.50
Income from investment operations:
Net investment income (B)........... 0.50
Net realized and unrealized gain
on investments.................... 1.19
------
Total from investment
operations.................... 1.69
Less distributions:
Dividends from net investment
income ........................... (0.50)
Distributions from capital gains.... (0.13)
------
Total distributions............. (0.63)
------
Net asset value, end of period......... $13.56
======
Total return.................... 14.11%+
Net assets, end of period (000's)...... $186,653
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 3.24%(A)
Portfolio turnover rate................ 44%(A)
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.005 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
60
<PAGE> 100
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
MODERATE 460 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
Net asset value, beginning
of period............................ $12.50
Income from investment operations:
Net investment income (B)........... 0.65
Net realized and unrealized gain
on investments.................... 0.98
------
Total from investment
operations.................... 1.63
Less distributions:
Dividends from net investment
income ........................... (0.65)
Distributions from capital gains.... (0.13)
------
Total distributions............. (0.78)
------
Net asset value, end of period......... $13.35
======
Total return.................... 13.70%+
Net assets, end of period (000's)...... $52,746
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 3.91%(A)
Portfolio turnover rate................ 39%(A)
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.005 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
61
<PAGE> 101
MANUFACTURERS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
- --------------------------------------------------------------------------------
LIFESTYLE
CONSERVATIVE 280 TRUST
--------------------------
01/07/97*
TO
12/31/97
--------------------------
Net asset value, beginning
of period............................ $12.50
Income from investment operations:
Net investment income (B)........... 0.76
Net realized and unrealized gain
on investments.................... 0.67
-----
Total from investment
operations.................... 1.43
Less distributions:
Dividends from net investment
income ........................... (0.76)
Distributions from capital gains.... (0.16)
------
Total distributions............. (0.92)
------
Net asset value, end of period......... $13.01
======
Total return.................... 12.15%+
Net assets, end of period (000's)...... $19,750
Ratio of operating expenses to
average net assets (C)............... 0.00%(A)
Ratio of net investment income to
average net assets................... 3.95%(A)
Portfolio turnover rate................ 38%(A)
- ----------
* Commencement of operations.
+ Non-annualized
(A) Annualized
(B) After investment adviser expense reimbursement per share of $0.006 for the
year ended December 31, 1997.
(C) The ratio of operating expenses, before reimbursement from the investment
adviser, was 0.03% for the year ended December 31, 1997.
The accompanying notes are an integral part of the financial statements.
62
<PAGE> 102
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
PACIFIC RIM EMERGING MARKETS TRUST
Shares Value
------ -----
COMMON STOCKS - 65.32%
AGRICULTURAL OPERATIONS - 0.53%
Austral Enterprises BHD 58,000 $60,841
United Plantations BHD 65,000 67,181
-------
128,022
AIR TRAVEL - 0.58%
Singapore Airlines, Ltd. 21,500 140,314
-------
ALUMINUM - 0.35%
Indian Aluminum, GDR* 45,000 85,500
------
APPAREL & TEXTILES - 1.28%
Esprit Holdings, Ltd. 78,000 25,416
Glorious Sun Enterprises 128,000 33,449
Guangdong Tannery, Ltd. 5,500 632
Mitsubishi Rayon Company, Ltd. 20,000 49,016
Onward Kashiyama 9,000 104,082
PT Indorama Synthetics 223,000 99,336
-------
311,931
AUTOMOBILES - 0.63%
Honda Motor Company 3,000 110,056
Qingling Motors Company 90,000 44,135
-------
154,191
BANKING - 11.81%
Australia and New Zealand
Bank Group 42,100 278,228
Bangkok Bank 13,000 32,399
Bank International Indonesia 417,102 24,647
Bank of Ayuda Public Company, Ltd. 35,750 14,478
Bank of Tokyo Mitsubishi 10,000 137,857
Dao Heng Bank Group 10,000 24,971
Hang Seng Bank 20,000 192,928
HSBC Holdings 31,200 769,028
Housing & Commercial Bank,
Korea, GDR* 26,500 178,875
Krung Thai Bank PLC 25,300 5,254
Lippo Bank 190,000 20,727
Macquarie Bank, Ltd 34,000 262,546
Malayan Bank BHD 27,000 78,442
Overseas Chinese Bank 49,280 286,529
Overseas Union Bank 55,600 212,768
Sanwa Bank 8,000 80,876
Siam Commercial Bank PLC 21,333 24,368
Thai Farmers Bank 9,000 16,355
United Overseas Bank 41,500 230,214
---------
2,871,490
BROADCASTING - 0.99%
BEC World Public Company, Ltd 7,500 29,284
News Corporation 38,200 210,876
-------
240,160
BUILDING MATERIALS & CONSTRUCTION - 0.93%
Citra Marga Nusaphala Persada 588,600 64,211
Henry Walker Group, Ltd. 68,400 82,472
New World Infrastructure, Ltd.* 35,045 78,918
-------
225,601
BUSINESS SERVICES - 0.55%
Keppel Telecom & Transport 169,000 108,288
Kinseki 3,000 13,533
Matichon Public Company, Ltd. 22,000 11,880
-------
133,701
CHEMICALS - 0.98%
Dainippon Ink & Chemical,
Incorporated 20,000 50,548
Denki Kogyo Company 4,000 13,020
ICI Australia, Ltd. 9,000 63,057
IOI Corporation 93,000 30,127
Toray Industries, Incorporated 18,000 80,646
-------
237,398
COMPUTERS & BUSINESS EQUIPMENT - 0.48%
PT Multipolar Corporation 2,522,000 68,782
Shinawatra C. Communications 20,000 49,014
-------
117,796
CONGLOMERATES - 4.27%
CSR, Ltd. 59,500 201,651
Hutchinson Whampoa 70,000 439,024
Multi-Purpose Holdings BHD 98,000 25,196
Singapore Technologies
Engineering, Ltd.* 302,806 228,160
Swire Pacific 20,000 109,692
Wheelock and Company 30,000 35,037
---------
1,038,760
CONSTRUCTION MATERIALS - 0.23%
Keppel International Engineering, Ltd. 90,000 38,446
Nikko Company 1,000 2,566
PT Semen Cibinong 318,000 14,455
------
55,467
CONSTRUCTION & MINING EQUIPMENT - 0.20%
Cahya Mata Sarawak 70,600 43,382
Sumitomo Densetsu 1,000 5,629
------
49,011
CONTAINERS & GLASS - 0.64%
Kian Joo Can Factory BHD 48,000 42,700
Malaysian Pacific Industries BHD 26,000 62,502
Nippon Sheet Glass 6,000 8,363
Rengo Company 19,000 41,472
-------
155,037
DRUGS & HEALTH CARE - 0.32%
Fujisawa Pharmaceutical Company, Ltd. 9,000 78,579
------
ELECTRIC UTILITIES - 2.81%
BSES, Ltd., GDR 17,000 295,460
China Light and Power 30,000 166,473
Hong Kong Electric 30,000 114,015
Hong Kong & China Gas Company, Ltd. 55,000 106,465
-------
682,413
ELECTRICAL EQUIPMENT - 0.44%
Matsushita Communication
Industrial Company, Ltd. 4,000 106,609
-------
The accompanying notes are an integral part of the financial statements.
63
<PAGE> 103
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
ELECTRONICS - 4.05%
Hosiden Corporation* 12,000 $93,743
Komatsu Electronic Metals
Company, Ltd. 5,000 80,417
K.R. Precision Public Company 37,000 139,855
LG Information & Communication, Ltd. 3,218 90,180
Samsung Electronics Company 3,253 73,696
Taiyo Yuden Company 5,000 34,656
TDK Corporation 4,000 301,447
Thakral Corporation 207,000 107,640
Tokyo Electron, Ltd. 2,000 64,027
-------
985,661
FINANCIAL SERVICES - 2.06%
China Resources Enterprises, Ltd. 28,000 62,511
Commerce Asset Holdings 93,600 44,761
Daiwa Securities 8,000 27,571
Henderson Investors 50,000 39,360
Nichiei Company 700 74,519
Nomura Securities Company, Ltd. 9,000 119,936
Shohkoh Fund & Company 300 91,445
Singapore Finance 59,400 40,528
-------
500,631
FOOD & BEVERAGES - 1.92%
Fraser and Neave 28,500 123,435
Goodman Fielder, Ltd. 118,500 188,447
Guangdong Brewery* 13,749 1,952
KFC Holdings 55,000 89,086
Tokuyama Corporation 12,000 28,858
Vitasoy International 33,810 33,811
-------
465,589
FOREST PRODUCTS - 0.62%
Fletcher Challenge 43,000 150,832
-------
GOLD - 0.51%
Normandy Mining, Ltd. 127,500 123,816
-------
HOTELS & RESTAURANTS - 0.55%
Orchard Parade Holdings 77,000 44,542
Royal Company 6,000 88,688
-------
133,230
HOUSEHOLD APPLIANCES - 0.19%
Guangdong Kelon Elec Holdings 45,000 46,167
------
INDUSTRIAL MACHINERY - 2.83%
Amada Company, Ltd. 15,000 55,717
Daiwa Industries 5,000 19,683
Keppel Corporation 37,125 106,606
Mitsubishi Heavy Industries 15,000 62,495
Mori Seiki Company 8,000 82,714
Reliance Industries, Ltd., GDR 34,000 280,500
Thai Engine Manufacturing Public
Company, Ltd. 13,500 22,430
THK Company, Ltd. 6,000 58,360
-------
688,505
INSURANCE - 1.23%
Mitsui Marine and Fire 15,000 76,511
Nippon Fire and Marine 15,000 56,177
Reinsurance Australia Corporation, Ltd. 64,000 166,848
-------
299,536
LEISURE TIME - 1.21%
Aristocrat Leisure, Ltd. 90,000 178,905
Crown, Ltd.* 96,734 42,872
Guangdong Investment, Ltd. 110,000 73,106
-------
294,883
METAL & METAL PRODUCTS - 1.03%
Amtek Engineering, Ltd. 124,000 75,040
Kitagawa Industries Companies, Ltd. 2,300 15,853
Simsmetal, Ltd. 17,000 98,621
Tambang Timah 56,800 60,931
-------
250,445
MINING - 0.79%
Lanna Lignite Public Company, Ltd. 24,500 47,830
Savage Resources, Ltd. 156,800 73,580
Tanjong 42,00 69,649
-------
191,059
MISCELLANEOUS SERVICES - 1.54%
Alsons Consolidated Resources,
Incorporated* 2,900,000 81,630
Boustead Holdings BHD 73,000 60,435
Cosco Pacific, Ltd. 32,000 26,016
Eastern and Oriental BHD 49,500 10,181
Lung Kee Metal Holdings, Ltd. 217,300 195,570
-------
373,832
NON-FERROUS METALS - 1.82%
MIM Holdings, Ltd. 56,600 34,676
MNI Holdings BHD 36,000 49,055
Straits Trading Company 77,000 91,368
PT Tambang Timah, GDR 6,000 62,400
WMC, Ltd. 59,000 205,725
-------
443,224
OFFICE FURNISHINGS & SUPPLIES - 0.03%
Catena Corporation 3,000 8,501
-----
PETROLEUM SERVICES - 1.64%
Broken Hill Proprietary Company 19,300 179,247
National Petrochemical 99,000 50,374
Novus Petroleum 64,700 168,673
-------
398,294
PUBLISHING - 0.01%
Land and House 8,263 1,647
-----
REAL ESTATE - 7.51%
Amoy Properties 68,000 59,672
Cheung Kong Holdings 40,000 261,969
China Resources Beijing 40,000 19,099
Citic Pacific, Ltd. 28,000 111,292
City Developments 35,000 161,970
Great Eagle Holdings 15,000 21,003
The accompanying notes are an integral part of the financial statements.
64
<PAGE> 104
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
REAL ESTATE - CONTINUED
Henderson China Holding, Ltd. 20,544 $16,437
Henderson Land Development 28,000 131,888
Hysan Development Company, 40,000 79,752
Mitsubishi Estate Company, Ltd. 6,000 65,252
Mitsui Fudosan Company 10,000 96,500
New World Development Company 30,000 103,755
PT Bhuwanatala Indah Permai* 370,000 10,091
Pakuwon Jati 376,500 30,805
Parkway Holdings 91,000 205,162
Singapore Land 52,000 114,150
Sun Hung Kai Properties 30,000 209,059
United Overseas Land 99,000 83,405
Wharf Holdings 20,000 43,877
---------
1,825,138
RETAIL TRADE - 1.37%
Circle K Japan Company 3,980 190,511
Isetan Company, Ltd. 12,000 50,088
Matahari Putra Prima 193,000 15,791
Mitsubishi Corporation 8,000 63,108
Sa Sa International Holdings, Ltd. 69,000 14,247
-------
333,745
SANITARY SERVICES - 0.24%
Puncak Niaga Holdings BHD* 77,000 57,411
------
STEEL - 0.07%
Southern Steel BHD 24,200 16,426
------
SOFTWARE - 2.90%
Datacraft Asia, Ltd. 190,000 490,200
NTT Data Communication
Systems Company 4 215,363
-------
705,563
TELECOMMUNICATION SERVICES - 0.39%
China Telecom, Ltd.* 8,000 13,731
Jasmine International Public
Company, Ltd. 58,000 11,082
Mahanagar Telephone Nigam, Ltd., GDR* 3,000 46,530
Telstra Corporation, Ltd.* 11,000 23,228
------
94,571
TELEPHONE - 2.70%
Hong Kong Telecomm 190,000 391,083
Nippon Telegraph and Telephone
Corporation 20 171,555
PT Telekomunikasi Indonesia 175,000 93,068
-------
655,706
TOBACCO - 0.10%
HM Sampoerna 33,900 25,579
------
TOTAL COMMON STOCKS
(Cost: $24,727,545) $15,881,971
----------
WARRANTS - 0.57%*
BANKING - 0.00%
Bank International Indonesia
(Expiration date 01/17/00; strike
price IDR 1,000) 19,796 270
---
CHEMICALS - 0.10%
Shin Etsu Chemical Company (Expiration
date 08/01/00; strike price Y 1,917) 18 24,750
------
COMPUTERS & BUSINESS EQUIPMENT - 0.09%
Nippon Comsys Corporation (Expiration
date 08/31/99; strike price Y 1,353) 155 22,913
------
CONSTRUCTION & MINING EQUIPMENT - 0.01%
Cahya Mata Sarawak BHD (Expiration
date 06/16/01; strike price MYR 18.10) 26,000 2,607
-----
FINANCIAL SERVICES - 0.31%
Credit Saison Company, Ltd. (Expiration
date 02/15/00; strike price Y 2,094.80) 18 40,275
Promise-Tamporo Company (Expiration
date 02/08/00; strike price Y 4,566.40) 15 35,813
------
76,088
FOOD & BEVERAGES - 0.01%
KFC Holdings BHD (Expiration date
05/07/01; strike price MYR 9.50) 18,333 1,885
-----
LEISURE TIME - 0.01%
Guangdong Investment, Ltd. (Expiration
date 07/30/99; strike price HKD 8.00) 11,000 1,505
-----
MINING - 0.01%
Normandy Mining, Ltd. (Expiration
date 04/30/01; strike price AUD 2.50) 13,200 1,505
-----
Savage Resources, Ltd. (Expiration
date 11/30/98; strike price AUD 1.25) 9,400 214
-----
1,719
MISCELLANEOUS SERVICES - 0.01%
Elpis, Ltd. (Expiration date 07/01/99;
strike price Y 2,367) 10 2,625
-----
PHOTOGRAPHY - 0.01%
Canon Sales Company, Incorporated
(Expiration date 11/22/99;
strike price Y 2,266.30) 100 1,916
-----
RAILROADS & EQUIPMENT - 0.00%
Hankyu Corporation (Expiration date
02/05/98; strike price Y 610.5) 15 $375
---
The accompanying notes are an integral part of the financial statements.
65
<PAGE> 105
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
WARRANTS - CONTINUED
REAL ESTATE - 0.00%
Great Eagles Holdings (Expiration date
11/30/98; strike price HKD 15.00) 3,000 387
Hysan Development Company, Ltd.
(Expiration date 04/30/98;
strike price HKD 25) 1,250 8
United Overseas Land, Ltd. (Expiration
date 05/28/01; strike price SGD 1.60) 4,700 628
-----
1,023
RETAIL TRADE - 0.00%
Takashimaya Company, Ltd. (Expiration
date 07/02/98; strike price Y 1,569) 7 350
---
TOTAL WARRANTS (Cost: $150,466) $138,026
-------
RIGHTS - 0.01%
LEISURE TIME - 0.01%
Crown, Ltd. (Expiration date
02/04/98; strike price AUD 0.50) 35,176 2,980
-----
TOTAL RIGHTS (Cost: $0) $2,980
-----
Principal
Amount Value
------ -----
CORPORATE BONDS - 0.52%
OFFICE FURNISHINGS & SUPPLIES - 0.52%
Ricoh Company, Ltd.,
1.90% due 03/31/98 $13,000,000 $127,441
-------
TOTAL CORPORATE BONDS
(Cost: $124,290) $127,441
-------
CONVERTIBLE BONDS - 5.43%
CHEMICALS - 0.21%
Shin Etsu Chemical Company,
0.40% due 09/30/05 Y 5,000,000 51,696
------
DRUGS & HEALTH CARE - 0.91%
Takeda Chemical Industries,
1.90% due 09/30/98 17,000,000 221,207
-------
ELECTRICAL EQUIPMENT - 0.58%
NEC Corporation,
1.00% due 09/30/11 13,000,000 110,416
2.10% due 09/30/98 4,000,000 31,707
-------
142,123
ELECTRONICS - 1.48%
Sony Corporation,
1.40% due 03/31/05 20,000,000 227,464
Tokyo Electron,
0.90% due 01/13/02 12,000,000 131,699
-------
359,163
FINANCIAL SERVICES - 0.52%
Arab Malaysian Finance,
7.50% due 05/25/02 MYR 76,000 5,178
MTI Capital, Ltd.,
0.50% due 10/01/07 Y 12,000,000 44,804
STB Cayman Capital,
0.50% due 10/01/07 5,000,000 28,337
Shanghai Investment Holdings,
Ltd., 1.00% due 06/12/02 $50,000 48,875
-------
127,194
MINING - 0.53%
Mitsui Mining & Smelting,
0.25% due 09/30/01 Y 15,000,000 130,103
-------
MISCELLANEOUS - 0.48%
AB International Cayman Trust,
0.50& due 08/01/07 6,000,000 33,315
Mitsui & Company, Ltd.,
1.05% due 09/30/09 10,000,000 76,587
Multi-Purpose Holdings,
3.00% due 01/13/02 MYR 90,000 5,785
-------
115,687
OFFICE FURNISHINGS & SUPPLIES - 0.21%
Ricoh Company, Ltd.,
6.35% due 03/31/03 5,000,000 52,041
------
RETAIL TRADE - 0.50%
Marui Company, Ltd.,
1.15% due 01/31/12 15,000,000 122,349
-------
TOTAL CONVERTIBLE BONDS
(Cost: $1,520,448) $1,321,563
---------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 4.67%
$1,136,665 Navigator Securities
Lending Trust, 5.74% $1,136,665
---------
REPURCHASE AGREEMENT - 23.46%
$5,705,000 Repurchase Agreement with
State Street Bank & Trust Company
dated 12/31/97at 5.00%, to be
repurchased at $5,706,585 on
01/02/98, collateralized by U.S.
$5,755,000 Treasury Strips,
5.00% due 02/15/99 (valued at
$5,927,650, including interest) $5,705,000
---------
TOTAL INVESTMENTS (Pacific Rim
Emerging Markets Trust) (Cost: $33,364,414) $24,313,646
==========
The accompanying notes are an integral part of the financial statements.
66
<PAGE> 106
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
SCIENCE & TECHNOLOGY TRUST
Shares Value
------ -----
COMMON STOCKS - 74.98%
BUSINESS SERVICES - 10.20%
America Online, Incorporated* 15,000 $1,337,812
BISYS Group, Incorporated 50,000 1,662,500
First Data Corporation 70,000 2,047,500
Gartner Group, Incorporated* 25,000 931,250
Nokia Corporation, ADR 10,000 700,000
Security Dynamics Technologies,
Incorporated 20,000 715,000
Sun Guard Data Systems* 30,000 930,000
---------
8,324,062
COMPUTERS & BUSINESS EQUIPMENT - 10.64%
3Com Corporation* 20,000 698,750
Affiliated Computer Services,
Incorporated 50,000 1,315,625
Cisco Systems, Incorporated* 25,000 1,393,750
Compaq Computer Corporation 10,000 564,375
Dell Computer Corporation* 8,000 672,000
EMC Corporation* 50,000 1,371,875
E*Trade Group, Incorporated 40,000 920,000
Hewlett-Packard Company 10,000 625,000
Newbridge Networks Corporation* 15,000 523,125
Sequent Computer Systems,
Incorporated 30,000 600,000
---------
8,684,500
DRUGS & HEALTH CARE - 0.97%
ALZA Corporation 25,000 795,312
-------
ELECTRICAL EQUIPMENT - 2.77%
Anixter International, Incorporated 35,000 577,500
ASM Lithography Holding 25,000 1,687,500
---------
2,265,000
ELECTRONICS - 19.44%
ADC Telecommunications,
Incorporated* 10,000 417,500
Adaptec, Incorporated* 40,000 1,485,000
Altera Corporation 45,000 1,490,625
Analog Devices, 75,000 2,076,563
Incorporated
DSC Communications Corporation 25,000 600,000
Electronics For Imaging, Incorporated 70,300 1,168,737
KLA-Tencor Corporation 25,000 965,625
Lam Research Corporation 30,000 877,500
Linear Technology Corporation 20,000 1,152,500
Maxim Integrated Products,
Incorporated* 56,900 1,963,050
Motorola, Incorporated 10,000 570,625
Texas Instruments, Incorporated 30,000 1,350,000
Xilinx, Incorporated* 50,000 1,753,125
----------
15,870,850
INDUSTRIAL MACHINERY - 1.84%
Applied Materials, Incorporated* 50,000 1,506,250
---------
MISCELLANEOUS - 2.11%
Cendant Corporation 50,000 1,718,750
---------
SOFTWARE - 17.53%
Adobe Systems, Incorporated 10,000 412,500
BMC Software, Incorporated 20,000 1,312,500
Mircochip Technology, Incorporated 45,000 1,350,000
Microsoft Corporation* 13,000 1,680,250
Networks Associates, Incorporated 40,000 2,115,000
Parametric Technology Corporation 50,000 2,368,750
Platinum Technology, Incorporated* 20,000 565,000
Sterling Commerce, Incorporated 25,000 960,938
Summit Design, Incorporated 100,000 1,037,500
Synopsys, Incorporated* 50,000 1,787,500
Veritas Software Company* 5,000 255,000
VIASOFT, Incorporated 6,500 274,625
Visio Corporation 5,000 191,875
----------
14,311,438
TELECOMMUNICATION SERVICES - 7.93%
Advanced Fibre Communications 22,200 646,575
Ascend Communications, Incorporated* 25,000 612,500
CIENA Corporation 15,000 916,875
Paging Network, Incorporated 80,000 860,000
Pairgain Technologies, Incorporated 50,000 968,750
QUALCOMM, Incorporated 25,000 1,262,500
Transaction Network Services,
Incorporated 70,000 1,207,500
---------
6,474,700
TELEPHONE - 1.53%
MCI Communications Corporation 15,000 642,188
WorldCom, Incorporated 20,000 605,000
---------
1,247,188
TOTAL COMMON STOCKS
(Cost: $62,809,019) $61,198,050
----------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 25.02%
$2,445,000 Federal Farm Credit Bank,
5.64% due 02/12/98 $2,428,912
Federal Home Loan Bank,
562,000 4.75% due 01/02/98 561,926
513,000 5.66% due 02/13/98 509,532
3,000,000 Federal Home Loan Mortgage
Corporation, 5.70% due 01/14/98 2,993,825
13,925,496 Navigator Securities
Lending Trust, 5.74% 13,925,496
----------
20,419,691
TOTAL INVESTMENTS (Science &
Technology Trust) (Cost: $83,228,710) $81,617,741
==========
The accompanying notes are an integral part of the financial statements.
67
<PAGE> 107
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
INTERNATIONAL SMALL CAP TRUST
Shares Value
------ -----
COMMON STOCKS - 65.78%
AGRICULTURAL MACHINERY - 0.46%
Kverneland Gruppen AS 38,450 $624,712
-------
AGRICULTURAL PRODUCTS - 0.27%
Perusahaan Perkebunan 644,600 366,250
-------
AIR TRAVEL - 1.16%
Ryanair Holdings PLC, ADR* 33,850 850,481
Virgin Express Holdings PLC, ADR* 34,650 718,987
---------
1,569,468
AUTO SERVICES - 0.23%
Sixt AG 3,925 314,183
-------
BANKING - 1.45%
Banco de A Edwards, Series A, ADR 46,575 791,775
Banco Latinoamericano
de Exportaciones SA, Series E 28,350 1,172,981
---------
1,964,756
BROADCASTING - 2.05%
Editoriale L'Espresso SPA 80,000 384,398
Flextech PLC* 236,025 2,023,643
Sky Network Television, Ltd.* 242,200 364,240
---------
2,772,281
BUSINESS SERVICES - 4.71%
Altran Technologies SA 7,575 2,315,860
Brunel International* 20,525 392,755
Kobenhavn Lufthavne 22,825 2,748,234
Select Appointments Holdings PLC 97,475 896,575
---------
6,353,424
COMPUTERS & BUSINESS EQUIPMENT - 2.70%
Fuji S Ware ABC 26,500 907,214
Psion PLC 370,750 2,740,306
---------
3,647,520
CONGLOMERATES - 2.43%
Misys 108,471 3,278,211
---------
CONTAINERS & GLASS - 2.65%
Compania Cervecerias Unidas SA, ADR 41,725 1,225,672
International Container Terminal
& Services 425,650 52,549
SCHMALBACH LUBECA AG 13,925 2,295,096
---------
3,573,317
DRUGS & HEALTH CARE - 1.57%
Schwarz Pharma AG 31,575 2,123,780
---------
ELECTRONICS - 2.11%
Pricer AB* 8,750 161,998
Toolex-Alpha* 30,500 308,362
VTech Holdings, Ltd. 804,800 2,373,168
---------
2,843,528
FINANCIAL SERVICES - 2.38%
JBA Holdings 189,225 3,216,801
---------
FOOD & BEVERAGES - 2.62%
Raisio Tehtaat Oy PLC 29,800 3,537,108
---------
HOTELS & RESTAURANTS - 9.65%
Doutor Coffee Company 36,000 923,642
Grupo Posadas SA* 1,370,000 950,623
J.D. Wetherspoon PLC 608,265 3,326,921
Pizza Express 294,025 3,602,706
Regent Inns PLC 172,550 926,762
Tele Pizza* 40,825 3,296,012
----------
13,026,666
HOUSEHOLD APPLIANCES - 3.42%
DFS Furniture Company 152,650 1,303,784
Hunter Douglas 52,425 1,835,709
Industrie Natuzzi SPA, ADR 71,425 1,473,141
---------
4,612,634
INDUSTRIAL MACHINERY - 3.66%
IHC Caland 28,275 1,466,984
KCI Konecranes 36,750 1,213,550
International
Noritsu Koki Company 43,800 1,080,156
Tomra Systems AS 52,750 1,178,444
---------
4,939,134
INTERNATIONAL OIL - 1.76%
Cairn Energy PLC* 196,450 1,593,985
Gulf Indonesia Resources, Ltd.* 35,575 782,650
---------
2,376,635
LEISURE TIME - 3.19%
Capital Radio 167,675 1,379,521
Cinar Films, Incorporated, Class B* 57,000 2,215,875
Village Roadshow 279,000 707,351
---------
4,302,747
MISCELLANEOUS SERVICES - 1.91%
BTG PLC 62,050 698,133
Plettac AG 2,310 319,736
Rofin-Sinar Technologies, Incorporated* 129,300 1,567,762
---------
2,585,631
OFFICE FURNISHINGS & SUPPLIES - 0.84%
Turbon International AG 52,600 1,137,408
---------
PAPER - 1.15%
Guilbert SA 10,850 1,546,781
---------
PETROLEUM SERVICES - 2.10%
Coflexip SA, ADR 36,375 2,018,813
Petroleum Geological Services AS, ADR* 12,500 812,612
---------
2,831,425
RETAIL TRADE - 4.06%
Beter Bed Holdings 14,350 276,717
Brito Borneo Pets 415,325 2,906,050
Bulgari SPA 280,000 1,424,534
Douglas Holding AG 17,075 515,396
Narvesen ASA 16,000 353,110
---------
5,475,807
The accompanying notes are an integral part of the financial statements.
68
<PAGE> 108
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
SOFTWARE - 2.15%
Dassault Systems SA 62,825 $1,915,492
Eidos PLC, ADR* 25,000 306,250
Nippon System Development 33,000 677,338
---------
2,899,080
TELECOMMUNICATION SERVICES - 2.09%
Asia Satellite Telecommunications
Holdings, ADR 36,700 617,019
Grupo Iusacell SA De CV, ADR* 101,700 2,205,618
---------
2,822,637
TELEPHONE - 3.01%
Cellular Communications International* 56,350 2,634,362
Netcom Systems AB* 66,500 1,428,009
---------
4,062,371
TOTAL COMMON STOCKS
(Cost $82,095,825) $88,804,295
----------
PREFERRED STOCKS - 4.33%
AUTOMOBILES - 2.22%
Porsche AG* 1,800 3,001,751
---------
FINANCIAL SERVICES - 2.10%
Marschollek Lautenschlaeger und
Partner AG 11,230 2,840,351
---------
TOTAL PREFERRED STOCKS
(Cost: $3,943,616) $5,842,102
---------
WARRANTS - 0.02%*
ELECTRONICS - 0.02%
Gold Peak Industries, Ltd. (Expiration
date 08/06/00; strike price HKD 5.25) 250,000 23,552
------
TOTAL WARRANTS (Cost: $0) $23,552
------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 7.57%
$10,214,498 Navigator Securities
Lending Trust, 5.74% $10,214,498
----------
REPURCHASE AGREEMENT - 22.31%
$30,113,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $30,121,365 on
01/02/98, collateralized by
$24,440,000 U.S. Treasury Bonds,
10.75% due 2/15/03 (valued at
$31,703,262, including interest) $30,113,000
----------
TOTAL INVESTMENTS (International
Small Cap Trust) (Cost: $126,366,939) $134,997,447
===========
EMERGING GROWTH TRUST
COMMON STOCKS - 75.73%
AEROSPACE - 0.79%
Gulfstream Aerospace Corporation* 92,700 $2,711,475
---------
AGRICULTURAL PRODUCTS - 0.34%
U.S. Home & Garden, Incorporated* 280,000 1,155,000
---------
APPAREL & TEXTILES - 1.48%
Interface, Incorporated 81,000 2,349,000
Westpoint Stevens, Incorporated* 58,000 2,740,500
---------
5,089,500
AUTO SERVICES - 0.79%
Budget Group, Incorporated* 79,000 2,730,438
---------
BANKING - 2.66%
Bank United Corporation 55,400 2,711,138
City National Corporation 86,600 3,198,787
Cullen Frost Bankers, Incorporated 53,500 3,246,781
---------
9,156,706
BROADCASTING - 2.03%
Central European Media
Enterprises, Ltd.* 105,500 2,663,875
Heftel Broadcasting Corporation* 39,700 1,855,975
Metro Networks, Incorporated* 75,400 2,469,350
---------
6,989,200
BUSINESS SERVICES - 9.57%
DeVRY, Incorporated* 74,600 2,377,875
Harbinger Corporation* 64,200 1,805,625
Outdoor Systems, Incorporated* 104,050 3,992,919
PMT Services, Incorporated* 198,500 2,754,187
Pre-Paid Legal Services, Incorporated* 87,000 2,974,313
Robert Half International, Incorporated* 127,199 5,087,960
SITEL Corporation* 261,500 2,386,188
SunGuard Data Systems, Incorporated* 103,400 3,205,400
Universal Outdoor Holdings,
Incorporated* 65,200 3,390,400
Valassis Communications, Incorporated* 80,000 2,960,000
Vincam Group, Incorporated* 74,050 1,971,581
----------
32,906,448
COMPUTERS & BUSINESS EQUIPMENT - 1.64%
Hypercom Corporation* 166,200 2,347,575
Network Appliance, Incorporated* 92,800 3,294,400
---------
5,641,975
CRUDE PETROLEUM & NATURAL GAS - 3.24%
Chieftain International, Incorporated* 123,500 2,624,375
Forcenergy, Incorporated* 99,000 2,592,563
Global Industries, Incorporated* 167,000 2,839,000
KCS Energy, Incorporated 117,900 2,446,425
Meridian Resources Corporation 67,400 644,512
----------
11,146,875
The accompanying notes are an integral part of the financial statements.
69
<PAGE> 109
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
DRUGS & HEALTH CARE - 6.74%
ChiRex, Incorporated* 125,000 $2,203,125
FPA Medical Management,
Incorporated* 118,300 2,203,338
Gilead Sciences, Incorporated* 65,400 2,501,550
Mid Atlantic Medical Services,
Incorporated* 166,400 2,121,600
National Surgery Centers,
Incorporated* 98,400 2,583,000
Novacare, Incorporated* 208,300 2,720,919
Sangstat Medical Corporation* 85,500 3,462,750
Sepracor, Incorporated* 67,200 2,692,200
Watson Pharmaceuticals,
Incorporated* 82,700 2,682,581
----------
23,171,063
ELECTRONICS - 5.89%
ATMI, Incorporated 104,700 2,538,975
Etec Systems, Incorporated* 60,200 2,799,300
KLA-Tencor Corporation* 59,100 2,282,737
Maxim Integrated Products,
Incorporated* 203,200 7,010,400
Technology Solutions Company* 102,850 2,712,669
Tracor, Incorporated* 95,100 2,888,662
Uniphase Corporation* 400 16,550
----------
20,249,293
FINANCIAL SERVICES - 3.36%
Allmerica Financial Corporation 65,990 3,295,376
ARM Financial, Incorporated 118,400 3,122,800
Legg Mason, Incorporated 49,132 2,748,321
T.Rowe Price Associates, Incorporated 37,900 2,382,962
----------
11,549,459
FOOD & BEVERAGEE - 0.36%
Hain Food Group, Incorporated* 135,200 1,242,150
---------
HOMEBUILDERS - 0.73%
Fairfield Communities, Incorporated* 57,000 2,515,125
---------
HOTELS & RESTAURANTS - 1.77%
Promus Hotel Corporation* 54,800 2,301,600
Vistana, Incorporated* 164,800 3,790,400
---------
6,092,000
INSURANCE - 0.96%
AmerUS Life Holdings, Incorporated 90,000 3,318,750
---------
LEISURE TIME - 0.74%
Premier Parks, Incorporated* 63,000 2,551,500
---------
METAL & METAL PRODUCTS - 0.80%
Metals USA, Incorporated* 180,000 2,745,000
---------
MISCELLANEOUS SERVICES - 0.54%
Alternative Living Services,
Incorporated* 63,200 1,868,350
---------
OFFICE FURNISHINGS & SUPPLIES - 2.78%
Corporate Express, Incorporated* 197,000 2,536,375
Miller Herman, Incorporated 77,500 4,228,595
U.S. Office Products Company* 143,000 2,806,375
---------
9,571,345
PETROLEUM SERVICES - 3.36%
Nabors Industries, Incorporated* 99,900 3,140,606
Petroleum Geo Services AS, ADR* 72,100 4,668,475
Pride International, Incorporated* 148,200 3,742,050
----------
11,551,131
POLLUTION CONTROL - 1.78%
Casella Waste Systems, Incorporated* 125,000 3,296,875
Allied Waste Industries, Incorporated* 121,000 2,820,812
---------
6,117,687
REAL ESTATE - 0.72%
Security Capital Pacific Trust 102,028 2,474,179
---------
RETAIL TRADE - 5.33%
Borders Group, Incorporated* 152,500 4,775,156
Central Garden & Pet Company* 109,000 2,861,250
Family Dollar Stores, Incorporated 89,500 2,623,469
Payless ShoeSource, Incorporated* 41,800 2,805,825
Staples, Incorporated* 99,000 2,747,250
Wilmar Industries, Incorporated* 105,000 2,506,875
----------
18,319,825
SOFTWARE - 11.80%
Avant Corporation* 106,000 1,775,500
BMC Software, Incorporated* 76,600 5,026,875
Cambridge Technology Partners,
Incorporated* 59,700 2,485,013
JDA Software Group, Incorporated* 78,000 2,730,000
Manugistics Group, Incorporated* 45,000 2,008,125
National Instruments Corporation* 107,400 3,114,600
PeopleSoft, Incorporated* 153,000 5,967,000
Pinnacle Systems, Incorporated* 84,800 2,067,000
Platinum Technology, Incorporated* 117,000 3,305,250
Sterling Commerce, Incorporated* 75,000 2,882,812
System Software Associates,
Incorporated* 200,000 1,750,000
Tecnomatix Technologies, Ltd.* 91,000 3,071,250
Transaction Systems Architects,
Incorporated* 115,800 4,400,400
----------
40,583,825
TELECOMMUNICATION SERVICES - 3.25%
Intermedia Communications,
Incorporated* 60,000 3,645,000
McLeodUSA, Incorporated* 95,100 3,043,200
Paging Network, Incorporated* 217,000 2,332,750
Teledata Communications,
Incorporated* 117,800 2,149,850
----------
11,170,800
The accompanying notes are an integral part of the financial statements.
70
<PAGE> 110
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
TRANSPORTATION - 2.30%
Coach USA, Incorporated* 84,200 $2,820,700
Swift Transportation, Incorporated* 88,000 2,849,000
Heartland Express, Incorporated* 82,800 2,225,250
---------
7,894,950
TOTAL COMMON STOCKS
(Cost: $217,450,691) $260,514,049
-----------
WARRANTS - 0.01%*
FINANCIAL SERVICES - 0.01%
Security Capital Group, Incorporated
(Expiration date 09/18/98;
strike price $28.00) 4,897 25,709
------
TOTAL WARRANTS (Cost: $0) $25,709
------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 22.19%
$66,418,106 Navigator Securities
Lending Trust, 5.74% $66,418,106
10,000,000 U.S. Treasury Bills,
5.367% due 03/05/98 9,906,069
----------
76,324,175
REPURCHASE AGREEMENT - 2.07%
$7,128,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.75%, to be
repurchased at $7,130,277 on
01/02/98, collateralized by
$7,270,000 U.S. Treasury Notes,
4.75% due 10/31/98 (valued at
$7,329,586, including interest) $7,128,000
---------
TOTAL INVESTMENTS (Emerging
Growth Trust) (Cost: $300,902,866) $343,991,933
===========
PILGRIM BAXTER GROWTH TRUST
Shares Value
------ -----
COMMON STOCKS - 94.94%
APPAREL & TEXTILES - 2.11%
Jones Apparel Group, Incorporated* 21,900 $941,700
Nautica Enterprises, Incorporated* 46,900 1,090,425
---------
2,032,125
AUTOMOBILES - 1.33%
Harley Davidson, Incorporated 46,900 1,283,888
---------
BROADCASTING - 4.42%
Clear Channel Communications* 35,300 2,804,144
Jacor Communications, Incorporated* 27,400 1,455,625
---------
4,259,769
BUSINESS SERVICES - 16.19%
Accustaff, Incorporated* 48,200 1,108,600
America Online, Incorporated* 16,300 1,453,756
Apollo Group, Incorporated* 45,200 2,135,700
Computer Horizons Corporation 17,700 796,500
Corrections Corporation of America* 62,800 2,327,525
Security Dynamics Technologies,
Incorporated* 53,400 1,909,050
Gartner Group, Incorporated* 34,400 1,281,400
Paychex, Incorporated 52,600 2,662,875
Quintiles Transnational Corporation* 50,300 1,923,975
----------
15,599,381
CHEMICALS - 0.18%
Zoltek Companies, Incorporated* 6,400 178,400
-------
COMPUTERS & BUSINESS EQUIPMENT - 1.30%
CDW Computer Centers, Incorporated* 24,000 1,251,000
---------
CRUDE PETROLEUM & NATURAL GAS - 1.78%
BJ Services Company* 14,000 1,007,125
Cliffs Drilling Company 14,200 708,225
---------
1,715,350
DRUGS & HEALTH CARE - 7.41%
Dura Pharmaceuticals, Incorporated* 46,900 2,151,537
General Nutrition Companies,
Incorporated* 46,400 1,577,600
Healthsouth Corporation* 63,500 1,762,125
Medicis Pharmaceutical Corporation 11,900 608,388
Total Renal Care Holdings,
Incorporated* 37,966 1,044,065
---------
7,143,715
ELECTRICAL EQUIPMENT - 1.68%
Helix Technology Corporation 31,200 608,400
Jabil Circuit, Incorporated 25,500 1,013,625
---------
1,622,025
ELECTRONICS - 11.67%
ADC Telecommunications,
Incorporated* 59,500 2,484,125
DSC Communications Corporation* 47,900 1,149,600
Linear Technology Corporation 31,800 1,832,475
Novellus Systems, Incorporated 25,600 827,200
Tellabs, 45,600 2,411,100
Incorporated*
Uniphase Corporation* 29,700 1,228,838
Vitesse Semiconductor Corporation 34,800 1,313,700
----------
11,247,038
FINANCIAL SERVICES - 3.91%
AMRESCO, Incorporated* 32,300 977,075
A.G. Edwards, Incorporated 18,300 727,425
The Money Store, Incorporated 47,700 1,001,700
Newcourt Credit Group, Incorporated 14,000 467,250
Ocwen Finanical Corporation 23,500 597,781
---------
3,771,231
The accompanying notes are an integral part of the financial statements.
71
<PAGE> 111
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FOOD & BEVERAGES - 1.25%
Suiza Foods Corporation* 20,200 $1,203,163
---------
HOTELS & RESTAURANTS - 1.14%
CapStar Hotel Company* 16,000 549,000
Signature Resorts, Incorporated 25,100 549,063
---------
1,098,063
LEISURE TIME - 0.79%
Callaway Golf Company 26,500 756,906
-------
MISCELLANEOUS - 1.29%
Sunrise Assisted Living, Incorporated* 28,900 1,246,312
---------
PETROLEUM SERVICES - 5.74%
Camco International, Incorporated 16,700 1,063,581
Cooper Cameron Corporation 14,200 866,200
ENSCO International, Incorporated 27,700 927,950
Global Marine, Incorporated 44,100 1,080,450
Nabors Industries, Incorporated* 15,000 471,563
Santa Fe International Corporation 27,600 1,122,975
---------
5,532,719
POLLUTION CONTROL - 5.43%
Allied Waste Industries, Incorporated* 55,700 1,298,506
American Disposal Services,
Incorporated 23,900 872,350
Superior Services, Incorporated* 24,300 701,662
USA Waste Services, Incorporated* 60,012 2,355,471
---------
5,227,989
RETAIL TRADE - 6.85%
Bed Bath & Beyond, Incorporated* 74,500 2,868,250
Borders Group, Incorporated* 17,600 551,100
Dollar Tree Stores, Incorporated* 29,850 1,235,044
Staples, Incorporated* 70,200 1,948,050
---------
6,602,444
SOFTWARE - 16.81%
BMC Software, Incorporated* 32,200 2,113,125
Check Point Software
Technologies, Ltd.* 13,600 554,200
HBO and Company 63,600 3,052,800
HNC Software, Incorporated* 24,300 1,044,900
J.D. Edwards & Company 32,700 964,650
Keane, Incorporated 25,300 1,027,812
Microchip Technology, Incorporated* 24,700 741,000
PeopleSoft, Incorporated 83,100 3,240,900
Solectron Corporation* 28,300 1,176,219
VIASOFT, Incorporated* 25,900 1,094,275
Wind River Systems, Incorporated* 29,850 1,184,672
----------
16,194,553
TELECOMMUNICATION SERVICES - 2.44%
Advanced Fibre Communications 37,300 1,086,363
P-Com, Incorporated 29,500 508,875
QUALCOMM, Incorporated 4,500 236,953
World Access, Incorporated* 21,800 520,475
---------
2,352,666
TRUCKING & FREIGHT - 1.20%
Tidewater, Incorporated 20,900 1,152,112
---------
TOTAL COMMON STOCKS
(Cost: $84,705,174) $91,470,849
----------
Principal
Amount Value
--------- -----
REPURCHASE AGREEMENT - 5.06%
$4,878,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 12/31/97 at 5.00%, to be
repurchased at $4,879,355 on
01/02/98, collateralized by
$4,940,000 U.S. Treasury Notes,
5.25% due 01/31/01 (valued at
$5,086,187, including interest) $4,878,000
---------
TOTAL INVESTMENTS (Pilgrim Baxter
Growth Trust) (Cost: $89,583,174) $96,348,849
==========
SMALL/MID CAP TRUST
Shares Value
------ -----
COMMON STOCKS - 77.48%
AEROSPACE - 1.21%
Gulfstream Aerospace Corporation* 129,500 $3,787,875
AIR TRAVEL - 3.30%
Alaska Air Group, Incorporated* 54,000 2,092,500
AMR Corporation* 35,000 4,497,500
Continental Airlines, Incorporated* 78,000 3,753,750
----------
10,343,750
APPAREL & TEXTILES - 1.22%
Nautica Enterprises, Incorporated* 46,200 1,074,150
Pillowtex Corporation 45,700 1,593,787
Polo Ralph Lauren Corporation* 47,700 1,159,706
---------
3,827,643
BANKING - 2.88%
Dime Bancorp, Incorporated 49,300 1,491,325
Sovereign Bancorp, Incorporated 78,300 1,624,725
Star Banc Corporation 33,200 1,904,850
State Street Boston Corporation 68,500 3,985,844
---------
9,006,744
BUSINESS SERVICES - 4.61%
America Online, Incorporated* 28,200 2,515,087
Cognizant Corporation 182,200 8,119,288
Paychex, Incorporated 74,900 3,791,813
----------
14,426,188
COMPUTERS & BUSINESS EQUIPMENT - 1.86%
Bay Networks, Incorporated* 93,000 2,377,312
CISCO Systems, Incorporated* 37,500 2,090,625
Citrix Systems, Incorporated* 18,000 1,368,000
---------
5,835,937
The accompanying notes are an integral part of the financial statements.
72
<PAGE> 112
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
CONTRUCTION MATERIALS - 1.64%
Masco Corporation 100,800 $5,128,200
---------
DRUGS & HEALTH CARE - 17.58%
AmeriSource Health Corporation,
Class A* 89,600 5,219,200
Bergen Brunswig Corporation, Class A 126,400 5,324,600
BioChem Pharma, Incorporated* 150,100 3,133,338
Biomatrix, Incorporated* 41,500 1,245,000
Biomet, Incorporated 130,800 3,351,750
Cardinal Health, Incorporated 72,200 5,424,025
Elan PLC, ADR* 73,000 3,736,688
General Nutrition Companies,
Incorporated* 263,800 8,969,200
Guidant Corporation 104,500 6,505,125
McKesson Corporation 33,200 3,591,825
Mentor Corporation 82,600 3,014,900
Omnicare, Incorporated 87,000 2,697,000
Quorum Health Group, Incorporated* 108,250 2,828,031
----------
55,040,682
ELECTRONICS - 4.59%
Altera Corporation* 82,700 2,739,438
CIENA Corporation* 79,300 4,847,212
Linear Technology Corporation 72,100 4,154,762
Tellabs, Incorporated* 49,700 2,627,888
----------
14,369,300
FINANCIAL SERVICES - 3.40%
Consolidated Capital Corporation* 66,700 1,354,844
INMC Mortgage Holdings, Incorporated 57,400 1,345,313
The Money Store, Incorporated 222,220 4,666,200
Paine Webber Group, Incorporated 94,500 3,266,156
----------
10,632,513
FOOD & BEVERAGES - 0.55%
International Home Foods,
Incorporated* 61,000 1,708,000
---------
HOTELS & RESTAURANTS - 0.68%
CKE Restaurants, Incorporated 6,900 290,662
Mirage Resorts, Incorporated* 81,000 1,842,750
---------
2,133,412
HOUSEHOLD APPLIANCES - 3.60%
Leggett & Platt, Incorporated 92,100 3,856,688
Sunbeam Corporation 176,000 7,414,000
----------
11,270,688
INDUSTRIAL MACHINERY - 1.47%
Tyco International, Ltd. 101,952 4,594,212
---------
INSURANCE - 2.50%
MGIC Investment Corporation 73,00 4,854,500
SunAmerica, Incorporated 69,750 2,981,812
7,836,312
LEISURE TIME - 4.04%
Carnival Corporation 54,000 2,990,250
Family Golf Centers, Incorporated* 42,000 1,317,750
International Game Technology 330,600 8,347,650
----------
12,655,650
MISCELLANEOUS - 2.10%
Cendant Corporation* 150,000 5,156,250
Fortune Brands, Incorporated 38,500 1,426,906
---------
6,583,156
PETROLEUM SERVICES - 1.62%
Diamond Offshore Drilling,
Incorporated 47,700 2,295,563
Halliburton Company 53,500 2,778,656
---------
5,074,219
POLLUTION CONTROL - 3.01%
Allied Waste Industries, Incorporated* 64,700 1,508,319
USA Waste Services, Incorporated* 201,450 7,906,912
---------
9,415,231
REAL ESTATE - 1.32%
Equity Office Properties Trust 80,400 2,537,625
Boston Properties, Incorporated 47,900 1,583,694
---------
4,121,319
RETAIL TRADE - 7.55%
Bed Bath & Beyond, Incorporated* 45,000 1,732,500
BJ's Wholesale Club, Incorporated* 40,500 1,270,687
Borders Group, Incorporated* 131,000 4,101,938
CompUSA, Incorporated* 200,300 6,209,300
CVS Corporation 45,100 2,889,219
Nordstrom, Incorporated 25,000 1,509,375
Rite Aid Corporation 29,100 1,707,806
Staples, Incorporated* 151,300 4,198,575
----------
23,619,400
SOFTWARE - 3.47%
HBO & Company 165,000 7,920,000
Sterling Commerce, Incorporated* 76,800 2,952,000
----------
10,872,000
TELECOMMUNICATION SERVICES - 0.47%
Advanced Fibre Communications* 50,000 1,456,250
---------
TIRES & RUBBER - 0.73%
Safeskin Corporation* 40,500 2,298,375
---------
TOYS, AMUSEMENTS & SPORTING GOODS - 1.56%
Mattel, Incorporated 131,400 4,894,650
---------
TRANSPORTATION - 0.51%
Coach USA, Incorporated* 48,100 1,611,350
---------
TOTAL COMMON STOCKS
(Cost $209,789,765) $242,543,056
-----------
The accompanying notes are an integral part of the financial statements.
73
<PAGE> 113
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 22.51%
$9,000,000 American Honda Finance,
6.20% due 01/05/98 $8,993,800
9,000,000 Countrywide Funding Corporation,
6.63% due 01/05/98 8,993,370
9,000,000 Merrill Lynch & Company,
Incorporated, 6.05% due 01/09/98 8,987,900
38,431,346 Navigator Securities
Lending Trust, 5.74% 38,431,346
5,069,917 Seven Seas Money Market Fund 5,069,917
-----------
70,476,333
TOTAL INVESTMENTS
(Small/Mid Cap Trust) (Cost: $280,266,098) $313,019,389
===========
INTERNATIONAL STOCK TRUST
Shares Value
------ -----
COMMON STOCKS - 82.25%
AGRICULTURAL PRODUCTS - 0.05%
Grupo Industrial Maseca, S.A. de C.V. 83,000 $85,772
------
AIR TRAVEL - 0.06%
Air New Zealand 49,000 98,159
------
APPAREL & TEXTILES - 0.11%
Gucci Group 4,352 182,240
-------
AUTO PARTS - 0.66%
Denso Corporation 59,000 1,061,882
---------
AUTOMOBILES - 0.38%
Buderus AG 250 112,010
Honda Motor Company 5,000 183,426
Rolls Royce 40,000 154,395
Volkswagen AG 285 160,327
-------
610,158
BANKING - 9.80%
ABN AMRO Holdings 41,060 799,877
Argentaria Corporation 3,830 233,043
Australia and New Zealand
Bank Group 11,000 72,696
Banca Commerciale Italiana 21,000 73,007
Banca di Roma 317,000 319,867
Banco Bilbao Vizcaya 6,120 198,041
Banco De Galicia Buenos Aires SA, ADR 4,510 116,133
Banco Frances Del Rio De La Plata, ADR 4,590 125,651
Banco Latinoamericano De
Exportaciones, S.A. 857 35,458
Banco Popular Espana 6,160 430,614
Banco Santander SA 18,145 606,223
Bayerische Hypotheken und
Wechsel Bank AG 10,445 509,781
Bayerische Vereinsbanks AG 8,078 528,520
Commonwealth Bank 19,037 218,370
Commerzbank AG 4,640 182,613
Credit Commercial de France 2,931 200,887
Credit Suisse Group 1,926 297,889
Credito Italiano 222,538 686,232
Dao Heng Bank Group 82,000 204,762
Den Danske Bank 1,995 265,829
Deutsche Bank AG 11,608 819,487
Dexia France 975 112,914
Dresdner Bank AG 3,700 170,711
Generale De Banque 1,010 439,563
Grupo Financiero Banamex Accival SA* 46,000 137,649
HSBC Holdings 5,600 138,031
Istituto Mobiliare Italiano SPA 28,000 332,391
Kredietbank NV 2,630 1,103,789
National Australia Bank, Ltd. 11,014 153,832
National Westminster 200,000 3,324,420
Nordbanken AB* 106,971 604,919
Overseas Chinese Bank 7,800 45,352
Overseas Union Bank 34,600 132,406
Royal Bank Canada 2,970 157,120
Schweizerischer Bankverein 2,284 709,647
Societe Generale 2,239 305,056
Unidanmark 1,915 140,581
Union Bank of Switzerland/
Schweizerische Bankgesellschaft 300 433,616
United Overseas Bank 29,000 160,872
Westpac Banking Corporation, Ltd. 28,000 179,132
----------
15,706,981
BROADCASTING - 2.00%
Canal Plus 1,330 247,282
Grupo Televisa SA, ADR 5,000 193,437
News Corporation 43,021 237,490
Publishing & Broadcasting, Ltd. 33,000 148,705
Sangetsu Company 3,000 30,788
TV Azteca, SA, ADR* 10,200 230,138
TV Francaise 1,570 160,430
Wolters Kluwer 15,129 1,954,127
---------
3,202,397
BUILDING MATERIALS & CONSTRUCTION - 0.20%
Bilfinger & Berger
Bauaktiengesellschaft AG 3,390 105,151
Fletcher Challenge (Building) 39,019 79,750
John Laing PLC 20,000 105,449
National House Industrial 5,000 34,273
-------
324,623
BUSINESS SERVICES - 2.25%
Adecco SA 2,090 605,745
Brambles Industries, Ltd. 3,000 59,537
Eaux (Cie Generale Des) 15,135 2,112,387
Esselte AB 2,690 54,546
Havas 715 51,441
Kokuyo Company 16,000 275,714
Toppan Printing Company 34,000 442,675
---------
3,602,045
The accompanying notes are an integral part of the financial statements.
74
<PAGE> 114
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
CHEMICALS - 1.49%
AKZO Nobel NV 970 $167,244
Bayer AG 13,611 508,441
Hoechst AG 4,197 146,981
Kuraray Company 37,000 306,043
Mitsui Chemical, Incorporated 10,000 18,381
Sekisui 58,000 294,509
Chemical
Shin Etsu Chemical Company 34,000 648,388
Teijin 82,000 171,448
UCB SA 40 132,034
---------
2,393,469
CONGLOMERATES - 2.42%
First Pacific Company 170,000 82,269
Hutchison Whampoa 128,000 802,787
Kon PTT Netherland 4,020 167,727
Orkla ASA 16,025 1,377,762
Swire Pacific 74,000 405,859
Tomkins 220,500 1,043,053
---------
3,879,457
CONSTRUCTION & MINING EQUIPMENT - 0.28%
Atlas Copco AB 15,260 454,538
-------
CONSTRUCTION MATERIALS - 0.37%
Cemex SA, ADR 28,000 253,887
Cemex SA 20,000 106,809
Heywood Williams 5,000 17,164
Hornback Baummarkt 570 16,159
Inax Corporation 10,000 29,027
Kumagai Gumi Company 8,000 4,350
Lapeyre 2,770 152,572
Nippon Hodo Company 6,000 19,300
-------
599,268
CONTAINERS & GLASS - 0.49%
Cie De St. Gobain 5,095 723,806
Compania Cervecerias Unidas SA, ADR 2,094 61,511
-------
785,317
CRUDE PETROLEUM & NATURAL GAS - 0.86%
Elf Aquitaine 4,621 537,460
Eni SPA 142,873 810,071
Rao Gazprom, ADR 1,307 31,368
---------
1,378,899
DOMESTIC OIL - 0.05%
Primagaz 870 72,711
------
DRUGS & HEALTH CARE - 9.09%
Astra AB 75,656 1,272,066
Companhia Siderurgica National, ADR 4,000 111,109
Daiichi Pharmaceutical Company 43,000 484,108
Gehe AG 13,460 673,393
Glaxo Wellcome 80,000 1,907,245
L'Oreal 455 178,039
Novartis AG 1,830 2,968,177
Rhon Klinikum AG 2,220 217,193
Roche Holdings AG 213 2,114,402
Sankyo Company 42,000 948,916
Sanofi Company 6,722 748,316
Shiseido Company 14,000 190,855
SmithKline Beecham 266,100 2,742,610
----------
14,556,429
ELECTRIC UTILITIES - 2.70%
Australia Gas and Light 41,000 285,923
Centrica* 30,000 44,101
Chilectra SA, ADR 4,004 102,272
Chilgener SA, ADR 3,242 79,429
China Light & Power Company, Ltd. 32,000 177,571
Companhia Energetica de Minas
Gerais, ADR 18,000 782,082
Empressa Nacional Electricidad SA, ADR 5,869 103,808
Endesa SA 21,724 385,713
Enersis SA, ADR 3,399 98,571
Fletcher Challenge, Ltd. (Energy) 29,000 101,538
Gas Natural SDG SA 3,906 202,543
Huaneng Power International,
Incorporated, ADR* 19,000 440,563
Iberdrola SA 27,956 367,915
VEBA AG 16,840 1,146,724
---------
4,318,753
ELECTRICAL EQUIPMENT - 3.49%
ABB AB-SEK 24,640 291,711
ABB AG-CHF 470 590,234
Alcatel Alstom 3,875 492,544
Centrais Electricas Brasileiras, ADR 16,000 397,842
Hitachi 70,000 498,583
Legrand 1,180 235,078
Makita Corporation 25,000 239,335
NEC Corporation 119,000 1,266,830
Otra NV 1,490 21,310
Samsung Electronics Company 1,423 32,238
Siemens AG 4,650 275,286
Sumitomo Electric Industries, Ltd. 90,000 1,226,928
Yuritec Corporation 4,000 24,539
---------
5,592,458
ELECTRONICS - 2.77%
Advantest 2,380 134,885
Alps Electric Company 20,000 188,405
Dainippon Screen 30,000 137,857
Electrocomponents 34,000 252,978
Fanuc 8,400 317,807
Kyocera Corporation 21,000 952,133
Murata Manufacturing Company, Ltd. 19,000 477,292
Schneider SA 10,702 581,110
TDK Corporation 15,000 1,130,428
Tokyo Electron 8,200 262,510
---------
4,435,405
FINANCIAL SERVICES - 2.38%
Cifra SA de CV, ADR* 35,081 81,388
Credicorp, Ltd. 1,770 31,860
Credit Communal Holding/Dexia 1,278 171,603
Fortis Amev NV 14,700 640,880
Internationale Nederlanden Groep NV 40,409 1,701,935
The accompanying notes are an integral part of the financial statements.
75
<PAGE> 115
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FINANCIAL SERVICES - CONTINUED
Lend Lease Corporation 11,065 $216,348
Nomura Securities 61,000 812,897
TABCORP Holdings, Ltd. 35,000 164,241
---------
3,821,152
FOOD & BEVERAGES - 4.57%
Cadbury Schweppes 76,000 767,055
CSM NV 12,850 570,365
Danone 2,500 446,540
Diageo PLC 235,000 2,149,950
Fomento Economico Mexicano SA 28,000 223,778
Gruma SA de CV* 30,400 120,538
Gruma SA de CV, ADR* 7,046 111,871
Hillsdown Holdings 37,000 89,943
Kao Corporation 31,000 446,351
Koninklijke Numico N.V. 8,700 263,877
Nestle SA 1,228 1,839,647
Panamerican Beverages, Incorporated 9,000 293,625
---------
7,323,540
FOREST PRODUCTS - 0.06%
Sumitomo Forestry 20,000 97,879
------
GAS & PIPELINE UTILITIES - 0.23%
BG 50,764 228,461
Italgas 35,000 144,432
-------
372,893
HOMEBUILDERS - 0.34%
Daiwa House Industries 44,000 232,519
Groupe GTM 1,620 109,014
Seksui House 31,000 199,196
-------
540,729
HOTELS & RESTAURANTS - 0.18%
Ladbroke Group 65,000 281,853
-------
HOUSEHOLD APPLIANCES - 2.35%
Electrolux AB 8,610 597,502
Industrie Natuzzi SPA, ADR 5,000 103,125
Matsushita Electric Industrial
Company, Ltd. 64,000 936,203
Pioneer Electronic 22,000 338,669
Sharp Corporation 59,000 405,775
Sony Corporation 15,600 1,385,923
---------
3,767,197
HOUSEHOLD PRODUCTS - 0.94%
Kimberly-Clark de Mexico, SA de CV 47,000 230,035
Unilever 20,586 1,269,080
---------
1,499,115
INDUSTRIAL MACHINERY - 1.34%
Amada Company 34,000 126,292
Daifuku Company 4,000 19,453
GKN 7,000 143,374
Hitachi Zosen Corporation 60,000 96,040
Ishihara Sangyo 8,000 8,884
Komatsu 42,000 210,692
Komori Corporation 14,000 208,011
Mannesmann AG 458 231,425
Mitsubishi Heavy Industries 199,000 829,103
T & N PLC 66,000 276,433
---------
2,149,707
INSURANCE - 2.09%
Abbey National 54,000 972,097
Allianz AG Holding 3,130 810,795
Assicurazioni Generali 18,000 442,114
Assurances Generales de France 3,130 165,848
AXA-UAP 5,631 435,716
Mediolanum 16,074 302,580
Tokio Marine & Fire Insurance Company 19,000 215,363
---------
3,344,513
INTERNATIONAL OIL - 4.27%
The British Petroleum Company PLC 43,000 568,827
Lukoil Holding, ADR 550 50,504
Royal Dutch Petroleum Company 65,568 3,599,102
Saga Petroleum 2,590 39,275
Shell Transport & Trading 281,500 1,974,293
YPF Sociedad Anonima, ADR 18,014 615,854
---------
6,847,855
INVESTMENT COMPANIES - 0.01%
Brazil Fund 1,000 21,000
------
LEISURE TIME - 1.15%
Accor 840 156,179
Berjaya Sports 73,000 186,746
Compass Group 33,000 405,977
Pathe SA 880 170,780
Rank Group PLC 80,500 448,230
Sodexho Alliance SA 822 440,194
Sodexho Alliance SA-New 58 30,308
---------
1,838,414
LIQUOR - 0.24%
Fosters Brewing Group 76,000 144,636
Grupo Modelo SA, Series C 18,000 151,218
LVMH Moet Hennessy 558 92,621
-------
388,475
METAL & METAL PRODUCTS - 0.24%
Caradon PLC 125,300 364,275
Granges AB 1,695 26,578
-------
390,853
MINING - 0.23%
Tanjong 101,000 167,489
Usinas Siderurgicas de Minas, ADR 33,000 195,155
-------
362,644
NEWSPAPERS - 0.60%
United News & Media PLC 85,000 967,515
-------
NON-FERROUS METALS - 0.87%
Alcan Aluminum, Ltd. 7,500 206,781
Rio Tinto 52,150 642,851
Sandvik AB, A Shares 1,440 40,988
Sandvik AB, B Shares 14,020 400,829
WMC, Ltd. 27,500 95,889
---------
1,387,338
The accompanying notes are an integral part of the financial statements.
76
<PAGE> 116
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
OFFICE FURNISHINGS & SUPPLIES - 0.01%
Scribona AB 1,130 $12,595
------
PAPER - 0.24%
Guilbert SA 1,350 192,457
Mitsubishi Paper 15,000 21,023
David S. Smith Holdings 54,000 176,060
-------
389,540
PETROLEUM SERVICES - 2.15%
Broken Hill Proprietary Company 30,124 279,775
Norsk Hydro AS 22,823 1,110,898
Perez Compac SA 34,090 243,449
Repsol SA 5,949 253,813
TOTAL SA, B Shares 12,529 1,363,545
Woodside Petroleum, Ltd. 27,000 190,402
---------
3,441,882
PHOTOGRAPHY - 0.99%
Canon, Incorporated 68,000 1,583,212
---------
PUBLISHING - 2.60%
Elsevier NV 106,722 1,726,374
John Fairfax Holdings 65,000 135,564
Reed International PLC 208,300 1,984,370
Singapore Press Holdings 25,000 312,963
---------
4,159,271
RAILROADS & EQUIPMENT - 0.33%
East Japan Railway 117 527,786
-------
REAL ESTATE - 1.70%
Cheung Kong Holdings 19,000 124,435
City Developments 9,500 43,963
Hong Kong Land Holdings 194,000 372,480
Mitsui Fudosan Company 95,000 916,750
New World Development Company 183,000 632,907
Singapore Land 65,000 142,688
Sun Hung Kai Properties 19,000 132,404
Wharf Holdings 163,580 358,867
---------
2,724,494
RETAIL GROCERY - 1.13%
ASDA Group 170,000 500,120
Seven Eleven Japan Company, Ltd. 5,000 353,833
Tesco 81,500 672,050
Uny Company, Ltd, 16,000 219,346
Companhia Brasileira de Destribuicao
Grupo Pao de Acucar, GDR 4,000 73,117
---------
1,818,466
RETAIL TRADE - 4.79%
Argos 56,000 505,430
Carrefour 492 256,689
Centros Comerciales Pryca 179 2,667
Citizen Watch Company 24,000 160,833
Hennes & Mauritz AB 18,910 833,575
Ito-Yokado Company 16,000 814,889
Kingfisher 117,000 1,633,466
Koninklijke Ahold NV 7,931 206,914
La Rinascente SPA 7,000 52,233
Lojas Americanas SA, ADR 2,000 9,319
Marui Company, Ltd. 41,000 637,436
Mitsubishi Corporation 42,000 331,316
Pinault Printemps Redoute 2,311 1,232,968
Safeway 99,000 557,744
Santa Isabel SA, ADR 1,662 29,085
Sumitomo Corporation 72,000 402,543
---------
7,667,107
SOFTWARE - 0.65%
Baan Company - NLG 6,302 206,373
Baan Company* 5,980 197,340
SAP AG 2,080 631,880
---------
1,035,593
STEEL - 0.27%
Nippon Steel Corporation 256,000 378,402
Tokyo Steel Manufacturing 18,200 61,471
-------
439,873
TELECOMMUNICATION SERVICES - 0.80%
Cable & Wireless 101,500 891,919
Mahanagar Telephone Nigam, Ltd., GDR* 13,000 201,630
Telstra Corporation, Ltd. 86,000 181,603
---------
1,275,152
TELEPHONE - 4.60%
Compania Anonima Nacional
Telefonos de Venezuela, ADR 4,001 166,542
DDI Corporation 66 174,389
Deutsche Telekom AG 12,847 241,736
Nippon Telegraph & Telephone
Corporation 51 437,466
Telecomunicacoes Brasileiras, ADR 18,000 2,095,875
Teledanmark 305 18,918
Telecom Corporation of New Zealand 39,000 189,089
Telecom Italia Mobile SPA - RNC 44,800 127,385
Telecom Italia Mobile SPA 249,162 1,150,033
Telecom Italia SPA* 164,177 1,048,728
Telefonica de Argentina SA, ADR 8,890 331,152
Telefonica de Espana 20,037 572,110
Telefonica del Peru SA, ADR 1,520 35,435
Telefonos de Mexico SA, ADR 14,000 784,875
---------
7,373,733
TOYS, AMUSEMENTS & SPORTING GOODS - 0.34%
Polygram 9,555 457,098
SEGA Enterprises 5,200 93,988
-------
551,086
TRUCKING & FREIGHT - 0.02%
Bergesen ASA 1,640 38,636
------
TOTAL COMMON STOCKS
(Cost: $132,970,499) $131,782,059
-----------
The accompanying notes are an integral part of the financial statements.
77
<PAGE> 117
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
PREFERRED STOCKS - 0.57%
BROADCASTING - 0.06%
News Corporation 18,603 $92,073
------
CONSTRUCTION MATERIALS - 0.05%
Hornbach Holdings AG 1,090 75,436
------
DRUGS & HEALTH CARE - 0.08%
Fresenius AG 740 136,157
-------
ELECTRONICS - 0.21%
Nokia (AB) OY 4,829 342,844
-------
LEISURE TIME - 0.05%
Sydney Harbour Casino 81,600 77,381
------
RETAIL TRADE - 0.01%
Fielmann AG 930 20,679
------
SOFTWARE - 0.11%
SAP AG 525 171,746
-------
TOTAL PREFERRED STOCKS
(Cost: $928,271) $916,316
-------
WARRANTS - 0.14%*
BANKING - 0.09%
Dresdner Bank AG (Expiration date
04/30/02; strike price DEM 51.3) 8,295 147,553
-------
INSURANCE - 0.05%
Internationale Nederlanden Groep NV
(Expiration date 03/15/01;
strike price NLG 27.20) 7,179 75,201
------
TOTAL WARRANTS (Cost: $214,974) $222,754
-------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 9.70%
$15,537,088 Navigator Securities
Lending Trust, 5.74% $15,537,088
----------
REPURCHASE AGREEMENT - 7.34%
$11,761,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $11,764,267 on
01/02/98, collateralized by
$11,995,000 U.S. Treasury Notes,
4.75% due 10/31/98 (valued at
$12,093,313, including interest) $11,761,000
----------
TOTAL INVESTMENTS (International
Stock Trust) (Cost: $161,411,832) $160,219,217
===========
WORLDWIDE GROWTH TRUST
Shares Value
------ -----
COMMON STOCKS - 58.77%
AIR TRAVEL - 0.89%
Deutsche Lufthansa AG 11,200 $214,792
SAS Danmark A/S 3,300 48,162
-------
262,954
APPAREL & TEXTILES - 2.88%
Adidas AG 1,250 164,401
Warnaco Group, Incorporated 11,600 363,950
Wolverine World Wide, Incorporated 14,275 322,972
-------
851,323
AUTO PARTS - 0.72%
Autoliv 6,481 212,253
-------
BANKING - 4.27%
Banco de A. Edwards, ADR 1,250 21,250
Banco Latinoamericano de
Exportaciones SA 2,050 84,819
Commerzbank AG 3,000 118,069
Credito Italiano 220,575 680,179
Merita PLC 66,000 360,818
---------
1,265,135
BROADCASTING - 2.58%
Carlton Communications 18,500 142,815
Jacor Communications, Incorporated* 6,825 362,578
Pearson PLC 19,875 258,220
-------
763,613
BUILDING MATERIALS & CONSTRUCTION - 0.46%
Brisa-Auto Estradas de Portugal, SA* 4,100 136,355
-------
BUSINESS SERVICES - 2.86%
Kobenhavn Lufthave 250 30,101
Konami Company 5,000 122,923
Manpower, Incorporated 11,800 415,950
Nokia Corporation, ADR 650 45,500
Polygram 4,875 232,476
-------
846,950
CHEMICALS - 2.38%
Air Liquide 1,200 187,821
Imperial Chemical Industries PLC, ADR 4,900 318,194
Morton International Industries,
Incorporated 5,800 199,375
-------
705,390
COMPUTERS & BUSINESS EQUIPMENT - 0.96%
Oce-Van Der Grinten 925 100,819
Radisys Corporation* 3,324 123,856
Sandisk Corporation* 2,925 59,414
-------
284,089
CRUDE PETROLEUM & NATURAL GAS - 2.48%
Apache Corporation 10,225 358,514
Gulf Canada Resources, Ltd.* 53,650 375,550
-------
734,064
The accompanying notes are an integral part of the financial statements.
78
<PAGE> 118
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
DRUGS & HEALTH CARE - 5.51%
Glaxo Wellcome PLC, ADR 7,475 $357,866
Novartis AG 280 454,147
Quorum Health Group,
Incorporated* 7,612 198,863
Roche Holdings AG 44 436,778
Schwarz Pharmaceuticals AG 1,950 131,160
Sulzer Medica, Incorporated* 225 53,894
---------
1,632,708
ELECTRICAL EQUIPMENT - 2.10%
Emerson Electric
Company 5,700 321,694
Philips Electronics NV, ADR 4,975 300,987
-------
622,681
ELECTRONICS - 0.17%
Beijing Datang Power* 107,400 49,202
------
FINANCIAL SERVICES - 0.78%
Internationale Nederlanded Groep NV 5,500 231,647
FOOD & BEVERAGES - 1.70%
Danone 1,000 178,616
J.D. Wetherspoon, PLC 11,750 64,267
Pepsico, Incorporated 7,150 260,528
-------
503,411
GAS & PIPELINE UTILITIES - 1.18%
Sonat, Incorporated 7,625 348,844
-------
HOTELS & RESTAURANTS - 3.58%
Four Seasons Hotels, Incorporated 10,150 320,994
Ladbroke Group 142,575 618,234
Tricon Global Restaurants,
Incorporated* 4,165 121,045
---------
HOUSEHOLD APPLIANCES - 2.43% 1,060,273
Industrie Natuzzi SPA, ADR 3,000 61,875
Sony Corporation 7,400 657,425
-------
719,300
HOUSEHOLD PRODUCTS - 1.02%
Benckiser NV* 7,275 301,025
-------
INDUSTRIAL MACHINERY - 0.38%
VA Technologies AG 750 113,882
-------
INSURANCE - 1.26%
Royal & Sun Alliance Insurance
Group PLC 23,255 233,842
WPP Group 31,000 137,986
-------
371,828
INTERNATIONAL OIL - 1.54%
YPF Sociedad Anonima, ADR 13,375 457,258
-------
LEISURE TIME - 1.77%
Compass Group 28,500 350,616
Sports Authority, Incorporated* 8,400 123,900
Village Roadshow 20,000 50,706
-------
525,222
LIQUOR - 0.48%
Quilmes Industrial Quisna Societe, ADR 10,450 143,034
MINING - 1.31%
Potash Corporation of Saskatchewan,
Incorporated 4,675 388,025
-------
NEWSPAPERS - 1.90%
Ver Ned Uitgevers 19,975 563,495
-------
PAPER - 0.52%
Guilbert SA 250 35,640
Metsa-Serla OY 15,000 116,952
-------
152,592
PETROLEUM SERVICES - 2.41%
Aker Maritime ASA 5,425 115,319
Petroleum Geological Services AS, ADR* 2,350 152,163
Total SA, ADR 8,025 445,387
-------
712,869
RETAIL TRADE - 2.12%
Dixons Group 33,675 337,951
Next PLC 25,475 290,790
-------
628,741
SOFTWARE - 1.91%
Baan Company* 5,400 178,200
NTT Data Corporation 7 376,886
Square Company, Ltd. 400 11,090
-------
566,176
TELECOMMUNICATION SERVICES - 0.66%
France Telecom 5,400 195,866
-------
TELEPHONE - 3.55%
Compania Nacional Telephone
de Venezuela, ADR 7,750 322,594
Telecomunicacoes Brasileiras, ADR 820 95,479
Telefonica de Argentina SA, ADR 8,075 300,794
World Communications, Incorporated* 11,025 333,506
---------
1,052,373
TOTAL COMMON STOCKS
(Cost: $16,779,443) $17,402,578
----------
PREFERRED STOCKS - 5.42%
AUTOMOBILES - 0.69%
Volkswagen AG 475 203,841
-------
BROADCASTING - 0.65%
ProSieben Media AG 4,100 191,445
-------
FINANCIAL SERVICES - 1.79%
Marschollek Lautenschlaeger und
Partner AG 2,100 531,143
-------
SOFTWARE - 2.29%
SAP AG 2,075 678,806
-------
TOTAL PREFERRED STOCKS
(Cost: $1,456,523) $1,605,235
---------
The accompanying notes are an integral part of the financial statements.
79
<PAGE> 119
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 16.99%
$5,032,012 Navigator Securities
Lending Trust, 5.74% $5,032,012
---------
REPURCHASE AGREEMENT - 18.81%
$5,570,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $5,571,547 on
01/02/98, collateralized by
$4,320,000 U.S. Treasury Bonds,
8.75% due 05/15/17 (valued at
$5,735,693, including interest) $5,570,000
---------
TOTAL INVESTMENTS (Worldwide
Growth Trust) (Cost: $28,837,978) $29,609,825
==========
GLOBAL EQUITY TRUST
Shares Value
------ -----
COMMON STOCKS - 92.92%
ALUMINUM - 0.86%
Aluminum Company of America 111,700 $7,860,888
---------
AUTO PARTS - 1.38%
Borg Warner Automotive, Incorporated 243,550 12,664,600
AUTOMOBILES - 1.68%
Volkswagen AG 27,500 15,470,135
----------
BANKING - 6.16%
ABN AMRO Holdings 617,973 12,038,534
Bank of Ireland 644,800 9,902,540
First Chicago Corporation 146,000 12,191,000
Mellon Bank Corporation 222,400 13,483,000
Nordbanken AB 1,587,800 8,978,982
----------
56,594,056
BROADCASTING - 0.71%
Mediaset SPA 1,323,479 6,501,432
---------
BUSINESS SERVICES - 1.44%
Aggreko PLC 662,222 1,696,811
Danka Business Systems, ADR 298,700 4,760,531
Intelidata Technologies Corporation* 963,600 1,776,638
NCR Corporation* 180,193 5,011,618
----------
13,245,598
CHEMICALS - 4.19%
Akzo Nobel NV, ADS 54,300 9,362,207
BASF AG 217,700 7,714,709
Bayer AG 360,700 13,473,993
The B.F. Goodrich Company 191,970 7,954,757
----------
38,505,666
COMPUTERS & BUSINESS EQUIPMENT - 0.67%
Data General Corporation* 353,000 6,155,438
---------
CONGLOMERATES - 1.75%
CSR, Ltd. 1,939,000 6,571,463
----------
16,064,375
CONSTRUCTION MATERIALS - 0.98%
Cimpor-Cimentos de Portugal SA 59,050 1,547,716
---------
8,971,204
CONTAINERS & GLASS - 0.39%
Toyo Seikan Kaisha 254,100 3,619,713
---------
CRUDE PETROLEUM & NATURAL GAS - 1.57%
Elf Aquitaine 84,200 9,793,138
United Meridian Corporation* 165,650 4,658,906
----------
14,452,044
DOMESTIC OIL - 0.98%
Penzoil 27,200 1,817,300
Tenneco, Incorporated 181,820 7,181,890
---------
8,999,190
DRUGS AND HEALTH CARE - 4.28%
Fujisawa Pharmaceutical Company, Ltd. 485,000 4,234,510
Pharmacia & Upjohn, Incorporated 475,700 17,422,512
Reckitt & Coleman 1,131,767 17,752,756
----------
39,409,778
ELECTRIC UTILITIES - 3.11%
Iberdrola SA 752,900 9,908,529
Southern Electric PLC 646,153 5,402,049
VEBA AG 194,600 13,251,341
----------
28,561,919
ELECTRICAL EQUIPMENT - 1.29%
ABB AG 2,390 3,001,403
General Signal Corporation 94,500 3,986,719
Hitachi, Ltd. 680,000 4,843,379
----------
11,831,501
ELECTRONICS - 4.56%
Ascom Holding AG* 3,180 4,091,432
GenRad, Incorporated* 479,700 14,480,944
Premier Farnell PLC, ADS 930,200 6,691,999
Racal Electronics 1,002,442 4,396,184
SGS Thomson Microelectronics,
Incorporated* 68,900 4,264,393
TDK Corporation 106,000 7,988,358
----------
41,913,310
FINANCIAL SERVICES - 6.08%
Enhance Financial Services Group,
Incorporated 126,300 7,514,850
Internationale Nederlanden Groep 343,601 14,471,692
PennCorp Financial Group,
Incorporated 493,350 17,606,428
UST Corporation 585,800 16,255,950
----------
55,848,920
FOOD & BEVERAGES - 5.75%
Bass, ADS 494,500 7,692,013
Danone 22,600 4,036,720
The accompanying notes are an integral part of the financial statements.
80
<PAGE> 120
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FOOD & BEVERAGES - CONTINUED
IBP, Incorporated 171,550 $3,591,828
Kao Corporation 679,000 9,776,518
Lion Nathan, Ltd. 3,023,650 6,776,933
Nestle SA 8,900 13,332,946
Salveson Christian 662,222 1,065,946
Tate & Lyle PLC 794,523 6,538,070
----------
52,810,974
HOUSEHOLD APPLIANCES - 1.67%
Matsushita Electric Industrial
Company, Ltd. 404,000 5,909,780
Philips Electronics 156,700 9,397,440
----------
15,307,220
HOUSEHOLD PRODUCTS - 2.83%
Benckiser* 99,900 4,133,657
Unilever PLC 2,544,400 21,886,350
----------
26,020,007
INDUSTRIAL MACHINERY - 1.76%
Bobst AG 2,500 3,678,483
Schindler Holding AG 3,400 3,541,473
Sumitomo Rubber Industries 450,000 1,898,981
Tecumseh Products Company 133,700 6,517,875
United Dominion Industries, Ltd. 19,400 491,063
----------
16,127,875
INSURANCE - 8.15%
Irish Life 3,969,176 22,766,779
MBIA, Incorporated 230,600 15,406,963
Royal & Sun Alliance Insurance
Group PLC 1,017,500 10,244,724
SCOR 94,750 4,530,871
Sumitomo Marine & Fire 836,000 4,417,860
Terra Nova Bermuda Holdings, Ltd. 362,300 9,510,375
WPP Group PLC 1,794,000 7,985,408
----------
74,862,980
INVESTMENT COMPANIES - 0.01%
India Gateway Fund* 6,557 63,537
------
LEISURE TIME - 0.38%
Ascent Entertainment Group* 338,664 3,513,636
---------
MINING - 1.62%
English China Clay 596,160 2,624,237
Potash Corporation of
Saskatchewan, Incorporated 147,485 12,286,546
----------
14,910,783
PAPER - 1.46%
Boise Cascade Corporation 306,500 9,271,625
Clondalkin Group 513,400 4,131,972
----------
13,403,597
PETROLEUM SERVICES - 1.14%
Burma Castrol PLC 369,200 6,440,085
Noble Drilling Corporation* 132,850 4,068,531
----------
10,508,616
PHOTOGRAPHY - 1.80%
Fuji Photo Film Company 433,000 16,581,143
----------
POLLUTION CONTROL - 0.69%
Browning-Ferris Industries,
Incorporated 170,183 6,296,771
---------
PUBLISHING - 3.03%
Houghton Mifflin Company 724,950 27,819,956
----------
RETAIL GROCERY - 1.24%
Albertsons, Incorporated 240,100 11,374,738
----------
RETAIL TRADE - 5.82%
BJ's Wholesale Club, Incorporated* 576,200 18,078,275
Coles Myer, Ltd. 711,307 3,416,689
Delhaize-Le Lion SA 118,900 6,033,089
G.I.B. Holdings, Ltd. 79,300 3,852,527
HomeBase, Incorporated* 576,200 4,537,575
Karstadt AG 38,300 13,074,310
Toys R Us, Incorporated* 144,200 4,533,288
----------
53,525,753
STEEL - 0.51%
Lukens, Incorporated 113,000 3,227,563
NKK Corporation 1,850,000 1,473,539
---------
4,701,102
TELECOMMUNICATION SERVICES - 2.43%
Comsat Corporation 692,850 16,801,612
France Telecom, ADS* 65,900 2,390,292
Telstra Corporation, Ltd. 1,471,800 3,107,955
----------
22,299,859
TELEPHONE - 5.83%
American Telephone & Telegraph
Corporation 207,850 12,730,813
Nippon Telegraph & Telephone
Corporation 1,047 8,980,929
Telecom Italia SPA 3,650,000 16,093,838
Telefonica de Espana SA 353,300 10,087,660
Telus Corporation 259,509 5,720,257
----------
53,613,497
TOBACCO - 3.87%
BAT Industries PLC 491,941 4,486,089
Imperial Tobacco 500,700 3,149,791
Philip Morris Companies,
Incorporated 617,100 27,962,344
----------
35,598,224
TRUCKING & FREIGHT - 0.86%
Peninsular & Oriental Steam
Navigation Company 659,099 7,906,273
---------
TOTAL COMMON STOCKS
(Cost: $716,965,632) $853,916,308
-----------
The accompanying notes are an integral part of the financial statements.
81
<PAGE> 121
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 5.81%
$53,383,326 Navigator Securities
Lending Trust, 5.74% $53,383,326
----------
REPURCHASE AGREEMENT - 1.27%
$11,651,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $11,654,236 on
01/02/98 collateralized by
$9,400,000 U.S. Treasury Bonds,
8.125% due 05/15/21 (valued at
$11,986,697, including interest) $11,651,000
----------
TOTAL INVESTMENTS
(Global Equity Trust) (Cost: $781,999,958) $918,950,634
===========
SMALL COMPANY VALUE TRUST
Shares Value
------ -----
COMMON STOCKS - 95.38%
AEROSPACE - 0.49%
Applied Signal Technology, Incorporated 9,500 $130,625
Engineered Support Systems,
Incorporated 4,100 75,338
Primex Technologies, Incorporated 4,000 135,000
-------
340,963
AGRICULTURAL MACHINERY - 0.23%
Gehl Company 7,500 157,500
-------
AIR TRAVEL - 0.57%
Alaska Air Group* 10,200 395,250
-------
APPAREL & TEXTILES - 3.09%
Concord Fabrics, Incorporated 3,800 34,675
Dixie Group, Incorporated 13,300 151,288
Goody's Family Clothing, Incorporated 5,000 135,937
Gulford Mills, Incorporated 2,000 54,750
Haggar Corporation 8,900 140,175
Kellwood Company 13,000 390,000
Oshkosh B'Gosh, Incorporated 7,300 240,900
Quaker Fabric Corporation 4,200 82,425
Russell Corporation 18,900 502,031
Springs Industries, Incorporated 8,000 416,000
---------
2,148,181
AUTO PARTS - 2.85%
Borg-Warner Automotive, Incorporated 10,300 535,600
Excel Industries, Incorporated 7,600 137,275
Federal-Mogul Corporation 21,400 866,700
Insurance Auto Auctions, Incorporated 10,400 119,600
Raytech Corporation 5,000 26,875
Republic Automotive Parts, Incorporated 2,600 38,025
Safety Components International,
Incorporated* 4,200 50,400
Standard Products Company 8,200 210,125
---------
1,984,600
AUTO SERVICES - 0.63%
Budget Group, Incorporated* 12,600 435,488
-------
BANKING - 6.04%
Abington Bancorp, Incorporated 1,600 33,600
Ambanc Holding Company, Incorporated 5,400 101,250
Banknorth Group, Incorporated 800 51,400
Bay View Capital Corporation 4,900 177,625
BCB Financial Services Corporation 1,000 24,750
Carver Bancorp, Incorporated 1,200 19,500
Central Co-Operative Bank 1,600 45,600
Columbia Banking System, Incorporated 1,200 32,400
Commercial Bank of New York 800 18,400
Commercial Federal Corporation 18,300 650,794
Corus Bankshares, Incorporated 4,900 193,856
CVB Financial Corporation 2,500 92,812
Financial Bancorp, Incorporated 1,600 38,600
First Oak Brook Bancshares,
Incorporated 3,100 148,800
First Palm Beach Bancorp, Incorporated 4,100 176,813
First Republic Bank 7,800 249,113
FirstBank Puerto Rico 5,800 197,562
MAF Bancorp, Incorporated 10,100 357,288
North City Bancorp 525 8,400
OnBancorp, Incorporated 6,000 423,000
Pacific Bank, N.A. 2,700 118,800
People's Bancshares, Incorporated 3,700 84,175
PONCEBANK 5,700 107,587
Poughkeepsie Financial Company 9,300 108,112
Sandwich Bancorp, Incorporated 1,800 79,200
Sierrawest Bancorp 2,900 97,875
Silicon Valley Bancshares 5,900 331,875
Skaneateles Bancorp, Incorporated 1,200 24,450
Sterling Bancorp 1,500 36,000
Sterling Financial Corporation 2,200 47,850
Sumitomo Bank of California 2,200 120,175
---------
4,197,662
BROADCASTING - 0.29%
Andersen Group, Incorporated 2,600 13,325
United Video Satellite Group,
Incorporated* 6,500 186,875
-------
200,200
BUILDING MATERIALS & CONSTRUCTION - 0.81%
Abrams Industries, Incorporated* 700 5,162
American Buildings Company 4,800 121,200
Hughes Supply, Incorporated 8,600 300,463
NCI Building Systems, Incorporated 3,900 138,450
-------
565,275
BUSINESS SERVICES - 9.87%
ACNielson Corporation* 35,800 872,625
American Business Information,
Incorporated 4,800 49,200
American Business Information,
Incorporated, Class A 4,800 50,400
The accompanying notes are an integral part of the financial statements.
82
<PAGE> 122
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
BUSINESS SERVICES - CONTINUED
Analysis & Technology, Incorporated 1,400 $39,375
Analysts International Corporation 12,650 436,425
Automobile Protection Corporation* 14,700 98,306
Bowne & Company, Incorporated 11,900 474,512
Complete Management, Incorporated* 7,800 109,200
Grey Advertising, Incorporated 700 229,600
Harbinger Corporation* 7,100 199,688
Information Resources, Incorporated 18,000 240,750
Interim Services, Incorporated 27,100 701,213
Kelly Services, Incorporated 10,500 315,000
LCS Industries, Incorporated 5,900 85,550
M/A/R/C, Incorporated 2,900 52,200
Merrill Corporation 6,600 153,450
National Technical Systems, Incorporated 8,400 54,075
Personal Group of America, Incorporated 7,900 260,700
REFAC Technology Development
Corporation 4,800 51,300
Regis Corporation 4,100 103,012
Snyder Communications, Incorporated* 10,500 383,250
Source Services Corporation* 1,500 32,437
Stone & Webster, Incorporated 4,359 204,328
Systems & Computer Technology
Corporation* 9,400 466,475
Thomas Group, Incorporated* 8,100 101,250
TMP Worldwide, Incorporated* 5,800 133,400
Trio-Tech International 2,600 13,000
Yahoo, Incorporated* 13,700 948,725
---------
6,859,446
CHEMICALS - 1.46%
Carbide/Graphite Group, Incorporated 4,200 141,750
Dexter Corporation 5,700 246,169
Farrel Corporation 5,300 25,506
Ferro Corporation 17,300 420,606
Terra Industries, Incorporated 14,000 182,875
---------
1,016,906
COMPUTERS & BUSINESS EQUIPMENT - 3.10%
Adage, Incorporated 3,200 24,200
AMX Corporation 7,000 40,250
BancTec, Incorporated 9,800 262,763
Dataram Corporation 3,500 31,937
Equinox Systems, Incorporated 4,600 78,200
General Binding Corporation 1,500 45,000
Gerber Scientific, Incorporated 800 15,900
Gradco Systems, Incorporated 5,700 42,037
Intergraph Corporation 25,900 259,000
Metromail Corporation* 10,800 193,050
Microage, Incorporated* 8,400 126,525
Microsemi Corporation 9,400 165,088
National Computer Systems,
Incorporated 7,800 274,950
Printronix Corporation* 5,900 99,931
Programmers Paradise, Incorporated 6,900 64,688
Rainbow Technologies, Incorporated 7,800 226,200
Transnet Corporation 4,900 10,412
Trident Microsystems, Incorporated* 12,000 108,750
Wang Laboratories, Incorporated* 4,000 88,500
---------
2,157,381
CONGLOMERATES - 0.42%
Cooper Life Sciences, Incorporated 2,500 78,750
The First Years, Incorporated 1,700 39,100
Griffon Corporation* 12,100 176,963
-------
294,813
CONSTRUCTION & MINING EQUIPMENT - 0.64%
Astec Industries, Incorporated* 1,700 28,475
CDI Corporation 6,800 311,100
Gencor Industries, Incorporated 5,400 105,300
-------
444,875
CONSTRUCTION MATERIALS - 1.84%
Florida Rock Industries, Incorporated 7,400 168,350
Medusa Corporation 5,000 209,063
Patrick Industries, Incorporated 5,400 79,650
Republic Group, Incorporated 1,000 16,375
Texas Industries, Incorporated 13,300 598,500
TJ International, Incorporated 8,500 210,375
---------
1,282,313
CONTAINERS & GLASS - 0.82%
Ball Corporation 13,700 483,781
Continental Can Company,
Incorporated 3,500 87,938
-------
571,719
COSMETICS & TOILETRIES - 0.31%
Block Drug, Incorporated 5,047 218,283
-------
CRUDE PETROLEUM & NATURAL GAS - 0.62%
American Resources of Delaware,
Incorporated 10,500 27,562
Evergreen Resources, Incorporated 9,000 139,500
National-Oilwell, Incorporated* 7,800 266,663
-------
433,725
DOMESTIC OIL - 0.75%
Devon Energy Corporation 9,300 358,050
Houston Exploration Company* 8,300 152,513
Maynard Oil Company 1,300 13,325
-------
523,888
DRUGS & HEALTH CARE - 5.05%
Acuson Corporation 9,200 152,375
ALPHARMA, Incorporated 12,400 269,700
ATL Ultrasound 7,600 349,600
Bio Reference Laboratories,
Incorporated 7,000 9,844
Chattem, Incorporated* 5,100 75,225
Chemed Corporation 5,000 207,187
D & K Wholesale Drug, Incorporated 4,000 33,500
Datascope Corporation* 8,900 230,288
Gamma Biologicals, Incorporated 4,600 18,975
Hanger Orthopedic Group* 16,700 215,013
Herbalife International,
Incorporated, Class A 3,233 67,893
The accompanying notes are an integral part of the financial statements.
83
<PAGE> 123
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
DRUGS & HEALTH CARE - CONTINUED
Herbalife International,
Incorporated, Class B 6,466 $139,019
Marquette Medical Systems, Incorporated* 9,800 260,925
Minntech Corporation 4,900 60,638
Perrigo Company* 100 1,337
Polymedica Corporation 6,000 58,500
Prime Hospitality Corporation* 2,500 50,937
Quest Diagnostics, Incorporated* 18,100 305,438
Ramsay Health Care, Incorporated 3,100 9,300
Respironics, Incorporated* 10,500 234,937
Sheridan Healthcare, Incorporated 8,300 124,500
Summit Care Corporation 1,300 21,287
Sun Healthcare Group, Incorporated* 24,900 482,438
Syncor International Corporation 8,300 133,837
---------
3,512,693
ELECTRIC UTILITIES - 0.37%
Public Services Company of
New Mexico 10,800 255,825
-------
ELECTRICAL EQUIPMENT - 2.35%
Anixter International, Incorporated 8,100 133,650
Audiovox Corporation* 5,000 34,375
Bel Fuse, Incorporated* 6,300 120,487
Belden, Incorporated 700 24,675
C & D Technologies 2,300 110,975
Cohu, Incorporated 6,100 186,813
Comdial Corporation* 10,400 96,200
CMC Industries, Incorporated 8,600 50,525
ESCO Electronics Corporation 10,700 180,562
Fluke Corporation 10,000 260,625
Furon Company 6,000 125,250
IFR Systems, Incorporated 5,250 81,375
Kewaunee Scientific Corporation 2,500 25,000
PSC, Incorporated* 8,900 117,369
Twin Disc, Incorporated 2,700 88,425
---------
1,636,306
ELECTRONICS - 5.08%
Alpha Industries, Incorporated 6,100 98,362
Asyst Technologies, Incorporated* 5,000 108,750
Cobra Electronics Corporation 8,100 51,131
Cognitronics Corporation* 4,600 88,262
CTS Corporation 6,300 201,206
Dallas Semiconductor Corporation 2,300 93,725
EG & G, Incorporated 27,900 580,669
Frequency Electronics, Incorporated 4,200 67,200
Genicom Corporation* 13,400 154,100
Hadco Corporation* 5,500 248,875
Herley Industries, Incorporated 3,500 42,219
IEC Electronics Corporation 8,000 109,000
Integrated Circuit Systems,
Incorporated 10,900 310,650
Network Equipment Tecnhnologies,
Incorporated* 15,700 229,613
Reliability, Incorporated 5,800 79,750
Splash Technology Holdings,
Incorporated 5,700 128,250
Tech-Sym Corporation 4,400 111,925
TransPro, Incorporated 5,100 45,900
Uniphase Corporation* 18,100 748,888
Vicon Industries, Incorporated* 400 2,725
Xeta Corporation 1,800 31,275
---------
3,532,475
FINANCIAL SERVICES - 6.37%
Advest Group, Incorporated 2,000 49,375
Albank Financial Corporation 7,300 375,494
AmeriCredit Corporation* 500 13,844
Atalanta/Sosnoff Capital Corporation 2,000 24,000
JW Charles Financial Services,
Incorporated 4,300 49,988
D & N Savings Financial Corporation 550 14,575
Eaton Vance Corporation 1,000 37,750
EVEREN Capital Corporation 4,500 213,750
Hallmark Capital Corporation* 400 6,800
Hawthorne Financial Corporation 3,700 74,462
Jefferies Group, Incorporated 9,600 393,000
JSB Financial, Incorporated 1,900 95,119
National R.V. Holdings, Incorporated* 6,200 203,825
North Central Bancshares,
Incorporated 2,500 49,687
Pacific Crest Capital, Incorporated 2,000 36,500
PennFed Financial Services,
Incorporated 4,600 158,700
Peoples Heritage Financial Group,
Incorporated 17,300 795,800
Raymond James Financial,
Incorporated 16,500 654,844
Reliance Bancorp, Incorporated 7,000 256,375
Southwest Securities Group,
Incorporated 3,500 90,125
Standard Management Corporation 4,600 30,187
Stifel Financial Corporation 5,300 89,437
TF Financial Corporation 369 11,070
Thornburg Mortgage Asset
Corporation 11,600 191,400
UST Corporation 14,300 396,825
Value Line, Incorporated 2,000 79,000
WFS Financial, Incorporated* 3,600 40,500
---------
4,432,432
FOOD & BEVERAGES - 1.58%
Bob Evans Farms, Incorporated 6,300 139,388
Chock Full O'Nuts Corporation 11,700 81,900
Earthgrains Corporation 13,000 611,000
Grist Mill Company* 11,000 110,000
International Multifoods Corporation 2,200 62,287
International Dairy Queen,
Incorporated 100 2,678
Taco Cabana, Incorporated 19,000 90,250
---------
1,097,503
The accompanying notes are an integral part of the financial statements.
84
<PAGE> 124
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FOREST PRODUCTS - 0.24%
American Woodmark Corporation 7,600 $167,200
-------
HOMEBUILDERS - 0.53%
Beazer Homes USA, Incorporated* 5,300 105,669
Walter Industries, Incorporated 12,700 261,937
-------
367,606
HOTELS & RESTAURANTS - 2.53%
Ark Restaurants Corporation 700 8,225
Bertucci's, Incorporated 10,500 66,937
Brinker International, Incorporated* 27,100 433,600
Buffets, Incorporated* 31,900 299,063
Garden Fresh Restaurant Corporation 4,200 60,375
Luby's Cafeterias, Incorporated 13,400 235,338
Red Roof Inns, Incorporated* 9,200 140,875
Ryan's Family Steak Houses,
Incorporated* 28,800 246,600
ShowBiz Pizza Time, Incorporated* 11,700 269,100
---------
1,760,113
HOUSEHOLD APPLIANCES - 0.63%
American Biltrite, Incorporated 4,100 98,400
Graham Corporation 2,400 36,600
Libbey, Incorporated 800 30,300
Metatec Corporation* 7,000 33,250
Toro Company 5,600 238,700
-------
437,250
HOUSEHOLD PRODUCTS - 0.34%
Stanhome, Incorporated 9,300 238,894
-------
INDUSTRIAL MACHINERY - 2.99%
Cameron Ashley Building Product* 5,800 97,150
Gardner Denver Machinery,
Incorporated* 5,100 129,094
Kennametal, Incorporated 13,300 689,106
Lincoln Electric Company 700 27,300
Manitowoc, Incorporated 900 29,250
NACCO Industries, Incorporated 4,200 450,188
Quipp, Incorporated 2,300 37,950
Speizman Industries, Incorporated* 4,400 24,750
SPX Corporation 8,600 593,400
---------
2,078,188
INSURANCE - 2.93%
Acceptance Insurance Company 9,400 227,362
American Indemnity/Financial
Corporation 2,000 27,750
W.R. Berkley Corporation 1,100 48,262
Fidelity National Financial
Corporation 9,540 296,933
First American Financial Corporation 5,900 435,863
Guarantee Life Companies,
Incorporated 5,000 142,500
Intercontinental Life Corporation 1,700 34,000
Life USA Holdings, Incorporated 15,200 256,500
Presidential Life Corporation 6,800 137,700
PXRE Corporation 8,200 272,138
Stewart Information Services
Corporation 5,400 156,600
---------
2,035,608
LEISURE TIME - 0.93%
Anchor Gaming* 3,300 183,975
Children's Discovery Centers of
America, Incorporated 6,100 59,475
Inland Casino Corporation 6,500 24,375
Intrav, Incorporated 5,300 74,200
Movie Gallery, Incorporated 15,200 44,650
Play By Play Toys & Novelties,
Incorporated 6,100 110,944
Quintel Entertainment, Incorporated* 3,700 20,119
Video Lottery Technologies,
Incorporated 11,000 130,625
-------
648,363
METAL & METAL PRODUCTS - 0.86%
Encore Wire Corporation* 7,500 230,156
Mueller Industries, Incorporated* 6,200 365,800
-------
595,956
MINING - 0.56%
Cleveland-Cliffs, Incorporated 6,400 293,200
Pittston Company 3,800 99,750
-------
392,950
MOBILE HOMES - 1.28%
Fleetwood Enterprises, Incorporated 19,400 823,288
Oakwood Homes Corporation* 2,000 66,375
Schult Homes Corporation 100 2,075
-------
891,738
NEWSPAPERS - 0.42%
Media General, Incorporated 7,000 292,688
-------
NON-FERROUS METALS - 0.57%
Handy & Harman 1,400 48,300
Lindberg Corporation 4,900 73,500
Wolverine Tube, Incorporated* 8,800 272,800
-------
394,600
OFFICE FURNISHINGS & SUPPLIES - 0.74%
Kimball International, Incorporated 21,000 387,188
Winsloew Furniture, Incorporated 8,600 124,700
-------
511,888
PAPER - 0.99%
Chesapeake Corporation 2,000 68,750
FiberMark, Incorporated 7,300 156,950
Rock-Tenn Company 6,300 129,150
Shorewood Packaging Corporation* 10,700 286,225
Ultra Pac, Incorporated 4,900 47,775
-------
688,850
PETROLEUM SERVICES - 2.29%
Dawson Geophysical Company* 5,100 83,512
Lufkin Industries, Incorporated 5,700 203,775
Oceaneering International,
Incorporated* 14,600 288,350
Parker Drilling Company* 28,900 352,219
Petroleum Development Corporation 12,800 67,200
Pool Energy Services Company 11,800 262,550
Seitel, Incorporated 13,900 238,038
Varco International, Incorporated* 4,400 94,325
---------
1,589,969
The accompanying notes are an integral part of the financial statements.
85
<PAGE> 125
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
PHOTOGRAPHY - 0.30%
Innovex, Incorporated 3,900 $89,456
Optical Coating Laboratory,
Incorporated 8,600 118,250
-------
207,706
POLLUTION CONTROL - 0.64%
Allied Waste Industries, Incorporated* 9,100 212,144
Harding Lawson Associates Group 5,300 54,325
Zurn Industries, Incorporated 5,800 182,337
-------
448,806
PUBLISHING - 1.66%
Courier Corporation* 2,400 63,600
Houghton Mifflin Company 15,800 606,325
Mail-Well Holdings, Incorporated 8,100 328,050
Plenum Publishing Corporation 3,300 152,625
Pulitzer Publishing Company 100 6,281
---------
1,156,881
REAL ESTATE - 6.92%
Bay Apartment Communities,
Incorporated 15,000 585,000
Brandywine Realty Trust 3,000 75,375
Capstone Capital Corporation 1,800 46,013
China Pacific, Incorporated 10,200 11,475
Dominion Resources Black
Warrior Trust 4,300 86,000
Essex Property Trust 7,500 262,500
Excel Realty Trust, Incorporated 13,400 422,100
FelCor Suite Hotels, Incorporated* 1,600 56,800
First Industrial Realty Trust,
Incorporated 15,500 559,938
Glenborough Realty Trust,
Incorporated 10,600 314,025
Glimcher Realty Trust* 7,800 175,987
Healthcare Realty Trust 200 5,787
Highwood Properties, Incorporated 25,100 933,406
Hospitality Properties Trust 14,400 473,400
JDN Realty Corporation 700 22,663
J.W. Mays, Incorporated 1,000 11,500
Security Capital Atlantic, Incorporated 6,000 126,750
Taubman Centers, Incorporated* 19,700 256,100
Trinet Corporate Realty Trust,
Incorporated* 6,400 247,600
Walden Residential Properties,
Incorporated 5,400 137,700
---------
4,810,119
RETAIL GROCERY - 0.38%
Dominicks Supermarkets, Incorporated* 7,200 262,800
RETAIL TRADE - 3.82%
Ames Department Stores,
Incorporated 15,600 273,000
Bon-Ton Stores, Incorporated 7,000 105,000
Catherines Stores Corporation* 8,300 58,100
Cole National Corporation 6,700 200,581
Cruise America, Incorporated* 6,300 59,456
Damark International, Incorporated 7,100 69,225
Fingerhut Companies, Incorporated 16,400 350,550
Linens'n Things, Incorporated 7,900 344,637
Mac Frugal's Bargains-Close-Out,
Incorporated* 4,500 185,062
Perfunamia, Incorporated 4,900 11,331
Shopko Stores, Incorporated 12,300 267,525
Vans, Incorporated* 9,500 143,687
Video Update, Incorporated 14,900 29,800
Zale Corporation* 24,200 556,600
---------
2,654,554
SHIPBUILDING - 0.38%
Avondale Industries, Incorporated* 8,900 264,219
-------
SOFTWARE - 2.62%
Boole & Babbage, Incorporated 4,700 140,413
Datastream Systems, Incorporated 6,200 192,200
Expert Software, Incorporated* 7,300 26,006
Infinium Software, Incorporated* 11,700 190,125
Intersolv, Incorporated* 14,400 292,050
International Microcomp Software,
Incorporated 6,800 96,050
Mapics, Incorporated 20,000 217,500
Policy Management Systems
Corporation* 5,700 396,506
Progress Software Corporation* 10,200 220,575
Software Spectrum, Incorporated* 4,200 49,878
---------
1,821,303
STEEL - 0.49%
Steel of West Virginia, Incorporated* 7,500 68,437
Varlen Corporation 11,250 275,801
-------
344,238
TELECOMMUNICATION SERVICES - 0.87%
Atlantic Tele-Network, Incorporated 5,560 60,465
Centigram Communications Corporation 7,300 123,644
Commonwealth Tel Enterprises* 8,100 209,587
Emerging Communications 13,900 111,200
Superior Telecom, Incorporated* 2,800 96,775
-------
601,671
TELEPHONE - 0.04%
Hector Communications Corporation 3,100 28,675
------
TIRES & RUBBER - 0.04%
West, Incorporated 900 26,775
------
TRUCKING & FREIGHT - 2.72%
Airbourne Freight Corporation 14,400 894,600
Consolidated Freightways Corporation 15,000 204,375
Hvide Marine, Incorporated* 6,800 175,100
Roadway Express, Incorporated 10,000 221,250
Travel Ports America, Incorporated 2,200 7,425
Yellow Corporation 15,600 391,950
---------
1,894,700
TOTAL COMMON STOCKS
(Cost: $67,552,722) $66,310,010
----------
The accompanying notes are an integral part of the financial statements.
86
<PAGE> 126
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
REPURCHASE AGREEMENT - 4.62%
$3,215,000 Repurchase Agreement with
State Street Bank & Trust Company
dated 12/31/97 at 5.00% to be
repurchased at $3,215,893 on
01/02/98, collateralized by
$3,265,000 U.S. Treasury Notes,
5.50% due 11/15/98 (valued at
$3,304,144, including interest) $3,215,000
TOTAL INVESTMENTS
(Small Company Value Trust)
(Cost: $70,767,722) $69,525,010
==========
EQUITY TRUST
Shares Value
------ -----
COMMON STOCKS - 87.08%
AEROSPACE - 0.56%
Gencorp, Incorporated 69,000 $1,725,000
Gulfstream Aerospace Corporation* 142,100 4,156,425
Litton Industries, Incorporated 63,900 3,674,250
---------
9,555,675
AIR TRAVEL - 0.10%
Virgin Express Holdings PLC, ADR 82,400 1,709,800
---------
ALUMINUM - 1.08%
Aluminum Company of America 260,450 18,329,169
----------
APPAREL & TEXTILES - 1.51%
Kellwood Company 59,300 1,779,000
Mohank Industries, Incorporated* 280,000 6,142,500
Pacific Sunwear of California* 99,399 2,938,483
Reebok International, Ltd. 281,800 8,119,363
Stage Stores, Incorporated* 101,900 3,808,512
Unifi, Incorporated 70,500 2,868,469
----------
25,656,327
AUTOMOBILES - 0.23%
Harley Davidson, Incorporated 139,700 3,824,288
---------
BANKING - 1.96%
Banc One Corporation 53,500 2,905,719
Comerica, Incorporated 126,900 11,452,725
National Bank of Canada 62,000 1,023,897
New York Bancorp, Incorporated 41,500 1,647,031
North Fork Bancorporation,
Incorporated 136,000 4,564,500
U.S. Bancorp 90,825 10,166,723
Westamerica Bancorporation 15,000 1,533,750
----------
33,294,345
BROADCASTING - 1.79%
American Radio Systems Corporation* 170,800 9,105,775
Chancellor Media Corporation* 48,400 3,611,850
Clear Channel Communications 67,700 5,377,919
CBS Corporation 87,500 2,575,781
HSN, Incorporated 87,700 4,516,550
Viacom, Incorporated, Class A* 51,700 2,113,237
Viacom, incorporated, Class B* 75,000 3,107,813
----------
30,408,925
BUILDING MATERIALS & CONSTRUCTION - 1.06%
Fluor Corporation 276,900 10,349,138
Harsco Corporation 177,700 7,663,312
----------
18,012,450
BUSINESS SERVICES - 6.19%
AccuStaff, Incorporated* 143,300 3,295,900
America Online, Incorporated* 49,700 4,432,619
Banta Corporation 123,500 3,334,500
Cognizant Corporation 21,400 953,637
Computer Horizons Corporation* 92,200 4,149,000
Corrections Corporation of America* 62,100 2,301,581
Deluxe Corporation 514,200 17,739,900
DeVRY, Incorporated* 43,700 1,392,938
R. R. Donnelley & Sons Company 653,300 24,335,425
HBO & Company 80,300 3,854,400
Hagler Bailly, Incorporated* 58,100 1,307,250
Laidlaw, Incorporated 120,000 1,637,451
Manpower, Incorporated 7,100 250,275
NCR Corporation* 100,000 2,781,250
Omnicom Group 328,000 13,899,000
Personal Group of America,
Incorporated* 37,300 1,230,900
Pittston Brinks Group 2,600 104,650
Service Corporation International 64,600 2,386,162
Snyder Communications,
Incorporated* 37,800 1,379,700
Stone & Webster, Incorporated 279,300 13,092,188
VWR Scientific Products Corporation 39,000 1,101,750
-----------
104,960,476
CHEMICALS - 5.42%
Cabot Corporation 314,600 8,690,825
Cytec Industries, Incorporated* 115,500 5,421,281
Ferro Corporation 82,650 2,009,428
The B.F. Goodrich Company 76,400 3,165,825
M.A. Hanna Company 13,000 328,250
Hercules, Incorporated 293,300 14,683,331
Hexcel Corporation* 23,900 596,006
Lawter International, Incorporated 195,900 2,130,413
Nalco Chemical Company 356,000 14,084250
Olin Corporation 160,700 7,532,812
Twinlab Corporation* 42,900 1,061,775
Union Carbide Corporation 369,300 15,856,819
Valspar Corporation 58,800 1,874,250
Waters Corporation* 137,700 5,180,963
Witco Corporation 229,900 9,382,794
----------
91,999,022
The accompanying notes are an integral part of the financial statements.
87
<PAGE> 127
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
COMPUTERS & BUSINESS EQUIPMENT - 1.16%
Affiliated Computer Services,
Incorporated* 50,200 $1,320,888
Citrix Systems, Incorporated* 29,800 2,264,800
Computer Learning Centers,
Incorporated* 50,200 3,074,750
E*Trade Group, Incorporated* 80,900 1,860,700
Pitney Bowes, Incorporated 37,600 3,381,650
Seagate Technology, Incorporated* 165,000 3,176,250
Symbol Technologies, Incorporated 73,600 2,778,400
Unisys Corporation* 132,000 1,831,500
----------
19,688,938
CONGLOMERATES - 0.18%
Harcourt General, Incorporated 51,900 2,841,525
Triarc Companies, Incorporated* 10,600 288,850
---------
3,130,375
CONSTRUCTION & MINING EQUIPMENT - 0.24%
Foster Wheeler Corporation 57,900 1,566,919
Harnischfeger Industries, Incorporated 68,900 2,433,031
---------
3,999,950
CONSTRUCTION MATERIALS - 0.33%
Centex Construction Products,
Incorporated 11,800 355,475
Dayton Superior Corporation 51,600 851,400
Lafarge Corporation 58,200 1,720,537
Medusa Corporation 33,900 1,417,444
Sherwin Williams Company 31,600 876,900
USG Corporation* 6,600 323,400
---------
5,545,156
CONTAINERS & GLASS - 0.54%
Owens-Illinois, Incorporated* 190,450 7,225,197
Silgan Holdings, Incorporated* 57,900 1,881,750
---------
9,106,947
COSMETICS & TOILETRIES - 0.64%
Alberto Culver Company 265,100 7,157,700
Avon Products, Incorporated 60,600 3,719,325
----------
10,877,025
CRUDE PETROLEUM & NATURAL GAS - 1.87%
Apache Corporation 46,100 1,616,381
Burlington Resources, Incorporated 159,297 7,138,497
Enron Oil & Gas Company 112,200 2,377,238
Nuevo Energy Company* 108,200 4,409,150
Occidental Petroleum Corporation 400,000 11,725,000
Pioneer Natural Resources Company* 55,014 1,591,968
Renaissance Energy, Ltd.* 65,300 1,347,993
Weatherford Enterra, Incorporated* 36,000 1,575,000
----------
31,781,227
DOMESTIC OIL -0.49%
Amerada Hess Corporation 90,000 4,938,750
Unocal Corporation 85,700 3,326,231
---------
8,264,981
DRUGS & HEALTH CARE - 6.54%
Anesta Corporation* 37,400 612,425
Barr Laboratories, Incorporated* 2,800 95,550
Bausch & Lomb, Incorporated 353,900 14,023,289
Becton Dickinson & Company 5,000 250,000
Bristol-Myers Squibb Company 11,000 1,040,875
Cardinal Health, Incorporated 106,900 8,030,862
Columbia/HCA Healthcare Corporation 382,500 11,331,562
Cooper Companies, Incorporated* 62,000 2,534,250
Covance, Incorporated* 76,400 1,518,450
Cytyc Corporation* 54,900 1,365,637
Forest Laboratories, Incorporated* 49,300 2,431,106
Gilead Sciences, Incorporated* 32,400 1,239,300
Guidant Corporation 51,600 3,212,100
Health Management Association* 251,950 6,361,737
HEALTHSOUTH Corporation* 337,000 9,351,750
Incontrol, Incorporated* 20,800 122,200
McKesson Corporation 157,000 16,985,438
Medtronic, Incorporated 131,200 6,863,400
Physician Sales & Services,
Incorporated* 74,100 1,593,150
Sybron International Corporation* 123,300 5,787,394
United Healthcare Corporation 304,100 15,109,969
Young Innovations, Incorporated* 55,600 1,000,800
-----------
110,861,244
ELECTRIC UTILITIES - 0.08%
Consolidated Edison Company of
New York, Incorporated 31,400 1,287,400
---------
ELECTRICAL EQUIPMENT - 1.83%
Alcatel Alsthom, ADR 913,300 23,117,906
Boston Scientific Corporation* 94,900 4,353,538
General Electric Company 48,300 3,544,012
----------
31,015,456
ELECTRONICS - 4.41%
Alliant Techsystems, Incorporated* 54,000 3,010,500
Ametek Aerospace Products,
Incorporated 133,970 3,617,190
AMP, Incorporated 505,500 21,231,000
Boston Technology, Incorporated* 38,300 962,287
DSC Communications Corporation* 57,400 1,377,600
EG & G, Incorporated 357,500 7,440,469
Electronic Data Systems Corporation 274,200 12,047,663
Flextronics International* 27,700 955,650
Imation Corporation* 137,200 2,195,200
International Rectifier Group* 1,500 17,719
Leitch Technology Corporation* 51,400 1,546,622
Linear Technology Corporation 30,100 1,734,512
Micron Technology, Incorporated 456,300 11,863,800
Newport Corporation 14,800 208,125
Perkin-Elmer Corporation 46,200 3,283,087
Thermo Instrument Systems,
Incorporated* 93,874 3,232,786
----------
74,724,210
The accompanying notes are an integral part of the financial statements.
88
<PAGE> 128
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FINANCIAL SERVICES - 1.22%
Allmerica Financial Corporation 5,100 $254,681
Associates First Capital Corporation 45,100 3,207,738
Equifax, Incorporated 199,300 7,062,694
Household International, Incorporated 34,800 4,439,175
Washington Mutual, Incorporated 64,200 4,096,762
Webster Financial Corporation 24,700 1,642,550
----------
20,703,600
FOOD & BEVERAGES - 3.08%
American Italian Pasta Company* 9,600 240,000
Deans Foods Company 94,700 5,634,650
Dole Food, Incorporated 550,000 25,162,500
Fresh Del Monte Produce* 63,200 924,300
Hudson Foods, Incorporated 67,400 1,385,912
Interstate Bakeries Corporation 132,600 4,955,925
JP Foodservice, Incorporated* 119,462 4,412,646
Pilgrims Pride Corporation 64,800 1,008,450
Suiza Foods Corporation* 47,900 2,853,044
Tyson Foods, Incorporated 157,700 3,232,850
Unilever 40,000 2,497,500
----------
52,307,777
FOREST PRODUCTS - 0.10%
Georgia-Pacific Corporation 20,000 1,215,000
Georgia-Pacific Corporation
(Timber Group)* 20,000 453,750
---------
1,668,750
FURNITURE & FIXTURES - 0.29%
Knoll, Incorporated 154,100 4,950,463
---------
GAS & PIPELINE UTILITIES - 0.97%
Cooper Cameron Corporation 93,900 5,727,900
Falcon Drilling 93,100 3,264,319
Ocean Energy, Incorporated* 152,400 7,515,225
----------
16,507,444
HOMEBUILDERS - 0.77%
Centex Corporation 44,100 2,775,544
Elcor Corporation 64,500 1,548,000
Lennar Corporation 104,738 2,258,413
NVR, Incorporated* 49,800 1,089,375
Toll Brothers, Incorporated* 63,400 1,695,950
U.S. Home Corporation 20,800 816,400
Walter Industries, Incorporated* 135,700 2,798,812
----------
12,982,494
HOTELS & RESTAURANTS - 1.43%
CKE Restaurants, Incorporated 135,650 5,714,256
Mirage Resorts, Incorporated 337,200 7,671,300
Pegasus Systems, Incorporated* 127,000 1,889,125
Promus Hotel Corporation* 28,900 1,213,800
Rainforest Cafe, Incorporated* 30,100 993,300
Star Buffet, Incorporated* 30,800 354,200
Tricon Global Restaurants,
Incorporated* 220,500 6,408,282
----------
24,244,263
HOUSEHOLD APPLIANCES - 2.44%
Bassett Furniture Industries,
Incorporated 17,400 522,000
Ethan Allen Interiors, Incorporated 121,200 4,673,775
Furniture Brands International,
Incorporated* 3,300 67,650
Leggett & Platt, Incorporated 339,400 14,212,375
Newell Company 99,900 4,245,750
Whirlpool Corporation 320,000 17,600,000
----------
41,321,550
HOUSEHOLD PRODUCTS - 2.73%
Black & Decker Corporation 348,400 13,609,375
Church & Dwight, Incorporated 84,000 2,357,250
Rubbermaid, Incorporated 823,200 20,580,000
The Stanley Works 100,500 4,742,344
Tupperware Corporation 179,100 4,992,412
----------
46,281,381
INDUSTRIAL MACHINERY - 2.65%
AAR Corporation 118,000 4,572,500
American Standard Companies,
Incorporated* 405,000 15,516,563
GaSonics International Corporation* 29,200 288,350
Group Maintenance America
Corporation* 5,300 89,106
Ingersoll-Rand Company 56,000 2,268,000
Kaydon Corporation 124,600 4,065,075
Pentair, Incorporated 123,200 4,427,500
Thermo Electron Corporation* 80,900 3,600,050
Tyco International, Incorporated 224,100 10,098,506
----------
44,925,650
INSURANCE - 1.36%
Aetna, Incorporated 43,500 3,069,469
AFLAC, Incorporated 87,600 4,478,550
Ambac Financial Group, Incorporated 55,200 2,539,200
American Bankers Insurance Group,
Incorporated 73,700 3,385,594
Gorman-Rupp Company* 2,500 52,812
Paula Financial* 55,500 1,276,500
Progressive Corporation 18,800 2,253,650
ProtectiveLife Corporation 11,900 711,025
SunAmerica, Incorporated 43,600 1,863,900
UNUM Corporation 50,400 2,740,500
Vesta Insurance Group, Incorporated 12,900 765,937
----------
23,137,137
LEATHER PRODUCTS - 0.11%
Samsonite Corporation* 59,800 1,891,175
---------
LEISURE TIME - 1.91%
Action Performance Companies,
Incorporated* 17,100 647,662
AMF Bowling, Incorporated* 57,100 1,427,500
Brunswick Corporation 405,000 12,276,562
Carnival Corporation 74,600 4,130,975
Cinar Films, Incorporated* 41,000 1,593,875
Cinar Films, Incorporated - CAD 26,300 980,004
The accompanying notes are an integral part of the financial statements.
89
<PAGE> 129
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
LEISURE TIME - CONTINUED
Premier Parks, Incorporated* 42,000 $1,701,000
The Walt Disney Company 23,500 2,327,969
Westwood One, Incorporated* 178,200 6,615,675
WMS Industries, Incorporated* 33,400 705,575
----------
32,406,797
MINING - 0.39%
Getchell Gold Corporation* 101,700 2,440,800
Newmont Mining Corporation 140,000 4,112,500
---------
6,553,300
MISCELLANEOUS - 1.62%
W.H. Brady Company 146,400 4,538,400
Cendant Corporation* 665,930 22,891,344
----------
27,429,744
MOBILE HOMES - 0.26%
Oakwood Homes Corporation 131,800 4,374,113
---------
NEWSPAPERS - 0.41%
Central Newspapers, Incorporated 20,900 1,545,294
Tribune Company 87,900 5,471,775
---------
7,017,069
OFFICE FURNISHINGS & SUPPLIES - 0.30%
Reynolds & Reynolds Company 277,200 5,110,875
---------
PAPER - 0.75%
Fort James Corporation 130,875 5,005,969
Ivex Packaging Corporation 123,800 2,971,200
Unisource Worldwide, Incorporated 338,100 4,817,925
----------
12,795,094
PETROLEUM SERVICES - 2.02%
EVI, Incorporated 49,900 2,582,325
Noble Drilling Corporation* 51,300 1,571,062
Reading & Bates Corporation* 115,300 4,828,188
Tosco Corporation 253,000 9,566,563
Total SA, B Shares 20,000 2,176,622
Total SA, ADR 10,000 555,000
Transocean Offshore, Incorporated 139,900 6,741,431
Valero Energy Corporation 196,900 6,190,044
----------
34,211,235
PHOTOGRAPHY - 1.06%
Polaroid Corporation 370,200 18,024,113
----------
PLASTICS - 1.00%
First Brands Corporation 375,600 10,117,725
Sealed Air Corporation* 83,800 5,174,650
Spartech Corporation 101,600 1,536,700
----------
16,829,075
POLLUTION CONTROL - 3.91%
Browning Ferris Industries,
Incorporated 786,600 29,104,200
Eastern Environmental Services,
Incorporated* 34,000 748,000
USA Waste Services, Incorporated* 543,537 21,333,827
Waste Industries, Incorporated* 1,300 24,212
Waste Management, Incorporated 549,800 15,119,500
----------
66,329,739
PUBLISHING - 0.51%
Eltron International Company* 127,100 3,844,775
John H. Harland Company 195,000 4,095,000
Scholastic Corporation* 20,900 783,750
---------
8,723,525
REAL ESTATE - 0.19%
Bedford Property Investments,
Incorporated 25,900 566,562
Brandywine Realty Trust 43,900 1,102,987
LNR Property Corporation 59,800 1,412,775
SL Green Realty Corporation 8,500 220,469
---------
3,302,793
RETAIL GROCERY - 1.09%
Hannaford Brothers Company 109,300 4,747,719
Safeway, Incorporated* 141,200 8,930,900
Starbucks Corporation* 126,900 4,869,787
----------
18,548,406
RETAIL TRADE - 9.96%
99 Cents Only Stores* 1,213 35,769
AnnTaylor Stores Corporation* 224,200 2,998,675
Arbor Drugs, Incorporated 148,700 2,750,950
Brylane, Incorporated* 62,700 3,087,975
Charming Shoppes, Incorporated* 81,500 382,031
Consolidated Stores Corporation* 316,631 13,911,975
CVS Corporation 162,300 10,397,344
Dollar Tree Stores, Incorporated* 124,000 5,130,500
Federated Department Stores,
Incorporated* 660,000 28,421,250
Haverty Furniture Companies,
Incorporated 18,100 244,350
Heilig-Meyers Company 474,900 5,698,800
Hudson Bay Company 94,400 2,103,943
The Limited, Incorporated 427,600 10,903,800
Mac Frugal's Bargains-Close-Out,
Incorporated* 59,000 2,426,375
Michael's Stores, Incorporated* 80,700 2,360,475
Musicland Stores, Incorporated* 60,000 438,750
Payless ShoeSource, Incorporated* 47,600 3,195,150
Proffitt's, Incorporated* 227,200 6,461,000
Ross Stores, Incorporated 140,600 5,114,325
TJX Companies, Incorporated 266,200 9,150,625
Wal-Mart Stores, Incorporated 1,260,000 49,691,250
Zale Corporation 173,900 3,999,700
-----------
168,905,012
SHIPBUILDING - 0.18%
Avondale Industries, Incorporated* 103,300 3,066,719
SOFTWARE - 2.01%
BMC Software, Incorporated* 83,600 5,486,250
CIBER, Incorporated* 30,700 1,780,600
Compuware Corporation* 173,700 5,558,400
Dialogic Corporation* 46,000 2,012,500
Keane, Incorporated* 216,000 8,775,000
Siebal Systems, Incorporated* 72,000 3,010,500
Symantec Corporation* 218,800 4,799,925
Synopsys, Incorporated* 75,300 2,691,975
----------
34,115,150
The accompanying notes are an integral part of the financial statements.
90
<PAGE> 130
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
STEEL - 0.70%
Nucor Corporation 219,000 $10,580,438
Steel Dynamics, Incorporated* 76,100 1,217,600
----------
11,798,038
TELECOMMUNICATION SERVICES - 0.14%
Mobile Telecommunication
Technologies Corporation* 3,900 85,800
Teleport Communications Group* 41,700 2,288,287
---------
2,374,087
TELEPHONE - 2.68%
Cincinnati Bell, Incorporated 900,800 27,924,800
Worldcom, Incorporated* 580,095 17,547,874
----------
45,472,674
TOBACCO - 0.23%
Philip Morris Companies,
Incorporated 80,000 3,625,000
UST, Incorporated 9,000 332,437
---------
3,957,437
TOYS, AMUSEMENTS & SPORTING GOODS - 0.23%
Mattel, Incorporated 102,700 3,825,575
---------
TRUCKING & FREIGHT - 0.17%
C.H. Robinson Worldwide 30,500 682,438
Ryder System, Incorporated 49,600 1,624,400
Wisconsin Central Transportation
Corporation* 25,000 584,375
---------
2,891,213
TOTAL COMMON STOCKS
(Cost: $1,409,069,803) $1,477,016,853
-------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 11.25%
$190,931,857 Navigator Securities
Lending Trust, 5.74% $190,931,857
-----------
REPURCHASE AGREEMENT - 1.65%
$28,137,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 12/31/97 at 5.00%, to be
repurchased at $28,144,816 on
01/02/98, collateralized by
$26,870,000 U.S. Treasury Notes,
7.50% due 11/15/01 (valued at
$28,956,573, including interest) $28,137,000
----------
TOTAL INVESTMENTS
(Equity Trust) (Cost: $1,628,138,660) $1,696,085,710
=============
GROWTH TRUST
Shares Value
------ -----
COMMON STOCKS - 73.08%
AEROSPACE - 0.34%
Gulfstream Aerospace Corporation* 21,850 $639,113
-------
AIR TRAVEL - 2.40%
Galileo International, Incorporated 70,825 1,956,541
Deutsche Lufthansa AG 81,200 1,557,241
Southwest Airlines Company 39,462 971,752
---------
4,485,534
AUTOMOBILES - 1.37%
Ford Motor Credit Company 52,650 2,563,397
---------
BANKING - 1.60%
BankAmerica Corporation 15,425 1,126,025
Chase Manhattan Corporation 8,950 980,025
Mellon Bank Corporation 14,550 882,094
---------
2,988,144
BROADCASTING - 1.40%
CBS Corporation 71,050 2,091,535
Jacor Communications, Incorporated* 9,675 513,984
2,605,519
BUILDING MATERIALS & CONSTRUCTION - 1.20%
Lowe's Companies, Incorporated 46,900 2,236,544
---------
BUSINESS SERVICES - 2.40%
Cognizant Corporation 30,400 1,354,700
Fiserv, Incorporated* 63,525 3,120,666
---------
4,475,366
CHEMICALS - 0.19%
Imperial Chemical Industries PLC, ADR 5,500 357,156
COMPUTERS & BUSINESS EQUIPMENT - 1.12%
Bay Networks, Incorporated* 6,450 164,878
Hewlett-Packard Company 17,775 1,110,937
Oce-Van Der Grinten 7,500 817,449
---------
2,093,264
CRUDE PETROLEUM & NATURAL GAS - 0.35%
B.J. Services Company* 9,150 658,228
-------
DRUGS & HEALTH CARE - 11.62%
ALZA Corporation* 40,100 1,275,681
American Home Products Corporation 9,025 690,412
Bristol-Myers Squibb Company 27,650 2,616,381
Dura Pharmaceuticals, Incorporated* 27,800 1,275,325
Eli Lilly and Company 69,100 4,811,088
HEALTHSOUTH Corporation* 51,000 1,415,250
Merck & Company, Incorporated 16,650 1,769,063
Novartis AG 1,050 1,703,052
Pfizer, Incorporated 48,050 3,582,728
SmithKline Beecham PLC, ADR 30,250 1,555,984
Stryker Corporation 26,975 1,004,819
----------
21,699,783
ELECTRICAL EQUIPMENT - 2.93%
General Electric Company 65,400 4,798,725
Phillips Electronics, ADR 11,275 682,138
---------
5,480,863
ELECTRONICS - 5.91%
Altera Corporation* 46,750 1,548,594
CIENA Corporation* 42,850 2,619,206
Electronic Data Systems Corporation 28,150 1,236,841
The accompanying notes are an integral part of the financial statements.
91
<PAGE> 131
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
ELECTRONICS - CONTINUED
Lam Research Corporation* 4,100 $119,925
Maxim Integrated Products,
Incorporated* 67,400 2,325,300
Tellabs, Incorporated* 28,125 1,487,109
Xilinx, Incorporated* 48,325 1,694,395
----------
11,031,370
FINANCIAL SERVICES - 8.14%
Associates First Capital
Corporation, Class A 27,075 1,925,709
Beneficial Corporation 9,100 756,437
Capital One Financial Corporation 29,075 1,575,502
CIT Group, Incorporated* 28,950 933,638
Federal National Mortgage Association 32,475 1,853,105
Hartford Financial Services Group 22,500 2,109,834
H.F. Ahmanson & Company 26,925 1,802,292
SLM Holding Corporation 17,950 2,497,294
Washington Mutual, Incorporated 27,257 1,739,337
----------
15,193,148
FOOD & BEVERAGES - 3.75%
Coca-Cola Enterprises, Incorporated 58,025 2,063,514
Pepsico, Incorporated 44,750 1,630,578
Ralston Purina Company 10,550 980,491
Sara Lee Corporation 41,350 2,328,522
---------
7,003,105
HOTELS & RESTAURANTS - 0.90%
Mirage Resorts, Incorporated* 73,600 1,674,400
---------
HOUSEHOLD APPLIANCES - 3.66%
Hunter Douglas 12,050 421,942
Maytag Corporation 81,000 3,022,312
Sunbeam Corporation 80,650 3,397,381
---------
6,841,635
HOUSEHOLD PRODUCTS - 3.61%
Dial Corporation 73,925 1,538,564
Gillette Company 24,400 2,450,675
Proctor & Gamble Company 34,550 2,757,522
---------
6,746,761
INDUSTRIAL MACHINERY - 0.62%
Crane Company 26,600 1,153,775
---------
INSURANCE - 2.65%
Allstate Corporation 22,700 2,062,863
Everest Reinsurance Holdings 27,725 1,143,656
Marsh & McLennan Companies,
Incorporated 11,700 872,381
The Progressive Corporation 7,200 863,100
---------
4,942,000
LEISURE TIME - 1.12%
The Walt Disney Company 21,200 2,100,125
---------
PAPER - 1.83%
Fort James Corporation 32,250 1,233,563
International Paper Company 24,700 1,065,187
Mead Corporation 40,200 1,125,600
---------
3,424,350
PETROLEUM SERVICES - 2.82%
Baker Hughes, Incorporated 45,900 2,002,387
Reading & Bates Corporation* 34,250 1,434,219
Schlumberger, Ltd. 22,650 1,823,325
---------
5,259,931
POLLUTION CONTROL - 0.32%
Allied Waste Industries, Incorporated* 25,500 594,469
RETAIL TRADE - 1.42%
Dayton Hudson Corporation 19,875 1,341,563
Toys R Us, Incorporated* 41,550 1,306,228
---------
2,647,791
SOFTWARE - 3.79%
Microsoft Corporation* 38,950 5,034,288
PeopleSoft, Incorporated* 36,350 1,417,650
VERITAS Software Company* 12,400 632,400
---------
7,084,338
TELECOMMUNICATION SERVICES - 0.37%
Lucent Technologies, Incorporated 8,725 696,909
-------
TELEPHONE - 2.29%
American Telephone & Telegraph
Corporation 17,675 1,082,594
MCI Communications Corporation 74,525 3,190,601
---------
4,273,195
TOBACCO - 2.21%
Philip Morris Companies, Incorporated 50,875 2,305,273
RJR Nabisco Corporation 48,750 1,828,125
---------
4,133,398
TRUCKING & FREIGHT - 0.75%
CNF Transportation, Incorporated 36,350 1,394,932
---------
TOTAL COMMON STOCKS
(Cost: $122,635,718) $136,478,543
-----------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 8.75%
$16,341,262 Navigator Securities
Lending Trust, 5.74% $16,341,262
----------
REPURCHASE AGREEMENT - 18.16%
$33,923,000 Repurchase Agreement with
State Street Bank & Trust Company
dated 12/31/97 at 5.00% to be
repurchased at $33,932,423 on
01/02/98, collateralized by
$27,640,000 U.S. Treasury Bonds,
7.875% due 02/15/21 (valued at
$35,418,069, including interest) $33,923,000
----------
TOTAL INVESTMENTS
(Growth Trust) (Cost: $172,899,980) $186,742,805
===========
The accompanying notes are an integral part of the financial statements.
92
<PAGE> 132
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
QUANTITATIVE EQUITY TRUST
Shares Value
------ -----
COMMON STOCKS - 85.07%
AEROSPACE - 0.62%
United Technologies Corporation 15,500 $1,128,594
---------
AIR TRAVEL - 0.41%
Galileo International, Incorporated 5,000 138,125
Southwest Airlines Company 24,300 598,387
-------
736,512
APPAREL & TEXTILES - 0.51%
Jones Apparel Group, Incorporated* 21,300 915,900
-------
AUTO PARTS - 0.89%
Eaton Corporation 18,000 1,606,500
---------
AUTOMOBILES - 2.66%
Chrysler Corporation 32,500 1,143,594
Ford Motor Company 39,900 1,942,631
General Motors Corporation 19,200 1,164,000
PACCAR, Incorporated 10,400 546,000
---------
4,796,225
BANKING - 14.04%
Banc One Corporation 34,400 1,868,350
BankAmerica Corporation 28,000 2,044,000
BankBoston Corporation 22,100 2,076,019
Bankers Trust New York Corporation 16,700 1,877,706
Chase Manhattan Corporation 18,300 2,003,850
Citicorp 15,000 1,896,562
First Union Corporation 33,300 1,706,625
Fleet Financial Group, Incorporated 24,000 1,798,500
KeyCorp 17,600 1,246,300
MBNA Corporation 52,575 1,435,955
National City Corporation 26,600 1,748,950
NationsBank Corporation 26,900 1,635,856
Northern Trust Corporation 18,100 1,262,475
PNC Bank Corporation 34,700 1,980,069
State Street Corporation 13,000 756,438
----------
25,337,655
BROADCASTING - 0.39%
Clear Channel Communications* 8,800 699,050
-------
BUSINESS SERVICES - 3.13%
AccuStaff, Incorporated* 19,900 457,700
First Data Corporation 25,300 740,025
Omnicom Group 27,600 1,169,550
Outsource International, Incorporated* 75,000 909,375
Peapod, Incorporated* 11,500 74,750
Quintiles Transnational Corporation* 29,900 1,143,675
Robert Half International Corporation* 28,750 1,150,000
---------
5,645,075
CHEMICALS - 1.95%
Crompton & Knowles Corporation 22,700 601,550
E.I. Du Pont De Nemours & Company 17,500 1,051,094
Hercules, Incorporated 25,500 1,276,594
Praxair, Incorporated 13,100 589,500
---------
3,518,738
COMPUTERS & BUSINESS EQUIPMENT - 3.31%
Cabletron Systems, Incorporated* 27,500 412,500
Cisco Systems, Incorporated* 15,000 836,250
Compaq Computer Corporation 13,700 773,194
International Business Machines
Corporation 9,500 993,344
Pitney Bowes, Incorporated 13,000 1,169,188
Seagate Technology* 26,200 504,350
Sun Microsystems, Incorporated* 5,700 227,287
Sundstrand Corporation 21,000 1,057,875
---------
5,973,988
CONSTRUCTION MATERIALS - 0.45%
Masco Corporation 16,000 814,000
-------
CRUDE PETROLEUM & NATURAL GAS - 0.94%
Occidental Petroleum Corporation 57,600 1,688,400
---------
DOMESTIC OIL - 2.20%
Atlantic Richfield Company 20,200 1,618,525
Phillips Petroleum Company 21,800 1,060,025
USX Marathon Group 38,300 1,292,625
---------
3,971,175
DRUGS & HEALTH CARE - 3.16%
Baxter International, Incorporated 34,300 1,730,006
Dura Pharmaceuticals, Incorporated* 12,000 550,500
General Nutrition Companies,
Incorporated* 23,300 792,200
Merck & Company, Incorporated 12,400 1,317,500
Pharmacia & Upjohn, Incorporated 17,600 644,600
Watson Pharmaceuticals, Incorporated* 20,600 668,213
---------
5,703,019
ELECTRIC UTILITIES - 0.91%
CalEnergy, Incorporated* 8,400 241,500
Dominion Resources, Incorporated 18,000 766,125
PG&E Group, Incorporated 20,700 630,056
---------
1,637,681
ELECTRICAL EQUIPMENT - 3.02%
Cooper Industries, Incorporated* 35,000 1,715,000
Emerson Electric Company 13,600 767,550
General Cable Corporation 43,200 1,563,300
General Electric Company 19,100 1,401,463
---------
5,447,313
ELECTRONICS - 4.45%
AMP, Incorporated 36,500 1,533,000
Intel Corporation 16,100 1,131,025
LSI Logic Corporation* 30,500 602,375
Motorola, Incorporated 21,200 1,209,725
Raytheon Company, Class A* 1,224 60,359
Raytheon Company, Class B 40,000 2,020,000
Silicon Graphics, Incorporated* 29,900 371,881
Texas Instruments, Incorporated 24,600 1,107,000
---------
8,035,365
The accompanying notes are an integral part of the financial statements.
93
<PAGE> 133
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FINANCIAL SERVICES - 2.59%
H.F. Ahmanson & Company 15,100 $1,010,756
American Express Company 11,300 1,008,525
Capital One Financial Corporation 12,100 655,669
Travelers Group, Incorporated 37,050 1,996,069
---------
4,671,019
FOOD & BEVERAGES - 3.71%
Archer-Daniels-Midland Company 59,495 1,290,298
Coca-Cola Enterprises, Incorporated 10,100 359,181
Conagra, Incorporated 27,300 895,781
General Mills, Incorporated 10,500 752,063
Interstate Bakeries Corporation 13,000 485,875
PepsiCo, Incorporated 35,700 1,300,819
Quaker Oats Company 18,900 996,975
Sysco Corporation 13,600 619,650
---------
6,700,642
FOREST PRODUCTS - 0.93%
Georgia-Pacific Corporation 20,200 1,227,150
Georgia-Pacific Corporation
(Timber Group)* 20,200 458,287
---------
1,685,437
GAS & PIPELINE UTILITIES - 2.41%
Coastal Corporation 30,000 1,858,125
Consolidated Natural Gas Company 22,000 1,331,000
Cooper Cameron Corporation 11,800 719,800
Ocean Energy, Incorporated* 8,900 438,881
---------
4,347,806
HOTELS & RESTAURANTS - 0.46%
Hilton Hotels Corporation 27,700 824,075
---------
HOUSEHOLD APPLIANCES - 0.75%
Sunbeam Corporation 13,900 585,537
Whirlpool Corporation 14,000 770,000
---------
1,355,537
HOUSEHOLD PRODUCTS - 0.82%
Clorox Company 8,100 640,406
Gillette Company 8,300 833,631
-------
1,474,037
INDUSTRIAL MACHINERY - 2.59%
AES Corporation* 21,600 1,007,100
Applied Materials, Incorporated* 22,400 674,800
Ingersol Rand Company 32,150 1,302,075
Tyco International, Ltd. 37,400 1,685,337
---------
4,669,312
INSURANCE - 5.62%
Aetna, Incorporated 18,300 1,291,294
Allstate Corporation 19,900 1,808,413
American International Group,
Incorporated 11,950 1,299,562
Conseco, Incorporated 5,500 249,906
General RE Corporation 7,100 1,505,200
Marsh and McLennan Companies,
Incorporated 21,500 1,603,094
MGIC Investment Corporation 19,400 1,290,100
SunAmerica, Incorporated 11,800 504,450
Travelers Property Casualty
Corporation 13,400 589,600
----------
10,141,619
INTERNATIONAL OIL - 1.52%
Chevron Corporation 25,600 1,971,200
Texaco, Incorporated 14,200 772,125
---------
2,743,325
LEISURE TIME - 1.12%
Carnival Corporation 21,400 1,185,025
The Walt Disney Company 8,500 842,031
---------
2,027,056
MISCELLANEOUS - 0.45%
Dollar Thrifty Automotive Group 40,000 820,000
-------
NEWSPAPERS - 0.33%
New York Times Company 8,900 588,512
-------
PAPER - 1.75%
Fort James Corporation 42,700 1,633,275
Union Camp Corporation 28,300 1,519,356
---------
3,152,631
PETROLEUM SERVICES - 1.91%
Dresser Industries, Incorporated 24,300 1,019,081
EVI, Incorporated* 11,100 574,425
Halliburton Company 23,700 1,230,919
Nabors Industries, Incorporated* 20,100 631,894
---------
3,456,319
POLLUTION CONTROL - 0.31%
Browning Ferris Industries,
Incorporated 15,152 560,624
PUBLISHING - 0.83% -------
McGraw-Hill Companies, Incorporated 20,300 1,502,200
REAL ESTATE - 0.58% ---------
Equity Residential Properties Trust 8,400 424,725
Simon DeBartolo Group, Incorporated 18,900 617,794
-------
1,042,519
RETAIL GROCERY - 0.61%
American Stores Company 53,500 1,100,094
---------
RETAIL TRADE - 4.10%
AutoZone, Incorporated* 32,100 930,900
CVS Corporation 15,400 986,563
Dayton Hudson Corporation 21,400 1,444,500
Federated Department Stores,
Incorporated* 30,800 1,326,325
Lowe's Companies, Incorporated 23,700 1,130,194
TJX Companies, Incorporated 21,800 749,375
Toys R Us, Incorporated* 26,200 823,662
---------
7,391,519
SOFTWARE - 2.51%
BMC Software, Incorporated* 8,500 557,813
Cadence Design Systems, Incorporated* 8,600 210,700
Electronic Arts* 14,900 563,406
The accompanying notes are an integral part of the financial statements.
94
<PAGE> 134
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
SOFTWARE - CONTINUED
HBO & Company* 15,500 $744,000
Informix Corporation* 41,700 198,075
Microsoft Corporation* 9,100 1,176,175
PeopleSoft, Incorporated* 27,600 1,076,400
---------
4,526,569
TELECOMMUNICATION SERVICES - 0.72%
Lucent Technologies, Incorporated 16,200 1,293,975
---------
TELEPHONE - 2.24%
Airtouch Communications, Incorporated* 34,400 1,429,750
U.S. West, Incorporated 30,200 1,362,775
WorldCom, Incorporated* 41,370 1,251,442
---------
4,043,967
TOBACCO - 2.83%
Philip Morris Companies, Incorporated 72,100 3,267,031
RJR Nabisco Holdings Corporation 49,200 1,845,000
---------
5,112,031
TRUCKING & FREIGHT - 0.34%
Air Express International Corporation 2,800 85,400
Airbourne Freight Corporation 8,500 528,062
-------
613,462
TOTAL COMMON STOCKS
(Cost: $134,568,399) $153,499,477
-----------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 7.35%
$13,267,548 Navigator Securities
Lending Trust, 5.74% $13,267,548
----------
REPURCHASE AGREEMENT - 7.57%
$13,669,000 Repurchase Agreement with
State Street Bank & Trust Company
dated 12/31/97 at 5.85% to be
repurchased at $13,673,442 on
01/02/98 collateralized by
$13,505,000 U.S. Treasury Notes,
6.75% due 04/30/00 (valued at
$14,099,197, including interest) $13,669,000
----------
TOTAL INVESTMENTS (Quantitative
Equity Trust) (Cost: $161,504,947) $180,436,025
===========
EQUITY INDEX TRUST
Shares Value
------ -----
COMMON STOCKS - 70.52%
AEROSPACE - 1.27%
AlliedSignal, Incorporated 1,610 $62,689
Boeing Company 2,837 138,836
General Dynamics Corporation 177 15,299
Lockheed Martin Corporation 551 54,274
Northrop Grumman Corporation 176 20,240
Rockwell International Corporation 601 31,402
TRW, Incorporated 354 18,895
United Technologies Corporation 673 49,003
-------
390,638
AGRICULTURAL MACHINERY - 0.18%
Case Corporation 212 12,813
Deere & Company 722 42,102
------
54,915
AIR TRAVEL - 0.29%
AMR Corporation* 260 33,410
Delta Air Lines, Incorporated 209 24,871
Southwest Airlines Company 622 15,317
US Airways Group, Incorporated* 239 14,938
------
88,536
ALUMINUM - 0.21%
Alcan Aluminum, Ltd. 646 17,846
Aluminum Company of America 495 34,835
Reynolds Metals Company 209 12,540
------
65,221
APPAREL & TEXTILES - 0.24%
Fruit of The Loom, Incorporated* 214 5,484
Liz Claiborne, Incorporated 200 8,363
NIKE, Incorporated 822 32,264
Reebok International, Ltd.* 160 4,610
Russell Corporation 104 2,763
Springs Industries, Incorporated 58 3,016
Stride Rite Corporation 79 948
V.F. Corporation 362 16,629
------
74,077
AUTO PARTS - 0.20%
Dana Corporation 295 14,013
Eaton Corporation 219 19,546
Echlin, Incorporated 178 6,441
Genuine Parts Company 512 17,376
Meritor Automotive, Incorporated 115 2,422
------
59,798
AUTOMOBILES - 1.21%
Chrysler Corporation 1,941 68,299
Ford Motor Company 3,392 165,148
General Motors Corporation 2,075 125,797
PACCAR, Incorporated 221 11,603
-------
370,847
BANKING - 5.91%
Banc One Corporation 1,645 89,344
Bank of New York, Incorporated 1,092 63,131
BankAmerica Corporation 2,005 146,365
BankBoston Corporation 416 39,078
Bankers Trust New York Corporation 248 27,885
Barnett Banks, Incorporated 566 40,681
BB & T Corporation 167 10,698
Chase Manhattan Corporation 1,218 133,371
Citicorp 1,312 165,886
Comerica, Incorporated 300 27,075
Corestates Financial Corporation 582 46,596
The accompanying notes are an integral part of the financial statements.
95
<PAGE> 135
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
BANKING - CONTINUED
Fifth Third Bancorp 446 $36,461
First Chicago NBD Corporation 868 72,478
First Union Corporation 1,698 87,023
Fleet Financial Group, Incorporated 731 54,779
Huntington Bancshares, Incorporated 234 8,424
KeyCorp 629 44,541
MBNA Corporation 1,426 38,948
Mellon Bank Corporation 728 44,135
J.P. Morgan & Companies, Incorporated 518 58,469
National City Corporation 621 40,831
NationsBank Corporation 2,055 124,970
Norwest Corporation 2,130 82,271
PNC Bank Corporation 897 51,185
Republic New York Corporation 155 17,699
State Street Corporation 196 11,405
SunTrust Banks, Incorporated 619 44,181
Synovus Financial Corporation 214 7,009
U.S. Bancorp 696 77,909
Wachovia Corporation 468 37,967
Wells Fargo & Company 252 85,538
---------
1,816,333
BROADCASTING - 0.77%
Clear Channel Communications* 120 9,533
Comcast Corporation 995 31,405
Tele-Communications, Incorporated 1,697 47,410
CBS Corporation 1,895 55,784
U S West, Incorporated* 1,726 49,838
Viacom, Incorporated* 1,003 41,562
-------
235,532
BUILDING MATERIALS & CONSTRUCTION - 0.03%
Fluor Corporation 240 8,970
-----
BUSINESS SERVICES - 0.71%
Automatic Data Processing, Incorporated 833 51,125
H & R Block, Incorporated 296 13,265
Cognizant Corporation 473 21,078
Deluxe Corporation 234 8,073
R. R. Donnelley & Sons Company 417 15,533
EcoLab, Incorporated 184 10,201
First Data Corporation 1,270 37,148
Interpublic Group Companies, Incorporated 352 17,534
Laidlaw, Incorporated 912 12,426
Safety-Kleen Corporation 166 4,555
Service Corporation International 696 25,709
-------
216,647
CHEMICALS - 1.78%
Air Products & Chemicals, Incorporated 312 25,662
Dow Chemical Company 658 66,787
E.I. Du Pont De Nemours & Company 3,215 193,101
Eastman Chemical Company 223 13,282
Engelhard Corporation 410 7,124
FMC Corporation* 105 7,068
The B.F. Goodrich Company 154 6,381
W.R. Grace & Company 207 16,650
Great Lakes Chemical Corporation 170 7,629
Hercules, Incorporated 284 14,218
Monsanto Company 1,681 70,602
Morton International, Incorporated 390 13,406
Nalco Chemical Company 190 7,517
PPG Industries, Incorporated 512 29,248
Praxair, Incorporated 449 20,205
Rohm & Haas Company 176 16,852
Sigma-Aldrich Corporation 286 11,369
Solutia, Incorporated 192 5,124
Union Carbide Corporation 356 15,286
-------
547,511
COMPUTERS & BUSINESS EQUIPMENT - 4.06%
Apple Computer* 361 4,738
Applied Materials, Incorporated* 1,034 31,149
3Com Corporation 960 33,540
Bay Networks, Incorporated* 580 14,826
Cabletron Systems, Incorporated* 446 6,690
Ceridian Corporation* 223 10,216
Cisco Systems, Incorporated* 2,842 158,442
Compaq Computer Corporation 2,137 120,607
Computer Sciences Corporation* 218 18,203
Data General Corporation* 124 2,162
Dell Computer Corporation* 948 79,632
Digital Equipment Corporation* 435 16,095
EMC Corporation* 1,403 38,495
Hewlett-Packard Company 2,921 182,563
Honeywell, Incorporated 362 24,797
Intergraph Corporation 78 780
International Business Machines
Corporation 2,813 294,134
Lowe's Companies, Incorporated 494 23,558
Pitney Bowes, Incorporated 413 37,144
Seagate Technology, Incorporated* 697 13,417
Silicon Graphics, Incorporated* 503 6,256
Sun Microsystems, Incorporated* 1,050 41,869
Tandy Corporation 306 11,800
Unisys Corporation* 498 6,910
Xerox Corporation 922 68,055
---------
1,246,078
CONGLOMERATES - 0.24%
Aeroquip-Vickers, Incorporated 79 3,876
Fortune Brands, Incorporated 488 18,087
Harcourt General, Incorporated 201 11,005
ITT Industries, Incorporated* 337 10,573
Textron, Incorporated 470 29,375
------
72,916
CONSTRUCTION & MINING EQUIPMENT - 0.27%
Caterpillar, Incorporated 1,073 52,108
Dover Corporation 636 22,975
Foster Wheeler Corporation 116 3,139
Harnischfeger Industries, Incorporated 140 4,944
------
83,166
The accompanying notes are an integral part of the financial statements.
96
<PAGE> 136
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
CONSTRUCTION MATERIALS - 0.17%
Armstrong World Industries, Incorporated 116 $8,671
Masco Corporation 464 23,606
Owens-Corning 151 5,153
Sherwin Williams Company 491 13,625
------
51,055
CONTAINERS & GLASS - 0.14%
Ball Corporation 86 3,037
Bemis, Incorporated 151 6,653
Crown Cork & Seal, Incorporated 366 18,346
Owens-Illinois, Incorporated* 172 6,525
Temple-Inland, Incorporated 160 8,370
------
42,931
COSMETICS & TOILETRIES - 0.14%
Alberto Culver Company 160 5,130
Avon Products, Incorporated 376 23,077
International Flavours & Fragrances,
Incorporated 311 16,017
------
44,224
CRUDE PETROLEUM & NATURAL GAS - 0.40%
Anadarko Petroleum Corporation 73 4,430
Apache Corporation 110 3,857
Burlington Resources, Incorporated 503 22,541
EEX Corporation 170 1,541
Enron Oil & Gas Company 870 36,159
Occidental Petroleum Corporation 940 27,554
Oryx Energy Company* 300 7,650
Santa Fe Energy Resources, Incorporated* 162 1,822
Union Pacific Resources Group,
Incorporated 722 17,508
-------
123,062
DOMESTIC OIL - 0.77%
Amerada Hess Corporation 263 14,432
Ashland, Incorporated 212 11,382
Atlantic Richfield Company 915 73,314
Kerr-McGee Corporation 136 8,611
Pennzoil Company 134 8,953
Phillips Petroleum Company 750 36,469
Sun Company, Incorporated 208 8,749
Tenneco, Incorporated 486 19,197
Unocal Corporation 707 27,440
USX-Marathon Group 819 27,641
-------
236,188
DRUGS & HEALTH CARE - 7.72%
Abbott Laboratories 2,197 144,041
Allergan, Incorporated 185 6,209
ALZA Corporation* 242 7,699
American Home Products Corporation 1,838 140,607
Amgen, Incorporated 754 40,810
Bausch & Lomb, Incorporated 158 6,261
Baxter International, Incorporated 793 39,997
Becton Dickinson & Company 347 17,350
Beverly Enterprises, Incorporated* 161 2,093
Biomet, Incorporated 317 8,123
Bristol-Myers Squibb Company 2,841 268,830
Cardinal Health, Incorporated 309 23,214
Columbia/HCA Healthcare Corporation 1,883 55,784
C.R. Bard, Incorporated 163 5,104
Crescendo Pharmaceuticals Corporation 6 69
Eli Lilly & Company 3,164 220,294
Guidant Corporation 421 26,207
HEALTHSOUTH Corporation* 1,031 28,610
Humana, Incorporated* 465 9,649
Johnson & Johnson 3,789 249,600
Mallinckrodt, Incorporated 209 7,942
Manor Care, Incorporated 181 6,335
Medtronic, Incorporated 1,346 70,413
Merck & Company, Incorporated 3,436 365,075
Pfizer, Incorporated 3,676 274,092
Pharmacia & Upjohn, Incorporated 1,445 52,923
Pharmerica, Incorporated 73 757
Schering-Plough Corporation 2,084 129,469
St. Jude Medical, Incorporated* 260 7,930
Tenet Healthcare Corporation* 859 28,454
United Healthcare Corporation 531 26,384
United States Surgical Corporation 209 6,126
Warner-Lambert Company 773 95,852
---------
2,372,303
ELECTRIC UTILITIES - 1.90%
American Electric Power, Incorporated 537 27,723
Baltimore Gas & Electric Company 420 14,306
Carolina Power & Light Company 430 18,248
Central & South West Corporation 604 16,346
CINergy Corporation 449 17,202
Consolidated Edison Company of
New York, Incorporated 669 27,429
Dominion Resources, Incorporated 526 22,388
DTE Energy Company 413 14,326
Duke Energy Company 1,023 56,649
Edison International 1,151 31,293
Entergy Corporation 681 20,387
FirstEnergy Corporation 529 15,341
FPL Group, Incorporated 519 30,718
GPU, Incorporated 344 14,491
Houston Industries, Incorporated 896 23,912
Niagara Mohawk Power Corporation* 411 4,316
Northern States Power Company 202 11,767
PP&L Resources, Incorporated 469 11,227
PacifiCorp 842 22,997
Peco Energy Company 633 15,350
PG&E Corporation 1,200 36,525
Public Service Enterprise Group 661 20,945
Southern Company 1,944 50,301
Texas Utilities Company 684 28,429
Unicom Corporation 615 18,911
Union Electric Company 291 12,586
-------
584,113
The accompanying notes are an integral part of the financial statements.
97
<PAGE> 137
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
ELECTRICAL EQUIPMENT - 2.77%
Boston Scientific Corporation* 553 $25,369
Cooper Industries, Incorporated 341 16,709
Emerson Electric Company 1,265 71,393
General Electric Company 9,328 684,442
General Semiconductor, Incorporated 59 682
General Signal Corporation 144 6,075
W.W. Grainger, Incorporated 145 14,092
Johnson Controls, Incorporated 238 11,365
Millipore Corporation* 124 4,208
National Service Industries, Incorporated 128 6,344
Raychem Corporation 249 10,723
-------
851,402
ELECTRONICS - 2.19%
Advanced Micro Devices, Incorporated* 400 7,175
AMP, Incorporated 625 26,250
Andrew Corporation 258 6,192
Commscope, Incorporated 79 1,061
DSC Communications Corporation* 335 8,040
EG & G, Incorporated 131 2,726
Harris Corporation 227 10,414
Intel Corporation 4,655 327,014
KLA-Tencor Corporation 102 3,940
LSI Logic Corporation* 403 7,959
Micron Technology, Incorporated* 599 15,574
Motorola, Incorporated 1,693 96,607
National Semiconductor Corporation* 426 11,049
Nextlevel Systems, Incorporated 418 7,472
Perkin-Elmer Corporation 125 8,883
Raytheon Company, Class A 132 6,509
Raytheon Company, Class B 673 33,987
Scientific-Atlanta, Incorporated 221 3,702
TekTronix, Incorporated 142 5,636
Tellabs, Incorporated* 514 27,178
Texas Instruments, Incorporated 1,089 49,005
Thomas & Betts Corporation 155 7,324
-------
673,697
FINANCIAL SERVICES - 4.14%
H.F. Ahmanson & Company 282 18,876
American Express Company 1,341 119,684
Beneficial Corporation 152 12,635
Countrywide Credit Industries,
Incorporated 301 12,905
Equifax, Incorporated 429 15,203
Federal Home Loan Mortgage
Corporation 1,978 82,952
Federal National Mortgage Association 3,020 172,329
Green Tree Financial Corporation 387 10,134
Golden West Financial Corporation 162 15,846
Hartford Financial Services Group 335 31,343
Household International, Incorporated 304 38,779
Merrill Lynch & Company, Incorporated 943 68,780
Morgan Stanley Dean Witter 1,647 97,379
Providian Financial Corporation 267 12,065
Charles Schwab Corporation 749 31,411
SPDR Trust 3,990 387,279
Travelers Group, Incorporated 1,858 100,100
Washington Mutual, Incorporated 712 45,434
---------
1,273,134
FOOD & BEVERAGES - 4.31%
Archer-Daniels-Midland Company 1,594 34,570
Campbell Soup Company 1,317 76,551
The Coca-Cola Company 7,057 470,173
ConAgra, Incorporated 1,354 44,428
CPC International, Incorporated 409 44,070
General Mills, Incorporated 457 32,733
H.J. Heinz Company 1,048 53,251
Hershey Foods Corporation 423 26,199
Kellogg Company 1,178 58,458
PepsiCo, Incorporated 4,359 158,831
Pioneer Hi-Bred International,
Incorporated 213 22,844
Quaker Oats Company 389 20,520
Ralston Purina Company 303 28,160
Sara Lee Corporation 1,367 76,979
Super Valu, Incorporated 171 7,161
Sysco Corporation 496 22,599
Unilever N.V. 1,822 113,761
Whitman Corporation 289 7,532
William Wrigley Jr Company 331 26,335
---------
1,325,155
FOREST PRODUCTS - 0.18%
Georgia-Pacific Corporation 261 15,856
Georgia-Pacific Corporation
(Timber Group) 261 5,921
Louisiana Pacific Corporation 311 5,909
Weyerhaeuser Company 566 27,769
------
55,455
GAS & PIPELINE UTILITIES - 0.34%
Coastal Corporation 302 18,705
Columbia Gas System, Incorporated 158 12,413
Consolidated Natural Gas Company 271 16,396
Eastern Enterprises 58 2,610
NICOR, Incorporated 138 5,822
Pacific Enrterprises 237 8,917
Peoples Energy Corporation 100 3,937
Sonat, Incorporated 245 11,209
Williams Companies, Incorporated 902 25,594
-------
105,603
GOLD - 0.08%
Barrick Gold Corporation 1,061 19,761
Battle Mountain Gold Company 654 3,842
-----
23,603
HOMEBUILDERS - 0.03%
Centex Corporation 82 5,161
Kaufman & Broad Home Corporation 110 2,468
Pulte Corporation 60 2,509
------
10,138
The accompanying notes are an integral part of the financial statements.
98
<PAGE> 138
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
HOTELS & RESTAURANTS - 0.65%
Darden Restaurants, Incorporated 435 $5,437
Hilton Hotels Corporation 711 21,152
ITT Corporation 331 27,432
Marriot International, Incorporated 362 25,069
McDonald's Corporation 1,961 93,638
Mirage Resorts, Incorporated* 219 4,982
Tricon Global Restaurants, Incorporated* 435 12,642
Wendy's International, Incorporated 374 8,999
-------
199,351
HOUSEHOLD APPLIANCES - 0.13%
Maytag Corporation 279 10,410
Newell Company 452 19,210
Whirlpool Corporation 212 11,660
------
41,280
HOUSEHOLD PRODUCTS - 2.03%
Black & Decker Corporation 268 10,469
Clorox Company 294 23,244
Colgate-Palmolive Company 841 61,814
Corning, Incorporated 654 24,280
Gillette Company 1,589 159,595
Procter & Gamble Company 3,851 307,358
Rubbermaid, Incorporated 426 10,650
Snap-On, Incorporated 174 7,591
The Stanley Works 253 11,938
Tupperware Corporation 175 4,878
-------
621,817
INDUSTRIAL MACHINERY - 0.50%
Briggs & Stratton Corporation 72 3,496
Cincinnati Milacron, Incorporated 114 2,957
Crane Company 130 5,639
Cummins Engine, Incorporated 109 6,438
Ingersoll-Rand Company 467 18,913
NACCO Industries, Incorporated 23 2,465
Pall Corporation 361 7,468
Parker-Hannifin Corporation 318 14,588
Thermo Electron Corporation* 428 19,046
Timken Company 178 6,119
Tyco International, Ltd. 1,443 65,025
UNOVA, Incorporated 87 1,430
-------
153,584
INSURANCE - 2.80%
Aetna, Incorporated 428 30,201
Allstate Corporation 1,248 113,412
American General Corporation 695 37,573
American International Group,
Incorporated 2,000 217,500
Aon Corporation 474 27,788
ChoicePoint, Incorporated 24 1,146
Chubb Corporation 495 37,434
CIGNA Corporation 210 36,343
Conseco, Incorporated 527 23,946
General Re Corporation 228 48,336
Jefferson-Pilot Corporation 202 15,731
Lincoln National Corporation 293 22,891
Loews Corporation 328 34,809
Marsh & McLennan Companies,
Incorporated 475 35,417
MBIA, Incorporated 249 16,636
MGIC Investment Corporation 331 22,012
Progressive Corporation 88 10,549
SAFECO Corporation 375 18,281
ST. Paul Companies, Incorporated 239 19,613
SunAmerica, Incorporated 556 23,769
Torchmark, Incorporated 395 16,615
Transamerica Corporation 185 19,702
UNUM Corporation 398 21,641
USF&G Corporation 315 6,950
-------
858,295
INTERNATIONAL OIL - 4.13%
Amoco Corporation 1,402 119,345
Chevron Corporation 1,861 143,297
Exxon Corporation 7,056 431,739
Mobil Corporation 2,238 161,556
Royal Dutch Petroleum Company 6,102 330,652
Texaco, Incorporated 1,526 82,976
--------
1,269,565
LEISURE TIME - 0.69%
Brunswick Corporation 282 8,548
Harrahs Entertainment, Incorporated* 290 5,474
King World Productions, Incorporated 106 6,121
The Walt Disney Company 1,921 190,299
-------
210,442
LIQUOR - 0.36%
Adolph Coors Company 106 3,524
Anheuser-Busch Companies,
Incorporated 1,406 61,864
Brown-Forman Corporation 196 10,829
Seagram Company, Ltd. 1,055 34,090
-------
110,307
MINING - 0.16%
Cyprus Amax Minerals Company 266 4,090
Echo Bay Mines, Ltd.* 396 965
Freeport McMoRan Copper & Gold 568 8,946
Homestake Mining Company 418 3,710
Newmont Mining Corporation 444 13,043
Phelps Dodge Corporation 175 10,894
Placer Dome, Incorporated 682 8,653
------
50,301
MISCELLANEOUS - 0.25%
Cendant Corporation* 2,247 77,241
------
MOBILE HOMES - 0.01%
Fleetwood Enterprises, Incorporated 102 4,329
-----
NEWSPAPERS - 0.44%
Dow Jones & Company, Incorporated 272 14,603
Gannett, Incorporated 806 49,821
Knight-Ridder, Incorporated 255 13,260
New York Times Company 272 17,986
The accompanying notes are an integral part of the financial statements.
99
<PAGE> 139
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
NEWSPAPERS - CONTINUED
Times Mirror Company 272 $16,728
Tribune Company 349 21,725
-------
134,123
NON-FERROUS METALS - 0.04%
ASARCO, Incorporated 121 2,715
Inco, Ltd. 474 8,058
------
10,773
OFFICE FURNISHINGS & SUPPLIES - 0.09%
Avery Dennison Corporation 294 13,156
Ikon Office Solutions, Incorporated 377 10,603
Moore Corporation, Ltd. 251 3,796
------
27,555
PAPER - 0.94%
Boise Cascade Corporation 147 4,447
Champion International Corporation 272 12,325
Fort James Corporation 371 14,191
International Paper Company 858 37,001
Kimberly-Clark Corporation 1,589 78,358
Mead Corporation 298 8,344
Minnesota Mining & Manufacturing
Company 1,184 97,162
Potlatch Corporation 82 3,526
Stone Container Corporation* 282 2,943
Union Camp Corporation 197 10,577
Westvaco Corporation 291 9,148
Willamette Industries, Incorporated 316 10,171
-------
288,193
PETROLEUM SERVICES - 0.73%
Baker Hughes, Incorporated 474 20,678
Dresser Industries, Incorporated 500 20,969
Halliburton Company 721 37,447
Helmerich & Payne, Incorporated 71 4,819
McDermott International, Incorporated 157 5,750
ONEOK, Incorporated 83 3,351
Rowan Companies, Incorporated* 245 7,472
Schlumberger, Ltd. 1,407 113,263
Western Atlas, Incorporated* 153 11,322
-------
225,071
PHOTOGRAPHY - 0.21%
Eastman Kodak Company 932 56,677
Polaroid Corporation 129 6,281
------
62,958
PLASTICS - 0.14%
Illinois Tool Works, Incorporated 710 42,689
------
POLLUTION CONTROL - 0.16%
Browning Ferris Industries, Incorporated 370 13,690
Waste Management, Incorporated 1,289 35,447
------
49,137
PUBLISHING - 0.49%
American Greetings Corporation 214 8,373
Dun & Bradstreet Corporation 486 15,036
John H. Harland Company 88 1,848
McGraw-Hill Companies, Incorporated 283 20,942
Meredith Corporation 152 5,424
Time Warner, Incorporated 1,592 98,704
-------
150,327
RAILROADS & EQUIPMENT - 0.49%
Burlington Northern Santa Fe 440 40,892
CSX Corporation 619 33,426
Norfolk Southern Corporation 1,073 33,062
Union Pacific Corporation 703 43,894
-------
151,274
RETAIL GROCERY - 0.34%
Albertsons, Incorporated 707 33,494
American Stores Company 775 15,936
Fleming Companies, Incorporated 107 1,438
Giant Foods, Incorporated 170 5,727
Great Atlantic & Pacific Tea,
Incorporated 109 3,236
Kroger Company* 723 26,706
Winn-Dixie Stores, Incorporated 424 18,523
-------
105,060
RETAIL TRADE - 2.88%
AutoZone, Incorporated 430 12,470
Charming Shoppes, Incorporated 300 1,406
Circuit City Stores, Incorporated 279 9,922
Costco Companies, Incorporated* 603 26,909
CVS Corporation 481 30,814
Dayton Hudson Corporation 618 41,715
Dillard's, Incorporated 321 11,315
Federated Department Stores,
Incorporated* 594 25,579
Gap, Incorporated 1,158 41,037
Home Depot, Incorporated 2,075 122,166
Jostens, Incorporated 111 2,560
Kmart Corporation* 1,382 15,979
The Limited, Incorporated 772 19,686
Longs Drug Stores Corporation 111 3,566
May Department Stores Company 669 35,248
Mercantile Stores, Incorporated 105 6,392
Nordstrom, Incorporated 223 13,464
J.C. Penney, Incorporated 705 42,520
Pep Boys-Manny, Moe & Jack 176 4,202
Rite Aid Corporation 349 20,482
Sears Roebuck & Company 1,115 50,454
TJX Companies, Incorporated 452 15,537
Toys R Us, Incorporated* 813 25,559
Wal-Mart Stores, Incorporated 6,446 254,214
Walgreen Company 1,402 43,988
Woolworth Corporation* 383 7,804
-------
884,988
SOFTWARE - 2.08%
Adobe Systems, Incorporated 205 8,456
Autodesk, Incorporated 137 5,069
Computer Associates International,
Incorporated 1,552 82,062
HBO & Company 242 11,616
Microsoft Corporation* 3,411 440,872
Novell, Incorporated* 990 7,425
The accompanying notes are an integral part of the financial statements.
100
<PAGE> 140
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
SOFTWARE - CONTINUED
Oracle Systems Corporation* 2,789 $62,230
Parametric Technology Corporation* 363 17,197
Shared Medical Systems Corporation 70 4,620
-------
639,547
STEEL - 0.14%
Allegheny Teldyne, Incorporated 501 12,963
Armco, Incorporated* 305 1,506
Bethleham Steel Corporation* 320 2,760
Inland Steel Industries, Incorporated 139 2,380
Nucor Corporation 250 12,078
USX-U.S. Steel Group 244 7,625
Worthington Industries, Incorporated 275 4,538
------
43,850
TELECOMMUNICATION SERVICES - 0.99%
AirTouch Communications, Incorporated* 1,433 59,559
ALLTEL Corporation 531 21,801
Frontier Corporation 467 11,237
Lucent Technologies, Incorporated 1,823 145,612
Northern Telecom, Ltd. 742 66,038
-------
304,247
TELEPHONE - 4.54%
American Telephone & Telegraph
Corporation 4,624 283,220
Ameritech Corporation 1,563 125,821
Bell Atlantic Corporation 2,209 201,019
BellSouth Corporation 2,823 158,970
GTE Corporation 2,719 142,068
MCI Communications Corporation 1,961 83,955
SBC Communications, Incorporated 2,598 190,303
Sprint Corporation 1,225 71,816
U.S. West, Incorporated 1,364 61,550
Worldcom, Incorporated* 2,553 77,228
---------
1,395,950
TIRES & RUBBER - 0.11%
Cooper Tire & Rubber Company 224 5,460
Goodyear Tire & Rubber Company 444 28,249
------
33,709
TOBACCO - 1.08%
Philip Morris Companies, Incorporated 6,905 312,883
UST, Incorporated 523 19,318
332,201
TOYS, AMUSEMENTS & SPORTING GOODS - 0.14%
Hasbro, Incorporated 363 11,434
Mattel, Incorporated 828 30,843
------
42,277
TRUCKING & FREIGHT - 0.12%
Caliber Systems, Incorporated 111 5,404
Federal Express Corporation* 327 19,968
------
Navistar International Corporation,
Incorporated* 208 5,161
Ryder System, Incorporated 219 7,172
------
37,705
TOTAL COMMON STOCKS (Cost: $21,346,162) $21,661,394
----------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 24.89%
$400,000 Caterpillar Financial Services NV,
5.66% due 02/17/98 $397,044
400,000 Cregem North America, Incorporated,
5.685% due 02/18/98 396,968
1,500,000 Federal National Mortgage Association,
5.64% due 02/11/98 1,490,365
400,000 Merrill Lynch & Company, Incorporated,
5.71% due 02/18/98 396,955
400,000 MetLife Funding, Incorporated,
5.72% due 02/22/98 398,665
3,720,737 Navigator Securities
Lending Trust, 5.74% 3,720,737
250,000 United Parcel Service,
5.60% due 02/13/98 248,328
United States Treasury Bills,****
100,000 5.11% due 02/12/98 99,404
500,000 5.12% due 02/12/98 497,013
---------
7,645,479
REPURCHASE AGREEMENT - 4.59%
$1,411,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.85% to be repurchased
at $1,411,459 on 01/02/98,
collateralized by $1,415,000
U.S. Treasury Notes, 6.375% due
04/30/99 (valued at $1,457,341,
including interest) $1,411,000
---------
TOTAL INVESTMENTS
(Equity Index Trust) (Cost: $30,402,641) $30,717,873
==========
BLUE CHIP GROWTH TRUST
Shares Value
------ -----
COMMON STOCKS - 85.97%
AEROSPACE - 1.88%
AlliedSignal, Incorporated 239,200 $9,313,850
Boeing Company 23,500 1,150,031
Lockheed Martin Corporation 39,800 3,920,300
----------
14,384,181
AIR TRAVEL - 0.20%
Galileo International, Incorporated 56,300 1,555,288
---------
APPAREL & TEXTILES - 1.06%
Unifi, Incorporated 79,600 3,238,725
Warnaco Group, Incorporated, Class A 155,100 4,866,263
---------
8,104,988
AUTO PARTS - 0.88%
Danaher Corporation 106,800 6,741,750
---------
BANKING - 7.94%
Banc One Corporation 114,000 6,191,625
BankBoston Corporation 53,000 4,978,687
The accompanying notes are an integral part of the financial statements.
101
<PAGE> 141
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
BANKING - CONTINUED
The Chase Manhattan Corporation 59,800 $6,548,100
Citicorp 55,300 6,991,994
First Union Corporation 107,600 5,514,500
Mellon Bank Corporation 144,100 8,736,063
Mercantile Bancorporation,
Incorporated 30,400 1,869,600
NationsBank Corporation 66,500 4,044,031
Norwest Corporation 191,800 7,408,275
U.S. Bancorp 52,000 5,820,750
Wells Fargo & Company 7,900 2,681,556
----------
60,785,181
BROADCASTING - 0.50%
U.S. West, Incorporated* 132,300 3,820,163
---------
BUSINESS SERVICES - 4.45%
Automatic Data Processing,
Incorporated 89,100 5,468,512
H & R Block, Incorporated 113,600 5,090,700
R. R. Donnelley & Sons Company 34,900 1,300,025
First Data Corporation 184,700 5,402,475
National Data Corporation 39,600 1,430,550
Nokia Corporation, ADR 33,900 2,373,000
Omnicom Group 83,800 3,551,025
Service Corporation International 154,500 5,706,844
SunGard Data Systems, Incorporated* 120,400 3,732,400
----------
34,055,531
CHEMICALS - 1.74%
E.I. Du Pont De Nemours & Company 54,000 3,243,375
Great Lakes Chemical Corporation 77,400 3,473,325
Hercules, Incorporated 67,400 3,374,213
Olin Corporation 30,000 1,406,250
Sigma-Aldrich Corporation 45,000 1,788,750
----------
13,285,913
COMPUTERS & BUSINESS EQUIPMENT - 4.36%
Cisco Systems, Incorporated* 106,350 5,929,013
Compaq Computer Corporation 84,250 4,754,859
Dell Computer Corporation* 25,500 2,142,000
EMC Corporation* 62,000 1,701,125
Hewlett-Packard Company 67,400 4,212,500
Honeywell, Incorporated 65,800 4,507,300
International Business Machines
Corporation 61,100 6,388,769
Sun Microsystems, Incorporated* 39,600 1,579,050
Xerox Corporation 29,000 2,140,562
----------
33,355,178
CONGLOMERATES - 0.27%
Textron, Incorporated 33,000 2,062,500
---------
CONSTRUCTION MATERIALS - 0.57%
Masco Corporation 86,000 4,375,250
---------
CONTAINERS & GLASS - 0.32%
Crown Cork & Seal, Incorporated 49,100 2,461,138
---------
CRUDE PETROLEUM & NATURAL GAS - 0.27%
BJ Services Company* 29,000 2,086,188
---------
DOMESTIC OIL - 0.96%
Atlantic Richfield Company 50,300 4,030,288
USX-Marathon Group 99,100 3,344,625
---------
7,374,913
DRUGS & HEALTH CARE - 11.39%
Abbott Laboratories 38,300 2,511,044
American Home Products Corporation 79,900 6,112,350
Baxter International, Incorporated 40,700 2,052,806
Biogen, Incorporated* 41,000 1,491,375
Bristol-Myers Squibb Company 69,000 6,529,125
General Nutrition Companies,
Incorporated* 99,100 3,369,400
HEALTHSOUTH Corporation* 144,000 3,996,000
Johnson & Johnson 99,700 6,567,738
Eli Lilly & Company 34,200 2,381,175
McKesson Corporation 6,200 670,762
Medtronic, Incorporated 65,300 3,416,006
Merck & Company, Incorporated 88,200 9,371,250
Pfizer, Incorporated 123,800 9,230,837
Schering-Plough Corporation 84,800 5,268,200
SmithKline Beecham PLC, ADR 96,400 4,958,575
St. Jude Medical, Incorporated 48,000 1,464,000
Tenet Healthcare Corporation* 107,500 3,560,938
United Healthcare Corporation 112,000 5,565,000
United States Surgical Corporation 133,300 3,907,356
Warner-Lambert Company 38,700 4,798,800
----------
87,222,737
ELECTRICAL EQUIPMENT - 2.01%
ASM Lithography Holding NV 18,500 1,248,750
Boston Scientific Corporation* 59,100 2,711,212
General Electric Company 103,800 7,616,325
Hubbell, Incorporated, Class B 77,400 3,816,787
----------
15,393,074
ELECTRONICS - 2.69%
Intel Corporation 73,600 5,170,400
KLA-Tencor Corporation 21,000 811,125
Linear Technology Corporation 36,000 2,074,500
Maxim Integrated Products,
Incorporated* 88,000 3,036,000
Motorola, Incorporated 45,700 2,607,756
Raytheon Company 20,800 1,050,400
Teleflex, Incorporated 154,000 5,813,500
----------
20,563,681
FINANCIAL SERVICES - 6.60%
American Express Company 82,900 7,398,825
Associates First Capital Corporation 6,000 426,750
CIT Group, Incorporated 31,200 1,006,200
Corporate Express, Incorporated* 122,500 1,577,188
Federal Home Loan Mortgage
Corporation 199,900 8,383,306
Federal National Mortgage Association 146,900 8,382,481
Household International, Incorporated 41,800 5,332,113
The Money Store, Incorporated 34,600 726,600
Morgan Stanley Dean Witter 26,300 1,554,987
SLM Holding Corporation 39,600 5,509,350
The accompanying notes are an integral part of the financial statements.
102
<PAGE> 142
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
FINANCIAL SERVICES - CONTINUED
Travelers Group, Incorporated 189,700 $10,220,088
----------
50,517,888
FOOD & BEVERAGES - 4.43%
Cadbury Schweppes 250,000 2,523,209
Dean Foods Company 30,000 1,785,000
H.J. Heinz Company 65,000 3,302,813
Hershey Foods Corporation 37,500 2,322,656
Interstate Bakeries Corporation 53,200 1,988,350
JP Foodservices, Incorporated* 58,748 2,169,986
Nabisco Holdings Corporation, Class A 67,300 3,259,844
PepsiCo, Incorporated 153,900 5,607,731
Ralston Purina Company 31,400 2,918,237
Sara Lee Corporation 120,300 6,774,393
Unilever NV 20,800 1,298,700
----------
33,950,919
GAS PIPELINE UTILITIES - 0.45%
Cooper Cameron Corporation* 56,600 3,452,600
---------
HOTELS & RESTAURANTS - 0.31%
McDonald's Corporation 49,700 2,373,175
---------
HOUSEHOLD APPLIANCES - 0.70%
Newell Company 78,300 3,327,750
Sony Company, ADR 22,000 1,996,500
---------
5,324,250
HOUSEHOLD PRODUCTS - 1.98%
Black & Decker Corporation 14,000 546,875
Colgate-Palmolive Company 68,700 5,049,450
Corning, Incorporated 52,900 1,963,913
Gillette Company 14,600 1,466,387
Procter & Gamble Company 42,600 3,400,013
The Stanley Works 58,400 2,755,750
----------
15,182,388
INDUSTRIAL MACHINERY - 1.47%
SPX Corporation 38,600 2,663,400
Tyco International, Ltd. 191,532 8,630,911
----------
11,294,311
INSURANCE - 4.21%
ACE, Ltd. 87,200 8,414,800
American International Group,
Incorporated 26,150 2,843,813
EXEL, Ltd.* 59,000 3,739,125
Mid Ocean, Ltd. 70,000 3,797,500
St. Paul Companies, Incorporated 47,600 3,906,175
Travelers Property Casualty
Corporation, Class A 152,600 6,714,400
UNUM Corporation 51,400 2,794,875
----------
32,210,688
INTERNATIONAL OIL - 1.91%
The British Petroleum Company
PLC, ADR 55,800 4,446,562
Mobil Corporation 89,600 6,468,000
Texaco, Incorporated 68,400 3,719,250
----------
14,633,812
LEISURE TIME - 1.73%
Carnival Corporation, Class A 103,900 5,753,463
The Walt Disney Company 75,300 7,459,406
----------
13,212,869
MINING - 0.29%
Newmont Mining Corporation 74,500 2,188,438
---------
MISCELLANEOUS - 0.96%
Cendant Corporation* 215,800 7,418,125
---------
NEWSPAPERS - 0.79%
Tribune Company 97,500 6,069,375
---------
OFFICE FURNISHINGS & SUPPLIES - 0.22%
Wallace Computer Service,
Incorporated 42,500 1,652,187
---------
PAPER - 0.57%
Kimberly-Clark Corporation 88,800 4,378,950
---------
PETROLEUM SERVICES - 0.61%
Camco International, Incorporated 14,500 923,469
Halliburton Company 71,800 3,729,112
---------
4,652,581
POLLUTION CONTROL - 0.43%
USA Waste Services, Incorporated* 83,500 3,277,375
---------
PUBLISHING - 1.01%
Time Warner, Incorporated 88,100 5,462,200
Valassis Communications, Incorporated* 62,400 2,308,800
---------
7,771,000
RAILROADS & EQUIPMENT - 0.53%
Burlington Northern Santa Fe 35,200 3,271,400
Norfolk Southern Corporation 25,600 788,800
---------
4,060,200
REAL ESTATE - 1.32%
Crescent Real Estate Equities 48,000 1,890,000
Patriot American Hospitality,
Incorporated 99,998 2,881,192
Starwood Lodging Trust 92,500 5,353,438
----------
10,124,630
RETAIL GROCERY - 1.25%
American Stores Company 77,500 1,593,594
Safeway, Incorporated* 126,400 7,994,800
---------
9,588,394
RETAIL TRADE - 3.97%
CVS Corporation 96,283 6,168,130
Dayton Hudson Corporation 21,000 1,417,500
Federated Department Stores,
Incorporated* 89,600 3,858,400
Fred Meyer, Incorporated 70,400 2,560,800
The Home Depot, Incorporated 70,350 4,141,856
Kohl's Corporation* 41,500 2,827,187
Neiman-Marcus Group, Incorporated* 95,000 2,873,750
J.C. Penney, Incorporated 32,000 1,930,000
The accompanying notes are an integral part of the financial statements.
103
<PAGE> 143
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
RETAIL TRADE - CONTINUED
Wal-Mart Stores, Incorporated 116,500 $4,594,469
----------
30,372,092
SOFTWARE - 3.27%
BMC Software, Incorporated* 92,600 6,076,875
Microsoft Corporation* 57,000 7,367,250
Networks Associates, Incorporated* 89,400 4,727,025
Oracle Systems Corporation* 62,000 1,383,375
Parametric Technology Corporation* 71,700 3,396,787
Synopsys, Incorporated* 57,400 2,052,050
----------
25,003,362
TELECOMMUNICATION SERVICES - 0.57%
ALLTEL Corporation 75,000 3,079,687
Lucent Technologies, Incorporated 16,300 1,301,962
---------
4,381,649
TELEPHONE - 3.19%
American Telephone & Telegraph
Corporation 80,200 4,912,250
MCI Communications Corporation 114,900 4,919,156
SBC Communications, Incorporated 112,700 8,255,275
Vodafone Group PLC, ADR 45,300 3,284,250
WorldCom, Incorporated* 101,300 3,064,325
----------
24,435,256
TOBACCO - 1.01%
Philip Morris Companies, Incorporated 170,600 7,730,312
---------
TOYS, AMUSEMENTS & SPORTING GOODS - 0.70%
Mattel, Incorporated 143,300 5,337,925
---------
TOTAL COMMON STOCKS
(Cost: $504,763,949) $658,222,405
-----------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 13.98%
$6,319,000 Caisse Des Depots Et Consign,
5.85% due 01/15/98 $6,304,624
30,000,000 CIESCO LP, 5.60% due 02/10/98 29,813,334
55,974,160 Navigator Securities
Lending Trust, 5.74% 55,974,160
15,000,000 Transamerica Finance Corporation,
5.70% due 01/23/98 14,947,750
-----------
107,039,868
REPURCHASE AGREEMENT - 0.05%
$367,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $367,102 on
01/02/98, collateralized by
$375,380 U.S. Treasury Notes,
6.00% due 08/15/00 (valued at
$383,592, including interest) $367,000
-------
TOTAL INVESTMENTS
(Blue Chip Growth Trust) (Cost: $612,170,817) $765,629,273
===========
REAL ESTATE SECURITIES TRUST
COMMON STOCKS - 87.08%
REAL ESTATE - 87.08%
Apartment Investment & Management
Company, Class A 110,500 $4,060,875
Arden Realty, Incorporated 45,850 1,409,888
Avalon Properties, Incorporated 49,300 1,525,219
Bay Apartment Communities,
Incorporated 32,650 1,273,350
Boston Properties, Incorporated 124,400 4,112,975
Brandywine Realty Trust SBI 4,200 105,525
BRE Properties, Incorporated 52,700 1,482,188
Camden Property Trust 129,000 3,999,000
Capital Trust* 82,000 922,500
CarrAmerica Realty Corporation 85,300 2,702,944
CBL & Associates Properties,
Incorporated 117,200 2,893,375
Centerpoint Properties Corporation 23,987 842,543
Chateau Communities, Incorporated 31,570 994,455
Chelsea GCA Realty, Incorporated 75,400 2,879,338
Colonial Properties Trust 109,250 3,291,156
Cornerstone Properties, Incorporated 60,000 1,151,250
Cousins Properties, Incorporated 111,350 3,263,947
Crescent Real Estate Equities 150,570 5,928,694
Developers Diversified Realty 95,000 3,633,750
Duke Realty Investments, Incorporated 94,500 2,291,625
Equity Office Properties Trust, REIT 170,480 5,380,775
Equity Residential Properties Trust 130,912 6,619,238
Essex Property Trust 91,950 3,218,250
Excel Realty Trust, Incorporated 69,700 2,195,550
Federal Realty Investment Trust 53,100 1,367,325
FelCor Suite Hotels, Incorporated 105,800 3,755,900
First Industrial Realty Trust,
Incorporated 118,000 4,262,750
Franchise Finance Corporation
of America 51,800 1,398,600
Gables Residential Trust 23,300 643,663
General Growth Properties,
Incorporated 45,800 1,654,525
Glenborough Realty Trust, Incorporated 38,100 1,128,713
Glimcher Realty Trust 26,000 586,625
Highwoods Properties, Incorporated 121,800 4,529,437
Hospitality Properties Trust 39,100 1,285,413
Irvine Apartment Communities,
Incorporated 30,700 976,644
JDN Realty Corporation 95,200 3,082,100
Kilroy Realty Corporation 33,600 966,000
Kimco Realty Corporation 51,400 1,811,850
Liberty Property 61,200 1,748,025
Mack-California Realty Corporation 68,200 2,796,200
Macerich Company 116,300 3,314,550
Manufactured Home Communities,
Incorporated 110,400 2,980,800
Merry Land and Investment Company 51,100 1,168,912
Mid-America Apartment Communities,
Incorporated 24,500 699,781
The accompanying notes are an integral part of the financial statements.
104
<PAGE> 144
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
REAL ESTATE - CONTINUED
Mills Corporation 88,300 $2,163,350
New Plan Realty Trust 76,100 1,940,550
Patriot American Hospitality,
Incorporated 125,171 3,606,489
Post Properties,
Incorporated 36,291 1,474,322
Prentiss Properties Trust 34,100 952,669
Public Storage,
Incorporated 132,950 3,905,406
Reckson Associates Realty
Corporation 43,700 1,108,887
Regency Realty Corporation 29,700 822,319
Secuity Capital Atlantic,
Incorporated 59,700 1,261,162
Security Capital Industrial Trust 146,600 3,646,675
Security Capital Pacific Trust 116,950 2,836,037
Shurgard Storage Centers, Incorporated 38,400 1,113,600
Simon DeBartolo Group, Incorporated 155,360 5,078,330
Spieker Properties, Incorporated 65,400 2,804,025
Starwood Lodging Trust 60,800 3,518,800
Storage USA, Incorporated 73,700 2,943,394
Summit Properties, Incorporated 31,900 673,887
Sun Communities, Incorporated 20,700 743,906
Taubman Centers, Incorporated 68,200 886,600
Trammell Crow Company* 31,700 816,275
Trinet Corporation Realty Trust,
Incorporated 27,250 1,054,234
United Dominion Realty Trust,
Incorporated 122,729 1,710,535
Urban Shopping Centers, Incorporated 22,700 791,663
Vornado Realty Trust 117,250 5,503,422
Weeks Corporation 28,500 912,000
Weingarten Realty Investments 44,750 2,005,359
-----------
160,610,119
TOTAL COMMON STOCKS
(Cost: $147,362,725) $160,610,119
-----------
WARRANTS - 0.04%*
INSURANCE - 0.04%
Security Capital Group, Incorporated
(Expiration date 09/18/98;
strike price $28.00) 15,069 79,112
------
TOTAL WARRANTS (Cost: $0) $79,112
------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 12.47%
$23,007,430 Navigator Securities
Lending Trust, 5.74% $23,007,430
----------
REPURCHASE AGREEMENT - 0.40%
$739,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.85%, to be
repurchased at $739,240 on
01/02/98, collateralized by
$755,092 U.S. Treasury Notes,
6.125% due 07/31/00 (valued at
$773,682, including interest) $739,000
-------
TOTAL INVESTMENTS (Real Estate
Securities Trust) (Cost: $171,109,155) $184,435,661
===========
VALUE TRUST
Shares Value
------ -----
COMMON STOCKS - 81.22%
AEROSPACE - 0.82%
TRW, Incorporated 24,400 $1,302,350
AGRICULTURAL MACHINERY - 0.24%
Deere & Company 6,600 384,863
-------
AIR TRAVEL - 2.64%
AMR Corporation* 13,000 1,670,500
Delta Air Lines, Incorporated 21,300 2,534,700
---------
4,205,200
APPAREL & TEXTILES - 2.54%
Russell Corporation 31,600 839,375
Springs Industries, Incorporated 24,100 1,253,200
VF Corporation 42,200 1,938,563
---------
4,031,138
AUTO PARTS - 1.67%
Dana Corporation 28,200 1,339,500
Eaton Corporation 14,800 1,320,900
---------
2,660,400
AUTOMOBILES - 4.64%
Ford Motor Company 98,700 4,805,456
General Motors Corporation 42,400 2,570,500
7,375,956
BANKING - 7.19%
Bank of New York, Incorporated 14,000 809,375
Chase Manhattan Corporation 23,300 2,551,350
Citicorp 12,200 1,542,537
Crestar Financial Corporation 14,300 815,100
First Union Corporation 55,820 2,860,775
Mellon Bank Corporation 25,200 1,527,750
Republic New York Corporation 11,600 1,324,575
11,431,462
BUSINESS SERVICES - 0.82%
Olsten Corporation 87,200 1,308,000
---------
CHEMICALS - 5.74%
Cabot Corporation 29,900 825,987
The Dow Chemical Company 14,700 1,492,050
E. I. Du Pont De Nemours & Company 20,000 1,201,250
FMC Corporation* 15,700 1,056,806
Great Lakes Chemical Corporation 41,100 1,844,363
IMC Global, Incorporated 36,500 1,195,375
Rohm & Haas Company 15,700 1,503,275
---------
9,119,106
COMPUTERS & BUSINESS EQUIPMENT - 4.67%
International Business Machines
Corporation 38,300 4,004,744
Quantum Corporation* 34,400 690,150
The accompanying notes are an integral part of the financial statements.
105
<PAGE> 145
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
COMPUTERS & BUSINESS EQUIPMENT - CONTINUED
Seagate Technology* 38,100 $733,425
Stratus Computer,
Incorporated* 52,800 1,996,500
7,424,819
CONGLOMERATES - 2.05%
Aeroquip-Vickers, Incorporated 66,300 3,252,844
---------
CONSTRUCTION MATERIALS - 0.82%
Owens-Corning 38,000 1,296,750
---------
CONSTRUCTION & MINING EQUIPMENT - 1.91%
Caterpillar, Incorporated 18,900 917,831
Harnischfeger Industries, Incorporated 59,800 2,111,688
---------
3,029,519
DOMESTIC OIL - 2.80%
Atlantic Richfield Company 20,000 1,602,500
Phillips Petroleum Company 34,400 1,672,700
Ultramar Diamond Shamrock 37,100 1,182,563
---------
4,457,763
DRUGS & HEALTH CARE - 3.25%
Bergen Brunswig Corporation 14,700 619,238
Columbia/HCA Healthcare
Corporation 55,600 1,647,150
Mallinckrodt, Incorporated 33,500 1,273,000
Maxicare Health Plans, Incorporated* 30,100 327,337
Vencor, Incorporated* 24,300 593,831
Wellpoint Health Networks,
Incorporated* 16,600 701,350
---------
5,161,906
ELECTRIC UTILITIES - 2.57%
CINergy Corporation 16,300 624,494
DTE Energy Company 26,500 919,219
Duke Energy Company 13,639 755,260
Entergy Corporation 27,400 820,287
GPU, Incorporated 23,100 973,087
---------
4,092,347
ELECTRICAL EQUIPMENT - 0.78%
Arrow Electronics, Incorporated* 38,100 1,235,869
ELECTRONICS - 1.97%
Beckman Instruments, Incorporated 41,400 1,656,000
Raytheon Company 2,657 131,023
Tektronix, Incorporated 33,900 1,345,407
---------
3,132,430
FINANCIAL SERVICES - 3.40%
Case Corporation 49,700 3,003,744
Federal National Mortgage Association 16,400 935,825
Reliastar Financial Corporation 35,700 1,470,394
---------
5,409,963
FOOD & BEVERAGES - 1.43%
IBP, Incorporated 38,900 814,469
Universal Foods Corporation 34,500 1,457,625
---------
2,272,094
HOUSEHOLD PRODUCTS - 0.52%
Tupperware Corporation 29,800 830,675
-------
INDUSTRIAL MACHINERY - 4.56%
Cummins Engine, Incorporated 43,700 2,581,031
Kennametal, Incorporated 33,900 1,756,444
Parker Hannifin Corporation 36,050 1,653,794
Tecumseh Products Company 25,800 1,257,750
---------
7,249,019
INSURANCE - 9.02%
Allstate Corporation 22,500 2,044,687
American General
Corporation 23,000 1,243,437
Chubb Corporation 13,800 1,043,625
CIGNA Corporation 11,500 1,990,219
Everest Reinsurance Holdings 39,000 1,608,750
Foundation Health Systems,
Incorporated* 54,240 1,213,620
Hartford Financial Services
Group 17,400 1,627,987
Old Republic International Corporation 35,400 1,316,437
TIG Holdings, Incorporated 32,900 1,091,869
Transatlantic Holdings, Incorporated 16,300 1,165,450
----------
14,346,081
INTERNATIONAL OIL - 2.94%
Amoco Corporation 17,200 1,464,150
British Petroleum PLC, ADR 19,800 1,577,812
YPF Sociedad Anonima, ADR 47,800 1,634,163
---------
4,676,125
OFFICE FURNISHINGS & SUPPLIES - 0.36%
Standard Register 16,300 566,425
-------
PAPER - 0.41%
Westvaco Corporation 20,900 657,044
-------
PETROLEUM SERVICES - 0.84%
Repsol SA, ADR 31,300 1,332,206
---------
RAILROADS & EQUIPMENT - 0.74%
CSX Corporation 21,900 1,182,600
---------
RETAIL TRADE - 3.69%
Dillard's, Incorporated 29,800 1,050,450
Federal Department Stores,
Incorporated* 36,000 1,550,250
Sears, Roebuck & Company 43,000 1,945,750
Toys R Us, Incorporated* 42,000 1,320,375
---------
5,866,825
STEEL - 0.67%
Inland Steel Industries, Incorporated 39,800 681,575
National Steel Corporation* 33,600 388,500
---------
1,070,075
TIRES & RUBBER - 1.90%
The Goodyear Tire & Rubber Company 47,500 3,022,187
---------
TOBACCO - 3.62%
Philip Morris Companies, Incorporated 70,900 3,212,656
RJR Nabisco Holdings Corporation 68,000 2,550,000
---------
5,762,656
TOTAL COMMON STOCKS
(Cost: $123,826,223) $129,146,697
-----------
The accompanying notes are an integral part of the financial statements.
106
<PAGE> 146
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 7.88%
$12,529,476 Navigator Securities
Lending Trust, 5.74% $12,529,476
----------
REPURCHASE AGREEMENT - 10.90%
$17,338,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $17,342,816 on
01/02/98, collateralized by
$17,689,011 U.S. Treasury Bonds,
8.125% due 05/15/21 (valued at
$17,833,400, (including interest) $17,338,000
----------
TOTAL INVESTMENTS
(Value Trust) (Cost: $153,693,699) $159,014,173
===========
INTERNATIONAL GROWTH AND INCOME TRUST
Shares Value
------ -----
COMMON STOCKS - 66.72%
AEROSPACE - 1.27%
CSF Thomson 33,800 $1,065,359
Lucas Varity PLC, ADS 517,300 1,826,780
---------
2,892,139
AIR TRAVEL - 1.46%
British Airways PLC, ADS 107,000 984,186
Deutsche Lufthansa AG 65,300 1,252,314
Singapore Airlines, Ltd. 166,000 1,083,358
---------
3,319,858
AUTO PARTS - 0.46%
Autoliv, Incorporated, ADR 15,900 517,658
Qingling Motors Company 1,070,300 524,860
---------
1,042,518
AUTOMOBILES - 1.39%
Nissan Motor Company, Ltd. 124,000 512,828
Tata Engineering and Locomotive
Company, Ltd., GDR 42,200 318,846
Toyota Motor Corporation 81,000 2,320,135
---------
3,151,809
BANKING - 10.27%
Allied Irish Banks 250,900 2,428,319
Banco Bilbao Vizcaya, ADS 57,900 1,873,626
Banco Santander-Chile, ADR 55,700 786,763
Bangkok Bank 161,100 401,495
Bank of East Asia 120 281
Bank of Tokyo Mitsubishi, ADS 63,000 868,500
Deutsche Bank AG 29,380 2,074,132
Dresdner Bank AG 8,270 381,561
Housing & Commerical Bank of
Korea, ADR 142,500 961,875
HSBC Holdings - HKD 14,400 354,936
HSBC Holdings - P 54,700 1,419,547
Istituto Mobiliare Italiano SPA 121,000 1,436,405
Lloyds TSB Group PLC 159,900 2,080,233
The Mitsui Trust & Banking
Company, Ltd. 293,000 567,734
National Australia Bank, Ltd. 158,200 2,209,579
Royal Bank of Scotland Group PLC 201,800 2,572,732
Union Bank of Switzerland/
Schweizerische Bankgesellschaft 780 1,127,402
United Overseas Bank 203,000 1,126,105
Yapi ve Kredi Bankasi AS 18,050,860 688,067
----------
23,359,292
BROADCASTING - 0.28%
Central European Media
Enterprises, Ltd.* 25,200 636,300
-------
BUILDING MATERIALS & CONSTRUCTION - 0.19%
ACS, Actividades de Construccion y
Servicios SA 12,700 307,601
Gamuda BHD 222,200 123,397
-------
430,998
BUSINESS SERVICES - 2.06%
Eaux (Cie Generale Des) 13,569 1,893,821
Keppel Telecom & Transport 658,000 421,619
Toppan Printing Company, Ltd. 68,000 885,349
Wessex Water PLC 175,100 1,475,397
---------
4,676,186
CHEMICALS - 1.43%
Allied Colloids Group PLC 236,242 644,126
Bayer AG 17,060 637,278
Fauji Fertilizer Company, Ltd. 416,600 797,586
Henkel 8,890 499,119
Mitsubishi Rayon Company, Ltd. 121,000 296,546
SGL Carbon AG 2,076 267,729
Shin-Etsu Chemical Company 6,000 114,421
---------
3,256,805
COAL - 0.14%
Banpu Public Company, Ltd. 81,100 325,074
-------
COMPUTERS & BUSINESS EQUIPMENT - 1.24%
Fujitsu, Ltd. 160,000 1,715,555
Ricoh Company, Ltd. 89,000 1,104,235
---------
2,819,790
CONGLOMERATES - 0.66%
CSR, Ltd. 214,100 725,606
Hutchison Whampoa 43,000 269,686
Tomkins PLC, ADS 108,600 513,722
---------
1,509,014
CONSTRUCTION & MINING EQUIPMENT - 0.06%
Nishimatsu Construction 40,000 125,603
-------
CONSTRUCTION MATERIALS - 0.61%
CRH 34,200 400,124
Siam Cement Company 73,300 578,484
Tostem Company 38,000 407,444
---------
1,386,052
The accompanying notes are an integral part of the financial statements.
107
<PAGE> 147
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
CRUDE PETROLEUM & NATURAL GAS - 1.49%
Elf Aquitaine 10,097 $1,174,363
ENI SPA 390,000 2,211,249
---------
3,385,612
DRUGS & HEALTH CARE - 4.57%
Elan PLC, ADR 3,900 199,631
Glaxo Wellcome PLC 86,500 2,062,208
Ranbaxy Laboratories, Ltd., GDR 24,400 616,100
Roche Holding AG 70 694,874
Sanofi SA 12,280 1,367,052
Schering AG 4,880 470,652
Takeda Chemical Industries, Ltd. 42,000 1,196,599
Wockhardt, Ltd., ADR 11,500 64,688
Yamanouchi Pharmaceutical
Company, Ltd. 64,000 1,372,444
Zeneca Group PLC 66,500 2,355,519
----------
10,399,767
ELECTRIC UTILITIES - 3.49%
Chilgener SA, ADR 25,200 617,400
Companhia Energetica de Minas
Gerais, ADR 29,100 1,264,366
Empresa Nacional Electricidad SA, ADR 69,300 1,225,744
The Hub Power Company, Ltd., GDR* 19,800 613,800
Iberdrola SA 148,700 1,956,964
National Grid Group PLC 10 47
VEBA AG 33,300 2,267,573
---------
7,945,894
ELECTRICAL EQUIPMENT - 1.20%
Elektrim Spolka Akcyjina SA 28,169 272,500
Hitachi, Ltd. 91,000 648,158
Siemens AG 30,560 1,809,189
---------
2,729,847
ELECTRONICS - 1.85%
Fanuc, Ltd. 31,000 1,172,857
Nissei Sangyo Company 29,000 237,650
Racal Electronics 320,000 1,403,352
Samsung Electronics, Ltd., ADR 31,818 501,134
TDK Corporation 12,000 904,342
---------
4,219,335
FINANCIAL SERVICES - 1.99%
Brierley Investment, Ltd. 1,002,000 715,628
Compagnie Financiere de Paribas 17,310 1,504,217
Koc Holdings 4,964,000 1,161,660
Nichiei Company, Ltd. (Kyoto) 5,000 532,282
Nomura Securities 46,000 613,004
---------
4,526,791
FOOD & BEVERAGES - 2.27%
Diageo PLC 135,000 1,235,078
Greencore Group PLC 72,600 340,994
Lion Nathan, Ltd. 714,200 1,600,743
Molinos Rio de la Plata SA 195,410 469,073
Nestle SA 800 1,198,467
Okocimskie Zaklady Piwowarskie SA 47,700 324,766
---------
5,169,121
FOREST PRODUCTS - 0.41%
Carter Holt Harvey 610,000 942,163
-------
HOMEBUILDERS - 0.06%
Bilfinger & Berger
Bauaktiengesellschaft AG 4,600 142,683
-------
HOUSEHOLD APPLIANCES - 0.87%
Guangdong Kelon Elec Holdings 470,000 482,191
Philips Electronics NV 7,950 476,769
Sony Corporation 11,600 1,030,558
---------
1,989,518
HOUSEHOLD PRODUCTS - 0.97%
Unilever 256,000 2,202,054
---------
INDUSTRIAL MACHINERY - 1.11%
Daiken Corporation 109,000 263,797
Ebara Corporation 77,000 813,816
Hindalco Industries, Ltd., ADR 25,800 488,905
Ishihara Sangyo Kaisha 69,000 76,626
Reliance Industries, ADR 108,000 891,000
---------
2,534,144
INSURANCE - 4.32%
Axa-UAP 9,000 696,403
Irish Life PLC 200,000 1,147,179
Istituto Nazionale della
Assicurazioni 1,462,000 2,962,843
Munchener Ruckversicherungs AG 7,082 2,669,111
Prudential Corporation 89,000 1,083,782
Royal & Sun Alliance Insurance
Group PLC 71,000 714,865
Tokio Marine & Fire Insurance Company 48,000 544,076
---------
9,818,259
INTERNATIONAL OIL - 2.04%
Pakistan State Oil Company, Ltd.* 102,362 871,122
The Shell Transport and Trading
Company PLC 339,400 2,380,373
YPF Sociedad Anonima, ADR 40,610 1,388,354
---------
4,639,849
LEISURE TIME - 1.25%
Compass Group 231,700 2,850,449
---------
NON-FERROUS METALS - 0.48%
Billiton PLC* 137,000 351,035
WMC, Ltd. 210,800 735,031
---------
1,086,066
PAPER - 0.83%
Fletcher Challenge, Ltd. 514,700 672,436
Jefferson Smurfit Group PLC 432,400 1,218,561
---------
1,890,997
PETROLEUM SERVICES - 1.45%
Broken Hill Proprietary Company, Ltd. 163,800 1,521,282
Petroleo Brasileiro S/A-Petrobras, ADR 25,000 584,665
Repsol SA, ADS 13,700 584,509
Zhenhai Refining and Chemical
Company, Ltd. 1,467,300 610,665
---------
3,301,121
The accompanying notes are an integral part of the financial statements.
108
<PAGE> 148
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
PHOTOGRAPHY - 0.65%
Canon Sales Company, Incorporated 23,000 $262,465
Fuji Photo Film Company 32,000 1,225,396
---------
1,487,861
PUBLISHING - 0.51%
Hurriyet Gazetecilik ve Matbaacilik 4,901,000 922,263
Singapore Press Holdings, Ltd. 19,000 237,852
---------
1,160,115
REAL ESTATE - 1.27%
City Developments 137,000 633,996
Mepc PLC 111,000 926,173
Mitsubishi Estate Company, Ltd. 96,000 1,044,037
Sun Hung Kai Properties 42,000 292,683
---------
2,896,889
RETAIL GROCERY - 1.12%
Ito-Yokado Company, Ltd. 16,000 814,889
J. Sainsbury PLC 205,805 1,734,118
---------
2,549,007
RETAIL TRADE - 1.55%
Carrefour SA 2,619 1,366,397
The Great Universal Stores PLC 112,000 1,410,973
JD Group, Ltd. 906 5,539
Mitsubishi Corporation 93,000 733,629
---------
3,516,538
SHIPBUILDING - 0.08%
Sembawang Maritime, Ltd. 123,000 180,979
-------
SOFTWARE - 0.84%
SAP AG 6,280 1,907,791
---------
STEEL - 0.72%
Nippon Steel Corporation 310,000 458,222
Rautaruukki OY 42,000 339,023
Tokyo Steel Manufacturing
Company, Ltd. 46,000 155,365
Unisor SA 47,315 683,172
---------
1,635,782
TELECOMMUNICATION SERVICES - 3.20%
France Telecom SA* 15,730 570,551
Telecom Argentina Stet France, ADR 30,430 1,087,873
Telecom Corporation of New Zealand 369,000 1,789,070
Telecom Italia SPA 6 38
Telecom Italia SPA-RNC 670,000 2,954,211
Telefonica del Peru SA, ADR 27,800 648,087
Telstra Corporation* 114,700 242,208
---------
7,292,038
TELEPHONE - 2.70%
Nippon Telegraph & Telephone
Corporation 162 1,389,599
Philippine Long Distance Telephone
Company, ADR 13,616 306,360
Telecomunicacoes Brasileiras S/A-
Telebras, ADR 18,200 2,119,162
VodaFone Group 323,000 2,334,321
---------
6,149,442
TIRES & RUBBER - 1.03%
Bridgestone Corporation 66,000 1,430,497
Continental AG 41,800 922,460
---------
2,352,957
TOBACCO - 0.45%
ITC, Ltd., ADR 29,100 574,725
Japan Tobacco, Incorporated 64 453,887
---------
1,028,612
TRUCKING & FREIGHT - 0.43%
Mayne Nickless, Ltd. 141,560 748,242
Osprey Maritime, Ltd. 286,000 229,072
-------
977,314
TOTAL COMMON STOCKS
(Cost: $153,741,248) $151,840,433
-----------
PREFERRED STOCKS - 1.29%
AUTOMOBILES - 0.10%
Volkswagen AG 540 231,735
-------
BROADCASTING - 0.82%
News Corporation 378,000 1,870,869
---------
MISCELLANEOUS - 0.37%
WBK STRYPES Trust 24,900 834,150
-------
TOTAL PREFERRED STOCKS
(Cost: $2,632,321) $2,936,754
---------
WARRANTS - 0.07%*
CHEMICALS - 0.07%
Shin-Etsu Chemical (Expiration date
08/01/11; strike price Y 1,917) 125 171,875
-------
TOTAL WARRANTS (Cost: $162,500) $171,875
-------
Principal
Amount Value
------ -----
FOREIGN GOVERNMENT OBLIGATIONS - 15.14%
COMMONWEALTH OF AUSTRALIA - 3.07%
New South Wales Treasury,
6.50% due 05/01/06 AUD 10,500,000 $6,997,349
---------
GOVERNMENT OF CANADA - 1.62%
7.00% due 12/01/06 CAD 4,800,000 3,682,368
---------
KINGDOM OF DENMARK - 3.41%
8.00% due 05/15/03 DKK 854,000 140,728
8.00% due 03/15/06 45,000,000 7,608,474
---------
7,749,202
The accompanying notes are an integral part of the financial statements.
109
<PAGE> 149
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
REPUBLIC OF ITALY - 0.81%
8.50% due 08/01/04 ITL 2,800,000,000 $1,842,631
---------
GOVERNMENT OF SPAIN - 0.64%
7.90% due 02/28/02 ESP 200,000,000 1,453,233
---------
UNITED KINGDOM TREASURY - 5.59%
8.00% due 09/27/13 P 3,110,000 5,941,446
8.50% due 07/16/07 2,730,000 5,146,818
8.75% due 08/25/17 780,000 1,632,264
----------
12,720,528
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost: $34,727,475) $34,445,311
----------
CORPORATE BONDS - 1.29%
Athena Neuroscience, Incorporated,
4.75% due 11/15/04 $920,000 916,550
Mesta-Serla OY,
4.375% due 10/15/02 1,109,000 1,025,825
Nykredit,
6.00% due 10/01/06 DKK 6,965,000 990,585
-------
TOTAL CORPORATE BONDS
(Cost: $2,956,888) $2,932,960
---------
CONVERTIBLE BONDS - 1.03%
BTM Cayman Finance,
4.25% due 03/31/03 Y 130,000,000 $1,090,220
Elektrim SA,
2.00% due 05/30/04 DEM 540,000 284,416
MIT Capital Cayman, Ltd.,
0.50% due 10/01/07 Y 260,000,000 970,743
-------
TOTAL CONVERTIBLE BONDS
(Cost: $4,126,671) $2,345,379
---------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 12.56%
$28,577,353 Navigator Securities
Lending Trust, 5.74% $28,577,353
----------
REPURCHASE AGREEMENT - 1.90%
$4,325,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $4,326,201 on
01/02/98, collateralized by
$4,416,368 U.S. Treasury Bonds,
6.875% due 08/15/25 (valued at
$4,516,657, including interest) $4,325,000
---------
TOTAL INVESTMENTS (International
Growth & Income Trust) (Cost: $231,249,456) $227,575,065
===========
GROWTH AND INCOME TRUST
Shares Value
------ -----
COMMON STOCKS - 93.08%
AEROSPACE - 3.02%
Boeing Company 400,000 $19,575,000
Lockheed Martin Corporation 175,000 17,237,500
United Technologies Corporation 185,000 13,470,312
----------
50,282,812
AGRICULTURAL MACHINERY - 0.87%
Deere & Company 250,000 14,578,125
----------
AIR TRAVEL - 1.44%
Southwest Airlines Company 975,000 24,009,375
----------
ALUMINUM - 0.65%
Aluminum Company of America 155,000 10,908,125
----------
AUTOMOBILES - 0.29%
General Motors Corporation 130,000 4,801,875
---------
BANKING - 6.89%
The Chase Manhattan Corporation 90,000 9,855,000
Citicorp 250,000 31,609,375
Crestar Financial Corporation 180,000 10,260,000
First Union Corporation 600,000 30,750,000
U.S. Bancorp 289,000 32,349,938
-----------
114,824,313
BUSINESS SERVICES - 1.60%
Automatic Data Processing,
Incorporated 195,000 11,968,125
First Data Corporation 500,000 14,625,000
----------
26,593,125
CHEMICALS - 2.36%
The Dow Chemical Company 95,000 9,642,500
E.I. Du Pont De Nemours & Company 255,000 15,315,937
Zeneca Group PLC, ADR 133,300 14,396,400
----------
39,354,837
COMPUTERS & BUSINESS EQUIPMENT - 5.32%
3Com Corporation* 88,900 3,105,944
Cisco Systems, Incorporated* 292,500 16,306,875
EMC Corporation* 260,000 7,133,750
Hewlett-Packard Company 255,000 15,937,500
International Business Machines
Corporation 300,000 31,368,750
Xerox Corporation 200,000 14,762,500
----------
88,615,319
CONSTRUCTION & MINING EQUIPMENT - 0.87%
Caterpillar, Incorporated 219,500 10,659,469
Foster Wheeler Corporation 143,200 3,875,350
----------
14,534,819
CONTAINERS & GLASS - 0.45%
Crown Cork & Seal, Incorporated 150,000 7,518,750
---------
DOMESTIC OIL - 0.86%
Unocal Corporation 370,000 14,360,625
----------
The accompanying notes are an integral part of the financial statements.
110
<PAGE> 150
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
DRUGS & HEALTH CARE - 10.07%
Abbott Laboratories 320,000 $20,980,000
American Home Products Corporation 90,000 6,885,000
Bristol-Myers Squibb Company 180,000 17,032,500
Columbia/HCA Healthcare Corporation 360,000 10,665,000
Johnson & Johnson 214,000 14,097,250
Merck & Company, Incorporated 150,000 15,937,500
Pfizer, Incorporated 460,000 34,298,750
Pharmacia & Upjohn, Incorporated 700,000 25,637,500
Tenet Healthcare Corporation* 125,700 4,163,813
Warner-Lambert Company 146,000 18,104,000
-----------
167,801,313
ELECTRIC UTILITIES - 2.58%
DPL, Incorporated 445,000 12,793,750
Duke Energy Company 208,000 11,518,000
New England Electric System 195,000 8,336,250
Texas Utilities Company 250,000 10,390,625
----------
43,038,625
ELECTRICAL EQUIPMENT - 3.08%
General Electric Company 700,000 51,362,500
----------
ELECTRONICS - 3.43%
AMP, Incorporated 270,000 11,340,000
Analog Devices, Incorporated* 245,000 6,783,438
Intel Corporation 290,000 20,372,500
Motorola, Incorporated 270,000 15,406,875
Raytheon Company 1 49
Texas Instruments, Incorporated 74,000 3,330,000
----------
57,232,862
FINANCIAL SERVICES - 6.72%
American Express Company 330,000 29,452,500
Federal National Mortgage Association 550,000 31,384,375
Morgan Stanley Dean Witter 250,000 14,781,250
Travelers Group, Incorporated 675,000 36,365,625
-----------
111,983,750
FOOD & BEVERAGES - 3.98%
General Mills, Incorporated 170,000 12,176,250
H.J. Heinz Company 160,000 8,130,000
Nabisco Holdings Corporation 190,000 9,203,125
PepsiCo, Incorporated 300,000 10,931,250
Sara Lee Corporation 460,000 25,903,750
----------
66,344,375
GAS & PIPELINE UTILITIES - 0.82%
KN Energy, Incorporated 100,000 5,400,000
National Fuel Gas Company 100,000 4,868,750
Peoples Energy Corporation 85,600 3,370,500
----------
13,639,250
HOTELS & RESTAURANTS - 1.02%
McDonalds Corporation 355,000 16,951,250
----------
HOUSEHOLD PRODUCTS - 2.42%
Colgate-Palmolive Company 150,000 11,025,000
Gillette Company 70,600 7,090,887
Procter & Gamble Company 278,000 22,187,875
----------
40,303,762
INSURANCE - 5.46%
ACE, Ltd. 242,500 23,401,250
Allstate Corporation 330,000 29,988,750
American International Group,
Incorporated 189,000 20,553,750
Marsh & McLennan Companies,
Incorporated 230,000 17,149,375
----------
91,093,125
INTERNATIONAL OIL - 5.49%
Amoco Corporation 200,000 17,025,000
Chevron Corporation 330,000 25,410,000
Exxon Corporation 360,000 22,027,500
Royal Dutch Petroleum Company, ADR 500,000 27,093,750
----------
91,556,250
LEISURE TIME - 0.39%
The Walt Disney Company 66,000 6,538,125
---------
LIQUOR - 0.73%
Anheuser-Busch Companies,
Incorporated 276,000 12,144,000
----------
NEWSPAPERS - 1.63%
Gannett, Incorporated 440,000 27,197,500
----------
PAPER - 2.62%
International Paper Company 230,000 9,918,750
Kimberly-Clark Corporation 385,000 18,985,312
Minnesota Mining & Manufacturing
Company 180,000 14,771,250
----------
43,675,312
PETROLEUM SERVICES - 2.05%
Diamond Offshore Drilling, Incorporated 170,000 8,181,250
Schlumberger, Ltd. 323,400 26,033,700
----------
34,214,950
RAILROAD & EQUIPMENT - 0.86%
Union Pacific Corporation 230,000 14,360,625
----------
REAL ESTATE - 0.28%
Security Capital Pacific Trust 190,000 4,607,500
---------
RETAIL TRADE - 4.15%
Dayton Hudson Corporation 340,000 22,950,000
Gap, Incorporated 300,000 10,631,250
May Department Stores, Incorporated 205,000 10,800,938
Wal-Mart Stores, Incorporated 630,000 24,845,625
----------
69,227,813
SOFTWARE - 1.94%
Microsoft Corporation* 250,000 32,312,500
----------
TELECOMMUNICATION SERVICES - 1.01%
Cox Communications, Incorporated* 210,000 8,413,125
Lucent Technologies, Incorporated 105,000 8,386,875
----------
16,800,000
TELEPHONE - 5.57%
Bell Atlantic Corporation 283,699 25,816,609
BellSouth Corporation 170,000 9,573,125
The accompanying notes are an integral part of the financial statements.
111
<PAGE> 151
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
TELEPHONE - CONTINUED
SBC Communications, Incorporated 390,000 $28,567,500
U.S. West, Incorporated 350,000 15,793,750
WorldCom, Incorporated* 435,000 13,158,750
----------
92,909,734
TIRES & RUBBER - 0.67%
Goodyear Tire and Rubber Company 175,000 11,134,375
TOBACCO - 1.49%
Philip Morris Companies, Incorporated 550,000 24,921,875
TOTAL COMMON STOCKS
(Cost: $1,084,612,832) $1,551,733,471
-------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 3.95%
$65,892,173 Navigator Securities
Lending Trust, 5.74% $65,892,173
----------
REPURCHASE AGREEMENT - 2.97%
$49,462,000 Repurchase Agreement with Lehman
Brothers Incorporated dated
12/31/97 at 6.57%, to be
repurchased at $49,480,054 on
01/02/98, collateralized by
$52,139,501 U.S. Treasury Strips,
zero coupon due 08/15/17 (valued
at $52,139,501, including interest) $49,462,000
----------
TOTAL INVESTMENTS (Growth and
Income Trust) (Cost: $1,199,967,005) $1,667,087,644
=============
EQUITY-INCOME TRUST
Shares Value
------ -----
COMMON STOCKS - 88.65%
AEROSPACE - 0.12%
AlliedSignal, Incorporated 31,300 $1,218,744
---------
ALUMINUM - 0.47%
Reynolds Metals Company 76,500 4,590,000
---------
APPAREL & TEXTILES - 0.06%
Unifi, Incorporated 15,000 610,313
-------
AUTO PARTS - 1.11%
Echlin, Incorporated 120,500 4,360,594
Genuine Parts Company 192,150 6,521,091
----------
10,881,685
AUTOMBILES - 0.61%
General Motors Corporation 98,100 5,947,313
---------
BANKING - 8.87%
Banc One Corporation 143,000 7,766,688
BankBoston Corporation 64,000 6,012,000
Bankers Trust New York Corporation 72,200 8,117,987
The Chase Manhattan Corporation 75,900 $8,311,050
First Union Corporation 109,610 5,617,512
Fleet Financial Group, Incorporated 92,500 6,931,719
Mellon Bank Corporation 293,000 17,763,125
Mercantile Bankshares Corporation 96,150 3,761,869
J.P. Morgan & Company, Incorporated 67,200 7,585,200
National City Corporation 80,000 5,260,000
PNC Bank Corporation 72,400 4,131,325
Wells Fargo & Company 17,100 5,804,381
----------
87,062,856
BUSINESS SERVICES - 1.55%
H & R Block, Incorporated 152,000 6,811,500
Deluxe Corporation 61,400 2,118,300
R. R. Donnelley & Sons Company 168,600 6,280,350
----------
15,210,150
CHEMICALS - 6.77%
The Dow Chemical Company 145,600 14,778,400
E.I. Du Pont De Nemours & Company 150,200 9,021,388
Eastman Chemical Company 55,000 3,275,937
Great Lakes Chemical Corporation 165,700 7,435,788
Imperial Chemical Industries PLC, ADR 74,100 4,811,869
Lubrizol Corporation 96,900 3,573,187
Nalco Chemical Company 102,000 4,035,375
Olin Corporation 150,900 7,073,437
PPG Industries, Incorporated 77,800 4,444,325
Witco Corporation 194,700 7,946,194
----------
66,395,900
CONGLOMERATES - 1.25%
Fortune Brands, Incorporated 123,400 4,573,513
Lonrho PLC 990,500 1,529,282
Tomkins 1,298,500 6,142,424
----------
12,245,219
CONSTRUCTION MATERIALS - 0.43%
Armstrong World Industries,
Incorporated 56,200 4,200,950
---------
COSMETICS & TOILETRIES - 0.97%
International Flavours & Fragrances,
Incorporated 184,900 9,522,350
---------
CRUDE PETROLEUM & NATURAL GAS - 1.04%
Enron Corporation 112,000 4,655,000
Occidental Petroleum Corporation 188,800 5,534,200
----------
10,189,200
DOMESTIC OIL - 3.04%
Amerada Hess Corporation 113,700 6,239,288
Atlantic Richfield Company 170,200 13,637,275
Phillips Petroleum Company 98,000 4,765,250
USX-Marathon Group 152,000 5,130,000
----------
29,771,813
The accompanying notes are an integral part of the financial statements.
112
<PAGE> 152
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
DRUGS & HEALTH CARE - 5.41%
Abbott Laboratories 84,600 $5,546,588
American Home Products Corporation 160,300 12,262,950
Amgen, Incorporated 57,000 3,085,125
C.R. Bard, Incorporated 91,000 2,849,437
Bausch & Lomb, Incorporated 115,300 4,568,762
Baxter International, Incorporated 68,500 3,454,969
Pharmacia & Upjohn, Incorporated 287,100 10,515,038
Smith & Nephew PLC 1,267,200 3,746,477
United States Surgical Corporation 241,700 7,084,831
----------
53,114,177
ELECTRIC UTILITIES - 8.08%
Baltimore Gas & Electric Company 92,100 3,137,156
Central & South West Corporation 98,000 2,652,125
Dominion Resources, Incorporated 120,300 5,120,269
DQE, Incorporated 128,200 4,503,025
Duke Energy Company 150,800 8,350,550
Entergy Corporation 145,900 4,367,881
FirstEnergy Corporation* 240,775 6,982,475
GPU, Incorporated 58,300 2,455,887
Houston Industries, Incorporated 201,000 5,364,188
PacifiCorp 162,900 4,449,206
PECO Energy Company 191,800 4,651,150
PG & E Corporation 109,600 3,335,950
Public Service Enterprise Group,
Incorporated 97,700 3,095,869
Southern Company 274,900 7,113,038
TECO Energy, Incorporated 118,000 3,318,750
Unicom Corporation 209,400 6,439,050
Western Resources, Incorporated 92,000 3,956,000
----------
79,292,569
ELECTRICAL EQUIPMENT - 1.91%
Cooper Industries, Incorporated 92,500 4,532,500
General Electric Company 127,000 9,318,625
Hubbell, Incorporated 99,000 4,881,937
----------
18,733,062
ELECTRONICS - 0.64%
AMP, Incorporated 143,100 6,010,200
Raytheon Company 6,255 308,450
---------
6,318,650
FINANCIAL SERVICES - 2.05%
American Express Company 53,300 4,757,025
Federal National Mortgage Association 156,500 8,930,281
Travelers Group, Incorporated 119,049 6,413,765
----------
20,101,071
FOOD & BEVERAGES - 4.14%
Cadbury Schweppes PLC 270,700 2,732,130
General Mills, Incorporated 114,200 8,179,575
H.J. Heinz Company 123,200 6,260,100
McCormick & Company, Incorporated 226,000 6,328,000
Quaker Oats Company 159,700 8,424,175
Sara Lee Corporation 70,000 3,941,875
Unilever NV 75,400 4,707,788
----------
40,573,643
FOREST PRODUCTS - 0.39%
Georgia-Pacific Corporation 45,600 2,770,200
Georgia-Pacific Corporation
(Timber Group)* 45,600 1,034,550
---------
3,804,750
HOMEBUILDERS - 0.15%
Rouse Company 45,600 1,493,400
---------
HOTELS & RESTAURANTS - 0.59%
Hilton Hotels Corporation 90,500 2,692,375
ITT Corporation* 37,700 3,124,387
---------
5,816,762
HOUSEHOLD APPLIANCES - 0.64%
Whirlpool Corporation 114,700 6,308,500
---------
HOTELS & RESTAURANTS - 0.52%
Colgate-Palmolive Company 15,000 1,102,500
Rubbermaid, Incorporated 17,600 440,000
Tupperware Corporation 126,200 3,517,825
---------
5,060,325
INDUSTRIAL MACHINERY - 0.50%
Pall Corporation 236,000 4,882,250
---------
INSURANCE - 4.54%
American General Corporation 147,800 7,990,438
Exel, Ltd. 89,300 5,659,387
Hilb, Rogal & Hamilton Company 27,500 531,094
Lincoln National Corporation 58,000 4,531,250
SAFECO Corporation 103,600 5,050,500
St. Paul Companies, Incorporated 101,600 8,337,550
Transamerica Corporation 55,300 5,889,450
USF & G Corporation 169,000 3,728,562
Willis Corroon Group PLC, ADR 230,820 2,841,971
----------
44,560,202
INTERNATIONAL OIL - 6.07%
Amoco Corporation 94,500 8,044,312
The British Petroleum Company
PLC, ADR 76,000 6,056,250
Chevron Corporation 105,700 8,138,900
Exxon Corporation 179,400 10,977,038
Mobil Corporation 131,900 9,521,531
Royal Dutch Petroleum Company, ADR 141,600 7,672,950
Texaco, Incorporated 168,600 9,167,625
----------
59,578,606
LIQUOR - 1.56%
Anheuser-Busch Companies,
Incorporated 224,300 9,869,200
Brown-Forman Corporation, Class B 98,300 5,431,075
----------
15,300,275
MINING - 0.51%
Newmont Mining Corporation 168,700 4,955,562
---------
The accompanying notes are an integral part of the financial statements.
113
<PAGE> 153
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
NEWSPAPERS - 1.47%
Dow Jones & Company, Incorporated 121,800 $6,539,137
Knight-Ridder, Incorporated 151,400 7,872,800
----------
14,411,937
NON-FERROUS METALS - 0.17%
Inco, Ltd. 97,000 1,649,000
---------
PAPER - 2.36%
Consolidated Papers, Incorporated 94,600 5,049,275
International Paper Company 110,700 4,773,938
Kimberly-Clark Company 37,000 1,824,562
Minnesota Mining & Manufacturing
Company 31,600 2,593,175
Union Camp Corporation 165,200 8,869,175
----------
23,110,125
PETROLEUM SERVICES - 0.39%
Repsol SA, ADR 90,000 3,830,625
---------
PHOTOGRAPHY - 0.81%
Eastman Kodak Company 131,000 7,966,438
---------
POLLUTION CONTROL - 0.46%
Waste Management, Incorporated 165,000 4,537,500
---------
PUBLISHING - 1.26%
Dun & Bradstreet Corporation 144,200 4,461,188
McGraw-Hill Companies, Incorporated 63,000 4,662,000
The Reader's Digest Association,
Incorporated 136,900 3,234,262
----------
12,357,450
RAILROADS & EQUIPMENT - 2.89%
Burlington Northern Santa Fe
Corporation 64,300 5,975,881
Gatx Corporation 37,500 2,721,094
Norfolk Southern Corporation 256,900 7,915,731
Union Pacific Corporation 188,100 11,744,494
----------
28,357,200
REAL ESTATE - 1.20%
Security Capital Pacific Trust 56,500 1,370,125
Simon DeBartolo Group, Incorporated 238,700 7,802,506
Weingarten Realty Investors 57,700 2,585,681
----------
11,758,312
RETAIL TRADE - 1.41%
May Department Stores Company 77,600 4,088,550
J.C. Penney, Incorporated 162,300 9,788,719
----------
13,877,269
STEEL - 0.34%
USX-U.S. Steel Group 108,200 3,381,250
---------
TELEPHONE - 9.08%
ALLTEL Corporation 309,100 12,692,419
American Telephone & Telegraph
Corporation 261,900 17,878,875
BCE, Incorporated 170,600 5,683,113
Bell Altantic Corporation 90,000 8,190,000
BellSouth Corporation 125,700 7,078,481
Frontier Corporation 156,000 3,753,750
GTE Corporation 196,500 10,267,125
SBC Communications, Incorporated 151,229 11,077,524
Southern New England
Telecommunications Corporation 92,900 4,674,031
Sprint Corporation 75,000 4,396,875
U.S. West, Incorporated 75,900 3,424,988
----------
89,117,181
TOBACCO - 2.61%
Philip Morris Companies, Incorporated 245,300 11,115,156
RJR Nabisco Holdings Corporation 122,900 4,608,750
UST, Incorporated 266,600 9,847,538
----------
25,571,444
TRUCKING & FREIGHT - 0.21%
Alexander & Baldwin, Incorporated 76,400 2,086,675
TOTAL COMMON STOCKS
(Cost: $701,127,169) $869,752,702
-----------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 11.30%
$4,665,000 Bank of New York,
5.83% due 01/16/98 $4,653,668
32,000,000 Beta Finance, Incorporated,
5.68% due 02/19/98 31,752,604
4,375,000 Caisse Des Depots Et Consign,
28,300,000 5.85% due 01/15/98 4,365,047
CIESCO LP, 5.65% due 02/20/98 28,077,924
1,000,000 Federal Home Loan Bank,
4.75% due 01/02/98 999,868
41,049,758 Navigator Securities
Lending Trust, 5.74% 41,049,758
-----------
110,898,869
REPURCHASE AGREEMENT - 0.05%
$461,000 Repurchase Agreement with State
Street Bank & Trust Company dated
12/31/97 at 5.00%, to be
repurchased at $461,128 on
01/02/98, collateralized by
$470,231 U.S. Treasury Strips,
5.00% due 02/15/99 (valued at
$478,950, including interest) $461,000
-------
TOTAL INVESTMENTS
(Equity-Income Trust) (Cost: $812,487,038) $981,112,571
===========
The accompanying notes are an integral part of the financial statements.
114
<PAGE> 154
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
BALANCED TRUST
Shares Value
------ -----
COMMON STOCKS - 56.87%
BANKING - 1.60%
BankAmerica Corporation 22,500 $1,642,500
NationsBank Corporation 21,200 1,289,225
---------
2,931,725
CHEMICALS - 2.28%
ARCO Chemical Company 31,800 1,484,663
E.I. Du Pont De Nemours & Company 13,900 834,867
Imperial Chemical Industries PLC, ADR 28,900 1,876,695
---------
4,196,225
COMPUTERS & BUSINESS EQUIPMENT - 0.94%
Hewlett-Packard Company 13,100 818,750
International Business Machines
Corporation 8,700 909,694
---------
1,728,444
COSMETICS & TOILETRIES - 0.31%
Avon Products, Incorporated 4,800 294,600
Revlon, Incorporated* 7,800 275,437
-------
570,037
DOMESTIC OIL - 2.08%
Atlantic Richfield Company 37,700 3,020,713
Phillips Petroleum Corporation 16,500 802,312
---------
3,823,025
DRUGS & HEALTH CARE - 19.06%
Abbott Laboratories 14,800 970,325
ALZA Corporation* 29,300 932,106
American Home Products Corporation 7,300 558,450
Becton, Dickinson & Company 26,400 1,320,000
Bristol-Myers Squibb Company 6,600 624,525
Columbia/HCA Healthcare Corporation 29,300 868,012
Eli Lilly & Company 29,900 2,081,788
Glaxo Wellcome PLC, ADR 120,000 5,745,000
Johnson & Johnson 22,900 1,508,537
Merck & Company, Incorporated 13,100 1,391,875
Mylan Laboratories, Incorporated 26,400 552,750
Novartis AG 3,400 5,514,646
Pfizer, Incorporated 49,500 3,690,844
Schering-Plough Corporation 13,900 863,537
SmithKline Beecham PLC, ADR 114,500 5,889,594
Warner-Lambert Company 20,200 2,504,800
----------
35,016,789
ELECTRIC UTILITIES - 1.52%
Consolidated Edison Company of
New York, Incorporated 32,525 1,333,525
Duke Energy Company 26,194 1,450,493
---------
2,784,018
ELECTRICAL EQUIPMENT - 0.75%
Boston Scientific Corporation* 6,175 283,278
General Electric Company 14,800 1,085,950
---------
1,369,228
ELECTRONICS - 0.48%
Intel Corporation 12,600 885,150
-------
FINANCIAL SERVICES - 0.26%
American Express Company 5,300 473,025
-------
FOOD & BEVERAGES - 1.26%
Nestle SA 800 1,198,467
PepsiCo, Incorporated 29,900 1,089,481
Ralston Purina Company 325 30,196
---------
2,318,144
GAS & PIPELINE UTILITIES - 0.60%
Sonat, Incorporated 24,000 1,098,000
---------
HOTELS & RESTAURANTS - 0.18%
Hilton Hotels Corporation 11,150 331,712
-------
HOUSEHOLD PRODUCTS - 2.22%
Colgate-Palmolive Company 47,200 3,469,200
Dial Corporation 29,400 611,888
---------
4,081,088
INSURANCE - 5.32%
Allstate Corporation 47,300 4,298,388
W.R. Berkley Corporation 36,037 1,581,123
General Re Corporation 1,400 296,800
SAFECO Corporation 34,450 1,679,437
Travelers Property Casualty
Corporation 43,575 1,917,300
---------
9,773,048
INTERNATIONAL OIL - 3.21%
Amoco Corporation 20,200 1,719,525
The British Petroleum Company
PLC, ADR 15,600 1,243,125
Chevron Corporation 18,825 1,449,525
Mobil Corporation 10,200 736,312
Texaco, Incorporated 13,900 755,813
---------
5,904,300
LEISURE TIME - 0.09%
International Game Technology 6,900 174,225
-------
MINING - 4.51%
Newmont Mining Corporation 125,500 3,686,563
Potash Corporation of Saskatchewan,
Incorporated 55,450 4,602,350
---------
8,288,913
PAPER - 2.58%
Fort James Corporation 78,700 3,010,275
Kimberly-Clark Corporation 17,100 843,244
Minnesota Mining & Manufacturing
Company 10,700 878,069
---------
4,731,588
The accompanying notes are an integral part of the financial statements.
115
<PAGE> 155
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Shares Value
------ -----
PETROLEUM SERVICES - 0.75%
Baker Hughes, Incorporated 9,875 $430,797
Global Marine, Incorporated* 25,000 612,500
Helmerich & Payne, Incorporated 5,000 339,375
---------
1,382,672
RAILROADS & EQUIPMENT - 0.85%
Canadian Pacific, Ltd. 57,000 1,553,250
---------
REAL ESTATE - 1.08%
Legacy Hotels Real Estate
Investment 295,100 1,982,408
---------
SOFTWARE - 0.42%
Oracle Corporation* 34,800 776,475
-------
TELEPHONE - 4.18%
Ameritech Corporation 9,100 732,550
U.S. West, Incorporated 153,800 6,940,225
---------
7,672,775
TOBACCO - 0.34%
RJR Nabisco Holdings Corporation 16,975 636,562
-------
TOTAL COMMON STOCKS
(Cost: $96,057,446) $104,482,826
-----------
Principal
Amount Value
------ -----
U.S. TREASURY
OBLIGATIONS - 32.47%
U.S. Treasury Bonds - 4.42%
6.00% due 02/15/26 $470,000 $469,412
6.375% due 08/15/27 1,600,000 1,687,504
6.50% due 11/15/26 1,540,000 1,643,950
6.625% due 02/15/27 1,760,000 1,910,691
6.75% due 08/15/26 1,290,000 1,420,213
6.875% due 08/15/25 895,000 997,925
---------
8,129,695
U.S. TREASURY NOTES - 28.05%
5.625% due 11/30/99 1,300,000 1,298,778
5.75% due 10/31/00 3,775,000 3,779,719
5.75% due 11/31/00 1,700,000 1,703,179
5.75% due 10/31/02 1,700,000 1,701,598
5.875% due 02/15/00 10,000,000 10,039,100
5.875% due 11/15/05 800,000 804,248
6.00% due 08/15/99 8,400,000 8,460,396
6.125% due 12/31/01 1,600,000 1,621,248
6.25% due 08/31/00 965,000 977,970
6.25% due 02/15/07 4,635,000 4,782,717
6.625% due 03/31/02 10,300,000 10,633,102
6.625% due 04/30/02 1,100,000 1,136,091
6.875% due 05/15/06 4,300,000 4,601,000
----------
51,539,146
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $57,381,015) $59,668,841
----------
CORPORATE BONDS - 1.88%
TELEPHONE - 1.88%
New Jersey Bell Telephone Company,
5.875% due 12/01/06 500,000 484,215
New York Telephone Company,
5.875% due 09/01/03 2,000,000 1,960,660
7.00% due 12/01/33 1,000,000 1,002,180
---------
TOTAL CORPORATE BONDS
(Cost: $3,269,587) $3,447,055
---------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 5.60%
$10,297,248 Navigator Securities
Lending Trust, 5.74% $10,297,248
----------
REPURCHASE AGREEMENT - 3.18%
$5,841,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 12/31/97 at 5.00%, to be
repurchased at $5,842,623 on
01/02/98, collateralized by
$5,958,925 U.S. Treasury Bonds,
7.875% due 02/15/21 (valued at
$6,099,494, including interest) $5,841,000
---------
TOTAL INVESTMENTS
(Balanced Trust)
(Cost: $172,846,296) $183,736,970
===========
The accompanying notes are an integral part of the financial statements.
116
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION TRUSTS
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS: 72.30% 50.04% 23.92%
AEROSPACE: 0.63% 0.46% 0.27%
BE Aerospace, Incorporated* 3,100 $82,925 16,100 $430,675 3,400 $90,950
Boeing Company 9,114 446,016 17,042 833,993 3,642 178,230
British Aerospace 10,087 287,453 18,235 519,650 3,223 91,847
Gulfstream Aerospace Corporation -- -- -- -- 1,300 38,025
Kellstrom Industries, Incorporated* 5,500 136,125 6,100 150,975 900 22,275
Lockheed Martin Corporation 4,800 472,800 3,800 374,300 900 88,650
Northrop Grumman Corporation 900 103,500 5,800 667,000 400 46,000
United Technologies Corporation 1,800 131,063 1,200 87,375 300 21,844
--------- --------- -------
1,659,882 3,063,968 577,821
AIR FREIGHT: 0.07% 0.00% 0.01%
Expeditors International
of Washington, Incorporated 4,600 177,100 -- -- 300 11,550
------- ------
AIR TRAVEL: 1.01% 0.68% 0.33%
Air New Zealand, Ltd. 13,800 27,645 25,000 50,081 4,300 8,614
AMR Corporation* 17,700 2,274,450 30,500 3,919,250 4,400 565,400
Continental Airlines, Incorporated,
Class B* 3,000 144,375 5,800 279,125 1,800 86,625
Delta Air Lines, Incorporated 1,400 166,600 700 83,300 100 11,900
Japan Airlines Company, Ltd.* 11,000 29,907 36,000 97,879 6,000 16,313
Singapore Airlines, Ltd.* 4,000 26,105 8,000 52,210 -- --
--------- --------- -------
2,669,082 4,481,845 688,852
ALUMINUM: 0.06% 0.07% 0.04%
Alumax, Incorporated* 4,600 156,400 5,800 197,200 2,200 74,800
Aluminum Company of America -- -- 4,100 288,537 -- --
------- ------- ------
156,400 485,737 74,800
APPAREL & TEXTILES: 0.00% 0.00% 0.00%
Cygene Designs, Incorporated -- -- -- -- 900 253
---
AUTO PARTS: 1.00% 0.56% 0.32%
Eaton Corporation 26,000 2,320,500 41,200 3,677,100 6,600 589,050
Echlin, Incorporated -- -- 1,900 68,756 -- --
Modine Manufacturing 9,700 331,013 -- -- 2,800 95,550
--------- --------- -------
2,651,513 3,745,856 684,600
AUTOMOBILES: 0.78% 0.58% 0.29%
Bayer Motoren Werk 150 112,149 250 186,915 50 37,383
Chrysler Corporation 10,600 372,988 18,300 643,931 2,700 95,006
Daimler Benz AG* 1,900 133,289 3,500 245,532 700 49,106
Honda Motor Company 8,000 293,482 15,000 550,279 3,000 110,056
Oriental Holdings BHD* 6,400 7,832 11,200 13,707 1,600 1,958
Spartan Motors, Incorporated -- -- 11,900 73,631 2,900 17,944
Tower Automotive, Incorporated* 7,400 311,263 11,700 492,131 2,100 88,331
Toyota Motor Corporation 21,000 601,516 37,000 1,059,815 6,000 171,862
Volvo AB, Series B 3,100 83,162 5,600 150,229 1,000 26,827
Volvo Aktiebolaget, ADR 6,000 162,000 15,400 415,800 400 10,800
--------- --------- -------
2,077,681 3,831,970 609,273
</TABLE>
The accompanying notes are an integral part of the financial statements.
117
<PAGE> 157
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BANKING: 6.95% 4.87% 2.42%
Akita Bank, Ltd. 29,000 $113,273 54,000 $210,921 9,000 $35,154
Banc One Corporation 13,400 727,788 17,400 945,038 1,500 81,469
Bank of New York, Incorporated 45,300 2,618,906 78,900 4,561,406 12,400 716,875
Bank of Ireland 19,800 304,079 34,200 525,228 6,200 95,217
Bank of Tokyo-Mitsubishi, Ltd.* 37,000 510,071 67,000 923,642 12,000 165,429
Bank United Corporation 2,100 102,769 -- -- -- --
BankAmerica Corporation 24,400 1,781,200 45,400 3,314,200 6,000 438,000
Banco Bilbao Vizcaya SA* 7,050 228,136 12,700 410,968 2,200 71,191
Barclays 16,247 432,519 29,367 781,793 5,146 136,994
BHF-Bank AG* 7,850 222,546 14,150 401,151 2,450 69,457
Charter One Financial, Incorporated 10,400 656,484 28,638 1,807,774 2,315 146,134
Citicorp 11,300 1,428,744 23,500 2,971,281 3,600 455,175
Comerica, Incorporated 1,900 171,475 -- -- 800 72,200
Credito Italiano 67,500 208,147 122,000 376,207 22,500 69,382
Credit Suisse Group 3,370 521,229 6,085 941,151 1,165 180,188
Den Danske Bank* 975 129,917 1,775 236,515 300 39,974
Den Norske Bank 39,500 186,114 70,800 333,591 12,300 57,954
Deutsche Bank AG 1,700 120,014 3,000 211,790 550 38,828
First Chicago NBD Corporation 8,693 725,866 19,231 1,605,789 3,615 301,853
Fleet Financial Group, Incorporated 3,898 292,106 7,345 550,416 1,659 124,321
Fuji Bank 25,000 101,095 46,000 186,015 8,000 32,350
Hang Seng Bank* 14,000 135,050 20,000 192,928 4,000 38,586
HSBC Holdings - HKD 2,535 62,484 4,736 116,735 754 18,585
HSBC Holdings -(pound) 14,730 363,394 26,604 656,330 4,636 114,372
Lloyds TSB Group PLC 47,320 615,614 85,011 1,105,958 14,700 191,241
Mitsubishi Trust & Banking 8,000 80,263 15,000 150,494 2,000 20,066
National City Corporation 9,800 644,350 16,700 1,098,025 1,200 78,900
NationsBank Corporation 17,596 1,070,057 30,260 1,840,186 4,528 275,359
National Australia Bank* 12,500 174,587 22,900 319,844 3,900 54,471
Nordbanken Holdings AB* 20,300 114,796 43,400 245,426 7,000 39,585
North Fork Bancorporation, Incorporated 11,514 386,439 13,692 459,538 4,356 146,198
Popular, Incorporated 8,500 420,750 14,600 722,700 2,200 108,900
Sakura Bank, Ltd.* 40,000 114,268 72,000 205,683 13,000 37,137
Society Generale* 2,742 373,588 4,827 657,662 863 117,581
Svenska Handelbanken 7,100 245,463 12,800 442,524 2,200 76,059
Toyo Trust & Banking* 16,000 94,356 30,000 176,917 5,000 29,486
United Overseas Bank 13,800 76,553 25,600 142,011 6,200 34,393
U.S. Bancorp 8,300 929,081 8,300 929,081 2,400 268,650
Wachovia Corporation 2,700 219,037 4,500 365,063 700 56,788
Wells Fargo & Company 2,000 678,875 2,900 984,369 133 45,145
Westpac Banking Corporation, Ltd. 6,600 42,224 11,900 76,131 2,100 13,435
Zions Bancorp -- -- 2,000 90,750 -- --
---------- ---------- ---------
18,423,707 32,273,231 5,093,082
BROADCASTING: 1.09% 0.63% 0.38%
CBS Corporation 33,807 995,194 43,634 1,284,476 9,198 270,766
BET Holdings, Incorporated* 2,700 147,487 4,500 245,812 2,000 109,250
Flextech PLC* 7,000 60,017 12,600 108,031 2,200 18,863
King World Productions, Incorporated* 10,800 623,700 11,400 658,350 1,900 109,725
Medialink Worldwide, Incorporated* 12,600 170,100 16,500 222,750 -- --
News Corporation 13,800 76,180 24,000 132,488 4,300 23,737
Pearson 17,400 226,064 30,800 400,159 5,500 71,457
Sky Network Television, Ltd.* 6,700 10,076 12,100 18,197 2,100 3,158
</TABLE>
The accompanying notes are an integral part of the financial statements.
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(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BROADCASTING - CONTINUED
Viacom, Incorporated, Class A* -- -- -- -- 272 $11,118
Viacom, Incorporated, Class B* 14,000 $ 580,125 26,400 $1,093,950 4,400 182,325
--------- --------- -------
2,888,943 4,164,213 800,399
BUILDING CONSTRUCTION: 0.24% 0.11% 0.08%
Fluor Corporation 4,700 175,662 10,000 373,750 1,600 59,800
Harsco Corporation 10,400 448,500 7,800 336,375 2,400 103,500
------- ------- -------
624,162 710,125 163,300
BUSINESS SERVICES: 2.59% 1.71% 0.93%
ADVO, Incorporated* 4,400 85,800 5,000 97,500 2,200 42,900
Automatic Data Processing, Incorporated 2,500 153,438 4,300 263,912 700 42,962
Barra, Incorporated* 4,200 101,325 9,450 227,981 1,950 47,044
Brambles Industries, Ltd.* 4,700 93,275 8,700 172,658 1,100 21,830
Britax International* 49,900 109,827 78,000 171,674 13,800 30,373
Cap Gemini SA* 2,100 172,194 3,700 303,390 650 53,298
Cendant Corporation* 31,720 1,090,375 44,245 1,520,922 9,131 313,878
Dames and Moore, Incorporated 4,400 58,300 9,300 123,225 3,500 46,375
EA Engineering Science and Technology,
Incorporated -- -- -- -- 2,100 4,200
Fiserv, Incorporated* 2,535 124,532 8,132 399,485 612 30,065
ISS International* 7,450 273,997 13,450 494,666 2,350 86,429
Nokia Corporation, ADR 7,100 497,000 12,000 840,000 2,100 147,000
Ogden Corporation 36,900 1,040,119 66,700 1,880,106 11,700 329,794
OmniCom Group 41,200 1,745,850 74,800 3,169,650 11,000 466,125
Rentokil Initial PLC* 21,800 96,473 39,400 174,360 6,900 30,535
SABRE Group Holdings, Incorporated,
Class A* 10,700 308,962 5,000 144,375 1,200 34,650
Securitas AB, Series B* 1,200 36,273 2,200 66,500 400 12,091
Security Dynamics Technologies* 7,700 275,275 9,400 336,050 -- --
Sitel Corporation* 9,700 88,512 13,100 119,537 4,100 37,412
SunGard Data Systems, Incorporated* 11,800 365,800 18,000 558,000 2,600 80,600
TRC Companies, Incorporated -- -- -- -- 2,500 10,625
Universal Outdoor Holdings, Incorporated* 3,100 161,200 4,700 244,400 1,600 83,200
--------- ---------- ---------
6,878,527 11,308,391 1,951,386
CHEMICALS: 2.87% 2.14% 0.87%
Air Products & Chemicals, Incorporated 1,000 82,250 -- -- -- --
AKZO Nobel NV 650 112,071 1,150 198,279 200 34,483
Bayer AG* 3,200 119,536 5,800 216,660 1,000 37,355
Ciba Specialty Chemicals AG* 1,025 122,057 1,855 220,894 250 29,770
Cytec Industries, Incorporated* 22,200 1,042,013 44,000 2,065,250 5,600 262,850
Dainippon Ink & Chemicals, Incorporated* 42,000 106,150 76,000 192,081 13,000 32,856
E.I. Du Pont De Nemours & Company 24,100 1,447,506 43,200 2,594,700 6,100 366,381
W.R. Grace & Company 6,100 490,669 12,700 1,021,556 1,200 96,525
Hexcel Corporation* 5,700 142,144 16,600 413,963 2,000 49,875
Imperial Chemical Industries PLC 10,200 159,326 18,300 285,849 3,200 49,985
Imperial Chemical Industries PLC, ADR 5,400 350,662 13,400 870,162 -- --
Martek Biosciences Corporation* -- -- -- -- 600 4,950
Microfluidics International Corporation* -- -- -- -- 1,100 2,681
Monsanto Company 40,800 1,713,600 68,400 2,872,800 7,600 319,200
Olin Corporation -- -- 1,600 75,000 400 18,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CHEMICALS - CONTINUED
Om Group, Incorporated 2,700 $98,888 4,350 $159,319 -- --
Praxair, Incorporated 2,600 117,000 4,500 202,500 700 $31,500
Rhone Poulenc SA 12,313 551,563 22,831 1,022,720 3,808 170,580
Shin-Etsu Chemical Company, Ltd. 6,000 114,421 10,000 190,702 2,000 38,141
Solutia, Incorporated* 9,060 241,789 13,260 353,876 2,580 68,854
TETRA Technologies, Incorporated* 6,500 136,906 12,200 256,962 800 16,850
Toray Industries, Incorporated* 20,000 89,607 36,000 161,293 6,000 26,882
Union Carbide Corporation 5,500 236,156 12,600 541,012 2,600 111,638
Wesfarmers, Ltd.* 9,891 82,850 17,928 150,170 3,091 25,891
Witco Corporation 1,200 48,975 3,500 142,844 800 32,650
--------- ---------- ---------
7,606,139 14,208,592 1,828,647
COMPUTERS & BUSINESS EQUIPMENT: 2.40% 1.43% 0.81%
3COM Corporation* 1,500 52,406 3,500 122,281 900 31,444
Avant Corporation* 3,800 63,650 6,900 115,575 1,900 31,825
Cisco Systems, Incorporated* 7,950 443,213 13,650 760,988 1,950 108,713
Citrix Systems, Incorporated* 2,300 174,800 -- -- -- --
Compaq Computer Corporation 11,900 671,606 20,500 1,156,969 3,000 169,312
Dell Computer Corporation* 6,700 562,800 10,000 840,000 1,500 126,000
EMC Corporation* 37,800 1,037,138 59,600 1,635,275 8,200 224,987
Evans & Sutherland Computer* 6,700 194,300 5,000 145,000 1,800 52,200
Fujitsu 22,000 235,889 40,000 428,889 7,000 75,056
General Binding Corporation 6,000 180,000 12,500 375,000 -- --
Hewlett-Packard Company 2,100 131,250 4,000 250,000 800 50,000
International Business Machines Corporation 11,100 1,160,644 13,800 1,442,963 2,700 282,319
Iomega Corporation* 26,600 330,837 28,800 358,200 3,000 37,312
Pitney Bowes, Incorporated 11,600 1,043,275 18,200 1,636,862 3,700 332,769
Sundstrand Corporation 1,900 95,712 3,900 196,462 2,800 141,050
Tech Data Corporation -- -- -- -- 1,000 38,875
--------- --------- ---------
6,377,520 9,464,464 1,701,862
CONGLOMERATES: 0.27% 0.21% 0.09%
Berjaya Group BHD* 46,000 9,343 83,000 16,858 14,000 2,844
CSR, Ltd.* 24,400 82,694 47,300 160,304 9,200 31,180
Harcourt General, Incorporated 3,100 169,725 6,700 366,825 -- --
Hutchison Whampoa 40,000 250,871 72,000 451,568 13,000 81,533
Sophus Berendsen* 650 107,197 1,100 181,410 225 37,106
Viag AG* 200 107,729 400 215,459 50 26,932
------- --------- -------
727,559 1,392,424 179,595
CONSTRUCTION MATERIALS: 0.45% 0.35% 0.07%
Boral, Ltd.* 14,500 36,667 26,000 65,748 4,500 11,380
CRH* 3,851 44,657 7,693 89,210 916 10,622
Lafarge Corporation 1,100 32,519 1,800 53,212 -- --
Masco Corporation 10,100 513,838 21,500 1,093,812 1,000 50,875
Portland Valderrivas SA* 700 62,947 1,250 112,406 200 17,985
Sherwin-Williams Company 10,300 285,825 16,300 452,325 -- --
Tarmac PLC* 38,300 71,715 69,200 129,574 12,000 22,469
Vulcan Materials Company -- -- 800 81,700 -- --
Wolseley PLC 16,900 134,325 30,600 243,216 5,300 42,126
--------- --------- -------
1,182,493 2,321,203 155,457
</TABLE>
The accompanying notes are an integral part of the financial statements.
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CONSTRUCTION & MINING EQUIPMENT: 0.00% 0.01% 0.00%
Harnischfeger Industries, Incorporated -- -- 1,434 $50,638 291 $10,276
------ ------
CONTAINERS & GLASS: 0.06% 0.01% 0.01%
Silgan Holdings, Incorporated* 5,200 $169,000 3,000 97,500 500 16,250
------- ------ ------
Cosmetics & Toiletries: 0.09% 0.07% 0.04%
Avon Products, Incorporated 2,200 135,025 3,900 239,362 500 30,687
Kao Corporation 8,000 115,187 14,000 201,578 3,000 43,195
------- ------- ------
250,212 440,940 73,882
DOMESTIC OIL: 0.49% 0.26% 0.13%
Amerada Hess Corporation 4,000 219,500 5,900 323,763 1,100 60,363
Kerr-McGee Corporation 1,400 88,637 -- -- 600 37,987
USX Marathon Group 29,400 992,250 40,700 1,373,625 4,900 165,375
--------- --------- -------
1,300,387 1,697,388 263,725
DRUGS & HEALTH CARE: 7.26% 4.97% 2.27%
Alkermes, Incorporated* 8,900 176,888 23,500 467,062 2,100 41,737
American Home Products Corporation 11,800 902,700 23,000 1,759,500 3,500 267,750
Anesta Corporation* 8,600 140,825 6,200 101,525 -- --
Arris Pharmaceutical Corporation* 18,900 158,288 -- -- -- --
Astra AB* 10,533 182,406 17,766 307,664 3,100 53,685
Baxter International, Incorporated 3,700 186,619 7,100 358,106 600 30,263
Bristol-Myers Squibb Company 10,800 1,021,950 21,600 2,043,900 4,000 378,500
Columbia/HCA-Healthcare Corporation 20,700 613,237 34,150 1,011,694 4,150 122,944
Cor Therapeutics, Incorporated* 8,100 182,250 19,200 432,000 3,100 69,750
Eli Lilly & Company 8,400 584,850 4,400 306,350 2,200 153,175
GEHE AG* 3,500 175,102 6,570 328,692 1,120 56,033
GelTex Pharmaceuticals, Incorporated* 2,600 68,900 -- -- -- --
Genentech, Incorporated* 22,000 1,333,750 29,000 1,758,125 3,900 236,438
Genzyme Corporation* -- -- 4,700 130,425 -- --
Gilead Sciences* 900 34,425 1,400 53,550 -- --
Glaxo Wellcome PLC 21,769 518,985 39,251 935,766 6,830 162,831
Health Management Association, Class A* 13,387 338,022 25,050 632,512 4,462 112,665
Healthsouth Corporation* 34,800 965,700 53,100 1,473,525 4,800 133,200
ICN Pharmaceuticals, Incorporated 2,100 102,506 4,400 214,775 -- --
INCYTE Pharmaceuticals, Incorporated* 2,200 99,000 5,200 234,000 -- --
Johnson & Johnson 10,200 671,925 19,200 1,264,800 6,200 408,425
Ligand Pharmaceuticals,
Incorporated, Class B* 23,200 298,700 41,100 529,162 1,700 21,887
Medimmune, Incorporated* -- -- 6,700 287,263 -- --
Medtronic, Incorporated 2,400 125,550 -- -- 2,400 125,550
Merck & Company, Incorporated 28,900 3,070,625 46,000 4,887,500 5,700 605,625
Novartis AG 623 1,010,478 1,128 1,829,565 197 319,525
Pfizer, Incorporated 9,600 715,800 19,100 1,424,144 2,700 201,319
Renal Treatment Centers, Incorporated* 6,500 234,813 16,000 578,000 600 21,675
Roche Holdings AG 28 277,950 50 496,339 9 89,341
SangStat Medical Corporation* 10,000 405,000 20,700 838,350 2,400 97,200
Sankyo Company, Ltd.* 9,000 203,339 5,000 73,141 1,000 14,628
Sanofi 1,200 133,588 2,600 289,441 350 38,963
Schering-Plough Corporation 18,100 1,124,463 31,100 1,932,088 4,700 291,987
Sierra Health Services, Incorporated* 8,100 272,362 9,800 329,525 500 16,812
SmithKline Beecham PLC* 40,954 422,100 80,792 832,698 12,924 133,204
</TABLE>
The accompanying notes are an integral part of the financial statements.
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(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
DRUGS & HEALTH CARE - CONTINUED
Spacelabs, Incorporated* 2,800 $53,200 6,100 $115,900 1,900 $36,100
St. Jude Medical, Incorporated* 4,450 135,725 11,500 350,750 1,100 33,550
Takeda Chemical Industries 11,000 313,395 20,000 569,809 4,000 113,962
Tenet Healthcare Corporation* 16,400 543,250 28,200 934,125 4,100 135,812
Thermedics, Incorporated* 5,900 96,613 9,600 157,200 2,200 36,025
United Healthcare Corporation 12,200 606,187 24,400 1,212,375 2,800 139,125
Universal Health Services, Incorporated* 4,900 246,837 10,600 533,975 1,200 60,450
ViroPharma, Incorporated* 2,800 49,350 11,900 209,737 -- --
Warner Lambert Company 2,100 260,400 3,500 434,000 300 37,200
Wellpoint Health Networks, Incorporated* 4,600 194,350 7,200 304,200 -- --
---------- ---------- ---------
19,252,403 32,963,258 4,797,336
ELECTRICAL EQUIPMENT: 3.15% 2.20% 0.91%
ABB AG* 65 81,628 120 150,698 25 31,395
Alcatel Alsthom Cie Generale D'Electric 3,587 455,937 6,449 819,720 1,124 142,870
AVX Corporation 9,100 167,781 13,600 250,750 -- --
Baldor Electric Company 28,667 621,708 48,800 1,058,350 -- --
Boston Scientific Corporation* 2,600 119,275 5,200 238,550 1,600 73,400
Emerson Electric Company 7,000 395,063 10,400 586,950 -- --
FLIR Systems, Incorporated* 4,500 93,375 16,200 336,150 3,800 78,850
General Electric Company 68,900 5,055,537 119,500 8,768,313 17,000 1,247,375
Hitachi, Incorporated 20,000 142,452 30,000 213,678 5,000 35,613
IFR Systems, Incorporated 11,100 172,050 12,450 192,975 -- --
Johnson Controls, Incorporated 8,300 396,325 13,600 649,400 1,800 85,950
Matsushita Electric Works 14,000 121,161 26,000 225,013 4,000 34,617
NEC Corporation 6,000 63,874 11,000 117,102 2,000 21,291
Raychem Corporation 6,400 275,600 12,000 516,750 2,600 111,963
Sanmina Corporation* -- -- 1,600 108,400 -- --
Siemens AG* 2,100 124,323 3,800 224,965 600 35,521
Sumitomo Electric Industry 5,000 68,163 9,000 122,693 2,000 27,265
--------- ---------- ---------
8,354,252 14,580,457 1,926,110
ELECTRIC UTILITIES: 1.14% 0.80% 0.38%
American Electric Power, Incorporated 1,300 67,113 4,900 252,963 800 41,300
China Light & Power Holdings, Ltd. 22,000 122,080 40,000 221,964 7,000 38,844
CINergy Corporation 8,300 317,994 12,400 475,075 2,700 103,444
DPL, Incorporated 7,000 201,250 5,900 169,625 800 23,000
Datacraft Asia* 15,000 38,700 27,000 69,660 5,000 12,900
DQE -- -- 2,600 91,325 500 17,562
Duke Energy Company 12,400 686,650 20,100 1,113,038 2,100 116,288
Electric De Portugal* 8,400 159,055 15,000 284,026 2,650 50,178
Enova Corporation 2,800 75,775 9,700 262,506 1,300 35,181
Entergy Corporation 4,000 119,750 6,800 203,575 1,000 29,937
Iberdrola SA 8,400 110,548 15,150 199,381 2,650 34,875
Kansai Electric Power 4,800 81,244 9,000 152,332 1,500 25,389
National Grid Group 49,400 234,493 89,100 422,942 17,700 84,019
Peco Energy Company 3,700 89,725 3,900 94,575 -- --
Tenaga Nasional* 11,000 23,473 26,000 55,483 5,000 10,670
Tokyo Electric Power 2,400 43,747 4,000 72,911 -- --
United Water Resources, Incorporated 21,400 418,637 38,300 749,244 5,400 105,638
VEBA AG 1,150 78,310 2,050 139,595 400 27,238
Yorkshire Water* 18,646 148,536 34,495 274,791 6,008 47,860
--------- --------- -------
3,017,080 5,305,011 804,323
</TABLE>
The accompanying notes are an integral part of the financial statements.
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ELECTRONICS: 2.09% 1.41% 0.64%
ADC Telecommunications, Incorporated 15,000 $626,250 25,300 $1,056,275 700 $29,225
Adflex Solutions, Incorporated* -- -- 4,800 77,400 2,000 32,250
Altera Corporation* 7,400 245,125 10,400 344,500 2,100 69,562
AMP, Incorporated 2,400 100,800 5,500 231,000 1,000 42,000
Andrew Corporation* 19,000 456,000 17,600 422,400 2,500 60,000
DSC Communications Corporation -- -- -- -- 200 4,800
Dynatech Corporation* -- -- 2,900 135,937 400 18,750
Elec & Eltek International Holdings, Ltd.* 13,200 59,664 23,100 104,412 3,300 14,916
Electronic Data Systems Corporation 5,300 232,869 13,900 610,731 -- --
Electronics For Imaging, Incorporated* 11,400 189,525 17,800 295,925 3,800 63,175
Fanuc, Ltd. 1,000 37,834 3,000 113,502 -- --
Intel Corporation 18,700 1,313,675 26,400 1,854,600 4,300 302,075
Liberty Technologies, Incorporated -- -- -- -- 3,500 8,094
Linear Technology Corporation 7,400 426,425 12,700 731,838 1,900 109,487
Maxim Integrated Products, Incorporated* -- -- 8,400 289,800 1,200 41,400
Motorola, Incorporated 6,400 365,200 11,500 656,219 2,300 131,244
Raytheon Company 3,400 171,700 6,700 338,350 -- --
REMEC, Incorporated* 2,800 63,000 12,100 272,250 -- --
Rohm Company 2,000 203,722 3,000 305,583 1,000 101,861
Sawtek, Incorporated* 1,300 34,288 -- -- 400 10,550
Scientific-Atlanta, Incorporated 16,800 281,400 32,600 546,050 5,500 92,125
TDK Corporation 2,000 150,724 3,000 226,086 1,000 75,362
Texas Instruments, Incorporated 6,000 270,000 9,500 427,500 1,600 72,000
ThermoQuest Corporation* 5,400 97,875 5,700 103,313 -- --
Tracor, Incorporated* 2,700 82,012 -- -- -- --
Vitesse Semiconductor Corporation* 3,900 147,225 4,100 154,775 1,700 64,175
Xilinx, Incorporated* -- -- 2,100 73,631 400 14,025
--------- --------- ---------
5,555,313 9,372,077 1,357,076
FINANCIAL SERVICES: 3.33% 2.59% 1.12%
3I Group PLC 13,800 114,466 25,000 207,366 4,300 35,667
Acom Company 3,700 204,028 5,000 275,714 1,400 77,200
American Express Company 9,200 821,100 14,000 1,249,500 2,600 232,050
Associates First Capital Corporation 7,200 512,100 9,500 675,688 800 56,900
Bear Stearns 1,900 90,250 -- -- -- --
Beneficial Corporation 5,500 457,188 18,900 1,571,062 1,500 124,688
Case Corporation 3,400 205,488 12,000 725,250 -- --
Corporate Express, Incorporated* -- -- 3,700 47,637 600 7,725
Eaton Vance Corporation -- -- -- -- 1,200 45,300
A.G. Edwards, Incorporated 2,800 111,300 -- -- -- --
Enhance Financial Services
Group, Incorporated 3,900 232,050 6,300 374,850 -- --
FactSet Research Systems, Incorporated* 2,200 67,650 4,000 123,000 900 27,675
Federal Home Loan Mortgage Corporation 7,200 301,950 11,400 478,087 3,200 134,200
Federal National Mortgage Association 30,900 1,763,231 71,300 4,068,556 7,800 445,087
Green Tree Financial Corporation 9,300 243,544 21,200 555,175 2,500 65,469
Hartford Financial Services Group 6,100 570,731 9,300 870,131 1,500 140,344
Household International, Incorporated 4,100 523,006 7,800 994,988 1,500 191,344
Internationale Nederlanden Groep* 4,162 175,294 7,522 316,810 1,405 59,175
Interra Financial, Incorporated -- -- 8,100 558,900 1,450 100,050
Japan Associated Finance Company* 1,000 35,613 2,000 71,226 1,000 35,613
Julius Baer Holdings* 50 92,732 90 166,918 15 27,820
</TABLE>
The accompanying notes are an integral part of the financial statements.
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - CONTINUED
Lehman Brothers Holdings, Incorporated 5,700 $290,700 13,400 $683,400 -- --
London Forfaiting Company PLC 12,900 75,642 23,200 136,038 4,000 $23,455
McDonald Company Investments,
Incorporated 4,800 136,200 9,800 278,075 1,600 45,400
Morgan Stanley Dean Witter 1,980 117,068 -- -- 1,320 78,045
Nomura Securities Company, Ltd. 10,000 133,262 18,000 239,871 2,000 26,652
Orix Corporation 1,000 69,694 2,000 139,389 -- --
Peoples Heritage Financial Group 6,400 294,400 12,200 561,200 2,400 110,400
Pioneer Group, Incorporated 10,400 292,500 11,900 334,688 1,100 30,938
Providian Financial Corporation 1,400 63,262 1,900 85,856 600 27,112
SLM Holding Corporation 1,200 166,950 700 97,388 -- --
Travelers Group, Incorporated 12,447 670,582 24,247 1,306,307 4,047 218,032
--------- ---------- ---------
8,831,981 17,193,070 2,366,341
FOOD & BEVERAGES: 3.01% 2.18% 1.13%
Archer-Daniels-Midland Company 4,427 96,011 14,349 311,194 2,662 57,732
Asahi Breweries* 8,000 116,413 15,000 218,274 3,000 43,655
Campbell Soup Company 13,500 784,688 24,800 1,441,500 1,100 63,937
Celestial Seasonings, Incorporated* -- -- 2,900 91,350 1,600 50,400
The Coca Cola Company 29,900 1,992,087 60,900 4,057,463 8,400 559,650
Devro PLC* 18,000 111,460 33,000 204,343 5,700 35,296
Dole Food Company, Incorporated 3,900 178,425 6,100 279,075 1,500 68,625
General Mills, Incorporated 6,088 436,053 11,879 850,833 2,174 155,713
Goodmark Foods, Incorporated 4,400 81,400 10,900 201,650 2,600 48,100
Hershey Foods Corporation 5,200 322,075 5,800 359,238 -- --
Huhtamaki Oy 1,100 45,405 2,000 82,554 400 16,511
Kellogg Company 3,500 173,688 6,100 302,713 900 44,662
Lion Nathan, Ltd.* 19,700 44,154 35,600 79,791 6,200 13,896
Nabisco Holdings Corporation, Class A 5,800 280,937 6,000 290,625 5,100 247,031
Nestle SA 88 131,831 160 239,693 23 34,456
Nippon Suisan Kaisha, Ltd.* 50,000 63,185 131,000 165,543 16,000 20,219
PepsiCo, Incorporated 39,900 1,453,856 68,500 2,495,969 10,100 368,019
Pioneer Hi Bred International, Incorporated 3,700 396,825 6,800 729,300 1,100 117,975
Ralston Purina Company 6,300 585,506 10,800 1,003,725 1,800 167,287
Sara Lee Corporation 4,600 259,037 4,400 247,775 2,700 152,044
Snow Brand Milk Products Company, Ltd.* 31,000 83,335 56,000 150,540 9,000 24,194
Tyson Foods, Incorporated, Class A 16,950 347,475 33,000 676,500 4,950 101,475
--------- ---------- ---------
7,983,846 14,479,648 2,390,877
FOREST PRODUCTS: 0.08% 0.00% 0.01%
Georgia-Pacific Corporation 2,600 157,950 -- -- 200 12,150
Georgia-Pacific Corporation (Timber Group)* 2,600 58,988 -- -- 200 4,537
Wickes Lumber Company -- -- -- -- 1,800 5,850
------- ------
216,938 22,537
GAS & PIPELINE UTILITIES: 1.27% 0.94% 0.58%
Coastal Corporation 22,600 1,399,788 40,500 2,508,469 5,600 346,850
Eastern Enterprises -- -- 3,800 171,000 1,600 72,000
Enron Corporation 4,200 174,563 7,600 315,875 1,100 45,719
MCN Corporation 8,800 355,300 16,000 646,000 3,100 125,163
Ocean Energy, Incorporated* 5,300 261,356 6,700 330,394 1,200 59,175
Pacific Enterprises 9,900 372,488 19,000 714,875 3,400 127,925
Piedmont National Gas, Incorporated 7,900 283,906 14,200 510,312 3,200 115,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
124
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PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
GAS & PIPELINE UTILITIES - CONTINUED
Questar Corporation 4,100 $182,962 12,900 $575,662 5,900 $263,287
UGI Corporation 11,600 340,025 16,700 489,519 2,400 70,350
--------- --------- ---------
3,370,388 6,262,106 1,225,469
GOLD: 0.23% 0.15% 0.09%
Newmont Mining Corporation 20,600 605,125 33,600 987,000 6,300 185,063
------- ------- -------
HOMEBUILDERS: 0.12% 0.12% 0.06%
Beazer Homes USA, Incorporated* 40,300 106,570 72,800 192,514 12,700 33,584
Elcor Chemical Corporation 6,300 151,200 16,100 386,400 1,050 25,200
Lennar Corporation -- -- -- -- 2,000 43,125
Sekisui House 10,000 64,257 36,000 231,324 3,000 19,277
------- ------- -------
322,027 810,238 121,186
HOTELS & RESTAURANTS: 0.53% 0.36% 0.19%
Hilton Hotels Corporation 4,100 121,975 7,000 208,250 1,100 32,725
ITT Corporation* 1,300 107,738 3,200 265,200 400 33,150
La Quinta Inns, Incorporated 7,425 143,395 14,850 286,791 4,275 82,561
McDonald's Corporation 10,800 515,700 18,600 888,150 2,800 133,700
Mirage Resorts, Incorporated* 2,800 63,700 5,100 116,025 800 18,200
Promus Hotel Corporation* -- -- 1,433 60,186 323 13,566
Rainforest Cafe, Incorporated* 5,600 184,800 2,300 75,900 -- --
Tricon Global Restaurants, Incorporated* 6,080 176,700 11,250 326,953 1,760 51,150
Yoshinoya D&C Company, Ltd. 10 91,139 18 164,050 3 27,342
--------- --------- -------
1,405,147 2,391,505 392,394
HOUSEHOLD APPLIANCES FURNISHING: 0.37% 0.27% 0.13%
Fedders USA, Incorporated 10,000 62,500 23,800 148,750 -- --
Matsushita Electronic Industries 18,000 263,307 33,000 482,730 5,000 73,141
Philips Electronics 7,200 431,791 12,950 776,623 2,350 140,931
Sony Corporation 2,600 230,987 4,500 399,785 700 62,189
------- --------- -------
988,585 1,807,888 276,261
HOUSEHOLD PRODUCTS: 0.35% 0.20% 0.13%
Cultor Oyj* 1,300 70,593 2,350 127,611 350 19,006
Gillette Company 600 60,262 -- -- -- --
Procter & Gamble Company 2,000 159,625 -- -- -- --
Snap-On, Incorporated 1,700 74,163 2,800 122,150 800 34,900
Stanhome, Incorporated 2,500 64,219 7,100 182,381 2,600 66,788
Unilever PLC* 33,200 285,579 59,600 512,665 10,400 89,458
Unilever NV* 3,550 218,849 6,450 397,628 1,200 73,977
------- --------- -------
933,290 1,342,435 284,129
INDUSTRIAL MACHINERY: 0.82% 0.59% 0.31%
AES Corporation* 5,800 270,425 8,600 400,975 1,900 88,588
American Standard Companies, Incorporated -- -- -- -- 500 19,156
Applied Materials, Incorporated* 7,700 231,963 7,700 231,963 1,200 36,150
Bunka Shutter Company* 27,000 74,443 50,000 137,857 8,000 22,057
Ingersoll Rand Company 8,400 340,200 20,100 814,050 1,650 66,825
Komatsu, Ltd. 26,000 130,428 48,000 240,790 8,000 40,132
Laird Group PLC* 13,000 95,019 25,100 183,459 4,400 32,160
Mannesmann AG 500 252,647 1,000 505,295 150 75,794
Minebea Company 17,000 182,278 29,000 310,944 5,000 53,611
Mitsubishi Heavy Industry 7,000 29,164 12,000 49,996 -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
125
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PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL MACHINERY - CONTINUED
Sulzer AG 160 $101,396 290 $183,780 50 $31,686
Tadano, Ltd. 28,000 76,128 51,000 138,661 9,000 24,470
Thermo Electron Corporation* 3,825 170,212 6,075 270,338 1,950 86,775
THK Company, Ltd.* 14,400 140,063 30,000 291,798 4,500 43,770
TSI, Incorporated 7,800 78,000 14,400 144,000 2,400 24,000
--------- --------- -------
2,172,366 3,903,906 645,174
INSURANCE: 2.47% 1.74% 0.75%
Aflac, Incorporated 1,700 86,913 2,100 107,363 -- --
Allianz AG* 700 181,328 1,250 323,800 200 51,808
Allstate Corporation 29,842 2,711,892 51,744 4,702,236 8,262 750,809
American International Group, Incorporated 900 97,875 -- -- -- --
Assicurazioni Generali 6,000 147,371 10,000 245,619 2,000 49,124
CIGNA Corporation 1,200 207,675 700 121,144 -- --
Fortis AG* 300 62,589 500 104,316 100 20,863
Harleysville Group, Incorporated 7,000 168,000 14,600 350,400 4,000 96,000
Istituto Nazionale delle Assicurazioni 60,000 121,594 108,000 218,869 19,000 38,505
Marsh & McLennan Companies, Incorporated -- -- 3,600 268,425 -- --
MBIA, Incorporated 6,400 427,600 9,600 641,400 1,400 93,538
Mercury General Corporation* 800 44,200 -- -- -- --
National Mutual Asia, Ltd.* 42,000 41,734 76,000 75,519 14,000 13,911
PMI Group, Incorporated 13,100 947,294 26,900 1,945,206 2,500 180,781
Pohjola, Series B 1,500 55,587 2,700 100,056 450 16,676
Protective Life Corporation 2,100 125,475 4,400 262,900 -- --
Prudential Corporation 4,200 51,145 7,500 91,330 1,300 15,831
Selective Insurance Group, Incorporated 13,400 361,800 25,600 691,200 3,800 102,600
Skandia Foersaekrings AB 6,300 297,151 11,200 528,269 1,900 89,617
Sumitomo Marine & Fire 18,000 95,121 34,000 179,674 6,000 31,707
Transamerica Corporation 1,100 117,150 1,900 202,350 -- --
Vesta Insurance Group, Incorporated 3,300 195,938 5,900 350,312 600 35,625
--------- ---------- ---------
6,545,432 11,510,388 1,587,395
INTERNATIONAL OIL: 1.83% 1.24% 0.56%
British Petroleum Company PLC 28,071 371,338 50,812 672,168 8,864 117,258
British Petroleum Company PLC, ADR 600 47,812 2,200 175,312 600 47,812
Mobil Corporation 7,000 505,312 11,900 859,031 1,800 129,937
Royal Dutch Petroleum Company 9,100 493,106 6,600 357,638 900 48,769
Royal Dutch Petroleum Company - NLG 12,300 675,161 22,200 1,218,583 3,850 211,331
Shell Transport & Trading Company PLC 18,300 128,347 33,100 232,146 5,800 40,678
Texaco, Incorporated 48,500 2,637,188 86,700 4,714,313 10,800 587,250
--------- --------- ---------
4,858,264 8,229,191 1,183,035
LEISURE TIME: 1.13% 0.84% 0.40%
American Skiing Company* 130 32,500 370 92,500 -- --
Berjaya Sports 9,000 23,024 17,000 43,489 3,000 7,674
Capital Radio* 8,200 66,669 12,800 104,069 2,300 18,700
Granada Group PLC* 14,178 216,572 25,604 391,108 4,480 68,433
Hollywood Entertainment Corporation* -- -- 8,600 91,375 -- --
MGM Grand, Incorporated* -- -- 1,700 61,306 -- --
Sankyo Company, Ltd., Gunma 3,000 43,884 17,000 384,085 3,000 67,780
Sodak Gaming, Incorporated* -- -- 9,800 62,475 800 5,100
The Walt Disney Company 26,419 2,617,132 43,734 4,332,399 6,809 674,517
--------- --------- -------
2,999,781 5,562,806 842,204
</TABLE>
The accompanying notes are an integral part of the financial statements.
126
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PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
LIQUOR: 0.02% 0.01% 0.01%
Carlsberg Brewery* 16,500 $50,906 23,000 $70,960 4,500 $13,884
------ ------ ------
MINING: 0.31% 0.22% 0.10%
Canyon Resources Corporation* -- -- 48,200 57,238 -- --
Cookson Group 29,919 96,810 54,038 174,852 9,455 30,594
English China Clay 32,500 143,062 47,500 209,090 10,500 46,220
Getchell Gold Corporation* 23,800 571,200 40,400 969,600 4,900 117,600
Stillwater Mining Company* -- -- 4,100 68,675 1,100 18,425
------- --------- -------
811,072 1,479,455 212,839
MOBIL HOMES: 0.08% 0.00% 0.00%
Coachmen Industries, Incorporated 4,900 105,656 -- -- -- --
Fleetwood Enterprises, Incorporated 2,300 97,606 -- -- -- --
-------
203,262
NEWSPAPERS: 0.47% 0.33% 0.12%
Times Mirror Company, Series A 16,200 996,300 29,100 1,789,650 2,500 153,750
Ver Ned Uitgevers* 8,700 245,427 15,150 427,381 3,200 90,272
--------- --------- -------
1,241,727 2,217,031 244,022
NON-FERROUS METALS: 0.18% 0.13% 0.07%
Billiton PLC* 55,000 140,926 100,600 257,767 17,500 44,840
Imco Recycling, Incorporated 7,100 114,044 10,200 163,838 2,000 32,125
Pechiney 4,154 163,993 7,488 295,613 1,283 50,651
WMC, Ltd. 18,435 64,280 33,018 115,129 5,772 20,126
------- ------- -------
483,243 832,347 147,742
OFFICE FURNISHINGS & SUPPLIES: 0.02% 0.02% 0.01%
Ikon Office Solutions, Incorporated 2,200 61,875 3,900 109,688 600 16,875
------ ------- ------
PAPER: 2.81% 1.95% 0.87%
Boise Cascade Corporation 13,900 420,475 23,800 719,950 3,600 108,900
Bowater, Incorporated 8,500 377,719 15,200 675,450 2,100 93,319
Chesapeake Corporation 12,000 412,500 21,000 721,875 3,200 110,000
Domtar, Incorporated 5,400 37,463 -- -- -- --
Fort James Corporation 49,912 1,641,384 71,362 2,729,596 10,375 396,844
Jefferson Smurfit Corporation* -- -- 3,300 46,612 500 7,062
Kimberly Clark Corporation 31,000 1,528,688 55,100 2,717,119 8,900 438,881
Minnesota Mining & Manufacturing Company 28,400 2,330,575 49,200 4,037,475 6,600 541,613
Pope & Talbot, Incorporated 16,400 247,025 32,800 494,050 2,900 43,681
Stone Container Corporation -- -- -- -- 400 4,175
Willamette Industries, Incorporated 11,000 354,062 18,200 585,813 2,200 70,812
UPM-Kymmene Oyj* 4,800 95,983 8,700 173,970 1,000 19,997
--------- ---------- ---------
7,445,874 12,901,910 1,835,284
PETROLEUM & NATURAL GAS: 0.55% 0.34% 0.15%
Anadarko Petroleum Corporation 6,000 364,125 5,200 315,575 1,100 66,756
Burlington Resources, Incorporated 5,500 246,469 6,300 282,319 1,200 53,775
Elf Aquitaine* 2,700 314,032 4,900 569,909 900 104,677
ENI SPA* 19,000 107,727 34,300 194,477 6,000 34,019
Monument Oil & Gas PLC* 26,900 37,114 48,700 67,191 8,500 11,728
Occidental Petroleum Corporation -- -- 7,000 205,188 1,300 38,106
Santa Fe Energy Resources, Incorporated* -- -- 14,400 162,000 -- --
Union Pacific Resource Group, Incorporated 4,000 97,000 7,200 174,600 -- --
Vastar Resources, Incorporated 8,300 296,725 8,300 296,725 -- --
--------- --------- -------
1,463,192 2,267,984 309,061
</TABLE>
The accompanying notes are an integral part of the financial statements.
127
<PAGE> 167
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PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PETROLEUM SERVICES: 1.72% 1.26% 0.68%
Broken Hill Proprietary Company, Ltd. 10,168 $94,435 18,344 $170,369 3,202 $29,738
Diamond Offshore Drilling, Incorporated 2,100 101,063 2,300 110,687 800 38,500
Dresser Industries, Incorporated 6,600 276,788 11,300 473,894 3,100 130,006
Halliburton Company 8,700 451,856 17,600 914,100 4,000 207,750
Noble Drilling Corporation* 6,000 183,750 16,300 499,187 1,300 39,813
Schlumberger, Ltd. 4,100 330,050 7,300 587,650 1,100 88,550
Total SA, ADR 30,346 1,684,203 46,628 2,587,854 8,789 487,790
Total SA, B Shares 5,872 639,056 10,216 1,111,819 1,783 194,046
Transocean Offshore, Incorporated 5,600 269,850 23,700 1,142,044 1,400 67,463
Western Atlas, Incorporated* 6,000 444,000 7,900 584,600 1,500 111,000
Woodside Petroleum 13,700 96,611 22,400 157,963 4,300 30,323
--------- --------- ---------
4,571,662 8,340,167 1,424,979
PHOTOGRAPHY: 0.18% 0.12% 0.07%
Canon, Incorporated 11,000 256,108 19,000 442,368 3,000 69,848
Fuji Photo Film Company 6,000 229,762 10,000 382,936 2,000 76,587
------- ------- -------
485,870 825,304 146,435
PLASTICS: 0.10% 0.10% 0.03%
Sealed Air Corporation* 4,100 253,175 10,600 654,550 1,000 61,750
------- ------- ------
POLLUTION CONTROL: 0.22% 0.24% 0.11%
Republic Industries, Incorporated* 2,700 62,944 11,300 263,431 1,000 23,312
Sevenson Environmental
Services, Incorporated 4,320 52,920 7,520 92,120 -- --
USA Waste Services, Incorporated* 11,990 470,607 30,870 1,211,648 5,175 203,119
------- --------- -------
586,471 1,567,199 226,431
PUBLISHING: 0.17% 0.11% 0.02%
Meredith Corporation 900 32,119 -- -- -- --
Playboy Enterprises, Incorporated, Class B* 14,800 232,175 15,600 244,725 -- --
Time Warner, Incorporated* 3,100 192,200 8,300 514,600 800 49,600
------- ------- ------
456,494 759,325 49,600
RAILROADS & EQUIPMENT: 0.67% 0.31% 0.19%
CSX Corporation 14,800 799,200 15,700 847,800 1,800 97,200
Canadian National Railway Company 4,900 231,525 -- -- -- --
East Japan Railway 22 99,242 40 180,440 3 13,533
Norfolk Southern Corporation 20,700 637,819 34,200 1,053,787 8,100 249,581
Wisconsin Central Transportation Corporation -- -- -- -- 1,800 42,075
--------- --------- -------
1,767,786 2,082,027 402,389
REAL ESTATE: 0.16% 0.11% 0.06%
Mitsubishi Estate 14,000 152,256 25,000 271,885 4,000 43,502
Mitsui Fudosan Company, Ltd. 8,000 77,200 14,000 135,100 3,000 28,950
Sun Hung Kai Properties 27,000 188,153 48,000 334,495 8,000 55,749
------- ------- -------
417,609 741,480 128,201
RETAIL GROCERY: 0.40% 0.35% 0.14%
Giant Foods, Incorporated, Class A 6,900 232,444 17,000 572,688 2,900 97,694
Safeway* 3,900 246,675 11,700 740,025 700 44,275
Somerfield PLC* 41,800 144,178 75,000 258,694 13,100 45,185
Starbucks Corporation* 11,600 445,150 19,900 763,662 3,000 115,125
--------- --------- -------
1,068,447 2,335,069 302,279
</TABLE>
The accompanying notes are an integral part of the financial statements.
128
<PAGE> 168
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
RETAIL TRADE: 3.20% 2.15% 1.03%
Ahold Kon* 3,539 $92,330 6,308 $164,571 927 $24,185
Amway Malaysia* 16,000 26,533 29,000 48,091 2,000 3,317
AutoZone, Incorporated* 2,500 72,500 4,400 127,600 700 20,300
Boots Company 7,000 100,776 12,600 181,396 2,200 31,672
Cheung Kong (Holdings), Ltd. 22,000 144,083 39,000 255,420 7,000 45,845
Colruyt SA* 150 76,617 250 127,696 50 25,539
Consolidated Stores Corporation* 7,812 343,240 12,031 528,612 2,656 116,698
CVS Corporation 29,300 1,877,031 55,900 3,581,094 8,700 557,344
Dayton Hudson Corporation 5,400 364,500 -- -- 400 27,000
Dixons Group 6,453 64,760 11,676 117,177 2,049 20,563
Federated Department Stores, Incorporated* 2,400 103,350 5,100 219,619 600 25,837
Footstar, Incorporated* 4,203 112,956 10,997 295,544 2,216 59,555
Gadzooks, Incorporated* 5,300 111,300 -- -- -- --
Haverty Furniture Companies, Incorporated 5,600 75,600 -- -- -- --
The Home Depot, Incorporated 22,050 1,298,194 40,950 2,410,931 5,250 309,094
Ito-Yokado Company, Ltd. 4,000 203,722 7,000 356,514 1,000 50,930
Kingfisher 14,189 198,096 25,691 358,678 4,449 62,114
Lillian Vernon Corporation 4,500 74,813 10,500 174,562 2,500 41,562
Lowes Companies, Incorporated 11,100 529,331 19,600 934,675 2,900 138,294
Mitsubishi Corporation 11,000 86,773 20,000 157,770 3,000 23,665
Mitsui & Company 17,000 100,513 33,000 195,114 6,000 35,475
New World Development Company 16,609 57,442 28,584 98,858 6,361 22,000
Proffitts, Incorporated* 11,252 319,979 19,380 551,119 980 27,869
Takashimaya Company 9,000 54,454 17,000 102,857 3,000 18,151
TJX Companies, Incorporated 13,800 474,375 18,400 632,500 2,400 82,500
Wal-Mart Stores, Incorporated 38,800 1,530,175 66,300 2,614,706 10,300 406,206
--------- ---------- ---------
8,493,443 14,235,104 2,175,715
SAVINGS & LOAN: 0.85% 0.64% 0.26%
Astoria Financial Corporation 12,800 713,600 27,400 1,527,550 6,000 334,500
Commercial Federal Corporation 11,925 424,083 21,825 776,152 4,725 168,033
Greenpoint Financial Corporation -- -- 800 58,050 -- --
Long Island Bancorp, Incorporated 3,000 148,875 -- -- 300 14,887
TCF Financial Corporation 6,600 223,987 24,200 821,287 -- --
Washington Federal, Incorporated 17,800 559,588 18,100 569,019 -- --
Washington Mutual, Incorporated 2,900 185,056 8,200 523,262 600 38,288
--------- --------- -------
2,255,189 4,275,320 555,708
SHIPBUILDING: 0.04% 0.01% 0.07%
Anangel American Shipholdings, Ltd., ADR 5,000 43,750 7,700 67,375 2,700 23,625
Avondale Industries, Incorporated -- -- -- -- 3,100 92,031
West Marine, Incorporated* 2,600 58,175 -- -- 1,400 31,325
------- ------ -------
101,925 67,375 146,981
SOFTWARE: 2.27% 1.49% 0.69%
BMC Software, Incorporated* -- -- 1,800 118,125 -- --
Cadence Design System, Incorporated -- -- -- -- 800 19,600
Electronic Arts* -- -- 1,700 64,281 200 7,563
HBO & Company -- -- -- -- 600 28,800
Micro Focus Group, Incorporated PLC, ADR* 1,500 60,562 -- -- -- --
Microsoft Corporation* 35,300 4,562,525 60,800 7,858,400 8,900 1,150,325
Oracle Systems Corporation* 15,400 343,613 26,550 592,397 4,087 91,191
Peoplesoft, Incorporated* 12,600 491,400 21,600 842,400 2,200 85,800
Policy Management Systems Corporation* 3,100 215,644 -- -- 400 27,825
</TABLE>
The accompanying notes are an integral part of the financial statements.
129
<PAGE> 169
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Software - continued
Synopsys, Incorporated* 9,500 $ 339,625 11,400 $ 407,550 1,400 $ 50,050
--------- --------- ---------
6,013,369 9,883,153 1,461,154
STEEL: 0.10% 0.07% 0.02%
Amcast Industrial Corporation 5,400 123,862 6,500 149,094 -- --
Nippon Steel Corporation 38,000 56,169 70,000 103,469 12,000 17,738
Sumitomo Metal Industry 75,000 95,926 152,000 194,409 24,000 30,696
------- ------- ------
275,957 446,972 48,434
TELECOMMUNICATION SERVICES: 0.34% 0.32% 0.12%
Arch Communications Group, Incorporated* -- -- -- -- 600 3,075
China Telecom (Hong Kong)* 38,000 65,221 70,000 120,144 12,000 20,596
Ericsson Telecommunications 5,600 210,532 10,100 379,709 1,800 67,671
France Telecom SA* 3,382 122,670 6,482 235,112 1,132 41,059
Heartland Wireless Communications,
Incorporated* -- -- -- -- 500 875
ICG Communications, Incorporated* 1,300 35,425 -- -- -- --
Lucent Technologies, Incorporated 2,481 198,170 3,642 290,905 1,024 81,792
Omnipoint Corporation* -- -- -- -- 300 6,975
Portugal Telecom SA* 1,300 60,320 2,300 106,721 400 18,560
Superior Telecom, Incorporated* 3,900 134,794 25,500 881,344 -- --
Telstra Corporation, Ltd.* 29,400 62,083 57,300 120,998 9,200 19,428
------- --------- -------
889,215 2,134,933 260,031
TELEPHONE: 5.33% 3.65% 1.80%
360 Communications Company* -- -- 3,100 62,581 600 12,113
Ameritech Corporation 7,200 579,600 13,800 1,110,900 2,300 185,150
American Telephone & Telegraph
Corporation 43,000 2,633,750 61,200 3,748,500 8,500 520,625
BellSouth Corporation 5,400 304,088 8,400 473,025 1,500 84,469
British Telecommunication 18,000 141,832 32,400 255,298 5,600 44,126
Cincinnati Bell, Incorporated -- -- -- -- 1,000 31,000
Deutsche Telekom* 10,900 205,100 19,650 369,745 3,400 63,976
GTE Corporation 10,700 559,075 25,900 1,353,275 3,500 182,875
MCI Communications Corporation 72,500 3,103,906 120,300 5,150,344 17,600 753,500
McLeodUSA, Incorporated* 7,600 243,200 13,500 432,000 1,700 54,400
Nippon Telphone & Telegraph Corporation 76 651,911 139 1,192,311 24 205,867
SBC Communications, Incorporated 4,243 310,800 4,098 300,178 1,700 124,525
Singapore Telecommunications, Ltd.* 54,000 100,599 97,000 180,706 17,000 31,670
Sprint Corporation 2,400 140,700 7,400 433,825 -- --
Tel Save Holdings, Incorporated* 26,300 522,712 38,700 769,163 7,300 145,088
Telecom Italia Mobile* 53,500 246,935 100,500 463,868 17,200 79,045
Telecom Italia Mobile RISP* 91,000 258,751 157,100 446,700 27,800 79,388
Telecom Italia Mobile SPA RISP* 25,000 110,232 44,000 194,008 8,000 35,274
Telecomunicacoes Brasileiras
S/A-Telebras, ADR 2,800 326,025 6,200 721,912 1,400 163,012
Telefonica de Espana SA* 11,000 314,079 19,800 565,343 3,450 98,507
Telekom Malaysia 12,000 35,480 13,000 38,437 4,000 11,827
Teleport Communications Group, Class A* 3,400 186,575 8,000 439,000 1,300 71,338
VodaFone Group 52,758 381,282 95,229 688,220 16,583 119,845
WorldCom, Incorporated* 92,050 2,784,513 160,100 4,843,025 23,100 698,775
---------- ---------- ---------
14,141,145 24,232,364 3,796,395
TIRES & RUBBER: 0.03% 0.02% 0.01%
Bridgestone Corporation 4,000 86,697 7,000 151,719 1,000 21,674
------ ------- ------
</TABLE>
The accompanying notes are an integral part of the financial statements.
130
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
TOBACCO: 1.40% 0.96% 0.41%
BAT Industries PLC 25,056 $228,490 45,295 $413,052 7,815 $71,266
Philip Morris Companies, Incorporated 66,800 3,026,875 115,400 5,229,063 15,100 684,219
RJR Nabisco Holdings Corporation 7,000 262,500 9,900 371,250 1,500 56,250
R.J. Reynolds BHD* 19,000 31,019 34,000 55,508 6,000 9,796
Rothmans Pall Mall* 3,000 23,332 6,000 46,664 1,000 7,778
Swedish Match Company 40,600 135,505 73,300 244,644 12,700 42,387
--------- --------- -------
3,707,721 6,360,181 871,696
TRANSPORTATION: 0.10% 0.09% 0.04%
ASA Holdings, Incorporated 9,500 270,156 20,200 574,438 3,000 85,313
------- ------- ------
TRUCKING & FREIGHT FORWARDING: 0.33% 0.28% 0.10%
Air Express International Corporation 11,850 361,425 31,350 956,175 3,000 91,500
Hartwall* 700 57,788 1,250 103,193 200 16,511
Kirby Corporation* -- -- 5,200 100,425 -- --
Knight Transportation, Incorporated* 3,100 86,025 -- -- -- --
NCL Holdings* 46,555 166,407 84,111 300,649 14,666 52,422
Peninsular & Oriental Steam
Navigation Company* 13,004 147,911 23,436 266,568 4,135 47,033
U.S. Freightways Corporation 2,000 65,000 3,000 97,500 -- --
------- --------- -------
884,556 1,824,510 207,466
TOTAL COMMON STOCKS (COST:
$151,539,573, $259,021,934 and
$38,255,958, respectively) $191,720,563 $331,810,034 $50,444,258
----------- ----------- ----------
PREFERRED STOCKS: 2.33% 1.69% 0.14%
APPAREL & TEXTILES: 0.07% 0.05% 0.03%
Hugo Boss AG 150 191,779 250 319,631 50 63,926
------- ------- ------
BROADCASTING: 0.80% 0.59%
American Radio Systems Corporation, Series B 586 69,807 325 38,716 -- --
Cablevision Systems Corporation, Series H* 320 38,016 651 77,377 -- --
Cablevision Systems Corporation, Series M* 7,294 844,325 15,524 1,796,912 -- --
Capstar Broadcasting Partners* 6,593 759,843 9,986 1,150,887 -- --
Citadel Broadcasting Company* 1,700 198,475 3,550 414,462 -- --
Echostar Communications Corporation* 200 208,500 386 402,405 -- --
SFX Broadcasting, Incorporated, Series E -- -- 159 18,219 -- --
--------- ---------
2,118,966 3,898,978
COMPUTERS & BUSINESS EQUIPMENT: 0.00% 0.00%
Hyperion Telecommunications, Series B* 10 10,100 24 24,240 -- --
------ ------
DRUGS & HEALTH CARE: 0.04% 0.03% 0.02%
Wella AG* 150 113,816 250 189,694 50 37,939
------- ------- ------
ELECTRONICS: 0.09% 0.06% 0.03%
Nokia (AB) OY, Series A 3,200 227,190 5,800 411,781 800 56,798
------- ------- ------
FINANCIAL SERVICES: 0.00% 0.00%
S D Warren Company 169 8,323 558 27,482 -- --
----- ------
LEISURE TIME: 0.02% 0.01% 0.01%
Sydney Harbour Casino* 46,900 44,475 84,700 80,321 15,200 14,414
------ ------ ------
</TABLE>
The accompanying notes are an integral part of the financial statements.
131
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------- ------------------------ -------------------------
Shares Value Shares Value Shares Value
----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS: 0.24% 0.15%
Nextel Communications,
Incorporated, Series D* 480 $539,146 634 $711,406 -- --
Winstar Corporation* 1,000 100,000 2,750 275,000 -- --
------- -------
639,146 986,406
PUBLISHING: 0.55% 0.52%
Intermedia Communications,
Incorporated, Series B* 3,763 456,246 7,650 927,532 -- --
Nextlink Communications* 7,363 458,347 19,126 1,190,594 -- --
Primedia, Incorporated, Series E* 800 80,200 1,600 160,400 -- --
Primedia, Incorporated, Series D* 390 41,145 1,100 116,050 -- --
Time Warner, Incorporated, Series M* 387 434,991 927 1,043,055 -- --
--------- ---------
1,470,929 3,437,631
SOFTWARE: 0.15% 0.11% 0.06%
Sap AG 1,250 408,919 2,250 736,054 400 $130,854
------- ------- -------
TELECOMMUNICATION SERVICES: 0.32% 0.13%
American Communications Services* -- -- 29 30,232 -- --
IXC Communications, Incorporated* 720 844,200 720 844,200 -- --
------- -------
844,200 874,432
TELEPHONE: 0.04% 0.04%
Adelphia Communications
Corporation, Series B* 904 107,802 2,048 244,224 -- --
------- -------
TOTAL PREFERRED STOCK
(COST: $5,421,277, $9,801,442,
and $259,287, respectively) $6,185,645 $11,230,874 $303,931
--------- ---------- -------
WARRANTS:* 0.02% 0.03%
BUSINESS SERVICES: 0.00% 0.01%
Protection One, Incorporated (Expiration
date 06/30/05; strike price $6.60) 960 12,480 3,200 41,600 -- --
------ ------
CHEMICALS: 0.00% 0.00%
Sterling Chemicals Holdings, Incorporated
(Expiration date 08/05/08; strike
price $0.01) 40 1,400 120 4,200 -- --
----- -----
TELECOMMUNICATION SERVICES: 0.02% 0.02%
Highwaymaster Communication (Expiration
date 05/14/98; strike price $6.50) 162 18 338 37 -- --
Hyperion Telecommunications, Incorporated
(Expiration date 04/15/01; strike
price $0.0187) 220 13,200 830 49,800 -- --
Microcell Telecommunications, Incorporated
(Expiration date 06/15/06; strike
price $0.01) 1,280 17,472 3,760 51,324 -- --
(Expiration date 06/15/06; strike
price $0.01) 1,280 13 3,760 38 -- --
Orion Network Systems, Incorporated
(Expiration date 01/15/07;
strike price $0.01) 150 1,875 260 3,250 -- --
Powertel, Incorporated (Expiration date
02/01/06; strike price $18.15) 1,312 11,808 3,488 31,392 -- --
------ ------
44,386 135,841
TOTAL WARRANTS (COST: $13,082,
$36,385,and $0, respectively) $58,266 $181,641 --
------ -------
</TABLE>
The accompanying notes are an integral part of the financial statements.
132
<PAGE> 172
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS: 5.41% 6.87% 22.88%
U.S. TREASURY BILLS: 0.87% 0.98% 11.85%
zero coupon due 01/08/98**** $2,300,000 $2,298,298 $6,500,000 $6,495,190 $25,000,000 $24,981,500
--------- --------- ----------
U.S. TREASURY BONDS: 1.33% 4.73% 7.98%
6.50% due 11/15/26 360,000 384,300 -- -- 125,000 133,437
7.125% due 02/15/23 770,000 879,001 1,760,000 2,009,146 920,000 1,050,235
7.625% due 02/15/25 -- -- 75,000 91,019 40,000 48,544
8.125% due 08/15/19 -- -- -- -- 751,000 939,689
8.875% due 02/15/19 704,000 941,818 8,620,000 11,531,922 5,716,000 7,646,922
9.00% due 11/15/18 -- -- 2,120,000 2,863,993 350,000 472,829
10.75% due 05/15/03 67,000 82,232 72,000 88,368 -- --
11.625% due 11/15/04 -- -- 330,000 438,022 240,000 318,562
12.00% due 08/15/13 170,000 250,485 7,970,000 11,743,317 2,690,000 4,361,382
12.375% due 05/15/04 304,000 409,734 1,288,000 1,735,979 171,000 230,475
12.75% due 11/15/10 373,000 532,398 630,000 899,224 1,137,000 1,622,886
13.875% due 05/15/11 30,000 45,652 -- -- -- --
--------- ---------- ----------
3,525,620 31,400,990 16,824,961
U.S. TREASURY NOTES: 3.21% 1.16% 3.05%
5.75% due 10/31/00 3,150,000 3,153,937 -- -- -- --
6.125% due 03/31/98 -- -- -- -- 3,980,000 3,986,209
6.875% due 03/31/00 2,400,000 2,459,256 5,055,000 5,179,808 2,390,000 2,449,009
7.00% due 07/15/06 2,105,000 2,272,074 -- -- -- --
7.75% due 12/31/99 -- -- 2,404,000 2,497,540 -- --
7.875% due 08/15/01 600,000 641,436 -- -- -- --
--------- --------- ---------
8,526,703 7,677,348 6,435,218
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $13,957,289, $43,627,297 and
$47,157,642, respectively) $14,350,621 $45,573,528 $48,241,679
---------- ---------- ----------
U.S GOVERNMENT AGENCY AND
MORTGAGE-BACKED OBLIGATIONS: 7.97% 15.26%
FEDERAL AGRICULTURAL MORTGAGE CORPORATION: 0.13% 0.15%
7.04% due 08/10/05 -- -- 800,000 848,128 300,000 318,048
------- -------
FEDERAL HOME LOAN BANK: 0.24% 0.33%
7.59% due 03/10/05 -- -- 280,000 304,937 120,000 130,687
9.50% due 02/25/04 -- -- 1,130,000 1,331,987 470,000 554,013
--------- -------
1,636,924 684,700
FEDERAL HOME LOAN MORTGAGE CORPORATION: 0.99% 1.81%
6.50% due 07/01/06 - 08/15/14 -- -- -- -- 21,525 21,595
8.00% due 04/01/23 - 08/01/24 -- -- 2,374,601 2,464,058 1,351,051 1,404,205
9.50% due 12/01/19 - 12/01/22 -- -- 3,806,095 4,121,365 2,219,514 2,396,268
--------- ---------
6,585,423 3,822,068
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 4.97% 8.36%
6.00% due 12/01/08 - 04/01/11 -- -- 7,082,520 6,998,101 2,326,685 2,300,777
6.50% due 09/01/07 - 05/01/26 -- -- 10,682,656 10,629,043 5,383,539 5,365,900
7.00% due 12/01/99 - 12/01/25 -- -- 8,325,464 8,395,090 4,487,626 4,524,675
7.49% due 03/02/05 -- -- 470,000 508,996 200,000 216,594
7.50% due 11/01/06 - 10/01/27 -- -- 5,678,966 5,813,930 3,935,701 4,030,147
7.71% due 04/25/00 -- -- -- -- 320,639 321,440
8.50% due 05/01/17 - 06/01/24 -- -- 574,195 604,480 836,488 879,692
---------- ----------
32,949,640 17,639,225
</TABLE>
The accompanying notes are an integral part of the financial statements.
133
<PAGE> 173
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION: 1.09% 2.51%
7.50% due 10/15/22 - 07/01/23 -- -- $3,273,751 $3,363,216 $2,053,997 $2,110,401
9.00% due 09/15/16 - 11/15/24 -- -- 3,565,461 3,847,003 2,952,931 3,176,200
--------- ---------
7,210,219 5,286,601
OTHER: 0.55% 2.10%
Government Backed Trust,
9.625% due 05/15/02 -- -- 175,910 186,776 73,296 77,823
Government Loan Trust,
8.50% due 04/01/06 -- -- 1,120,000 1,235,517 1,720,000 1,897,401
Government Trust Certificates,
Class 1C, 9.25% due 11/15/01 -- -- 434,803 462,700 510,875 543,653
Class 2E, 9.40% due 05/15/02 -- -- 1,083,624 1,151,101 1,548,035 1,644,431
Guaranteed Export Trust,
Series 1993 C, 5.20% due 10/15/04 -- -- 197,867 194,571 87,733 86,272
Series 1993 D, 5.23% due 05/15/05 -- -- 344,680 338,842 153,191 150,596
6.61% due 09/15/99 -- -- 74,245 74,749 30,373 30,579
--------- ---------
3,644,256 4,430,755
TOTAL U.S. GOVERNMENT AGENCY AND
MORTGAGE-BACKED OBLIGATIONS
(Cost: $0, $51,688,820 and
$31,508,861, respectively) -- $52,874,590 $32,181,397
---------- ----------
FOREIGN BOND OBLIGATIONS: 0.56% 1.46%
Israel Export Trust, Series 1994-1
GTD Certificates, 6.88% due 01/26/03 -- -- 362,353 369,042 155,294 158,161
Israel State, U.S. Government GTD Notes,
Class 1D, 6.125% due 03/15/03 -- -- -- -- 250,000 251,367
Class 4A, 7.125% due 08/15/99 -- -- -- -- 355,000 360,911
Class 5B, 8.00% due 11/15/01 -- -- 3,155,000 3,381,119 2,150,000 2,304,091
--------- ---------
3,750,161 3,074,530
TOTAL FOREIGN BOND OBLIGATIONS
(Cost: $0, $3,699,331 and
$2,989,519, respectively) -- $3,750,161 $3,074,530
--------- ---------
CORPORATE BONDS: 6.71% 15.57% 16.72%
AEROSPACE: 0.17% 0.14%
Advance Agro Public Company, Ltd.,
13.00% due 11/15/07 $490,000 $445,900 1,010,000 919,100 -- --
------- -------
AUTO PARTS: 0.10%
Safelite Glass Corpopration,
9.875% due 12/15/06 250,000 263,750 -- -- -- --
-------
BANKING: 2.31% 4.07%
Banc One Corporation,
6.25% due 09/01/00 -- -- 880,000 885,685 490,000 493,165
6.70% due 03/24/00 -- -- 860,000 869,365 430,000 434,683
Banponce Corporation,
5.75% due 03/01/99 -- -- 490,000 487,173 270,000 268,442
6.378% due 4/08/99 -- -- 590,000 592,129 330,000 331,191
6.665% due 03/05/01 -- -- 820,000 826,314 430,000 433,311
</TABLE>
The accompanying notes are an integral part of the financial statements.
134
<PAGE> 174
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BANKING - CONTINUED
Canadian Imperial Bank of Commerce,
6.20% due 08/01/00 -- -- $1,050,000 $1,051,166 $590,000 $590,655
Capital One Bank, 6.42% due 11/12/99 -- -- 3,380,000 3,390,343 1,600,000 1,604,896
Den Danske Bank Aktieselskab,
7.40% due 06/15/10 -- -- 830,000 859,930 460,000 476,588
First Tennessee National Corporation,
6.75% due 11/15/05 -- -- 350,000 355,418 190,000 192,941
First USA Bank, 5.75% due 01/15/99 -- -- 840,000 837,388 660,000 657,947
Firstar Corporation, 7.15% due 09/01/00 -- -- 820,000 824,756 360,000 362,088
Fleet Financial Group, Incorporated,
7.625% due 12/01/99 -- -- 150,000 153,688 80,000 81,967
Kansallis-Osake-Pankki,
10.00% due 05/01/02 -- -- 360,000 409,100 150,000 170,458
Long Island Savings Bank,
7.00% due 06/13/02 -- -- 450,000 459,184 270,000 275,511
Provident Bank, 6.125% due 12/15/00 -- -- 1,040,000 1,035,143 520,000 517,572
Shawmut National Corporation,
8.625% due 12/15/99 -- -- -- -- 360,000 375,523
Union Planters Corporation,
6.75% due 11/01/05 -- -- 850,000 855,338 450,000 452,826
Union Planters National Bank,
6.29% due 08/20/98 -- -- 1,400,000 1,401,750 870,000 871,088
---------- ---------
15,293,870 8,590,852
BROADCASTING: 0.45% 0.51% 0.19%
Citadel Broadcasting Company,
10.25% due 07/01/07 $390,000 $422,175 810,000 876,825 -- --
EchoStar Communications Corporation,
Step up to 13.125% due 06/01/04 240,000 219,600 650,000 594,750 -- --
EchoStar Satellite Broadcasting Corporation,
Step up to 13.125% due 03/15/04 370,000 307,100 1,050,000 871,500 -- --
Granite Broadcasting Corporation,
9.375% due 12/01/05 250,000 253,125 250,000 253,125 -- --
Hearst-Argyle Television, Incorporated,
7.50% due 11/15/27 -- -- 770,000 781,334 400,000 405,888
--------- --------- -------
1,202,000 3,377,534
BUSINESS SERVICES: 0.19% 0.73% 0.82%
Comdisco, Incorporated,
5.75% due 02/15/01 -- -- 1,700,000 1,671,814 1,000,000 983,420
6.50% due 06/15/00 -- -- 1,700,000 1,708,075 750,000 753,562
Federal Data Corporation,
10.125% due 08/01/05 170,000 171,700 370,000 373,700 -- --
Protection One Alarm, Incorporated,
Step up to 13.625% due 06/30/05 300,000 322,500 1,000,000 1,075,000 --
------- --------- ---------
494,200 4,828,589 1,736,982
CHEMICAL PRODUCTS: 0.13% 0.14%
Huntsman Corporation,
9.50% due 07/01/07 210,000 220,500 540,000 567,000 -- --
Sterling Chemicals, Incorporated,
11.25% due 04/01/07 130,000 130,000 350,000 350,000 -- --
------- -------
350,500 917,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
135
<PAGE> 175
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CRUDE PETROLEUM & NATURAL GAS 0.06% 0.28% 0.41%
Occidental Petroleum Corporation,
5.93% due 11/09/98 -- -- $470,000 $469,154 $270,000 $269,514
Southwest Gas Corporation,
9.75% due 06/15/02 -- -- 290,000 326,595 170,000 191,452
Stone Energy Corporation,
8.75% due 09/15/07 $160,000 $161,600 340,000 343,400 -- --
Union Oil Company, 7.67% due 04/19/02 -- -- 680,000 718,440 390,000 412,047
------- --------- -------
161,600 1,857,589 873,013
DRUGS & HEALTH CARE: 0.09% 0.08%
Integrated Health Services, Incorporated,
9.25% due 01/15/08 246,000 250,920 520,000 530,400 -- --
------- -------
ELECTRIC UTILITIES: 0.06% 0.42% 0.66%
Avon Energy Partners Holdings,
6.73% due 12/11/02 -- -- 930,000 936,417 520,000 523,588
British Columbia Hydro & Power,
12.50% due 01/15/14 -- -- 460,000 506,635 260,000 286,359
Israel Electric Corporation,
7.10% due 12/17/07 -- -- 1,025,000 1,032,195 580,000 584,072
Trench Electric & Trench, Incorporated
10.25% due 12/15/07 160,000 162,400 340,000 345,100 -- --
------- --------- ---------
162,400 2,820,347 1,394,019
ELECTRICAL EQUIPMENT: 0.19% 0.16%
High Voltage Engineer Corporation,
10.50% due 08/15/04 320,000 332,000 680,000 705,500 -- --
SC International Services, Incorporated,
9.25% due 09/01/07 160,000 165,600 340,000 351,900 -- --
------- ---------
497,600 1,057,400
ELECTRONICS: 0.16% 0.29%
Raytheon Company, 6.45% due 08/15/02 -- -- 1,070,000 1,075,254 600,000 602,946
--------- -------
FINANCIAL SERVICES: 0.46% 3.72% 5.18%
American Telephone and
Telegraph Capital Corporation,
6.16% due 12/03/99 -- -- 2,490,000 2,487,162 1,120,000 1,118,723
6.65% due 04/30/99 -- -- 900,000 906,885 360,000 362,754
Ahmanson Capital Trust I,
8.36% due 12/01/26 -- -- 1,080,000 1,175,234 720,000 783,490
APP Financial II Mauritius, Ltd., Series B,
12.00% due 02/15/04 430,000 369,800 1,070,000 920,200 -- --
BankBoston Capital Trust II, Series B,
7.75% due 12/15/26 -- -- 1,610,000 1,642,538 910,000 928,391
Banponce Financial Corporation,
6.34% due 03/29/99 -- -- 350,000 351,089 200,000 200,622
Beal Financial Corporation,
12.75% due 08/15/00 120,000 128,400 380,000 406,600 --- --
Chrysler Financial Corporation,
6.375% due 01/28/00 -- -- 1,270,000 1,276,083 600,000 602,874
The CIT Group Holdings, Incorporated,
6.25% due 10/04/99 -- -- 3,850,000 3,858,470 1,850,000 1,854,070
</TABLE>
The accompanying notes are an integral part of the financial statements.
136
<PAGE> 176
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - CONTINUED
First Nationwide Escrow Corporation,
10.625% due 10/01/03 $190,000 $212,325 $250,000 $279,375 -- --
First Nationwide Parent Holdings,
12.50% due 04/15/03 250,000 283,750 750,000 851,250 -- --
General Motors Acceptance Corporation,
6.75% due 07/10/02 -- -- 1,050,000 1,063,781 $600,000 $607,875
GST Equipment Funding, Incorporated,
13.25% due 05/01/07 150,000 171,750 300,000 343,500 -- --
Great Western Financial Trust II, Series A,
8.206% due 02/01/27 -- -- 730,000 774,253 410,000 434,854
Heller Financial, Incorporated,
7.875% due 11/01/99 -- -- 1,000,000 1,026,100 540,000 554,094
Home Savings of America,
6.50% due 08/15/04 -- -- 510,000 512,310 290,000 291,314
Hydro Quebec Enterprises,
7.40% due 03/28/25 -- -- 630,000 765,986 360,000 437,706
Manufacturers Hanover Corporation,
8.50% due 02/15/99 -- -- 1,540,000 1,577,853 210,000 215,162
MCN Investment Corporation,
5.84% due 02/01/99 -- -- 800,000 800,480 440,000 440,264
Ocwen Capital Trust,
10.875% due 08/01/27 50,000 54,250 130,000 141,050 -- --
Secured Finance, 9.05% due 12/15/04 -- -- 2,500,000 2,854,675 1,480,000 1,689,968
U.S. West Capital Funding, Incorporated,
6.95% due 01/15/37 -- -- 640,000 659,245 380,000 391,427
--------- ---------- ----------
1,220,275 24,674,119 10,913,588
FOOD PRODUCTS: 0.01% 0.01%
Del Monte Foods Company,
Step up to 12.50% due 12/15/07 50,000 28,625 90,000 51,525 -- --
------ ------
FURNITURE & FIXTURES: 0.01% 0.01%
Sealy Mattress Company,
9.875% due 12/15/07 10,000 10,250 20,000 20,500 -- --
Step up to 10.875% due 12/15/07 20,000 12,100 40,000 24,200 -- --
------ ------
22,350 44,700
HOTELS & RESTAURANTS: 0.07% 0.26%
Darden Restaurants, Incorporated,
7.125% due 02/01/16 -- -- 490,000 470,719 570,000 547,571
------- -------
INDUSTRIALS: 1.36% 1.66% 1.07%
Advanced Accessory System LLC,
9.75% due 10/01/07 130,000 127,725 410,000 402,825 -- --
Anker Coal Group, Incorporated,
9.75% due 10/01/07 140,000 140,700 310,000 311,550 -- --
Atlantis Group, Incorporated,
11.00% due 02/15/03 50,000 52,500 130,000 136,500 -- --
Carson, Incorporated,
10.375% due 03/01/07 160,000 160,000 340,000 340,000 -- --
Color Spot Nursuries,
10.50% due 12/15/07 100,000 101,250 210,000 212,625 -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
137
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIALS - CONTINUED
Conagra, Incorporated,
7.125% due 10/01/26 -- -- $1,000,000 $1,061,990 $575,000 $610,644
Container Corporation of America,
9.75% due 04/01/03 $90,000 $96,750 200,000 215,000 -- --
10.75% due 05/01/02 120,000 131,400 250,000 273,750 -- --
11.25% due 05/01/04 90,000 98,100 300,000 327,000 -- --
Decision Holdings Corporation,
Step up to 11.50% due 08/01/08 10,000 6,400 40,000 25,600 -- --
Desa International, Incorporated,
9.875% due 12/15/07 80,000 81,900 180,000 184,275 -- --
E&S Holdings Corporation,
10.375% due 10/01/06 30,000 27,300 120,000 109,200 -- --
Flores and Rucks, Incorporated,
9.75% due 10/01/06 170,000 186,575 230,000 252,425 -- --
Freedom Chemical Company,
10.625% due 10/15/06 260,000 286,000 590,000 649,000 -- --
Holmes Products Corporation
9.875% due 11/15/07 80,000 81,400 170,000 172,975 -- --
Host Marriott Travel Plazas, Incorporated,
Series B, 9.50% due 05/15/05 150,000 159,750 350,000 372,750 -- --
Internorth Incorporated,
9.625% due 03/15/06 -- -- 590,000 701,711 330,000 392,482
Livent, Incorporated, 9.375% due 10/15/04 330,000 330,000 690,000 690,000 -- --
McCaw International, Ltd.,
13.00% due 04/15/07 250,000 145,000 250,000 145,000 -- --
McKesson Corporation,
6.60% due 03/01/00 -- -- 950,000 959,718 440,000 444,501
Motors and Gears, Incorporated, Series B,
10.75% due 11/15/06 260,000 276,250 740,000 786,250 -- --
Pathmark Stores, Incorporated,
9.625% due 05/01/03 210,000 193,200 360,000 331,200 -- --
Pennzoil Company,
9.625% due 11/15/99 -- -- 540,000 570,181 310,000 327,326
Perry-Judds, Incorporated,
10.625% due 12/15/07 10,000 10,400 30,000 31,200 -- --
Pueblo Xtra International, Incorporated,
9.50% due 08/01/03 260,000 247,000 40,000 38,000 -- --
Repap New Brunswick, Incorporated,
9.875% due 07/15/00 40,000 40,200 120,000 120,600 -- --
Roller Bearing Company of America,
Incorporated, Step up to
13.00% due 06/15/09 240,000 146,400 510,000 311,100
Stone Container Corporation,
12.58% due 08/01/16 250,000 263,750 -- -- -- --
Town Sports International, Incorporated,
9.75% due 10/15/04 190,000 190,000 410,000 410,000 -- --
WMX Technologies, Incorporated,
7.10% due 08/01/26 -- -- 830,000 858,353 470,000 486,055
Wyman-Gordon Company,
8.00% due 12/15/07 20,000 20,150 30,000 30,225 -- --
--------- ---------- ---------
3,600,100 11,031,003 2,261,008
</TABLE>
The accompanying notes are an integral part of the financial statements.
138
<PAGE> 178
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INSURANCE: 0.77% 1.32%
Metropolitan Life Insurance Company,
6.30% due 11/03/03 -- -- $2,350,000 $2,328,169 $1,155,000 $1,144,270
Nationwide Life Insurance Company,
6.50% due 02/15/04 -- -- 2,760,000 2,771,978 1,630,000 1,637,074
--------- ---------
5,100,147 2,781,344
LEISURE TIME: 0.83% 0.72%
AMC Entertainment, Incorporated,
9.50% due 03/15/09 $250,000 $256,250 750,000 768,750 -- --
American Skiing Company, Series B,
12.00% due 07/15/06 500,000 555,000 900,000 999,000 -- --
AMF Bowling Worldwide, Incorporated,
Series B, 10.875% due 03/15/06 170,000 184,450 530,000 575,050 -- --
Ballys Health & Tennis Corporation,
9.875% due 10/15/07 390,000 395,850 788,000 799,820 -- --
Hollywood Entertainment Corporation,
Series B, 10.625% due 08/15/04 450,000 441,000 970,000 950,600 -- --
Hollywood Theaters, Incorporated,
10.625% due 08/01/07 160,000 170,000 360,000 382,500 -- --
Six Flags Theme Parks, Incorporated,
zero coupon due 06/15/05 190,000 202,350 310,000 330,150 -- --
--------- ---------
2,204,900 4,805,870
MISCELLANEOUS: 0.11% 0.15%
HMC Acquisition Properties, Incorporated,
Series B, 9.00% due 12/15/07 280,000 292,600 940,000 982,300 -- --
------- -------
NON-BANK FINANCE: 0.14% 0.19%
Ford Capital BV, 9.00% due 08/15/98 -- -- 920,000 935,760 400,000 406,852
------- -------
PAPER: 0.03% 0.02%
American Pad & Paper Company,
Series B, 13.00% due 11/15/05 60,000 67,800 140,000 158,200 -- --
------ -------
PRINTING & PUBLISHING: 0.33% 0.23%
Sullivan Graphics, Incorporated,
12.75% due 08/01/05 600,000 606,000 1,180,000 1,191,800 -- --
Von Hoffman Press, Incorporated,
10.375% due 05/15/07 240,000 256,800 330,000 353,100 -- --
------- ---------
862,800 1,544,900
REAL ESTATE: 0.20% 0.20%
HMH Properties, Incorporated, Series B,
8.875% due 07/15/07 230,000 242,075 520,000 547,300 -- --
9.50% due 05/15/05 260,000 276,900 740,000 788,100
------- ---------
518,975 1,335,400
RETAIL TRADE: 0.20% 0.56% 0.70%
Amscan Holdings, Incorporated,
9.875% due 12/15/07 160,000 163,600 340,000 347,650 -- --
Federated Department Stores, Incorporated,
6.79% due 07/15/27 -- -- 550,000 564,723 350,000 359,369
</TABLE>
The accompanying notes are an integral part of the financial statements.
139
<PAGE> 179
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
RETAIL TRADE - CONTINUED
Levi Strauss & Company,
7.00% 11/01/06 -- -- $1,980,000 $2,026,273 $1,080,000 $1,105,240
Sunglass Hut International, Incorporated,
5.25% due 06/15/03 $484,000 $366,025 1,016,000 768,350 -- --
------- --------- ---------
529,625 3,706,996 1,464,609
TELECOMMUNICATION SERVICES: 0.55% 0.51%
Brooks Fiber Properties, Incorporated,
Step up to 10.875% due 03/01/06 220,000 182,600 520,000 431,600 -- --
11.875% due 11/01/06 30,000 23,925 90,000 71,775 -- --
GST Telecommunications, Incorporated,
12.75% due 11/15/07 50,000 52,375 110,000 115,225 -- --
Hyperion Telecommunications, Incorporated,
12.25% due 09/01/04 100,000 110,000 200,000 220,000
Series B, Step up to 13.00% due 04/15/03 220,000 161,150 830,000 607,975 -- --
McLeodUSA, Incorporated,
Step up to 10.50% due 03/01/07 90,000 65,475 190,000 138,225 -- --
Orion Network Systems, Incorporated
11.25% due 01/15/07 150,000 170,250 260,000 295,100 -- --
NEXTLINK Communications,
Incorporated, 9.625% due 10/01/07 30,000 30,975 60,000 61,950 -- --
Winstar Communications, Incorporated,
Step up to 14.00% due 10/15/05 480,000 381,600 1,020,000 810,900 -- --
Winstar Equipment II Corporation,
12.50% due 03/15/04 265,000 295,475 560,000 624,400 -- --
--------- ---------
1,473,825 3,377,150
TELEPHONE: 0.56% 0.51%
Adelphia Communications Corporation,
Series B, 9.25% due 10/01/02 100,000 102,000 200,000 204,000 -- --
Series B, 9.875% due 03/01/07 490,000 515,725 930,000 978,825 -- --
Benedek Communications Corporation,
Step up to 13.25% due 05/15/06 410,000 307,500 1,170,000 877,500 -- --
HighwayMaster Communications,
Incorporated, 13.75% due 09/15/05 160,000 162,400 340,000 345,100 -- --
Microcell Telecommunications, Series B,
Step up to 14.00% due 06/01/06 90,000 60,750 270,000 182,250 -- --
Millicom International Cellular SA,
Step up to 13.50% due 06/01/06 150,000 110,250 290,000 213,150 -- --
NEXTEL Communications, Incorporated,
9.75% due 10/31/07 363,000 222,791 900,000 552,375 -- --
--------- ---------
1,481,416 3,353,200
TOBACCO: 0.48% 0.90%
Philip Morris Companies, Incorporated,
6.95% due 06/01/06 -- -- 1,400,000 1,449,924 850,000 880,311
7.00% due 07/15/05 -- -- 850,000 866,456 480,000 489,293
7.25% due 09/15/01 -- -- 850,000 870,868 520,000 532,766
--------- ---------
3,187,248 1,902,370
</TABLE>
The accompanying notes are an integral part of the financial statements.
140
<PAGE> 180
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
TRANSPORTATION: 0.50% 0.74% 0.66%
Burlington Northern Santa Fe,
7.29% due 06/01/36 -- -- $1,070,000 $1,146,173 $610,000 $653,425
Greyhound Lines, Incorporated, Series B,
11.50% due 04/15/07 $500,000 $553,125 600,000 663,750 -- --
Norfolk Southern Corporation,
7.05% due 05/01/37 -- -- 1,220,000 1,289,467 690,000 729,289
Transtar Holdings L.P., Series B,
Step up to 13.375% due 12/15/03 400,000 350,000 1,100,000 962,500 -- --
U.S. Air, Incorporated,
9.625% due 02/01/01 190,000 195,700 490,000 504,700 -- --
10.00% due 07/01/03 210,000 216,300 355,000 365,650 -- --
--------- --------- ---------
1,315,125 4,932,240 1,382,714
TRANSPORTATION EQUIPMENT: 0.13% 0.14%
Aftermarket Technology Corporation,
Series B, 12.00% due 08/01/04 180,000 199,800 600,000 666,000 -- --
K & F Industries, Incorporated,
9.25% due 10/15/07 10,000 10,250 30,000 30,750 -- --
Newport News Shipbuilding, Incorporated,
9.25% due 12/01/06 130,000 137,475 220,000 232,650 -- --
------- -------
347,525 929,400
TOTAL CORPORATE BONDS
(Cost: $16,917,266, $100,292,106
and $34,738,680, respectively) $17,794,811 $103,297,960 $35,263,756
---------- ----------- ----------
CONVERTIBLE BONDS: 0.09% 0.08%
GST Telecommunications, Incorporated,
Step up to 13.875% due 12/15/05 10,000 9,500 10,000 9,500 -- --
Sunglass Hut International, Incorporated,
5.25% due 06/15/03 320,000 242,000 680,000 514,250 -- --
------- -------
251,500 523,750
TOTAL CONVERTIBLE BONDS
(Cost: $244,400, $507,310
and $0, respectively) $251,500 $523,750 --
-------- --------
FIXED INCOME - OTHER: 0.06% 3.69% 6.84%
MISCELLANEOUS ASSET BACKED SECURITIES: 0.00% 1.02% 1.97%
CPS Auto Grantor Trust,
Series 1997 1 Certificates, Class A,
6.55% due 07/15/02 -- -- 682,232 687,253 404,285 407,261
Series 1996 2 Certificates, Class A,
6.70% due 02/15/02 -- -- 371,011 373,097 209,115 210,291
Dayton Hudson Credit Card Master
Certificates, Series 95 1, Class A
6.25% due 08/25/05 -- -- 870,000 873,463 490,000 491,950
Discover Card Trust, 1992 B,
7.50% due 06/16/00 -- -- 1,330,000 1,334,987 730,000 732,738
Ford Credit Grantor Trust, 1995 B
Certificates, Class A, 5.90% due 10/15/00 -- -- 964,422 963,516 420,839 420,443
MBNA Master Credit Card Trust II,
Series 97 Certificates, Class A,
6.55% due 01/15/07 -- -- 1,720,000 1,758,150 970,000 991,515
</TABLE>
The accompanying notes are an integral part of the financial statements.
141
<PAGE> 181
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS ASSET
BACKED SECURITIES - CONTINUED
Premier Auto Trust, Series 933, Class A3,
4.90% due 12/15/98 -- -- $151,246 $150,819 $84,418 $84,179
Railcar Trust 1992 1, 7.75% due 06/01/04 -- -- 617,845 648,558 770,835 809,154
--------- ---------
6,789,843 4,147,531
OTHER COLLATERALIZED MORTGAGE OBLIGATIONS: 0.06% 2.67% 4.87%
Airplane Pass Thru Trust, Series 1,
Class D, 10.875% due 03/15/19 $135,000 $156,076 385,000 445,106 -- --
American Housing Trust, Series IV,
9.552% due 09/25/20 -- -- 1,773,996 1,838,121 874,622 906,236
CBM Funding Corporation, Certificates 96 1B,
Class A2, 6.88% due 07/01/07 -- -- 480,000 487,950 270,000 274,472
Class A1, 7.55% due 07/01/04 -- -- 67,697 68,474 38,684 39,128
Contimortgage Home Equity Loan Trust,
Series 1997-4, Class A3,
6.26% VR due 07/15/12 -- -- 880,000 880,000 490,000 490,000
Credit Suisse First Boston Mortgage,
Certificates 1997, 7.27% due 04/18/11 -- -- 990,000 992,784 560,000 561,575
Edison Mission Energy Funding
Corporation, Series A 144A,
6.77% due 09/15/03 -- -- 944,102 953,420 680,317 687,032
First Union Lehman Brothers Mortgage
Trust, Series 1997 C2, Certificates
Class A, 6.65% due 11/18/29 -- -- 1,100,000 1,116,844 620,000 629,494
General Growth Properties, Series 1,
Class A2, 6.602% due 11/15/07 -- -- 710,000 711,839 400,000 401,036
Class D2, 6.992% due 11/15/07 -- -- 760,000 763,815 430,000 432,159
Class E2, 7.224% due 11/15/07 -- -- 450,000 452,255 260,000 261,303
GMAC Commericial Mortgage Security,
Incorporated, Certificates 1997 C2,
Class D, 7.192% VR due 01/15/08 -- -- 270,000 270,000 150,000 150,000
Class E, 7.624% VR due 04/15/11 -- -- 570,000 570,000 320,000 320,000
Green Tree Financial Corporation,
96 8 Series Certificates, Class A2,
6.55% due 10/15/27 -- -- 900,000 901,125 950,000 951,187
97 6 Series, 6.68% due 01/15/29 -- -- 1,230,000 1,243,444 690,000 697,542
GS Mortgage Securities Corporation II,
Certificates Series 97 GL 1,
6.86% due 07/13/30 -- -- 850,000 873,010 470,000 482,723
Meritor Mortgage Securities Corporation,
Certificates 87 1, 9.40% due 06/01/99 -- -- 23,910 23,880 12,584 12,569
Morgan Stanley Capital Income, 97 C1,
Class A1, 7.63% due 12/15/06 -- -- 1,090,000 1,155,400 620,000 657,200
NationsLink Funding Corporation,
Certificates 96 1, Class A1,
7.53% due 09/20/02 -- -- 1,311,195 1,367,026 786,717 820,216
Nomura Asset Securities Corporation,
Series 1994 MD II A/6,
6.952% due 07/07/03 -- -- 1,092,469 1,095,244 702,302 704,085
</TABLE>
The accompanying notes are an integral part of the financial statements.
142
<PAGE> 182
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE MODERATE CONSERVATIVE
------------------------ ------------------------- -------------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OTHER COLLATERALIZED
MORTGAGE OBLIGATIONS - CONTINUED
Olympic Automobile Receivable, 1997 A,
6.40% due 09/15/01 -- -- $1,080,000 $1,084,493 $440,000 $441,830
Overseas Private Investment Corporation,
Series 1995, 6.08% due 08/15/04 -- -- 421,400 421,851 352,800 353,177
Structured Asset Securities Corporation,
Certificates Series 95 C4, Class A 1A,
6.90% due 06/25/26 -- -- 19,128 19,043 11,089 11,039
------- ---------- ----------
156,076 17,735,124 10,284,003
TOTAL FIXED INCOME - OTHER
(Cost: $135,219, $24,273,235
and $14,315,967, respectively) $156,076 $24,524,967 $14,431,534
------- ---------- ----------
SUPRANATIONAL OBLIGATIONS: 0.13% 0.24%
Inter-American Development Bank,
6.29% due 07/16/27 -- -- 800,000 836,472 480,000 501,883
------- -------
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost: $0, $794,994 and $476,997,
respectively) -- $836,472 $501,883
------- -------
SHORT TERM INVESTMENTS: 8.90% 8.10% 2.25%
Navigator Securities
Lending Trust, 5.74% $23,611,834 $53,721,023 $4,738,674
---------- ---------- ---------
REPURCHASE AGREEMENTS: 4.17% 5.24% 10.29%
Repurchase Agreement with State Street Bank
& Trust Company dated 12/31/97 at 5.00%, to
be repurchased at $11,058,071 on 01/02/98,
collateralized by $11,276,557 U.S. Treasury
Notes, 5.125% due 12/31/98 (valued at
$11,567,016, including interest) $11,055,000
----------
Repurchase Agreement with State Street Bank
& Trust Company dated 12/31/97 at 5.00%, to
be repurchased at $34,816,669 on 01/02/98,
collateralized by $35,505,861 U.S. Treasury
Notes, 6.125% due 12/31/01 (valued at
$36,580,798, including interest) $34,807,000
----------
Repurchase Agreement with State Street Bank
& Trust Company dated 12/31/97 at 5.00%, to
be repurchased at $21,704,028 on 01/02/98,
collateralized by $22,136,870 U.S. Treasury
Notes, 7.50% due 11/15/01 (valued at
$22,334,387, including interest) $21,701,000
----------
TOTAL INVESTMENTS
(Aggressive, Moderate and Conservative
Asset Allocation Trusts) (Cost:
$222,894,940, $582,270,877
and $196,142,585, respectively) $265,184,316 $663,132,000 $210,882,641
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
143
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
HIGH YIELD TRUST
Shares Value
------ -----
COMMON STOCKS - 0.04%
TELECOMMUNICATION SERVICES - 0.04%
NEXTEL Communications, Incorporated* 1,673 $43,498
------
TOTAL COMMON STOCKS
(Cost: $27,000) $43,498
------
PREFERRED STOCKS - 4.00%
INDUSTRIAL - 0.33%
Sinclair Capital 3,125 $346,094
-------
PUBLISHING - 3.16%
Time Warner, Incorporated* 2,944 3,312,935
---------
TELECOMMUNICATION SERVICES - 0.52%
IXC Communications, Incorporated* 463 542,867
-------
TOTAL PREFERRED STOCKS
(Cost: $3,922,875) $4,201,896
---------
Principal
Amount Value
------ -----
U.S. TREASURY OBLIGATIONS - 1.77%
U.S. TREASURY NOTES - 1.77%
6.50% due 10/15/06 $1,775,000 $1,858,478
---------
TOTAL U.S. TREASURY
OBLIGATIONS (Cost: $1,773,206) $1,858,478
---------
FOREIGN GOVERNMENT OBLIGATIONS - 4.40%
REPUBLIC OF ARGENTINA - 1.29%
5.50% due 03/31/23 1,855,000 1,358,787
---------
REPUBLIC OF COLUMBIA - 0.35%
8.70% due 02/15/16 375,000 364,950
-------
GOVERNMENT OF JAMAICA - 0.25%
9.625% due 07/02/02 275,000 261,250
-------
GOVERNMENT OF MEXICO - 1.04%
United Mexican States,
6.25% due 12/31/19 1,315,000 1,094,738
---------
REPUBLIC OF PANAMA - 1.09%
7.875% due 02/13/02 1,180,000 1,147,550
---------
REPUBLIC OF VENEZUELA - 0.37%
9.25% due 09/15/27 435,000 389,760
-------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost: $4,465,221) $4,617,035
---------
CORPORATE BONDS - 62.17%
BANKING - 0.22%
Korea Development Bank,
7.375% due 09/17/04 $295,000 $236,062
-------
BROADCASTING - 7.56%
Cablevision Systems Corporation,
7.875% due 12/15/07 575,000 586,500
9.875% due 05/15/06 885,000 969,075
Comcast Cellular Holdings,
Incorporated, 9.50% due 05/01/07 975,000 1,014,000
Fox/Liberty Network LLC
8.875% due 08/15/07 240,000 240,000
Step up to 9.75% due 08/15/07 1,765,000 1,129,600
Rogers Cablesystems, Ltd., Series B,
10.00% due 03/15/05 115,000 126,500
10.125% due 09/01/12 650,000 708,500
Sinclair Broadcast Group,
Incorporated, 9.00% due 07/15/07 1,080,000 1,101,600
TCI Satellite Entertainment, Incorporated,
Step up to 12.25% due 02/15/07 2,025,000 1,336,500
TV Azteca SA DE CV, Series B,
10.50% due 02/15/07 700,000 722,750
---------
7,935,025
BUSINESS SERVICES - 0.48%
Kinetic Concepts, Incorporated,
9.625% due 11/01/07 500,000 508,125
-------
CHEMICALS - 0.35%
Huntsman Corporation,
FRN due 07/01/07 360,000 371,700
-------
COSMETICS & TOILETRIES - 1.33%
Revlon Worldwide Corporation,
Series B, zero coupon due 03/15/01 2,005,000 1,398,487
---------
DRUGS & HEALTH CARE - 2.97%
Integrated Health Services,
Incorporated, 9.50% due 09/15/07 980,000 1,009,400
Tenet Healthcare Corporation,
8.625% due 01/15/07 1,175,000 1,213,187
Vencor, Incorporated,
8.625% due 07/15/07 900,000 897,750
---------
3,120,337
ELECTRIC UTILITIES - 1.37%
AES Corporation,
8.50% due 11/01/07 630,000 630,000
Quezon Power, Ltd.,
8.86% due 06/15/17 970,000 803,965
---------
1,433,965
The accompanying notes are an integral part of the financial statements.
144
<PAGE> 184
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
ELECTRONICS - 0.69%
Hyundai Semiconductor,
8.625% due 05/15/07 $830,000 $729,537
-------
FINANCIAL SERVICES - 5.70%
APP FIN II Mauritius, Ltd.,
12.00% due 02/15/04 860,000 739,600
Geberit International SA,
10.125% due 04/15/07 250,000 152,172
Globalstar LP, 11.375% due 02/15/04 750,000 757,500
Kmart Funding Corporation,
Series F, 8.80% due 07/01/10 1,175,000 1,229,814
Navistar Financial Corporation,
Series B, 9.00% due 06/01/02 110,000 113,988
PTC International Finance BV,
Step up to 10.75% due 07/01/07 1,270,000 825,500
Pindo Deli Financial Mauritius, Ltd.,
10.75% due 10/01/07 1,045,000 898,700
Riggs Capital Trust II,
8.875% due 03/15/27 200,000 220,122
Western Financial Savings,
8.875% due 08/01/07 1,090,000 1,048,973
---------
5,986,369
HOTELS & RESTAURANTS - 1.58%
Host Marriott Travel Plazas, Incorporated,
Series B, 9.50% due 05/15/05 1,560,000 1,661,400
---------
INDUSTRIALS - 11.13%
Advanced Micro Devices,
Incorporated, 11.00% due 08/01/03 1,350,000 1,444,500
Ameriserve Food Distribution,
Incorporated, 10.125% due 07/15/07 220,000 228,800
AST Research, Incorporated,
7.45% due 10/01/02 565,000 449,517
Azteca Holdings SA,
11.00% due 06/15/02 120,000 123,600
Concentric Network Corporation,
12.75% due 12/15/07 250,000 255,938
EES Coke Battery, Incorporated,
9.328% due 04/15/07 525,000 566,024
Hermes Europe Railtel BV,
11.50% due 08/15/07 135,000 148,838
Hylsa SA De CV,
9.25% due 09/15/07 750,000 735,000
Iridium LLC/Capital Corporation,
Series A, 13.00% due 07/15/05 490,000 512,050
ISP Holdings, Incorporated,
Series B, 9.00% due 10/15/03 1,570,000 1,624,950
ITT Promedia,
9.125% due 09/15/07 DEM 1,050,000 612,857
Multicanal SA, 10.50% due 02/01/07 $1,195,000 1,178,509
Murrin Murrin Holdings Property,
9.375% due 08/31/07 1,070,000 1,059,300
Paramount Communications,
Incorporated, 8.25% due 08/01/22 900,000 906,912
RBS Participacoes SA,
11.00% due 04/01/07 870,000 802,575
RCN Corporation,
11.125% due 10/15/07 1,000,000 627,500
Reliance Industries, Ltd.,
9.375% due 06/24/26 250,000 246,468
Transamerican Energy Corporation,
Step up to 13.00% due 06/15/02 200,000 161,500
----------
11,684,838
INSURANCE - 0.28%
Anthem Insurance Companies,
Incorporated, 9.00% due 04/01/27 $265,000 $291,622
-------
LEISURE TIME - 2.34%
Grand Casino, Incorporated,
10.125% due 12/01/03 525,000 567,000
Horseshoe Gaming L.L.C.,
Series B, 9.375% due 06/15/07 925,000 968,937
Station Casinos, Incorporated,
9.75% due 04/15/07 425,000 442,000
10.125% due 03/15/06 450,000 474,750
---------
2,452,687
METAL & METAL PRODUCTS - 0.33%
Impress Metal Packaging Holdings,
9.875% due 05/29/07 600,000 346,035
-------
PETROLEUM SERVICES - 2.75%
Newpark Resources, Incorporated,
8.625% due 12/15/07 1,035,000 1,050,525
Nuveo Energy Company,
9.50% due 04/15/06 800,000 846,000
Synder Oil Corporation,
8.75% due 06/15/07 985,000 991,156
---------
2,887,681
POLLUTION CONTROL - 1.35%
Norcal Waste Systems, Incorporated,
Series B, 13.50% due 11/15/05 1,220,000 1,415,200
---------
PUBLISHING - 2.03%
Big Flower Press Holdings,
Incorporated, 8.875% due 07/01/07 500,000 497,500
Outdoor Systems, Incorporated,
8.875% due 06/15/07 1,115,000 1,159,600
S.D. Warren Company,
Series B, 12.00% due 12/15/04 420,000 469,350
---------
2,126,450
REAL ESTATE - 1.13%
Criimi Mae, Incorporated,
9.125% due 12/01/02 1,050,000 1,052,625
The accompanying notes are an integral part of the financial statements.
145
<PAGE> 185
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
REAL ESTATE - CONTINUED
HMH Properties, Incorporated,
Series B, 8.875% due 07/15/07 130,000 $ 136,825
---------
1,189,450
RETAIL GROCERY - 3.12%
Fleming Companies, Incorporated,
10.50% due 12/01/04 1,185,000 1,250,175
10.625% due 07/31/07 200,000 210,000
Southland Corporation,
5.00% due 12/15/03 2,109,000 1,813,740
---------
3,273,915
TELECOMMUNICATION SERVICES - 5.71%
Brooks Fiber Properties, Incorporated,
zero coupon due 03/01/06 500,000 415,000
11.875% due 11/01/06 625,000 498,438
Esprit Telecom Group PLC,
11.50% due 12/15/07 1,850,000 1,061,800
Globo Comunicacoes,
10.50% due 12/20/06 600,000 570,000
Rogers Cantel, Incorporated,
8.30% due 10/01/07 1,355,000 1,344,837
Rogers Communications,
Incorporated, 8.875% due 07/15/07 400,000 400,000
Telesystem International Wireless,
Incorporated, Step up to
10.50% due 11/01/07 1,565,000 868,575
Teligent, Incorporated,
11.50% due 12/01/07 830,000 832,075
---------
5,990,725
TELEPHONE - 9.74%
Dial Call Communications,
Incorporated, Series B,
Step up to 10.25% due 12/15/05 650,000 593,125
Interamericas Communications,
14.00% due 10/27/07 440,000 440,000
Intermedia Communications,
Incorporated, Series B,
Step up to 11.25% due 07/15/07 2,400,000 1,746,000
IXC Communications, Incorporated,
Series B, 12.50% due 10/01/05 590,000 675,550
Lenfest Communications,
Incorporated, 8.375% due 11/01/05 890,000 914,475
NEXTEL Communications, Incorporated,
zero coupon due 08/15/04 3,050,000 2,714,500
Occidente y Caribe Celular SA, Series B,
Step up to 14.00% due 03/15/04 900,000 675,000
Philippine Long Distance Telephone
Company, 7.85% due 03/06/07 880,000 774,400
Qwest Communications International,
Incorporated, 10.875% due 04/01/07 225,000 255,938
Teleport Communications Group,
zero coupon due 07/01/07 1,765,000 1,438,475
----------
10,227,463
TOTAL CORPORATE BONDS
(Cost: $64,742,252) $65,267,073
----------
CONVERTIBLE BONDS - 0.53%
INDUSTRIALS - 0.35%
Comcast Corporation,
1.125% due 04/15/07 $570,000 $367,650
-------
TELECOMMUNICATION SERVICES - 0.18%
Total Access Communication Public
Company, Ltd., 2.00% due 05/15/06 400,000 186,000
-------
TOTAL CONVERTIBLE BONDS
(Cost: $775,493) $553,650
-------
COLLATERALIZED
MORTGAGE OBLIGATIONS - 4.00%
ALPS, 12.75% due 06/15/06 149,588 161,610
CA FM Lease Trust,
8.50% due 07/15/17 244,664 272,142
DLJ Mortgage Acceptance Corporation,
Series 1997-CF2, Class S,
0.3567% due 10/15/17 IO 21,000,000 558,182
DR Structured Finance,
6.66% due 08/15/10, Series A-1 649,302 601,208
7.43% due 08/15/18, Series A-2 375,000 334,253
8.375% due 08/15/15, Series A-2 550,000 540,254
9.35% due 08/15/19, Series 94K2 400,000 416,684
Jet Equipment Trust,
11.79% due 06/15/13 300,000 404,058
Midland Funding Corporation,
10.33% due 07/23/02 294,107 316,162
Securitized Multiple Asset Rated
Trust, Series 1997, Class 5,
7.72% due 04/15/05 589,612 595,547
---------
4,200,100
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (Cost: $4,048,082) $4,200,100
---------
FIXED INCOME - OTHER - 2.11%
MISCELLANEOUS ASSET BACKED SECURITIES - 2.11%
Long Beach Acceptance Auto
Business, 14.22% due 10/25/03 1,603,201 1,603,631
OHA Auto Grantor Trust, Series 1997-1,
Class B, 11.00% due 01/15/04 615,144 616,650
---------
2,220,281
TOTAL FIXED INCOME - OTHER
(Cost: $2,233,278) $2,220,281
---------
The accompanying notes are an integral part of the financial statements.
146
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 9.99%
$10,489,036 Navigator Securities
Lending Trust, 5.74% $10,489,036
----------
REPURCHASE AGREEMENT - 10.98%
$11,531,000 Repurchase Agreement with
State Street Bank & Trust
Company dated 12/31/97 at
5.00%, to be repurchased at
$11,534,203 on 01/02/98,
collateralized by $9,300,000
U.S. Treasury Bonds, 8.125%
due 05/16/21 (valued at
$11,857,092, including interest) $11,531,000
----------
TOTAL INVESTMENTS
(High Yield Trust) (Cost: $104,007,443) $104,982,047
-----------
STRATEGIC BOND TRUST
Shares Value
------ -----
WARRANTS - 0.00%*
FINANCIAL SERVICES - 0.00%
BPC Holdings Corporation (Expiration
date 04/15/04; strike price $18.797) 1,000 $20,000
------
TELEPHONE - 0.00%
Wireless One, Incorporated (Expiration
date 10/19/00; strike price $11.50) 2,250 22
--
TOTAL WARRANTS (Cost: $0) $20,022
------
Principal
Amount Value
------ -----
U.S. TREASURY OBLIGATIONS - 10.02%***
U.S. TREASURY BONDS - 1.21%
6.375% due 08/15/27 $5,470,000 $5,769,154
---------
U.S. TREASURY NOTES - 8.81%
3.375% due 01/15/07 1,190,000 1,158,763
5.875% due 09/30/02 5,000,000 5,027,350
6.125% due 08/15/07 16,325,000 16,776,549
6.25% due 08/31/02 13,000,000 13,266,110
6.625% due 03/31/02 5,500,000 5,677,870
----------
41,906,642
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $47,005,225) $47,675,796
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 12.63%
FEDERAL HOME LOAN BANK - 0.36%
5.89% due 07/24/00 1,200,000 1,202,064
5.94% due 06/13/00 500,000 501,560
---------
1,703,624
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 1.10%
6.50% TBA** $1,250,000 1,235,538
7.595% due 07/15/06 IO 1,576,986 220,778
8.00% due 05/01/10 1,000,259 1,027,686
8.50% due 05/01/08 519,773 541,645
10.00% due 05/15/20 1,971,493 2,182,798
---------
5,208,445
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 10.91%
Interest Only due 03/17/20, REMIC 24,923,683 763,911
Interest Only due 10/17/36, REMIC 51,248,891 1,601,528
6.50% TBA** 750,000 741,322
6.50% due 11/01/10 - 12/01/10 1,296,169 1,304,270
6.65% due 08/25/07 5,350,000 5,472,047
7.00% TBA** 34,750,000 34,999,505
7.50% TBA** 4,075,000 4,170,477
8.80% due 01/25/19, REMIC 1,464,589 1,562,526
10.40% due 04/25/19, REMIC 860,316 968,389
13.00% due 11/01/15 270,627 324,329
----------
51,908,304
STUDENT LOAN MARKETING ASSOCIATION - 0.26%
7.20% due 11/09/00 1,200,000 1,242,936
---------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost: $59,092,987) $60,063,309
----------
FOREIGN GOVERNMENT OBLIGATIONS - 17.23%
REPUBLIC OF ARGENTINA - 2.22%
5.50% due 03/31/23 14,400,000 10,548,000
----------
COMMONWEALTH OF AUSTRALIA - 0.05%
8.75% due 08/15/08 AUD 300,000 235,668
-------
FEDERAL REPUBLIC OF BRAZIL - 1.82%
10.125% due 05/15/27 $9,250,000 8,671,875
---------
NATIONAL REPUBLIC OF BULGARIA - 0.92%
6.687% due 07/28/11 6,000,000 4,395,000
---------
GOVERNMENT OF CANADA - 0.95%
6.50% due 09/01/98 CAD 3,060,000 2,162,588
7.00% due 12/01/06 590,000 452,625
7.50% due 09/01/00 2,590,000 1,908,486
---------
4,523,699
GOVERNMENT OF COSTA RICA - 0.11%
Series B, 6.25% due 05/21/15 $700,000 518,000
-------
KINGDOM OF DENMARK - 0.67%
6.00% due 11/15/02 DKK 19,000,000 2,879,712
8.00% due 03/15/06 1,900,000 321,247
---------
3,200,959
The accompanying notes are an integral part of the financial statements.
147
<PAGE> 187
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
REPUBLIC OF ECUADOR - 0.26%
3.25% due 02/27/15 $2,023,076 $1,246,821
---------
FEDERAL REPUBLIC OF GERMANY - 2.16%
5.25% due 10/20/98 DEM 8,790,000 4,939,932
6.50% due 07/04/27 8,850,000 5,328,842
----------
10,268,774
REPUBLIC OF ITALY - 0.72%
zero coupon due 07/31/98 ITL 6,200,000,000 3,403,867
---------
GOVERNMENT OF MEXICO - 2.03%
6.25% due 12/31/19, Series B $1,400,000 1,165,500
6.25% due 12/31/19, Series W-A 1,000,000 832,500
6.25% due 12/31/19, Series W-B 3,000,000 2,497,500
FRN due 12/31/19, Series D 2,500,000 2,312,500
11.50% due 05/15/26 2,400,000 2,835,000
---------
9,643,000
GOVERNMENT OF MOROCCO - 1.27%
FRN due 01/01/09 7,000,000 6,020,000
---------
GOVERNMENT OF NEW ZEALAND - 0.71%
8.00% due 07/15/98 NZD 5,800,000 3,360,664
---------
REPUBLIC OF PANAMA - 0.57%
3.75% due 07/17/14 $3,500,000 2,699,375
---------
KINGDOM OF SWEDEN - 0.93%
6.50% due 10/25/06 SEK 8,100,000 1,059,644
11.00% due 01/21/99 25,200,000 3,363,100
---------
4,422,744
REPUBLIC OF VENEZUELA - 1.85%
VR, 6.75% due 03/31/07, Series A $452,381 405,469
VR, 6.75% due 03/31/07, Series B 1,130,952 1,013,673
FRN due 12/18/07, Series DL 6,047,619 5,322,207
9.25% due 09/15/27 2,325,000 2,075,062
---------
8,816,411
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost: $78,779,838) $81,974,857
----------
FOREIGN BONDS - 1.16%
Russian Ian,
FRN due 12/02/15 5,600,000 3,969,000
Treuhandanstalt,
7.375% due 12/02/02 DEM 2,480,000 1,529,399
---------
5,498,399
TOTAL FOREIGN BONDS
(Cost: $5,466,552) $5,498,399
---------
CORPORATE BONDS - 30.89%
APPAREL & TEXTILES - 0.79%
ClarkSchwebel, Incorporated,
10.50% due 04/15/06 $1,150,000 $1,253,500
Collins & Aikman Floorcover,
10.00% due 01/15/07 1,250,000 1,293,750
Synthetic Industries, Incorporated,
Series B, 9.25% due 02/15/07 1,150,000 1,207,500
---------
3,754,750
BANKING - 2.33%
Banc One Corporation,
7.60% due 05/01/07 3,200,000 3,439,584
Korea Development Bank,
9.60% due 12/01/00 3,000,000 2,680,290
Malayan Banking BHD,
7.125% due 09/15/05 2,100,000 1,912,155
Midland Bank PLC,
7.65% due 05/01/25 2,825,000 3,070,944
----------
11,102,973
BROADCASTING - 0.59%
Cablevision Systems Corporation,
10.50% due 05/15/16 1,000,000 1,165,000
Chancellor Media Corporation,
9.375% due 10/01/04 500,000 520,000
SFX Broadcasting, Incorporated,
Series B, 10.75% due 05/15/06 1,000,000 1,097,500
---------
2,782,500
BUSINESS SERVICES - 0.21%
Borg-Warner Security Corporation,
9.125% due 05/01/03 1,000,000 1,020,000
---------
CHEMICAL PRODUCTS - 0.25%
Texas-Petro Chemical Corporation,
11.125% due 07/01/06 1,085,000 1,171,800
---------
CONSTRUCTION & BUILDING MATERIALS - 0.29%
Southdown, Incorporated,
Series B, 10.00% due 03/01/06 1,250,000 1,371,875
---------
COSMETICS & TOILETRIES - 0.29%
Revlon Worldwide Corporation,
Series B, zero coupon due 03/15/01 2,000,000 1,395,000
---------
DRUGS & HEALTH CARE - 1.16%
Dade International, Incorporated,
11.125% due 05/01/06 1,000,000 1,112,500
Eye Care Centers of America,
Incorporated, 12.00% due 10/01/03 1,250,000 1,350,000
Imagyn Medical Technologies,
Incorporated, 12.50% due 04/01/04 1,000,000 947,500
The accompanying notes are an integral part of the financial statements.
148
<PAGE> 188
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
DRUGS & HEALTH CARE - CONTINUED
Integrated Health Services,
Incorporated, 9.25% due 01/15/08 $1,000,000 $1,020,000
Maxxim Medical, Incorporated,
10.50% due 08/01/06 1,000,000 1,087,500
---------
5,517,500
ELECTRONICS - 0.17%
Amphenol Corporation,
9.875% due 05/15/07 750,000 795,000
-------
ENERGY & UTILITIES - 0.83%
AES Corporation,
8.50% due 11/01/07 1,000,000 1,000,000
AES China Generating, Ltd.,
10.125% due 12/15/06 1,000,000 1,015,000
KCS Energy, Incorporated, Series B,
11.00% due 01/15/03 1,000,000 1,100,000
Transamerican Energy Corporation,
Step up to 13.00% due 06/15/02 1,050,000 847,875
---------
3,962,875
FINANCIAL SERVICES - 3.67%
APP FIN II Mauritius, Ltd., Series B,
Step up to 12.00% due 02/15/04 1,000,000 860,000
Dollar Financial Group, Incorporated,
Series A, 10.875% due 11/15/06 525,000 567,000
DVI, Incorporated,
9.875% due 02/01/04 1,000,000 1,020,000
Foamex Capital Corporation,
9.875% due 05/15/07 1,000,000 1,025,000
Green Tree Financial Corporation,
7.07% due 09/15/07 8,355,334 8,514,586
Intertek Finance PLC, Series B,
10.25% due 11/01/06 1,250,000 1,300,000
Paine Webber Group, Incorporated,
7.00% due 03/01/00 1,700,000 1,718,734
United States Leasing International,
8.45% due 01/25/05 1,500,000 1,662,180
Venture Holdings Trust,
9.75% due 04/01/04 781,000 777,095
----------
17,444,595
FOOD & BEVERAGES - 0.99%
B & G Foods, Incorporated,
9.625% due 08/01/07 500,000 503,750
Delta Beverage Group, Incorporated,
9.75% due 12/15/03 750,000 780,000
Dole Foods, Incorporated,
6.75% due 07/15/00 1,500,000 1,512,480
Specialty Foods Corporation,
Series B, 11.125% due 10/01/02 1,000,000 1,010,000
Stroh Brewery Company,
11.10% due 07/01/06 1,000,000 905,000
---------
4,711,230
FOREST PRODUCTS - 0.20%
Doman Industries, Ltd.,
8.75% due 03/15/04 1,000,000 955,000
-------
FURNITURE & FIXTURES - 0.11%
Simmons Company,
10.75% due 04/15/06 500,000 526,250
-------
HOTELS & RESTAURANTS - 0.53%
Prime Hospitality Corporation,
Series B,9.75% due 04/01/07 1,000,000 1,070,000
Wyndham Hotel Corporation,
10.50% due 05/15/06 1,250,000 1,450,000
---------
2,520,000
INDUSTRIALS - 6.79%
Alvey Systems, Incorporated,
11.375% due 01/31/03 750,000 817,500
Ameriserve Food Distribution, Incorporated,
10.125% due 07/15/07 1,000,000 1,040,000
Berry Plastics Corporation,
12.25% due 04/15/04 1,150,000 1,267,875
CFP Holding, Incorporated,
Series B, 11.625% due 01/15/04 1,100,000 1,100,000
CLN Holdings, Incorporated,
zero coupon due 05/15/01 2,500,000 1,656,250
Dawson Production Services,
Incorporated, 9.375% due 02/01/07 1,250,000 1,317,187
Decisionone Corporation,
9.75% due 08/01/07 1,030,000 1,058,325
Ekco Group, Incorporated,
Series B, 9.25% due 04/01/06 1,000,000 1,040,000
Exide Electronics Group, Incorporated,
Series B, 11.50% due 03/15/06 750,000 890,625
Harnischfeger Industries,
Incorporated, 6.875% due 02/15/27 2,400,000 2,495,400
Hollinger, Incorporated,
zero coupon due 10/05/13 3,000,000 1,166,250
Huntsman Packaging Corporation,
9.125% due 10/01/07 1,000,000 1,030,000
ICG Holdings, Incorporated,
Step up to 13.50% due 09/15/05 1,250,000 1,026,563
International Semi Tech Microelectronic,
Step up to 11.50% due 08/15/03 800,000 288,000
Insilco Corporation,
10.25% due 08/15/07 1,000,000 1,047,500
Jordan Industries, Incorporated, Series B,
Step up to 11.75% due 04/01/09 2,412,580 1,423,422
Key Plastics, Incorporated,
Series B, 10.25% due 03/15/07 500,000 530,000
Loomis Fargo & Company,
10.00% due 01/15/04 1,000,000 1,005,000
Marcus Cable Company,
Step up to 14.25% due 12/15/05 1,750,000 1,513,750
The accompanying notes are an integral part of the financial statements.
149
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
INDUSTRIALS - CONTINUED
Murrin Murrin Holdings Property,
9.375% due 08/31/07 $1,000,000 $990,000
Nortek, Incorporated, Series B,
9.125% due 09/01/07 1,000,000 1,015,000
Packard Bioscience Company,
Series B, 9.375% due 03/01/07 900,000 864,000
Printpack, Incorporated, Series B,
10.625% due 08/15/06 750,000 802,500
Production Resource,
11.50% due 01/15/08 500,000 501,250
Pueblo Xtra International,
9.50% due 08/01/03 1,000,000 952,500
Rayovac Corporation, Series B,
10.25% due 11/01/06 650,000 708,500
SC International Services, Incorporated,
9.25% due 09/01/07 1,000,000 1,035,000
Stellex Industries, Incorporated,
9.50% due 11/01/07 750,000 757,500
Talley Manufacturing & Technology,
Incorporated, 10.75% due 10/15/03 1,000,000 1,065,000
Terex Corporation,
13.25% due 05/15/02 667,000 753,710
Williams Scotsman, Incorporated,
9.875% due 06/01/07 1,100,000 1,133,000
----------
32,291,607
INSURANCE - 0.38%
Aetna Services, Incorporated,
7.625% due 08/15/26 1,700,000 1,792,004
---------
LEISURE TIME - 0.32%
Grand Casinos, Incorporated,
9.00% due 10/15/04 1,000,000 1,000,000
Sun International Hotels, Ltd.,
9.00% due 03/15/07 500,000 516,250
---------
1,516,250
METAL & METAL PRODUCTS - 1.05%
Algoma Steel, Incorporated,
12.375% due 07/15/05 1,000,000 1,160,000
Commonwealth Aluminum
Corporation, 10.75% due 10/01/06 1,000,000 1,080,000
EnviroSource, Incorporated,
9.75% due 06/15/03 600,000 610,500
International Knife & Saw,
11.375% due 11/15/06 1,000,000 1,080,000
Renco Metals, Incorporated,
11.50% due 07/01/03 1,000,000 1,060,000
---------
4,990,500
MINING - 0.07%
Royal Oaks Mines, Incorporated,
Series B, 11.00% due 08/15/06 500,000 355,000
-------
MISCELLANEOUS SERVICES - 0.79%
American Media Operations, Incorporated,
11.625% due 11/15/04 1,150,000 1,247,750
Hines Horticulture, Incorporated,
Series B, 11.75% due 10/15/05 1,290,000 1,406,100
Selmer Company, Incorporated,
11.00% due 05/15/05 1,000,000 1,095,000
---------
3,748,850
NEWSPAPERS - 0.21%
Garden State Newspapers,
Incorporated, 8.75% due 10/01/09 1,000,000 1,003,750
---------
OFFICE FURNISHINGS & SUPPLIES - 0.61%
Staples, Incorporated,
7.125% due 08/15/07 2,850,000 2,895,486
---------
PAPER - 0.44%
Crown Paper Company,
11.00% due 09/01/05 800,000 816,000
Stone Container Corporation,
12.25% due 04/01/02 1,250,000 1,268,750
---------
2,084,750
PETROLEUM SERVICES - 1.90%
Bellwether Exploration Company,
10.875% due 04/01/07 1,000,000 1,100,000
Benton Oil & Gas Company,
11.625% due 05/01/03 1,000,000 1,102,500
Cliffs Drilling Company,
10.25% due 05/15/03 1,100,000 1,188,000
Costilla Energy, Incorporated,
10.25% due 10/01/06 1,000,000 1,045,000
National Energy Group, Incorporated,
10.75% due 11/01/06 1,250,000 1,296,875
Occidental Petroleum Corporation,
9.25% due 08/01/19 2,225,000 2,778,958
United Refining Company,
10.75% due 06/15/07 500,000 525,000
---------
9,036,333
PLASTICS - 0.17%
Plastic Containers, Incorporated,
Series B, 10.00% due 12/15/06 750,000 795,000
-------
POLLUTION CONTROL - 0.60%
Allied Waste Industries, Incorporated,
Step up to 11.30% due 06/01/07 2,000,000 1,400,000
Norcal Waste Systems, Incorporated,
Series B, 13.50% due 11/15/05 1,250,000 1,450,000
---------
2,850,000
REAL ESTATE - 0.27%
Radnor Holdings Corporation,
10.00% due 12/01/03 1,250,000 1,296,875
---------
The accompanying notes are an integral part of the financial statements.
150
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
RETAIL GROCERY - 0.58%
Carr Gottstein Foods Company,
12.00% due 11/15/05 $1,000,000 $1,110,000
Fleming Companies, Incorporated,
10.50% due 12/01/04 500,000 527,500
Jitney-Jungle Stores of America,
Incorporated, 12.00% due 03/01/06 1,000,000 1,135,000
---------
2,772,500
RETAIL TRADE - 0.93%
Cole National Group, Incorporated,
8.625% due 08/15/07 1,000,000 993,750
Fox Kids Worldwide, Incorporated,
Step up to 10.25% due 11/01/07 1,500,000 888,750
French Fragrances, Incorporated,
Series B, 10.375% due 05/15/07 500,000 522,500
Herff Jones, Incorporated,
Series B, 11.00% due 08/15/05 500,000 542,500
Hills Stores Company,
Series B, 12.50% due 07/01/03 500,000 392,500
Windy Hill Pet Food, Incorporated,
9.75% due 05/15/07 1,040,000 1,060,800
---------
4,400,800
TELECOMMUNICATION SERVICES - 1.49%
Adelphia Communications Corporation,
Series B, 9.875% due 03/01/07 525,000 552,563
Series B, 10.50% due 07/15/04 475,000 508,844
Comcast Cellular Holdings, Incorporated,
Series B, 9.50% due 05/01/07 1,000,000 1,040,000
Diamond Cable Communications PLC,
Step up to 11.75% due 12/15/05 1,000,000 777,500
International Cabletel,
Incorporated, Series B,
Step up to 11.50% due 02/01/06 1,500,000 1,177,500
Telewest Communication PLC,
Step up to 11.00% due 10/01/07 1,500,000 1,166,250
United International Holdings,
Incorporated, zero coupon
due 11/15/99 2,250,000 1,845,000
---------
7,067,657
TELEPHONE - 0.78%
Intermedia Communications,
Incorporated, Series B,
Step up to 11.25% due 07/15/07 1,000,000 727,500
8.875% due 11/01/07 500,000 513,750
NEXTEL Communications, Incorporated,
zero coupon due 08/15/04 1,250,000 1,112,500
Nextlink Communications LLC,
12.50% due 04/15/06 1,000,000 1,140,000
Wireless One, Incorporated,
13.00% due 10/15/03 750,000 232,500
---------
3,726,250
TRANSPORTATION SERVICES - 0.89%
Atlantic Express Transportation
Corporation, 10.75% due 02/01/04 1,250,000 1,328,125
Iron Mountain, Incorporated,
10.125% due 10/01/06 1,000,000 1,100,000
Ryder Trucks, Incorporated,
10.00% due 12/01/06 850,000 850,000
TFM SA DE CV,
Step up to 11.75% due 06/15/09 1,500,000 952,500
---------
4,230,625
TOYS, AMUSEMENTS & SPORTING GOODS - 0.22%
Riddell Sports, Incorporated,
10.50% due 07/15/07 1,000,000 1,027,500
---------
TOTAL CORPORATE BONDS
(Cost: $143,951,192) $146,913,085
-----------
CONVERTIBLE BONDS - 0.17%
Fresenius Medical Care Capital
Trust, 9.00% due 12/01/06 750,000 785,625
-------
TOTAL CONVERTIBLE BONDS
(Cost: $766,875) $785,625
-------
FIXED INCOME - OTHER - 1.41%
MISCELLANEOUS ASSET BACKED SECURITIES - 1.41%
Mid State Trust VI, Class A,
7.34% due 07/01/35 6,379,917 6,688,513
---------
TOTAL FIXED INCOME - OTHER
(Cost: $6,378,934) $6,688,513
---------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENTS - 26.49%
$15,000,000 Bausch & Lomb, Incorporated,
7.50% due 01/02/98 $14,996,875
15,000,000 Bombardier Capital, Incorporated,
7.25% due 01/02/98 14,996,979
11,656,000 Cummins Engine, Incorporated,
7.15% due 01/05/98 11,646,740
75,776,050 Navigator Securities
Lending Trust, 5.74% 75,776,050
3,000,000 New York, New York,
3,000,000 Series 7, 5.78% due 02/04/98 3,000,000
Series B, VR, 5.85%, 02/03/98 3,000,000
2,604,000 SuperValue, Incorporated,
6.80% due 01/02/98 2,603,508
-----------
126,020,152
TOTAL INVESTMENTS
(Strategic Bond Trust) (Cost: $467,461,755) $475,639,758
-----------
The accompanying notes are an integral part of the financial statements.
151
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
GLOBAL GOVERNMENT BOND TRUST
Principal
Amount Value
------ -----
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 7.32%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 7.32%
5.80% due 12/10/03 $10,000,000 $9,920,300
6.375% due 08/15/07 AUD 8,000,000 5,302,632
----------
15,222,932
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost: $14,976,721) $15,222,932
----------
FOREIGN GOVERNMENT OBLIGATIONS - 63.48%
COMMONWEALTH OF AUSTRALIA - 2.23%
Queensland Treasury,
6.50% due 06/14/05 AUD 7,000,000 4,635,245
---------
GOVERNMENT OF CANADA - 8.65%
6.00% due 02/21/06 $10,000,000 9,945,000
6.125% due 07/15/02 8,000,000 8,045,000
----------
17,990,000
KINGDOM OF DENMARK - 6.08%
zero coupon due 12/23/02 6,000,000 4,503,750
7.00% due 11/10/24 DKK 50,000,000 8,140,808
----------
12,644,558
FEDERAL REPUBLIC OF GERMANY - 4.62%
zero coupon due 07/04/27 DEM 40,000,000 3,779,983
6.00% due 07/04/07 10,000,000 5,838,961
---------
9,618,944
REPUBLIC OF ITALY - 18.08%
zero coupon due 01/10/01 $14,000,000 11,690,000
6.75% due 02/01/07 ITL 10,000,000,000 6,127,190
7.25% due 11/01/26 10,000,000,000 6,579,989
8.50% due 04/01/04 10,000,000,000 6,544,940
9.00% due 10/01/03 10,000,000,000 6,667,609
----------
37,609,728
GOVERNMENT OF NEW ZEALAND - 3.35%
7.00% due 07/15/09 NZD 12,000,000 6,962,567
---------
REPUBLIC OF SOUTH AFRICA - 4.66%
12.50% due 12/21/06 ZAR 20,000,000 3,819,994
13.00% due 08/31/10 30,000,000 5,872,448
---------
9,692,442
KINGDOM OF SWEDEN - 11.81%
zero coupon due 07/31/00 $4,000,000 3,442,500
5.50% due 04/12/02 SEK 50,000,000 6,282,888
6.00% due 02/09/05 50,000,000 6,342,775
6.50% due 10/25/06 65,000,000 8,503,318
----------
24,571,481
GOVERNMENT OF UNITED KINGDOM - 3.99%
United Kingdom Treasury,
7.00% due 11/06/01 P 5,000,000 8,307,453
---------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost: $132,808,129) $132,032,418
-----------
CORPORATE BONDS - 17.11%
FINANCIAL SERVICES - 12.19%
Commerzbank Overseas Finance,
14.00% due 01/05/01 ZAR 6,000,000 $1,225,984
DEPFA Finance NV,
7.125% due 11/11/03 P 5,000,000 8,294,625
Deutsche Finance BV,
zero coupon due 11/18/26 DKK 130,000,000 3,059,370
Helaba International Finance
PLC, 7.375% due 12/30/02 P 5,000,000 8,325,422
Swedish Export Credit,
zero coupon due 05/22/17 ZAR 150,000,000 2,581,424
Westlb Finance Curacao,
15.25% due 02/07/00 9,000,000 1,863,249
----------
25,350,074
TOBACCO - 4.92%
Philip Morris Companies,
Incorporated,
7.00% due 07/15/05 $10,000,000 10,239,720
----------
TOTAL CORPORATE BONDS
(Cost: $34,634,265) $35,589,794
----------
FIXED INCOME - OTHER - 3.89%
MISCELLANEOUS ASSET BACKED SECURITIES - 3.89%
Citibank Credit Card
Master Trust, Series A,
5.75% due 07/16/07 DEM 15,000,000 8,088,051
---------
TOTAL FIXED-INCOME - OTHER
(Cost: $8,518,679) $8,088,051
---------
SUPRANATIONAL OBLIGATIONS - 6.80%
International Bank for Reconstruction
& Development (World Bank),
zero coupon due 07/14/27 ZAR 500,000,000 3,531,799
7.00% due 09/18/00 NZD 12,000,000 6,815,379
Eurofima,
15.50% due 02/07/02 ZAR 9,000,000 1,909,483
European Investment Bank,
14.75% due 06/13/02 9,000,000 1,889,833
----------
14,146,494
TOTAL SUPRANATIONAL
OBLIGATIONS (Cost: $15,179,634) $14,146,494
----------
The accompanying notes are an integral part of the financial statements.
152
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
REPURCHASE AGREEMENT - 1.39%
$2,900,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 12/31/97 at 5.00%, to be
repurchased at $2,900,806 on
01/02/98, collateralized by
$2,945,000 U.S. Treasury Notes,
5.625% due 11/30/98 (valued at
$2,972,296, including interest) $2,900,000
---------
TOTAL INVESTMENTS
(Global Government Bond Trust)
(Cost: $209,017,428) $207,979,689
-----------
CAPITAL GROWTH BOND TRUST
Principal
Amount Value
------ -----
U.S. TREASURY OBLIGATIONS - 7.85%
U.S. TREASURY BONDS - 3.93%
6.375% due 08/15/27 $750,000 $791,017
6.625% due 02/15/27 1,065,000 1,156,185
6.75% due 08/15/26 235,000 258,721
---------
2,205,923
U.S. TREASURY NOTES - 3.92%
6.125% due 08/15/07 1,000,000 1,027,660
6.375% due 05/15/99 360,000 363,319
7.25% due 05/15/04 750,000 809,415
---------
2,200,394
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $4,283,785) $4,406,317
---------
FOREIGN GOVERNMENT OBLIGATIONS - 1.97%
GOVERNMENT OF CANADA - 1.97%
Province of Quebec,
8.80% due 04/15/03 1,000,000 1,108,760
---------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $1,106,594) $1,108,760
---------
CORPORATE BONDS - 61.07%
AUTOMOBILES - 5.55%
Ford Motor Credit Corporation,
6.375% due 04/15/00 1,000,000 1,004,200
Chrysler Corporation,
7.45% due 02/01/97 2,000,000 2,114,380
---------
3,118,580
BANKING - 9.53%
Bank of New York, Incorporated,
6.625% due 06/15/03 1,000,000 1,012,810
Bank of Nova Scotia Halifax,
9.00% due 10/01/99 1,000,000 1,046,530
BCH Cayman Islands, Ltd.,
6.50% due 02/15/06 1,000,000 984,880
Citicorp, 7.125% due 06/01/03 1,000,000 1,038,210
Republic New York Corporation,
9.50% due 04/15/14 1,000,000 1,271,700
---------
5,354,130
COMPUTERS & BUSINESS EQUIPMENT - 2.13%
GTE Corporation,
8.75% due
11/01/21 1,000,000 1,197,820
---------
CONGLOMERATES - 1.75%
ITT Corporation, 6.25% due 11/15/00 1,000,000 983,300
-------
DRUGS & HEALTH CARE - 1.92%
Columbia/HCA Healthcare
Corporation, 8.70% due 02/10/10 1,000,000 1,078,130
---------
ELECTRIC UTILITIES - 5.36%
Baltimore Gas and Electric Company,
6.125% due 07/01/03 1,000,000 997,830
Northern States Power Company,
6.375% due 04/01/03 1,000,000 1,008,120
Pacific Gas & Electric Company,
6.25% due 08/01/03 1,000,000 1,002,710
---------
3,008,660
FINANCIAL SERVICES - 18.23%
Associates Corporation of North
America, 6.125% due 02/01/98 1,000,000 999,980
Bear Stearns Capital Trust,
Incorporated, 7.00% due 01/15/27 1,000,000 1,012,858
CEZ Finance BV,
7.125% due 07/15/07 1,000,000 989,890
CIT Group Holdings, Incorporated,
8.75% due 04/15/98 1,000,000 1,007,880
Commerical Credit Group,
Incorporated, 7.375% due 04/15/05 1,000,000 1,055,060
Donaldson Lufkin and Jenrette,
5.625% due 02/15/16 1,000,000 984,640
Fifth Third Capital Trust
Incorporated, 8.136% due 03/15/27 1,000,000 1,113,341
Household Finance Corporation,
7.75% due 06/01/99 1,000,000 1,020,790
Salomon, Incorporated,
5.75% due 03/31/98 1,000,000 999,410
Southern Company Capital Trust,
Incorporated, 8.19% due 02/01/37 1,000,000 1,057,140
----------
10,240,989
FUNERAL SERVICES - 1.80%
Service Corporation International,
6.75% due 06/01/01 1,000,000 1,011,650
---------
HOUSEHOLD PRODUCTS - 2.29%
Procter & Gamble Profit,
Series A, 9.36% due
01/01/21 1,000,000 1,284,850
---------
The accompanying notes are an integral part of the financial statements.
153
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
INSURANCE - 1.82%
Zurich Reinsurance Centre
Holdings, Incorporated,
7.125% due 10/15/23 $1,000,000 $1,023,600
---------
NATURAL GAS - 1.82%
Columbia Gas Systems,
Incorporated, 7.05% due 11/28/07 1,000,000 1,021,490
---------
NEWSPAPERS - 1.95%
News America Holdings,
Incorporated, 8.50% due 02/15/05 1,000,000 1,096,610
---------
PETROLEUM SERVICES - 1.93%
Ultramar Corporation,
8.00% due 03/15/05 1,000,000 1,082,340
---------
REAL ESTATE - 1.86%
MEPC Finance, Incorporated,
7.50% due 05/01/03 1,000,000 1,044,770
---------
TELEPHONE - 1.30%
BellSouth Savings, ESOT
9.19% due 07/01/03 667,674 729,614
-------
TOYS, AMUSEMENTS & SPORTING GOODS - 1.82%
Brunswick Corporation,
7.125% due 08/01/27 1,000,000 1,024,820
---------
TOTAL CORPORATE BONDS
(Cost: $32,776,509) $34,301,353
----------
FIXED INCOME - OTHER - 8.95%
MISCELLANEOUS ASSET BACKED SECURITIES - 8.95%
Carco Auto Loan Master Trust,
Series 1997-1, Class A,
6.689% due 08/15/04 1,000,000 1,010,240
Discover Card Master Trust I,
Series 1997-2, Class A,
6.792% due 04/16/10 1,000,000 1,009,790
Mortgage Index Amortizing Trust,
Series 1997-1, Class A-1,
7.00% due 08/25/04 1,000,000 1,003,750
Residential Funding Mortgage
Securities, Series 1996-S1,
Class A12, 7.25% due 01/25/26 1,000,000 1,010,621
Residential Funding Mortgage
Securities, Series 1996-S3,
Class A5, 7.25% due 01/25/26 981,758 991,647
---------
5,026,048
TOTAL FIXED INCOME - OTHER
(Cost: $4,984,690) $5,026,048
---------
SHORT TERM INVESTMENT - 5.09%
$2,860,600 Navigator Securities
Lending Trust, 5.74% $2,860,600
---------
REPURCHASE AGREEMENT - 15.06%
$8,461,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 12/31/97 at 5.85%, to be
repurchased at $8,463,750 on
01/02/98, collateralized by
$8,415,000 U.S. Treasury Notes,
5.875% due 01/31/99 (valued at
$8,840,554, including interest) $8,461,000
---------
TOTAL INVESTMENTS (Capital Growth
Bond Trust) (Cost: $54,473,178) $56,164,078
----------
INVESTMENT QUALITY BOND TRUST
Shares Value
------ -----
PREFERRED STOCKS - 0.12%
MINING - 0.12%
Fairfield Manufacturing,
Incorporated 270 $279,450
-------
TOTAL PREFERRED STOCKS
(Cost: $279,450) $279,450
-------
Principal
Amount Value
------ -----
U.S. TREASURY OBLIGATIONS - 36.65%
U.S. TREASURY BONDS - 34.94%
7.50% due 11/15/16 $3,100,000 $3,618,289
9.25% due 02/15/16 1,500,000 2,035,305
11.625% due 11/15/04 3,100,000 4,114,754
11.875% due 11/15/03 20,000,000 26,015,600
12.00% due 08/15/13 31,200,000 45,971,328
----------
81,755,276
U.S. TREASURY NOTES - 1.71%
5.75% due 10/31/00 4,000,000 4,005,000
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $84,205,492) $85,760,276
----------
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 10.14%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.93%
6.00% due 02/01/03 - 07/01/03 686,436 680,376
6.50% due 08/17/11 500,000 502,030
6.50% due 06/25/19, REMIC 900,000 906,462
7.00% due 06/01/23 - 01/01/26 3,716,307 3,762,878
7.50% due 06/01/10 - 04/01/11 972,480 1,000,164
---------
6,851,910
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 0.42%
5.90% due 10/25/19, REMIC 1,000,000 992,180
-------
The accompanying notes are an integral part of the financial statements.
154
<PAGE> 194
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 6.78%
6.50% due 07/15/08 - 05/15/09 $184,992 $186,840
7.00% due 04/15/23 - 02/15/24 7,618,933 7,706,919
7.50% due 04/15/02 - 01/15/24 3,711,486 3,811,843
8.00% due 06/15/23 - 10/15/23 2,095,593 2,181,386
8.50% due 09/15/16 - 04/15/22 1,867,573 1,985,240
9.50% due 10/15/09 816 905
----------
15,873,133
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (Cost: $23,053,945) $23,717,223
----------
FOREIGN GOVERNMENT OBLIGATIONS - 0.82%
REPUBLIC OF ARGENTINA - 0.82%
11.00% due 10/09/06 1,800,000 1,921,500
---------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $1,975,500) $1,921,500
---------
CORPORATE BONDS - 27.06%
APPAREL & TEXTILES - 0.18%
Clark-Schwebel, Incorporated,
10.50% due 04/15/06 95,000 103,550
Collins & Aikman Products Company,
11.50% due 04/15/06 250,000 280,938
Pillowtex Corporation,
9.00% due 12/15/07 30,000 30,750
-------
415,238
BANKING - 5.46%
BankAmerica Corporation,
9.625% due 02/13/01 1,475,000 1,611,216
Credit National, 7.00% due 11/14/05 1,300,000 1,306,500
Export-Import Bank of Korea,
6.375% due 02/15/06 1,550,000 1,106,018
First Financial Caribbean Corporation,
7.84% due 10/10/06 450,000 473,062
First Republic Bancorp,
7.75% due 09/15/12 825,000 843,777
Korea Development Bank,
7.125% due 09/17/01 715,000 599,342
National Westminster Bank PLC,
9.45% due 05/01/01 1,000,000 1,092,470
NBD Bancorp, 8.25% due 11/01/24 2,000,000 2,370,320
Norwest Corporation,
6.00% due 03/15/00 900,000 897,534
U.S. Bancorp, 7.50% due 06/01/26 2,300,000 2,486,530
----------
12,786,769
BROADCASTING - 0.35%
Chancellor Broadcasting Company,
8.125% due 12/15/07 225,000 220,219
Granite Broadcasting Corporation,
10.375% due 05/15/05 275,000 288,062
Jacor Communications Company,
8.75% due 06/15/07 60,000 61,500
Young Broadcasting, Incorporated,
9.00% due 01/15/06 250,000 250,000
-------
819,781
BUSINESS SERVICES - 0.65%
International Lease Finance
Corporation, 7.50% due 03/01/99 1,500,000 1,521,855
---------
CHEMICALS - 0.19%
Huntsman Corporation,
9.50% due 07/01/07 135,000 141,750
Sovereign Specialty Chemicals,
9.50% due 08/01/07 35,000 35,963
Texas-Petro Chemical Corporation,
11.125% due 07/01/06 250,000 270,000
-------
447,713
COSMETICS & TOILETRIES - 0.11%
Revlon Worldwide Corporation,
Series B, zero coupon due 03/15/01 370,000 258,075
-------
DRUGS & HEALTH CARE - 1.76%
Allegiance Corporation,
7.00% due 10/15/26 2,570,000 2,652,882
Owens & Minor, Incorporated,
10.875% due 06/01/06 250,000 277,500
Tenet Healthcare Corporation,
7.875% due 01/15/03 850,000 860,625
Vencor, Incorporated,
8.625% due 07/15/07 335,000 334,163
---------
4,125,170
ELECTRIC UTILITIES - 0.74%
Cleveland Electric Illuminating
Company, 7.19% due 07/01/00 1,010,000 1,024,958
Duke Energy Company,
7.50% due 04/01/99 700,000 712,159
---------
1,737,117
ELECTRONICS - 0.11%
Fairchild Semiconductor Corporation,
10.125% due 03/15/07 250,000 262,500
-------
FINANCIAL SERVICES - 5.56%
American General Finance
Corporation, 8.00% due 02/15/05 1,270,000 1,313,663
Amerus Capital I, 8.85% due 02/01/27 900,000 959,526
Associates Corporation of North America,
9.125% due 04/01/00 300,000 318,327
BanPonce Financial Corporation,
6.75% due 08/09/01 2,150,000 2,170,790
Beneficial Corporation,
8.40% due 05/15/08 350,000 396,868
The accompanying notes are an integral part of the financial statements.
155
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
FINANCIAL SERVICES - CONTINUED
Dime Capital Trust I,
9.33% due 05/06/27 $1,200,000 $1,357,392
General Electric Capital Corporation,
8.88% due 06/18/03 600,000 681,348
Japan Financial Corporation,
8.70% due 07/30/01 1,500,000 1,619,610
9.125% due 10/11/00 500,000 537,605
Pindo Deli Financial Mauritius, Ltd.,
10.75% due 10/01/07 100,000 86,000
Sun Canada Financial Company,
7.25% due 12/15/15 1,500,000 1,576,275
Tembec Finance Corporation,
9.875% due 09/30/05 240,000 244,800
U.S. West Capital Funding,
Incorporated, 6.95% due 01/15/37 1,515,000 1,560,556
Western Financial Savings,
8.875% due 08/01/07 200,000 192,472
----------
13,015,232
FOOD & BEVERAGES - 0.07%
Del Monte Foods Company,
Step up to 12.50% due 12/15/07 275,000 157,437
-------
HOMEBUILDERS - 0.05%
Standard Pacific Corporation,
8.50% due 06/15/07 115,000 114,856
-------
INDUSTRIALS - 3.63%
Acindar Industria, Argentina,
11.25% due 02/15/04 75,000 73,875
Advanced Micro Devices,
Incorporated, 11.00% due 08/01/03 275,000 294,250
Cincinnati Milacron, Incorporated,
7.875% due 05/15/00 870,000 890,709
Concentric Network Corporation,
12.75% due 12/15/07 40,000 40,950
Decision Holdings Corporation,
Step up to 11.50% due 08/01/08 85,000 54,400
EchoStar DBS Corporation,
12.50% due 07/01/02 250,000 270,000
Elgin National Industries,
Incorporated, 11.00% due 11/01/07 210,000 217,875
GCI, Incorporated,
9.75% due 08/01/07 250,000 258,125
Globalstar L.P. Capital Corporation,
10.75% due 11/01/04 350,000 343,000
Grupo Industrial Durango,
12.625% due 08/01/03 300,000 335,250
Guitar Center Management,
11.00% due 07/01/06 120,000 133,800
Hylsa SA De CV,
9.25% due 09/15/07 205,000 200,900
International Wire Group,
Incorporated, 11.75% due 06/01/05 150,000 165,298
Iridium LLC/Capital Corporation,
11.25% due 07/15/05 370,000 364,450
JCAC, Incorporated,
10.125% due 06/15/06 100,000 108,750
Key Plastics, Incorporated,
10.25% due 03/15/07 95,000 100,700
LDM Technologies, Incorporated,
10.75% due 01/15/07 160,000 174,400
Moog, Incorporated,
10.00% due 05/01/06 150,000 165,000
Neenah Corporation,
11.125% due 05/01/07 85,000 92,863
News America Holdings,
Incorporated, 9.25% due 02/01/13 1,800,000 2,143,962
Park Ohio Industries,
Incorporated, 9.25% due 12/01/07 210,000 213,150
Pioneer Americas Acquisition
Corporation, 9.25% due 06/15/07 175,000 176,313
Repap New Brunswick, Incorporated,
10.625% due 04/15/05 275,000 261,250
Rifkin Acquisitions Partners LP,
11.125% due 01/15/06 150,000 164,625
Scotsman Group, Incorporated,
8.625% due 12/15/07 65,000 65,522
YPF Sociedad Anonima,
8.00% due 02/15/04 1,150,000 1,187,570
---------
8,496,987
INSURANCE - 1.58%
Jackson National Life Insurance
Company, 8.15% due 03/15/27 1,000,000 1,098,520
Ohio National Life Insurance
Company, 8.50% due 05/15/26 1,150,000 1,285,401
Security Benefit Life Company,
8.75% due 05/15/16 1,150,000 1,306,862
---------
3,690,783
LEISURE TIME - 0.32%
Argosy Gaming Company,
13.25% due 06/01/04 210,000 219,450
Hollywood Casino, Incorporated,
12.75% due 11/01/03 205,000 219,862
Plitt Theatres, Incorporated,
10.875% due 06/15/04 95,000 102,719
Riviera Holdings Corporation,
10.00% due 08/15/04 200,000 198,500
-------
740,531
METAL & METAL PRODUCTS - 0.05%
CSN Iron SA, 9.125% due 06/01/07 140,000 116,200
-------
The accompanying notes are an integral part of the financial statements.
156
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
NON-BANK FINANCE - 0.47%
KFW International Financial, Incorporated,
9.125% due 05/15/01 $1,000,000 $1,090,080
---------
PETROLEUM SERVICES - 1.25%
Cross Timbers Oil Company,
8.75% due 11/01/09 55,000 56,100
9.25% due 04/01/07 210,000 218,400
Energy Corporation of America,
Incorporated, 9.50% due 05/15/07 200,000 200,000
Newfield Exploration Company,
7.45% due 10/15/07 340,000 331,740
Petroliam Nasional BHD,
7.125% due 08/15/05 1,450,000 1,383,010
Petroleos Mexicanos,
8.85% due 09/15/07 370,000 366,300
Plains Resources, Incorporated,
10.25% due 03/15/06 350,000 377,125
---------
2,932,675
PUBLISHING - 0.09%
Sullivan Graphics, Incorporated,
12.75% due 08/01/05 210,000 212,100
-------
RETAIL TRADE - 0.92%
J. Crew Group, Incorporated,
Step up to 13.125% due 10/15/08 135,000 60,750
J.C. Penney Company, Incorporated,
7.40% due 04/01/37 1,900,000 2,081,545
---------
2,142,295
STEEL - 0.19%
AK Steel Corporation,
9.125% due 12/15/06 115,000 117,587
Silgan Holdings, Incorporated,
9.00% due 06/01/09 65,000 66,463
Weirton Steel Corporation,
11.375% due 07/01/04 250,000 260,000
-------
444,050
TELECOMMUNICATION SERVICES - 0.73%
Esprit Telecom Group PLC,
11.50% due 12/15/07 60,000 61,800
Tele-Communications, Incorporated,
9.25% due 04/15/02 1,500,000 1,646,505
---------
1,708,305
TELEPHONE - 1.89%
Benedek Communications,
Step up to 13.25% due 05/15/06 215,000 161,250
Clearnet Communications,
Step up to 14.75% due 12/15/05 300,000 236,250
Comcast Cable Communications,
8.50% due 05/01/27 1,000,000 1,174,860
GST Telecommunications,
Incorporated, 12.75% due 11/15/07 210,000 219,975
Intermedia Communications,
Incorporated, 8.875% due 11/01/07 250,000 256,875
Lenfest Communications, Incorporated
8.375% due 11/01/05 200,000 205,500
MobileMedia Communications,
Incorporated, 9.375% due 11/01/07 250,000 28,750
NEXTEL Communications, Incorporated,
Step up to 9.75% due 10/31/07 660,000 405,075
Teleport Communications Group,
Step up to 11.125% due 07/01/07 270,000 220,050
WorldCom, Incorporated,
7.55% due 04/01/04 1,450,000 1,518,426
---------
4,427,011
TRANSPORTATION SERVICES - 0.40%
Iron Mountain, Incorporated,
8.75% due 09/30/09 75,000 76,875
Johnstown American Industries,
Incorporated, 11.75% due 08/15/05 300,000 327,000
Southern Railway Company,
8.75% due 10/15/03 470,000 526,353
-------
930,228
TRANSPORTATION EQUIPMENT - 0.31%
Argo-Tech Corporation,
8.625% due 10/01/07 300,000 300,750
Hayes Wheels International,
Incorporated, 11.00% due 07/15/06 200,000 223,000
K & F Industries, Incorporated,
9.25% due 10/15/07 55,000 56,375
Walbro Corporation,
9.875% due 07/15/05 150,000 152,250
-------
732,375
TOTAL CORPORATE BONDS
(Cost: $61,821,757) $63,325,363
----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.91%
Asset Securitization Corporation,
Series 1992-D5, Class A1B,
6.66% due 02/14/41 2,110,000 2,146,925
CS First Boston Mortgage Securities
Corporation, Series 1992-C2,
Class A2, 6.52% due 07/17/07 400,000 400,875
First Union-Lehman Brothers Commercial
Mortgage Trust II, Series 1997-C2,
Class A2, 6.60% due 05/18/07 1,915,000 1,915,000
---------
4,462,800
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (Cost: $4,451,145) $4,462,800
---------
The accompanying notes are an integral part of the financial statements.
157
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
FIXED INCOME - OTHER - 0.77%
MISCELLANEOUS ASSET BACKED SECURITIES - 0.77%
American Express Master Trust,
Series 1992, Class A,
6.60% due 05/15/00 $1,500,000 $1,510,770
Premier Auto Trust, Series 1993,
Class A2, 4.65% due 11/02/99 290,036 287,861
---------
1,798,631
TOTAL FIXED INCOME - OTHER
(Cost: $1,767,144) $1,798,631
---------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 20.79%
$48,636,883 Navigator Securities
Lending Trust, 5.74% $48,636,883
----------
REPURCHASE AGREEMENT - 1.75%
$4,094,000 Repurchase Agreement with
Lehman Brothers dated 12/31/97
at 6.57% to be repurchased at
$4,095,494 on 01/02/98,
collateralized by $11,080,000
U.S. Treasury Strip, zero
coupon due 11/15/13 (valued at
$4,305,555, including interest) $4,094,000
---------
TOTAL INVESTMENTS
(Investment Quality Bond Trust)
(Cost: $230,285,316) $233,996,126
-----------
U.S. GOVERNMENT SECURITIES TRUST
Principal
Amount Value
------ -----
U.S. TREASURY OBLIGATIONS - 12.78%
U.S. TREASURY BONDS - 0.87%
6.375% due 08/15/27 $2,100,000 $2,214,849
6.625% due 02/15/27 500,000 542,810
---------
2,757,659
U.S. TREASURY NOTES - 11.91%
5.875% due 09/30/02 7,000,000 7,038,290
6.125% due 08/15/07 22,250,000 22,865,435
6.25% due 08/31/02 6,750,000 6,888,173
6.625% due 05/15/07 750,000 793,830
----------
37,585,728
TOTAL U.S. TREASURY OBLIGATIONS
(Cost: $39,706,903) $40,343,387
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 56.21%
FEDERAL HOME LOAN BANK - 1.05%
5.94% due 06/13/00 3,300,000 3,310,296
---------
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 13.00%
6.00% due 10/01/10 994,396 983,517
6.50% due 07/01/06 9,391 9,422
7.00% due 12/01/04 - 04/15/21 32,867,096 33,433,290
7.50% due 05/01/07 3,604,673 3,709,857
8.25% due 07/01/06 132,811 136,920
9.50% due 08/01/20 2,413,910 2,590,150
11.75% due 07/01/06 - 12/01/13 154,991 175,197
----------
41,038,353
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 30.08%
6.50% TBA** 6,600,000 6,517,500
6.50% due 12/01/03 - 04/01/26 22,725,000 22,515,667
6.74% due 08/25/07 9,000,000 9,289,687
6.783% due 01/17/03, REMIC 2,183,812 2,206,109
6.909% due 06/25/16, REMIC 6,000,000 6,159,375
7.00% TBA** 31,225,000 31,449,195
7.50% TBA** 500,000 511,715
8.00% due 08/01/04 - 10/01/24 25,369 26,066
8.25% due 09/01/08 250,022 261,263
8.50% due 02/01/09 47,747 50,090
8.75% due 08/01/09 - 10/01/11 1,968,885 2,067,825
10.00% due 04/01/16 5,046 5,542
10.50% due 03/01/16 8,268 8,575
11.50% due 09/01/13 - 09/01/19 2,307,883 2,642,411
11.75% due 09/01/11 - 12/01/15 117,553 135,799
12.00% due 10/01/15 - 04/01/16 3,617,449 4,218,636
12.50% due 08/01/11 - 09/01/15 2,258,883 2,685,947
13.00% due 11/01/15 1,811,974 2,171,538
13.50% due 11/01/14 883,055 1,086,986
14.50% due 11/01/14 742,827 914,374
----------
94,924,300
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 10.66%
7.50% due 02/15/07 - 12/15/27 25,524,273 26,147,631
8.00% due 10/15/05 11,688 12,128
9.00% due 02/20/16 - 10/20/17 6,630,103 7,173,021
9.50% due 09/15/20 263,586 285,725
11.00% due 09/15/15 30,735 35,067
----------
33,653,572
STUDENT LOAN
MARKETING ASSOCIATION - 1.41%
7.50% due 03/08/00 4,300,000 4,446,458
---------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost: $174,451,495) $177,372,979
-----------
The accompanying notes are an integral part of the financial statements.
158
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
SHORT TERM INVESTMENT - 9.38%
$29,590,565 Navigator Securities
Lending Trust, 5.74% $29,590,565
----------
REPURCHASE AGREEMENTS - 21.63%***
$34,136,000 Repurchase Agreement with
State Street Bank & Trust Company
dated 12/31/97 at 5.00%, to be
repurchased at $34,145,482 on
01/02/98, collateralized by
$22,615,000 U.S. Treasury Bonds,
10.625% due 08/15/15 (valued at
$35,721,155, including interest) $34,136,000
----------
34,136,000 Repurchase Agreement with Merrill
Lynch dated 12/31/97 at 6.60%, to
be repurchased at $34,148,517 on
01/02/98, collateralized by
$33,280,000 U.S. Treasury Notes,
6.50% due 08/31/01 (valued at
$35,548,234, including interest) 34,136,000
----------
68,272,000
TOTAL INVESTMENTS
(U.S. Government Securities Trust)
(Cost: $312,020,963) $315,578,931
-----------
MONEY MARKET TRUST
Principal
Amount Value
------ -----
U.S. GOVERNMENT
AGENCY OBLIGATIONS - 11.60%
FEDERAL HOME LOAN BANKS - 5.41%
5.775% due 10/30/98 $13,500,000 $13,501,634
6.00% due 12/30/98 10,000,000 10,000,000
----------
23,501,634
STUDENT LOAN MARKETING ASSOCIATION - 6.19%
5.619% due 09/28/98 9,000,000 9,000,000
5.629% VR due 01/02/98 7,900,000 7,900,293
5.779% due 04/16/98 10,000,000 9,998,481
----------
26,898,774
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS $50,400,408
----------
COMMERCIAL PAPER - 88.08%
AC Acquisition Holdings
Company, 5.68% due 02/10/98 16,600,000 16,495,236
Allianz of America Finance,
5.70% due 02/03/98 2,330,000 2,317,826
5.70% due 02/10/98 7,875,000 7,825,125
Bank of Nova Scotia,
5.59% due 02/03/98 19,500,000 19,400,079
Bil North America, Incorporated,
5.59% due 01/23/98 15,000,000 14,948,758
Caterpillar Financial Services NV,
5.55% due 01/16/98 15,000,000 14,965,312
Cregem North America, Incorporated,
5.60% due 01/29/98 4,100,000 4,082,142
5.685% due 02/18/98 15,000,000 14,886,300
CXC, Incorporated,
5.62% due 01/29/98 15,000,000 14,934,433
Daimler-Benz of North America,
5.50% due 01/05/98 20,000,000 19,987,778
Delaware Funding Corporation,
5.56% due 01/16/98 20,000,000 19,953,667
Duff & Phelps Utility
Corporation, 5.78% due 01/06/98 3,000,000 2,997,592
Ford Motor Credit Company,
5.48% due 01/27/98 15,000,000 14,940,633
General Electric Capital Corporation,
5.55% due 01/15/98 5,000,000 4,989,208
5.58% due 02/20/98 15,000,000 14,883,750
Goldman Sachs Group LP,
5.65% due 03/24/98 20,000,000 19,742,611
Household Financial Corporation,
5.64% due 02/11/98 20,000,000 19,871,533
International Lease Finance Corporation,
5.50% due 01/12/98 10,000,000 9,983,194
5.53% due 01/23/98 10,000,000 9,966,206
Merrill Lynch & Company, Incorporated,
5.50% due 01/14/98 10,000,000 9,980,139
5.55% due 01/08/98 5,300,000 5,294,280
New York Life Capital Corporation,
5.58% due 02/09/98 10,000,000 9,939,550
Peoples Security Life Insurance,
Company, 5.88% VR due 02/01/98 10,000,000 10,000,000
Province of Quebec,
5.58% due 02/04/98 15,000,000 14,920,950
PHH Corporation,
5.55% due 01/26/98 20,000,000 19,922,917
Royal Bank of Canada,
5.619% due 03/18/98 20,000,000 19,762,754
Toronto Dominion Holdings,
5.54% due 01/26/98 20,000,000 19,923,057
Travelers Insurance Company,
5.925% due 06/01/98 6,000,000 6,000,000
Trident Capital Finance,
5.68% due 02/12/98 10,000,000 9,933,733
Winn-Dixie Stores, Incorporated,
5.68% due 02/03/98 10,000,000 9,947,933
---------
TOTAL COMMERCIAL PAPER $382,796,696
-----------
The accompanying notes are an integral part of the financial statements.
159
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MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
Principal
Amount Value
------ -----
REPURCHASE AGREEMENT - 0.32%
$1,391,000 Repurchase Agreement with State
Street Bank & Trust Company
dated 12/31/97 at 5.85%, to
be repurchased at $1,391,452 on
01/02/98, collateralized by
$1,390,000 U.S. Treasury Notes,
5.875% due 02/28/99 (valued at
$1,447,867, including interest) $1,391,000
---------
TOTAL INVESTMENTS
(Money Market Trust) (Note 2) $434,588,104
-----------
LIFESTYLE AGGRESSIVE 1000 TRUST
Shares Value
------ -----
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 163,673 $2,455,094
Emerging Growth Trust 203,489 4,910,188
Equity Trust 114,190 2,455,094
Growth Trust 142,655 2,455,094
International Small Cap Trust 358,408 4,910,188
International Stock Trust 642,134 7,365,282
Pilgrim Baxter Growth Trust 785,630 9,820,376
Small Company Value Trust 822,477 9,820,376
Real Estate Securities Trust 244,653 4,910,188
----------
49,101,880
TOTAL INVESTMENTS
(Lifestyle Aggressive 1000 Trust)
(Cost: $48,871,953) $49,101,880
==========
LIFESTYLE GROWTH 820 TRUST
Shares Value
------ -----
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 723,857 $10,857,848
Emerging Growth Trust 449,973 10,857,848
Equity Trust 505,016 10,857,848
Equity-Income Trust 629,806 10,857,847
Growth Trust 630,903 10,857,848
High Yield Trust 800,726 10,857,847
International Small Cap Trust 792,544 10,857,847
International Stock Trust 2,839,890 32,573,542
Pilgrim Baxter Growth Trust 1,737,256 21,715,695
Small Company Value Trust 1,818,735 21,715,692
Real Estate Securities Trust 540,999 10,857,848
Strategic Bond Trust 1,754,095 21,715,694
U.S. Government Securities Trust 804,285 10,857,847
Value Trust 1,467,277 21,715,698
-----------
217,156,949
TOTAL INVESTMENTS
(Lifestyle Growth 820 Trust)
(Cost: $214,958,102) $217,156,949
===========
LIFESTYLE BALANCED 640 TRUST
Shares Value
------ -----
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Emerging Growth Trust 386,762 $9,332,574
Equity Trust 434,073 9,332,574
Equity-Income Trust 541,333 9,332,574
Growth Trust 542,276 9,332,574
High Yield Trust 688,243 9,332,574
International Stock Trust 1,627,301 18,665,148
Investment Quality Bond Trust 769,380 9,332,574
Money Market Trust 933,257 9,332,575
Pilgrim Baxter Growth Trust 746,606 9,332,574
Quantitative Equity Trust 414,781 9,332,574
Small Company Value Trust 1,563,245 18,665,147
Real Estate Securities Trust 465,001 9,332,574
Strategic Bond Trust 1,507,686 18,665,147
U.S. Government Securities Trust 1,382,604 18,665,149
Value Trust 1,261,159 18,665,147
-----------
186,651,479
TOTAL INVESTMENTS
(Lifestyle Balanced 640 Trust)
(Cost: $183,176,848) $186,651,479
===========
LIFESTYLE MODERATE 460 TRUST
Shares Value
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 351,638 $5,274,563
Equity-Income Trust 305,949 5,274,562
High Yield Trust 194,490 2,637,281
International Stock Trust 459,857 5,274,563
Investment Quality Bond Trust 434,836 5,274,565
Money Market Trust 791,184 7,911,844
Quantitative Equity Trust 117,213 2,637,281
Strategic Bond Trust 426,055 5,274,563
U.S. Government Securities Trust 586,063 7,911,844
Value Trust 356,389 5,274,563
----------
52,745,629
TOTAL INVESTMENTS
(Lifestyle Moderate 460 Trust)
(Cost: $51,481,755) $52,745,629
==========
The accompanying notes are an integral part of the financial statements.
160
<PAGE> 200
MANUFACTURERS INVESTMENT TRUST
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1997 - CONTINUED
(SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS)
- --------------------------------------------------------------------------------
LIFESTYLE CONSERVATIVE 280 TRUST
Shares Value
------ -----
COMMON STOCKS - 100.00%
INVESTMENT COMPANIES - 100.00%
Manufacturers Investment Trust
Blue Chip Growth Trust 65,833 $987,500
Equity-Income Trust 114,559 1,975,001
Investment Quality Bond Trust 244,229 2,962,501
Money Market Trust 592,502 5,925,015
Quantitative Equity Trust 87,778 1,975,001
Strategic Bond Trust 79,766 987,500
U.S. Government Securities Trust 365,741 4,937,501
----------
19,750,019
TOTAL INVESTMENTS
(Lifestyle Conservative 280 Trust)
(Cost: $19,278,876) $19,750,019
==========
Key to Currency Abbreviations
AUD - Australian Dollar
BEF - Belgian Franc
CAD - Canadian Dollar
DKK - Danish Krone
FIM - Finnish Markka
FRF - French Franc
DEM - German Deustche Mark
P - Great British Pound
HKD - Hong Kong Dollar
IDR - Indonesian Rupiah
IEP - Irish Punt
ITL - Italian Lira
KRW - Korean Wan
Y - Japanese Yen
MYR - Malaysian Ringgit
NLG - Netherland Guilder
NZD - New Zealand Dollar
SGD - Singapore Dollar
ZAR - South African Rand
ESP - Spanish Peseta
SEK - Swedish Krone
CHF - Swiss Franc
THB - Thailand Baht
Key to Security Abbreviations and Legend
ADR - American Depository Receipt
ADS - American Depository Shares
FRN - Floating Rate Note
GTD - Guaranteed
IO - Interest Only (Carries notional principal amount)
REIT - Real Estate Investment Trust
REMIC - Real Estate Mortgage Investment Conduit
TBA - To Be Announced
VR - Variable Rate Demand Note (Rate effective
as of December 31, 1997)
(1) - Non-Income producing, issuer is in bankruptcy
and is in default of interest payments.
* - Non-Income producing
** - Purchased on a forward commitment (Note 2)
*** - At December 31, 1997 a portion of this security
was pledged to cover forward commitments purchased.
**** - At December 31, 1997 a portion of this security was pledged to
cover margin requirements for open futures contracts.
The accompanying notes are an integral part of the financial statements.
161
<PAGE> 201
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION OF THE TRUST. The Manufacturers Investment Trust (the "Trust"),
formerly NASL Series Trust, is a no-load, open-end management investment company
organized as a Massachusetts business trust. It is a series company, which means
that it has several portfolios, each with a stated investment objective which it
pursues through separate investment policies. The Trust currently offers the
following thirty six Portfolios: The Pacific Rim Emerging Markets Trust
("Pacific Rim Emerging Markets"), the Science & Technology Trust ("Science &
Technology"), the International Small Cap Trust ("International Small Cap"), the
Emerging Growth Trust ("Emerging Growth"), the Pilgrim Baxter Growth Trust
("Pilgrim Baxter Growth"), the Small/Mid Cap Trust ("Small/Mid Cap"), the
International Stock Trust ("International Stock"), the Worldwide Growth Trust
("Worldwide Growth"), the Global Equity Trust ("Global Equity"), the Small
Company Value Trust ("Small Company Value"), the Equity Trust ("Equity"), the
Growth Trust ("Growth"), the Quantitative Equity Trust ("Quantitative Equity"),
the Equity Index Trust ("Equity Index"), the Blue Chip Growth Trust ("Blue Chip
Growth"), the Real Estate Securities Trust ("Real Estate Securities"), the Value
Trust ("Value"), the International Growth and Income Trust ("International
Growth and Income"), the Growth and Income Trust ("Growth and Income"), the
Equity-Income Trust ("Equity-Income"), the Balanced Trust ("Balanced"), the
Aggressive Asset Allocation Trust ("Aggressive Asset Allocation"), the Moderate
Asset Allocation Trust ("Moderate Asset Allocation"), the Conservative Asset
Allocation Trust ("Conservative Asset Allocation"), the High Yield Trust ("High
Yield"), the Strategic Bond Trust ("Strategic Bond"), the Global Government Bond
Trust ("Global Government Bond"), the Capital Growth Bond Trust ("Capital Growth
Bond"), the Investment Quality Bond Trust ("Investment Quality Bond"), the U.S.
Government Securities Trust ("U.S. Government Securities"), the Money Market
Trust ("Money Market"), the Lifestyle Aggressive 1000 Trust ("Lifestyle
Aggressive 1000"), the Lifestyle Growth 820 Trust ("Lifestyle Growth 820"), the
Lifestyle Balanced 640 Trust ("Lifestyle Balanced 640"), the Lifestyle Moderate
460 Trust ("Lifestyle Moderate 460") and the Lifestyle Conservative 280 Trust
("Lifestyle Conservative 280"). Each of the Portfolios with the exception of
Emerging Growth, Global Government Bond, Lifestyle Aggressive 1000, Lifestyle
Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle
Conservative 280 is diversified for purposes of the Investment Company Act of
1940, as amended.
Shares of the Portfolios are presently offered only to Separate Accounts A, B
and C, separate accounts of The Manufacturers Life Insurance Company of North
America ("MNA"), to Separate Account A, a separate account of The Manufacturers
Life Insurance Company of New York ("MNY"), to Separate Accounts One, Two,
Three, and Four, separate accounts of The Manufacturers Life Insurance Company
of America ("Manulife America") and in the case of certain Portfolios, to
unregistered separate accounts issued by The Manufacturers Life Insurance
Company (U.S.A.) ("Manulife USA"). MNA is controlled by The Manufacturers Life
Insurance Company ("Manulife"), a mutual life insurance company based in
Toronto, Canada. MNY is a wholly-owned subsidiary of MNA. Manulife America and
Manulife USA are wholly-owned subsidiaries of Manulife.
At December 31, 1997, Manulife America owned seed money shares in Pacific Rim
Emerging Markets, International Stock, and Equity Index. Manulife USA owned seed
money shares in Science & Technology, Pilgrim Baxter Growth, Worldwide Growth,
Value and High Yield.
Manufacturers Securities Services, LLP ("MSS"), formerly NASL Financial
Services, a wholly-owned subsidiary of MNA, serves as investment adviser for the
Trust (See Note 6). MSS is also the principal underwriter of the variable
contracts issued by MNA and MNY.
NAME CHANGE. Effective October 1, 1997, the Trustees, including a majority of
Trustees who are not interested persons of the Trust, voted to approve a name
change for the Trust from NASL Series Trust to Manufacturers Investment Trust.
NEW PORTFOLIOS. On January 1, 1997, Science & Technology, Pilgrim Baxter Growth,
Worldwide Growth, Value and High Yield commenced operations. In addition, also
effective January 1, 1997, Emerging Growth, International Stock and Balanced
were reorganized whereby all assets and liabilities of these existing Portfolios
were transferred to form new Portfolios of the Trust. Concurrent with this
reorganization, the subadvisors to these Portfolios were changed. T. Rowe Price
Associates, Inc. ("T. Rowe Price") is the subadviser to Science & Technology,
Warburg Pincus Asset Management, Inc. ("Warburg Pincus") is the subadviser to
Emerging Growth, Pilgrim Baxter & Associates ("PBHG") is the subadviser to
Pilgrim Baxter Growth, Rowe Price-Fleming International, Inc. ("Price-Fleming")
is the subadviser to International Stock, Founders Asset Management, Inc.
("Founders") is the subadviser to Worldwide Growth and Balanced and Miller
Anderson & Sherrerd, LLP ("MAS") is the subadviser to Value and High Yield. On
January 7, 1997, Lifestyle Aggressive 1000, Lifestyle Growth 820, Lifestyle
Balanced 640, Lifestyle Moderate 460 and Lifestyle Conservative 280 commenced
operations. Manufacturers Adviser Corporation ("MAC") is the subadviser to
Lifestyle Aggressive 1000, Lifestyle Growth 820, Lifestyle Balanced 640,
Lifestyle Moderate 460 and Lifestyle Conservative 280. Small Company Value,
managed by Rosenberg Institutional Equity Management ("Rosenberg") commenced
operations on October 1, 1997.
162
<PAGE> 202
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES. The policies described below are followed by
the Trust in the preparation of the financial statements.
SECURITY VALUATION. Securities held by Money Market and short term instruments
with remaining maturities of 60 days or less held by the other Portfolios of the
Trust are valued at amortized cost basis, which approximates market value. All
other securities held by the Portfolios are valued at the last sale price as of
the close of business on a principal securities exchange (domestic or foreign)
or, lacking any sales, at the closing bid price. Securities traded only in the
over-the-counter market are valued at the last bid price quoted by brokers
making markets in the securities at the close of trading.
Portfolio securities for which there are no such quotations, principally debt
securities, are valued on the basis of the valuation provided by a pricing
service which utilizes both dealer-supplied and electronic data processing
techniques. Other assets and securities for which no such quotations are readily
available are valued at their fair value as determined in good faith under
consistently applied procedures established by and under the general supervision
of the Board of Trustees.
FOREIGN CURRENCY TRANSLATIONS. The accounting records of the Trust are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of securities, other assets and other liabilities at
the current rate of exchange of such currencies against U.S.
dollars; and
(ii) purchases and sales of securities, income and expenses at the rate
of exchange quoted on the respective dates of such transactions.
Gains and losses that arise from changes in foreign exchange rates have been
segregated from gains and losses that arise from changes in the market prices of
investments. These gains and losses are included with gains and losses on
foreign currency and forward foreign currency contracts in the Statements of
Operations.
FORWARD FOREIGN CURRENCY CONTRACTS. All portfolios with the exception of Equity
Index, Real Estate Securities, Investment Quality Bond, U.S. Government
Securities, Money Market, Lifestyle Aggressive 1000, Lifestyle Growth 820,
Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle Conservative 280
may purchase and sell forward foreign currency contracts in order to hedge a
specific transaction or portfolio position. Forward foreign currency contracts
are valued at forward foreign currency exchange rates and marked to market
daily.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held at the end of the period, the resulting net unrealized
appreciation (depreciation) and related net receivable or payable amount are
determined using forward foreign currency exchange rates supplied by a quotation
service. The Portfolios could be exposed to risks if the counterparties to the
contracts are unable to meet the terms of their contracts or if the value of the
forward foreign currency contract changes unfavorably.
Net realized gains (losses) on foreign currency and forward foreign currency
contracts shown in the Statements of Operations, include net gains or losses
realized by a Portfolio on contracts which have matured or which the Portfolio
has terminated by entering into an offsetting commitment with the same broker.
FUTURES. All Portfolios with the exception of Real Estate Securities, Investment
Quality Bond, Money Market, Lifestyle Aggressive 1000, Lifestyle Growth 820,
Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle Conservative 280
may purchase and sell financial futures contracts and options on those
contracts. The Portfolios invest in contracts based on financial instruments
such as U.S. Treasury Bonds or Notes or on securities indices such as the S&P
500 Index, in order to hedge against a decline in the value of securities owned
by the Portfolios.
When a Portfolio sells a futures contract based on a financial instrument, the
Portfolio becomes obligated to deliver that kind of instrument at an agreed upon
date for a specified price. The Portfolio realizes a gain or loss depending on
whether the price of an offsetting purchase is less or more than the price of
the initial sale or on whether the price of an offsetting sale is more or less
than the price of the initial purchase . The Portfolios could be exposed to
risks if it could not close out futures positions because of an illiquid
secondary market or the inability of counterparties to meet the terms of their
contracts. Upon entering into futures contracts, the Portfolio is required to
deposit with a broker an amount, initial margin, which typically represents 5%
of the purchase price indicated in the futures contract.
Payments to and from the broker, known as variation margin, are required to be
made on a daily basis as the price of the futures contract fluctuates, making
the long or short positions in the contract more or less valuable. If the
position is closed out by taking an opposite position prior to the settlement
date of the futures contract, a final determination of variation margin is made,
cash is required to be paid to or released by the broker, and the Portfolio
realizes a gain or loss.
163
<PAGE> 203
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
The following is a summary of open futures contracts at December 31, 1997:
<TABLE>
<CAPTION>
SALES OF FUTURES CONTRACTS PURCHASES OF FUTURES CONTRACTS
---------------------------------------- -----------------------------------------
NUMBER AGGREGATE NUMBER AGGREGATE
EXPIRATION OF OPEN MARKET VALUE UNREALIZED OF OPEN MARKET VALUE UNREALIZED
DATE CONTRACTS OF CONTRACTS LOSS CONTRACTS OF CONTRACTS GAIN/LOSS
------------ ---------- ---------------- ----------- ---------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY INDEX:
S&P 500 Futures.............. March 1998 -- -- 22 $5,385,050 $65,634
AGGRESSIVE ASSET ALLOCATION:
S&P 500 Futures.............. March 1998 6 $1,468,650 ($4,866) -- --
CAC 40 Futures............... March 1998 -- -- 8 FRF 4,840,800 (20,976)
DAX 30 Futures............... March 1998 -- -- 5 DEM 2,139,250 93,895
FTSE 100 Futures............. March 1998 -- -- 5 P 647,875 80,141
NIKKEI 300 Futures........... March 1998 -- -- 62 Y 147,126,000 (255,473)
MODERATE ASSET ALLOCATION:
S&P 500 Futures.............. March 1998 12 2,937,300 (9,732) -- --
CAC 40 Futures............... March 1998 -- -- 4 FRF 2,420,400 (22,402)
DAX 30 Futures............... March 1998 -- -- 2 DEM 855,700 82,968
FTSE 100 Futures............. March 1998 -- -- 2 P 259,150 97,572
NIKKEI 300 Futures........... March 1998 -- -- 27 Y 64,071,000 (173,312)
CONSERVATIVE ASSET ALLOCATION:
S&P 500 Futures.............. March 1998 2 469,550 1,772 -- --
</TABLE>
FORWARD COMMITMENTS. All Portfolios with the exception of Lifestyle Aggressive
1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 may purchase debt securities on a when issued or
forward delivery basis, which means that the obligations will be delivered to
the Portfolios of the Trust at a future date, which may be a month or more after
the date of commitment. The price of the underlying securities and the date when
the securities will be delivered and paid for are fixed at the time the
transaction is negotiated. The value of the securities underlying a forward
commitment to purchase securities, and the subsequent fluctuations in their
value, are taken into account when determining the Portfolio's net asset value
starting on the day the Portfolio agrees to purchase the securities. At December
31, 1997, forward commitments in Strategic Bond and U.S. Government Securities
were valued at $41,146,842 and $38,478,410, respectively.
SECURITIES LENDING. All Portfolios with the exception of Lifestyle Aggressive
1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 may lend securities in amounts up to 33 1/3% of its
total non-cash assets to brokers, dealers and other financial institutions,
provided such loans are callable at any time and are at all times fully secured
by cash, cash equivalents or securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, marked to market to the value
of the loaned securities on a daily basis. The Portfolios may bear the risk of
delay in recovery of, or even of rights in, the securities loaned should the
borrower of the securities fail financially. Consequently, loans of Portfolio
securities will only be made to firms deemed by the subadvisers to be
creditworthy. The Portfolios receive compensation for lending its securities
either in the form of fees or by retaining a portion of interest on the
investment of any cash received as collateral. Income generated from the
investment of cash collateral is included as interest income in the Statement of
Operations. All collateral received will be in an amount equal to at least 100%
of the market value of the loaned securities and must be maintained at that
level during the period of the loan. During the loan period, the Portfolio
continues to retain rights of ownership, including dividends and interest of the
loaned securities.
At December 31, 1997, the value of the securities loaned amounted to $1,490,350,
$13,611,016, $9,824,123, $65,312,522, $37,541,612, $17,085,652, $4,883,669,
$50,105,089, $190,760,729, $18,482,172, $13,124,693, $3,863,859, $55,897,235,
$22,329,636, $12,321,889, $30,478,510, $75,229,383, $41,733,409, $10,738,299,
$23,947,743, $54,572,939, $4,850,423, $10,198,532, $73,906,137, $2,801,609,
$47,995,504 and $29,201,997 in Pacific Rim Emerging Markets, Science &
Technology, International Small Cap, Emerging Growth, Small/Mid Cap,
International Stock, Worldwide Growth, Global Equity, Equity, Growth,
Quantitative Equity, Equity Index, Blue Chip Growth, Real Estate Securities,
Value, International Growth and Income, Growth and Income, Equity-Income,
Balanced, Aggressive Asset Allocation, Moderate Asset Allocation, Conservative
Asset Allocation, High Yield, Strategic Bond, Capital Growth Bond, Investment
Quality Bond and U.S. Government Securities, respectively.
164
<PAGE> 204
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
At December 31, 1997, the value of collateral amounted to $1,589,540,
$14,020,686, $10,214,498, $66,418,106, $38,431,346, $17,946,172, $5,032,012,
$53,383,326, $194,776,908, $19,081,662, $13,357,643, $3,954,637, $56,669,960,
$23,007,430, $12,675,676, $32,349,003, $77,127,781, $42,557,216, $10,920,106,
$24,716,245, $56,027,675, $5,035,515, $10,489,036, $75,776,050, $2,860,600,
$48,836,383 and $29,590,565 in Pacific Rim Emerging Markets, Science &
Technology, International Small Cap, Emerging Growth, Small/Mid Cap,
International Stock, Worldwide Growth, Global Equity, Equity, Growth,
Quantitative Equity, Equity Index, Blue Chip Growth, Real Estate Securities,
Value, International Growth and Income, Growth and Income, Equity-Income,
Balanced, Aggressive Asset Allocation, Moderate Asset Allocation, Conservative
Asset Allocation, High Yield, Strategic Bond, Capital Growth Bond, Investment
Quality Bond and U.S. Government Securities, respectively.
MORTGAGE DOLLAR ROLLS. Strategic Bond and U.S. Government Securities may enter
into mortgage dollar rolls in which they sell mortgage securities for delivery
currently and simultaneously contract to repurchase similar, but not identical,
securities at the same price on an agreed upon date. The Portfolios receive
compensation as consideration for entering into the commitment to repurchase.
The compensation is recorded as deferred income and amortized to income over the
roll period. As the holder, the counterparty receives all principal and interest
payments, including prepayments, made with respect to the similar security.
Mortgage dollar rolls may be renewed with a new sale and repurchase price with a
cash settlement made at renewal without physical delivery of the securities
subject to the contract.
ORGANIZATION COSTS. Costs incurred by a Portfolio in connection with its
organization, initial registration and public offering of shares are being
amortized on a straight-line basis for International Growth and Income,
Equity-Income and Strategic Bond over a five-year period beginning with the
commencement of operations of each Portfolio.
FEDERAL INCOME TAXES. The Trust's and Portfolios policy is to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code, as
amended, and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required. Each Portfolio of the
Trust is treated as a separate taxpayer for federal income tax purposes.
DISTRIBUTION OF INCOME AND GAINS. All of the net investment income of Money
Market, Lifestyle Balanced 640, Lifestyle Moderate 460 and Lifestyle
Conservative 280 is declared as a dividend to shareholders of record as of the
close of business each day and is reinvested daily. During any particular year,
net realized gains from investment transactions of each Portfolio, in excess of
available capital loss carryforwards of each Portfolio would be taxable to such
Portfolio if not distributed. Therefore, each Portfolio of the Trust intends to
distribute all of its investment company taxable income and any net realized
capital gains in order to avoid federal income tax. The Portfolios'
distributions are based on income amounts determined in accordance with federal
income tax regulations. The character of distributions made during the year from
net investment income and net realized gains may differ for tax purposes due to
various differences in recording net investment income and realized gains for
financial statement and tax purposes.
EXPENSE ALLOCATION. Expenses not directly attributable to a particular Portfolio
are allocated based on the relative share of net assets of each Portfolio at the
time the expense was incurred, except as discussed in footnote 5.
REPURCHASE AGREEMENTS. Each Portfolio of the Trust may enter into repurchase
agreements. When a Portfolio enters into a repurchase agreement through its
custodian, it receives delivery of securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value is 102% of the repurchase amount. Each
Portfolio will take constructive receipt of all securities underlying the
repurchase agreements it has entered into until such agreements expire. If the
seller defaults, a Portfolio would suffer a loss to the extent that proceeds
from the sale of underlying securities were less than the repurchase amount.
CAPITAL ACCOUNTS. The Portfolios report the undistributed net investment income
and accumulated undistributed net realized gain (loss) accounts on a basis
approximating amounts available for future tax distributions (or to offset
future taxable realized gains when a capital loss carryforward is available).
Accordingly, each Portfolio of the Trust may periodically make reclassifications
among certain capital accounts without impacting its net asset value.
OTHER. Investment security transactions are accounted for on the trade date.
Interest income is accrued as earned. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Foreign dividends are
recorded on the ex-date or as soon after the ex-date that the Portfolio is aware
of such dividends, net of all taxes. All original issue discounts are accreted
for financial and tax reporting purposes. The Portfolios use the First In, First
Out method for determining realized gain or loss on investments for both
financial and federal income tax reporting purposes. 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 at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results may differ from these estimates.
165
<PAGE> 205
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
3. CAPITAL LOSS CARRYFORWARDS. At
December 31, 1997, capital loss carryforwards available to offset future
realized gains were approximately:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYFORWARD
EXPIRATION YEAR
-------------------------------------------------------------------------------
PORTFOLIO 2002 2003 2004 2005
- ------------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
International Small Cap..................... -- -- $426,000 $3,982,000
Pilgrim Baxter Growth....................... -- -- -- 4,038,000
Small/Mid Cap............................... -- -- 1,180,000 --
Small Company Value......................... -- -- -- 732,000
Capital Growth Bond......................... $644,000 -- 213,000 --
Investment Quality Bond..................... 3,114,000 -- -- --
U.S. Government Securities.................. 2,529,000 -- -- 867,000
</TABLE>
4. CAPITAL SHARES. Share activity for the Trust for the year ended December 31,
1997 was as follows:
<TABLE>
<CAPTION>
SHARES CAPITAL
-------------------- --------------------
<S> <C> <C>
PACIFIC RIM EMERGING MARKETS
Sold........................................ 3,400,497 $32,539,805
Reinvestment of distributions............... 10,109 72,382
Redeemed.................................... (2,213,030) (20,978,785)
--------- -----------
Net increase.............................. 1,197,576 $11,633,402
========= ===========
SCIENCE & TECHNOLOGY
Sold........................................ 5,455,276 $76,940,278
Reinvestment of distributions............... 77,906 1,061,075
Redeemed.................................... (589,036) (7,987,153)
--------- -----------
Net increase.............................. 4,944,146 $70,014,200
========= ===========
INTERNATIONAL SMALL CAP
Sold........................................ 6,033,997 $84,497,104
Reinvestment of distributions............... 4,164 56,628
Redeemed.................................... (3,804,258) (53,399,946)
--------- -----------
Net increase.............................. 2,233,903 $31,153,786
========= ===========
EMERGING GROWTH
Sold........................................ 4,278,426 $94,741,094
Redeemed.................................... (2,147,743) (46,889,392)
Issued in connection with asset transfer.... 9,296,125 191,511,608
--------- ------------
Net increase.............................. 7,426,808 $239,363,310
========= ============
PILGRIM BAXTER GROWTH
Sold........................................ 8,406,519 $102,216,243
Redeemed.................................... (939,814) (11,334,741)
--------- ------------
Net increase.............................. 7,466,705 $ 90,881,502
========= ============
SMALL/MID CAP
Sold........................................ 7,383,392 $110,225,373
Redeemed.................................... (3,131,150) (45,151,663)
--------- ------------
Net increase.............................. 4,252,242 $ 65,073,710
========= ============
INTERNATIONAL STOCK
Sold........................................ 11,384,468 $136,647,399
Reinvestment of distributions............... 173,235 1,987,010
Redeemed.................................... (1,787,295) (21,507,311)
Issued in connection with asset transfer.... 2,890,613 33,142,921
---------- ------------
Net increase.............................. 12,661,021 $150,270,019
========== ============
</TABLE>
166
<PAGE> 206
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
-------------------- --------------------
<S> <C> <C>
WORLDWIDE GROWTH
Sold........................................ 1,787,771 $24,432,259
Reinvestment of distributions............... 14,864 208,696
Redeemed.................................... (74,857) (1,054,633)
--------- -----------
Net increase.............................. 1,727,778 $23,586,322
========= ===========
GLOBAL EQUITY
Sold........................................ 5,372,811 $98,427,703
Reinvestment of distributions............... 4,509,999 72,926,679
Redeemed.................................... (5,809,552) (107,408,865)
--------- -----------
Net increase.............................. 4,073,258 $63,945,517
========= ===========
SMALL COMPANY VALUE
Sold........................................ 5,662,330 $69,557,589
Redeemed.................................... (44,312) (530,637)
--------- -----------
Net increase.............................. 5,618,018 $69,026,952
========= ===========
EQUITY
Sold........................................ 8,030,182 $168,965,845
Reinvestment of distributions............... 14,581,215 258,233,327
Redeemed.................................... (11,346,571) (237,282,560)
---------- ------------
Net increase.............................. 11,264,826 $189,916,612
========== ============
GROWTH
Sold........................................ 6,715,373 $108,024,505
Reinvestment of distributions............... 163 2,287
Redeemed.................................... (1,124,814) (18,038,803)
--------- ------------
Net increase.............................. 5,590,722 $ 89,987,989
========= ============
QUANTITATIVE EQUITY
Sold........................................ 3,133,709 $64,485,410
Redeemed.................................... (989,855) (21,111,223)
--------- -----------
Net increase.............................. 2,143,854 $43,374,187
========= ===========
EQUITY INDEX
Sold........................................ 1,943,741 $24,678,547
Reinvestment of distributions............... 272,281 3,398,067
Redeemed.................................... (778,770) (9,819,130)
--------- -----------
Net increase.............................. 1,437,252 $18,257,484
========= ===========
BLUE CHIP GROWTH
Sold........................................ 16,962,808 $238,884,781
Reinvestment of distributions............... 6,465,537 77,457,126
Redeemed.................................... (5,697,993) (81,597,829)
---------- ------------
Net increase.............................. 17,730,352 $234,744,078
========== ============
REAL ESTATE SECURITIES
Sold........................................ 4,924,515 $88,035,372
Redeemed.................................... (1,362,424) (25,747,943)
--------- -----------
Net increase.............................. 3,562,091 $62,287,429
========= ===========
VALUE
Sold........................................ 10,980,659 $159,142,076
Reinvestment of distributions............... 299,130 4,427,125
Redeemed.................................... (1,509,501) (23,618,997)
--------- ------------
Net increase.............................. 9,770,288 $139,950,204
========= ============
</TABLE>
167
<PAGE> 207
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
-------------------- --------------------
<S> <C> <C>
INTERNATIONAL GROWTH AND INCOME
Sold........................................ 10,352,348 $117,674,886
Reinvestment of distributions............... 1,115,731 11,982,954
Redeemed.................................... (9,013,183) (102,808,661)
--------- ------------
Net increase.............................. 2,454,896 $ 26,849,179
========= ============
GROWTH AND INCOME
Sold........................................ 12,971,288 $281,085,010
Reinvestment of distributions............... 4,267,736 79,422,565
Redeemed.................................... (3,367,863) (72,232,962)
---------- ------------
Net increase.............................. 13,871,161 $288,274,613
========== ============
EQUITY-INCOME
Sold........................................ 13,837,627 $218,464,961
Reinvestment of distributions............... 6,521,913 89,480,654
Redeemed.................................... (4,638,631) (74,332,261)
---------- ------------
Net increase.............................. 15,720,909 $233,613,354
========== ============
BALANCED
Sold........................................ 2,059,156 $36,894,383
Redeemed.................................... (1,116,401) (20,068,809)
Issued in connection with asset transfer.... 8,216,455 134,806,542
--------- ------------
Net increase.............................. 9,159,210 $151,632,116
========= ============
AGGRESSIVE ASSET ALLOCATION
Sold........................................ 679,646 $9,394,223
Reinvestment of distributions............... 1,870,946 22,526,197
Redeemed.................................... (2,451,432) (33,450,747)
--------- ----------
Net increase (decrease)................... 99,160 ($1,530,327)
========= ==========
MODERATE ASSET ALLOCATION
Sold........................................ 860,403 $10,390,694
Reinvestment of distributions............... 5,474,371 61,148,726
Redeemed.................................... (9,320,339) (116,158,813)
--------- -----------
Net decrease.............................. (2,985,565) ($44,619,393)
========= ===========
CONSERVATIVE ASSET ALLOCATION
Sold........................................ 1,076,901 $12,425,189
Reinvestment of distributions............... 1,713,268 18,160,638
Redeemed.................................... (3,356,484) (38,387,124)
--------- ----------
Net decrease.............................. (566,315) ($7,801,297)
========= ==========
HIGH YIELD
Sold........................................ 7,004,304 $93,538,496
Reinvestment of distributions............... 254,582 3,452,134
Redeemed.................................... (417,477) (5,560,458)
--------- -----------
Net increase.............................. 6,841,409 $91,430,172
========= ===========
STRATEGIC BOND
Sold........................................ 12,161,795 $145,357,240
Reinvestment of distributions............... 1,453,112 16,245,787
Redeemed.................................... (2,607,070) (31,110,681)
---------- ------------
Net increase.............................. 11,007,837 $130,492,346
========== ============
</TABLE>
168
<PAGE> 208
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
-------------------- --------------------
<S> <C> <C>
GLOBAL GOVERNMENT BOND
Sold........................................ 445,962 $6,317,050
Reinvestment of distributions............... 1,530,040 20,181,238
Redeemed.................................... (3,299,413) (45,957,392)
--------- -----------
Net increase.............................. (1,323,411) ($19,459,104)
========= ===========
CAPITAL GROWTH BOND
Sold........................................ 1,100,955 $12,419,231
Redeemed.................................... (708,093) (7,959,276)
------- -----------
Net increase.............................. 392,862 $ 4,459,955
======= ===========
INVESTMENT QUALITY BOND
Sold........................................ 3,757,805 $44,037,489
Reinvestment of distributions............... 944,301 10,368,425
Redeemed.................................... (2,019,021) (23,604,392)
--------- -----------
Net increase.............................. 2,683,085 $30,801,522
========= ===========
U.S. GOVERNMENT SECURITIES
Sold........................................ 6,194,421 $81,409,947
Reinvestment of distributions............... 1,050,320 13,118,502
Redeemed.................................... (3,945,265) (51,864,571)
--------- -----------
Net increase.............................. 3,299,476 $42,663,878
========= ===========
MONEY MARKET
Sold........................................ 72,701,409 $727,014,088
Reinvestment of distributions............... 2,149,753 21,497,529
Redeemed.................................... (67,236,388) (672,363,876)
---------- ------------
Net increase.............................. 7,614,774 $ 76,147,741
========== ============
LIFESTYLE AGGRESSIVE 1000
Sold........................................ 3,820,037 $49,636,650
Reinvestment of distributions............... 22,372 275,584
Redeemed.................................... (197,797) (2,564,164)
--------- -----------
Net increase.............................. 3,644,612 $47,348,070
========= ===========
LIFESTYLE GROWTH 820
Sold........................................ 15,722,003 $208,934,467
Reinvestment of distributions............... 172,185 2,262,295
Redeemed.................................... (126,294) (1,693,725)
---------- ------------
Net increase.............................. 15,767,894 $209,503,037
========== ============
LIFESTYLE BALANCED 640
Sold........................................ 13,728,402 $180,016,438
Reinvestment of distributions............... 190,251 2,442,732
Redeemed.................................... (151,558) (1,962,700)
---------- ------------
Net increase.............................. 13,767,095 $180,496,470
========== ============
LIFESTYLE MODERATE 460
Sold........................................ 3,978,329 $51,517,510
Reinvestment of distributions............... 65,379 833,933
Redeemed.................................... (92,432) (1,211,121)
--------- -----------
Net increase.............................. 3,951,276 $51,140,322
========= ===========
</TABLE>
169
<PAGE> 209
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
CAPITAL SHARES, CONTINUED
<TABLE>
<CAPTION>
SHARES CAPITAL
-------------------- --------------------
<S> <C> <C>
LIFESTYLE CONSERVATIVE 280
Sold........................................ 1,519,237 $19,198,138
Reinvestment of distributions............... 25,234 308,024
Redeemed.................................... (26,947) (342,717)
--------- -----------
Net increase.............................. 1,517,524 $19,163,445
========= ===========
</TABLE>
5. PURCHASES AND SALES OF SECURITIES. The following summarizes the securities
transactions (except for short-term investments) for the Portfolios (with the
exception of Money Market) for the year ended December 31, 1997:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------------- ---------------------------------------
PORTFOLIO U.S. GOVERNMENT OTHER ISSUES U.S. GOVERNMENT OTHER ISSUES
----------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ -- $20,573,217 -- $13,802,893
Science & Technology................ -- 101,895,920 -- 39,275,981
International Small Cap............. -- 86,703,231 -- 69,086,144
Emerging Growth..................... -- 368,191,802 -- 231,329,283
Pilgrim Baxter Growth............... -- 117,930,914 -- 29,135,551
Small/Mid Cap....................... -- 347,757,745 -- 299,724,666
International Stock................. -- 139,940,638 -- 32,114,037
Worldwide Growth.................... -- 26,288,767 -- 8,116,100
Global Equity....................... -- 282,732,746 -- 259,726,754
Small Company Value*................ -- 79,902,241 -- 11,587,359
Equity.............................. -- 3,088,809,325 -- 3,154,584,852
Growth.............................. -- 236,264,860 -- 165,112,426
Quantitative Equity................. -- 178,450,940 -- 139,002,323
Equity Index........................ -- 21,358,532 -- 458,718
Blue Chip Growth.................... -- 335,112,351 -- 186,132,772
Real Estate Securities.............. -- 243,779,445 -- 173,099,465
Value............................... -- 146,863,079 -- 25,885,501
International Growth and Income..... -- 335,579,590 -- 309,113,646
Growth and Income................... -- 633,517,513 -- 442,181,054
Equity-Income....................... -- 320,249,766 -- 171,721,637
Balanced............................ $75,034,928 263,596,684 $31,352,131 286,189,838
Aggressive Asset Allocation......... 26,465,619 175,231,873 43,929,378 220,791,841
Moderate Asset Allocation........... 107,248,551 343,653,109 200,040,761 342,481,720
Conservative Asset Allocation....... 98,929,063 58,847,589 120,347,928 57,030,314
High Yield.......................... 1,773,059 107,985,909 -- 29,037,823
Strategic Bond...................... 129,480,684 312,031,113 119,284,520 232,661,015
Global Government Bond.............. 56,809,087 284,398,811 70,922,246 286,916,127
Capital Growth Bond................. 13,745,096 21,934,779 11,993,554 20,067,514
Investment Quality Bond............. 46,829,582 54,827,292 15,575,007 58,103,122
U.S. Government Securities.......... 244,784,871 -- 204,671,603 369,145
Lifestyle Aggressive 1000**......... -- 62,984,819 -- 15,639,396
Lifestyle Growth 820**.............. -- 257,374,971 -- 47,872,642
Lifestyle Balanced 640**............ -- 216,576,563 -- 36,081,916
Lifestyle Moderate 460**............ -- 59,019,893 -- 7,879,572
Lifestyle Conservative 280**........ -- 22,418,452 -- 3,255,008
</TABLE>
* For the period October 1, 1997 (commencement of operations) to December 31,
1997.
** For the period January 7, 1997 (commencement of operations) to December 31,
1997.
Purchases and sales for Money Market for the year ended December 31, 1997 were
$4,880,797,613 and $4,813,287,167, respectively.
170
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MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
PURCHASES AND SALES OF SECURITIES - CONTINUED
At December 31, 1997, tax basis net unrealized appreciation (depreciation) was
equal to the aggregate gross unrealized appreciation for all securities in which
there was an excess of market value over tax cost and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
market value as follows:
<TABLE>
<CAPTION>
TAX BASIS NET
UNREALIZED TAX BASIS TAX BASIS
TAX BASIS APPRECIATION UNREALIZED UNREALIZED
PORTFOLIO COST (DEPRECIATION) APPRECIATION DEPRECIATION
--------- ------------------- ------------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $33,383,480 ($9,069,834) $1,183,498 $10,253,332
Science & Technology................ 83,537,990 (1,920,249) 3,967,267 5,887,516
International Small Cap............. 126,462,919 8,534,528 15,138,686 6,604,158
Emerging Growth..................... 300,986,226 43,005,707 53,590,157 10,584,450
Pilgrim Baxter Growth............... 89,635,688 6,713,161 10,208,280 3,495,119
Small/Mid Cap ...................... 280,266,098 32,753,291 37,259,251 4,505,960
International Stock................. 161,606,048 (1,386,831) 9,773,713 11,160,544
Worldwide Growth.................... 28,884,047 725,778 1,332,724 606,946
Global Equity....................... 782,022,128 136,928,506 169,929,345 33,000,839
Small Company Value................. 70,784,833 (1,259,823) 2,876,539 4,136,362
Equity.............................. 1,630,273,388 65,812,322 134,323,289 68,510,967
Growth.............................. 173,088,662 13,654,143 16,173,488 2,519,345
Quantitative Equity................. 161,513,612 18,922,413 24,156,609 5,234,196
Equity Index........................ 30,402,696 315,177 1,066,635 751,458
Blue Chip Growth.................... 612,382,133 153,247,140 159,795,129 6,547,989
Real Estate Securities.............. 170,736,929 13,698,732 14,352,799 654,067
Value............................... 154,129,921 4,884,252 9,046,237 4,161,985
International Growth and Income..... 231,976,641 (4,401,576) 14,452,390 18,853,966
Growth and Income................... 1,199,957,742 467,129,902 482,483,178 15,353,276
Equity-Income....................... 812,757,137 168,355,434 175,693,764 7,338,330
Balanced............................ 172,912,191 10,824,779 13,196,749 2,371,970
Aggressive Asset Allocation......... 223,567,651 41,616,665 49,272,219 7,655,554
Moderate Asset Allocation........... 583,282,558 79,849,442 94,061,869 14,212,427
Conservative Asset Allocation....... 196,302,399 14,580,242 17,170,147 2,589,905
High Yield.......................... 104,007,991 974,056 2,304,481 1,330,425
Strategic Bond...................... 467,644,287 7,995,471 11,911,148 3,915,677
Global Government Bond.............. 209,064,456 (1,084,767) 3,636,611 4,721,378
Capital Growth Bond................. 54,473,178 1,690,901 1,734,452 43,551
Investment Quality Bond............. 230,285,316 3,710,810 4,925,602 1,214,792
U.S. Government Securities.......... 312,020,963 3,557,968 3,727,163 169,195
Lifestyle Aggressive 1000........... 48,920,775 181,105 1,055,395 874,290
Lifestyle Growth 820................ 215,049,293 2,107,654 5,683,430 3,575,776
Lifestyle Balanced 640.............. 183,242,041 3,409,438 5,312,971 1,903,533
Lifestyle Moderate 460.............. 51,512,291 1,233,338 1,561,982 328,644
Lifestyle Conservative 280.......... 19,298,855 451,164 451,164 --
</TABLE>
171
<PAGE> 211
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
6. INVESTMENT ADVISORY AGREEMENTS. Effective March 20, 1987, the Trust entered
into an Investment Advisory Agreement with MSS (the "Adviser"), a wholly-owned
subsidiary of MNA and the principal underwriter of the variable annuity
contracts issued by MNA and MNY. The Adviser is responsible for managing the
corporate and business affairs of the Trust and for selecting and compensating
subadvisers to handle the investment and reinvestment of the assets of each
Portfolio of the Trust, subject to the supervision of the Trust's Board of
Trustees. As compensation for its services, the Adviser receives an advisory fee
from the Trust based on the average daily net assets of each Portfolio, except
for the Lifestyle Trusts for which the Adviser makes no charge. Advisory fees
charged to each Portfolio were as follows:
PORTFOLIO FEE
- ---------------- -------------
Pacific Rim Emerging Markets...................... .850%
Science & Technology.............................. 1.100%
International Small Cap........................... 1.100%
Emerging Growth................................... 1.050%
Pilgrim Baxter Growth............................. 1.050%
Small/Mid Cap..................................... 1.000%
International Stock............................... 1.050%
Worldwide Growth.................................. 1.000%
Global Equity..................................... .900%
Small Company Value(1)............................ 1.050%
Equity............................................ .750%
Growth............................................ .850%
Quantitative Equity............................... .700%*
Equity Index...................................... .250%
Blue Chip Growth.................................. .925%
Real Estate Securities............................ .700%*
Value............................................. .800%
International Growth and Income................... .950%
Growth and Income................................. .750%
Equity-Income..................................... .800%
Balanced.......................................... .800%
Aggressive Asset Allocation....................... .750%
Moderate Asset Allocation......................... .750%
Conservative Asset Allocation..................... .750%
High Yield........................................ .775%
Strategic Bond.................................... .775%
Global Government Bond............................ .800%
Capital Growth Bond............................... .650%*
Investment Quality Bond........................... .650%
U.S. Government Securities........................ .650%
Money Market...................................... .500%
(1) For the period October 1, 1997 (commencement of operations) to December 31,
1997.
* Because of the special one year expense limitation described below, total fees
including advisory fees did not exceed 0.50%.
For the year ended December 31, 1997, the Adviser paid aggregate subadvisory
fees of $26,369,969 and retained net investment advisory fees after payment of
subadvisory fees of $44,607,679, allocated among the portfolios as follows:
<TABLE>
<CAPTION>
% OF AVERAGE % OF AVERAGE
FEE ANNUAL NET ASSETS FEE ANNUAL NET
PAID TO PAID TO RETAINED ASSETS RETAINED
PORTFOLIO SUBADVISER SUBADVISER BY ADVISER BY ADVISER
- ------------ ------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $107,828 .400% $121,307 .450%
Science & Technology................ 201,450 .600% 167,874 .500%
International Small Cap............. 760,136 .620% 587,572 .480%
Emerging Growth..................... 1,221,387 .550% 1,110,352 .500%
Pilgrim Baxter Growth............... 286,942 .600% 215,207 .450%
Small/Mid Cap....................... 1,078,894 .500% 1,066,433 .500%
International Stock................. 487,128 .590% 373,528 .460%
</TABLE>
172
<PAGE> 212
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS, CONTINUED
<TABLE>
<CAPTION>
FEE % OF NET ASSETS FEE % OF NET ASSETS
PAID TO PAID TO RETAINED RETAINED
PORTFOLIO SUBADVISER SUBADVISER BY ADVISER BY ADVISER
- ------------ ------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Worldwide Growth.................... $74,971 .600% $49,981 .400%
Global Equity....................... 3,045,314 .380% 4,210,940 .520%
Small Company Value(1).............. 76,634 .600% 58,054 .450%
Equity.............................. 3,354,190 .240% 7,349,021 .510%
Growth.............................. 495,015 .450% 440,014 .400%
Quantitative Equity................. 318,784 .240% 595,212 .460%
Equity Index........................ 16,885 .100% 25,327 .150%
Blue Chip Growth.................... 2,298,963 .412% 2,857,045 .513%
Real Estate Securities.............. 292,169 .250% 539,022 .450%
Value............................... 233,286 .360% 290,160 .440%
International Growth and Income..... 951,446 .460% 1,014,453 .490%
Growth and Income................... 2,507,394 .190% 7,530,243 .560%
Equity-Income....................... 1,785,490 .230% 4,356,469 .570%
Balanced............................ 537,310 .340% 723,760 .460%
Aggressive Asset Allocation......... 831,665 .350% 934,997 .400%
Moderate Asset Allocation........... 1,722,433 .280% 2,861,688 .470%
Conservative Asset Allocation....... 631,791 .310% 889,256 .440%
High Yield.......................... 138,181 .341% 176,192 .434%
Strategic Bond...................... 847,735 .293% 1,392,743 .482%
Global Government Bond.............. 801,544 .350% 1,035,907 .450%
Capital Growth Bond................. 109,281 .220% 206,420 .430%
Investment Quality Bond............. 362,694 .230% 685,088 .420%
U.S. Government Securities.......... 473,424 .220% 928,144 .430%
Money Market........................ 319,605 .075% 1,815,270 .425%
</TABLE>
(1) For the period October 1, 1997 (commencement of operations) to December 31,
1997.
Of the total retained by the Adviser, $2,631,602 was paid to Manulife America
and $104 was paid to Manulife USA.
EXPENSE REIMBURSEMENT. Pursuant to the Advisory Agreement, the Adviser
reimburses the Trust for expenses (excluding advisory fees, taxes, portfolio
brokerage commissions and interest) incurred in excess, on an annualized basis,
of 0.15% of the average daily net assets of Equity Index, 0.50% of the average
daily net assets of Science & Technology, Emerging Growth, Pilgrim Baxter
Growth, Small/Mid Cap, Growth, Equity, Quantitative Equity, Blue Chip Growth,
Real Estate Securities, Value, Growth and Income, Equity-Income, Balanced,
Aggressive Asset Allocation, Moderate Asset Allocation, Conservative Asset
Allocation, High Yield, Strategic Bond, Capital Growth Bond, Investment Quality
Bond, U.S. Government Securities, Money Market, Lifestyle Aggressive 1000,
Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 and 0.75% of the average daily net assets of Pacific
Rim Emerging Markets, International Small Cap, International Stock, Worldwide
Growth, Global Equity, International Growth and Income and Global Government
Bond. For the limited period of one year ended December 31, 1997, the expense
limitation applicable to Quantitative Equity, Real Estate Securities and Capital
Growth Bond included all expenses of such portfolios, so that their total
expenses for the year, including advisory fees, did not exceed 0.50%. In
addition, in the case of the Lifestyle Trusts, the Adviser has agreed to pay the
expenses of the Lifestyle Trusts (other than the expenses of the underlying
Portfolios) for a period of one year commencing January 1, 1997. After this one
year period, this expense reimbursement may be terminated at any time. For the
year ended December 31, 1997, the Adviser reimbursed Equity Index, Quantitative
Equity, Real Estate Securities, Capital Growth Bond, Lifestyle Aggressive 1000,
Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460 and
Lifestyle Conservative 280 the amounts of $28,392, $347,760, $316,025, $110,604,
$5,627, $24,484, $19,564, $5,579 and $2,031 respectively, for expenses incurred
in excess of the applicable limitations.
7. TRUSTEES' FEES. The Trust pays each Trustee who is not an employee or
director of the Adviser or its affiliates a fee of $7,500 plus travel expenses
for each Board of Trustees meeting attended. The Trust also pays each Trustee
who is not an employee of the Adviser or its affiliates an annual retainer of
$30,000.
173
<PAGE> 213
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
8. COMMITMENTS. At December 31, 1997, International Small Cap, International
Stock, Global Equity, International Growth and Income, Balanced, Aggressive
Asset Allocation, Moderate Asset Allocation, Conservative Asset Allocation, High
Yield, Strategic Bond and Global Government Bond had entered into forward
foreign currency contracts which contractually obligate the Portfolio to deliver
currencies at future dates. Open sale and purchase contracts at December 31,
1997 were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE VALUE (DEPRECIATION)
------------ -------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL SMALL CAP:
PURCHASES $233,378 DEM 411,724 1/02/98 $228,869 ($4,509)
197,683 DEM 351,678 1/05/98 195,491 (2,192)
8,268 NLG 16,561 1/05/98 8,167 (101)
-------- -------- ------
$439,330 $432,527 ($6,802)
======== ======== ======
INTERNATIONAL STOCK:
SALES
Japanese Yen.................. 59,075 $455 1/05/98 $452 $3
New Zealand Dollar............ 4,095 2,382 1/05/98 2,378 4
------- ------- ---
$2,837 $2,830 $7
====== ====== ==
GLOBAL EQUITY:
SALES
Great British Pound........... 32,400,000 $52,882,650 12/16/98 $52,402,510 $480,140
Netherlands Guilder........... 63,000,000 30,616,708 12/16/98 31,175,386 (558,678)
----------- ----------- -------
. $83,499,358 $83,577,896 ($78,538)
=========== =========== -------
PURCHASES $202,536 ITL 356,767,585 1/05/98 $201,677 ($859)
221,232 NZD 379,342 1/05/98 220,265 (967)
-------- -------- ------
$423,768 $421,942 ($1,826)
======== ======== ------
($80,364)
=======
INTERNATIONAL GROWTH AND INCOME:
SALES
Australian Dollar............. 28,244,850 $19,343,090 2/23/98 $18,429,958 $913,132
Canadian Dollar............... 3,236,279 2,298,493 2/23/98 2,268,514 29,979
German Deutsche Mark.......... 31,000,427 17,472,000 2/23/98 17,285,446 186,554
Great British Pound........... 7,561,728 12,676,595 2/23/98 12,388,477 288,118
Hong Kong Dollar.............. 20,233,454 2,583,269 2/23/98 2,601,635 (18,366)
Japanese Yen.................. 1,819,405,136 14,548,370 2/23/98 14,042,177 506,193
New Zealand Dollar............ 10,542,776 6,587,517 2/23/98 6,095,961 491,556
Singapore Dollar.............. 7,547,893 4,760,576 2/23/98 4,447,621 312,955
----------- ----------- ----------
$80,269,910 $77,559,789 $2,710,121
=========== =========== ----------
PURCHASES $7,697,743 AUD 11,717,930 2/23/98 $7,646,030 ($51,713)
33,413,819 DEM 57,826,253 2/23/98 32,243,186 (1,170,633)
2,431,496 P 1,458,949 2/23/98 2,390,215 (41,281)
1,640,000 HKD 12,891,860 2/23/98 1,657,646 17,646
9,916,000 Y 1,245,283,698 2/23/98 9,611,105 (304,895)
----------- ----------- ----------
$55,099,058 $53,548,182 ($1,550,876)
=========== =========== ----------
$1,159,245
==========
BALANCED:
SALES
Canadian Dollar............... 243 $169 1/02/98 $170 ($1)
==== ==== ==
AGGRESSIVE ASSET ALLOCATION:
SALES
Norwegian Krone............... 121,030 $16,539 1/02/98 $16,387 $152
======= ======= ----
PURCHASES $16,241 NOK 121,030 1/07/98 $16,387 $146
16,226 NOK 121,030 1/09/98 16,387 161
------- ======= ----
$32,467 $32,774 $307
======= ======= ----
$459
====
</TABLE>
174
<PAGE> 214
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
COMMITMENTS, CONTINUED
<TABLE>
<CAPTION>
NET
UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE VALUE (DEPRECIATION)
------------ ------------------ -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
MODERATE ASSET ALLOCATION:
SALES
Norwegian Krone............... 218,686 $29,883 1/02/98 $29,609 $274
======= ======= ----
PURCHASES
$29,346 NOK 218,686 1/07/98 $29,609 $263
29,318 NOK 218,686 1/09/98 29,609 291
------- ======= ----
$58,664 $59,218 $554
======= ======= ----
$828
=====
CONSERVATIVE ASSET ALLOCATION:
SALES
Norwegian Krone............... 38,116 $5,208 1/02/98 $5,161 $47
====== ====== ---
PURCHASES
$5,115 NOK 38,116 1/07/98 $5,161 $46
5,110 NOK 38,116 1/09/98 5,161 51
------- ======= -----
$10,225 $10,322 $ 97
======= ======= -----
$144
=====
HIGH YIELD:
SALES
German Deutsche Mark.......... 300,000 $172,811 1/20/98 $166,967 $5,844
German Deutsche Mark.......... 630,000 362,590 2/27/98 351,355 11,235
German Deutsche Mark.......... 1,850,000 1,050,003 3/18/98 1,033,039 16,964
German Deutsche Mark.......... 1,215,000 688,700 3/23/98 678,659 10,041
---------- ---------- -------
$2,274,104 $2,230,020 $44,084
========== ========== -------
PURCHASES
$28,468 DEM 50,000 2/27/98 $27,885 ($583)
======= ======= -------
($583)
-------
$43,501
=======
STRATEGIC BOND:
SALES
Australian Dollar............. 273,816 $180,622 2/11/98 $178,622 $2,000
Canadian Dollar............... 6,219,459 4,379,901 2/11/98 4,358,266 21,635
German Deutsche Mark.......... 26,586,579 15,155,093 2/11/98 14,814,758 340,335
Italian Lira.................. 5,784,961,140 3,349,174 2/11/98 3,269,162 80,012
----------- ----------- --------
$23,064,790 $22,620,808 $443,982
=========== =========== --------
PURCHASES
$4,400,798 DEM 7,765,422 2/11/98 $4,327,103 ($73,695)
========== ========== --------
($73,695)
--------
$370,287
========
GLOBAL GOVERNMENT BOND:
SALES
German Deutsche Mark.......... 1,000,000 $563,412 1/02/98 $555,880 $7,532
South African Rand............ 1,251,000 257,222 1/02/98 257,064 158
South African Rand............ 55,000,000 11,258,956 1/15/98 11,254,348 4,608
German Deutsche Mark.......... 31,732,799 18,100,000 1/26/98 17,667,583 432,417
Danish Krone.................. 81,430,380 12,200,000 1/26/98 11,900,910 299,090
Great British Pound........... 11,085,520 18,500,000 1/26/98 18,184,192 315,808
Italian Lira.................. 22,057,100,000 13,000,000 1/26/98 12,465,629 534,371
Swedish Krona................. 99,216,650 13,000,000 1/26/98 12,505,445 494,555
</TABLE>
175
<PAGE> 215
MANUFACTURERS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
COMMITMENTS, CONTINUED
<TABLE>
<CAPTION>
NET
UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE VALUE (DEPRECIATION)
------------ ------------------ -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
GLOBAL GOVERNMENT BOND - CONTINUED
New Zealand Dollar............ 21,049,406 $13,000,000 1/27/98 $12,192,496 $807,504
New Zealand Dollar............ 10,911,249 6,964,650 4/09/98 6,286,922 677,728
Australian Dollar............. 11,415,118 8,000,000 5/11/98 7,461,968 538,032
Italian Lira.................. 18,599,275,000 10,700,000 5/11/98 10,516,558 183,442
Swedish Krone................. 46,674,000 6,000,000 5/11/98 5,897,431 102,569
German Deutsche Mark.......... 30,001,813 17,000,000 6/04/98 16,824,506 175,494
Italian Lira.................. 22,812,400,000 13,000,000 10/02/98 12,954,306 45,694
------------ ------------ ----------
$161,544,240 $156,925,238 $4,619,002
============ ============ ----------
PURCHASES
$18,571,258 DEM 31,732,799 1/26/98 $17,667,583 ($903,675)
12,158,527 DKK 81,430,380 1/26/98 11,900,910 (257,617)
12,635,331 ITL 22,057,100,000 1/26/98 12,465,629 (169,702)
8,002,141 SEK 62,216,650 1/26/98 7,841,899 (160,242)
6,964,650 NZD 11,000,000 4/09/98 6,338,059 (626,591)
10,561,769 ITL 18,599,275,000 5/11/98 10,516,558 (45,211)
----------- ----------- ----------
$68,893,676 $66,730,638 ($2,163,038)
=========== =========== ----------
$2,455,964
==========
</TABLE>
9. REORGANIZATION. On December 20, 1996, the shareholders of the Manulife Series
Fund, Inc. (MSF), a registered management investment company with nine
portfolios voted to approve an Agreement and Plan of Reorganization (the
"Reorganization") effective December 31, 1996 between MSF on behalf of its
portfolios and comparable portfolios of the Trust. The agreement provided for
the tax free transfer of all assets and liabilities of each MSF portfolio to the
corresponding Trust portfolio in exchange solely for shares of beneficial
interest, par value of $0.01 per share of such Trust portfolio and the
distribution of such Trust portfolio shares to the shareholders of such MSF
portfolio in liquidation of such MSF portfolio. Costs of the merger were borne
by Manulife and NASL Financial. The MSF portfolios and the corresponding Trust
Portfolios were as follows:
<TABLE>
<CAPTION>
MSF PORTFOLIOS CORRESPONDING TRUST PORTFOLIOS
----------------- -----------------------------------
<S> <C>
Money-Market Fund Money Market Trust
International Fund International Stock Trust (a newly organized Trust shell portfolio)
Emerging Growth Equity Fund Emerging Growth Trust (a newly organized Trust shell portfolio)
Balanced Assets Fund Balanced Trust (a newly organized Trust shell portfolio)
Common Stock Fund Quantitative Equity Trust (a newly organized Trust shell portfolio)
Pacific Rim Emerging Markets Fund Pacific Rim Emerging Markets Trust (a newly organized Trust shell portfolio)
Real Estate Securities Fund Real Estate Securities Trust (a newly organized Trust shell portfolio)
Capital Growth Bond Fund Capital Growth Bond Trust (a newly organized Trust shell portfolio)
Equity Index Fund Equity Index Trust (a newly organized Trust shell portfolio)
</TABLE>
The total value of all shares of each Trust portfolio issued in the
Reorganization equaled the total value of the net assets of the corresponding
MSF portfolio being acquired by such Trust portfolio. The MSF Money-Market Fund
was merged into Money Market with the resulting activity as follows:
<TABLE>
<CAPTION>
PORTFOLIO SHARES TOTAL NET ASSETS NET ASSET VALUE
- -------------- ---------------- --------------------- ---------------------
<S> <C> <C> <C>
MSF Money-Market Fund
at December 31, 1996........................... 4,364,278 $45,731,589 $10.48
NASL Series Trust
Money Market Trust
at December 31, 1996........................... 31,783,421 $317,834,208 $10.00
Money Market Trust
after reorganization
on December 31, 1996........................... 36,356,580 $363,565,797 $10.00
</TABLE>
176
