<PAGE>
Registration No. 2-94479
811-4161
As filed with the Securities and Exchange Commission on April 17, 1995.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
----------------------
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Pre-effective Amendment No.
Post-effective Amendment No. 16 /X/
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 17 /X/
----------------------
Chubb America Fund, Inc.
(Exact name of Registrant as Specified in Charter)
One Granite Place
Concord, New Hampshire 03301
(Address of Principal Executive Offices)
603-226-5000
(Registrant's Telephone Number)
Ronald R. Angarella, President
One Granite Place
Concord, New Hampshire 03301
(Name and Address of Agent for Service)
Copies To:
THOMAS H. ELWOOD, Esq. JOAN E. BOROS, Esq.
Chubb America Fund, Inc. Katten Muchin & Zavis
One Granite Place 1025 Thomas Jefferson Street, N.W.
Concord, NH 03301 Washington, D.C. 20007
Approximate date of proposed public offering: It is proposed that this filing
will become effective on May 1, 1996, pursuant to Rule 485(b).
The Registrant has registered an indefinite number or amount of its shares of
common stock under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The Registrant filed a Rule 24f-2 Notice on
February 27, 1996.
<PAGE>
CHUBB AMERICA FUND, INC.
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Prospectus of information
required by the Items in Part A of Form N-1A.
Item
Number Heading In Prospectus
- ------
1 Cover Page
2 *(Synopsis)
3 Financial Highlights
4 Investment Objectives and Policies, Capital Stock
5 Management of the Fund
6 Capital Stock, Taxes and Dividends
7 Offering and Redemption of Shares
8 Offering and Redemption of Shares
9 *(Legal Proceedings)
- -------------
* Indicates inapplicable or negative.
<PAGE>
- -------------------------------------------------------------------------------
CHUBB AMERICA FUND, INC.
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(603) 226-5000
- -------------------------------------------------------------------------------
Chubb America Fund, Inc. (the "Fund") is an open-end diversified management
investment company which was incorporated in Maryland on October 19, 1984. The
Fund is composed of nine separate Portfolios which operate as distinct
investment vehicles. The names and investment objectives of the Portfolios are
as follows:
World Growth Stock Portfolio: to achieve long-term capital growth through a
policy of investing primarily in stocks of companies organized in the United
States or in any foreign nation. A portion of the Portfolio may also be
invested in debt obligations of companies and governments of any nation. Any
income realized will be incidental. Such companies will be those considered by
the Sub-Investment Manager to be undervalued or which are well-managed and
have good growth potential.
Money Market Portfolio: to achieve the highest possible current income,
consistent with preservation of capital and maintenance of liquidity, by
investing primarily in short-term money market instruments other than
commercial paper. AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER
INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
Gold Stock Portfolio: to realize long-term capital appreciation, while
retaining the option to take current income into account, by investing
primarily, and sometimes exclusively, in common stocks of gold mining
companies.
Bond Portfolio: to provide a stable level of income, consistent with
limiting risk to principal, by investing primarily in high quality corporate
debt securities and U.S. Government debt obligations.
Domestic Growth Stock Portfolio: to achieve reasonable income and growth of
capital by investing primarily in a diversified portfolio of equity securities
issued by companies organized in the U.S. and considered by the Sub-Investment
Manager to be undervalued in light of the company's earning power and growth
potential.
Growth and Income Portfolio: to seek long-term growth of capital by
investing primarily in a wide range of equity issues that may offer capital
appreciation and, secondarily, to seek a reasonable level of current income.
Capital Growth Portfolio: to seek capital growth. Realization of income is
not a significant investment consideration and any income realized will be
incidental.
Balanced Portfolio: to seek reasonable current income and long-term capital
growth, consistent with conservation of capital, by investing primarily in
common stocks and fixed income securities.
Emerging Growth Portfolio: to seek long-term growth of capital by investing
primarily in common stocks of small and medium-sized companies. THE PORTFOLIO
IS INTENDED FOR INVESTORS WHO UNDERSTAND AND ARE WILLING TO ACCEPT RISKS
ENTAILED IN SEEKING LONG-TERM GROWTH OF CAPITAL.
The World Growth Stock Portfolio, the Gold Stock Portfolio, the Growth and
Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio permit investments in any nation, and investments in
these Portfolios involve special considerations and risks.
AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR
GUARANTEED BY THE UNITED STATES GOVERNMENT. INVESTMENTS IN THE PORTFOLIOS ARE
NOT BANK DEPOSITS AND ARE NOT INSURED BY, GUARANTEED BY, OBLIGATIONS OF, OR
OTHERWISE SUPPORTED BY THE FDIC OR ANY BANK. AN INVESTMENT IN ANY OF THE
PORTFOLIOS IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE INVESTMENT TO
FLUCTUATE, AND WHEN THE INVESTMENT IS REDEEMED, THE VALUE MAY BE HIGHER OR
LOWER THAN THE AMOUNT ORIGINALLY INVESTED BY THE INVESTOR.
This Prospectus sets forth concisely the information about the Fund and its
Portfolios that a prospective investor should know before investing. This
Prospectus should be read and retained for future reference.
A Statement of Additional Information for the Fund, dated May 1, 1996, has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. This Statement of Additional Information is available
upon request, and without charge, from the Fund at the address or telephone
number above. Inquiries about the Fund should be directed to the Fund at the
same address or telephone number.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
THE DATE OF THIS PROSPECTUS IS MAY 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL HIGHLIGHTS....................................................... 2
PERFORMANCE AND YIELD INFORMATION.......................................... 16
PORTFOLIOS................................................................. 16
INVESTMENT OBJECTIVES AND POLICIES......................................... 16
World Growth Stock Portfolio............................................. 17
Investment Objectives.................................................. 17
Investment Policies.................................................... 17
Risk Factors........................................................... 18
Money Market Portfolio................................................... 18
Investment Objectives.................................................. 18
Investment Policies.................................................... 18
Risk Factors........................................................... 18
Gold Stock Portfolio..................................................... 18
Investment Objectives.................................................. 18
Investment Policies.................................................... 19
Risk Factors........................................................... 19
Bond Portfolio........................................................... 19
Investment Objectives.................................................. 19
Investment Policies.................................................... 19
Risk Factors........................................................... 20
Domestic Growth Stock Portfolio.......................................... 20
Investment Objectives.................................................. 20
Investment Policies.................................................... 20
Risk Factors........................................................... 21
Growth and Income Portfolio.............................................. 21
Investment Objectives.................................................. 21
Investment Policies.................................................... 21
Risk Factors........................................................... 22
Capital Growth Portfolio................................................. 22
Investment Objectives.................................................. 22
Investment Policies.................................................... 22
Risk Factors........................................................... 23
Balanced Portfolio....................................................... 23
Investment Objectives.................................................. 23
Investment Policies.................................................... 23
Risk Factors........................................................... 23
Emerging Growth Portfolio................................................ 23
Investment Objective................................................... 23
Investment Policies.................................................... 23
Risk Factors........................................................... 24
Additional Risk Factors.................................................. 25
Foreign Securities....................................................... 26
American Depository Receipts............................................. 27
Forward Foreign Currency Exchange Contracts.............................. 27
Repurchase Agreements.................................................... 27
Zero Coupon Bonds........................................................ 28
Securities and Index Options............................................. 28
Purchasing Put and Call Options.......................................... 28
Futures Contracts........................................................ 28
Lending of Securities.................................................... 29
When Issued Securities................................................... 29
Corporate Asset-Backed Securities........................................ 29
Loan Participations and Other Direct Indebtedness........................ 29
INVESTMENT RESTRICTIONS.................................................... 30
Portfolio Turnover....................................................... 30
MANAGEMENT OF THE FUND..................................................... 30
CAPITAL STOCK.............................................................. 31
TAXES AND DIVIDENDS........................................................ 32
OFFERING AND REDEMPTION OF SHARES.......................................... 32
OTHER INFORMATION.......................................................... 33
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN THE STATEMENT OF ADDITIONAL INFORMATION, AND IN THE
ATTACHED PROSPECTUS FOR THE POLICY.
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables include selected data for a share of capital stock
outstanding for each fund throughout the periods indicated. The related
financial statements and report of Ernst & Young LLP, independent auditors, are
incorporated by reference into the Statement of Additional Information and are
available upon request and without charge by calling 1-800-452-4822.
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
World Growth Stock Portfolio
-------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1995 1994 1993 1992
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of year..................... $ 19.00 $ 20.89 $ 16.73 $ 16.45
Income From Investment
Operations
Net investment income.. 0.45 0.25 0.24 0.35
Net realized and
unrealized gains (losses)
on securities and foreign
currencies................ 2.65 (0.89) 5.40 0.65
----------- ----------- ----------- -----------
Total from investment
operations............... 3.10 (0.64) 5.64 1.00
Less Distributions to
Shareholders
Dividends from net
investment income....... (0.43) (0.25) (0.24) (0.35)
Dividends in excess of net
investment income.......
Distributions from capital
gains................... (0.47) (0.81) (1.24) (0.37)
Distributions in excess
of capital gains........ (0.19)
Returns of capital........
----------- ----------- ----------- -----------
Total distributions....... (0.90) (1.25) (1.48) (0.72)
Net asset value, end
of year..................... $ 21.20 $ 19.00 $ 20.89 $ 16.73
=========== =========== =========== ===========
Total Return (A).............. 16.35% (3.05%) 33.73% 6.10%
Ratios to Average Net Assets:
Expenses.................. 0.96% 1.00% 1.04% 1.17%
Net investment income..... 2.31% 1.56% 1.64% 2.19%
Portfolio Turnover Rate....... 18.09% 18.47% 34.90% 32.27%
Net Assets, At End of Year.... $73,692,357 $52,903,768 $42,031,141 $25,416,357
</TABLE>
(A) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more
or less than the original cost.
2
<PAGE>
<TABLE>
<CAPTION>
WORLD GROWTH STOCK PORTFOLIO
----------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1991 1990 1989 1988 1987 1986
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 13.70 $ 16.07 $ 12.77 $ 11.48 $ 13.75 $ 10.81
0.34 0.36 0.32 0.18 0.06 0.31
2.75 (2.00) 3.34 1.32 (0.91) 2.69
---------- ----------- ----------- ---------- ---------- ----------
3.09 (1.64) 3.66 1.50 (0.85) 3.00
(0.34) (0.37) (0.36) (0.18) (0.34) (0.06)
(0.36) (0.03) (1.08)
---------- ----------- ----------- ---------- ---------- ----------
(0.34) (0.73) (0.36) (0.21) (1.42) (0.06)
16.45 $ 13.70 $ 16.07 $ 12.77 $ 11.48 $ 13.75
========== =========== =========== ========== ========== ==========
22.53% (10.38%) 28.62% 13.10% (7.74%) (27.77%)
1.14% 1.22% 1.42% 1.60% 1.81% 1.62%
2.40% 2.65% 2.46% 1.80% 1.14% 3.02%
50.06% 25.79% 5.73% 14.75% 8.88% 67.53%
$22,659,930 $16,052,089 $14,467,050 $8,781,827 $5,253,616 $2,105,193
</TABLE>
3
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year (A):
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
---------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year................... $ 10.25 $ 10.26 $ 10.22 $ 10.22 $ 10.21
INCOME FROM INVESTMENT OP-
ERATIONS
Net investment income.... 0.50 0.35 0.20 0.29 0.52
Net realized and
unrealized gains (loss-
es) on
securities.............. 0.02 (0.01) 0.04 0.01
---------- ---------- ---------- ---------- ----------
Total from investment op-
erations................ 0.52 0.34 0.24 0.29 0.53
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net in-
vestment income......... (0.50) (0.35) (0.20) (0.29) (0.52)
Dividends in excess of
net investment income...
Distributions from capi-
tal gains...............
Distributions in excess
of capital gains........
Returns of capital.......
---------- ---------- ---------- ---------- ----------
Total distributions...... (0.50) (0.35) (0.20) (0.29) (0.52)
Net asset value, end of
year...................... $ 10.27 $ 10.25 $ 10.26 $ 10.22 $ 10.22
========== ========== ========== ========== ==========
Total Return (B)........... 5.06% 3.28% 2.32% 2.83% 5.18%
Ratios to Average Net As-
sets:
Expenses................. 0.63% 0.65% 0.74% 0.85% 0.85%
Net investment income.... 4.89% 3.31% 2.32% 2.81% 4.95%
Portfolio Turnover Rate
(C)....................... N/A N/A N/A N/A N/A
Net Assets, At End of Year. $8,312,676 $7,680,485 $5,061,181 $3,956,152 $3,672,941
</TABLE>
(A) The per share amounts which are shown have been computed based on the
average number of shares outstanding during each year.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect account fees and charges. Investment returns and principal
values will fluctuate and shares, when redeemed, may be worth more or less
than the original cost.
(C) There were no purchase and/or sales of securities other than short term
obligations during the year. Therefore, the portfolio turnover rate has not
been calculated.
4
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
$ 10.18 $ 10.16 $ 10.09 $ 10.56 $ 10.33
0.73 0.78 0.63 0.49 0.56
---------- ---------- ---------- ---------- ----------
0.73 0.78 0.63 0.49 0.56
(0.70) (0.76) (0.56) (0.96) (0.33)
---------- ---------- ---------- ---------- ----------
(0.70) (0.76) (0.56) (0.96) (0.33)
$ 10.21 $ 10.18 $ 10.16 $ 10.09 $ 10.56
========== ========== ========== ========== ==========
7.15% 7.63% 6.33% 4.85% 5.36%
1.09% 1.37% 1.79% 1.81% 1.45%
6.90% 7.35% 6.16% 4.75% 5.23%
N/A N/A N/A N/A N/A
$2,910,677 $2,496,140 $2,228,190 $1,539,184 $1,249,363
</TABLE>
5
<PAGE>
CHUBB AMERICA FUND, INC.
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
GOLD STOCK PORTFOLIO
-----------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of year........... $ 16.25 $ 19.00 $ 11.57 $ 11.99
INCOME FROM INVESTMENT
OPERATIONS
Net investment income. 0.05 0.03 0.02 0.03
Net realized and
unrealized gains
(losses) on
securities and foreign
currencies........... 0.40 (2.65) 7.43 (0.42)
---------- ---------- ---------- ----------
Total from investment
operations........... 0.45 (2.62) 7.45 (0.39)
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income.... (0.05) (0.03) (0.02) (0.03)
Dividends in excess of
net investment
income............... (0.04)
Distributions from
capital gains........
Distributions in
excess of capital
gains................ (0.10)
Returns of capital....
---------- ---------- ---------- ----------
Total distributions... (0.09) (0.13) (0.02) (0.03)
Net asset value, end of
year................... $ 16.61 $ 16.25 $ 19.00 $ 11.57
========== ========== ========== ==========
Total Return (B)........ 2.76% (13.77%) 63.90% (3.29%)
Ratios to Average Net
Assets:
Expenses.............. 1.01% 0.99% 1.01% 1.13%
Net investment income. 0.24% 0.18% 0.14% 0.24%
Portfolio Turnover Rate. 23.98% 11.12% 7.32% 7.78%
Net Assets, At End of
Year................... $6,867,645 $7,351,625 $7,863,581 $4,338,297
</TABLE>
- -------
(A) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
6
<PAGE>
<TABLE>
<CAPTION>
GOLD STOCK PORTFOLIO
---------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1991 1990 1989 1988 1987 1986
------------ ------------ ------------ ------------ ------------ ------------
<C> <S> <C> <C> <C> <C>
$ 12 76 $ 16.95 $ 14.37 $ 18.24 $ 13.59 $ 10.00
0.07 0.07 0.06 (0.03) (0.03) (0.07)
(0.77) (4.19) 2.70 (3.84) 4.69 3.74
-------- ---------- ---------- ---------- ---------- ----------
(0.70) (4.12) 2.76 (3.87) 4.66 3.67
(0.07) (0.07) (0.05) (0.08)
(0.12) (0.01)
(0.01)
-------- ---------- ---------- ---------- ---------- ----------
(0.07) (0.07) (0.18) (0.01) (0.08)
$ 11.99 $ 12.76 $ 16.95 $ 14.37 $ 18.24 $ 13.59
======== ========== ========== ========== ========== ==========
(5.48%) (24.28%) 19.24% (21.24%) 34.29% 37.00%
1.16% 1.36% 1.39% 1.62% 1.92% 1.48%
0.57% 0.59% 0.39% (0.38%) (0.24%) (0.63%)
14.23% 17.61% 3.05% 9.92% 7.02% 7.43%
$4,646,951 $5,390,279 $5,969,256 $4,258,297 $3,821,605 $1,458,593
</TABLE>
7
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK PORTFOLIO
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year................... $ 15.94 $ 16.14 $ 15.16 $ 12.96 $ 10.15
INCOME FROM INVESTMENT OP-
ERATIONS
Net investment income.... 0.15 0.09 0.12 0.14 0.24
Net realized and
unrealized gains
(losses) on securities.. 4.48 1.12 2.29 3.27 3.13
------------ ------------ ------------ ------------ ------------
Total from investment op-
erations................ 4.63 1.21 2.41 3.41 3.37
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income....... (0.15) (0.09) (0.12) (0.14) (0.24)
Dividends in excess of
net investment income...
Distributions from cap-
tal gains............... (2.55) (1.32) (1.31) (1.07) (0.32)
Distributions in excess
of capital gains........
Returns of capital.......
------------ ------------ ------------ ------------ ------------
Total distributions...... (2.70) (1.41) (1.43) (1.21) (0.56)
Net asset value, end of
year...................... $ 17.87 $ 15.94 $ 16.14 $ 15.16 $ 12.96
============ ============ ============ ============ ============
Total Return (B)........... 29.72% 7.66% 15.89% 26.50% 33.18%
Ratios to Average Net As-
sets:
Expenses................. 0.87% 0.89% 0.97% 1.07% 1.13%
Net investment income.... 0.95% 0.63% 0.76% 1.07% 2.02%
Portfolio Turnover Rate.... 64.17% 46.65% 49.47% 41.36% 40.93%
Net Assets, At End of Year. $48,517,886 $31,458,666 $25,072,289 $19,985,838 $15,583,806
</TABLE>
- -------
(A) Per share data calculated from initial offering date, April 18, 1986 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized
8
<PAGE>
<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK PORTFOLIO
------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR APRIL 18,
ENDED ENDED ENDED ENDED 1986 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986(A)
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C>
$ 13.25 $ 11.71 $ 9.54 $ 10.57 $ 10.00
0.26 0.18 0.11 0.04 0.10
(2.71) 2.06 2.40 (0.11) 0.47
----------- ----------- ---------- ---------- ----------
(2.45) 2.24 2.51 (0.07) 0.57
(0.26) (0.21) (0.10) (0.12)
(0.39) (0.49) (0.24) (0.84)
----------- ----------- ---------- ---------- ----------
(0.65) (0.70) (0.34) (0.96) 0.00
$ 10.15 $ 13.25 $ 11.71 $ 9.54 $ 10.57
=========== =========== ========== ========== ==========
(18.55%) 19.36% 26.31% (1.61%) 5.65%(C)
1.25% 1.45% 1.70% 1.75% 1.64%
2.38% 1.59% 1.26% 0.71% 1.32%
15.17% 10.32% 22.69% 13.53% 31.53%
$10,517,783 $11,320,279 $6,893,776 $3,448,383 $1,139,554
</TABLE>
9
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
BOND PORTFOLIO
-------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year.................. $ 9.70 $ 10.28 $ 10.21 $ 10.61 $ 9.83
INCOME FROM INVESTMENT OP-
ERATIONS
Net investment income... 0.74 0.35 0.74 0.66 0.72
Net realized and
unrealized gains
(losses) on securities. 0.89 (0.58) 0.13 0.13 0.79
---------- ----------- ---------- ---------- ----------
Total from investment
operations............. 1.63 (0.23) 0.87 0.79 1.51
LESS DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income...... (0.74) (0.35) (0.74) (0.66) (0.73)
Dividends in excess of
net investment income..
Distributions from capi-
tal gains.............. (0.06) (0.53)
Distributions in excess
of capital gains.......
Returns of capital......
---------- ----------- ---------- ---------- ----------
Total distributions..... (0.74) (0.35) (0.80) (1.19) (0.73)
Net asset value, end of
year..................... $ 10.59 $ 9.70 $ 10.28 $ 10.21 $ 10.61
========== =========== ========== ========== ==========
Total Return (B).......... 16.76% (2.28%) 8.68% 7.46% 15.34%
Ratios to Average Net As-
sets:
Expenses................ 0.63% 0.68% 0.74% 0.88% 1.03%
Net investment income... 6.43% 6.07% 7.59% 6.83% 7.12%
Portfolio Turnover Rate... 127.74% 140.30% 112.66% 81.23% 23.73%
Net Assets, At End of
Year..................... $9,230,090 $13,066,445 $5,461,879 $4,042,506 $3,516,314
</TABLE>
(A) Per share data calculated from initial offering date, April 18, 1986, for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annualized basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized
10
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO
---------------------------------------------------------------
FOR THE
PERIOD
FROM
APRIL 18,
YEAR YEAR YEAR YEAR 1986 TO
ENDED ENDED ENDED ENDED DECEMBER
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 31,
1990 1989 1988 1987 1986(A)
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C>
$ 9.76 $ 9.29 $ 9.38 $ 10.47 $ 10.02
0.75 0.73 0.62 0.55 0.37
0.06 0.47 (0.09) (0.65) 0.08
---------- ---------- ---------- ---------- ----------
0.81 1.20 0.53 (0.10) 0.45
(0.74) (0.73) (0.62) (0.94)
(0.05)
---------- ---------- ---------- ---------- ----------
(0.74) (0.73) (0.62) (0.99)
$ 9.83 $ 9.76 $ 9.29 $ 9.38 $ 10.47
========== ========== ========== ========== ==========
8.44% 12.92% 5.62% (1.04%) 4.47(c)%
1.21% 1.60% 1.80% 1.96% 1.18%
7.97% 7.62% 6.85% 6.43% 5.08%
29.25% 7.64% 13.80% 53.17% 97.37%
$2,905,564 $2,289,788 $1,730,229 $1,302,390 $1,069,355
</TABLE>
11
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
--------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR MAY 1,
ENDED ENDED ENDED 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER
1995 1994 1993 31, 1992(A)
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year. $ 11.22 $ 12.35 $ 11.10 $ 10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.15 0.13 0.12 0.02
Net realized and unrealized gains
(losses) on securities.......... 3.62 (0.65) 1.53 0.83
----------- ---------- ---------- ----------
Total from investment operations. 3.77 (0.52) 1.65 0.85
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................ (0.15) (0.13) (0.12) (0.02)
Dividends in excess of net in-
vestment income.................
Distributions from capital gains. (0.29) (0.48) (0.28)
Distributions in excess of capi-
tal gains....................... (0.14)
Returns of capital...............
----------- ---------- ---------- ----------
Total distributions.............. (0.58) (0.61) (0.40) (0.02)
Net asset value, end of year....... $ 14.41 $ 11.22 $ 12.35 $ 11.10
=========== ========== ========== ==========
Total Return(B).................... 33.58% (4.24%) 14.94% 12.48%
Ratios to Average Net Assets:
Expenses......................... 0.92% 1.10% 1.35% 2.09%(C)
Net investment income............ 1.50% 1.52% 1.38% 0.36%(C)
Portfolio Turnover Rate............ 32.30% 38.17% 77.68% 54.11%
Net Assets, At End of Year......... $13,126,023 $5,610,472 $2,831,442 1,489,179
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total Return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
12
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
CAPITAL GROWTH PORTFOLIO
--------------------------------------------------------------
FOR THE
YEAR YEAR YEAR PERIOD FROM
ENDED ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992 (A)
------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
year............................ $ 13.38 $ 14.26 $ 12.42 $ 9.95
INCOME FROM INVESTMENT OPERATIONS
Net investment income.......... 0.03 0.03 (0.01)
Net realized and unrealized
gains (losses) on securities
and foreign currencies........ 5.56 (0.49) 3.03 2.69
------------- ----------- ----------- ----------
Total from investment opera-
tions......................... 5.59 (0.46) 3.03 2.68
LESS DISTRIBUTIONS TO SHAREHOLD-
ERS
Dividends from net investment
income........................ (0.03) (0.03)
Dividends in excess of net in-
vestment income...............
Distributions from capital
gains......................... (1.56) (0.33) (1.19) (0.21)
Distributions in excess of cap-
ital gains.................... (0.06)
Returns of capital.............
------------- ----------- ----------- ----------
Total distributions............ (1.59) (0.42) (1.19) (0.21)
Net asset value, end of year..... $ 17.38 $ 13.38 $ 14.26 $ 12.42
============= =========== =========== ==========
Total Return (B)................. 41.74% (3.26%) 24.73% 40.40%
Ratios to Average Net Assets:
Expenses....................... 1.15% 1.22% 1.33% 1.96% (C)
Net investment income.......... 0.21% 0.25% (0.11%) (0.37%)(C)
Portfolio Turnover Rate.......... 170.32% 202.04% 162.79% 104.76%
Net Assets, At End of Year....... $ 49,853,029 $27,564,086 $15,373,489 $5,343,734
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992 for
sale to Chubb Separate Account A.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more
or less than the original cost. Total Return for periods of less than one
year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
13
<PAGE>
FINANCIAL HIGHLIGHTS--(CONTINUED)
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
--------------------------------------------------------------
FOR THE
YEAR YEAR YEAR PERIOD FROM
ENDED ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992 (A)
------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year. $ 10.62 $ 11.22 $ 10.77 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.37 0.32 0.25 0.16
Net realized and unrealized gains
(losses) on securities.......... 1.99 (0.47) 0.74 0.67
----------- ----------- ----------- ----------
Total from investment operations. 2.36 (0.15) 0.99 0.83
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................ (0.37) (0.32) (0.25) (0.16)
Dividends in excess of net in-
vestment income.................
Distributions from capital gains. (0.70) (0.13) (0.25)
Distributions in excess of capi-
tal gains....................... (0.04)
Returns of capital...............
----------- ----------- ----------- ----------
Total distributions.............. (1.07) (0.45) (0.54) (0.16)
Net asset value, end of year....... $ 11.91 $ 10.62 $ 11.22 $ 10.77
=========== =========== =========== ==========
Total Return (B)................... 22.35% (1.33%) 9.27% 12.33%
Ratios to Average Net Assets:
Expenses......................... 0.99% 1.01% 1.07% 1.43%(C)
Net investment income............ 3.20% 3.34% 2.79% 2.80%(C)
Portfolio Turnover Rate............ 164.70% 103.68% 65.49% 77.33%
Net Assets, At End of Year......... $14,532,268 $14,764,853 $11,703,898 $6,944,437
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more
or less than the original cost. Total Return for periods of less than one
year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.
14
<PAGE>
<TABLE>
<CAPTION>
EMERGING
GROWTH
PORTFOLIO
--------------
FOR THE
PERIOD FROM
MAY 1, 1995 TO
DECEMBER 31,
1995 (A)
--------------
<S> <C>
Net asset value, beginning of period. $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ (0.04)
Net realized and unrealized gains
on securities................... 3.33
--------------
Total from investment operations. 3.29
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................
Dividends in excess of net in-
vestment income.................
Distributions from capital gains.
Distributions in excess of capi-
tal gains.......................
Returns of capital...............
--------------
Total distributions.............. 0.00
Net asset value, end of period..... $ 13.29
==============
Total Return (B)................... 32.91%
Ratios to Average Net Assets:
Expenses......................... 1.63%(C)
Net investment income............ (0.84%)(C)
Portfolio Turnover Rate............ 30.31%
Net Assets, At End of period....... $11,439,524
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1995, for
sale to Chubb Separate Account A.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth more
or less than the original cost. Total return for periods of less than one
year have not been annualized.
(C) Per share data and ratios calculated on an annualized basis.
15
<PAGE>
PERFORMANCE AND YIELD INFORMATION
From time to time the Fund may advertise the yield and/or the average annual
total return of some or all of its nine investment portfolios. These figures
are based on historical earnings and are not intended to indicate future
performance. Shares of the portfolios are presently offered only to
corresponding divisions of separate accounts established by Chubb Life
Insurance Company of America ("Chubb Life"), or its affiliated insurance
companies, to fund flexible premium life insurance policies. None of these
performance figures reflect fees and charges imposed under such flexible
premium life insurance policies, which fees and charges will reduce the yield
and total return to policyowners; therefore, these performance figures may be
of limited use for comparative purposes.
The Money Market Portfolio's yield quotations represent the Portfolio's
investment income, less expenses, expressed as a percentage of assets on an
annualized basis for a seven-day period. The yield is expressed as both a
simple annualized yield and a compounded effective yield. The yield for the
non-money market portfolios is calculated by dividing the portfolio's net
investment income per share during a recent 30-day period by the maximum
offering price per share of that Portfolio (which is the net asset value of
that Portfolio) on the last day of the period.
The average annual total return quotations of the non-money market portfolios
are determined by computing the average annual percentage change in value of a
$1,000 investment, made at the maximum public offering price (which is net
asset value) for certain specified periods. This computation assumes
reinvestment of all dividends and distributions.
PORTFOLIOS
The Fund currently consists of nine investment portfolios, namely the World
Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock Portfolio,
the Bond Portfolio, the Domestic Growth Stock Portfolio, the Growth and Income
Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio (the "Portfolios").
The separate accounts established by Chubb Life or its affiliated insurance
companies are used for the purpose of funding Flexible Premium Variable Life
Insurance Policies (the "Policies") issued by Chubb Life, its affiliated
insurance companies and their successors or assigns. The owner of a Policy may
allocate among the Portfolios the amounts available for investment under the
Policy. Chubb Life is a wholly-owned subsidiary of The Chubb Corporation, a New
Jersey corporation.
In the future, the Fund may sell its shares to other separate accounts,
funding variable annuities and variable life insurance policies, established by
Chubb Life, its successors or assigns, or by other insurance companies with
which Chubb Life is affiliated, and may add or delete Portfolios.
Shares of each Portfolio are both offered and redeemed at their net asset
value without the addition of any sales load or redemption charge. See
"OFFERING AND REDEMPTION OF SHARES" in the Prospectus.
The investment manager to the Fund is Chubb Investment Advisory Corporation
("Chubb Investment Advisory"), a wholly-owned subsidiary of Chubb Life. Chubb
Investment Advisory and the Fund have contracted with six unaffiliated
companies, Templeton Global Advisors, Inc. formerly known as Templeton,
Galbraith & Hansberger Ltd. ("Templeton"), Van Eck Associates Corporation ("Van
Eck Associates"), Pioneering Management Corporation ("Pioneer"), Janus Capital
Corporation ("Janus"), Phoenix Investment Counsel, Inc. ("Phoenix"), and
Massachusetts Financial Services Company ("MFS") to act as sub-investment
advisers or managers to the World Growth Stock, Gold Stock, Domestic Growth
Stock, Capital Growth, Balanced and Emerging Growth Portfolios, respectively,
and one affiliated company, Chubb Asset Managers, Inc. ("Chubb Asset") to act as
sub-investment adviser or manager to the Money Market, Bond, and Growth and
Income Portfolios. (Collectively the "Sub-Investment Managers"). The fees of the
Sub-Investment Managers are paid directly by Chubb Investment Advisory.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Portfolio are described below.
The investment objectives of a Portfolio, and certain investment restrictions
discussed in the Statement of Additional Information, may be changed only with
the approval of the stockholders of each Portfolio that are affected by such
change. The investment policies of a Portfolio, used to achieve the Portfolio's
objectives, may be changed by the Fund's Board of Directors without the
approval of the Portfolio's stockholders.
16
<PAGE>
Because investment involves both opportunities for gain and risks of loss, no
assurance can be given that the Portfolios will achieve their objectives. The
difference in objectives and policies among the various Portfolios can be
expected to affect each Portfolio's investment return as well as the degree of
market and financial risks to which each Portfolio is subject. Prospective
purchasers of Policies should carefully review the objectives and policies of
the Portfolios and consider their ability to assume the risks involved before
purchasing Policies and allocating amounts thereunder to particular Portfolios.
World Growth Stock Portfolio
Investment Objectives. The investment objective of the World Growth Stock
Portfolio is long-term capital growth, which it seeks to achieve through a
flexible policy of investing primarily in stocks of companies organized in the
United States or in any foreign nation. A portion of the Portfolio may also be
invested in debt obligations of companies and governments of any nation. Any
income realized will be incidental.
The Portfolio invests primarily in securities of companies of any size that
are (i) believed to be well-managed and possessing good growth potential or
(ii) are considered by the Sub-Investment Manager to be undervalued. See
"Foreign Securities," in the Prospectus.
Investment Policies. The Portfolio believes that in a world where investment
opportunities change rapidly, not only from company to company and from
industry to industry but also from one national economy to another, its
objective is more likely to be achieved through an investment policy that is
flexible and mobile. Accordingly, the Portfolio seeks investment opportunities
in all types of securities issued by companies or governments of any nation.
Investments are usually made in common stocks, but may also include preferred
stocks and certain debt securities, rated or unrated, such as convertible bonds
and bonds selling at a discount; all of these debt securities will have credit
ratings in the four highest rating categories of Standard & Poor's Rating
Service Corporation ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's") or other nationally recognized statistical rating organizations
("NRSROs") or, if not rated, will be of comparable quality to obligations so
rated in the judgment of the Sub-Investment Manager. Securities rated BBB or
Baa by Standard & Poor's or Moody's are considered investment-grade obligations
and are regarded as having adequate capacity to pay interest and repay
principal, although adverse economic conditions or changing circumstances are
more likely to lead to a weakening of such capacity than for higher grade
bonds. Such securities may be considered to have speculative characteristics.
See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional
Information for a more complete description of investment ratings. In the event
that the ratings of securities held by the Portfolio fall below investment
grade, the Portfolio will not be obligated to dispose of such securities and
may continue to hold such securities if, in the opinion of the Sub-Investment
Manager, such investment is considered appropriate under the circumstances.
Notwithstanding the investment objective of long-term capital growth, the
Portfolio may on occasion, for defensive purposes and without limitation as to
amount, invest in debt obligations of the U.S. Government, its agencies or
instrumentalities for the purpose of earning income; hold cash and time
deposits with banks in the U.S. or Canadian currencies or currencies of other
nations; acquire repurchase agreements with respect to U.S. or Canadian
government obligations; or invest in high-grade commercial paper. For a more
complete description of obligations of the U.S. Government, its agencies or
instrumentalities, see the description in the "Investment Policies" section of
the description of the Bond Portfolio. The Portfolio may also invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the
Statement of Additional Information for more information concerning repurchase
agreements, warrants, and commercial paper. See also "Repurchase Agreements" in
the Prospectus.
The Portfolio may enter into agreements with banks or broker-dealers to
purchase some securities on a "forward commitment," "when issued" or on a
"delayed delivery" basis. Such agreements involve a commitment to purchase
securities at a price, which is fixed at the time of commitment, for delivery
at a future date, which may be up to three months in the future. The Portfolio
will not pay for the securities or begin earning interest on them until the
securities are paid for and received. The securities so purchased are subject
to market fluctuations so that at the time of delivery, the value of such
securities may be more or less than the purchase price.
The Portfolio will generally be composed of investments from among many
different industries. Although management may invest up to 25% of the
Portfolio's assets in a single industry, it has no present intention of doing
so. As a general matter, the Portfolio will be invested in a minimum of five
different foreign countries at all times. However,
17
<PAGE>
this minimum is reduced to four when foreign country investments comprise less
than 80% of the Portfolio's net asset value; to three when less than 60% of
such value; to two when less than 40%; and to one when less than 20%.
Risk Factors. All or a significant portion of this Portfolio may be invested
in foreign securities, including American Depository Receipts ("ADRs"), and
investors should understand the special considerations and risks related to
such an investment emphasis. See "Foreign Securities" and "American Depository
Receipts" in the Prospectus.
Money Market Portfolio
Investment Objectives. The primary objective of the Money Market Portfolio is
to seek as high a level of current income as is consistent with preservation of
capital and liquidity.
Investment Policies. The Portfolio invests exclusively in (1) obligations
whose timely payment of principal and interest is backed by the full faith and
credit of the U.S. Government or that of its agencies or instrumentalities
("U.S. Government Obligations") or which are secured or collateralized by such
obligations, (2) short-term obligations of U.S. banks which are members of the
Federal Deposit Insurance Corporation ("FDIC"), (3) U.S. dollar obligations of
foreign branches of U.S. banks, or (4) instruments fully secured or
collateralized by such bank obligations. Some of the obligations which the
Portfolio buys are insured by the FDIC up to $100,000. The Portfolio may also
invest in commercial paper, and may buy corporate or other notes if such notes
are guaranteed as to the payment of principal and interest by U.S. banks'
letters of credit or collateralized by U.S. Government Obligations. For a more
complete description of U.S. Government Obligations see the description in the
"Investment Policies" section of the description of the Bond Portfolio.
The Portfolio will invest only in securities which present minimal credit
risk and (1) which have been rated or whose issuer has received a rating at the
time of acquisition in one of the two highest rating categories for short-term
debt obligations by any two NRSROs, or by one NRSRO if it is the only NRSRO to
have issued a rating, ("Requisite NRSROs") or (2) which are unrated securities
of comparable quality. The Portfolio will invest no more than 5% of the value
of its total assets, at time of acquisition, in the securities of any one
issuer, other than U.S. Government Obligations, except that the Portfolio may
invest more than 5% of its total assets in securities of a single issuer rated
in the highest rating category by the Requisite NRSROs for up to three business
days after purchase. The Portfolio will also invest no more than 5% of its
total assets, at time of acquisition, in securities rated in the second highest
rating category by the Requisite NRSROs, with investment in any one issuer
limited to no more than the greater of 1% of the Portfolio's total assets or
$1,000,000.
The Sub-Investment Manager, under the supervision of Chubb Investment
Advisory, will use its best judgment in selecting investments, taking into
consideration rates, terms, and marketability of obligations as well as the
capitalization, earnings, liquidity, and other indicators of the financial
condition of their issuers. Because the market value of debt obligations
fluctuates as an inverse function of changing interest rates, the Portfolio
seeks to minimize the effect of such fluctuations by investing in instruments
with a remaining maturity of 397 calendar days or less at the time of
investment, except for U.S. government obligations which may have a remaining
maturity of 762 calendar days or less. The Portfolio will maintain a dollar-
weighted average portfolio maturity of 90 days or less.
The Portfolio may enter into repurchase agreements whereby it purchases
securities, subject to agreement by the other party to repurchase the
obligations at a specified price and date. Repurchase agreements may involve
certain additional risks. See "Repurchase Agreements" in the Prospectus and
"RISK CONSIDERATIONS" in the Statement of Additional Information for a
discussion of these risks. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the
Statement of Additional Information for a more complete description of
repurchase agreements.
Risk Factors. The principal risk factors associated with investment in the
Money Market Portfolio are the risk of fluctuations in short-term interest
rates and the risk of default among one or more issuers of securities which
comprise the Portfolio's assets. Compared with the other available Portfolios,
the Money Market Portfolio could be considered the least risky of all the
Fund's Portfolios. See "RISK CONSIDERATIONS" in the Statement of Additional
Information for a description of the risks associated with investment in U.S.
dollar obligations of foreign branches of U.S. banks.
Gold Stock Portfolio
Investment Objectives. The primary investment objective of the Gold Stock
Portfolio is long-term capital appreciation while retaining, however, freedom
of action to take current income into consideration in selecting its
investments.
18
<PAGE>
Investment Policies. The present policy is to concentrate investments in
common stocks of gold mining companies. Up to 100% of the value of the
Portfolio's assets may be invested in this industry. The Fund does not
currently plan to concentrate investments of the Gold Stock Portfolio in any
industry other than the gold mining industry. Under unusual economic, political
or financial conditions, it may temporarily place a substantial portion (no
more than 75%) of its investments in debt or equity securities issued by
foreign companies, debt obligations of one or more foreign governments and/or
U.S. Government Obligations. All such debt securities in which the Portfolio
invests will have credit ratings in the four highest rating categories of
Standard & Poor's or Moody's or other NRSROs or, if not rated, will be of
comparable quality to obligations so rated in the judgment of the Sub-
Investment Manager. Securities rated BBB or Baa by Standard & Poor's or Moody's
are considered investment-grade obligations and are regarded as having adequate
capacity to pay interest and repay principal, although adverse economic
conditions or changing circumstances are more likely to lead to a weakening of
such capacity than for higher grade bonds. Such securities may be considered to
have speculative characteristics. See "DESCRIPTION OF CERTAIN INVESTMENTS" in
the Statement of Additional Information for a more complete description of
investment ratings. In the event that the ratings of securities held by the
Portfolio fall below investment grade, the Portfolio will not be obligated to
dispose of such securities and may continue to hold such securities if, in the
opinion of the Sub-Investment Manager, such investment is considered
appropriate under the circumstances.
The Gold Stock Portfolio may invest in securities of U.S. companies and also
in the following types of securities: securities of companies, wherever
organized, whose properties, products or services are international in scope or
substantially in countries outside of the U.S.; securities of foreign
governments; and U.S. Government Obligations. The Portfolio may also invest in
ADRs. See "American Depository Receipts" in the Prospectus and "DESCRIPTION OF
CERTAIN INVESTMENTS" in the Statement of Additional Information for a
description of ADRs.
The Portfolio may also enter into repurchase agreements and invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "Repurchase Agreements" in the Prospectus and
"DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional Information
for a description of repurchase agreements and warrants.
Risk Factors. All or a significant portion of this Portfolio may be invested
in foreign securities, including ADRs, and investors should understand the
special considerations and risks related to such an investment emphasis. See
"Foreign Securities" below. In addition, given the Portfolio's concentration in
stocks of gold mining companies, investors should be aware that gold mining
shares are at times volatile; there may be sharp fluctuations in prices even
during periods of general inflation and political conditions in gold mining
countries may affect the Fund's investment decisions relating to gold mining
shares. The price of gold may affect the value of investments in the Gold Stock
Portfolio. Gold has been subject to substantial price fluctuations over short
periods of time and may be affected by the actions of certain governments and
changes in existing governments, by unpredictable international monetary and
political policies such as currency devaluations or revaluations, by economic
and social conditions within a country, trade imbalances or trade or currency
restrictions between countries or political unrest. See "RISK CONSIDERATIONS--
Gold Mining Shares" in the Statement of Additional Information.
Bond Portfolio
Investment Objectives. The investment objective of the Bond Portfolio is to
provide a stable level of income, consistent with limiting risk to principal,
by investing primarily in high quality corporate debt securities and U.S.
Government debt obligations.
Investment Policies. At least 85% of the assets of the Bond Portfolio are
invested in (a) U.S. Government Obligations, (b) debt securities, including
convertible securities, which are rated "AA" or higher by Standard & Poor's or
Moody's or other NRSROs or, if unrated, are considered by the Portfolio's Sub-
Investment Manager to be of comparable quality and (c) cash and cash
equivalents (such as bankers' acceptances, commercial paper and certificates of
deposit no greater than $100,000 per issuing bank, having ratings of A-1 or
Prime-1 by Standard & Poor's or Moody's or other NRSROs or, if unrated, are
considered by the Portfolio's Sub-Investment Manager to be of comparable
quality.)
U.S. Government Obligations consist of marketable securities issued or
guaranteed as to the timely payment of both principal and interest by the U.S.
Government, its agencies or instrumentalities. Federal agency securities are
debt obligations issued by agencies of the U.S. Government established under
authority granted by Congress. Such obligations include, but are not limited
to, those issued by the Federal Housing Authority, Maritime Administration,
Government
19
<PAGE>
National Mortgage Association, the Tennessee Valley Authority, and the General
Services Administration. Instrumentalities include, for example, each of the
Federal Home Loan Banks, the National Bank for Cooperatives, the Federal Home
Loan Mortgage Corporation, the Farm Credit Banks, the Federal National Mortgage
Association, and the U.S. Postal Service. These U.S. Government Obligations are
either: (i) backed by the full faith and credit of the U.S. Government (e.g.,
U.S. Treasury Bills); (ii) guaranteed by the U.S. Treasury (e.g., Government
National Mortgage Association mortgage-backed securities); (iii) supported by
the issuing agency's or instrumentality's right to borrow from the U.S.
Treasury (e.g., Federal National Mortgage Association Discount Notes); or (iv)
supported only by the issuing agency's or instrumentality's own credit (e.g.,
each of the Federal Home Loan Banks).
The Portfolio may also invest up to 15% of its total assets in corporate debt
securities which are rated A or BBB by Standard & Poor's or A and Baa by
Moody's or other NRSROs or, if not rated, are of comparable quality to
obligations so rated in the judgment of the Sub-Investment Manager. Securities
rated BBB or Baa by Standard & Poor's or Moody's are considered investment-
grade obligations and are regarded as having adequate capacity to pay interest
and repay principal, although adverse economic conditions or changing
circumstances are more likely to lead to a weakening of such capacity than for
higher grade bonds. Such securities may be considered to have speculative
characteristics. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of
Additional Information for a more complete description of investment ratings.
In the event that the ratings of securities held by the Portfolio fall below
investment grade, the Portfolio will not be obligated to dispose of such
securities and may continue to hold such securities if, in the opinion of the
Sub-Investment Manager, such investment is considered appropriate under the
circumstances.
The Portfolio will not purchase preferred or common stocks but may acquire
and retain up to 10% of its total assets in preferred or common stocks either
by conversion of fixed income securities or by the exercise of related
warrants.
The Portfolio may enter into agreements with banks or broker-dealers to
purchase some securities on a "forward commitment," "when issued" or on a
"delayed delivery" basis. Such agreements involve a commitment to purchase
securities at a price, which is fixed at the time of commitment, for delivery
at a future date, which may be up to three months in the future. The Portfolio
will not pay for the securities or begin earning interest on them until the
securities are paid for and received. The securities so purchased are subject
to market fluctuations so that at the time of delivery, the value of such
securities may be more or less than the purchase price.
It is the policy of the Bond Portfolio not to engage in trading for short-
term profits. The Portfolio will engage in trading if it believes a transaction
net of costs (including custodian's fees) will contribute to the achievement of
its investment objective.
It is anticipated that the Portfolio's average portfolio maturity will not
exceed 15 years, with the precise term to maturity dependent upon general
market and economic conditions.
Risk Factors. If the Bond Portfolio disposes of an obligation prior to
maturity, it may realize a loss or a gain. An increase in interest rates will
generally reduce the value of portfolio investments, and a decline in interest
rates will generally increase the value of portfolio investments. As a result,
the level of income under such circumstances may vary. In addition, portfolio
investments (other than U.S. Government Obligations) are dependent upon the
ability of the issuer to make scheduled payments of principal and income.
Domestic Growth Stock Portfolio
Investment Objectives. The investment objective of the Domestic Growth Stock
Portfolio is to achieve reasonable income and growth of capital by investing
primarily in a diversified portfolio of equity securities issued by companies
organized in the U.S. and considered by the Sub-Investment Manager to be
undervalued in light of the company's earning power and growth potential.
Investment Policies. The mix of assets of the Portfolio will vary with
prevailing economic and market conditions. Generally, at least 80% of the
Portfolio's assets are invested in common stocks and other equity related
securities such as preferred stocks and securities convertible into common
stock. The Portfolio may also invest up to 20% of its assets in both U.S.
Government Obligations and corporate debt securities, which will be rated
within the top four rating categories of Standard & Poor's or Moody's or other
NRSROs or, if unrated, are considered by the Portfolio's Sub-Investment Manager
to be of comparable quality and cash equivalent investments, such as
certificates of deposit, bankers'
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acceptances, and commercial paper, having ratings of A-1 or Prime-1 by Standard
& Poor's or Moody's or other NRSROs or, if unrated, are considered by the
Portfolio's Sub-Investment Manager to be of comparable quality. Securities
rated BBB or Baa by Standard & Poor's or Moody's are considered investment-
grade obligations and are regarded as having adequate capacity to pay interest
and repay principal, although adverse economic conditions or changing
circumstances are more likely to lead to a weakening of such capacity than for
higher grade bonds. Such securities may be considered to have speculative
characteristics. In the event that the ratings of securities held by the
Portfolio fall below investment grade, the Portfolio will not be obligated to
dispose of such securities and may continue to hold such securities if, in the
opinion of the Sub-Investment Manager, such investment is considered
appropriate under the circumstances. Generally, at least 60% of the Portfolio's
assets will be invested in securities which have paid dividends or interest
within the preceding 12 months, but non-income producing securities will be
held for anticipated increases in value. The Portfolio may also invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "DESCRIPTION OF CERTAIN INVESTMENTS--Warrants" in
the Statement of Additional Information.
This Portfolio invests primarily in stocks listed on the New York Stock
Exchange and on other national securities exchanges and, to a lesser extent, in
stocks that are traded over-the-counter. Securities are selected principally
for their potential appreciation and anticipated income. Assets of the
Portfolio will be substantially fully invested at all times.
Risk Factors. The prices of the types of securities usually purchased for the
Domestic Growth Stock Portfolio will tend to fluctuate more than the prices of
the securities usually purchased for the Bond Portfolio or the Money Market
Portfolio. As a result, the net asset value of the Domestic Growth Stock
Portfolio may experience greater short-term and long-term variations than
Portfolios that invest primarily in fixed income securities.
Growth and Income Portfolio
Investment Objectives. The objective of the Growth and Income Portfolio is to
seek long-term growth of capital by investing primarily in a wide range of
equity issues that may offer capital appreciation and, secondarily, to seek a
reasonable level of current income.
Investment Policies. The Growth and Income Portfolio invests at least 80% of
its assets in common stocks and other equity securities such as preferred
stocks and securities convertible into common stock that are either listed on
the New York Stock Exchange, traded over-the-counter or, to a lesser extent,
listed on other national securities exchanges. Securities are selected
principally for potential capital appreciation, based upon such criteria as
relatively low price to earnings ratio and relatively low price to book value
ratio, as compared to such ratios for the market in general and, secondarily,
for current income and increasing future dividends. While the Growth and Income
Portfolio intends to invest at least 60% of its assets in securities which have
paid dividends or interest within the preceding 12 months, the Portfolio may
invest in securities not currently paying dividends where the Sub-Investment
Manager anticipates that they will increase in value.
The Growth and Income Portfolio may also invest for temporary or defensive
purposes in high-grade debt securities and money market securities, including
U.S. Government Obligations, commercial paper and bank obligations, and
repurchase agreements.
The Growth and Income Portfolio will invest primarily in U.S. companies, but
may, when deemed appropriate by the Sub-Investment Manager, invest in and hold
up to 20% of the Portfolio's total assets in foreign securities which are
traded in the U.S. or in ADRs. The Growth and Income Portfolio may also
purchase the securities of foreign issuers directly in foreign markets. The
Portfolio's investments in foreign securities will primarily be in equity
securities of companies organized outside the U.S., but may also include debt
obligations of foreign companies and governments. See "Foreign Securities" and
"American Depository Receipts" in the Prospectus and "DESCRIPTION OF CERTAIN
INVESTMENTS--American Depository Receipts" in the Statement of Additional
Information.
The Growth and Income Portfolio may write covered call options or purchase
put and call options with respect to certain of its portfolio securities or
purchase stock index options for hedging purposes or to enhance income. The
Growth and Income Portfolio may also purchase or write futures contracts,
including stock index futures contracts. The Portfolio may also enter into
closing transactions with respect to such options and futures contracts. See
"Securities and Index Options" and "Futures Contracts" in this Prospectus.
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Risk Factors. The prices of the securities purchased for the Growth and
Income Portfolio will tend to fluctuate more than the prices of securities
purchased for the Bond Portfolio or the Money Market Portfolio. As a result,
the net asset value of the Growth and Income Portfolio may experience greater
short-term and long-term variations than Portfolios that invest primarily in
fixed income securities.
Capital Growth Portfolio
Investment Objectives. The investment objective of the Capital Growth
Portfolio is to seek capital growth. Realization of income is not a significant
investment consideration and any income realized will be incidental.
Investment Policies. The Capital Growth Portfolio will invest primarily in
common stocks when the Sub-Investment Manager believes that the market
environment favors investment in those securities. Common stock investments are
selected in industries and companies that the Sub-Investment Manager believes
are experiencing favorable demand for their products and services and that
operate in a favorable environment from a competitive and regulatory
standpoint.
It is the policy of the Capital Growth Portfolio to purchase and hold
securities for capital growth. If the Sub-Investment Manager is satisfied with
the performance of a security and anticipates continued appreciation, the
Portfolio will generally retain such security. However, changes in the
Portfolio will generally be made whenever the Sub-Investment Manager believes
they are advisable, either as a result of securities having reached a price
objective, or by reason of developments not foreseen at the time of the
investment decision. Since investment changes usually will be made without
reference to the length of time a security has been held, a significant number
of short-term transactions may result. To a limited extent, the Portfolio may
also purchase individual securities in anticipation of relatively short-term
price gains, and the rate of portfolio turnover will not be a determining
factor in the sale of such securities. However, certain tax rules may restrict
the Portfolio's ability to sell securities held for less than 90 days.
Although the Portfolio expects that under normal conditions its assets will
be primarily invested in common stocks, to the extent that it is not so
invested, the Capital Growth Portfolio may also invest in other securities,
including: U.S. Government Obligations, corporate bonds and debentures, high
grade commercial paper, preferred stocks, convertible securities, warrants or
other securities of U.S. issuers when the Sub-Investment Manager perceives an
opportunity for capital growth from such securities or so that the Portfolio
may receive a return on its idle cash. The Portfolio's cash position may
increase when the Sub-Investment Manager is unable to locate investment
opportunities that it believes have desirable risk/reward characteristics.
Investments in debt securities will be limited to securities of U.S. companies,
the U.S. Government and foreign governments and foreign governmental entities.
Foreign governmental entities include supranational organizations, such as the
European Economic Community and the World Bank, that are chartered to promote
economic development and are supported by various governments and governmental
entities. All debt securities in which the Portfolio invests, except as noted
below, will have credit ratings in the four highest rating categories of
Standard & Poor's or Moody's or other NRSROs or, if not rated, will be of
comparable quality to obligations so rated in the judgment of the Sub-
Investment Manager. The Capital Growth Portfolio may invest up to 5% of its
assets in high-yield/high-risk bonds. Such securities include debt securities
that are below investment grade (securities rated Ba or lower by Moody's or BB
or lower by Standard & Poor's) and unrated securities of comparable quality as
determined by the Sub-Investment Manager.
Investments may also be made in foreign equity securities and in ADRs. The
Portfolio will not invest more than 25% of its assets in foreign securities
denominated in foreign currencies and not publicly traded in the U.S. See
"Foreign Securities" and "American Depository Receipts" in the Prospectus.
Additionally, in order to manage exchange rate risks, the Portfolio may enter
into foreign currency exchange contracts (agreements to exchange one currency
for another at a future date). See "Forward Foreign Currency Exchange
Contracts" in the Prospectus.
The Portfolio may purchase and sell futures contracts as more fully described
under "Futures Contracts" in this Prospectus and may write covered call options
and purchase call and put options as described under "Securities and Index
Options" in this Prospectus.
The Portfolio may invest in "special situations" from time to time. A special
situation arises when, in the Sub-Investment Manager's opinion, the securities
of a particular company will be recognized and appreciate in value due to a
specific development, such as a technological breakthrough or a new product, at
that company.
The Portfolio expects that its securities will primarily be traded on U.S.
and foreign securities exchanges and established over-the-counter markets.
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Risk Factors. The foreign securities and ADRs, EDRs and GDRs in which the
Portfolio may invest involve special considerations and risks. See "Foreign
Securities" and "American Depository Receipts" in this Prospectus. Investing in
foreign currency exchange contracts involves certain risks since shifting the
Portfolio's currency exposure from one currency to another removes the
Portfolio's opportunity to profit from increases in the value of the original
currency and involves a risk of increased losses if the Sub-Investment Manager's
projection of future exchange rates is inaccurate. Investment in special
situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention. The price of the securities purchased by the Capital Growth Portfolio
will tend to fluctuate more than the prices of securities purchased by the Bond
Portfolio and the Money Market Portfolio.
Balanced Portfolio
Investment Objectives. The investment objective of the Balanced Portfolio is
to seek reasonable current income and long-term capital growth, consistent with
conservation of capital, by investing primarily in common stocks and fixed
income securities.
Investment Policies. The Balanced Portfolio intends to invest based on
combined considerations of risk, income, capital enhancement and protection of
capital value. The Balanced Portfolio may invest in any type or class of
security. Normally, the Balanced Portfolio will invest in common stocks and
fixed income securities; however, it may also invest in warrants and in
securities convertible into common stocks. At least 25% of the value of its
assets will be invested in high-grade fixed income senior securities which are
rated in the three highest rating categories by any NRSRO or, if unrated, are
considered by the Portfolio's Sub-Investment Manager to be of comparable
quality. The Portfolio may purchase and sell futures contracts as more fully
described under "Futures Contracts" in this Prospectus and may write covered
call options and purchase call and put options as described under "Securities
and Index Options" in this Prospectus. The Portfolio may also invest in zero
coupon debt obligations. In order to provide additional diversification the
Portfolio may invest in equity and debt securities of foreign issuers limited
to 15% of the Portfolio's total assets and in ADRs. See "Foreign Securities"
and "American Depository Receipts" in this Prospectus.
In implementing the investment objectives of the Balanced Portfolio, the Sub-
Investment Manager will select securities believed to have potential for the
production of current income, with emphasis on securities that also have
potential for capital enhancement. In an effort to protect its assets against
major market declines, or for other temporary defensive purposes, the Balanced
Portfolio may actively pursue a policy of retaining cash or investing part or
all of its assets in cash equivalents, such as U.S. Government Obligations,
high grade commercial paper and U.S. dollar obligations of foreign branches of
U.S. banks.
Risk Factors. The prices of equity securities in which the Balanced Portfolio
invests will fluctuate day to day and, as a result, the value of an investment
in the Balanced Portfolio will vary based upon such market conditions. The
value of the Balanced Portfolio's investment in fixed income securities will
vary depending on various factors including prevailing interest rates. Fixed
income securities are also subject to the ability of the issuer to make
payments of principal and interest when due. Although the Balanced Portfolio
seeks to reduce both financial and market risks associated with any one
investment medium, performance of the Balanced Portfolio will depend on such
additional factors as timing the mix of investments and the ability of the Sub-
Investment Manager to predict and react to changing market conditions.
Investment in foreign securities and ADRs involve special considerations and
risks. See "Foreign Securities" and "American Depository Receipts" in this
Prospectus.
Emerging Growth Portfolio
Investment Objective. The Emerging Growth Portfolio seeks to provide long-
term growth of capital. Dividend and interest income from portfolio securities,
if any, is incidental to the Portfolio's investment objective of long term
growth of capital.
Investment Policies. The Portfolio's policy is to invest primarily (i.e., at
least 80% of its assets under normal circumstances) in common stocks of small
and medium-sized companies that are early in their life cycle but which have the
potential to become major enterprises (emerging growth companies). Such
companies generally would be expected to show earnings growth over time that is
well above the growth rate of the overall economy and the rate of inflation, and
would have the products, technologies, management and market and other
opportunities which are usually necessary to become more widely recognized as
growth companies. Emerging growth companies can be of any size and
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the Portfolio may also invest in larger or more established companies whose
rates of earnings growth are expected to accelerate because of special factors,
such as rejuvenated management, new products, changes in consumer demand, or
basic changes in the economic environment.
While the Portfolio will invest primarily in common stocks, the Portfolio may,
to a limited extent, seek appreciation in other types of securities such as
foreign or convertible securities and warrants when relative values make such
purchases appear attractive either as individual issues or as types of
securities in certain economic environments (see "Risk Factors" and "Foreign
Securities" below). The Portfolio may also enter into forward foreign currency
exchange contracts for the purchase or sale of foreign currency for hedging
purposes and non-hedging purposes, including transactions entered into for the
purpose of profiting from anticipated changes in foreign currency exchange
rates, as well as options on foreign currencies. The Portfolio may also hold
foreign currency (see "Risk Factors" below). The Portfolio may invest up to 25%
(and generally expects to invest between 0% and 10%) of its total assets in
foreign securities (not including American Depository Receipts ("ADRs") (see
"American Depository Receipts" below)), which may be traded on foreign
exchanges. The Portfolio may hold cash equivalents or other forms of debt
securities as a reserve for future purchases of common stock or to meet
liquidity needs. The Portfolio may also invest in emerging market securities.
The Portfolio may invest in corporate asset-backed securities (see "Corporate
Asset-Backed Securities" below). The Portfolio may write covered call and put
options and purchase call and put options on securities and stock indices in an
effort to increase current income and for hedging purposes. The Portfolio may
also purchase and sell stock index futures contracts and may write and purchase
options thereon for hedging purposes and for non-hedging purposes, subject to
applicable law (see "Futures Contracts" below and the Statement of Additional
Information). In addition, the Portfolio may purchase portfolio securities on a
"when-issued" or on a "forward delivery" basis (See "When-Issued Securities"
below). The Portfolio may also invest a portion of its assets in "loan
participations" (see "Loan Participations and Other Direct Indebtedness" below
and in the Statement of Additional Information).
While it is not generally the Portfolio's policy to invest or trade for
short-term profits, the Portfolio may dispose of a portfolio security whenever
the Sub-Investment Manager is of the opinion that such security no longer has
an appropriate appreciation potential or when another security appears to offer
relatively greater appreciation potential. Subject to tax requirements,
portfolio changes are made without regard to the length of time a security has
been held, or whether a sale would result in a profit or loss.
During periods of unusual market conditions when the Sub-Investment Manager
believes that investing for temporary defensive purposes is appropriate, or in
order to meet anticipated redemption requests, a large portion or all of the
assets of the Portfolio may be invested in cash or cash equivalents including,
but not limited to, obligations of banks (including certificates of deposit,
bankers' acceptances and repurchases agreements) with assets of $1 billion or
more, commercial paper, short-term notes, obligations issued or guaranteed by
the U.S. Government or any of its agencies, authorities or instrumentalities and
related repurchase agreements. U.S. Government securities also include interests
in trust or other entities representing interests in obligations that are issued
or guaranteed by the U.S. Government, its agencies, authorities or
instrumentalities.
Risk Factors. The nature of investing in emerging growth companies involves
greater risk than is customarily associated with investments in more established
companies. Emerging growth companies often have limited product lines, markets
or financial resources, and they may be dependent on one-person management. In
addition, there may be less research available on many promising small and
medium sized emerging growth companies. The securities of emerging growth
companies may have limited marketability and may be subject to more abrupt or
erratic market movements than securities of larger, more established growth
companies or the market averages in general. Shares of the Portfolio, therefore,
are subject to greater fluctuation in value than shares of a conservative equity
Portfolio or of a growth Portfolio which invests entirely in proven growth
stocks.
The Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities. Investments in lower rated income
securities, while offering generally high current income and generally providing
greater income and opportunity for gain than investments in higher rated
securities, usually entail greater risk of principal and income (including the
possibility of default or bankruptcy of the issuers of such securities), and
involve greater volatility of price (especially during periods of economic
uncertainty or change) than investments in higher rated securities and because
yields may vary over time, no specified level of income can ever be assured. In
particular, securities rated lower than Baa by Moody's Investors Service, Inc.
("Moody's") or BBB by Standard & Poor's Rating Service or comparable unrated
securities (commonly known as "junk bonds") are considered speculative. These
lower rated high yielding fixed income securities generally tend to reflect
economic changes (and the outlook for economic growth), short-term corporate and
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industry developments and the market's perception of their credit quality
(especially during times of adverse publicity) to a greater extent than higher
rated securities which react primarily to fluctuations in the general level of
interest rates (although these lower rated fixed income securities are also
affected by changes in interest rates). In the past, economic downturns or an
increase in interest rates have under certain circumstances caused a higher
incidence of default by the issuers of these securities and may do so in the
future, especially in the case of highly leveraged issuers. During certain
periods, the higher yields on the Portfolio's lower rated high yielding fixed
income securities are paid primarily because of the increased risk of loss of
principal and income, arising from such factors as the heightened possibility of
default or bankruptcy of the issuers of such securities. Due to the fixed income
payments of these securities, the Portfolio may continue to earn the same level
of interest income while its net asset value declines due to portfolio losses,
which could result in an increase in the Portfolio's yield despite the actual
loss of principal. The prices for these securities may be affected by
legislative and regulatory developments. An effect of such rules may be to
depress the prices of outstanding lower rated high yielding fixed income
securities. Changes in the value of securities subsequent to their acquisition
will not affect cash income or yield to maturity to the Portfolio but will be
reflected in the net asset value of shares of the Portfolio. The market for
these lower rated fixed income securities may be less liquid than the market for
investment grade fixed income securities. Furthermore, the liquidity of these
lower rated securities may be affected by the market's perception of their
credit quality. Therefore, the Sub-Investment Manager's judgment may at times
play a greater role in valuing these securities than in the case of investment
grade fixed income securities, and it also may be more difficult during times of
certain adverse market conditions to sell these lower rated securities at their
fair value to meet redemption requests or to respond to changes in the market.
No minimum rating standard is required by the Portfolio. To the extent the
Portfolio invests in these lower rated fixed income securities, the achievement
of its investment objective may be more dependent on the Sub-Investment
Manager's own credit analysis than in the case of a Portfolio investing in
higher quality bonds. While the Sub-Investment Manager may refer to ratings
issued by established credit rating agencies, it is not a policy of the
Portfolio to rely exclusively on ratings issued by these agencies, but rather to
supplement such ratings with the Sub-Investment Manager's own independent and
ongoing review of credit quality.
The Portfolio may also invest in fixed income securities rated Baa by Moody's
or BBB by S&P and comparable unrated securities. These securities, while
normally exhibiting adequate protection parameters, may have speculative
characteristics and changes in economic conditions and other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher rated securities.
Additional Risk Factors
The net asset value of the shares of an open-end investment company which may
invest to a limited extent in fixed income securities changes as the general
levels of interest rates fluctuate. When interest rates decline, the value of a
fixed income portfolio can be expected to rise. Conversely, when interest rates
rise, the value of a fixed income portfolio can be expected to decline.
Although changes in the value of securities subsequent to their acquisition
are reflected in the net asset value of shares of the Portfolio, such changes
will not affect the income received by the Portfolios from such securities.
However, the dividends paid by the Portfolios, if any, will increase or
decrease in relation to the income received by the Portfolio from its
investments, which would in any case be reduced by the Portfolio's expenses
before it is distributed to shareholders.
In addition, the use of options, futures contracts, options on futures
contracts, forward contracts and options on foreign currencies may result in
the loss of principal, particularly where such instruments are traded for other
than hedging purposes (e.g., to enhance current yield).
The Emerging Growth Portfolio is aggressively managed and, therefore, the
value of its shares is subject to greater fluctuation and investments in its
shares involve the assumption of a higher degree of risk than would be the case
with an investment in a conservative equity portfolio or a growth portfolio
investing entirely in proven growth equities.
See the Statement of Additional Information for further discussion of foreign
securities and the holding of foreign currency as well as the associated risks.
Given the above average investment risk inherent to the Emerging Growth
Portfolio, investment in shares of the Emerging Growth Portfolio should not be
considered a complete investment program and may not be appropriate for all
investors.
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Foreign Securities
The World Growth Stock Portfolio, the Capital Growth Portfolio, the Gold Stock
Portfolio and the Emerging Growth Portfolio intend to purchase securities that
are listed on stock exchanges in foreign countries. They may also, to a limited
extent, purchase unlisted foreign securities. The Growth and Income Portfolio,
the Capital Growth Portfolio and the Balanced Portfolio may also invest in
listed and unlisted foreign securities. Foreign investments may involve greater
risks than are present in domestic investments. Compared to domestic companies,
there is generally less publicly available information about foreign companies,
less comprehensive accounting, reporting and disclosure requirements, and there
may be less governmental regulation and supervision of foreign stock exchanges,
brokers and listed companies. Investments in foreign securities also involve the
risk of expropriation or confiscatory taxation that could affect investments,
currency blockages which would prevent cash from being brought back into the
United States, generally higher brokerage and custodial costs than those of
domestic securities and settlement of transactions with respect to such
securities may sometimes be delayed beyond periods customary in the United
States. The Sub-Investment Managers, under the supervision of Chubb Investment
Advisory, consider possible political and financial instability abroad, as well
as the liquidity and volatility of foreign investments.
Investing in foreign securities or on foreign exchanges may present a greater
degree of risk than investing in domestic issuers. These risks include changes
in currency rates, exchange control regulations, governmental administration,
economic or monetary policy (in this country or abroad), war or expropriation.
In particular, the dollar value of portfolio securities of non-U.S. issuers
fluctuates with changes in market and economic conditions abroad and with
changes in relative currency values (when the value of the dollar increases as
compared to a foreign currency, the dollar value of a foreign-denominated
security decreases, and vice versa). Costs may be incurred in connection with
conversions between various currencies. Special considerations may also include
more limited information about foreign issuers, higher brokerage costs,
different accounting standards and thinner trading markets. Foreign securities
markets may also be less liquid, more volatile and less subject to government
supervision than in the United States. Investments in foreign countries could
be affected by other factors including confiscatory taxation and potential
difficulties in enforcing contractual obligations and could be subject to
extended settlement periods. Therefore, an investment in shares of a Portfolio
may be subject to a greater degree of risk than investments in other investment
companies which invest exclusively in domestic securities.
As a result of its investments in foreign securities, the Portfolios may
receive interest or dividend payments, or the proceeds of the sale or
redemption of such securities, in the foreign currencies in which such
securities are denominated. In that event, a Portfolio may promptly convert
such currencies into dollars at the then current exchange rate. Under certain
circumstances, however, such as where the Sub-Investment Manager believes that
the applicable exchange rate is unfavorable at the time the currencies are
received or the Sub-Investment Manager anticipates, for any other reason, that
the exchange rate will improve, a Portfolio may hold such currencies for an
indefinite period of time.
In addition, a Portfolio may be required to receive delivery of the foreign
currency underlying forward currency contracts it has entered into. This could
occur, for example, if an option written by the Portfolio is exercised or is
unable to close out a forward contract it has entered into. A Portfolio may
also hold foreign currency in anticipation of purchasing foreign securities. A
Portfolio may also elect to take delivery of the currencies underlying options
or forward contracts if, in the judgment of the Sub-Investment Manager, it is
in the best interest of the Portfolio to do so. In such instances as well, a
Portfolio may promptly convert the foreign currencies to dollars at the then
current exchange rate, or may hold such currencies for an indefinite period of
time.
While the holding of currencies will permit a Portfolio to take advantage of
favorable movements in the applicable exchange rate, it also exposes a
Portfolio to risk of loss if such rates move in a direction adverse to the
Portfolio's position. Such losses could reduce any profits or increase any
losses sustained by the Portfolio from the sale or redemption of securities,
and could reduce the dollar value of interest or dividend payments received. In
addition, the holding of currencies could adversely affect the Portfolio's
profit or loss on currency options or forward contracts, as well as its hedging
strategies.
Prior to investing in foreign securities, a Portfolio may hold funds
temporarily in foreign currencies. The value of the assets of that Portfolio
may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. The Portfolio may also incur
costs in connection with conversions between various currencies. The Portfolios
will, therefore, consider foreign exchange rates in making investment
decisions, but, other
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than the Capital Growth Portfolio and the Emerging Growth Portfolio, will not
actively hedge foreign currency fluctuations by entering into contracts to
purchase or sell foreign currencies at a future date or options or futures
contracts on foreign currencies. See "RISK CONSIDERATIONS--Foreign Securities"
in the Statement of Additional Information.
Emerging Market Securities
Consistent with the Portfolios' objectives and policies the Portfolios may
invest in securities of issuers whose principal activities are located in
emerging market countries. Emerging market countries include any country
determined by the Sub-Investment Manager to have an emerging market economy,
taking into account a number of factors including whether the country has a low
to middle economy according to the International Bank for Reconstruction and
Development, the country's foreign currency debt rating, its political and
economic stability and the development of its financial and capital markets.
The Sub-Investment Manager determines whether an issuer's principal activities
are located in an emerging market country by considering such factors as country
of organization, the principal trading market for its securities and the source
of its revenues and assets. The issuer's principal activities generally are
deemed to be located in a particular country if: (a) the security is issued or
guaranteed by the government of the country or any of its agencies, authorities,
or instrumentalities; (b) the issuer is organized under the laws of, and
maintains a principal office in that country; (c) the issuer has its principal
securities trading market in that country; (d) the issuer derives 50% or more of
its total revenue from goods sold or services performed in that country; or (e)
the issuer has 50% or more of its assets in that country.
American Depository Receipts
The World Growth Stock Portfolio, the Gold Stock Portfolio, the Growth and
Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio may invest in ADRs. These are certificates issued by
a United States bank representing the right to receive securities of a foreign
issuer deposited in that bank or a correspondent bank. There are no fees
imposed on the purchase or sale of ADRs when purchased from the issuing bank in
the initial underwriting, although the issuing bank may impose charges for the
collection of dividends and the conversion of ADRs into the underlying ordinary
shares. Brokerage commissions will be incurred if ADRs are purchased through
brokers on U.S. stock exchanges. Investments in ADRs often have advantages over
direct investments in the underlying foreign securities, including the
following: they are more liquid investments, they can be sold for U.S. dollars,
they may be transferred easily, market quotations are readily available in the
U.S. and more uniform financial information is available for the issuers of
such securities.
Forward Foreign Currency Exchange Contracts
The Capital Growth Portfolio and the Emerging Growth Portfolio may utilize
forward foreign currency exchange contracts ("forward currency contracts"). A
forward currency contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the forward currency contract agreed upon by the parties, at a price set at
the time of the contract. These forward currency contracts are principally
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. The Portfolios will enter
into forward currency contracts only under two circumstances. First, when a
Portfolio has entered into a contract to purchase or sell a security
denominated in a foreign currency, the Portfolio may be able to protect itself
against a possible loss, between trade date and settlement date for such
security, resulting from an adverse change in the relationship between the U.S.
dollar and the foreign currency in which such security is denominated, by
entering into a forward currency contract in U.S. dollars for the purchase or
sale of the amount of the foreign currency involved in the underlying security
transaction. However, this tends to limit potential gains which might result
from a positive change in such currency relationships. Second, when management
of a Portfolio believes that the currency of a particular foreign country may
suffer or enjoy a substantial movement against the U.S. dollar (or another
currency), the Portfolio may enter into a forward currency contract to sell or
buy an amount of foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such foreign currency, or a proxy currency
where performance is expected to correlate to the currency limited to no more
than 10% of the Portfolio's total assets. The forecasting of short-term currency
market movement is extremely difficult and whether such a short-term hedging
strategy will be successful is highly uncertain.
Repurchase Agreements
All of the Portfolios except the Bond Portfolio and the Domestic Growth Stock
Portfolio may enter into repurchase agreements, whereby the Portfolio purchases
securities (referred to as "underlying securities") from well-established
securities dealers or banks, subject to agreement by the seller to repurchase
the securities at a stated price on a specified date. Repurchase agreements
involve certain risks not associated with direct investment in securities,
including the risk that the original seller will default on its obligations to
repurchase, as a result of bankruptcy or otherwise. To minimize this risk, a
Portfolio will enter into repurchase agreements only if the repurchase
agreement is structured in a manner reasonably designed to collateralize fully
the value of a Portfolio's investment during the entire term of the agreement
and in accordance with guidelines regarding the creditworthiness of the seller
determined by the Board of Directors of the Fund. As a general matter, if the
seller of the repurchase agreement is a bank it must have assets of at least
$1,000,000,000; if the seller is a broker-dealer it must have a net worth of at
least $25,000,000. The underlying securities, held as collateral, will be
marked to market on a daily basis, and must be high-quality short-term
securities. In addition, the underlying securities of repurchase agreements
acquired by the Money Market Portfolio must be either U.S. Government
Obligations or securities that, at the time the repurchase agreement is entered
into, are rated in the highest rating category by the Requisite NRSROs.
Nevertheless, in the event that the other party to the agreement fails to
repurchase the securities subject to the agreement, a Portfolio could suffer a
loss to the extent proceeds from the sale of the underlying securities held as
collateral were less than the price specified in the repurchase agreement.
27
<PAGE>
Zero Coupon Bonds
The Balanced Portfolio, Capital Growth Portfolio and the Emerging Growth
Portfolio may invest in zero coupon bonds which are debt obligations that do
not make any interest payments for a specified period of time prior to maturity
or until maturity. The value of these obligations fluctuates more in response
to interest rate changes than does the value of debt obligations that make
current interest payments.
Securities and Index Options
The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may write covered call options and
purchase call and put options on securities and stock indices. The Capital
Growth Portfolio and the Emerging Growth Portfolio may also utilize options on
foreign currencies. See the Statement of Additional Information for a more
detailed description of these options.
Writing (Selling) Call Options. In order to earn additional income or to
protect partially against declines in the value of its securities, the
Portfolios noted above may write (sell) covered call options. A Portfolio may
also purchase call options to the extent necessary to close out call option
positions previously written by the Portfolio. A call option gives the holder
(purchaser) the right to buy and obligates the writer (seller) to sell, in
return for a premium paid to the writer, the underlying security at the
exercise price at any time during the option period. A call option on a
securities index is similar to a call option on an individual security, except
that the value of the option depends on the weighted value of the group of
securities comprising the index and all settlements are made in cash rather
than by delivery of a particular security. The Portfolios will write only
covered call options which are listed on exchanges, and will not write a
covered call option if, as a result, the aggregate market value of all
portfolio securities covering all call options or subject to call options
written exceeds 25% of the value of the Portfolio's total assets.
The writing of call options on securities and securities indices involves the
following risks: (1) during the option period the writer of a call option gives
up the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but retains the risk of loss
should the price of the underlying security or index decline and (ii) the
inability to close out options previously written, which would require the
Portfolio to retain the option and the securities covering the option until its
exercise or expiration.
Purchasing Put and Call Options
In order to hedge against changes in the market value of their portfolio
securities, the Growth and Income Portfolio, the Capital Growth Portfolio, the
Balanced Portfolio and the Emerging Growth Portfolio may also purchase put and
call options with respect to equity securities, bonds, and stock and bond
indices which correlate with their portfolio securities, provided that the
premiums paid for such options are limited in each case to no more than 5% of
the Portfolio's total assets. A put option on a security gives the purchaser of
the option, in return for the premium paid to the writer (seller), the right to
sell the underlying security at the exercise price at any time during the
option period. Upon exercise by the purchaser, the writer of a put option has
the obligation to purchase the underlying security at the exercise price. A put
option on a securities index is similar to a put option on an individual
security, except that the value of the option depends on the weighted value of
the group of securities comprising the index and all settlements are made in
cash, rather than by delivery of a particular security.
Purchasing a put or call option on securities and securities indices involves
the risk that the Portfolio may lose the premium it paid plus transaction
costs.
Futures Contracts
The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may purchase and sell futures
contracts on debt securities and indexes of debt securities (i.e., interest
rate futures contracts) as a hedge against or to minimize adverse principal
fluctuations resulting from anticipated interest rate changes. They may also,
where appropriate, enter into stock index futures contracts to provide a hedge
for a portion of a Portfolio's equity holdings. Stock index futures contracts
may be used as a way to implement either an increase or decrease in portfolio
exposure to the equity markets in response to changing market conditions. The
Capital Growth Portfolio and the Emerging Growth Portfolio may also enter into
currency futures contracts to hedge the currency fluctuations of its foreign
securities. A Portfolio may also write covered call options and purchase put or
call options on futures contracts of the type which that Portfolio is permitted
to purchase. The Portfolios will not enter into futures contracts for
speculation and will only enter into futures contracts that are traded on
national futures exchanges. No Portfolio will enter into futures contracts or
options thereon if immediately thereafter the sum of the amounts of initial
28
<PAGE>
margin deposits on the Portfolio's existing futures contracts and premiums paid
for options on unexpired futures contracts would exceed 5% of the value of the
Portfolio's total assets.
The use of futures contracts by the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio
entails certain risks, including but not limited to the following: no assurance
that futures contracts transactions can be offset in closing transactions at
favorable prices or at all unless a liquid secondary market exists; possible
reduction of the Portfolio's income due to the use of hedging; possible
reduction in value of both the securities hedged and the hedging instrument;
possible lack of liquidity due to daily limits on price fluctuation; imperfect
correlation between the contract and the securities being hedged; and potential
losses well in excess of the amount invested in futures contracts themselves.
If a Sub-Investment Manager's forecasts regarding movements in securities
prices or interest rates are incorrect, the Portfolio's investment results may
have been better without the hedge. Futures contracts and their associated
risks are described in more detail in the Statement of Additional Information.
Lending of Securities
The Emerging Growth Portfolio may make loans of its portfolio securities. Such
loans will usually be made only to member banks of the Federal Reserve System
and member firms (and subsidiaries thereof) of the New York Stock Exchange and
would be required to be secured continuously by collateral in cash, U.S.
Government securities or an irrevocable letter of credit maintained on a current
basis at an amount at least equal to the market value of the securities loaned.
The Portfolio would continue to collect the equivalent of the interest on the
securities loaned and would receive either interest (through investment of cash
collateral) or a fee (if the collateral is U.S. Government securities or a
letter of credit).
When-Issued Securities
In order to help ensure the availability of suitable securities for its
portfolio, the Bond Capital Growth and the Emerging Growth Portfolios may
purchase securities on a "when-issued" or on a "forward delivery" basis, which
means that the obligations will be delivered to the Portfolios at a future date
usually beyond customary settlement time. It is expected that, under normal
circumstances, the Portfolios will take delivery of such securities. In general,
the Portfolios do not pay for the securities until received and does not start
earning interest on the obligations until the contractual settlement date. While
awaiting delivery of the obligations purchased on such bases, the Portfolios
will establish a segregated account consisting of cash, short-term money market
instruments or high quality debt securities equal to the amount of the
commitments to purchase "when-issued" securities. See the Statement of
Additional Information.
Corporate Asset-Backed Securities
The Bond and the Emerging Growth Portfolios may invest in corporate asset-
backed securities. These securities, issued by trusts and special purpose
corporations, are backed by a pool of assets, such as credit card or automobile
loan receivables, representing the obligations of a number of different
parties. Corporate asset-backed securities present certain risks. For instance,
in the case of credit card receivables, these securities may not have the
benefit of any security interest in the related collateral. See the Statement
of Additional Information for further information on these securities.
Loan Participations and Other Direct Indebtedness
The Bond and the Emerging Growth Portfolios may invest a portion of their
assets in "Loan Participations" and other direct indebtedness. By purchasing a
loan participation, the Portfolios acquire some or all of the interest of a
bank or other lending institution in a loan to a corporate borrower. Many such
loans are secured, and impose restrictive covenants which must be met by the
borrower. These loans are made generally to finance internal growth, mergers,
acquisitions, stock repurchases, leveraged buy-outs and other corporate
activities. Such loans may be in default at the time of purchase. The
Portfolios may also purchase other direct indebtedness such as trade or other
claims against companies, which generally represent money owed by the company
to a supplier of goods and services. These claims may also be purchased at a
time when the company is in default. Certain of the loan participations and
other direct indebtedness acquired by the Portfolios may involve revolving
credit facilities or other standby financing commitments which obligate the
Portfolios to pay additional cash on a certain date or on demand.
The highly leveraged nature of many such loans and other direct indebtedness
may make such loans especially vulnerable to adverse changes in economic or
market conditions. Loan participations and other direct indebtedness may not be
in the form of securities or may be subject to restrictions on transfer, and
only limited opportunities may exist to
29
<PAGE>
resell such instruments. As a result, the Portfolios may be unable to sell such
investments at an opportune time or may have to resell them at less than fair
market value. For a further discussion of loan participations, other direct
indebtedness and the risks related to transactions therein, see the Statement
of Additional Information.
INVESTMENT RESTRICTIONS
Investments of the Portfolios are further restricted by certain policies that
may not be changed without a vote of stockholders. See "INVESTMENT
RESTRICTIONS" in the Statement of Additional Information.
Portfolio Turnover
Portfolio turnover may vary and from year to year or within a year depending
upon economic, market and business conditions. The annual portfolio turnover
rates for the Portfolios in 1995 and 1994 were as follows: 18.09% and 18.47% for
the World Growth Stock Portfolio; 23.98% and 11.12% for the Gold Stock
Portfolio; 64.17% and 46.65% for the Domestic Growth Stock Portfolio; 127.74%
and 140.30% for the Bond Portfolio; 32.30% and 38.17%, respectively, for the
Growth and Income Portfolio; 170.32% and 202.14%, respectively, for the Capital
Growth Portfolio; and 164.70% and 103.68%, respectively, for the Balanced
Portfolio. In addition, the portfolio turnover rate for the Balanced Portfolio
for such periods can be broken down into rates of 219.50% and 152%,
respectively, for the common stock portion of the Portfolio and 92.85% and 36%,
respectively, for the fixed income portion. The Portfolio turnover rate for
Emerging Growth Portfolio for the period from May 1, 1995 (commencment of
operations) to December 31, 1995 was 30.31%. Portfolios having annual portfolio
turnover rates of over 100% may realize larger amounts of gains and losses than
they would with a lower portfolio turnover rate and will generally incur
correspondingly greater brokerage commissions. Excessive short-term trading may
result in excessive "short-short" income under the Internal Revenue Code ("IRC")
which, in turn, could cause the Portfolio to also violate IRC Section 817(h)
affecting the status of such Portfolios as regulated investment companies and
the tax status of the contracts invested in the Portfolio. See "TAXES AND
DIVIDENDS" in this Prospectus and "PORTFOLIO TRANSACTIONS AND BROKERAGE
ALLOCATIONS" in the Statement of Additional Information.
MANAGEMENT OF THE FUND
The Board of Directors of the Fund is responsible for the administration of
the affairs of the Fund.
The Fund's investment manager is Chubb Investment Advisory, a registered
investment adviser, which is a wholly-owned subsidiary of Chubb Life. Its
address is One Granite Place, Concord, NH 03301. It provides supervisory
investment advice, acts as transfer and dividend disbursing agent for the Fund
and provides certain administrative services for all of the Fund's Portfolios.
Its investment advisory responsibilities include, among other things,
recommending and overseeing the activities of the Sub-Investment Managers and
reviewing the practices of broker-dealers selected by the Sub-Investment
Managers. Chubb Investment Advisory also provides office space and related
utilities, including telephones, necessary for the Fund's operations;
recommends auditors, counsel and custodians; maintains records not otherwise
maintained by other parties; and provides personnel, data processing services,
and supplies to the Fund. The cost of such facilities, supplies and services is
included in the investment management fee described below. Chubb Investment
Advisory also acts as investment administrator to Chubb Investment Funds, Inc.,
and UST Master Variable Series, Inc., both open-end management investment
companies organized in 1987 and 1994 respectively, and as investment manager
for Chubb Series Trust, an open-end management investment company established
in 1994.
Investment management fees are paid to Chubb Investment Advisory monthly at
an annual rate based on a percentage of the average daily net asset value of
each Portfolio as shown below:
<TABLE>
<CAPTION>
WORLD GROWTH STOCK,
GOLD STOCK,
DOMESTIC GROWTH STOCK,
MONEY MARKET GROWTH AND INCOME, CAPITAL EMERGING
AVERAGE DAILY NET ASSETS AND BOND AND BALANCED GROWTH GROWTH
- ------------------------ ------------ ---------------------- ------- --------
<S> <C> <C> <C> <C>
First $200 Million....... .50% .75% 1.00% .80%
Next $1.1 Billion........ .45% .70% .95% .75%
Over $1.3 Billion........ .40% .65% .90% .70%
</TABLE>
30
<PAGE>
The Sub-Investment Managers for the Portfolios are Templeton Global Advisors,
Inc (formerly known as Templeton, Galbraith & Hansberger Ltd.), Lyford Cay,
Nassau, Bahamas for the World Growth Stock Portfolio; Chubb Asset Managers,
Inc., 15 Mountain View Road, Warren, New Jersey 07061 for the Money Market,
Bond, and Growth and Income Portfolios; Van Eck Associates Corporation, 99 Park
Avenue, New York, New York 10016 for the Gold Stock Portfolio; Pioneering
Management Corporation, 60 State Street, Boston, Massachusetts 02109 for the
Domestic Growth Stock Portfolio; Janus Capital Corporation, 100 Fillmore Street,
Suite 300, Denver, Colorado 80206 for the Capital Growth Portfolio; Phoenix
Investment Counsel, Inc., One American Row, Hartford, Connecticut 06115 for the
Balanced Portfolio; Massachusetts Financial Services Company, 500 Boylston
Street, Boston, Massachusetts 02116 for the Emerging Growth Portfolio.
Templeton, a registered investment adviser, is organized under the laws of
the Bahamas. Templeton is an indirect wholly owned subsidiary of Franklin
Resources, Inc. ("Franklin"), a Delaware corporation. Franklin is a publicly
traded company whose ordinary shares of common stock are listed on the New York
Stock Exchange. Templeton serves as an investment adviser or sub-adviser to
various investment companies registered under the Investment Company Act of
1940, subject to the supervision and direction of each company's Board of
Directors and, where appropriate, the company's investment adviser, as well as
to investment companies registered in foreign jurisdictions. In this capacity,
Templeton is responsible on a daily basis for managing the companies'
investments, making investment decisions on behalf of the companies and
supplying research services. Templeton may also provide investment research and
advice to certain common trust vehicles. Templeton is also an adviser or sub-
adviser to several private accounts. Templeton and its affiliates currently
serve as investment manager to twenty-five U.S. registered investment
companies. Mr. Sean Sarrington has been primarily responsible for the day-
to-day management of the World Growth Stock Portfolio since 1995. He has been
employed by Templeton since 1991.
Chubb Asset, a registered investment adviser, is a Delaware corporation and a
wholly-owned subsidiary of The Chubb Corporation. Since 1987, Chubb Asset has
been the investment manager for Chubb Investment Funds, Inc., which currently
consists of the Chubb Money Market Fund, the Chubb Government Securities Fund,
the Chubb Tax-Exempt Fund, the Chubb Total Return Fund and the Chubb Growth and
Income Fund. Persons employed by Chubb Asset, who are also investment personnel
of Chubb & Son, Inc., a wholly-owned subsidiary of The Chubb Corporation,
currently provide investment advice to and supervise and monitor investment
portfolios for The Chubb Corporation and its affiliates, including general
accounts of insurance affiliates of The Chubb Corporation. In addition, certain
investment personnel employed by Chubb Asset currently provide advice to other
investment portfolios of entities not affiliated with The Chubb Corporation or
its affiliates in their capacity as officers or directors of certain registered
investment advisers not related to Chubb Asset. Ned Gerstman and Paul Geyer
have been primarily responsible for the day-to-day management of the Bond
Portfolio since 1988 and 1991, respectively. Mr. Gerstman is Senior Vice
President of Chubb Asset and Vice President and Portfolio Manager of The Chubb
Corporation. He has been employed by Chubb Asset since 1988 and has been
Portfolio Manager for The Chubb Corporation since 1987. Mr. Geyer, Assistant
Vice President and Assistant Portfolio Manager of Chubb Asset, has been
affiliated with Chubb Asset since 1991 and with The Chubb Corporation since
1990. He was previously affiliated with Merrill Lynch in New York. David
Schafer and Robert Witkoff have been primarily responsible for the day-to-day
management of the Growth and Income Portfolio since 1993 and 1992,
respectively. Mr. Schafer, Senior Vice President of Chubb Asset, has been
affiliated with Chubb Asset since 1993. Mr. Schafer is also President of Chubb
Equity Managers, Director and President of Schafer Value Fund, Inc., Director,
President and Treasurer of Schafer Capital Management, Inc., Chairman of the
Board of Schafer Cullen Capital Management, Inc. and sole proprietor of Schafer
Capital Management Co. Mr. Witkoff joined Chubb Asset in 1988 and is currently
Vice President of Chubb Asset and Portfolio Manager for The Chubb Corporation.
Van Eck Associates, a registered investment adviser, is a Delaware
corporation. It acts as an adviser to three other registered investment
companies, Van Eck Funds, Van Eck Investment Trust and International Growth
Trust and as a sub-adviser to two other registered investment companies,
Thomson Fund Group--Thomson Precious Metals and Natural Resources Fund and GCG
Trust--Natural Resources Fund, and manages or advises managers of portfolios of
pension plans and other accounts. Mr. John C. van Eck owns 25.6% of the
outstanding voting securities of Van Eck Associates and his wife and two sons,
Jan and Derek van Eck, 270 River Road, Briarcliff Manor, New York, are each the
beneficial owners of 24.8% of such securities. Mr. John C. van Eck has retained
the right to direct the voting and disposition of the shares of Van Eck
Associates held by his wife. Lucille Palermo has been primarily responsible for
the day-to-day management of the Gold Stock Portfolio since October of 1991.
She has been affiliated with Van Eck
31
<PAGE>
Associates and related companies since 1989 and is currently Executive Vice
President of Van Eck Funds and President and Portfolio Manager for the
Gold/Resources Fund.
Pioneer, a registered investment adviser, is a Delaware corporation. It is a
wholly-owned subsidiary of The Pioneer Group, Inc., a Delaware corporation.
Pioneer currently acts as a manager and investment adviser of twenty-five other
registered investment companies. Robert Benson, Senior Vice President of
Pioneer, has been primarily responsible for the day-to-day management of the
Domestic Growth Stock Portfolio since 1986. Mr. Benson has been employed by
Pioneer since 1974.
Janus, a registered investment adviser, is a Colorado corporation. It serves
as investment adviser or subadviser to Janus Growth and Income Fund, Janus
Worldwide Fund, Janus Fund, Janus Twenty Fund, Janus Venture Fund, Janus
Flexible Income Fund and Janus Intermediate Government Securities Fund, as well
as several other mutual funds and individual, corporate and pension and profit-
sharing accounts. Kansas City Southern Industries, Inc. ("KCSI") owns
approximately 83% of the outstanding voting stock of Janus, most of which it
acquired in 1984. KCSI is a publicly-traded holding company whose primary
subsidiaries are engaged in transportation, financial services and real estate.
Helen Young Hayes has been primarily responsible for the day-to-day management
of the Capital Growth Portfolio since its inception in 1992. Ms. Hayes, who is
currently Executive Vice President of Janus Investment Fund and Janus Aspen
Series, as well as Portfolio Manager of the Janus Worldwide Fund and separate
equity accounts, has been affiliated with Janus since 1987.
Phoenix, a registered investment adviser, is a Massachusetts corporation. It
was originally organized in 1932 as John P. Chase, Inc. and has been engaged in
the management of the Phoenix Series Fund since 1958. It also serves as
investment adviser or sub-investment adviser to Phoenix Multi-Portfolio Fund,
Phoenix Total Return Fund, Inc., The Phoenix Edge Series Fund, Cambridge Series
Trust, SunAmerica Series Trust, JNL Series Trust and American Skandia Trust.
All of the outstanding stock of Phoenix is owned by Phoenix Equity Planning
Corporation, an indirect subsidiary of Phoenix Home Life Mutual Insurance
Company. Phoenix Home Life Mutual Insurance Company is in the business of
writing ordinary and group life and health insurance and annuities, including
variable life insurance and variable annuities. Melanie Reichl has been
primarily responsible for the day-to-day management of the Balanced Portfolio
since May 1995. Previously she was an Assistant Vice President Personal Trust
Portfolio manager at the Bank of Boston.
Massachusetts Financial Services Company ("MFS") is America's oldest mutual
fund organization. MFS and its predecessor organizations have a history of money
management dating from 1924 and the founding of the first mutual fund in the
United States, Massachusetts Investors Trust. Net assets under the management of
the MFS organization were approximately $43.9 billion on behalf of approximately
1.9 million investor accounts as of February 29, 1996. As of such date, the MFS
organization manages approximately $20 billion of assets invested in equity
securities and approximately $20 billion of assets invested in fixed income
securities. Approximately $3.8 billion of the assets managed by MFS are invested
in securities of foreign issuers and non-U.S. dollar denominated securities of
U.S. issuers. MFS is a subsidiary of Sun Life Assurance Company of Canada
(U.S.), which in turn is a wholly owned subsidiary of Sun Life Assurance Company
of Canada.
MFS also serves as investment adviser to each of the other funds in the MFS
Family of Funds (the "MFS Funds") and to MFS (R) Municipal Income Trust, MFS
Multimarket Income Trust, MFS Government Markets Income Trust, MFS Intermediate
Income Trust, MFS Charter Income Trust, MFS Special Value Trust, MFS Variable
Insurance Trust, MFS Institutional Trust, MFS Union Standard Trust, MFS/Sun Life
Series Trust, Sun Growth Variable Annuity Fund, Inc. and seven variable
accounts, each of which is a registered investment company established by Sun
Life Assurance Company of Canada (U.S.) in connection with the sale of various
combination fixed/variable annuity contracts. MFS and its wholly owned
subsidiary, MFS Asset Management, Inc., provide investment advice to substantial
private clients. John W. Ballen, a Senior Vice President of MFS, is the
Portfolio's portfolio manager. Mr. Ballen has been employed as a portfolio
manager by MFS since 1984.
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<PAGE>
The compensation of the Sub-Investment Managers is paid directly from the
investment management fees of Chubb Investment Advisory and is set forth in the
table below as an annual percentage of the average daily net asset value of the
Portfolio managed:
<TABLE>
<CAPTION>
SUB-INVESTMENT MANAGER
-----------------------------------------------------------------------------
CHUBB ASSET
CHUBB ASSET FOR THE
FOR THE BOND AND
GROWTH AND MONEY MARKET VAN ECK
AVERAGE DAILY NET ASSETS INCOME PORTFOLIO JANUS PHOENIX TEMPLETON PORTFOLIOS ASSOCIATES PIONEER MFS
- ------------------------ ---------------- ----- ------- --------- ------------ ---------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $200 Million...... .50% .75% .50% .50% .35% .50% .50% .50%
Next $1.1 Billion....... .45% .70% .45% .45% .30% .45% .45% .45%
Over $1.3 Billion....... .40% .65% .40% .40% .25% .40% .40% .40%
</TABLE>
As noted above, Chubb Investment Advisory acts as transfer agent and dividend
paying agent for the Fund and assumes a number of administrative functions in
addition to its investment management services. For example, Chubb Investment
Advisory prepares and distributes proxy statements, prospectuses, Statements of
Additional Information, reports and other communications with stockholders;
schedules, plans the agenda for, and conducts the meetings of the Fund's
directors and stockholders; and prepares and files tax returns and reports
which federal, state, local or foreign laws may require. The cost of preparing,
printing and distributing all materials and holding such meetings is borne by
the Fund. The Fund also pays certain other expenses which are described under
the heading "INVESTMENT ADVISORY AND OTHER SERVICES--Payment of Expenses" in
the Statement of Additional Information.
For the year ended December 31, 1995, all investment management fees paid to
Chubb Investment Advisory totalled: .75%, .50%, .75%, .75%, .50%, .75%, and
1.00%, respectively, of the average daily net assets of the World Growth Stock
Portfolio, Money Market Portfolio, Gold Stock Portfolio, Domestic Growth Stock
Portfolio, Bond Portfolio, Growth and Income Portfolio, Capital Growth Portfolio
and Balanced Portfolio. For the year ended December 31, 1995 the ratio of
operating expenses to average net assets was 0.96%, 0.63%, 1.01%, 0.87%, 0.63%,
0.92%, 1.15%, and .99% respectively, for the World Growth Stock Portfolio, the
Money Market Portfolio, the Gold Stock Portfolio, the Domestic Growth Stock
Portfolio, the Bond Portfolio, the Growth and Income Portfolio, the Capital
Growth Portfolio and the Balanced Portfolio. For the period from May 1, 1995
(commencement of operations) to December 31, 1995 investment management fees
paid to Chubb Investment Advisory totalled 0.80% of the average daily net assets
of the Emerging Growth Portfolio and the ratio of operating expenses to average
daily net assets was 1.63%.
CAPITAL STOCK
The Fund issues a separate series of capital stock for each Portfolio. Each
share of capital stock issued with respect to a Portfolio has a pro rata
interest in the assets of that Portfolio. Each share of capital stock is
entitled to one vote on all matters submitted to a vote of all stockholders of
the Fund, and fractional shares are entitled to a corresponding fractional
vote. Shares of a Portfolio will be voted separately from shares of other
Portfolios on matters affecting only that Portfolio, including approval of the
investment management agreement, a sub-investment management agreement, and
changes in fundamental investment policies of that Portfolio. The assets of
each Portfolio are charged with the liabilities of that Portfolio and a
proportionate share of the general liabilities of the Fund. All shares may be
redeemed at any time.
As a Maryland corporate entity, the Fund is not required to hold regular
annual shareholder meetings and, in the normal course, does not expect to hold
such meetings. The Fund is, however, required to hold shareholder meetings for
such purposes as, for example: (i) approving certain agreements as required by
the 1940 Act; (ii) changing fundamental investment objectives and restrictions
of the Portfolios; and (iii) filling vacancies on the Board of Directors in the
event that less than a majority of the directors were elected by shareholders.
The Fund expects that there will be no meetings of shareholders for the purpose
of electing directors unless and until such time as less than a majority of the
directors holding office have been elected by shareholders. At such time, the
directors then in office will call a shareholder meeting for the election of
directors. In addition, holders of record of not less than two-thirds of the
outstanding shares of the Fund may remove a director from office by a vote cast
in person or by proxy at a shareholder meeting called for that purpose at the
request of holders of 10% or more of the outstanding shares of the Fund. The
Fund has the obligation to assist in such shareholder communications. Except as
set forth above, directors will continue in office and may appoint successor
directors.
33
<PAGE>
Chubb Life initially purchased 100,000 shares of the capital stock of each
Portfolio, other than the Balanced Portfolio and the Emerging Growth Portfolio,
for its general account. Chubb Life initially purchased 500,000 shares of the
capital stock of the Balanced Portfolio and will purchase 300,000 shares of
capital stock of the Emerging Growth Portfolio for its general account. The
purchase price of each share was $10.00. All other shares are offered only to
corresponding divisions of separate accounts established by Chubb Life or its
affiliated insurance companies. As of March 31, 1995, Chubb Life owned greater
than 25% of the shares of capital stock of the Bond Portfolio, the Growth and
Income Portfolio and the Balanced Portfolio. Chubb Life's ownership of greater
than 25% of these Portfolios may result in Chubb Life being deemed to be a
controlling entity of them. The shares held in a separate account which are
attributable to Policies will be voted by Chubb Life or its affiliated
insurance companies in accordance with instructions received from the owners of
Policies. The shares held by Chubb Life or its affiliated insurance companies,
including shares for which no voting instructions have been received, shares
held in the separate account representing charges imposed by Chubb Life or its
affiliated insurance companies against the separate account and shares held by
Chubb Life or its affiliated insurance companies that are not otherwise
attributable to Policies, will also be voted by Chubb Life or its affiliated
insurance companies in proportion to instructions received from the owners of
Policies. Chubb Life and its affiliated insurance companies reserve the right
to vote any or all such shares at their discretion to the extent consistent
with then current interpretations of the Investment Company Act of 1940 and
rules thereunder.
TAXES AND DIVIDENDS
Each Portfolio intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code ("Code"). It is the Fund's policy to
comply with the provisions of the Code regarding distribution of investment
income. Under those provisions, a Portfolio will not be subject to federal
income tax on that portion of its ordinary income and net capital gains
distributed to shareholders.
The Fund expects that each Portfolio will declare and distribute by the end
of each calendar year all or substantially all ordinary income and net capital
gains. Failure to distribute substantially all ordinary and net capital gains,
as described, may subject the Fund to an excise tax.
Dividends from ordinary income will be declared and distributed with respect
to each Portfolio at least once each year. Ordinary income of each Portfolio is
the investment company taxable income as defined in Section 852(b) of the Code.
All dividends and distributions will be automatically reinvested in additional
shares of the Portfolio with respect to which dividends have been declared, at
net asset value, as of the ex-dividend date of such dividends.
Section 817(h) of the Code and regulations thereunder set standards for
diversification of the investments underlying variable life insurance policies
in order for such policies to be treated as life insurance. These requirements,
which are in addition to diversification requirements applicable to the
Portfolios under Subchapter M and the Investment Company Act of 1940, may
affect the composition of a Portfolio's investments. Since the shares of the
Fund are currently sold to segregated asset accounts underlying such variable
life insurance policies, the Fund intends to comply with the diversification
requirements as set forth in the regulations.
The Secretary of the Treasury may in the future issue additional regulations
or revenue rulings that will prescribe the circumstances in which a
policyowner's control of the investments of a separate account may cause the
policyowner, rather than the insurance company, to be treated as the owner of
the assets of the separate account. Failure to comply with Section 817(h) of
the Code or any regulations thereunder, or with any regulations or revenue
rulings on policyowner control, if promulgated, would cause earnings on a
policyowner's interest in the separate account to be includible in the
policyowner's gross income in the year earned.
OFFERING AND REDEMPTION OF SHARES
Shares of capital stock of each Portfolio of the Fund are offered only to the
corresponding division of a separate account to which premiums have been
allocated by the owner of a Policy. Shares are sold and redeemed at their net
asset value as next determined following receipt by the separate account of
premium payments, surrender requests under Policies, loan payments, transfer
requests, and similar or related transactions through the separate account. The
Fund's principal underwriter and distributor is Chubb Securities Corporation,
One Granite Place, Concord, New Hampshire 03301. Chubb Securities Corporation
is an affiliate of Chubb Investment Advisory and a wholly-owned subsidiary of
Chubb Life. No selling commission or redemption charge is made with respect to
the purchase or sale of Fund shares.
34
<PAGE>
Net asset value is normally determined as of the close of regular trading on
the New York Stock Exchange (presently 4:00 p.m. New York Time) on each day
during which the New York Stock Exchange is open for trading.
An equity security listed on a stock exchange is valued at the closing sale
price on the exchange on which such security is principally traded. If no sale
took place, the mean of the bid and asked prices at the close of trading is
used. A security not listed on a stock exchange is valued at the closing sale
price as reported on a readily available market quotation system, or, if no
sales took place, the mean of the bid and asked prices at the close of trading
in the over-the-counter market. Quotations of foreign securities in foreign
currencies are converted to United States dollar equivalents using
appropriately translated foreign market closing prices.
Trading in securities on exchanges in European and Far Eastern countries, and
in over-the-counter markets in such other nations, is normally completed well
before the close of trading on the New York Stock Exchange. Trading of European
and Far Eastern securities, either generally or in a particular country or
countries, may not take place on every day on which the New York Stock Exchange
is open. Furthermore, trading takes place in Japanese markets on certain
Saturdays, and in various foreign markets on days which are not business days
in New York and on which the Fund's net asset value is not normally calculated.
The calculation of the net asset value of those Portfolios which do such
trading, therefore, may not take place contemporaneously with the determination
of the prices of many of the securities of each such Portfolio which are used
in making the calculation of net asset value. Occasionally, events affecting
the values of such securities may occur between the times at which they are
determined and the close of the New York Stock Exchange, which events may not
be reflected in the computation of a Portfolio's net asset value. If, during
such periods, events occur which materially affect the value of the securities
of a Portfolio, and during such periods either shares are tendered for
redemption or a purchase or sale order is received by the Fund, such securities
will be valued at fair value as determined in good faith by the Board of
Directors of the Fund.
Debt securities having remaining maturities of 60 days or less are valued on
an amortized cost basis unless the Board determines that such method does not
represent fair value. This procedure values a purchased instrument at cost on
the date of purchase. It thereafter assumes a constant rate of amortization of
any discount or premium and of accrual of interest income, regardless of any
intervening change in general interest rates or the market value of the
instrument.
Options and convertible preferred stocks listed on a national securities
exchange are valued as of their last sale price or, if there is no sale, at the
current bid price. Futures Contracts are valued as of their last sale price or,
if there is no sale, at the latest available bid price.
All other securities and assets are valued at their fair value as determined
in good faith by the Board of Directors of the Fund.
With the approval of the Board, the Fund may utilize a pricing service, a
bank, or a broker-dealer experienced in such matters to perform any of the
above-described valuation functions.
Further discussion of asset valuation methods is included in the Statement of
Additional Information under the heading "DETERMINATION OF NET ASSET VALUE."
OTHER INFORMATION
Shares of the Portfolios are presently offered only to corresponding
divisions of separate accounts established by Chubb Life or its affiliated
insurance companies in order to fund the Policies. In the future, however, the
shares of the Portfolios may also be offered to separate accounts of Chubb Life
or affiliates of Chubb Life in order to fund additional variable life insurance
policies or variable annuity contracts offered by Chubb Life or its affiliates.
A potential for certain conflicts of interest exists between the interests of
variable life insurance policyowners and variable annuity contract owners. In
the event that shares of the Portfolios are offered to separate accounts
funding variable annuity contracts, the Board of Directors of the Fund intends
to monitor events for the existence of any material conflict between the
interests of variable life insurance policyowners and variable annuity contract
owners and to determine what action, if any, should be taken in response
thereto.
35
<PAGE>
CHUBB AMERICA FUND, INC
One Granite Place
Concord, New Hampshire 03301
(603) 226-5000
A Series Fund
with a
World Growth Stock Portfolio Investing Primarily in Stocks
Money Market Portfolio Investing Primarily
in Money Market Instruments
Gold Stock Portfolio Investing Primarily in Gold Mining Shares
Bond Portfolio Investing Primarily in Debt Securities
Domestic Growth Stock Portfolio Investing Primarily in Stocks
Growth and Income Portfolio Investing Primarily in Stocks
Capital Growth Portfolio Investing Primarily in Stocks
Balanced Portfolio Investing Primarily in
Stocks and Fixed Income Securities
Emerging Growth Portfolio Investing Primarily in Common Stocks
of Small and Medium-Sized Companies
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus but supplements and
should be read in conjunction with the Prospectus for the Fund. It is
incorporated by reference into the Prospectus. A copy of the Prospectus may be
obtained by writing or calling the Fund at the address or telephone number
above.
- --------------------------------------------------------------------------------
The date of the Prospectus to which this Statement of Additional Information
relates is May 1, 1996.
The date of this Statement of Additional Information is May 1, 1996.
S-1
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TABLE OF CONTENTS
Page
----
Business History 1
Investment Restrictions 1
Description of Certain Investments
Bank Obligations
Repurchase Agreements
Commercial Paper
Loan Participation and other Direct Indebtedness
Corporate Asset Backed Securities
Lending of Securities
Foreward Commitments
Warrants
Forward Foreign Currency Exchange Contracts
American Depository Receipts
Securities and Index Options
Futures Contracts and Related Options
High Yield Bonds
Description of Investment Ratings
Risk Considerations
U.S. Dollar Obligations of Foreign
Branches of U.S. Banks
Repurchase Obligations
Foreign Securities
Forward Foreign Currency Exchange Contracts
Gold Mining Shares
Options
Futures Contracts and Related Options
Federal Tax Matters
Investment Advisory and Other Services
Investment Management Agreements
and Sub-Investment Management Agreements
Independent Auditors
Custodians
Payment of Expenses
Portfolio Transactions and Brokerage Allocations
Management of the Fund
Capital Stock
Offering and Redemption of Shares
Determination of Net Asset Value
Taxes
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Page
----
Performance and Yield Information
Additional Information
Reports
Name and Service Mark
S-3
<PAGE>
BUSINESS HISTORY
Chubb America Fund, Inc. (the "Fund") is an open-end diversified management
investment company established by Chubb Life Insurance Company of America
("Chubb Life") to provide for the investment of assets of separate accounts
established by Chubb Life or its affiliated insurance companies. Such assets are
acquired by the separate accounts pursuant to the sale of flexible premium
variable life insurance policies (the "Policies"). The Fund has no business
history prior to being incorporated in Maryland on October 19, 1984. In the
future, the Fund may sell its shares to other separate accounts funding variable
annuities and variable life insurance policies established by Chubb Life, its
successors or assigns, or by other insurance companies with which Chubb Life is
affiliated, and may add or delete Portfolios.
INVESTMENT RESTRICTIONS
Each of the following investment restrictions are fundamental policies of the
World Growth Stock, Money Market, Gold Stock, Bond and Domestic Growth Stock
Portfolios and may not be changed for any such Portfolio without approval of a
majority of the outstanding shares of each affected Portfolio. Investment
restrictions 2, 3, 5, 6, 8-12 and 17 are fundamental policies for the Growth and
Income, Capital Growth, Emerging Growth and Balanced Portfolios and may not be
changed for any such Portfolio without approval of a majority of the outstanding
shares of the affected Portfolio. Each restriction, whether or not fundamental,
applies to each Portfolio of the Fund, unless otherwise indicated. A change in
policy affecting only one Portfolio may be effected with the approval of a
majority of the outstanding shares of that Portfolio only. (As used in the
Prospectus and this Statement of Additional Information, the term "majority of
the outstanding voting shares" means the lesser of (1) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (2) more than 50% of the outstanding shares.) A Portfolio will
not:
1. Invest more than 10%, or in the case of Emerging Growth Portfolio 15%, of
the value of the total assets of the Portfolio in securities, or 5%, except
with respect to Emerging Growth Portfolio, of the value of the total assets
of the Portfolio in equity securities, which are not readily marketable,
such as repurchase agreements having a maturity of more than seven days,
restricted securities, and securities that are secured by interests in real
estate.
2. Invest in real estate, although it may buy securities of companies which
deal in real estate and securities which are secured by interests in real
estate, including interests in real estate investment trusts.
3. Invest in commodities or commodity contracts, except that the Growth and
Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and
the Emerging Growth Portfolio may each enter into financial futures
contracts and options thereon that are listed on a national securities or
commodities exchange if, immediately thereafter for that Portfolio: (a) the
total of the initial margin deposits required with respect to all open
futures positions at the time such positions were established plus the sum
of the premiums paid for all unexpired options on futures contracts would
not exceed 5% of the value of a Portfolio's total assets and (b) a
segregated account consisting of cash or liquid high-grade debt securities
in an amount equal to the total market value of any futures contracts
purchased by a Portfolio, less the amount of any initial margin, is
established by that Portfolio. In the case of an option that is "in-the-
money" at the time of purchase, the "in-the-money" amount, as defined under
Commodity Futures Trading Commission
S-4
<PAGE>
regulations, may be excluded in computing the 5% limit.
4. Invest in securities of other investment companies, except by purchases in
the open market involving only customary broker's commissions or as part of
a merger, consolidation, or acquisition, subject to limitations in the
Investment Company Act of 1940 (the "1940 Act") and rules thereunder.
5. Make loans, except by the purchase of bonds or other debt obligations
customarily distributed privately to institutional investors and except
that the Fund may buy repurchase agreements and provided that the Emerging
Growth Fund may lend its portfolio securities representing not in excess of
30% of its total assets (taken at market value).
6. Make an investment unless, when considering all its other investments, 75%
of the value of the Portfolio's assets would consist of cash, cash items,
U.S. Government securities, securities of other investment companies, and
other securities. For this restriction, "other securities" are limited, for
each issuer, to not more than 5% of the value of the Portfolio's assets and
to not more than 10% of the issuer's outstanding voting securities.
As a matter of operating policy, the Fund considers bank obligations as "other
securities" and will invest no more than 5% of a Portfolio's total assets in the
obligations of any one issuer and will own no more than 10% of the outstanding
voting securities of such issuer. Pursuant to this operating policy, the Fund
will not consider repurchase agreements to be subject to this 5% limitation if
the collateral underlying the repurchase agreements are exclusively U.S.
Government Obligations.
7. Invest more than 5% of the value of the total assets of the Portfolio in
securities of companies having a record of less than three years'
continuous operations, including predecessors and unconditional guarantors.
8. Act as an underwriter of securities of other issuers, except to the extent
that it may be deemed to be an underwriter in reselling securities, such as
restricted securities, acquired in private transactions and subsequently
registered under the Securities Act of 1933.
9. Except with respect to the Emerging Growth Portfolio, borrow money, except
that, as a temporary measure for extraordinary or emergency purposes and
not for investment purposes, any Portfolio may borrow from banks up to 5%
of its assets taken at cost, provided in each case that the total
borrowings have an asset coverage, based on value, of at least 300%. The
Emerging Growth Portfolio may not borrow money in an amount in excess of
33 1/3% of its total assets, and then only as a temporary measure for
extraordinary or emergence purposes. This restriction will not prevent the
Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio or Emerging Growth Portfolio from entering into futures contracts
as set forth above in restriction 3.
10. Issue securities senior to its common stock except to the extent set out in
paragraph 9 above. For purposes hereof, writing covered call options, and
as regards Emerging Growth Portfolio, put options, and entering into
futures contracts, to the extent permitted by restrictions 3 and 13, shall
not involve the issuance of senior securities.
11. Sell securities short, except the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio
may make short sales against the box.
S-5
<PAGE>
12. Buy securities on margin, except that (1) it may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities, and (2) the Growth and Income Portfolio, the Capital Growth
Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio may
make margin deposits in connection with futures contracts and options
transactions to the extent permitted by restrictions 3 and 13.
13. Invest in or write puts, calls, straddles, or spreads. However, this
restriction shall not prohibit the Portfolios (other than the Money Market
Portfolio) from writing or selling covered call options or purchasing call
options in order to close transactions. Nor shall this restriction prohibit
the Emerging Growth or Capital Growth Portfolio from writing or selling
covered call and put options or purchasing call or put options. This
restriction shall not prohibit the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio
from investing more than 5% of the value of the total assets of the
Portfolio in securities of companies having a record of less than three
years' continuous operations, including predecessors and unconditional
guarantors. (In addition, as a matter of operating policy, no Portfolio may
write covered call options if, as a result, a Portfolio's securities
covering all call options written or subject to put or call options would
exceed 25% of the value of the Portfolio's total assets.)
14. Enter into a repurchase agreement with Chubb Life Insurance Company of
America ("Chubb Life"); The Chubb Corporation; or a subsidiary of either of
such corporations.
15. Except for the Emerging Growth Portfolio, participate on a joint or joint
and several basis in any trading account in securities. Transactions for
the Portfolios and any other accounts under common management may be
combined or allocated between the Portfolios and such other accounts.
16. Invest in companies for the purpose of exercising control of management.
17. Invest more than 25% of the value of the total assets of the Portfolio
(other than the Gold Stock Portfolio) in securities of any one industry.
Banks are not considered a single industry for purposes of this
restriction. (As a matter of operating policy, only the Money Market
Portfolio may utilize this exception.) Nor shall this restriction apply to
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
S-6
<PAGE>
18. Invest in interests, other than debentures or equity stock interests, in
oil and gas or other mineral exploration or development programs.
19. Invest more than 5% of the total value of the assets of the Portfolio in
warrants, whether or not the warrants are listed on the New York or
American Stock Exchanges, or more than 2% of the value of the assets of the
Portfolio in warrants which are not listed on those exchanges. Warrants
acquired in units or attached to securities are not included in this
restriction.
20. Invest more than 15% of the value of the assets of the Portfolios (except
the Emerging Growth Portfolio) in securities of foreign issuers that are
not listed on a recognized U.S. or foreign securities exchange, or quoted
on an inter-dealer quotation system.
DESCRIPTION OF CERTAIN INVESTMENTS
The following is a description of certain types of investments which may be made
by the Portfolios and which may involve certain specific risks, discussed under
"RISK CONSIDERATIONS" below:
Bank Obligations
All of the Portfolios may acquire obligations of banks. These include
certificates of deposit, which are normally limited to $100,000 per issuing
bank, bankers' acceptances and time deposits. Certificates of deposit are
generally short-term, interest-bearing negotiable certificates issued by
commercial banks or savings and loan associations against funds deposited in the
issuing institution. Bankers' acceptances are time drafts drawn on a commercial
bank by a borrower, usually in connection with an international commercial
transaction (to finance the import, export, transfer or storage of goods). With
a bankers' acceptance, the borrower is liable for payment as is the bank, which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most bankers' acceptances have maturities of six months or less and are
traded in secondary markets prior to maturity. Time deposits are generally
short-term, interest-bearing negotiable obligations issued by commercial banks
against funds deposited in the issuing institution. None of the Portfolios will
invest in time deposits maturing in more than seven days.
The Money Market Portfolio will not invest in any security issued by a
commercial bank unless the bank is organized and operating in the U.S. and is a
member of the Federal Deposit Insurance Corporation. However, this limitation
shall not prohibit investments in foreign branches of U.S. banks which otherwise
meet the foregoing requirements.
Repurchase Agreements
All of the Portfolios, except the Bond Portfolio and the Domestic Growth Stock
Portfolio, may invest in repurchase agreements.
A repurchase agreement customarily obligates the seller, at the time it sells
securities to the Portfolio, to repurchase the securities at a mutually agreed
upon time and price. The total amount received on repurchase would be calculated
to exceed the price paid by the Portfolio, reflecting an agreed upon market rate
of interest for the period from the time of the repurchase agreement to the
settlement date, and would not necessarily be related to the interest rate on
the underlying securities. The differences between the total amount to be
received upon repurchase
S-7
<PAGE>
of the securities and the price which was paid by the Portfolio upon their
acquisition is accrued as interest and is included in the Portfolio's net income
declared as dividends. The underlying securities will consist of high-quality
securities. With respect to the Money Market Portfolio, the underlying security
must be either a U.S. Government Obligation or a security rated in the highest
rating category by the Requisite NRSROs (as defined in the Prospectus) and must
be determined to present minimal credit risk. The Fund has the right to sell
securities subject to repurchase agreements but would be required to deliver
identical securities upon maturity of the repurchase agreements unless the
seller fails to pay the repurchase price. It is each Portfolio's intention not
to sell securities subject to repurchase agreements prior to the agreement's
maturity.
Commercial Paper
All of the Portfolios may invest in commercial paper. Commercial paper involves
an unsecured promissory note issued by a corporation. It is usually sold on a
discount basis and has a maturity at the time of issuance of nine months or
less. In connection with the World Growth Stock Portfolio, the Gold Stock
Portfolio, the Bond Portfolio and the Domestic Growth Stock Portfolio, on the
date of investment, such paper must be rated A-1 by Standard & Poor's
Corporation ("Standard & Poor's") or Prime-1 by Moody's Investor's Service, Inc.
("Moody's"), the highest commercial paper ratings, or the highest commercial
paper ratings by other NRSROs, or, if not rated, must have been issued by a
corporation with an outstanding debt issue rated AAA or AA by Standard & Poor's
or AAA or Aa by Moody's as described below, and be of equivalent investment
quality in the judgment of the Portfolio's Investment Manager or Sub-Investment
Manager, as appropriate. On the date of investment, with respect to the Money
Market Portfolio, such paper or its issuer must be rated in one of the two
highest commercial paper rating categories by at least two NRSROs which have
issued a rating with respect to such commercial paper or its issuer or by one
NRSRO if that paper or its issuer has been rated by only one NRSRO or, if not
rated, must be of comparable quality. In connection with the Growth and Income
Portfolio, the Capital Growth Portfolio and the Balanced Portfolio, on the date
of investment, such paper must be rated within the three highest categories by
Moody's, Standard & Poor's or other NRSROs or, if not rated, must be of
equivalent investment quality in the judgment of the Portfolio's Investment
Manager or Sub-Investment Manager, as appropriate.
Loan Participations and Other Direct Indebtedness
As described in the Prospectus, the Portfolios may purchase loan participations
and other direct indebtedness. In purchasing a loan participation, a Portfolio
acquires some or all of the of the interest of a bank or other lending
institution in a loan to a corporate borrower. Many such loans are secured,
although some may be unsecured. Such loans may be in default at the time of
purchase. Loans and other direct indebtedness that are fully secured offer a
Portfolio more protection than an unsecured loan in the event of non-payment of
scheduled interest or principal. However, there is no assurance that the
liquidation collateral from a secured loan or other direct indebtedness would
satisfy the corporate borrower's obligation, or that the collateral can be
liquidated.
These loans and other direct indebtedness are made generally to finance internal
growth, mergers, acquisitions, stock repurchases, leveraged buy-outs and other
corporate activities. Such loans and other direct indebtedness loans are
typically made by a syndicate of lending institutions represented by an agent
lending institution which has negotiated and structured the loan and is
S-8
<PAGE>
responsible for collecting interest, principal and other amounts due on its own
behalf and on behalf of the others in the syndicate, and for enforcing its and
their other rights against the borrower. Alternatively, such loans and other
direct indebtedness may be structured as a novation, pursuant to which the
Portfolio would assume all of the rights of the lending institution in a loan,
or as an assignment, pursuant to which the Portfolio would purchase an
assignment of a portion of a lender's interest in a loan or other direct
indebtedness either directly from the lender or through an intermediary. A
Portfolio may also purchase trade or other claims against companies, which
generally represent money owed by the company to a supplier of goods or
services. These claims may also be purchased at a time when the company is in
default.
Certain of the loan participations and other direct indebtedness acquired by a
Portfolio may involve revolving credit facilities or other standby financing
commitments which obligates a Portfolio to pay additional cash on a certain date
or on demand. These commitments may have the effect of requiring a Portfolio to
increase its investment in a company at a time when the Emerging Growth
Portfolio might not otherwise decide to do so (including at a time when the
company's financial condition makes it unlikely that such amounts will be
repaid). To the extent that a Portfolio is committed to advance additional
funds, it will at all times hold and maintain in a segregated account cash or
other high grade debt obligations in an amount sufficient to meet such
commitments.
The Emerging Growth Portfolio's ability to receive payment of principal,
interest and other amounts due in connection with these investments will depend
primarily on the financial condition of the borrower. In selecting the loan
participations and other direct indebtedness which the Portfolio will purchase,
The Sub-Investment Manager will rely upon its own (and not the original lending
institution's) credit analysis of the borrower. As the Portfolio may be required
to rely upon another lending institution to collect and pass on to the Portfolio
amounts payable with respect to the loan and to enforce the Portfolio's rights
under the loan and other direct indebtedness, an insolvency, bankruptcy or
reorganization of the lending institution may delay or prevent the Portfolio
from receiving such amounts. In such cases, the Portfolio will evaluate as well
the creditworthiness of the lending institution and will treat both the borrower
and the lending institution as an "issuer" of the loan participation for the
purposes of certain investment restrictions pertaining to the diversification of
the Portfolio's investments. The highly leveraged nature of many such loans and
other direct indebtedness may make such loans and other direct indebtedness
especially vulnerable to adverse changes in economic or market conditions.
Investments in such loans and other direct indebtedness may involve additional
risk to the Portfolio. For example, if a loan or other direct indebtedness is
foreclosed, the Portfolio could become part owner of any collateral, and would
bear the costs and liabilities associated with owning and disposing of
collateral. In addition, it is conceivable that under emerging legal theories of
lender liability, the Portfolio could be held liable as co-lender. It is unclear
whether loans and other forms of direct indebtedness offer securities law
protections against fraud and misrepresentation. In the absence of definitive
regulatory guidance, the Portfolio relies on the Sub-Investment Manager's
research in an attempt to avoid situations where fraud and misrepresentation
could adversely affect the Portfolio. In addition, loan participations and other
direct investments may not be in the form of securities or may be subject to
restrictions on transfer, and only limited opportunities may exist to resell
such instruments. As a result, the Portfolio may be unable to sell such
investments at an opportune time or may have to resell them at less than fair
market value. To the extent that the Sub-Investment Manager determines that any
such
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investments are illiquid, the Portfolio will include them in the investment
limitations described below.
Corporate Asset-Backed Securities
As described in the Prospectus, the Fund may invest in corporate asset-backed
securities. These securities, issued by trusts and special purposes
corporations, are backed by a pool of assets, such as credit card and automobile
loan receivables, representing the obligations of a number of different parties.
Corporate asset-backed securities present certain risks. For instance, in the
case of credit card receivables, these securities may not have the benefit of
any security interest in the related collateral. Credit card receivables are
generally unsecured and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set off certain amounts owed on the credit cards, thereby reducing the
balance due. Most issuers of automobile receivables permit the servicers to
retain possession of the underlying obligations. If the servicer were to sell
these obligations to another party, there is a risk that the purchaser would
acquire an interest superior to that of the holders of the related automobile
receivables. In addition, because of the large number of vehicles involved in
a typical issuance and technical requirements under state laws, the trustee for
the holders of the automobile receivables may not have a proper security
interest in all of the obligations backing such receivables. Therefore, there
is the possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on these securities. The underlying
assets (e.g., loans) are also subject to prepayments which shorten the
securities' weighted average life and may lower their return.
Corporate 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 failures by obligors and underlying assets to make payments, the
securities may contain elements of credit support which fall 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 receipt of payments
on the underlying pool occurs in a timely fashion. Protection against losses
resulting from ultimate default ensures payment through insurance policies or
letter of credit obtained by the issuer or sponsor from third parties. The Fund
will not pay any additional or separate fees for credit support. The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit risk associated with the underlying
assets. Delinquency or loss in excess of that anticipated or failure of the
credit support could adversely affect the return on an investment in such a
security.
Lending of Securities
The Emerging Growth Portfolio may seek to increase its income by lending
portfolio securities. Such loans will usually be made only to member banks of
the Federal Reserve System and to its member firms (and subsidiaries thereof) of
the New York Stock Exchange and would be required to be secured continuously by
collateral in cash, cash equivalents, or U.S. Government securities maintained
on a current basis at an amount at least equal to the market value of the
securities loaned. The Emerging Growth Portfolio would have the right to call a
loan and obtain the securities loaned at any time on customary industry
settlement notice (which will usually not exceed five days). During the
existence of a loan, the Emerging Growth Portfolio would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
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loaned and would also receive compensation based on investment of the
collateral. The Emerging Growth Portfolio would not, however, have the right to
vote any securities having voting rights during the existence of the loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit,
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower fail financially. However, the loans would be made only to
firms deemed by The Sub-Investment Manager to be of good standing, and when, in
the judgment of The Sub-Investment Manager, the consideration which could be
earned currently from securities loans of this type justifies the attendant
risk. If The Sub-Investment Manager determines to make securities loans, it is
not intended that the value of the securities loaned would exceed 30% of the
value of the Emerging Growth Portfolio's total assets.
Forward Commitments
The Money Market, Capital Growth, Bond and Emerging Growth Portfolios may, from
time to time, purchase securities on a forward commitment, when issued, or
delayed delivery basis. The price of such forward commitment securities, which
may be expressed in yield terms, is fixed at the time the commitment to purchase
is made. Delivery and payment will take place at a later date. Normally, the
settlement date may take up to three months. During the period between purchase
and settlement, no payments are made by the Portfolio to the issuer and no
interest accrues to the Portfolio. Forward commitments involve a risk of loss if
the value of the security to be purchased declines prior to the settlement date.
While forward commitment securities may be sold prior to the settlement date,
each Portfolio intends to purchase such securities with the purpose of actually
acquiring them, unless a sale appears desirable for investment reasons. At the
time a Portfolio makes the commitment to purchase a security on a forward
commitment basis, the Portfolio will record the transaction and reflect the
value of the security in determining its net asset value. The Fund does not
believe that the net asset value or income of either Portfolio will be adversely
affected by the purchase of securities on a forward commitment basis. Each
Portfolio using forward commitments will maintain with the Fund's custodian, in
a segregated account, cash or high-grade money market securities equal in value
to its total commitments for forward commitment securities.
Warrants
All of the Portfolios, except the Money Market Portfolio, may invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. If, prior to the expiration date, the Portfolio is not
able to exercise a warrant at a cost lower than the underlying securities, the
Portfolio will suffer a loss of its entire investment in the warrant.
Forward Foreign Currency Exchange Contracts
The Capital Growth Portfolio and the Emerging Growth Portfolio may use forward
foreign currency exchange contracts ("forward currency contracts") to hedge
against the decline of a currency in which the Portfolio's securities are
denominated. A forward currency contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract as agreed by the parties, at a price set at the
time of the contracts.
The Capital Growth Portfolio and the Emerging Growth Portfolio may enter into
forward currency contracts or maintain a net exposure on such contracts only if
(i) the consummation of
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the contracts would not obligate the Portfolio to deliver an amount of foreign
currency in excess of the value of the Portfolio's securities or other assets
denominated in the currency and (ii) the Capital Growth Portfolio and the
Emerging Growth Portfolio maintain with their custodian cash, U.S. government
securities, or liquid, high-grade debt securities in a segregated account in an
amount not less than the value of the Portfolio's total assets committed to the
consummation of the contracts or otherwise cover the forward currency contract
in accordance with the current SCC's securities.
American Depository Receipts
The World Growth Stock Portfolio, the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio, the Gold Stock Portfolio and the
Emerging Growth Portfolio may invest in American Depository Receipts ("ADR's"),
Global Depository Receipts ("GDR's"), and European Depository Receipts
("EDR's"). These are certificates issued by a U.S. bank representing the right
to receive securities of a foreign issuer deposited in that bank or a
correspondent bank. There are no fees imposed on the purchase or sale of ADR's
when purchased from the issuing bank in the initial underwriting, although the
issuing bank may impose charges for the collection of dividends and the
conversion of ADR's into the underlying ordinary shares. Brokerage commissions
will be incurred if ADR's are purchased through brokers on U.S. stock exchanges.
Investments in ADR's often have advantages over direct investments in the
underlying foreign securities, including the following: they are more liquid
investments, they can be sold for U.S. dollars, they may be transferred easily,
market quotations are readily available in the U.S. and more uniform financial
information is available for the issuers of such securities. The Fund believes
that the risk associated with ownership of ADR's are no greater than the risks
associated with the direct ownership of foreign shares.
Securities and Index Options
All of the Portfolios, except the Money Market Portfolio, may write (sell)
covered call options and purchase call options in order to close transactions.
In addition, the Growth and Income Portfolio, the Capital Growth Portfolio, the
Balanced Portfolio and the Emerging Growth Portfolio may purchase put and call
options to enhance investment performance or for hedging purposes. The options
activities of a Portfolio may increase its portfolio turnover rate and the
amount of brokerage commissions paid. These commissions may be higher than those
which would apply to purchases and sales of securities directly.
Writing Covered Call Options. A call option is a contract that gives the holder
(buyer) of the option the right to buy (in return for a premium paid), and the
writer of the option (in return for a premium received) the obligation to sell,
the underlying security at a specified price (the exercise price) at any time
before the option expires. A covered call option is a call in which the writer
of the option, for example, owns the underlying security throughout the option
period. In such cases, the security covering the call will be maintained in a
segregated account with the Fund's custodian. The exercise price of a call
option written by a Portfolio may be below, equal to or above the current market
value of the underlying security at the time the option is written. A Portfolio
will write covered call options to reduce the risks associated with certain of
its investments or to increase total investment return through the receipt of
premiums.
A Portfolio may attempt to protect itself from loss due to a decline in value of
the underlying security or from the loss of appreciation due to its rise in
value by buying an identical option, in which case the purchase cost of such
option may offset the premium received for the option previously written. In
order to do this, the Portfolio makes a "closing purchase transaction" by the
purchase of a call option on the same security with the same exercise price and
expiration date as the covered call option which it has previously written. The
Portfolio will realize a gain or loss from a closing purchase transaction if the
amount paid to purchase a call option is less
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or more than the amount received from the sale of the corresponding call option.
Also, because increases in the market price of a call option will generally
reflect increases in the market price of the underlying security, any loss
resulting from the exercise or closing out of a call option is likely to be
offset in whole or in part by unrealized appreciation of the underlying security
owned by the Portfolio.
Purchasing Put and Call Options. A Portfolio may purchase put options on
securities to protect its holdings in an underlying or related security against
an anticipated decline in market value. Such hedge protection is provided only
during the life of the option. Securities are considered related if their price
movements generally correlate with one another. The purchase of put options on
securities held by a Portfolio or related to such securities will enable a
Portfolio to preserve, at least partially, unrealized gains in an appreciated
security in its portfolio without actually selling the security. In addition, a
Portfolio will continue to receive interest or dividend income on the security.
A Portfolio may purchase call options on individual securities or stock indices
in order to take advantage of anticipated increases in the price of those
securities by purchasing the right to acquire the securities underlying the
option or, with respect to options on indices, to receive income equal to the
value of such index over the strike price. As the holder of a call option with
respect to individual securities, a Portfolio obtains the right to purchase the
underlying securities at the exercise price at any time during the option
period. As the holder of a call option on a stock index, a Portfolio obtains the
right to receive, upon exercise of the option, a cash payment equal to the
multiple of any excess of the value of the index on the exercise date over the
strike price specified in the option.
Options on Indexes. A Portfolio may write covered call options and purchase put
and call options on appropriate securities indexes for the purpose of hedging
against the risk of unfavorable price movements adversely affecting the value of
a Portfolio's securities or to enhance income. Unlike a stock option which gives
the holder the right to purchase or sell a specified stock at a specified price,
an option on a securities index gives the holder the right to receive a cash
settlement amount based upon price movements in the stock market generally (or
in a particular industry or segment of the market represented by the index)
rather than the price movements in individual stocks.
A securities index fluctuates with changes in the market values of the
securities so included. For example, some securities index options are based on
a broad market index such as the S&P 500 or the NYSE Composite Index, or a
narrower market index such as the S&P 100. Indexes may also be based on an
industry or market segment such as the AMEX Oil and Gas Index or the Computer
and Business Equipment Index. Options on stock indexes are currently traded on
the following exchanges, among others: The Chicago Board Options Exchange, New
York Stock Exchange and American Stock Exchange. Options on other types of
securities indexes, which do not currently exist, including indexes on certain
debt securities, may be introduced and traded on exchanges in the future.
Futures Contracts and Related Options
The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may purchase or sell futures
contracts and related options.
Futures Transactions. A futures contract is an agreement to buy or sell a
security (or deliver a final cash settlement price in the case of a contract
relating to an index or otherwise not calling
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for physical delivery at the end of trading in the contracts) for a set price in
the future. Futures exchanges and trading in futures is regulated under the
Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC").
Futures contracts trade on certain regulated contracts markets.
Positions taken in the futures markets are not normally held until delivery or
cash settlement is required, but are instead liquidated through offsetting
transactions which may result in a gain or a loss. While futures positions taken
by a Portfolio will usually be liquidated in this manner, the Portfolio may
instead make or take delivery of underlying securities whenever it appears
economically advantageous to the Portfolio to do so. A clearing organization
associated with the exchange on which futures are traded assumes responsibility
for closing-out transactions and guarantees that, as between the clearing
members of an exchange, the sale and purchase obligations will be performed with
regard to all positions that remain open at the termination of the contract.
Upon entering into a futures contract, a Portfolio will be required to deposit
with a futures commission merchant a certain percentage (usually 1% to 5%) of
the futures contracts market value as initial margin. A Portfolio may not commit
in the aggregate more than 5% of the market value of its total assets to initial
margin deposits on the Portfolio's existing futures contracts and premium paid
for options on unexpired futures contracts used for non hedging purposes.
Initial margin is in the nature of a performance bond or good faith deposit on
the contract which is returned upon termination of the futures contract if all
contractual obligations have been satisfied. The initial margin in most cases
will consist of cash or U.S. Government securities. Subsequent payments, called
variation margin, may be made with the futures commission merchant as a result
of marking the contracts to market on a daily basis as the contract value
fluctuates.
Futures on Debt Securities. A futures contract on a debt security is a binding
contractual commitment which, if held to maturity, will result in an obligation
to make or accept delivery, during a particular future month, of securities
having a standardized face value and rate of return. By purchasing futures on
debt securities [assuming a "long" position] a Portfolio will legally obligate
itself to accept the future delivery of the underlying security and pay the
agreed price. By selling futures on debt securities [assuming a "short"
position] it will legally obligate itself to make the future delivery of the
security against payment of the agreed price. Open future positions on debt
securities will be valued at the most recent settlement price, unless such price
does not appear to the Sub-Investment Manager to reflect the fair value of the
contract, in which case the positions will be valued by, or under the direction
of, the Board of Directors.
The Portfolios by hedging through the use of futures on debt securities seek to
establish more certainty with respect to the effective rate of return on their
portfolio securities. A Portfolio may, for example, take a "short" position in
the futures market by selling contracts for the future delivery of debt
securities held by the Portfolio (or securities having characteristics similar
to those held by the Portfolio) in order to hedge against an anticipated rise in
interest rates that would adversely affect the value of the Portfolio's
portfolio securities. When hedging of this character is successful, any
depreciation in the value of portfolio securities will be substantially offset
by appreciation in the value of the futures position.
On other occasions, a Portfolio may take a "long" position by purchasing futures
on debt securities. This would be done, for example, when the Portfolio intends
to purchase particular debt securities, but expects the rate of return available
in the bond market at that time to be less favorable than rates currently
available in the futures markets. If the anticipated rise in the price of the
debt securities should occur (with its concomitant reduction in yield), the
increased cost to the Portfolio of purchasing the debt securities will be
offset, at least to some extent, by the
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rise in the value of the futures position in debt securities taken in
anticipation of the subsequent purchase of such debt securities.
The Portfolio could accomplish similar results by selling debt securities with
long maturities and investing in debt securities with short maturities when
interest rates are expected to increase or by buying debt securities with long
maturities and selling debt securities with short maturities when interest rates
are expected to decline. However, by using futures contracts as a risk
management technique (to reduce a Portfolio's exposure to interest rate
fluctuations), given the greater liquidity in the futures market than in the
bond market, it might be possible to accomplish the same result more effectively
and perhaps at a lower cost. See Limitations on Purchase and Sale of Futures
Contracts and Options on Futures Contracts below.
Stock Index Futures. A stock index futures contract does not require the
physical delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the contract to be credited or
debited at the close of each trading day to the respective accounts of the
parties to the contract. On the contract's expiration date, a final cash
settlement occurs and the futures positions are simply closed out. Changes in
the market value of a particular stock index futures contract reflect changes in
the specified index of equity securities on which the future is based.
Stock index futures may be used to hedge the equity portion of a Portfolio's
securities portfolio with regard to market risk (involving the market's
assessment of over-all economic prospects), as distinguished from stock-specific
risk (involving the market's evaluation of the merits of the issuer of a
particular security). By establishing an appropriate "short" position in stock
index futures, a Portfolio may seek to protect the value of its portfolio
against an overall decline in the market for equity securities. Alternatively,
in anticipation of a generally rising market, a Portfolio can seek to avoid
losing the benefit of apparently low current prices by establishing a "long"
position in stock index futures and later liquidating that position as
particular equity securities are in fact acquired. To the extent that these
hedging strategies are successful, a Portfolio will be affected to a lesser
degree by adverse overall market price movements, unrelated to the merits of
specific portfolio equity securities, than would otherwise be the case. See
Limitations on Purchase and Sale of Futures Contracts and Options on Futures
Contracts below.
Options on Futures. For bona fide hedging purposes, the Growth and Income
Portfolio, the Capital Growth Portfolio, the Emerging Growth Portfolio and the
Balanced Portfolio may purchase put and call options and write call options on
futures contracts. These options are traded on exchanges that are licensed and
regulated by the CFTC for the purpose of options trading. A call option on a
futures contract gives the purchaser the right, in return for the premium paid,
to purchase a futures contract (assume a "long" position) at a specified
exercise price at any time before the option expires. A put option gives the
purchaser the right, in return for the premium paid, to sell a futures contract
(assume a "short" position) at a specified exercise price at any time before the
option expires. Upon the exercise of a call, the writer of the option is
obligated to sell the futures contract (to deliver a "long" position to the
option holder) at the option exercise price, which presumably will be lower than
the current market price of the contract in the futures market. Upon exercise of
a put, the writer of the option is obligated to purchase the futures contract
(to deliver a "short" position to the option holder) at the option exercise
price which presumably will be higher than the current market price of the
contract in the futures market.
When a Portfolio, as a purchaser of an option on a futures contract, exercises
such option and assumes a long futures position, in the case of a call, or a
short futures position, in the case of
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a put, its gain will be credited to its futures variation margin account. Any
loss suffered by the writer of the option of a futures contract will be debited
to its futures variation margin account. However, as with the trading of
futures, most participants in the options markets do not seek to realize their
gains or losses by exercise of their option rights. Instead, the holder of an
option usually will realize a gain or loss by buying or selling an offsetting
option at a market price that will reflect an increase or a decrease from the
premium originally paid as purchaser or required as a writer.
Options on futures contracts can be used by a Portfolio to hedge the same risks
as might be addressed by the direct purchase or sale of the underlying futures
contracts themselves. Depending on the pricing of the option, compared to either
the futures contract upon which it is based or upon the price of the underlying
securities themselves, it may or may not be less risky than direct ownership of
the futures contract or the underlying securities.
In contrast to a futures transaction, in which only transaction costs are
involved, benefits received by a Portfolio as a purchaser in an option
transaction will be reduced by the amount of the premium paid as well as by
transaction costs. In the event of an adverse market movement, however, a
Portfolio which purchased an option will not be subject to a risk of loss on the
option transaction beyond the price of the premium it paid plus its transaction
costs, and may consequently benefit from a favorable movement in the value of
its portfolio securities that would have been more completely offset if the
hedge had been effected through the use of futures.
If a Portfolio writes call options on futures contracts, the Portfolio will
receive a premium but will assume a risk of adverse movement in the price of the
underlying futures contract comparable to that involved in holding a futures
position. If the option is not exercised, the Portfolio will realize a gain in
the amount of the premium, which may partially offset unfavorable changes in the
value of securities held by, or to be acquired for, the Portfolio. If the option
is exercised, the Portfolio will incur a loss in the option transaction, which
will be reduced by the amount of the premium it has received, but which may be
partially offset by favorable changes in the value of its portfolio securities.
While the purchaser or writer of an option on a futures contract may normally
terminate its position by selling or purchasing an offsetting option of the same
series, a Portfolio's ability to establish and close out options positions at
fairly established prices will be subject to the existence of a liquid market.
The Portfolios will not purchase or write options on futures contracts unless,
in the Sub-Investment Manager's opinion, the market for such options has
sufficient liquidity that the risks associated with such options transactions
are not at unacceptable levels.
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Options on Foreign Currencies
As noted in the Prospectus, the Capital Growth and Emerging Growth Portfolios
may purchase and write options on foreign currencies for hedging purposes in a
manner similar to that in which Forward Contracts will be utilized. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are denominated will reduce the dollar value of such securities, even
if their value in the foreign currency remains constant.
In order to protect against such diminutions in the value of portfolio
securities, the Capital Growth and Emerging Growth Portfolios may purchase put
options on the foreign currency. If the value of the currency does decline, the
Capital Growth and Emerging Growth Portfolios will have the right to sell such
currency for a fixed amount in dollars and will thereby offset, in whole or in
part, the adverse effect on its investments which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which securities
to be acquired are denominated is projected, thereby increasing the cost of such
securities, the Capital Growth and the Emerging Growth Portfolios may purchase
call options thereon. The purchase of such options could offset, at least
partially, the effects of the adverse movements in exchange rates. As in the
case of other types of options, however, the benefit to the Capital Growth and
the Emerging Growth Portfolios deriving from purchases of foreign options will
be reduced by the amount of the premium and related transactions costs. In
addition, where currency exchange rates do not move in the direction or to the
extent anticipated, the Capital Growth and the Emerging Growth Portfolios could
sustain losses on transactions in foreign currency options which would require
it to forgo a portion or all of the benefits of advantageous changes in such
rates.
The Capital Growth and Emerging Growth Portfolios may write options on foreign
currencies for the same types of hedging purposes. For example, where the
Capital Growth or Emerging Growth Portfolios anticipate a decline in the dollar
value of foreign-dominated securities due to adverse fluctuations in exchange
rates it could, instead of purchasing a put option, write a call option on the
relevant currency. If the expected decline occurs, the options will most likely
not be exercised, and the diminution in value of portfolio securities will be
offset by the amount of premium received.
Similarly, instead of purchasing a call option to hedge against anticipated
increase in the dollar cost of securities to be acquired, the Capital Growth or
Emerging Growth Portfolio could write a put option on the relevant currency
which, if rates move in the manner projected, will expire unexercised and allow
the Capital Growth or Emerging Growth Portfolio to hedge such increased costs up
to the amount of the premium. Foreign currency options written by the Emerging
Growth Portfolio will generally be covered in a manner similar to the covering
of other types of options. As in the case of other types of options, however,
the writing of a foreign currency option will constitute only a partial hedge up
to the amount of the premium, and only if rates move in the expected direction.
If this does not occur, the option may be exercised and the Emerging Growth
Portfolio would be required to purchase or sell the underlying currency at a
loss which may not be offset by the amount of the premium. Through the writing
of options on foreign currencies, the Emerging Growth Portfolio also may be
required to forgo all or a portion of the benefits which might otherwise have
been obtained from favorable movements in exchange rates.
Limitations on Purchase and Sale of Futures Contracts
and Options on Futures Contracts.
The Portfolios will engage in transactions in futures contracts and related
options only for bona fide hedging purposes and not for speculation. The
Portfolios may not purchase or sell futures contracts or related options if
immediately thereafter the sum of the amounts of initial margin
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deposits on a Portfolio's existing futures contracts and premiums paid for
unexpired options on futures contracts would exceed 5% of the value of the
Portfolio's total assets; provided, however, that in the case of an option that
is "in-the-money" at the time of purchase, the "in-the-money" amount may be
excluded in calculating the 5% limitation. In instances involving the purchase
or sale of futures contracts or the writing of covered call options thereon by a
Portfolio, such positions will always be "covered", as appropriate, by either
(i) an amount of cash and cash equivalents, equal to the market value of the
futures contracts purchased or sold and options written thereon (less any
related margin deposits), deposited in a segregated account with its custodian
or (ii) by owning the instruments underlying the futures contract sold (i.e.,
short futures positions) or option written thereon or by holding a separate
option permitting the Portfolio to purchase or sell the same futures contract or
option at the same strike price or better.
High Yield Bonds
The medium and lower quality debt securities in which the Capital Growth and
Emerging Growth Portfolios may invest are regarded as predominantly speculative
with respect to the issuer's continuing ability to meet principal and interest
payments. Medium and lower quality bonds may be more susceptible to real or
perceived adverse economic and individual corporate developments than would
investment grade bonds. For example, a projected economic downturn or the
possibility of an increase in interest rates could cause a decline in high yield
bond prices because such an event might lessen the ability of highly leveraged
high yield issuers to meet their principal and interest payment obligations,
meet projected business goals or obtain additional financing. In addition, the
secondary trading market for medium and lower quality bonds may be less liquid
than the market for investment grade bonds. This potential lack of liquidity may
make it more difficult for the Sub-Investment Manager to accurately value
certain portfolio securities. Further, there is the risk that certain high yield
bonds containing redemption or call provisions may be called by the issuers of
such bonds in a declining interest rate market and the Portfolio might then have
to replace such called bonds with lower yielding bonds, thereby decreasing the
net investment income to the Portfolio.
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Description of Investment Ratings
Moody's - Bond Ratings
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt-
edge". Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa-Bonds which are rated Caa are 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 a
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.
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Moody's Commercial Paper Ratings
Moody's Commercial Paper ratings are opinions of the ability of issuers to repay
punctually promissory obligations not having an original maturity in excess of
nine months. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative capacity of rated issuers:
Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations.
Issuers rated Prime-3 (or related supporting institutions) have an acceptable
capacity for repayment of short-term promissory obligations.
Issuers rated Not Prime do not fall within any of the Prime rating categories.
Standard & Poor's - Bond Ratings
AAA-This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA-Bonds rated AA also qualify as quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A-Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay principal
and interest. Whereas they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB, B, CCC, CC-Bonds rated BB, B, CCC, and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree. While such bonds
will likely have some equality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
C-Bonds rated C are typically subordinated to senior debt which is assigned an
actual or implied CCC rating.
D-Bonds rated D are in payment default or may be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
Standard & Poor's Commercial Paper Ratings
A Standard & Poor's Commercial Paper Rating is a current assessment of the
likelihood of
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timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded into four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. Ratings are applicable to both
taxable and tax-exempt commercial paper. The four categories are as follows:
A-Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
the designation 1, 2 and 3 to indicate the relative degree of safety.
A-1-This designation indicates that the degree of safety regarding timely
payment is very strong.
A-2-Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as overwhelming as for issues
designated "A-1".
A-3-Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
The Commercial Paper Rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer and obtained by Standard & Poor's from other sources it
considers reliable. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information.
Commencing on July 27, 1984, Standard & Poor's instituted a new rating category
with respect to certain municipal note issues with a maturity of less than three
years. The new note ratings and symbols are:
SP-1-A very strong, or strong, capacity to pay principal and interest. Issues
that possess overwhelming safety characteristics will be given a "+"
designation.
SP-2-A satisfactory capacity to pay principal and interest.
SP-3-A speculative capacity to pay principal and interest.
Standard & Poor's may continue to rate note issues with a maturity greater than
three years in accordance with the same rating scale currently employed for
municipal bond ratings.
RISK CONSIDERATIONS
U.S. Dollar Obligations of Foreign Branches of U.S. Banks
The Money Market Portfolio and the Balanced Portfolio may regularly invest in
U.S. dollar denominated obligations of foreign branches of FDIC-member U.S.
banks. These instruments represent the loan of funds actually on deposit in the
U.S. The Fund believes that the U.S. bank would be liable in the event that the
foreign branch failed to pay on its U.S. dollar obligations. Nevertheless, the
assets supporting the liability could be expropriated or otherwise restricted if
located outside the U.S. Exchange controls, taxes, or political and economic
developments could affect liquidity or repayment. Because of possibly
conflicting laws or regulations, the issuing bank could maintain and prevail
that the liability is solely that of the branch, thus exposing the Portfolio to
a possible loss. Such U.S. dollar obligations of foreign branches of FDIC-member
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U.S. banks are not covered by the usual $100,000 of FDIC insurance if they are
payable only at an office of such a bank located outside the U.S., the District
of Columbia, Puerto Rico, Guam, American Samoa, and the Virgin Islands.
Repurchase Agreements
During the holding period of a repurchase agreement, the seller marks to market
the collateral on a daily basis and must provide additional collateral if the
market value of the obligation falls below the repurchase price. If a Portfolio
acquires a repurchase agreement and then the seller defaults at a time when the
value of the underlying securities is less than the obligation of the seller,
the Fund could incur a loss. If the seller defaults or becomes insolvent, a
Portfolio could realize delays, costs or a loss in asserting its rights to the
collateral in satisfaction of the seller's repurchase agreement. The Portfolios
will enter into repurchase agreements only with sellers who are believed to
present minimal credit risks and whose creditworthiness has been evaluated by
the Board of Directors of the Fund. As a general matter, if the seller of the
repurchase agreement is a bank it must have assets of at least $1,000,000,000;
if the seller is a broker-dealer it must have a net worth of at least
$25,000,000.
Foreign Securities
The investment in securities of foreign issuers by the World Growth Stock
Portfolio, the Gold Stock Portfolio, the Growth and Income Portfolio, the
Capital Growth Portfolio, the Balanced Portfolio, and the Emerging Growth
Portfolio may involve special considerations associated with fluctuating
exchange rates, the fact that foreign securities and the markets therefore are
not as liquid as their domestic counterparts, the imposition of exchange control
restrictions, and economic or political instability. In addition, issuers of
foreign securities are subject to different, and in some cases less
comprehensive, accounting, reporting and disclosure requirements than domestic
issuers. As a result, the selection of investments in foreign issuers may be
more difficult and subject to greater risks than investments in domestic
issuers.
These Portfolios make investments in businesses located in foreign nations.
Thus, there is the possibility of expropriation or confiscatory taxation,
political or social instability or diplomatic developments which could affect
investments in those nations. Further, foreign brokerage commissions and
custodian fees are generally higher than in the U.S. In addition, government
restrictions in certain countries and other limitations or investment may affect
the maximum percentage of equity ownership in any one company by the Portfolios.
Moreover, in some countries, only special classes of securities may be purchased
by external investors and the price, liquidity, and rights with respect to such
securities may differ from those relating to shares owned by nationals. In
addition, there may also be the absence of developed legal structures governing
private or foreign investment or allowing for judicial redress for injury to
private property. As a result, the selection of securities of non-U.S. issuers
may be more difficult and subject to greater risks than investment in domestic
issuers.
A Portfolio may be affected, either unfavorably or favorably, by fluctuations in
the relative rates of exchange between the currencies of different nations and
the exchange control regulations and by their indigenous economic and political
developments. The Sub-Investment Managers for these Portfolios will consider
these and other factors before investing in particular foreign securities, and
will not make such investments unless, in its opinion, such investments will
meet the policies and objectives of its respective Portfolio. In addition, the
Board of Directors will monitor all foreign custody arrangements to ensure
compliance with the 1940 Act and the rules thereunder, and will review and
approve, at least annually, the continuance of such arrangements as consistent
with the best interests of the Fund and the stockholders.
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Forward Foreign Currency Exchange Contracts
The Capital Growth and Emerging Growth Portfolios' use of forward foreign
currency exchange contracts involves the special risks described below. The
precise matching of the amounts of foreign currency contracts and the value of
the portfolio securities being hedged will not generally be possible, because
the future value of such securities in foreign currencies will change as a
consequence of movements in the market value of those securities between the
dates the forward currency contracts are entered into and the dates they mature.
In addition, since it is impossible to forecast with precision the market value
of portfolio securities at the expiration or maturity of a forward currency
contract, it may be necessary for the Portfolio to purchase additional foreign
currency on the spot (i.e., cash) market (and bear the expense of such purchase)
if the market value of the securities being hedged is less than the amount of
foreign currency the Portfolio would be obligated to deliver upon the sale of
such securities. Conversely, it may be necessary for the Portfolio to sell some
of the foreign currency received upon the sale of portfolio securities on the
spot market if the market value of such securities exceeds the amount of foreign
currency the Portfolio is obligated to deliver.
Further, the Capital Growth and Emerging Growth Portfolios may not always be
able to enter into a forward currency contract when the Sub-Investment Manager
deems it advantageous to do so, for instance, if the Portfolio is unable to find
a counterparty to the transaction at an attractive price. Moreover, the
Portfolio may not be able to purchase forward currency contracts with respect to
all of the foreign currencies in which its portfolio securities may be
denominated. In those circumstances, and in other circumstances in which the
Portfolio enters into a cross-hedging forward currency contract, the correlation
between the movements in the exchange rates of the subject currency and the
currency in which the portfolio security is denominated may not be precise.
Finally, the cost of purchasing forward currency contracts in a particular
currency will reflect, in part, the rate of return available on instruments
denominated in that currency. The cost of purchasing forward contracts to hedge
portfolio securities that are denominated in currencies that, in general, yield
high rates of return may, therefore, tend to reduce the rate of return.
Gold Mining Shares
The four largest producers of gold currently are the Republic of South Africa,
the U.S., Australia and Canada. Economic and political conditions and objectives
prevailing in these countries may have direct effects on the production and
marketing of newly produced gold and sales of central bank gold holdings.
Political and social conditions in South Africa, due to the history of apartheid
and the volatility of the political conditions in the new South African
government and unsettled political conditions which could recur in South Africa
as well as in neighboring countries, may pose certain risks to investments in
South Africa if aggravated by local or international developments, such risks
could have an adverse effect on investments in South Africa including the Fund's
investments and, under certain conditions, on the liquidity of the Funds
portfolio and its ability to meet shareholder redemption requests. The ability
of the Fund to invest or hold investments in South African companies may be
further affected by changes in the United States or South African laws or
regulations. In the past legislation has been proposed in Congress which would
require U.S. investors, including the Fund, to sell their investment in South
Africa. If such legislation were to be enacted it could have a materially
adverse effect on the value of the Fund's investments in South Africa.
Notwithstanding these considerations, the recent liberalization of South
Africa's political system could reduce the risks described above in the future.
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Options
During the option period, the writer of a call option has, in return for the
premium received on the option, given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security increase, but has retained the risk of loss should the price of the
underlying security decline. The writer has no control over the time when it may
be required to fulfill its obligation as a writer of the option. The premium is
intended to offset that loss in whole or in part. Unlike the situation in which
the Portfolio owns securities not subject to a call option, the Portfolio in
writing call options must assume that the call may be exercised at any time
prior to the expiration of its obligation as a seller, and that in such
circumstances the net proceeds realized from the sale of the underlying
securities pursuant to the call may be substantially below the prevailing market
price, although it must be at the previously agreed to exercise price.
The risk of purchasing a call option or a put option is that the Portfolio may
lose the premium it paid plus transaction costs. If a Portfolio does not
exercise the option and is unable to close out the position prior to expiration
of the option, it will lose its entire investment. An option position may be
closed out only on an exchange that provides a secondary market for an option of
the same series. Although a Portfolio will write and purchase options only when
the Sub-Investment Manager believes that a liquid secondary market will exist
for options of the same series, there can be no assurance that a liquid
secondary market will exist for a particular option at a particular time and
that a Portfolio, if it so desires, can close out its position by effecting a
closing transaction. If the writer of a covered call option is unable to effect
a closing purchase transaction, it cannot sell the underlying security until the
option expires or the option is exercised. Accordingly, a covered call writer
may not be able to sell the underlying security at a time when it might
otherwise be advantageous to do so.
The effectiveness of hedging through the purchase of securities index options
will depend upon the extent to which price movements in the portion of the
securities portfolio being hedged correlate with price movements in the selected
securities index. Perfect correlation is not possible because the securities
held or to be acquired by a Portfolio will not exactly match the composition of
the securities indexes on which options are written. The principal risk in
purchasing securities index options is that the premium and transaction costs
paid by a Portfolio will be lost as a result of unanticipated movements in the
price of the securities comprising the securities index for which the option has
been purchased. In writing securities index options, the principal risks are the
inability to effect closing transactions at favorable prices and the inability
to participate in the appreciation of the underlying securities.
Futures Contracts and Related Options
Positions in futures contracts and related options may be closed out only on an
exchange that provides a secondary market for such contracts or options. A
Portfolio will enter into an option or futures contract only if there appears to
be a liquid secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular option or futures contract at any
specific time. Thus, it may not be possible to close out a futures contract or
related option position. In the case of a futures contract, in the event of
adverse price movements a Portfolio would continue to be required to make daily
margin payments. In this situation, if a Portfolio has insufficient cash to meet
daily margin requirements it may have to sell portfolio securities at a time
when it may be disadvantageous to do so. In addition, a Portfolio may be
required to take or make delivery of the securities underlying the futures
contracts it holds. The inability to close out futures contracts also could have
an adverse impact on a Portfolio's ability to hedge its portfolio effectively.
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There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also preclude a hedger's opportunity to benefit from a
favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause a Portfolio to incur additional
brokerage commissions and may cause an increase in a Portfolio's turnover rate.
The successful use of futures contracts and related options also depends on the
ability of the Sub-Investment Manager to forecast correctly the direction and
extent of market movements within a given time frame. To the extent market
prices remain stable during the period a futures contract or option is held by a
Portfolio or such prices move in a direction opposite to that anticipated, a
Portfolio may realize a loss on the hedging transaction that will not be offset
by an increase in the value of its portfolio securities. As a result, a
Portfolio's return for the period may be less than if it had not engaged in the
hedging transaction.
Utilization of futures contracts by a Portfolio involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities which are being hedged. If the price of the futures
contract moves more or less than the price of the securities being hedged, a
Portfolio will experience a gain or loss which will not be completely offset by
movements in the price of the securities.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for a Portfolio
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to a Portfolio while the
purchase or sale of the futures contract would not have resulted in a loss, such
as when there is no movement in the price of the underlying securities.
Federal Tax Matters
A policyowner's interest in earnings on assets held in a separate account and
invested in the Fund are not includible in the policyowner's gross income
because the Policies presently qualify as life insurance contracts for Federal
income tax purposes.
The Fund intends that each Portfolio will comply with Section 817(h) of the Code
and the regulations thereunder. Pursuant to that Section, the only shareholders
of the Fund and its Portfolios will be separate accounts funding variable
annuities and variable life insurance policies established by Chubb Life, its
successors and assigns or by other insurance companies with which Chubb Life is
affiliated and Chubb Life's general account which provided the initial capital
for the Portfolios.
In addition, Section 817(h) of the Code and the regulations thereunder impose
diversification requirements on the separate accounts and on the Portfolios.
These diversification requirements are in addition to the diversification
requirements imposed by the Code for the Portfolios to be treated as regulated
investment companies. Failure to meet the requirements of Section 817(h) could
result in taxation to Chubb Life or its affiliated insurance companies and
immediate taxation of the owners of the policies funded by the Fund.
The Secretary of the Treasury may in the future issue regulations or one or more
revenue rulings which would prescribe the circumstances in which a policyowner's
control of the investments of a segregated asset account may cause the
policyowner, rather than an insurance company, to be treated as the owner of the
assets of the account. The regulations could impose requirements that are not
reflected in the Policy, relating, for example, to such elements of policyowner
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control as premium allocation, transfer privileges and investment in a division
focusing on a particular investment sector such as the Gold Stock Portfolio.
Failure to comply with any such regulations presumably would cause earnings on a
policyowner's interest in the separate account to be includible in the
policyowner's gross income in the year earned.
The Fund may, therefore, find it necessary to take action to assure that the
Policy continues to qualify as a life insurance policy under Federal tax laws.
The Fund, for example, may be required to alter the investment objectives of any
Portfolios or substitute the shares of one Portfolio for those of another. No
such change of investment objectives or substitution of securities will take
place without notice to affected policyholders and the approval of a majority of
such policyholders or without prior approval of the Securities and Exchange
Commission, to the extent legally required. See "TAXES" below.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Management Agreements and Sub-Investment Management Agreements.
The Fund has entered into Investment Management Agreements with Chubb Investment
Advisory Corporation ("Chubb Investment Advisory") with respect to all
Portfolios. The Fund and Chubb Investment Advisory have also executed Sub-
Investment Management Agreements with Templeton Global Advisors, Inc.
("Templeton"), Chubb Asset Managers, Inc. ("Chubb Asset"), Van Eck Associates
Corporation ("Van Eck Associates"), Pioneering Management Corporation
("Pioneer"), Janus Capital Corporation ("Janus"), Phoenix Investment Counsel,
Inc. ("Phoenix") and Massachusetts Financial Services Company ("MFS")
(collectively the "Sub-Investment Managers") with regard to the World Growth
Stock; Money Market, Bond and Growth and Income; Gold Stock; Domestic Growth
Stock; Capital Growth; Balanced and Emerging Growth Portfolios,
respectively.
The Investment Management Agreements provide that Chubb Investment Advisory,
subject to control and review by the Fund's Board of Directors, is responsible
for the overall management and supervision of each Portfolio and for providing
certain administrative services to the Fund. See "MANAGEMENT OF THE FUND" in the
Prospectus. The Sub-Investment Management Agreements provide that the Sub-
Investment Managers, subject to review by the Fund's Board of Directors and by
Chubb Investment Advisory, have the day-to-day responsibility for making
decisions to buy, sell or hold any particular security for the Portfolio which
they advise.
Chubb Investment Advisory, each Sub-Investment Manager and their affiliates may
provide investment advice to other clients, including, but not limited to,
mutual funds, individuals, pension funds and institutional investors. In
addition, persons employed by Chubb Asset, who are also investment personnel of
Chubb & Son, Inc., currently provide investment advice to, supervise and monitor
investment portfolios for The Chubb Corporation and its affiliates, including
general accounts of the insurance affiliates of The Chubb Corporation. Some of
the advisory accounts of Chubb Investment Advisory, each Sub-Investment Manager,
and their affiliates may have investment objectives and investment programs
similar to those of the Portfolios. Accordingly, occasions may arise when
securities that are held by other advisory accounts, or that are currently being
purchased or sold for other advisory accounts, are also being selected for
purchase or sale for a Portfolio. It is the practice of Chubb Investment
Advisory, each Sub-Investment Manager and their affiliates to allocate such
purchases or sales insofar as feasible among their several clients in a manner
they deem equitable, to all accounts involved. Under normal circumstances such
transactions will be (1) done on a pro-rata basis substantially in proportion to
the amounts ordered by each account, (2) entered into only if the
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trade is likely to produce a benefit for the Portfolios, and (3) at the same
average price for each client. While it is conceivable that in certain instances
this procedure could adversely affect the price or number of shares involved in
the Fund's transaction, it is believed that the procedure generally contributes
to better overall execution of the Fund's portfolio transactions. It is also the
policy of Chubb Investment Advisory, each Sub-Investment Manager, and each of
their affiliates not to favor any one account over the other.
For providing investment advisory and management services to the Fund, Chubb
Investment Advisory receives monthly compensation from the Fund and has sole
responsibility to provide each Sub-Investment Manager, other than Janus, with
quarterly compensation and Janus with monthly compensation, at annual rates
computed as described under "MANAGEMENT OF THE FUND" in the Prospectus. For the
year ended December 31, 1993, the Fund paid $251,741, $21,623, $45,147, $25,819,
$177,616, $15,277, $104,700, and $73,318 to Chubb Investment Advisory for the
World Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock
Portfolio, the Bond Portfolio and the Domestic Growth Stock Portfolio,
respectively. For the year ended December 31, 1994, the Fund paid $377,344,
$39,051, $60,959, $38,648, $221,681, $32,319, $214,041 and $100,956 to Chubb
Investment Advisory for the World Growth Stock Portfolio, the Money Market
Portfolio, the Gold Stock Portfolio, the Bond Portfolio, the Domestic Growth
Stock Portfolio, the Growth and Income Portfolio, the Capital Growth Portfolio
and the Balanced Portfolio, respectively. For the year ended December 31, 1995
the Fund paid and $511,260, $40,941, $59,640, $50,107, $317,840, $65,332,
$387,176, and $106,430 to Chubb Investment Advisory for the World Growth
Stock Portfolio, the Money Market Portfolio, the Gold Stock Portfolio, the Bond
Portfolio, the Domestic Growth Stock Portfolio, the Growth Stock Portfolio, the
Capital Growth Portfolio, and the Balanced Portfolio. For the period from May 1,
1995 (commencement of operations) to December 31, 1995 the Fund paid $33,463
to Chubb Investment Advisory for the Emerging Growth Portfolio. All such fees
were paid pursuant to the terms of the Investment Management Agreements and the
Sub-Investment Management Agreements. The Emerging Growth Portfolio was added to
the Fund on May 1, 1995 and therefore no investment advisory fees were paid by
it during 1994 and 1993.
The Investment Management Agreements also obligate Chubb Investment Advisory to
perform certain administrative services which are described more completely in
the Prospectus. Certain of these functions have been delegated to the Sub-
Investment Managers.
The continuance of the Investment Management Agreements and the Sub-Investment
Management Agreements were approved by the Fund's Board of Directors on February
1, 1996. Unless earlier terminated, each Agreement will remain in effect as to
the applicable Portfolio from year to year with respect to each such Portfolio,
if approved annually (1) by the Board of Directors of the Fund or by a majority
of the outstanding shares of the Portfolio, and (2) by a majority of the Board
of Directors who are not interested persons, within the meaning of the 1940 Act,
of any party to such Agreement. The Agreements are not assignable and may be
terminated without penalty on 60 days' written notice at the option of any party
or, with respect to any Portfolio, by the requisite vote of the stockholders of
that Portfolio. See "CAPITAL STOCK" in this Statement of Additional Information.
Independent Auditors
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Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116, has been
selected as the independent auditors of the Fund.
The financial statements of the Fund incorporated by reference in this Statement
of Additional Information and the related financial highlights included in the
Prospectus for the periods indicated therein have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon incorporated by
reference herein, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Custodians
Citibank, N.A., 111 Wall Street, New York, New York 10043, acts as custodian of
the Fund's assets. The Fund has also appointed, with the approval of the Fund's
Board of Directors, from time to time, sub-custodians, qualified under Rule 17f-
5 of the 1940 Act, with respect to certain foreign securities. The Fund may
authorize Citibank to enter into an agreement with any U.S. banking institution
or trust company to act as a sub-custodian pursuant to a resolution of the
Fund's Board of Directors. Securities owned by the Fund subject to repurchase
agreements may be held in the custody of other U.S. banks.
Payment of Expenses
Chubb Investment Advisory is obligated to assume the cost of certain
administrative expenses for the Fund, as described in the Prospectus under the
heading "MANAGEMENT OF THE FUND." The Fund pays the following expenses:
brokerage commissions and transfer taxes; other state, federal and local taxes
and filing fees; fees and expenses of qualification of the Fund and its shares
under federal and state securities laws subsequent to the effective date of this
Prospectus; compensation of directors who are not interested persons of the Fund
("disinterested directors"); travel expenses of disinterested directors;
interest and other borrowing costs; extraordinary or nonrecurring expenses such
as litigation; costs of printing and distributing communications to current
policyowners; insurance premiums; charges and expenses of the custodian,
independent auditors, and counsel; industry association dues; and other expenses
not expressly assumed by Chubb Investment Advisory. Certain other expenses are
assumed by Chubb Securities Corporation ("Chubb Securities") pursuant to a
distribution agreement with the Fund. See "OFFERING AND REDEMPTION OF SHARES"
below.
PORTFOLIO TRANSACTIONS AND BROKERAGE
ALLOCATIONS
Under the Investment Management Agreements, Chubb Investment Advisory has
ultimate authority to select broker-dealers through which securities are to be
purchased and sold, subject to the general control of the Board of Directors.
Under the Sub-Investment Management Agreements, the Sub-Investment Managers have
day-to-day responsibility for selecting broker-dealers through which securities
are to be purchased and sold, subject to Chubb Investment Advisory's overall
monitoring and supervision. The Sub-Investment Managers each provide the trading
desk for their respective Portfolio transactions. Chubb Investment Advisory will
perform daily valuation of the assets of each Portfolio.
The Money Market Portfolio's investments usually will be purchased on a
principal basis directly from issuers, underwriters or dealers. Accordingly,
minimal brokerage charges are expected to be paid on such transactions.
Purchases from an underwriter generally include a commission or concession paid
by the issuer, and transactions with a dealer usually include the dealer's
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mark-up.
The amount of brokerage commissions paid by the Fund for all Portfolios
(excluding the Emerging Growth Portfolio, for the year 1994 were $201,435, and
for all portfolios for 1995 were $402,052.
Insofar as known to management, no director or officer of the Fund, Chubb
Investment Advisory, any Sub-Investment Manager or any person affiliated with
any of them has any material direct or indirect interest in any broker-dealer
employed by or on behalf of the Fund.
In selecting broker-dealers to execute transactions for the Fund, the Sub-
Investment Managers are obligated to use their best efforts to obtain for each
Portfolio the most favorable overall price and execution available, considering
all the circumstances. Such circumstances include the price of the security, the
size of the broker-dealer's "spread" or commission, the willingness of the
broker-dealer to position the trade, the reliability, financial strength and
stability and operational capabilities of the broker-dealer, the ability to
effect the transaction at all where a large block is involved, the availability
of the broker-dealer to stand ready to execute possibly difficult transactions
in the future, and past experience as to qualified broker-dealers, including
broker-dealers who specialize in any Canadian or foreign securities held by the
Portfolios. Such considerations are judgmental and are weighed by the Sub-
Investment Managers in seeking the most favorable overall economic result for
the Fund.
Notwithstanding the foregoing, however, and subject to appropriate policies and
procedures as then approved by the Board of Directors of the Fund, Chubb
Investment Advisory and the Sub-Investment Managers are authorized to allocate
portfolio transactions to broker-dealers who have provided brokerage and
research services, as such services are defined in Section 28(e) of the
Securities and Exchange Act of 1934, for the Portfolios or other advisory
accounts as to which Chubb Investment Advisory or any Sub-Investment Manager has
investment discretion. In addition, Chubb Investment Advisory and the Sub-
Investment Managers may cause the Portfolios to pay a broker-dealer a commission
for effecting a securities transaction in excess of the amount another broker-
dealer would have charged for effecting the same transaction, if Chubb
Investment Advisory or the Sub-Investment Manager determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services, as defined above, provided by such broker-
dealer viewed in terms of either that particular transaction or the overall
responsibilities of Chubb Investment Advisory or the Sub-Investment Managers
with respect to the Portfolios or their other advisory accounts. Such brokerage
and research services may include, among other things, analyses and reports
concerning issuers, industries, securities, economic factors and trends, and,
portfolio strategy. Such brokerage and research services may be used by Chubb
Investment Advisory or a Sub-Investment Manager in connection with any other
advisory accounts managed by it. Conversely, research services for any other
advisory accounts may be used by the Sub-Investment Manager or Chubb Investment
Advisory in managing the investments of a Portfolio. Chubb Investment Advisory
or a Sub-Investment Manager may also receive from such broker-dealers quotations
for Portfolio valuation purposes, provided that this results in no additional
cost to the Fund.
Research services may be provided to Templeton, at no additional cost to the
Fund, by various wholly owned subsidiaries, including Templeton Investment
Counsel, Inc., a corporation registered under the Investment Advisers Act of
1940, Templeton Investment Management (Hong Kong) Ltd., and Templeton Management
Limited, a Canadian company. The research services include information,
analytical reports, computer screening studies, statistical data, and factual
resumes pertaining to securities in the U.S. and in various foreign nations
which
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Templeton considers as having relatively stable and friendly governments.
Such supplemental research, when utilized, is subjected to analysis by Templeton
before being incorporated into the investment advisory process. Templeton pays
these subsidiaries compensation and reimbursement of expenses as mutually agreed
on, without cost to the Fund. These subsidiaries and Templeton are independent
contractors and in no sense is any of them an agent for the other. Any of them
is free to discontinue such research services at any time on 30 days' notice
without cost or penalty.
In 1995, $117,338 of commissions were paid to brokers because of research
services provided to either Chubb Investment Advisory or the Sub-Investment
Managers.
The Sub-Investment Managers will use their best efforts to recapture all
available tender offer solicitation fees and similar payments in connection with
tenders of the securities of the Fund and to advise the Fund of any fees or
payments of whatever type which it may be possible to obtain for the Fund's
benefit in connection with the purchase or sale of Fund securities.
Any of the Sub-Investment Managers and Chubb Investment Advisory may combine
transactions for the Fund with transactions for other accounts managed by them
or their affiliates, including other investment companies registered under the
1940 Act, as previously described above. Transactions will be combined only when
the transaction meets the Fund's requirements as to selection of brokers or
dealers and negotiation of prices and commissions which the Sub-Investment
Managers would otherwise apply.
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MANAGEMENT OF THE FUND
The directors and officers of the Fund, their addresses, their positions with
the Fund, and their principal occupations for the past five years are set forth
below:
Positions
with Principal Occupations for
Name and Address the Fund the Past Five Years
- ---------------- --------- -------------------
Ronald Angarella* President Senior Vice President, Chubb Life,
One Granite Place and Director President and Director, Chubb
Concord, N.H. 03301 Investment Advisory, Chubb
Securities and Hampshire Funding,
Inc.; Senior Vice President and
Director, Chubb Investment Funds,
Inc.
Richard V. Werner* Senior Vice Senior Vice President, Chief
One Granite Place President and Financial Officer, Chubb Life
Concord, N.H. 03301 Director Insurance Company of America,
Colonial Life Insurance Company, and
Chubb Sovereign Life Insurance
Company; Director, Chubb Investment
Advisory; Vice President, The Chubb
Corporation; President, ChubbHealth
Holdings, Inc., Chairman of the
Board, ChubbHealth, Inc.
Charles C. Cornelio Vice Senior Vice President, Chief
One Granite Place President Administrative Officer, Counsel and
Concord, N.H. 03301 Assistant Secretary, Chubb Life
Insurance Company of America and
Chubb Investment Funds, Inc.; Vice
President, General Counsel and
Secretary, Chubb Securities
Corporation and Hampshire Funding,
Inc.; Secretary, Chubb Investment
Advisory.
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Positions
with Principal Occupations
Name and Address the Fund for the Past Five Years
- ---------------- -------- -----------------------
Shari J. Lease Secretary Assistant Vice President and
One Granite Place Associate Counsel, Chubb Life;
Concord, N.H. 03301 Secretary, Chubb Investment Funds,
Inc.; Assistant Secretary, Chubb
Investment Advisory, previously
Assistant Counsel and Assistant Vice
President, State Bond and Mortgage
Company and affiliated companies.
John A. Weston Treasurer Assistant Vice President and Mutual
One Granite Place Fund Accounting Officer of
Concord, N.H. 03301 ChubbLife; Treasurer of Chubb
Securities Corporation, Chubb
Investment Advisory and Hampshire
Funding, Inc.; formerly, Mutual Fund
Accounting Manager for the Fund,
Chubb Investment Funds, Inc. and
Chubb Investment Advisory
Corporation and Assistant Treasurer
for Chubb Securities Corporation and
Hampshire Funding, Inc.
Thomas H. Elwood Assistant Assistant Counsel, Chubb Life
One Granite Place Secretary Assistant Secretary, Chubb
Concord, N.H. 03301 Investment Funds, Inc., Chubb Series
Trust; formerly, Associate Counsel,
New York Life Insurance Company;
Secretary New York Life
Institutional Funds, Inc., Assistant
Secretary, Mainstay Funds, and MFA
Funds.
Mark D. Landry Assistant Mutual Fund Accounting and
One Granite Place Treasurer Operations Officer for ChubbLife
Concord, N.H. 03301 Concord, N.H. 03301 and Chubb
Investment Advisory; Assistant
Treasurer of Chubb Investment Funds,
Inc.; formerly Mutual Fund Accounting
and Operations Manager for the Fund,
Chubb Investment Funds, Inc. and
Chubb Investment Advisory.
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Position
with Principal Occupations
Name and Address the Fund for the Past Five Years
- ---------------- ------------ -----------------------
James J. Weisbart Director Retired, previously President of
301 Smithfield Road Bird Bath Laundromats and President
Contoocook, N.H. 03329 of Solomon's Inc. (retail clothing
company)
Michael D. Coughlin Director President of Concord Litho
106 School Street Company, Inc. (printing company)
Concord, N.H. 03301
Elizabeth S. Hager Director Formerly State Representative, New
5 Auburn Street Hampshire; Consultant, Fund
Concord, N.H. 03301 Development; previously, City
Councilor, City of Concord, N.H. and
Mayor, City of Concord, N.H.
Asterisks indicate those directors who are "interested persons" within the
meaning of Section 2(a)(19) of the 1940 Act. Messrs. Angarella and Werner are
members of the executive committee, and Messrs. Weisbart and Coughlin and Ms.
Hager are members of the audit committee.
CAPITAL STOCK
The authorized capital stock of the Fund consists of 1,000,000,000 shares of
common stock which are divided into nine series: World Growth Stock Portfolio
common stock, Money Market Portfolio common stock, Gold Stock Portfolio common
stock, Bond Portfolio common stock, Domestic Growth Stock Portfolio common
stock, Growth and Income Portfolio common stock, Capital Growth Portfolio common
stock, Balanced Portfolio common stock and Emerging Growth Portfolio common
stock. Each series currently consists of 100,000,000 shares. The Fund has the
right to issue additional shares without the consent of stockholders, and may
allocate its reissued shares to new series or to one or more of the nine
existing series.
The assets received by the Fund for the issuance or sale of shares of each
Portfolio and all income, earnings, profits and proceeds thereof are
specifically allocated to each Portfolio. They constitute the underlying assets
of each Portfolio, are required to be segregated on the books of account and are
to be charged with the expenses of such Portfolio. Any assets which are not
clearly allocable to a particular Portfolio or Portfolios are allocated in a
manner determined by the Board of Directors. Accrued liabilities which are not
clearly allocable to one or more Portfolios would generally be allocated among
the Portfolios in proportion to their relative net assets before adjustment for
such unallocated liabilities. Each issued and outstanding share in a Portfolio
is entitled to participate equally in dividends and distributions declared with
respect to such Portfolio and in the net assets of such Portfolio upon
liquidation or dissolution remaining after satisfaction of outstanding
liabilities.
The shares of each Portfolio, when issued, will be fully paid and non-
assessable, will have no preference, preemptive, conversion, exchange or similar
rights, and will be freely transferable. Shares do not have cumulative voting
rights.
Chubb Life provided the initial capital for the Fund by purchasing $1,000,000
worth of shares of the World Growth Stock Portfolio, the Money Market Portfolio
and the Gold Stock Portfolio
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for its general account. Subsequently, upon formation of the Bond Portfolio and
Domestic Growth Stock Portfolio, Chubb Life purchased $1,000,000 worth of shares
of the two additional Portfolios for its general account. Most recently, Chubb
Life purchased $1,000,000 worth of shares of the Growth and Income Portfolio and
the Capital Growth Portfolio and $5,000,000 worth of shares of the Balanced
Portfolio and $3,000,000 worth of shares of Emerging Growth Portfolio for its
general account. Chubb Life intends to withdraw such investment from time to
time, but has agreed not to make any redemption request, except with respect to
the Emerging Growth Portfolio, if it would reduce the Fund's net worth below
$100,000.
As of March 31, 1996, Chubb Life owned of record and beneficially the following
percentages of shares of the Fund's Portfolios in its general account: 0.00% of
the World Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock
Portfolio, the Bond Portfolio and the Domestic Growth Stock Portfolio
2.49% of the Growth and Income Portfolio, 0.44% of the Capital Growth,
Portfolio, 1.25% of the Balanced Portfolio and 26.80% of the Emerging Growth
Portfolio. Chubb Life's ownership of more than 25% of the shares of the Emerging
Growth Portfolio may result in Chubb Life being deemed to be a controlling
entity of this Portfolio. Chubb Separate Account A, a separate account
established by Chubb Life, owned of record as of March 31, 1995, 100% of the
World Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock
Portfolio, the Bond Portfolio, the Domestic Growth Stock Portfolio, 97.51% of
the Growth and Income Portfolio, 99.56% the Capital Growth Portfolio, 98.75% of
the Balanced Portfolio, and 73.2% of the Emerging Growth Portfolio. The shares
held by Chubb Life or its affiliated insurance companies, including shares for
which no voting instructions have been received, shares held in a separate
account representing charges imposed by Chubb Life or its affiliates and shares
held by Chubb Life that are not otherwise attributable to Policies, will be
voted by Chubb Life or its affiliated insurance companies in proportion to
instructions received from the owners of Policies. Chubb Life and its affiliated
insurance companies reserve the right to vote any or all such shares at their
discretion to the extent consistent with then current interpretations of the
1940 Act and rules thereunder.
The officers and directors of the Fund cannot directly own shares of the Fund
without purchasing a Policy. As a result, the amount of shares owned by the
directors and officers of the Fund as a group is less than 1% of each Portfolio.
OFFERING AND REDEMPTION OF SHARES
The Fund offers shares of each Portfolio only for purchase by the corresponding
division of separate accounts established by Chubb Life or its affiliated
insurance companies. It thus will serve as an investment medium for the Policies
offered by Chubb Life and its affiliated insurance companies. The offering is
without a sales charge and is made at each Portfolio's net asset value per
share, which is determined in the manner set forth below under "DETERMINATION OF
NET ASSET VALUE." In the future, the shares of the Fund may be offered to
additional separate accounts of Chubb Life, its successor or assigns, or of its
affiliated insurance companies.
Chubb Securities is the principal underwriter and distributor of the Fund's
shares. It is also the principal underwriter and distributor of the Policies.
Under the terms of the Fund Distribution Agreement entered into by Chubb
Securities and the Fund, Chubb Securities is not obligated to sell any specific
number of shares of the Fund. Chubb Securities also pays any distribution
expenses and costs (that is, those arising from any activity
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which is primarily intended to result in the sale of shares issued by the Fund)
including expenses and costs attributable to the Fund which are related to the
printing and distributing of prospectuses and periodic reports to new or
prospective owners of Policies. Such expenses are reimbursed by Chubb Life or
its affiliated insurance companies, their successors or assigns, pursuant to the
terms of separate agreements with Chubb Securities relating to the sale of
Policies.
The Fund redeems all full and fractional shares of the Fund at the net asset
value per share applicable to each Portfolio. See "DETERMINATION OF NET ASSET
VALUE" below.
Redemptions are normally made in cash, but the Fund has authority, at its
discretion, to make full or partial payment by assignment to the separate
account of portfolio securities at their value used in determining the
redemption price. The Fund, nevertheless, pursuant to Rule 18f-1 under the 1940
Act, has filed a notification of election on Form N-18f-1, by which the Fund has
committed itself to pay to the separate account in cash, all such separate
account's requests for redemption made during any 90-day period, up to the
lesser of $250,000 or 1% of the applicable Portfolio's net asset value at the
beginning of such period. The securities, if any, to be paid in-kind to the
separate account will be selected in such manner as the Board of Directors deems
fair and equitable. In such cases, the separate account would incur brokerage
costs should it wish to liquidate these portfolio securities.
The right to redeem shares or to receive payment with respect to any redemption
of shares of any Portfolio may only be suspended (1) for any period during which
trading on the New York Stock Exchange is restricted or such Exchange is closed,
other than customary weekend and holiday closings, (2) for any period during
which an emergency exists as a result of which disposal of securities or
determination of the net asset value of that Portfolio is not reasonably
practicable, or (3) for such other periods as the Securities and Exchange
Commission may by order permit for the protection of stockholders of the
Portfolio.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of each Portfolio of the Fund is determined
immediately after the declaration by the Fund of dividends, if any, as of the
close of regular trading on the New York Stock Exchange (presently 4:00 P.M. New
York Time), on each day during which the New York Stock Exchange is open for
trading except on days where both (i) the degree of trading in the Portfolio's
securities would not materially affect the net asset value of the Portfolio's
shares and (ii) no shares of the Portfolio were tendered for redemption or no
purchase order was received. The New York Stock Exchange is open from Monday
through Friday except on the following national holidays: New Years Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. In the event that any of the above holidays
falls on a Sunday, it is regularly observed on the following Monday. The net
asset value per share of each Portfolio is computed by dividing the sum of the
value of the securities held by that Portfolio, plus any cash or other assets
and minus all liabilities, by the total number of outstanding shares of that
Portfolio at such time. Any expenses borne by the Fund, including the investment
management fee payable to Chubb Investment Advisory, are accrued daily except
for extraordinary or non-recurring expenses. See "INVESTMENT ADVISORY AND OTHER
SERVICES-Payment of Expenses" above.
Portfolio securities which are traded on national stock exchanges are valued at
the last sale price as of the close of business of the New York Stock Exchange
on the day the securities are being valued, or, lacking any sales, at the mean
between the closing bid and asked prices.
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Securities traded in the over-the-counter market are valued at the closing sales
price as reported on a readily available market quotation system, or, if no sale
took place, the mean between the bid and asked prices. Securities and assets for
which market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors of the Fund.
Quotations of foreign securities in foreign currencies are converted to U.S.
dollar equivalents using appropriately translated foreign market closing prices.
U.S. Treasury securities and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities with remaining maturities of 60
days or more, are valued at representative quoted prices from bond pricing
services.
Long-term publicly traded corporate bonds are valued at prices obtained from a
bond pricing service when such prices are available or, when appropriate, from
broker-dealers who make a market in that security.
Debt instruments with a remaining maturity of 60 days or less are valued on an
amortized cost basis. Under this method of valuation, the security is initially
valued at cost on the date of purchase or, in the case of securities purchased
with more than 60 days remaining to maturity, the market value on the 61st day
prior to maturity. Thereafter, a constant proportionate amortization in value is
assumed until maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the security. The amortized
cost value of the security may be either more or less than the market value at
any given time. If for any reason the fair value of any security is not fairly
reflected through the amortized cost method of valuation, such security will be
valued by market quotations, if available, otherwise as determined in good faith
by the Board of Directors.
TAXES
In order for each Portfolio of the Fund to qualify for Federal income tax
treatment as a regulated investment company, two of the tests they must meet are
(i) that at least 90% of its gross income for a taxable year must be derived
from qualifying income, i.e., dividends, interest, income derived from loans of
securities, and gains from the sale of securities and (ii) gains realized on the
sale or other disposition of securities held for less than three months must be
limited to less than 30% of each Portfolio's annual gross income. It is the
Fund's policy to comply with the provisions of the Internal Revenue Code of 1986
regarding distribution of investment income and capital gains so that each
Portfolio will not be subject to Federal income tax on amounts distributed and
undistributed or an excise tax on certain undistributed income or capital gains.
For these purposes, if a regulated investment company declares a dividend in
December to stockholders of record in December and pays such dividends before
the end of January they will be treated as paid in the preceding calendar year
and to have been received by such stockholder in December.
PERFORMANCE AND YIELD INFORMATION
Money Market Portfolio
For the seven days ended December 31, 1995, the yield of the Money Market
Portfolio expressed as a simple annualized yield was 4.40%; the yield of the
Money Market Portfolio expressed as a compounded effective yield was 4.50%.
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The Money Market Portfolio's yield is its investment income, less expenses,
expressed as a percentage of assets on an annualized basis for a seven-day
period. The yield is expressed as a simple annualized yield and as a compounded
effective yield. The yield does not reflect the fees and charges imposed on the
assets of Separate Account A.
The simple annualized yield is computed by determining the net change (exclusive
of realized gains and losses from the sale of securities and unrealized
appreciation and depreciation) in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the seven-day period,
dividing the net change in account value by the value of the account at the
beginning of the period, and annualizing the resulting quotient (base period
return) on a 365-day basis. The net change in account value reflects the value
of additional shares purchased with dividends from the original shares in the
account during the seven-day period, dividends declared on such additional
shares during the period, and expenses accrued during the period.
The compounded effective yield is computed by determining the unannualized base
period return, adding one to the base period return, raising the sum to a power
equal to 365 divided by seven, and subtracting one from the result.
Non-Money Market Portfolios
The yield for the 30-day period ended December 31, 1995 for the Bond Portfolio
was 5.75%.
This yield figure represents the net annualized yield based on a specified 30-
day (or one month) period assuming a reinvestment semiannual compounding of
income. Yield is calculated by dividing the average daily net investment income
per share earned during the specified period by the maximum offering price,
which is net asset value per share on the last day of the period, and
annualizing the result according to the following formula:
Yield = 2((A-B+1)/6/ -1)
---
CD
Where A equals dividends and interest earned during the period, B equals
expenses accrued for the period (net of reimbursements), C equals the average
daily number of shares outstanding during the period that were entitled to
receive dividends, and D equals the maximum offering price per share on the last
day of the period.
The average annual total return quotations for the World Growth Stock Portfolio,
the Money Market Portfolio, the Gold Stock Portfolio, the Bond Portfolio, the
Domestic Growth Stock Portfolio, the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and Emerging Growth Portfolio for the
year or period ended December 31, 1995 are 16.35%, 5.06%, 2.76%, 16.76%, 29.72%,
33.58%, 41.74%, 22.35% and 32.91%, respectively. The average annual total return
quotations for these Portfolios, other than the Growth and Income Portfolio, the
Capital Growth Portfolio, the Balanced Portfolio and the Emerging Growth
Portfolio, for the 5 years ended December 31, 1995 are 14.40%, 3.73%, 5.88%,
8.98% and 22.21%, respectively. The average annual total return quotations for
these Portfolios since each Portfolio's inception are 11.71%, 5.05%, 5.43%,
7.70%, 13.70%, 13.49%, 23.61%, 10.26% and 32.91%, respectively.
The average annual total return figures represent the average annual compounded
rate of return of the stated period. Average annual total return quotations
reflect the percentage change between the beginning value of a static account in
the Portfolio and the ending value of that account measured by the then current
net asset value of that Portfolio assuming that all dividends
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and capital gains distributions during the stated period were reinvested in
shares of the Portfolio when paid. Total return is calculated by finding the
average annual compounded rates of return of a hypothetical investment that
would compare the initial amount to the ending redeemable value of such
investment according to the following formula:
T = (ERV/P)/1/n/ -1
where T equals average annual total return, where ERV, the ending redeemable
value, is the value, at the end of the applicable period, of a hypothetical
$1,000 payment made at the beginning of the applicable period, where P equals a
hypothetical initial payment of $1,000, and where N equals the number of years.
From time to time, in reports and sales literature: (1) each Portfolio's
performance or P/E ratio may be compared to: (i) the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index") and Dow Jones Industrial Average
so that you may compare that Portfolio's results with those of a group of
unmanaged securities widely regarded by investors as representative of the U.S.
stock market in general; (ii) other groups of mutual funds traced by: (A) Lipper
Analytical Services, a widely-used independent research firm which ranks mutual
funds by overall performance, investment objectives, and asset size; (B) Forbes
Magazine's Annual Mutual Funds Survey and Mutual Fund Honor Roll; or (C) other
financial or business publications, such as the Wall Street Journal, Business
Week, Money Magazine, and Barron's, which provide similar information; (iii)
indices of stocks comparable to those in which the particular Portfolio invests;
(2) the Consumer Price Index (measure of inflation) may be used to assess the
real rate of return from an investment in each Portfolio; (3) other U.S.
government statistics such as GNP, and net import and export figures derived
from governmental publications, e.g., The Survey of Current Business, may be
used to illustrate investment attributes of each Portfolio or the general
economic, business, investment, or financial environment in which each Portfolio
operates; and (4) the effect of tax-deferred compounding on the particular
Portfolio's investment returns, or on returns in general, may be illustrated by
graphs, charts, etc. where such graphs or charts would compare, at various
points in time, the return from an investment in the particular Portfolio (or
returns in general) on a tax-deferred basis (assuming reinvestment of capital
gains and dividends and assuming one or more tax rates) with the return on a
taxable basis. Each Portfolio's performance may also be compared to the
performance of other mutual funds by Morningstar, Inc. which ranks mutual funds
on the basis of historical risk and total return. Morningstar rankings are
calculated using the mutual fund's performance relative to three-month Treasury
bill monthly returns. Morningstar's rankings range from five stars (highest) to
one star (lowest) and represent Morningstar's assessment of the historical risk
level and total return of a mutual fund as a weighted average for 3, 5, and 10-
year periods. In each category, Morningstar limits its five star rankings to 10%
of the funds it follows and its four star rankings to 22.5% of the funds it
follows. Rankings are not absolute or necessarily predictive of future
performance.
The performance of the Portfolios may be compared, for example, to the record of
the S&P 500 Index, NASDAQ Composite Index, and the Europe, Australia, Far
Eastern ("EAFE") Index. The S&P 500 Index is a well known measure of the price
performance of 500 leading larger domestic stocks which represent approximately
80% of the market capitalization of the U.S. equity market. The NASDAQ Composite
Index is comprised of all stocks on NASDAQ's National Market Systems, as well as
other NASDAQ domestic equity securities. The NASDAQ Composite Index has
typically included smaller, less mature companies representing 10% to 15% of the
capitalization of the entire domestic equity market. The EAFE Index is comprised
of more than 900 companies in Europe, Australia and the Far East. All of these
indices are unmanaged and capitalization weighted. In general, the securities
comprising the NASDAQ Composite Index are more growth oriented and have a
somewhat higher beta and P/E ratio than those in the S&P
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500 Index.
The total returns of all of these indices will show the changes in prices for
the stocks in each index. However, only the performance data for the S&P 500
Index assumes reinvestment of all capital gains distributions and dividends paid
by the stocks in each data base. Tax consequences will not be included in such
illustration, nor will brokerage or other fees or expenses of investing be
reflected in the NASDAQ Composite, S&P 500, EAFE Index.
ADDITIONAL INFORMATION
Reports
Annual and semi-annual reports containing financial statements of the Fund, as
well as voting instruction soliciting material for the Fund, will be sent to
Policyowners.
Name and Service Mark
The Chubb Corporation has granted the Fund the right to use the "Chubb" name and
service mark and has reserved the right to withdraw its consent to the use of
such name and mark by the Fund at any time and to grant the use of such name and
mark to any other users.
FINANCIAL STATEMENTS
The financial statements contained in the Fund's December 31, 1995 Annual Report
to Shareholders are incorporated herein by reference.
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PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The financial statements contained in the Fund's December 31, 1995
Annual Report to Shareholders filed on February 29, 1996 are
incorporated by reference in the Fund's Statement of Additional
Information.
(b) Exhibits
1. a. Amended and Restated Articles of Incorporation,
incorporated by reference to earlier filing on April 11,
1990, SEC File No. 2-94479, Exhibit 1 of Form N-1A
Registration Statement.
b. Articles Supplementary to the Articles of
Incorporation, incorporated by reference to earlier filing
on February 28, 1992, SEC File No. 2-94479, Exhibit 1(b)
of N-1A Registration Statement.
c. Articles Supplementary to the Articles of
Incorporation, incorporated by reference to earlier filing
on February 28, 1992, SEC File No. 2-94479, Exhibit 1(c)
of N-1A Registration Statement.
d. Articles Supplementary to the Articles of
Incorporation incorporated by reference to earlier filing
on April 17, 1995, SEC File No. 2-94479, Exhibit 1(d) of
N-1A Registration Statement.
2. By-Laws, incorporated by reference to earlier
filing on February 21, 1991, SEC File No. 2-94479, Exhibit
2 of Form N-1A Registration Statement.
3. Not applicable.
4. a. Specimen of Certificate of Stock of the World
Growth Stock Portfolio, incorporated by reference to earlier filing on
April 11, 1990, SEC File No. 2-94479, Exhibit 4(a) of N1-A Registration
Statement.
b. Specimen of Certificate of Stock of the Money Market Portfolio,
incorporated
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by reference to earlier filing on April 11, 1990, SEC File No. 2-
94479, Exhibit 4(b) of N-1A Registration Statement.
c. Specimen of Certificate of Stock of the Gold Stock Portfolio,
incorporated by reference to earlier filing on April 11, 1990, SEC
File No. 2-94479, Exhibit 4(c) of N-1A Registration Statement.
d. Specimen of Certificate of Stock of the Bond Portfolio,
incorporated by reference to earlier filing on April 11, 1990, SEC
File No. 2-94479, Exhibit 4(d) of N-1A Registration Statement.
e. Specimen of Certificate of Stock of the Domestic Growth Stock
Portfolio, incorporated by reference to earlier filing on April 11,
1990, SEC File No. 2-94479, Exhibit 4(e) of N-1A Registration
Statement.
f. Specimen of Certificate of Stock of the Growth and Income
Portfolio, incorporated by reference to earlier filing on February 28,
1992, SEC File No. 2-94479, Exhibit 4(f) of N-1A Registration
Statement.
g. Specimen of Certificate of Stock of the Capital Growth Portfolio,
incorporated by reference to earlier filing on February 28, 1992, SEC
File No. 2-94479, Exhibit 4(g) of N-1A Registration Statement.
S-41
<PAGE>
h. Specimen of Certificate of Stock of the Balanced Portfolio,
incorporated by reference to earlier filing on February 28, 1992, SEC
File No. 2-94479, Exhibit 4(h) of N-1A Registration Statement.
i. Specimen of Certificate of Stock of the Emerging Growth Portfolio,
incorporated by reference to earlier filing on April 17, 1995, SEC
File No.2-94479, Exhibit 4(i) of N-1A Registration Statement.
5. a. Amended and Restated Investment Management Agreement between Chubb
America Fund, Inc. and Chubb Investment Advisory Corporation,
incorporated by reference to earlier filing on April 11, 1990, SEC
File No. 2-94479, Exhibit 5(a) of N-1A Registration Statement.
b. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Templeton Investment
Advisers Limited, incorporated by reference to earlier filing on April
11, 1990, SEC File No. 2-94479, Exhibit 5(b) of N-1A Registration
Statement.
c. Amendment to Sub-Investment Management Agreement among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and
Templeton Investment Advisers Limited, incorporated by reference to
earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit 5(c)
of N-1A Registration Statement.
d. Second Amendment to Sub-Investment Management Agreement among
Chubb America Fund, Inc., Chubb Investment Advisory Corporation and
Templeton Investment Advisors Limited, incorporated by reference to
earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit 5(d)
of N-1A Registration Statement.
e. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Templeton, Galbraith &
Hansberger Ltd., incorporated by reference to earlier filing on April
14, 1993, SEC File No. 2-94479, Exhibit 5(e) of N-1A Registration
Statement.
f. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc., incorporated by reference to earlier filing on April 11, 1990,
SEC File No. 2-94479, Exhibit 5(e) of N-1A Registration Statement.
g. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Van Eck Associates
Corporation, incorporated by reference to earlier filing on April 11,
1990, SEC File No. 2-94479, Exhibit 5(f) of N-1A Registration
Statement.
h. Sub-Investment Management Agreement among Chubb America Fund, Inc.,
Chubb Investment Advisory Corporation and Pioneering Management
Corporation, incorporated by reference to earlier filing on April 11,
1990, SEC File No. 2-94479, Exhibit 5(g) of N-1A Registration
Statement.
i. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc., incorporated by reference to earlier filing on February 28,
1992, SEC File No. 2-94479, Exhibit 5(h) of N-1A Registration
Statement.
S-42
<PAGE>
j. Investment Management Agreement between Chubb America Fund, Inc.,
and Chubb Investment Advisory Corporation for the Growth and Income
Portfolio, incorporated by reference to earlier filing on February 28,
1992, SEC File No. 2-94479, Exhibit 5(i) of N-1A Registration
Statement.
k. Investment Management Agreement between Chubb America Fund, Inc.,
and Chubb Investment Advisory Corporation for the Capital Growth
Portfolio, incorporated by reference to earlier filing on February 28,
1992, SEC File No. 2-94479, Exhibit 5(j) of N-1A Registration
Statement.
l. Investment Management Agreement between Chubb America Fund, Inc.,
and Chubb Investment Advisory Corporation for the Balanced Portfolio,
incorporated by reference to earlier filing on February 28, 1992, SEC
File No. 2-94479, Exhibit 5(k) of N-1A Registration Statement.
m. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Chubb Asset Managers,
Inc., incorporated by reference to earlier filing on April 14, 1993,
SEC File No. 2-94479, Exhibit 5(m) of N-1A Registration Statement.
S-43
<PAGE>
n. Sub-Investment Management Agreement among ChubbAmerica Fund, Inc.,
Chubb Investment Advisory Corporation and Janus Capital Corporation,
incorporated by reference to earlier filing on April 14, 1993, SEC
File No. 2-94479, Exhibit 5(n) of N-1A Registration Statement.
o. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Phoenix Investment
Counsel, Inc., incorporated by reference to earlier filing on April
14, 1993, SEC File No. 2-94479, Exhibit 5(o) N-1A Registration
Statement.
p. Investment Management Agreement between Chubb America Fund, Inc.,
and Chubb Investment Advisory Corporation with respect to the Emerging
Growth Portfolio.
q. Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation, and Massachusetts
Financial Services Company with respect to the Emerging Growth
Portfolio.
6. a. Amendment to Fund Distribution Agreement Between Chubb America
Fund, Inc. and Chubb Securities Corporation, incorporated by reference
to earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit
6(a) of N-1A Registration Statement.
b. Fund Distribution Agreement between Chubb America Fund, Inc. and
Chubb Securities Corporation, incorporated by reference to earlier
filing on April 11, 1990, SEC File No. 2-94479, Exhibit 6(b) of N-1A
Registration Statement.
S-44
<PAGE>
7. Not applicable.
8. a. Custodian Agreement between Chubb America Fund, Inc. and Citibank,
N.A., incorporated by reference to earlier filing on February 21,
1991, SEC File No. 2-94479, Exhibit 8 of N-1A Registration Statement.
b. Amendment to the Custodial Services Agreement between Chubb
America Fund, Inc. and Citibank, N.A., incorporated by reference to
earlier filing on April 14, 1993, SEC File No. 2-94479, Exhibit 8(b)
of N-1A Registration Statement.
c. Amendment No.2 to Custodial Services Agreement between Chubb
America Fund, Inc. and Citibank, N.A., incorporated by reference to
earlier filing on April 14, 1993, SEC File No. 2-94479, Exhibit 8(c)
of N-1A Registration Statement.
9. Not applicable.
10. a. Opinion and Consent of Counsel as to the legality the securities
being registered, incorporated by reference to earlier filing on April
11, 1990, SEC File No. 2-94479, Exhibit 10(a) of N-1A Registration
Statement.
b. Opinion and Consent of Counsel as to legality of the securities
being registered, incorporated by reference to earlier filing April
11, 1990, SEC File No. 2-94479, Exhibit 10(b) of N-1A Registration
Statement.
c. Opinion and Consent of Counsel as to legality of the securities
being registered, incorporated by reference to earlier filing on
February 28, 1992, SEC File No. 2-94479, Exhibit 10(c) of N-1A
Registration Statement.
d. Opinion and Consent of Counsel as to the legality of securities
being registered, incorporated by reference to earlier filing on April
17, 1995, SEC File No. 2-94479, Exhibit 10(d) of N-1A Registration
Statement.
11. Not applicable.
12. Not applicable.
S-45
<PAGE>
13. a. Stock Subscription Agreement between Chubb America Fund, Inc. and
The Volunteer State Life Insurance Company, incorporated by reference
to earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit
13(a) of N-1A Registration Statement.
b. Stock Subscription Agreement between Chubb America Fund, Inc. and
The Volunteer State Life Insurance Company, incorporated by reference
to earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit
13(b) of N-1A Registration Statement.
c. Stock Subscription Agreement between Chubb America Fund, Inc. and
Chubb Life Insurance Company of America, incorporated by reference to
earlier filing on February 28, 1992, SEC File No. 2-94479, Exhibit
13(c) of N-1A Registration Statement.
d. Stock Subscription Agreement between Chubb America Fund, Inc., and
Chubb Life Insurance Company of America.
14. Not applicable.
19. Agreement Regarding Use of Name and Service Mark between The Chubb
Corporation and Chubb America Fund, Inc., incorporated by reference to
earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit 19 of N-1A
Registration Statement.
27.1 Financial Data Schedules
99.1 Consent of Ernst & Young LLP
99.2 Schedule of Computation of Performance Quotations
99.3 Diagram of Subsidiaries of the Chubb Corporation
99.4 Price Make-up Sheet
S-46
<PAGE>
20. Consent of Freedman, Levy, Kroll & Simonds, incorporated by reference
to earlier filing on April 11, 1990, SEC File No. 2-94479, Exhibit 20 of
N-1A Registration Statement.
Item 25. Persons Controlled by or under Common Control with Registrant
Initially, shares of the Registrant were offered and sold only to The Volunteer
State Life Insurance Company ("Volunteer"), a stock life insurance company
organized under the laws of Tennessee. Effective July 1, 1991, Volunteer
changed its name to Chubb Life Insurance Company of America ("Chubb Life") and
re-domesticated to New Hampshire. The purchasers of variable life insurance
contracts issued in connection with separate accounts established by Chubb Life
or its affiliated insurance companies will have the right to instruct Chubb Life
or its affiliated insurance companies with respect to the voting of the
Registrant's shares held by such separate accounts on behalf of policyowners.
The shares held by Chubb Life or its affiliated insurance companies, including
shares for which no voting instructions have been received, shares held in the
separate accounts representing charges imposed by Chubb Life or its affiliated
insurance companies against the separate account and shares held by Chubb life
or its affiliated insurance companies that are not otherwise attributable to
Policies, will also be voted by Chubb Life or its affiliated insurance companies
in proportion to instructions received from owners of Policies. Chubb Life or
its affiliated insurance companies reserve the right to vote any or all such
shares at their discretion to the extent consistent with then current
interpretations of the Investment Company Act of 1940 and rules thereunder.
Subject to such voting instruction rights, Chubb Life or its affiliated
insurance companies will directly control the Registrant.
Subsequently, shares of the Registrant may be offered and sold to other separate
accounts formed by Chubb Life, its successors or assigns, and by other insurance
companies which, along with Chubb Life, are subsidiaries of The Chubb
Corporation, a New Jersey corporation, or subsidiaries of such subsidiaries. A
diagram of the subsidiaries of The Chubb Corporation has been filed herein as
Exhibit 17.
S-47
<PAGE>
Item 26. Number of Holders of Securities
As of the effective date of this Registration Statement:
<TABLE>
<CAPTION>
(2)
(1) Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
World Growth Stock Portfolio Capital Stock; $.01 par value.... Two
Money Market Portfolio Capital Stock; $.01 par value.......... Two
Gold Stock Portfolio Capital Stock; $.01 par value............ Two
Bond Portfolio Capital Stock; $.01 par value.................. Two
Domestic Growth Stock Portfolio Capital Stock; $.01 par value. Two
Growth and Income Portfolio Capital Stock; $.01 par value..... Two
Capital Growth Portfolio Capital Stock; $.01 par value........ Two
Balanced Portfolio Capital Stock; $.01 par value.............. Two
Emerging Growth Portfolio Capital Stock; $.01 par value....... Two
</TABLE>
Chubb Life has purchased 300,000 shares of capital stock of the the Emerging
Growth Portfolio. Chubb Separate Account A has purchased shares of each
Portfolio in the amounts allocated to each Portfolio by purchasers of Policies.
Item 27. Indemnification
Reference is made to Article VIII, Section 10 of the Registrant's Amended and
Restated Articles of Incorporation filed on April 11, 1990 as Exhibit 1 to the
Form N-1A Registration Statement and to Article V of the Registrant's By-Laws
filed herein as Exhibit 2 to this Registration Statement. The Amended and
Restated Articles of Incorporation provide that neither an officer nor director
of the Registrant will be liable to the Registrant or its stockholders for
monetary damages for breach of fiduciary duty as an officer or director, except
to the extent such limitation of liability is not otherwise permitted by law.
The By-Laws provide that the Registrant will indemnify its directors and
officers to the extent permitted or required by Maryland law. A resolution of
the Board of Directors specifically approving payment or advancement of expenses
to an officer is required by the By-Laws. Indemnification may not be made if
the director or officer has incurred liability by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of duties in the conduct of
his/her office ("Disabling Conduct"). The means of determining whether
indemnification shall be made are (1) a final decision by a court or other body
before whom the proceeding is brought that the director or officer was not
liable by reason of Disabling Conduct, or (2) in the absence of such a decision,
a reasonable determination, based on a review of the facts, that the director or
officer was not
S-48
<PAGE>
liable by reason of Disabling Conduct. Such latter determination may be made
either by (a) vote of a majority of directors who are neither interested persons
(as defined in the Investment Company Act of 1940) nor parties to the proceeding
or (b) independent legal counsel in a written opinion. The advancement of legal
expenses may not occur unless the director or officer agrees to repay the
advance (if it is determined that the director or officer is not entitled to the
indemnification) and one of three other conditions is satisfied: (1) the
director or officer provides security for his/her agreement to repay, (2) the
Registrant is insured against loss by reason of lawful advances, or (3) the
directors who are not interested persons and are not parties to the proceedings,
or independent counsel in a written opinion, determine that there is reason to
believe that the director or officer will be found entitled to indemnification.
The directors and officers are currently covered for liabilities incurred in
their capacities as such directors and officers under the terms of a joint
liability insurance policy. This policy also covers the directors and officers
of Chubb Investment Advisory, Chubb Asset, and Chubb Investment Funds, Inc. The
policy also insures the Registrant, Chubb Investment Advisory, Chubb Asset and
Chubb Investment Funds, Inc. for errors and omissions liabilities.
Insofar as indemnification for liability arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
Chubb Investment Advisory was formed in 1984 and had not been previously
engaged in any other business. The other businesses, professions, vocations and
employment of a substantial nature of its directors and officers during the past
two years are as follows:
S-49
<PAGE>
Other Business,
Name of Director Positions with Chubb Profession, Vocation or
or Officer of Chubb Investment Employment During
Investment Advisory Advisory Past Two Years
- -------------------- -------- --------------
Ronald Angarella President and Director Senior Vice President,
Chubb Life; President and
Director, Chubb
Securities, Hampshire
Funding, Inc. and Chubb
America Fund, Inc.;
Senior Vice President and
Director, Chubb
Investment Funds, Inc.
Michael O'Reilly Senior Vice President Senior Vice President and
and Director Chief Investment Officer,
The Chubb Corporation;
Director, President and
Chief Operating Officer,
Chubb Asset Managers,
Inc.; President and
Director, Chubb
Investment Funds, Inc.;
Senior Vice President,
Chubb & Son Inc., Federal
Insurance Company
Ronald H. Emery Senior Vice President Senior Vice President and
and Director Controller, Chubb Life
Charles C. Cornelio Secretary Senior Vice President and
Chief Administrative
Officer, Chubb Life Vice
President, Counsel and
Assistant Secretary,
Chubb Investment Funds,
Inc. and Chubb America
Fund, Inc.; Vice
President, General
Counsel and Secretary,
Chubb Securities and
Hampshire Funding, Inc.
S-50
<PAGE>
Name of Director Positions with Chubb Other Business,
or Officer of Chubb Investment Profession, Vocation or
Investment Advisory Advisory Employment During
- ------------------- -------- Past Two Years
--------------
John A. Weston Treasurer Assistant Vice President,
Mutual Fund Accounting
Officer, Chubb Life;
Treasurer, Chubb
Securities Corporation,
Chubb Investment Funds
Inc. and Chubb Series
Trust and Hampshire
Funding, Inc.; previously
Financial Reporting
Officer, Chubb Life
Richard V. Werner Director Senior Vice President,
Treasurer and Chief
Financial Officer, Chubb
Life Insurance Company of
America, Colonial Life
Insurance Company, and
Chubb Sovereign Life
Insurance Company; Vice
President, The Chubb
Corporation; Senior Vice
President and Director,
Chubb America Fund, Inc.;
President, ChubbHealth
Holdings, Inc.; Chairman
of the Board,
ChubbHealth, Inc.
Vice President, The Chubb
Corporation, Federal
Insurance Company and
Chubb & Son Inc.; Senior
Vice President, Chubb
Asset Managers, Inc.
Marjorie Raines Director Assistant Vice President
and Assistant Secretary,
Chubb Securities and
Hampshire Funding, Inc,;
Assistant Vice President,
Chubb Life
Vice President of Chubb
Securities and Hampshire
Funding, Inc.
Mary Toumpas Assistant Vice Assistant Vice President
President and and Associate Counsel,
Compliance Officer Chubb Life; Secretary,
Chubb America Fund, Inc.
and Chubb Investment
Funds, Inc.
S-51
<PAGE>
Name of Director Positions with Chubb Other Business,
or Officer of Chubb Investment Profession, Vocation or
Investment Advisory Advisory Employment During
- ------------------- -------- Past Two Years
--------------
Carol R. Hardiman Assistant Vice Vice President of Chubb
President Securities and Hampshire
Funding Inc.
Shari J. Lease Assistant Secretary Assistant Vice President
and Counsel, Chubb Life;
Secretary Chubb
Investment Funds, Inc.
and Chubb Series Trust
The directors, officers, employees and partners of the Sub-Investment Managers
have rendered investment advice and management during the past two years and
have not engaged in any other business of a substantial nature.
Item 29. Principal Underwriters
The names, principal business addresses, positions and offices with Chubb
Securities Corporation, and positions and offices with the Fund, of each
director or officer of Chubb Securities Corporation who is a director or officer
of the Fund are:
Positions and
Officers
with Chubb Positions and
Name and Principal ---------- Officers
Business Address Securities with the Fund
---------------- ---------- -------------
Ronald Angarella President and Director President and Director
One Granite Place
Concord,
New Hampshire 03301
Charles C. Cornelio Vice President, General Vice President, Counsel
One Granite Place Counsel and Secretary and Assistant Secretary
Concord,
New Hampshire 03301
John A. Weston Treasurer Treasurer
One Granite Place
Concord,
New Hampshire 03301
Item 30. Location of Accounts and Records
The following entities prepare, maintain and preserve the records required by
Section 31(a) of the 1940 Act for the Registrant. These services are provided
to the Registrant through written agreements between the parties to the effect
that such services will be provided to the Registrant
S-52
<PAGE>
for such periods prescribed by the Rules and Regulations of the Securities and
Exchange Commission under the 1940 Act and such records will be surrendered
promptly on request:
Citibank, N.A., 111 Wall Street, New York, New York 10043; Chubb Asset
Managers, Inc., 15 Mountain View Road, Warren, New Jersey 07061; Van Eck
Associates Corporation, 99 Park Avenue, New York, New York 10016; Chubb
Investment Advisory, One Granite Place, Concord, New Hampshire 03301; Pioneering
Management Corporation, 60 State Street, Boston, Massachusetts; Templeton,
Galbraith & Hansberger Ltd, Lyford Cay, Nassau, Bahamas; Janus Capital
Corporation, 100 Fillmore Street, Suite 300, Denver, Colorado 80206; Phoenix
Investment Counsel, Inc., One American Row, Hartford Connecticut 06115;
Massachusetts Financial Services Company, 500 Boylston Street, Boston,
Massachusetts 02116; and Chubb Securities Corporation, One Granite Place,
Concord, New Hampshire 03301.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
S-53
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amended Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amended
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Concord, and State of New Hampshire, on the 17th
day of April 1996.
CHUBB AMERICA FUND, INC.
By: /s/ RONALD ANGARELLA
---------------------
Ronald Angarella
President
Each of the undersigned Officers and Directors of Chubb America Fund, Inc. (the
"Fund") whose signatures appear below hereby makes, constitutes and appoints
Ronald Angarella and Charles C. Cornelio, and each of them acting individually,
his/her true and lawful attorneys with power to act without any other and with
full power of substitution, to execute, deliver and file in each of the
undersigned Officers and Directors' capacity or capacities as shown below, this
Registration Statement and any and all documents in support of this Registration
Statement or supplement thereto, and any and all amendments, including any and
all post-effective amendments to the foregoing; and said Officers and Directors
hereby grant to said attorneys, and to any one or more of them, full power and
authority to do and perform each and every act and thing whatsoever as said
attorney or attorneys may deem necessary or advisable to carry out fully the
intent of this Power of Attorney to the same extent and with the same effect as
each of said Officers and Directors might or could do personally in his/her
capacity or capacities as aforesaid, and each of said Officers and Directors
ratifies, confirms and approves all acts and things which said attorney or
attorneys might do or cause to be done by virtue of this Power of Attorney and
his/her signature as the same as may be signed by said attorney or attorneys, or
any one or more of them to this Registration Statement and any and all
amendments thereto, including any and all post-effective amendments to the
foregoing.
S-54
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amended
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/RONALD ANGARELLA President, April 15, 1996
------------------- Principal
RONALD ANGARELLA Executive
Officer, and
Director
RICHARD V. WERNER* Director April 15, 1996
-----------------
/s/JOHN A. WESTON Treasurer, Principal April 15, 1996
----------------- Financial Officer, and
JOHN A. WESTON, Principal Accounting
Officer
MICHAEL D. COUGHLIN* Director April 15, 1996
-------------------
ELIZABETH S. HAGER* Director April 15, 1996
------------------
JAMES J. WEISBART* Director April 15, 1996
-----------------
By /s/ Ronald Angerella
-----------------------
Ronald Angerella, attorney in fact
</TABLE>
S-55
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<C> <S> <C>
27.1 Financial Data Schedules, All Portfolios
99.1 Consent of Ernst & Young LLP
99.2 Schedule of Computation of Performance Quotations
99.3 Diagram of Subsidiaries of the Chubb Corporation
99.4 Price Make-up Sheet.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 1
<NAME> WORLD GROWTH PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 63,052,537
<INVESTMENTS-AT-VALUE> 76,009,300
<RECEIVABLES> 1,627,857
<ASSETS-OTHER> 796,841
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 78,433,998
<PAYABLE-FOR-SECURITIES> 1,513,473
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,228,168
<TOTAL-LIABILITIES> 4,741,641
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 60,661,910
<SHARES-COMMON-STOCK> 3,475,276
<SHARES-COMMON-PRIOR> 2,783,776
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 454,018
<ACCUMULATED-NET-GAINS> 556,740
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,927,725
<NET-ASSETS> 73,692,357
<DIVIDEND-INCOME> 1,641,400
<INTEREST-INCOME> 699,258
<OTHER-INCOME> (103,016)
<EXPENSES-NET> 659,048
<NET-INVESTMENT-INCOME> 1,578,594
<REALIZED-GAINS-CURRENT> 2,186,993
<APPREC-INCREASE-CURRENT> 6,880,026
<NET-CHANGE-FROM-OPS> 10,645,613
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,504,890
<DISTRIBUTIONS-OF-GAINS> 1,647,022
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,079,198
<NUMBER-OF-SHARES-REDEEMED> 537,061
<SHARES-REINVESTED> 149,363
<NET-CHANGE-IN-ASSETS> 20,788,589
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 265
<OVERDIST-NET-GAINS-PRIOR> 452,287
<GROSS-ADVISORY-FEES> 511,260
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 659,048
<AVERAGE-NET-ASSETS> 68,422,038
<PER-SHARE-NAV-BEGIN> 19.00
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> 2.65
<PER-SHARE-DIVIDEND> .43
<PER-SHARE-DISTRIBUTIONS> .47
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.2
<EXPENSE-RATIO> .96
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 2
<NAME> MONEY MARKET PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 8,571,497
<INVESTMENTS-AT-VALUE> 8,572,813
<RECEIVABLES> 490
<ASSETS-OTHER> 146,559
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,719,862
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 407,186
<TOTAL-LIABILITIES> 407,186
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,312,305
<SHARES-COMMON-STOCK> 809,271
<SHARES-COMMON-PRIOR> 749,331
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (945)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,316
<NET-ASSETS> 8,312,676
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 453,581
<OTHER-INCOME> 0
<EXPENSES-NET> 51,895
<NET-INVESTMENT-INCOME> 401,686
<REALIZED-GAINS-CURRENT> (59)
<APPREC-INCREASE-CURRENT> 1,316
<NET-CHANGE-FROM-OPS> 402,943
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 401,686
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 1,632,081
<NUMBER-OF-SHARES-REDEEMED> 1,597,452
<SHARES-REINVESTED> 25,311
<NET-CHANGE-IN-ASSETS> 632,191
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (886)
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 3
<NAME> GOLD STOCK PORTFOLIO
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
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<INVESTMENTS-AT-COST> 6,149,439
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 6,867,645
<DIVIDEND-INCOME> 77,501
<INTEREST-INCOME> 27,226
<OTHER-INCOME> (4,946)
<EXPENSES-NET> 80,266
<NET-INVESTMENT-INCOME> 19,515
<REALIZED-GAINS-CURRENT> 1,123,227
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<NUMBER-OF-SHARES-SOLD> 186,086
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC.
<SERIES>
<NAME> DOMESTIC GROWTH PORTFOLIO
<NUMBER> 004
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
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<PER-SHARE-NAV-BEGIN> 15.94
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 5
<NAME> BOND PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
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<NET-ASSETS> 9,230,090
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<NET-CHANGE-IN-ASSETS> (3,836,355)
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NII> 0.74
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<PER-SHARE-NAV-END> 10.59
<EXPENSE-RATIO> 0.63
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 6
<NAME> GROWTH AND INCOME PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 11,317,794
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<SHARES-COMMON-STOCK> 910,807
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<NET-ASSETS> 13,126,023
<DIVIDEND-INCOME> 191,856
<INTEREST-INCOME> 23,578
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<EXPENSES-NET> 81,067
<NET-INVESTMENT-INCOME> 132,259
<REALIZED-GAINS-CURRENT> 263,627
<APPREC-INCREASE-CURRENT> 1,988,518
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<NUMBER-OF-SHARES-SOLD> 513,526
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<SHARES-REINVESTED> 17,247
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<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 81,067
<AVERAGE-NET-ASSETS> 8,812,533
<PER-SHARE-NAV-BEGIN> 11.22
<PER-SHARE-NII> .15
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<PER-SHARE-NAV-END> 14.41
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 7
<NAME> CAPITAL GROWTH PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 31,535,862
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<PAID-IN-CAPITAL-COMMON> 39,364,560
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<ACCUMULATED-NET-GAINS> 1,602,334
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<ACCUM-APPREC-OR-DEPREC> 8,887,278
<NET-ASSETS> 49,853,029
<DIVIDEND-INCOME> 198,249
<INTEREST-INCOME> 344,901
<OTHER-INCOME> (3,929)
<EXPENSES-NET> 446,426
<NET-INVESTMENT-INCOME> 82,795
<REALIZED-GAINS-CURRENT> 6,192,507
<APPREC-INCREASE-CURRENT> 7,917,933
<NET-CHANGE-FROM-OPS> 14,193,235
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<DISTRIBUTIONS-OF-INCOME> 82,795
<DISTRIBUTIONS-OF-GAINS> 4,477,144
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<NUMBER-OF-SHARES-SOLD> 1,012,623
<NUMBER-OF-SHARES-REDEEMED> 238,732
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<NET-CHANGE-IN-ASSETS> 22,288,943
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 446,426
<AVERAGE-NET-ASSETS> 38,849,159
<PER-SHARE-NAV-BEGIN> 13.38
<PER-SHARE-NII> .03
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.38
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC
<SERIES>
<NUMBER> 8
<NAME> BALANCED PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 14,870,294
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<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 167,827
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,251,981
<NET-ASSETS> 14,532,268
<DIVIDEND-INCOME> 120,628
<INTEREST-INCOME> 475,627
<OTHER-INCOME> 0
<EXPENSES-NET> 141,276
<NET-INVESTMENT-INCOME> 454,979
<REALIZED-GAINS-CURRENT> 956,351
<APPREC-INCREASE-CURRENT> 1,446,230
<NET-CHANGE-FROM-OPS> 2,857,560
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 454,979
<DISTRIBUTIONS-OF-GAINS> 868,152
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 423,487
<NUMBER-OF-SHARES-REDEEMED> 643,500
<SHARES-REINVESTED> 49,731
<NET-CHANGE-IN-ASSETS> (232,585)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 79,628
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 106,430
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 141,276
<AVERAGE-NET-ASSETS> 14,223,822
<PER-SHARE-NAV-BEGIN> 10.62
<PER-SHARE-NII> .37
<PER-SHARE-GAIN-APPREC> 1.99
<PER-SHARE-DIVIDEND> 0.37
<PER-SHARE-DISTRIBUTIONS> 0.70
<RETURNS-OF-CAPITAL> 0
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757551
<NAME> CHUBB AMERICA FUND, INC.
<SERIES>
<NUMBER> 9
<NAME> EMERGING GROWTH PORTFOLIO
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9,812,337
<INVESTMENTS-AT-VALUE> 11,251,716
<RECEIVABLES> 1,114,473
<ASSETS-OTHER> 320,655
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<PAYABLE-FOR-SECURITIES> 1,227,078
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,242
<TOTAL-LIABILITIES> 1,247,320
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,966,663
<SHARES-COMMON-STOCK> 860,878
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 33,482
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,439,379
<NET-ASSETS> 11,439,524
<DIVIDEND-INCOME> 2,747
<INTEREST-INCOME> 30,454
<OTHER-INCOME> 0
<EXPENSES-NET> 68,342
<NET-INVESTMENT-INCOME> (35,141)
<REALIZED-GAINS-CURRENT> 68,623
<APPREC-INCREASE-CURRENT> 1,439,379
<NET-CHANGE-FROM-OPS> 1,472,861
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 864,931
<NUMBER-OF-SHARES-REDEEMED> 4,053
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,439,524
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 33,463
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 68,342
<AVERAGE-NET-ASSETS> 6,291,003
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> 3.33
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.29
<EXPENSE-RATIO> 1.63
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 99.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Independent Auditors" in the Statement of
Additional Information and to the use of our report dated February 16, 1996,
incorporated by reference in Post-Effective Amendment Number 16 to the
Registration Statement (Form N-1A No. 2-94479) of Chubb America Fund, Inc.
ERNST & YOUNG LLP
Boston, Massachusetts
April 11, 1996
<PAGE>
CHUBB AMERICA FUND
MONEY MARKET PORTFOLIO
7 DAY YIELD
<TABLE>
<CAPTION>
NET NET ASSETS DAILY
DATE INCOME EXPENSES INCOME AT MARKET YIELD
<S> <C> <C> <C> <C> <C>
12/23/95 1,265.42 156.12 1,109.30 8,915,032.720 0.000124
12/24/95 1,265.42 156.12 1,109.30 8,915,032.720 0.000124
12/25/95 1,265.42 156.12 1,109.30 8,915,032.720 0.000124
12/26/95 1,265.42 156.13 1,109.29 8,915,032.720 0.000124
12/27/95 1,270.67 155.21 1,115.46 8,848,338.650 0.000126
12/28/95 1,269.29 405.77 863.52 8,889,442.030 0.000097
12/29/95 1,249.64 155.22 1,094.42 8,848,713.470 0.000124
</TABLE>
7 DAY YIELD: 4.40%
7 DAY EFFECTIVE YIELD: 4.50%
FORMULA:
7 DAY YIELD: @SUM(L11..L17)/7*365
7 DAY EFFECTIVE YIELD: ((1+@SUM(L11..L17)) (Circumflex)
(365/7)-1)
<PAGE>
<TABLE>
<CAPTION>
CHUBB AMERICA BOND PORTFOLIO
30 DAY YIELD INCOME CALCULATION
T NOTES: FOR PERIOD 11/30/95 - 12/29/95
- -----
SETTLEMENT MARKET
BOND # SYMBOL DATE COUPON DUE DATE QUOTE YTM VALUE DAYS HELD INCOME
- ----- --------- ---------- -------------- ---------- --------- ----------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CORN 11/30/95 8.250% 03/15/02 111.0360 6.108% 55,519.00 30 282.59
F0997 11/30/95 9.550% 09/10/97 106.8691 5.434% 58,778.01 30 266.17
N0203 11/30/95 6.250% 02/15/03 104.3750 5.505% 1,868,312.50 30 8,570.88
N1112 11/30/95 10.375% 11/15/12 138.3125 6.589% 1,901,796.88 30 10,442.45
N0501 11/30/95 8.000% 05/15/01 111.9686 5.436% 223,937.20 30 1,014.44
N1199 11/30/95 7.750% 11/30/99 108.3436 5.403% 1,657,657.08 30 7,463.60
-------------- -----------
5,766,000.67 28,040.13
============== ===========
<CAPTION>
INTEREST ACCRUAL FACE RATE DAYS INCOME
---------------- ---------- -------------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
FHLMC, #C80090, 6.00% 579,050 6.000% 30 2,895.25
MAT: 01/01/2024
FNMA, CMO, 8829B, 9.50% 86,910 9.500% 30 688.04
MAT: 12/25/18
FNMA, #248672, 6.00% 178,725 6.000% 30 893.63
MAT: 12/01/23
FNMA, #261605, 6.00% 782,523 6.000% 30 3,912.62
MAT: 01/01/24
FNMA, #267376, 6.00% 186,284 6.000% 30 931.42
MAT: 01/01/24
GNMA POOL 190666, 9.00% 95,664 9.000% 30 717.48
MAT: 12/15/2016
GNMA POOL 385809, 8.50% 985,641 8.500% 30 6,981.62
MAT: 07/15/2024
GNMA POOL 402760, 8.00% 999,281 8.000% 30 6,661.87
MAT: 08/15/2025
FNMA, 9.550%, DUE 09/10/97 55,000>
SEE CALC. ABOVE******> 28,040.13
SWEEP - ASTRA .......................................................... 576.44
-----------
NOT ADJUSTED TO REFLECT ESTIMATED PAYDOWNS, 49,403.24
DIFFERENCES WOULD HAVE BEEN MINIMAL ==============
<CAPTION>
DISCOUNT EARNED
----------------
$ DAILY
----------
<S> <C> <C> <C> <C>
FHLMC, #C80090, 6.00% 11/30/95-12/29/95 5.62 30 168.60
FNMA, CMO, 8829B, 9.50% 11/30/95-12/29/95 0.23 30 6.90
FNMA, #248672, 6.00% 11/30/95-12/29/95 1.71 30 51.30
FNMA, #261605, 6.00% 11/30/95-12/29/95 7.46 30 223.80
FNMA, #267376, 6.00% 11/30/95-12/29/95 1.78 30 53.40
GNMA POOL 190666, 9.00% 11/30/95-12/29/95 0.16 30 4.80
GNMA POOL 385809, 8.50% 11/30/95-12/29/95 (4.21) 30 (126.30)
GNMA POOL 402760, 8.00% 11/30/95-12/29/95 (3.00) 30 (90.00)
-----------
292.50
-----------
TOTAL INCOME FOR PERIOD $49,695.74
===========
<CAPTION>
..... 30 DAY YEILD ..............
<S> <C> <C>
.....INCOME $49,695.74
.....EXPENSES $5,416.59
.....AVG DAILY SHARES ELIGIBLE FOR DIST. 882,334.233
.....OFFERING PRICE AT END OF PERIOD $10.59
30 DAY YIELD = 5.75% PREPARED BY:
---------------------------
2*((((49695.74-5416.59)/(882334.233*10.59)+1) REVIEWED BY:
(Circumflex) 6)-1) ---------------------------
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED)= GROSS VALUE
548.702202 21.20 11635.0919
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 19.00 11635.0919 10,000.00 (1635.0919)
SHARES PURCHASED: 526.1961491
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(1635.0919) 10,000.00 0.1635
ONE YEAR NET RATE OF RETURN: 16.35%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS
<S> <C> <C> <C> <C> <C>
12/31/94 19.004320 12/31/94 01/03/95 0.265230 0.754446
03/31/95 19.252199 03/31/95 03/31/95
06/30/95 20.830000 06/30/95 06/30/95
09/30/95 21.870337 09/30/95 09/30/95
10/31/95 21.488719 10/31/95 10/31/95
11/30/95 21.654547 11/30/95 11/30/95
12/31/95 21.204748 12/31/95 12/31/95 0.433027 0.473926
<CAPTION>
SHARES TOTAL
DATE REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<C> <C> <C> <C> <C> <C>
12/31/94 19.004320 2,838,549.43 526.196149
03/31/95 19.252199 526.196149
06/30/95 20.830000 526.196149
09/30/95 21.870337 526.196149
10/31/95 21.488719 526.196149
11/30/95 21.654547 526.196149
12/31/95 21.204748 3,151,911.72 477.235176 22.506053 548.702202
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED)= GROSS VALUE
924.255184 21.20 19598.5983
PURCHASE DATE: 12/31/90
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 13.71 19598.5983 10,000.00 (9598.5983)
SHARES PURCHASED: 729.5826124
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(9598.5983) 10,000.00 0.9599
GROSS 5 YEAR RETURN: 95.99%
ANNUALIZED GROSS 5 YEAR RETURN: 14.40%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS
<S> <C> <C> <C> <C> <C>
12/31/90 13.706467 12/31/90 12/31/90 0.369060
01/31/91 14.180000 01/31/91 01/31/91
02/28/91 15.240000 02/28/91 02/28/91
03/31/91 15.080000 03/31/91 03/31/91
04/30/91 15.150000 04/30/91 04/30/91
05/31/91 15.470000 05/31/91 05/31/91
06/30/91 14.680000 06/30/91 06/30/91
07/31/91 15.590000 07/31/91 07/31/91
08/31/91 15.840000 08/31/91 08/31/91
09/30/91 15.970000 09/30/91 09/30/91
10/31/91 16.160000 10/31/91 10/31/91
11/30/91 15.760000 11/30/91 11/30/91
12/31/91 16.450000 12/31/91 12/31/91 0.336800
01/31/92 16.418704 01/31/92 01/31/92
02/28/92 16.766066 02/28/92 02/28/92
03/31/92 16.419780 03/31/92 03/31/92 0.001510
04/30/92 16.991563 04/30/92 04/30/92
05/31/92 17.746603 05/31/92 05/31/92
06/30/92 17.360832 06/30/92 06/30/92
07/31/92 17.470219 07/31/92 07/31/92
08/31/92 17.133530 08/31/92 08/31/92
09/30/92 16.837943 09/30/92 09/30/92
10/31/92 16.863608 10/31/92 10/31/92
11/30/92 17.043888 11/30/92 11/30/92
12/31/92 16.725976 12/31/92 12/31/92 0.352180 0.369510
01/31/93 17.112758 01/31/93 01/31/93
02/28/93 17.325399 02/28/93 02/28/93
03/31/93 17.860448 03/31/93 03/31/93
04/30/93 18.484501 04/30/93 04/30/93
05/31/93 18.848873 05/31/93 05/31/93
06/30/93 18.555732 06/30/93 06/30/93
07/31/93 18.758134 07/31/93 07/31/93
08/31/93 20.063211 08/31/93 08/31/93
09/30/93 20.007417 09/30/93 09/30/93
<CAPTION>
SHARES TOTAL
DATE REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C>
12/31/90 13.706467 420,996.00 729.582612
01/31/91 14.180000 729.582612
02/28/91 15.240000 729.582612
03/31/91 15.080000 729.582612
04/30/91 15.150000 729.582612
05/31/91 15.470000 729.582612
06/30/91 14.680000 729.582612
07/31/91 15.590000 729.582612
08/31/91 15.840000 729.582612
09/30/91 15.970000 729.582612
10/31/91 16.160000 729.582612
11/30/91 15.760000 729.582612
12/31/91 16.450000 454,602.01 245.723424 14.937594 744.520207
01/31/92 16.418704 744.520207
02/28/92 16.766066 744.520207
03/31/92 16.419780 2,100.00 1.124226 0.068468 744.588674
04/30/92 16.991563 744.588674
05/31/92 17.746603 744.588674
06/30/92 17.360832 744.588674
07/31/92 17.470219 744.588674
08/31/92 17.133530 744.588674
09/30/92 16.837943 744.588674
10/31/92 16.863608 744.588674
11/30/92 17.043888 744.588674
12/31/92 16.725976 1,096,656.10 537.362200 32.127405 776.716079
01/31/93 17.112758 776.716079
02/28/93 17.325399 776.716079
03/31/93 17.860448 776.716079
04/30/93 18.484501 776.716079
05/31/93 18.848873 776.716079
06/30/93 18.555732 776.716079
07/31/93 18.758134 776.716079
08/31/93 20.063211 776.716079
09/30/93 20.007417 776.716079
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
10/31/93 21.040060 10/31/93 10/31/93
11/30/93 20.733282 11/30/93 11/30/93
12/31/93 20.889335 12/31/93 12/31/93 0.236602 1.242153
01/31/94 21.893065 01/31/94 01/31/94
02/28/94 21.505751 02/28/94 02/28/94
03/31/94 19.956783 03/31/94 03/31/94 0.005400 0.222800
04/30/94 20.160521 04/30/94 04/30/94
05/31/94 20.202263 05/31/94 05/31/94
06/30/94 19.642215 06/30/94 06/30/94
09/30/94 20.981873 09/29/94 09/29/94
12/31/94 19.004320 12/31/94 01/03/95 0.265230 0.754446
03/31/95 19.252199 03/31/95 03/31/95
06/30/95 20.830000 06/30/95 06/30/95
09/30/95 21.870337 09/30/95 09/30/95
10/31/95 21.488719 10/31/95 10/31/95
11/30/95 21.654547 11/30/95 11/30/95
12/31/95 21.204748 12/31/95 12/31/95 0.433027 0.473926
<CAPTION>
<C> <C> <C> <C> <C> <C>
10/31/93 21.040060 776.716079
11/30/93 20.733282 776.716079
12/31/93 20.889335 1148.573071 54.983707 831.699786
01/31/94 21.893065 831.699786
02/28/94 19.956783 831.699786
03/31/94 19.956783 511,530.10 189.793891 9.510245 841.210031
04/30/94 841.210031
05/31/94 841.210031
06/30/94 19.642215 841.210031
09/30/94 20.981873 841.210031
12/31/94 19.004320 2,838,549.43 857.761679 45.135089 886.345120
03/31/95 19.252199 886.345120
06/30/95 20.830000 886.345120
09/30/95 21.870337 886.345120
10/31/95 21.488719 886.345120
11/30/95 21.654547 886.345120
12/31/95 21.204748 3,151,911.72 803.873365 37.910065 924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
924.255184
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV +NOT REINVESTED)GROSS VALUE
1420.406065 21.20 0 30119.3527
PURCHASE DATE: 12/31/85
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.81 30119.3527 10,000.00 (20119.3527)
SHARES PURCHASED: 925.0693802
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(20119.3527) 10,000.00 2.0119
GROSS 10 YEAR RETURN: 201.19%
ANNUALIZED GROSS 10 YEAR RETUR 11.66%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS
<S> <C> <C> <C> <C> <C>
12/31/85 10.810000 12/31/85 12/31/85
01/31/86 10.883980 01/31/86 01/31/86
02/28/86 12.195507 02/28/86 02/28/86
03/31/86 13.280718 03/31/86 03/31/86
04/30/86 13.385027 04/30/86 04/30/86 0.060000
05/31/86 13.252997 05/31/86 05/31/86
06/30/86 13.000000 06/30/86 06/30/86
07/31/86 12.643114 07/31/86 07/31/86
08/31/86 13.228849 08/31/86 08/31/86
09/30/86 13.051185 09/30/86 09/30/86
10/31/86 13.824138 10/31/86 10/31/86
11/30/86 13.711601 11/30/86 11/30/86
12/31/86 13.750000 12/31/86 12/31/86
01/31/87 14.487582 01/31/87 01/31/87
02/28/87 13.873665 02/28/87 02/28/87
03/31/87 13.930530 03/31/87 03/31/87 0.273800 1.048500
04/30/87 13.668272 04/30/87 04/30/87
05/31/87 13.581600 05/31/87 05/31/87
06/30/87 14.006038 06/30/87 06/30/87
07/31/87 14.834140 07/31/87 07/31/87
08/31/87 15.253643 08/31/87 08/31/87
09/30/87 15.095986 09/30/87 09/30/87
10/31/87 11.413366 10/31/87 10/31/87
11/30/87 10.892080 11/30/87 11/30/87
12/31/87 11.483548 12/31/87 12/31/87 0.071100 0.031700
01/31/88 11.863134 01/31/88 01/31/88
02/28/88 12.524002 02/28/88 02/28/88
03/31/88 12.790585 03/31/88 03/31/88 0.031900
04/30/88 12.996789 04/30/88 04/30/88
05/31/88 12.760931 05/31/88 05/31/88
06/30/88 13.250035 06/30/88 06/30/88
07/31/88 13.162747 07/31/88 07/31/88
08/31/88 12.759928 08/31/88 08/31/88
09/30/88 13.054684 09/30/88 09/30/88
<CAPTION>
SHARES TOTALS
DATE REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C>
12/31/85 10.810000 0.00 925.069380
01/31/86 10.883980 0.00 0.000000 0.000000 925.069380
02/28/86 12.195507 0.00 0.000000 0.000000 925.069380
03/31/86 13.280718 0.00 0.000000 0.000000 925.069380
04/30/86 13.385027 5,842.00 55.504163 4.146735 929.216115
05/31/86 13.252997 0.00 0.000000 0.000000 929.216115
06/30/86 13.000000 0.00 0.000000 0.000000 929.216115
07/31/86 12.643114 0.00 0.000000 0.000000 929.216115
08/31/86 13.228849 0.00 0.000000 0.000000 929.216115
09/30/86 13.051185 0.00 0.000000 0.000000 929.216115
10/31/86 13.824138 0.00 0.000000 0.000000 929.216115
11/30/86 13.711601 0.00 0.000000 0.000000 929.216115
12/31/86 13.750000 0.00 0.000000 0.000000 929.216115
01/31/87 14.487582 0.00 0.000000 0.000000 929.216115
02/28/87 13.873665 0.00 0.000000 0.000000 929.216115
03/31/87 13.930530 229,747.00 1228.702469 88.202134 1017.418249
04/30/87 13.668272 0.00 0.000000 0.000000 1017.418249
05/31/87 13.581600 0.00 0.000000 0.000000 1017.418249
06/30/87 14.006038 0.00 0.000000 0.000000 1017.418249
07/31/87 14.834140 0.00 0.000000 0.000000 1017.418249
08/31/87 15.253643 0.00 0.000000 0.000000 1017.418249
09/30/87 15.095986 0.00 0.000000 0.000000 1017.418249
10/31/87 11.413366 0.00 0.000000 0.000000 1017.418249
11/30/87 10.892080 0.00 0.000000 0.000000 1017.418249
12/31/87 11.483548 46,639.00 104.590596 9.107864 1026.526113
01/31/88 11.863134 0.00 0.000000 0.000000 1026.526113
02/28/88 12.524002 0.00 0.000000 0.000000 1026.526113
03/31/88 12.790585 16,625.00 32.746183 2.560179 1029.086292
04/30/88 12.996789 0.00 0.000000 0.000000 1029.086292
05/31/88 12.760931 0.00 0.000000 0.000000 1029.086292
06/30/88 13.250035 0.00 0.000000 0.000000 1029.086292
07/31/88 13.162747 0.00 0.000000 0.000000 1029.086292
08/31/88 12.759928 0.00 0.000000 0.000000 1029.086292
09/30/88 13.054684 0.00 0.000000 0.000000 1029.086292
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
10/31/88 13.457890 10/31/88 10/31/88
11/30/88 13.011370 11/30/88 11/30/88
12/31/88 12.775918 12/31/88 12/31/88 0.180000
01/31/89 13.882000 01/31/89 01/31/89
02/28/89 13.753000 02/28/89 02/28/89
03/31/89 13.995000 03/31/89 03/31/89
04/30/89 14.612647 04/30/89 04/30/89
05/31/89 14.559000 05/31/89 05/31/89
06/30/89 14.440000 06/30/89 06/30/89
07/31/89 15.653000 07/31/89 07/31/89
08/31/89 16.287000 08/31/89 08/31/89
09/14/89 16.280000 09/14/89 09/14/89 0.001300
09/30/89 16.610000 09/30/89 09/30/89
10/31/89 15.832000 10/31/89 10/31/89
11/30/89 16.026000 11/30/89 11/30/89
12/31/89 16.070000 12/31/89 12/31/89 0.352420
01/31/90 15.219327 01/31/90 01/31/90
02/28/90 15.307648 02/28/90 02/28/90
03/31/90 15.005069 03/31/90 03/31/90 0.355600
04/30/90 14.694539 04/30/90 04/30/90
05/31/90 15.977056 05/31/90 05/31/90
06/30/90 16.245950 06/30/90 06/30/90
07/31/90 16.306960 07/31/90 07/31/90
08/31/90 14.886446 08/31/90 08/31/90
09/30/90 13.534062 09/30/90 09/30/90
10/31/90 13.422003 10/31/90 10/31/90
11/30/90 13.860478 11/30/90 11/30/90
12/31/90 13.706467 12/31/90 12/31/90 0.369060
01/31/91 14.180000 01/31/91 01/31/91
02/28/91 15.240000 02/28/91 02/28/91
03/31/91 15.080000 03/31/91 03/31/91
04/30/91 15.150000 04/30/91 04/30/91
05/31/91 15.470000 05/31/91 05/31/91
06/30/91 14.680000 06/30/91 06/30/91
07/31/91 15.590000 07/31/91 07/31/91
08/31/91 15.840000 08/31/91 08/31/91 0.000000
09/30/91 15.970000 09/30/91 09/30/91 0.000000
10/31/91 16.160000 10/31/91 10/31/91 0.000000
11/30/91 15.760000 11/30/91 11/30/91
12/31/91 16.450000 12/31/91 12/31/91 0.336800
01/31/92 16.418704 01/31/92 01/31/92
02/28/92 16.766066 02/28/92 02/28/92
03/31/92 16.419780 03/31/92 03/31/92 0.001510
04/30/92 16.991563 04/30/92 04/30/92
05/31/92 17.746603 03/31/92 05/31/92
06/30/92 17.360832 06/30/92 06/30/92
07/31/92 17.470219 07/31/92 07/31/92
08/31/92 17.133530 08/31/92 08/31/92
09/30/92 16.837943 09/30/92 09/30/92
10/31/92 16.863608 10/31/92 10/31/92
<CAPTION>
<S> <C> <C> <C> <C> <C>
10/31/88 13.457890 0.00 0.000000 0.000000 1029.086292
11/30/88 13.011370 0.00 0.000000 0.000000 1029.086292
12/31/88 12.775918 122,768.00 185.235533 14.498804 1043.585096
01/31/89 13.882000 0.00 0.000000 0.000000 1043.585096
02/28/89 13.753000 0.00 0.000000 0.000000 1043.585096
03/31/89 13.995000 0.00 0.000000 0.000000 1043.585096
04/30/89 14.612647 0.00 0.000000 0.000000 1043.585096
05/31/89 14.559000 0.00 0.000000 0.000000 1043.585096
06/30/89 14.440000 0.00 0.000000 0.000000 1043.585096
07/31/89 15.653000 0.00 0.000000 0.000000 1043.585096
08/31/89 16.287000 0.00 0.000000 0.000000 1043.585096
09/14/89 16.280000 1,045.00 1.356661 0.083333 1043.668429
09/30/89 16.610000 0.00 0.000000 0.000000 1043.668429
10/31/89 15.832000 0.00 0.000000 0.000000 1043.668429
11/30/89 16.026000 0.00 0.000000 0.000000 1043.668429
12/31/89 16.070000 310,442.00 367.809628 22.887967 1066.556396
01/31/90 15.219327 0.00 0.000000 0.000000 1066.556396
02/28/90 15.307648 0.00 0.000000 0.000000 1066.556396
03/31/90 15.005069 336,584.00 379.267454 25.275955 1091.832351
04/30/90 14.694539 0.00 0.000000 0.000000 1091.832351
05/31/90 15.977056 0.00 0.000000 0.000000 1091.832351
06/30/90 16.245950 0.00 0.000000 0.000000 1091.832351
07/31/90 16.306960 0.00 0.000000 0.000000 1091.832351
08/31/90 14.886446 0.00 0.000000 0.000000 1091.832351
09/30/90 13.534062 0.00 0.000000 0.000000 1091.832351
10/31/90 13.422003 0.00 0.000000 0.000000 1091.832351
11/30/90 13.860478 0.00 0.000000 0.000000 1091.832351
12/31/90 13.706467 420,996.00 402.951648 29.398652 1121.231003
01/31/91 14.180000 0.00 0.000000 0.000000 1121.231003
02/28/91 15.240000 0.00 0.000000 0.000000 1121.231003
03/31/91 15.080000 0.00 0.000000 0.000000 1121.231003
04/30/91 15.150000 0.00 0.000000 0.000000 1121.231003
05/31/91 15.470000 0.00 0.000000 0.000000 1121.231003
06/30/91 14.680000 0.00 0.000000 0.000000 1121.231003
07/31/91 15.590000 0.00 0.000000 0.000000 1121.231003
08/31/91 15.840000 0.00 0.000000 0.000000 1121.231003
09/30/91 15.970000 0.00 0.000000 0.000000 1121.231003
10/31/91 16.160000 0.00 0.000000 0.000000 1121.231003
11/30/91 15.760000 0.00 0.000000 0.000000 1121.231003
12/31/91 16.450000 454,602.01 377.630602 22.956268 1144.187271
01/31/92 16.418704 0.00 0.000000 0.000000 1144.187271
02/28/92 16.766066 0.00 0.000000 0.000000 1144.187271
03/31/92 16.419780 2,100.00 1.727723 0.105222 1144.292493
04/30/92 16.991563 0.00 0.000000 0.000000 1144.292493
05/31/92 17.746603 0.00 0.000000 0.000000 1144.292493
06/30/92 17.360832 0.00 0.000000 0.000000 1144.292493
07/31/92 17.470219 0.00 0.000000 0.000000 1144.292493
08/31/92 17.133530 0.00 0.000000 0.000000 1144.292493
09/30/92 16.837943 0.00 0.000000 0.000000 1144.292493
10/31/92 16.863608 0.00 0.000000 0.000000 1144.292493
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/30/92 17.043888 11/30/92 11/30/92
12/31/92 16.725976 12/31/92 12/31/92 0.352180 0.369510
01/31/93 17.112758 01/31/93 01/31/93
02/28/93 17.325399 02/28/93 02/28/93
03/31/93 17.860448 03/31/93 03/31/93
04/30/93 18.484501 04/30/93 04/30/93
05/31/93 18.848873 05/31/93 05/31/93
06/30/93 18.555732 06/30/93 06/30/93
07/31/93 18.758134 07/31/93 07/31/93
08/31/93 20.063211 08/31/93 08/31/93
09/30/93 20.007417 09/30/93 09/30/93
10/31/93 21.040060 10/31/93 10/31/93
11/30/93 20.733282 11/30/93 11/30/93
12/31/93 20.889335 12/31/93 12/31/93 0.236602 1.242153
01/31/94 21.893065 01/31/94 01/31/94
02/28/94 21.505751 02/28/94 02/28/94
03/31/94 19.956783 03/31/94 03/31/94 0.005400 0.222800
04/30/94 20.160521 04/30/94 04/30/94 0.000000 0.000000
05/31/94 20.202263 05/31/94 05/31/94 0.000000 0.000000
06/30/94 19.642215 06/30/94 06/30/94 0.000000 0.000000
09/30/94 20.981873 09/29/94 09/29/94 0.000000 0.000000
12/31/94 19.004320 12/31/94 01/03/95 0.265230 0.754446
03/31/95 19.252199 03/31/95 03/31/95 0.000000 0.000000
06/30/95 20.830000 06/30/95 06/30/95 0.000000 0.000000
09/30/95 21.870337 09/30/95 09/30/95 0.000000 0.000000
10/31/95 21.488719 10/31/95 10/31/95 0.000000 0.000000
11/30/95 21.654547 11/30/95 11/30/95 0.000000 0.000000
12/31/95 21.204748 12/31/95 12/31/95 0.433027 0.473926
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/30/92 17.043888 0.00 0.000000 0.000000 1144.292493
12/31/92 16.725976 1,096,656.10 825.824449 49.373767 1193.666260
01/31/93 17.112758 0.00 0.000000 0.000000 1193.666260
02/28/93 17.325399 0.00 0.000000 0.000000 1193.666260
03/31/93 17.860448 0.00 0.000000 0.000000 1193.666260
04/30/93 18.484501 0.00 0.000000 0.000000 1193.666260
05/31/93 18.848873 0.00 0.000000 0.000000 1193.666260
06/30/93 18.555732 0.00 0.000000 0.000000 1193.666260
07/31/93 18.758134 0.00 0.000000 0.000000 1193.666260
08/31/93 20.063211 0.00 0.000000 0.000000 1193.666260
09/30/93 20.007417 0.000000 0.000000 1193.666260
10/31/93 21.040060 0.000000 0.000000 1193.666260
11/30/93 20.733282 0.000000 0.000000 1193.666260
12/31/93 20.889335 0.00 1765.140390 84.499597 1278.165857
01/31/94 21.893065 0.000000 0.000000 1278.165857
02/28/94 19.956783 0.000000 0.000000 1278.165857
03/31/94 19.956783 511,530.10 291.677449 14.615454 1292.781311
04/30/94 0.00 0.000000 0.000000 1292.781311
05/31/94 0.00 0.000000 0.000000 1292.781311
06/30/94 19.642215 0.00 0.000000 0.000000 1292.781311
09/30/94 20.981873 0.00 0.000000 0.000000 1292.781311
12/31/94 19.004320 2,838,549.43 1318.218076 69.364128 1362.145439
03/31/95 19.252199 0.00 0.000000 0.000000 1362.145439
06/30/95 20.830000 0.00 0.000000 0.000000 1362.145439
09/30/95 21.870337 0.00 0.000000 0.000000 1362.145439
10/31/95 21.488719 0.00 0.000000 0.000000 1362.145439
11/30/95 21.654547 0.00 0.000000 0.000000 1362.145439
12/31/95 21.204748 3,151,911.72 1235.401892 58.260626 1420.406065
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN 08/01/85
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE (NAV +NOT REINVESTED GROSS VALUE
1495.091486 21.20 31703.0382
PURCHASE DATE: 08/01/85
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.27 31703.0382 10,000.00 (21703.0382)
SHARES PURCHASED 973.710
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(21703.0382) 10,000.00 2.1703
GROSS RATE OF RETURN SINCE INCEPTION: 217.03%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEP 11.71%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
08/01/85 10.270000 08/01/85 08/01/85 10.270000
08/31/85 9.862001 08/31/85 08/31/85 9.862001
09/30/85 9.357841 09/30/85 09/30/85 9.357841
10/31/85 9.772022 10/31/85 10/31/85 9.772022
11/30/85 10.370973 11/30/85 11/30/85 10.370973
12/31/85 10.810000 12/31/85 12/31/85 10.810000
01/31/86 10.883980 01/31/86 01/31/86 10.883980
02/28/86 12.195507 02/28/86 02/28/86 12.195507
03/31/86 13.280718 03/31/86 03/31/86 13.280718
04/30/86 13.385027 04/30/86 04/30/86 0.060000 13.385027 5,842.00 58.422590 4.364772
05/31/86 13.252997 05/31/86 05/31/86 13.252997
06/30/86 13.000000 06/30/86 06/30/86 13.000000
07/31/86 12.643114 07/31/86 07/31/86 12.643114
08/31/86 13.228849 08/31/86 08/31/86 13.228849
09/30/86 13.051185 09/30/86 09/30/86 13.051185
10/31/86 13.824138 10/31/86 10/31/86 13.824138
11/30/86 13.711601 11/30/86 11/30/86 13.711601
12/31/86 13.750000 12/31/86 12/31/86 13.750000
01/31/87 14.487582 01/31/87 01/31/87 14.487582
02/28/87 13.873665 02/28/87 02/28/87 13.873665
03/31/87 13.930530 03/31/87 03/31/87 0.273800 1.048500 13.930530 229,747.00 1293.308052 92.839831
04/30/87 13.668272 04/30/87 04/30/87 13.668272
05/31/87 13.581600 05/31/87 05/31/87 13.581600
06/30/87 14.006038 06/30/87 06/30/87 14.006038
07/31/87 14.834140 07/31/87 07/31/87 14.834140
08/31/87 15.253643 08/31/87 08/31/87 15.253643
09/30/87 15.095986 09/30/87 09/30/87 15.095986
10/31/87 11.413366 10/31/87 10/31/87 11.413366
11/30/87 10.892080 11/30/87 11/30/87 10.892080
12/31/87 11.483548 12/31/87 12/31/87 0.071100 0.031700 11.483548 46,639.00 110.090004 9.586759
01/31/88 11.863134 01/31/88 01/31/88 11.863134
02/28/88 12.524002 02/28/88 02/28/88 12.524002
03/31/88 12.790585 03/31/88 03/31/88 0.031900 12.790585 16,625.00 34.467988 2.694794
04/30/88 12.996789 04/30/88 04/30/88 12.996789
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<S> <C> <C>
08/01/85 973.709834 10,000
08/31/85 973.709834 9,603
09/30/85 973.709834 9,112
10/31/85 973.709834 9,515
11/30/85 973.709834 10,098
12/31/85 973.709834 10,526
01/31/86 973.709834 10,598
02/28/86 973.709834 11,875
03/31/86 973.709834 12,932
04/30/86 978.074606 13,092
05/31/86 978.074606 12,962
06/30/86 978.074606 12,715
07/31/86 978.074606 12,366
08/31/86 978.074606 12,939
09/30/86 978.074606 12,765
10/31/86 978.074606 13,521
11/30/86 978.074606 13,411
12/31/86 978.074606 13,449
01/31/87 978.074606 14,170
02/28/87 978.074606 13,569
03/31/87 1070.914437 14,918
04/30/87 1070.914437 14,638
05/31/87 1070.914437 14,545
06/30/87 1070.914437 14,999
07/31/87 1070.914437 15,886
08/31/87 1070.914437 16,335
09/30/87 1070.914437 16,167
10/31/87 1070.914437 12,223
11/30/87 1070.914437 11,664
12/31/87 1080.501196 12,408
01/31/88 1080.501196 12,818
02/28/88 1080.501196 13,532
03/31/88 1083.195990 13,855
04/30/88 1083.195990 14,078
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 08/01/85
INCEPTION 12/31/95
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
05/31/88 12.760931 05/31/88 05/31/88 12.760931
06/30/88 13.250035 06/30/88 06/30/88 13.250035
07/31/88 13.162747 07/31/88 07/31/88 13.162747
08/31/88 12.759928 08/31/88 08/31/88 12.759928
09/30/88 13.054684 09/30/88 09/30/88 13.054684
10/31/88 13.457890 10/31/88 10/31/88 13.457890
11/30/88 13.011370 11/30/88 11/30/88 13.011370
12/31/88 12.775918 12/31/88 12/31/88 0.180000 12.775918 122,768.00 194.975278 15.261156
01/31/89 13.882000 01/31/89 01/31/89 13.882000
02/28/89 13.753000 02/28/89 02/28/89 13.753000
03/31/89 13.995000 03/31/89 03/31/89 13.995000
04/30/89 14.612647 04/30/89 04/30/89 14.612647
05/31/89 14.559000 05/31/89 05/31/89 14.559000
06/30/89 14.440000 06/30/89 06/30/89 14.440000
07/31/89 15.653000 07/31/89 07/31/89 15.653000
08/31/89 16.287000 08/31/89 08/31/89 16.287000
09/14/89 16.280000 09/14/89 09/14/89 0.001300 16.280000 1,045.00 1.427994 0.087715
09/30/89 16.610000 09/30/89 09/30/89 16.610000
10/31/89 15.832000 10/31/89 10/31/89 15.832000
11/30/89 16.026000 11/30/89 11/30/89 16.026000
12/31/89 16.070000 12/31/89 12/31/89 0.352420 16.070000 310,442.00 387.149180 24.091424
01/31/90 15.219327 01/31/90 01/31/90 15.219327
02/28/90 15.307648 02/28/90 02/28/90 15.307648
03/31/90 15.005069 03/31/90 03/31/90 0.355600 15.005069 336,584.00 399.209463 26.604973
04/30/90 14.694539 04/30/90 04/30/90 14.694539
05/31/90 15.977056 05/31/90 05/31/90 15.977056
06/30/90 16.245950 06/30/90 06/30/90 16.245950
07/31/90 16.306960 07/31/90 07/31/90 16.306960
08/31/90 14.886446 08/31/90 08/31/90 14.886446
09/30/90 13.534062 09/30/90 09/30/90 13.534062
10/31/90 13.422003 10/31/90 10/31/90 13.422003
11/30/90 13.860478 11/30/90 11/30/90 13.860478
12/31/90 13.706467 12/31/90 12/31/90 0.369060 13.706467 420,996.00 424.138979 30.944442
01/31/91 14.180000 01/31/91 01/31/91 14.180000
02/28/91 15.240000 02/28/91 02/28/91 15.240000
03/31/91 15.080000 03/31/91 03/31/91 15.080000
04/30/91 15.150000 04/30/91 04/30/91 15.150000
05/31/91 15.470000 05/31/91 05/31/91 15.470000
06/30/91 14.680000 06/30/91 06/30/91 14.680000
07/31/91 15.590000 07/31/91 07/31/91 15.590000
08/31/91 15.840000 08/31/91 08/31/91 15.840000
09/30/91 15.970000 09/30/91 09/30/91 15.970000
10/31/91 16.160000 10/31/91 10/31/91 16.160000
11/30/91 15.760000 11/30/91 11/30/91 15.760000
12/31/91 16.450000 12/31/91 12/31/91 0.336800 16.450000 454,602.01 397.486544 24.163316
01/31/92 16.418704 01/31/92 01/31/92 16.418704
02/28/92 16.766066 02/28/92 02/28/92 16.766066
03/31/92 16.419780 03/31/92 03/31/92 0.001510 16.419780 2,100.00 1.818567 0.110755
04/30/92 16.991563 04/30/92 04/30/92 16.991563
05/31/92 17.746603 05/31/92 05/31/92 17.746603
<CAPTION>
<S> <C> <C>
05/31/88 1083.195990 13,823
06/30/88 1083.195990 14,352
07/31/88 1083.195990 14,258
08/31/88 1083.195990 13,822
09/30/88 1083.195990 14,141
10/31/88 1083.195990 14,578
11/30/88 1083.195990 14,094
12/31/88 1098.457146 14,034
01/31/89 1098.457146 15,249
02/28/89 1098.457146 15,107
03/31/89 1098.457146 15,373
04/30/89 1098.457146 16,051
05/31/89 1098.457146 15,992
06/30/89 1098.457146 15,862
07/31/89 1098.457146 17,194
08/31/89 1098.457146 17,891
09/14/89 1098.544861 17,884
09/30/89 1098.544861 18,247
10/31/89 1098.544861 17,392
11/30/89 1098.544861 17,605
12/31/89 1122.636284 18,041
01/31/90 1122.636284 17,086
02/28/90 1122.636284 17,185
03/31/90 1149.241258 17,244
04/30/90 1149.241258 16,888
05/31/90 1149.241258 18,361
06/30/90 1149.241258 18,671
07/31/90 1149.241258 18,741
08/31/90 1149.241258 17,108
09/30/90 1149.241258 15,554
10/31/90 1149.241258 15,425
11/30/90 1149.241258 15,929
12/31/90 1180.185700 16,176
01/31/91 1180.185700 16,735
02/28/91 1180.185700 17,986
03/31/91 1180.185700 17,797
04/30/91 1180.185700 17,880
05/31/91 1180.185700 18,257
06/30/91 1180.185700 17,325
07/31/91 1180.185700 18,399
08/31/91 1180.185700 18,694
09/30/91 1180.185700 18,848
10/31/91 1180.185700 19,072
11/30/91 1180.185700 18,600
12/31/91 1204.349016 19,812
01/31/92 1204.349016 19,774
02/28/92 1204.349016 20,192
03/31/92 1204.459771 19,777
04/30/92 1204.459771 20,466
05/31/92 1204.459771 21,375
</TABLE>
<PAGE>
GROSS CAF: WORLD GROWTH FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 08/01/85
INCEPTION 12/31/95
...................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/92 17.360832 06/30/92 06/30/92 17.360832
07/31/92 17.470219 07/31/92 07/31/92 17.470219
08/31/92 17.133530 08/31/92 08/31/92 17.133530
09/30/92 16.837943 09/30/92 09/30/92 16.837943
10/31/92 16.863608 10/31/92 10/31/92 16.863608
11/30/92 17.043888 11/30/92 11/30/92 17.043888
12/31/92 16.725976 12/31/92 12/31/92 0.352180 0.369510 16.725976 1,096,656.10 869.246572 51.969856
01/31/93 17.112758 01/31/93 01/31/93 17.112758
02/28/93 17.325399 02/28/93 02/28/93 17.325399
03/31/93 17.860448 03/31/93 03/31/93 17.860448
04/30/93 18.484501 04/30/93 04/30/93 18.484501
05/31/93 18.848873 05/31/93 05/31/93 18.848873
06/30/93 18.555732 06/30/93 06/30/93 18.555732
07/31/93 18.758134 07/31/93 07/31/93 18.758134
08/31/93 20.063211 08/31/93 08/31/93 20.063211
09/30/93 20.007417 09/30/93 09/30/93 20.007417
10/31/93 21.040060 10/31/93 10/31/93 21.040060
11/30/93 20.733282 11/30/93 11/30/93 20.733282
12/31/93 20.889335 12/31/93 12/31/93 0.236602 1.242153 20.889335 1857.952056 88.942614
01/31/94 21.893065 01/31/94 01/31/94 21.893065
02/28/94 21.505751 02/28/94 02/28/94 19.956783
03/31/94 19.956783 03/31/94 03/31/94 0.005400 0.222800 19.956783 511,530.10 307.013945 15.383940
04/30/94 20.160521 04/30/94 04/30/94
05/31/94 20.202263 05/31/94 05/31/94
06/30/94 19.642215 06/30/94 06/30/94 19.642215
09/30/94 20.981873 09/29/94 09/29/94 20.981873
12/31/94 19.004320 12/31/94 01/03/95 0.265230 0.754446 19.004320 2,838,549.43 1387.530419 73.011316
03/31/95 19.252199 03/31/95 03/31/95 19.252199
06/30/95 20.830000 06/30/95 06/30/95 20.830000
09/30/95 21.870337 09/30/95 09/30/95 21.870337
10/31/95 21.488719 10/31/95 10/31/95 21.488719
11/30/95 21.654547 11/30/95 11/30/95 21.654547
12/31/95 21.204748 12/31/95 12/31/95 0.433027 0.473926 21.204748 3,151,911.72 1300.359733 61.323989
<CAPTION>
<S> <C> <C>
06/30/92 1204.459771 20,910
07/31/92 1204.459771 21,042
08/31/92 1204.459771 20,637
09/30/92 1204.459771 20,281
10/31/92 1204.459771 20,312
11/30/92 1204.459771 20,529
12/31/92 1256.429627 21,015
01/31/93 1256.429627 21,501
02/28/93 1256.429627 21,768
03/31/93 1256.429627 22,440
04/30/93 1256.429627 23,224
05/31/93 1256.429627 23,682
06/30/93 1256.429627 23,314
07/31/93 1256.429627 23,568
08/31/93 1256.429627 25,208
09/30/93 1256.429627 25,138
10/31/93 1256.429627 26,435
11/30/93 1256.429627 26,050
12/31/93 1345.372241 28,104
01/31/94 1345.372241 29,454
02/28/94 1345.372241 28,933
03/31/94 1360.756181 27,156
04/30/94 1360.756181 27,434
05/31/94 1360.756181 27,490
06/30/94 1360.756181 26,728
09/30/94 1360.756181 28,551
12/31/94 1433.767497 27,248
03/31/95 1433.767497 27,603
06/30/95 1433.767497 29,865
09/30/95 1433.767497 31,357
10/31/95 1433.767497 30,810
11/30/95 1433.767497 31,048
12/31/95 1495.091486 31,703
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1022.774024 10.27 10505.7312
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.25 10505.7312 10,000.00 (505.7312)
SHARES PURCHASED: 975.6295542
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(505.7312) 10,000.00 0.0506
ONE YEAR NET RATE OF RETURN: 5.06%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS
<S> <C> <C> <C> <C> <C>
12/31/94 10.249792 12/31/94 01/03/95 0.3462
03/31/95 10.376299 03/31/95 03/31/95
06/30/95 10.508592 06/30/95 06/30/95
09/30/95 10.637749 09/30/95 09/30/95
10/31/95 10.682268 10/31/95 10/31/95
11/30/95 10.725870 11/30/95 11/30/95
12/31/95 10.271801 12/31/95 12/31/95 0.4964
<CAPTION>
SHARES TOTALS
DATE REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C>
12/31/94 10.249792 259,434.83 975.629554
03/31/95 10.376299 975.629554
06/30/95 10.508592 975.629554
09/30/95 10.637749 975.629554
10/31/95 10.682268 975.629554
11/30/95 10.725870 975.629554
12/31/95 10.271801 401,686.14 484.258607 47.144469 1022.774024
1022.774024
1022.774024
1022.774024
1022.774024
1022.774024
1022.774024
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1169.283577 10.27 12010.6482
PURCHASE DATE: 12/31/90
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.21 12010.6482 10,000.00 (2010.6482)
SHARES PURCHASED: 979.1156588
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(2010.6482) 10,000.00 0.2011
GROSS 5 YEAR RETURN: 20.11%
ANNUALIZED GROSS 5 YEAR RETURN: 3.73%
</TABLE>
<TABLE>
<CAPTION>
INCOME
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION
<C> <C> <C> <C> <C>
12/31/90 10.213298 12/31/90 12/31/90 0.697537
01/31/91 10.270000 01/31/91 01/31/91
02/28/91 10.310000 02/28/91 02/28/91
03/31/91 10.350000 03/31/91 03/31/91 0.005781
04/30/91 10.400000 04/30/91 04/30/91
05/31/91 10.450000 05/31/91 05/31/91
06/30/91 10.480000 06/30/91 06/30/91
07/31/91 10.530000 07/31/91 07/31/91
08/31/91 10.570000 08/31/91 08/31/91
09/30/91 10.610000 09/30/91 09/30/91
10/31/91 10.650000 10/31/91 10/31/91
11/30/91 10.690000 11/30/91 11/30/91
12/31/91 10.220000 12/31/91 12/31/91 0.513289
01/31/92 10.248921 01/31/92 01/31/92
02/28/92 10.275814 02/28/92 02/28/92
03/31/92 10.305377 03/31/92 03/31/92
04/30/92 10.332586 04/30/92 04/30/92
05/31/92 10.360020 05/31/92 05/31/92
06/30/92 10.386424 06/30/92 06/30/92
07/31/92 10.410719 07/31/92 07/31/92
08/31/92 10.433551 08/31/92 08/31/92
09/30/92 10.458103 09/30/92 09/30/92
10/31/92 10.473089 10/31/92 10/31/92
11/30/92 10.490953 11/30/92 11/30/92
12/31/92 10.224693 12/31/92 12/31/92 0.289496
01/31/93 10.241677 01/31/93 01/31/93
02/28/93 10.258708 02/28/93 02/28/93
03/31/93 10.281631 03/31/93 03/31/93
04/30/93 10.299324 04/30/93 04/30/93
05/31/93 10.316329 05/31/93 05/31/93
06/30/93 10.339935 06/30/93 06/30/93
07/31/93 10.360750 07/31/93 07/31/93
08/31/93 10.380618 08/31/93 08/31/93
09/30/93 10.401556 09/30/93 09/30/93
<CAPTION>
CAPITAL SHARES TOTALS
DATE DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C> <C>
12/31/90 10.213298 186,082.00 979.115659
01/31/91 10.270000 979.115659
02/28/91 10.310000 979.115659
03/31/91 10.350000 1,880.00 5.660268 0.546886 979.662545
04/30/91 10.400000 979.662545
05/31/91 10.450000 979.662545
06/30/91 10.480000 979.662545
07/31/91 10.530000 979.662545
08/31/91 10.570000 979.662545
09/30/91 10.610000 979.662545
10/31/91 10.650000 979.662545
11/30/91 10.690000 979.662545
12/31/91 10.220000 175,624.63 502.850008 49.202545 1028.865089
01/31/92 10.248921 1028.865089
02/28/92 10.275814 1028.865089
03/31/92 10.305377 1028.865089
04/30/92 10.332586 1028.865089
05/31/92 10.360020 1028.865089
06/30/92 10.386424 1028.865089
07/31/92 10.410719 1028.865089
08/31/92 10.433551 1028.865089
09/30/92 10.458103 1028.865089
10/31/92 10.473089 1028.865089
11/30/92 10.490953 1028.865089
12/31/92 0.000002 10.224693 112,012.79 297.854386 29.130888 1057.995977
01/31/93 10.241677 1057.995977
02/28/93 10.258708 1057.995977
03/31/93 10.281631 1057.995977
04/30/93 10.299324 1057.995977
05/31/93 10.316329 1057.995977
06/30/93 10.339935 1057.995977
07/31/93 10.360750 1057.995977
08/31/93 10.380618 1057.995977
09/30/93 10.401556 1057.995977
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10/31/93 10.421846 10/31/93 10/31/93
11/30/93 10.440622 11/30/93 11/30/93
12/31/93 10.259162 12/31/93 12/31/93 0.2030
01/31/94 10.279000 01/31/94 01/31/94
02/28/94 10.297060 02/28/94 02/28/94
03/31/94 10.318002 03/31/94 03/31/94
04/30/94 10.338249 04/30/94 04/30/94
05/31/94 10.365119 05/31/94 05/31/94
06/30/94 10.390870 06/30/94 06/30/94
09/30/94 10.482911 09/30/94 09/30/94
12/31/94 10.249792 12/31/94 01/03/95 0.3462
03/31/95 10.376299 03/31/95 03/31/95
06/30/95 10.508592 06/30/95 06/30/95
09/30/95 10.637749 09/30/95 09/30/95
10/31/95 10.682268 10/31/95 10/31/95
11/30/95 10.725870 11/30/95 11/30/95
12/31/95 10.271801 12/31/95 12/31/95 0.4964
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
10/31/93 10.421846 1057.995977
11/30/93 10.440622 1057.995977
12/31/93 0.0001 10.259162 100,194.81 214.876867 20.944875 1078.940852
01/31/94 10.279000 1078.940852
02/28/94 10.297060 1078.940852
03/31/94 10.318002 1078.940852
04/30/94 1078.940852
05/31/94 1078.940852
06/30/94 10.390870 1078.940852
09/30/94 10.482911 1078.940852
12/31/94 10.249792 259,434.83 373.553060 36.444941 1115.385793
03/31/95 10.376299 1115.385793
06/30/95 10.508592 1115.385793
09/30/95 10.637749 1115.385793
10/31/95 10.682268 1115.385793
11/30/95 10.725870 1115.385793
12/31/95 10.271801 401,686.14 553.627315 53.897784 1169.283577
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV +NOT REINVESTEDGROSS VALUE
1583.732793 10.27 0 16267.7881
PURCHASE DATE: 12/31/85
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.33 16267.7881 10,000.00 (6267.7881)
SHARES PURCHASED: 967.6766017
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(6267.7881) 10,000.00 0.6268
GROSS 10 YEAR RETURN: 62.68%
ANNUALIZED GROSS 10 YEAR RETURN: 4.99%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/85 10.334031 12/31/85 12/31/85 10.334031 0.00
01/31/86 10.379673 01/31/86 01/31/86 10.379673 0.00 0.000000 0.000000
02/28/86 10.428895 02/28/86 02/28/86 10.428895 0.00 0.000000 0.000000
03/31/86 10.483993 03/31/86 03/31/86 10.483993 0.00 0.000000 0.000000
04/01/86 10.490000 04/01/86 04/01/86 0.33 10.490000 32,533.00 319.333279 30.441685
04/30/86 10.212532 04/30/86 04/30/86 10.212532 0.00 0.000000 0.000000
05/31/86 10.295073 05/31/86 05/31/86 10.295073 0.00 0.000000 0.000000
06/30/86 10.344354 06/30/86 06/30/86 10.344354 0.00 0.000000 0.000000
07/31/86 10.389806 07/31/86 07/31/86 10.389806 0.00 0.000000 0.000000
08/31/86 10.429832 08/31/86 08/31/86 10.429832 0.00 0.000000 0.000000
09/30/86 10.469425 09/30/86 09/30/86 10.469425 0.00 0.000000 0.000000
10/31/86 10.508642 10/31/86 10/31/86 10.508642 0.00 0.000000 0.000000
11/30/86 10.506834 11/30/86 11/30/86 10.506834 0.00 0.000000 0.000000
12/31/86 10.556109 12/31/86 12/31/86 10.556109 0.00 0.000000 0.000000
01/31/87 10.599582 01/31/87 01/31/87 10.599582 0.00 0.000000 0.000000
02/28/87 10.150733 02/28/87 02/28/87 10.150733 0.00 0.000000 0.000000
03/31/87 10.174001 03/31/87 03/31/87 10.174001 0.00 0.000000 0.000000
04/01/87 10.170000 04/01/87 04/01/87 0.5122 10.170000 60,645.00 511.236187 50.269045
04/30/87 10.200265 04/30/87 04/30/87 10.200265 0.00 0.000000 0.000000
05/31/87 10.227052 05/31/87 05/31/87 10.227052 0.00 0.000000 0.000000
06/30/87 10.259622 06/30/87 06/30/87 10.259622 0.00 0.000000 0.000000
07/31/87 10.297469 07/31/87 07/31/87 10.297469 0.00 0.000000 0.000000
08/31/87 10.344069 08/31/87 08/31/87 10.344069 0.00 0.000000 0.000000
09/30/87 10.394908 09/30/87 09/30/87 10.394908 0.00 0.000000 0.000000
10/31/87 10.448850 10/31/87 10/31/87 10.448850 0.00 0.000000 0.000000
11/30/87 10.492539 11/30/87 11/30/87 10.492539 0.00 0.000000 0.000000
12/31/87 10.085865 12/31/87 12/31/87 0.4511 10.085865 65,901.00 472.927525 46.890130
01/31/88 10.130703 01/31/88 01/31/88 10.130703 0.00 0.000000 0.000000
02/28/88 10.178268 02/28/88 02/28/88 10.178268 0.00 0.000000 0.000000
03/31/88 10.225347 03/31/88 03/31/88 10.225347 0.00 0.000000 0.000000
04/30/88 10.275893 04/30/88 04/30/88 10.275893 0.00 0.000000 0.000000
05/31/88 10.331694 05/31/88 05/31/88 10.331694 0.00 0.000000 0.000000
06/30/88 10.381242 06/30/88 06/30/88 10.381242 0.00 0.000000 0.000000
07/31/88 10.433533 07/31/88 07/31/88 10.433533 0.00 0.000000 0.000000
<CAPTION>
TOTALS
DATE SHARES
<S> <C>
12/31/85 967.676602
01/31/86 967.676602
02/28/86 967.676602
03/31/86 967.676602
04/01/86 998.118287
04/30/86 998.118287
05/31/86 998.118287
06/30/86 998.118287
07/31/86 998.118287
08/31/86 998.118287
09/30/86 998.118287
10/31/86 998.118287
11/30/86 998.118287
12/31/86 998.118287
01/31/87 998.118287
02/28/87 998.118287
03/31/87 998.118287
04/01/87 1048.387332
04/30/87 1048.387332
05/31/87 1048.387332
06/30/87 1048.387332
07/31/87 1048.387332
08/31/87 1048.387332
09/30/87 1048.387332
10/31/87 1048.387332
11/30/87 1048.387332
12/31/87 1095.277462
01/31/88 1095.277462
02/28/88 1095.277462
03/31/88 1095.277462
04/30/88 1095.277462
05/31/88 1095.277462
06/30/88 1095.277462
07/31/88 1095.277462
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
08/31/88 10.490025 08/31/88 08/31/88 10.490025 0.00 0.000000 0.000000
09/30/88 10.548161 09/30/88 09/30/88 10.548161 0.00 0.000000 0.000000
10/31/88 10.612295 10/31/88 10/31/88 10.612295 0.00 0.000000 0.000000
11/30/88 10.665012 11/30/88 11/30/88 10.665012 0.00 0.000000 0.000000
12/31/88 10.164476 12/31/88 12/31/88 0.56 10.164476 116,402.00 613.355379 60.343040
01/31/89 10.229000 01/31/89 01/31/89 10.229000 0.00 0.000000 0.000000
02/28/89 10.287000 02/28/89 02/28/89 10.287000 0.00 0.000000 0.000000
03/31/89 10.358000 03/31/89 03/31/89 10.358000 0.00 0.000000 0.000000
04/30/89 10.419101 04/30/89 04/30/89 10.419101 0.00 0.000000 0.000000
05/31/89 10.490000 05/31/89 05/31/89 10.490000 0.00 0.000000 0.000000
06/30/89 10.554000 06/30/89 06/30/89 10.554000 0.00 0.000000 0.000000
07/31/89 10.622000 07/31/89 07/31/89 10.622000 0.00 0.000000 0.000000
08/31/89 10.681000 08/31/89 08/31/89 10.681000 0.00 0.000000 0.000000
09/30/89 10.736757 09/30/89 09/30/89 10.736757 0.00 0.000000 0.000000
10/31/89 10.798000 10/31/89 10/31/89 10.798000 0.00 0.000000 0.000000
11/30/89 10.876000 11/30/89 11/30/89 10.876000 0.00 0.000000 0.000000
12/31/89 10.181000 12/31/89 12/31/89 0.755523 10.181000 172,428.87 873.097869 85.757575
01/31/90 10.249911 01/31/90 01/31/90 10.249911 0.00 0.000000 0.000000
02/28/90 10.310286 02/28/90 02/28/90 10.310286 0.00 0.000000 0.000000
03/31/90 10.359670 03/31/90 03/31/90 10.359670 0.00 0.000000 0.000000
04/30/90 10.414995 04/30/90 04/30/90 10.414995 0.00 0.000000 0.000000
05/31/90 10.480941 05/31/90 05/31/90 10.480941 0.00 0.000000 0.000000
06/30/90 10.540132 06/30/90 06/30/90 10.540132 0.00 0.000000 0.000000
07/31/90 10.610158 07/31/90 07/31/90 10.610158 0.00 0.000000 0.000000
08/31/90 10.672740 08/31/90 08/31/90 10.672740 0.00 0.000000 0.000000
09/30/90 10.728073 09/30/90 09/30/90 10.728073 0.00 0.000000 0.000000
10/31/90 10.789012 10/31/90 10/31/90 10.789012 0.00 0.000000 0.000000
11/30/90 10.850259 11/30/90 11/30/90 10.850259 0.00 0.000000 0.000000
12/31/90 10.213298 12/31/90 12/31/90 0.697537 10.213298 186,082.00 865.907140 84.782324
01/31/91 10.270000 01/31/91 01/31/91 10.270000 0.00 0.000000 0.000000
02/28/91 10.310000 02/28/91 02/28/91 10.310000 0.00 0.000000 0.000000
03/31/91 10.350000 03/31/91 03/31/91 0.005781 10.350000 1,880.00 7.666533 0.740728
04/30/91 10.400000 04/30/91 04/30/91 10.400000 0.00 0.000000 0.000000
05/31/91 10.450000 05/31/91 05/31/91 10.450000 0.00 0.000000 0.000000
06/30/91 10.480000 06/30/91 06/30/91 0.0000 10.480000 0.00 0.000000 0.000000
07/31/91 10.530000 07/31/91 07/31/91 0.0000 10.530000 0.00 0.000000 0.000000
08/31/91 10.570000 08/31/91 08/31/91 0.0000 10.570000 0.00 0.000000 0.000000
09/30/91 10.610000 09/30/91 09/30/91 10.610000 0.00 0.000000 0.000000
10/31/91 10.650000 10/31/91 10/31/91 10.650000 0.00 0.000000 0.000000
11/30/91 10.690000 11/30/91 11/30/91 10.690000 0.00 0.000000 0.000000
12/31/91 10.220000 12/31/91 12/31/91 0.513289 10.220000 175,624.63 681.083753 66.642246
01/31/92 10.248921 01/31/92 01/31/92 10.248921 0.00 0.000000 0.000000
02/28/92 10.275814 02/28/92 02/28/92 10.275814 0.00 0.000000 0.000000
03/31/92 10.305377 03/31/92 03/31/92 10.305377 0.00 0.000000 0.000000
04/30/92 10.332586 04/30/92 04/30/92 10.332586 0.00 0.000000 0.000000
05/31/92 10.360020 05/31/92 05/31/92 10.360020 0.00 0.000000 0.000000
06/30/92 10.386424 06/30/92 06/30/92 10.386424 0.00 0.000000 0.000000
07/31/92 10.410719 07/31/92 07/31/92 10.410719 0.00 0.000000 0.000000
08/31/92 10.433551 08/31/92 08/31/92 10.433551 0.00 0.000000 0.000000
09/30/92 10.458103 09/30/92 09/30/92 10.458103 0.00 0.000000 0.000000
<CAPTION>
<S> <C>
08/31/88 1095.277462
09/30/88 1095.277462
10/31/88 1095.277462
11/30/88 1095.277462
12/31/88 1155.620502
01/31/89 1155.620502
02/28/89 1155.620502
03/31/89 1155.620502
04/30/89 1155.620502
05/31/89 1155.620502
06/30/89 1155.620502
07/31/89 1155.620502
08/31/89 1155.620502
09/30/89 1155.620502
10/31/89 1155.620502
11/30/89 1155.620502
12/31/89 1241.378077
01/31/90 1241.378077
02/28/90 1241.378077
03/31/90 1241.378077
04/30/90 1241.378077
05/31/90 1241.378077
06/30/90 1241.378077
07/31/90 1241.378077
08/31/90 1241.378077
09/30/90 1241.378077
10/31/90 1241.378077
11/30/90 1241.378077
12/31/90 1326.160401
01/31/91 1326.160401
02/28/91 1326.160401
03/31/91 1326.901129
04/30/91 1326.901129
05/31/91 1326.901129
06/30/91 1326.901129
07/31/91 1326.901129
08/31/91 1326.901129
09/30/91 1326.901129
10/31/91 1326.901129
11/30/91 1326.901129
12/31/91 1393.543374
01/31/92 1393.543374
02/28/92 1393.543374
03/31/92 1393.543374
04/30/92 1393.543374
05/31/92 1393.543374
06/30/92 1393.543374
07/31/92 1393.543374
08/31/92 1393.543374
09/30/92 1393.543374
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/92 10.473089 10/31/92 10/31/92 10.473089 0.00 0.000000 0.000000
11/30/92 10.490953 11/30/92 11/30/92 10.490953 0.00 0.000000 0.000000
12/31/92 10.224693 12/31/92 12/31/92 0.289496 0.000002 10.224693 112,012.79 403.428020 39.456248
01/31/93 10.241677 01/31/93 01/31/93 10.241677 0.00 0.000000 0.000000
02/28/93 10.258708 02/28/93 02/28/93 10.258708 0.00 0.000000 0.000000
03/31/93 10.281631 03/31/93 03/31/93 10.281631 0.00 0.000000 0.000000
04/30/93 10.299324 04/30/93 04/30/93 10.299324 0.00 0.000000 0.000000
05/31/93 10.316329 05/31/93 05/31/93 10.316329 0.00 0.000000 0.000000
06/30/93 10.339935 06/30/93 06/30/93 10.339935 0.00 0.000000 0.000000
07/31/93 10.360750 07/31/93 07/31/93 10.360750 0.00 0.000000 0.000000
08/31/93 10.380618 08/31/93 08/31/93 10.380618 0.00 0.000000 0.000000
09/30/93 10.401556 09/30/93 09/30/93 10.401556 0.000000 0.000000
10/31/93 10.421846 10/31/93 10/31/93 10.421846 0.000000 0.000000
11/30/93 10.440622 11/30/93 11/30/93 10.440622 0.000000 0.000000
12/31/93 10.259162 12/31/93 12/31/93 0.2030 0.0001 10.259162 100,194.81 291.039357 28.368726
01/31/94 10.279000 01/31/94 01/31/94 10.279000 0.000000 0.000000
02/28/94 10.297060 02/28/94 02/28/94 10.297060 0.000000 0.000000
03/31/94 10.318002 03/31/94 03/31/94 0.0000 0.0000 10.318002 0.00 0.000000 0.000000
04/30/94 10.338249 04/30/94 04/30/94 0.0000 0.0000 0.00 0.000000 0.000000
05/31/94 10.365119 05/31/94 05/31/94 0.0000 0.0000 0.00 0.000000 0.000000
06/30/94 10.390870 06/30/94 06/30/94 0.0000 0.0000 10.390870 0.00 0.000000 0.000000
09/30/94 10.482911 09/30/94 09/30/94 10.482911 0.00 0.000000 0.000000
12/31/94 10.249792 12/31/94 01/03/95 0.3462 0.0000 10.249792 259,434.83 505.957872 49.362745
03/31/95 10.376299 03/31/95 03/31/95 0.0000 0.0000 10.376299 0.00 0.000000 0.000000
06/30/95 10.508592 06/30/95 06/30/95 0.0000 0.0000 10.508592 0.00 0.000000 0.000000
09/30/95 10.637749 09/30/95 09/30/95 0.0000 0.0000 10.637749 0.00 0.000000 0.000000
10/31/95 10.682268 10/31/95 10/31/95 0.0000 0.0000 10.682268 0.00 0.000000 0.000000
11/30/95 10.725870 11/30/95 11/30/95 0.0000 0.0000 10.725870 0.00 0.000000 0.000000
12/31/95 10.271801 12/31/95 12/31/95 0.4964 0.0000 10.271801 401,686.14 749.858932 73.001700
<CAPTION>
<S> <C>
10/31/92 1393.543374
11/30/92 1393.543374
12/31/92 1432.999622
01/31/93 1432.999622
02/28/93 1432.999622
03/31/93 1432.999622
04/30/93 1432.999622
05/31/93 1432.999622
06/30/93 1432.999622
07/31/93 1432.999622
08/31/93 1432.999622
09/30/93 1432.999622
10/31/93 1432.999622
11/30/93 1432.999622
12/31/93 1461.368348
01/31/94 1461.368348
02/28/94 1461.368348
03/31/94 1461.368348
04/30/94 1461.368348
05/31/94 1461.368348
06/30/94 1461.368348
09/30/94 1461.368348
12/31/94 1510.731094
03/31/95 1510.731094
06/30/95 1510.731094
09/30/95 1510.731094
10/31/95 1510.731094
11/30/95 1510.731094
12/31/95 1583.732793
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1626.873139 10.27 16710.9171
PURCHASE DATE: 08/01/85
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.06 16710.9171 10,000.00 (6710.9171)
SHARES PURCHASED: 994.036
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(6710.9171) 10,000.00 0.6711
GROSS RATE OF RETURN SINCE INCEPTION: 67.11%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION: 5.05%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS
<S> <C> <C> <C> <C> <C>
08/01/85 10.060000 08/01/85 08/01/85
08/31/85 10.109922 08/31/85 08/31/85
09/30/85 10.168525 09/30/85 09/30/85
10/31/85 10.221058 10/31/85 10/31/85
11/30/85 10.273969 11/30/85 11/30/85
12/31/85 10.334031 12/31/85 12/31/85
01/31/86 10.379673 01/31/86 01/31/86
02/28/86 10.428895 02/28/86 02/28/86
03/31/86 10.483993 03/31/86 03/31/86
04/01/86 10.490000 04/01/86 04/01/86 0.33
04/30/86 10.212532 04/30/86 04/30/86
05/31/86 10.295073 05/31/86 05/31/86
06/30/86 10.344354 06/30/86 06/30/86
07/31/86 10.389806 07/31/86 07/31/86
08/31/86 10.429832 08/31/86 08/31/86
09/30/86 10.469425 09/30/86 09/30/86
10/31/86 10.508642 10/31/86 10/31/86
11/30/86 10.506834 11/30/86 11/30/86
12/31/86 10.556109 12/31/86 12/31/86
01/31/87 10.599582 01/31/87 01/31/87
02/28/87 10.150733 02/28/87 02/28/87
03/31/87 10.174001 03/31/87 03/31/87
04/01/87 10.170000 04/01/87 04/01/87 0.5122
04/30/87 10.200265 04/30/87 04/30/87
05/31/87 10.227052 05/31/87 05/31/87
06/30/87 10.259622 06/30/87 06/30/87
07/31/87 10.297469 07/31/87 07/31/87
08/31/87 10.344069 08/31/87 08/31/87
09/30/87 10.394908 09/30/87 09/30/87
10/31/87 10.448850 10/31/87 10/31/87
11/30/87 10.492539 11/30/87 11/30/87
12/31/87 10.085865 12/31/87 12/31/87 0.4511
01/31/88 10.130703 01/31/88 01/31/88
02/28/88 10.178268 02/28/88 02/28/88
<CAPTION>
SHARES TOTAL
DATE REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C>
08/01/85 10.060000 994.035785
08/31/85 10.109922 994.035785
09/30/85 10.168525 994.035785
10/31/85 10.221058 994.035785
11/30/85 10.273969 994.035785
12/31/85 10.334031 994.035785
01/31/86 10.379673 994.035785
02/28/86 10.428895 994.035785
03/31/86 10.483993 994.035785
04/01/86 10.490000 32,533.00 328.031809 31.270906 1025.306692
04/30/86 10.212532 1025.306692
05/31/86 10.295073 1025.306692
06/30/86 10.344354 1025.306692
07/31/86 10.389806 1025.306692
08/31/86 10.429832 1025.306692
09/30/86 10.469425 1025.306692
10/31/86 10.508642 1025.306692
11/30/86 10.506834 1025.306692
12/31/86 10.556109 1025.306692
01/31/87 10.599582 1025.306692
02/28/87 10.150733 1025.306692
03/31/87 10.174001 1025.306692
04/01/87 10.170000 60,645.00 525.162088 51.638357 1076.945048
04/30/87 10.200265 1076.945048
05/31/87 10.227052 1076.945048
06/30/87 10.259622 1076.945048
07/31/87 10.297469 1076.945048
08/31/87 10.344069 1076.945048
09/30/87 10.394908 1076.945048
10/31/87 10.448850 1076.945048
11/30/87 10.492539 1076.945048
12/31/87 10.085865 65,901.00 485.809911 48.167402 1125.112450
01/31/88 10.130703 1125.112450
02/28/88 10.178268 1125.112450
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95
INCEPTION
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
03/31/88 10.225347 03/31/88 03/31/88
04/30/88 10.275893 04/30/88 04/30/88
05/31/88 10.331694 05/31/88 05/31/88
06/30/88 10.381242 06/30/88 06/30/88
07/31/88 10.433533 07/31/88 07/31/88
08/31/88 10.490025 08/31/88 08/31/88
09/30/88 10.548161 09/30/88 09/30/88
10/31/88 10.612295 10/31/88 10/31/88
11/30/88 10.665012 11/30/88 11/30/88
12/31/88 10.164476 12/31/88 12/31/88 0.56
01/31/89 10.229000 01/31/89 01/31/89
02/28/89 10.287000 02/28/89 02/28/89
03/31/89 10.358000 03/31/89 03/31/89
04/30/89 10.419101 04/30/89 04/30/89
05/31/89 10.490000 05/31/89 05/31/89
06/30/89 10.554000 06/30/89 06/30/89
07/31/89 10.622000 07/31/89 07/31/89
08/31/89 10.681000 08/31/89 08/31/89
09/30/89 10.736757 09/30/89 09/30/89
10/31/89 10.798000 10/31/89 10/31/89
11/30/89 10.876000 11/30/89 11/30/89
12/31/89 10.181000 12/31/89 12/31/89 0.755523
01/31/90 10.249911 01/31/90 01/31/90
02/28/90 10.310286 02/28/90 02/28/90
03/31/90 10.359670 03/31/90 03/31/90
04/30/90 10.414995 04/30/90 04/30/90
05/31/90 10.480941 05/31/90 05/31/90
06/30/90 10.540132 06/30/90 06/30/90
07/31/90 10.610158 07/31/90 07/31/90
08/31/90 10.672740 08/31/90 08/31/90
09/30/90 10.728073 09/30/90 09/30/90
10/31/90 10.789012 10/31/90 10/31/90
11/30/90 10.850259 11/30/90 11/30/90
12/31/90 10.213298 12/31/90 12/31/90 0.697537
01/31/91 10.270000 01/31/91 01/31/91
02/28/91 10.310000 02/28/91 02/28/91
03/31/91 10.350000 03/31/91 03/31/91 0.005781
04/30/91 10.400000 04/30/91 04/30/91
05/31/91 10.450000 05/31/91 05/31/91
06/30/91 10.480000 06/30/91 06/30/91
07/31/91 10.530000 07/31/91 07/31/91
08/31/91 10.570000 08/31/91 08/31/91
09/30/91 10.610000 09/30/91 09/30/91
10/31/91 10.650000 10/31/91 10/31/91
11/30/91 10.690000 11/30/91 11/30/91
12/31/91 10.220000 12/31/91 12/31/91 0.513289
01/31/92 10.248921 01/31/92 01/31/92
02/28/92 10.275814 02/28/92 02/28/92
03/31/92 10.305377 03/31/92 03/31/92
04/30/92 10.332586 04/30/92 04/30/92
<CAPTION>
<S> <C> <C> <C> <C> <C>
03/31/88 10.225347 1125.112450
04/30/88 10.275893 1125.112450
05/31/88 10.331694 1125.112450
06/30/88 10.381242 1125.112450
07/31/88 10.433533 1125.112450
08/31/88 10.490025 1125.112450
09/30/88 10.548161 1125.112450
10/31/88 10.612295 1125.112450
11/30/88 10.665012 1125.112450
12/31/88 10.164476 116,402.00 630.062972 61.986764 1187.099214
01/31/89 10.229000 1187.099214
02/28/89 10.287000 1187.099214
03/31/89 10.358000 1187.099214
04/30/89 10.419101 1187.099214
05/31/89 10.490000 1187.099214
06/30/89 10.554000 1187.099214
07/31/89 10.622000 1187.099214
08/31/89 10.681000 1187.099214
09/30/89 10.736757 1187.099214
10/31/89 10.798000 1187.099214
11/30/89 10.876000 1187.099214
12/31/89 10.181000 172,428.87 896.880759 88.093582 1275.192796
01/31/90 10.249911 1275.192796
02/28/90 10.310286 1275.192796
03/31/90 10.359670 1275.192796
04/30/90 10.414995 1275.192796
05/31/90 10.480941 1275.192796
06/30/90 10.540132 1275.192796
07/31/90 10.610158 1275.192796
08/31/90 10.672740 1275.192796
09/30/90 10.728073 1275.192796
10/31/90 10.789012 1275.192796
11/30/90 10.850259 1275.192796
12/31/90 10.213298 186,082.00 889.494157 87.091766 1362.284562
01/31/91 10.270000 1362.284562
02/28/91 10.310000 1362.284562
03/31/91 10.350000 1,880.00 7.875367 0.760905 1363.045467
04/30/91 10.400000 1363.045467
05/31/91 10.450000 1363.045467
06/30/91 10.480000 1363.045467
07/31/91 10.530000 1363.045467
08/31/91 10.570000 1363.045467
09/30/91 10.610000 1363.045467
10/31/91 10.650000 1363.045467
11/30/91 10.690000 1363.045467
12/31/91 10.220000 175,624.63 699.636245 68.457558 1431.503025
01/31/92 10.248921 1431.503025
02/28/92 10.275814 1431.503025
03/31/92 10.305377 1431.503025
04/30/92 10.332586 1431.503025
</TABLE>
<PAGE>
GROSS CAF: MONEY MARKET FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95
INCEPTION
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
05/31/92 10.360020 05/31/92 05/31/92
06/30/92 10.386424 06/30/92 06/30/92
07/31/92 10.410719 07/31/92 07/31/92
08/31/92 10.433551 08/31/92 08/31/92
09/30/92 10.458103 09/30/92 09/30/92
10/31/92 10.473089 10/31/92 10/31/92
11/30/92 10.490953 11/30/92 11/30/92
12/31/92 10.224693 12/31/92 12/31/92 0.289496 0.000002
01/31/93 10.241677 01/31/93 01/31/93
02/28/93 10.258708 02/28/93 02/28/93
03/31/93 10.281631 03/31/93 03/31/93
04/30/93 10.299324 04/30/93 04/30/93
05/31/93 10.316329 05/31/93 05/31/93
06/30/93 10.339935 06/30/93 06/30/93
07/31/93 10.360750 07/31/93 07/31/93
08/31/93 10.380618 08/31/93 08/31/93
09/30/93 10.401556 09/30/93 09/30/93
10/31/93 10.421846 10/31/93 10/31/93
11/30/93 10.440622 11/30/93 11/30/93
12/31/93 10.259162 12/31/93 12/31/93 0.2030 0.0001
01/31/94 10.279000 01/31/94 01/31/94
02/28/94 10.297060 02/28/94 02/28/94
03/31/94 10.318002 03/31/94 03/31/94
04/30/94 10.338249 04/30/94 04/30/94
05/31/94 10.365119 05/31/94 05/31/94
06/30/94 10.390870 06/30/94 06/30/94
09/30/94 10.482911 09/30/94 09/30/94
12/31/94 10.249792 12/31/94 01/03/95 0.3462
03/31/95 10.376299 03/31/95 03/31/95
06/30/95 10.508592 06/30/95 06/30/95
09/30/95 10.637749 09/30/95 09/30/95
10/31/95 10.682268 10/31/95 10/31/95
11/30/95 10.725870 11/30/95 11/30/95
12/31/95 10.271801 12/31/95 12/31/95 0.4964
<CAPTION>
<S> <C> <C> <C> <C> <C>
05/31/92 10.360020 1431.503025
06/30/92 10.386424 1431.503025
07/31/92 10.410719 1431.503025
08/31/92 10.433551 1431.503025
09/30/92 10.458103 1431.503025
10/31/92 10.473089 1431.503025
11/30/92 10.490953 1431.503025
12/31/92 10.224693 112,012.79 414.417263 40.531023 1472.034048
01/31/93 10.241677 1472.034048
02/28/93 10.258708 1472.034048
03/31/93 10.281631 1472.034048
04/30/93 10.299324 1472.034048
05/31/93 10.316329 1472.034048
06/30/93 10.339935 1472.034048
07/31/93 10.360750 1472.034048
08/31/93 10.380618 1472.034048
09/30/93 10.401556 1472.034048
10/31/93 10.421846 1472.034048
11/30/93 10.440622 1472.034048
12/31/93 10.259162 100,194.81 298.967171 29.141481 1501.175528
01/31/94 10.279000 1501.175528
02/28/94 10.297060 1501.175528
03/31/94 10.318002 1501.175528
04/30/94 1501.175528
05/31/94 1501.175528
06/30/94 10.390870 1501.175528
09/30/94 10.482911 1501.175528
12/31/94 10.249792 259,434.83 519.739994 50.707370 1551.882898
03/31/95 10.376299 1551.882898
06/30/95 10.508592 1551.882898
09/30/95 10.637749 1551.882898
10/31/95 10.682268 1551.882898
11/30/95 10.725870 1551.882898
12/31/95 10.271801 401,686.14 770.284836 74.990241 1626.873139
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
618.612568 16.61 10275.9658
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 16.25 10275.9658 10,000.00 (275.9658)
SHARES PURCHASED: 615.2489956
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(275.9658) 10,000.00 0.0276
ONE YEAR NET RATE OF RETURN: 2.76%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 16.253582 12/31/94 01/03/95 0.112518 16.253582 50,892.72
03/31/95 16.573346 03/31/95 03/31/95 0.000059 16.573346 33.66 0.036148
05/31/95 16.573346 05/31/95 05/31/95 16.573346
06/30/95 16.677838 06/30/95 06/30/95 16.677838
09/30/95 17.476544 09/30/95 09/30/95 17.476544
10/31/95 15.430857 10/31/95 10/31/95 15.430857
11/30/95 16.558341 11/30/95 11/30/95 16.558341
12/31/95 16.611311 12/31/95 12/31/95 0.090755 16.611311 37,520.90 55.837121
<CAPTION>
SHARES TOTALS
DATE REINV. SHARES
<S> <C> <C>
12/31/94 615.248996
03/31/95 0.002181 615.251177
05/31/95 615.251177
06/30/95 615.251177
09/30/95 615.251177
10/31/95 615.251177
11/30/95 615.251177
12/31/95 3.361392 618.612568
618.612568
618.612568
618.612568
618.612568
618.612568
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
801.198592 16.61 13308.9590
PURCHASE DATE: 12/31/90
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 12.76 13308.9590 10,000.00 (3308.9590)
SHARES PURCHASED: 783.4590485
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(3308.9590) 10,000.00 0.3309
GROSS 5 YEAR RETURN: 33.09%
ANNUALIZED GROSS 5 YEAR RETURN: 5.88%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/90 12.763909 12/31/90 12/31/90 0.074160 12.763909 31,137.00
01/31/91 11.290000 01/31/91 01/31/91 11.290000
02/28/91 12.250000 02/28/91 02/28/91 12.250000
03/31/91 12.080000 03/31/91 03/31/91 0.000800 12.080000 314.51 0.626767 0.051885
04/30/91 11.760000 04/30/91 04/30/91 11.760000
05/31/91 12.310000 05/31/91 05/31/91 12.310000
06/30/91 13.250000 06/30/91 06/30/91 13.250000
07/31/91 13.010000 07/31/91 07/31/91 13.010000
08/31/91 11.730000 08/31/91 08/31/91 11.730000
09/30/91 11.940000 09/30/91 09/30/91 11.940000
10/31/91 12.490000 10/31/91 10/31/91 12.490000
11/30/91 12.480000 11/30/91 11/30/91 12.480000
12/31/91 11.990000 12/31/91 12/31/91 0.069530 11.990000 26,801.64 54.477515 4.543579
01/31/92 12.537230 01/31/92 01/31/92 12.537230
02/28/92 12.465343 02/28/92 02/28/92 12.465343
03/31/92 11.512562 03/31/92 03/31/92 11.512562
04/30/92 10.665906 04/30/92 04/30/92 10.665906
05/31/92 11.609132 05/31/92 05/31/92 11.609132
06/30/92 12.422040 06/30/92 06/30/92 12.422040
07/31/92 13.000353 07/31/92 07/31/92 13.000353
08/31/92 12.614457 08/31/92 08/31/92 12.614457
09/30/92 12.503699 09/30/92 09/30/92 12.503699
10/31/92 11.893408 10/31/92 10/31/92 11.893408
11/30/92 10.920135 11/30/92 11/30/92 10.920135
12/31/92 11.574689 12/31/92 01/04/93 0.026120 11.574689 9,790.26 20.583984 1.778362
01/31/93 11.259309 01/31/93 01/31/93 11.259309
02/28/93 12.041281 02/28/93 02/28/93 12.041281
03/31/93 13.707730 03/31/93 03/31/93 13.707730
04/30/93 15.032484 04/30/93 04/30/93 15.032484
05/31/93 17.307920 05/31/93 05/31/93 17.307920
06/30/93 17.755083 06/30/93 06/30/93 17.755083
07/31/93 19.380805 07/31/93 07/31/93 19.380805
08/31/93 17.495044 08/31/93 08/31/93 17.495044
09/30/93 15.186717 09/30/93 09/30/93 15.186717
<CAPTION>
TOTALS
DATE SHARES
<S> <C>
12/31/90 783.459048
01/31/91 783.459048
02/28/91 783.459048
03/31/91 783.510933
04/30/91 783.510933
05/31/91 783.510933
06/30/91 783.510933
07/31/91 783.510933
08/31/91 783.510933
09/30/91 783.510933
10/31/91 783.510933
11/30/91 783.510933
12/31/91 788.054512
01/31/92 788.054512
02/28/92 788.054512
03/31/92 788.054512
04/30/92 788.054512
05/31/92 788.054512
06/30/92 788.054512
07/31/92 788.054512
08/31/92 788.054512
09/30/92 788.054512
10/31/92 788.054512
11/30/92 788.054512
12/31/92 789.832874
01/31/93 789.832874
02/28/93 789.832874
03/31/93 789.832874
04/30/93 789.832874
05/31/93 789.832874
06/30/93 789.832874
07/31/93 789.832874
08/31/93 789.832874
09/30/93 789.832874
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/93 17.110323 10/31/93 10/31/93 17.110323
11/30/93 16.950429 11/30/93 11/30/93 16.950429
12/31/93 19.000000 12/31/93 12/31/93 0.016533 19.000000 13.058307 0.687279
01/31/94 19.505582 01/31/94 01/31/94 19.505582
02/28/94 18.694719 02/28/94 02/28/94 18.694719
03/31/94 19.057402 03/31/94 03/31/94 0.001700 19.057402 738.50 1.343884 0.070518
04/30/94 17.233519 04/30/94 04/30/94
05/31/94 18.028666 05/31/94 05/31/94
06/30/94 17.022927 06/30/94 06/30/94 17.022927
09/30/94 19.326626 09/14/94 09/14/94 0.017529 17.922432 8,614.00 13.858228 0.773234
12/31/94 16.253582 12/31/94 01/03/95 0.112518 16.253582 50,892.72 89.042684 5.478342
03/31/95 16.573346 03/31/95 03/31/95 0.000059 16.573346 33.66 0.046817 0.002825
05/31/95 16.573346 05/31/95 05/31/95 16.573346
06/30/95 16.677838 06/30/95 06/30/95 16.677838
09/30/95 17.476544 09/30/95 09/30/95 17.476544
10/31/95 15.430857 10/31/95 10/31/95 15.430857
11/30/95 16.558341 11/30/95 11/30/95 16.558341
12/31/95 16.611311 12/31/95 12/31/95 0.090755 16.611311 37,520.90 72.317674 4.353520
<CAPTION>
<S> <C>
10/31/93 789.832874
11/30/93 789.832874
12/31/93 790.520153
01/31/94 790.520153
02/28/94 790.520153
03/31/94 790.590671
04/30/94 790.590671
05/31/94 790.590671
06/30/94 790.590671
09/30/94 791.363905
12/31/94 796.842247
03/31/95 796.845072
05/31/95 796.845072
06/30/95 796.845072
09/30/95 796.845072
10/31/95 796.845072
11/30/95 796.845072
12/31/95 801.198592
801.198592
801.198592
801.198592
801.198592
801.198592
801.198592
801.198592
801.198592
801.198592
801.198592
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1048.520725 16.61 0 17417.3039
PURCHASE DATE: 12/31/85
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.00 17417.3039 10,000.00 (7417.3039)
SHARES PURCHASED: 1000
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(7417.3039) 10,000.00 0.7417
GROSS 10 YEAR RETURN: 74.17%
ANNUALIZED GROSS 10 YEAR RETURN: 5.71%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST.
<S> <C> <C> <C> <C> <C> <C> <C>
12/31/85 10.000000 12/31/85 12/31/85 10.000000 0.00
01/31/86 10.878179 01/31/86 01/31/86 10.883980 0.00 0.000000
02/28/86 10.125862 02/28/86 02/28/86 12.195507 0.00 0.000000
03/31/86 10.258072 03/31/86 03/31/86 13.280718 0.00 0.000000
04/01/86 9.900000 04/01/86 04/01/86 0.080000 9.900000 8,360.00 80.000000
04/30/86 9.966539 04/30/86 04/30/86 13.385027 0.00 0.000000
05/31/86 9.828679 05/31/86 05/31/86 9.828679 0.00 0.000000
06/30/86 10.100434 06/30/86 06/30/86 10.100434 0.00 0.000000
07/31/86 10.406548 07/31/86 07/31/86 10.406548 0.00 0.000000
08/31/86 11.830752 08/31/86 08/31/86 11.830752 0.00 0.000000
09/30/86 12.934295 09/30/86 09/30/86 12.934295 0.00 0.000000
10/31/86 13.449433 10/31/86 10/31/86 13.449433 0.00 0.000000
11/30/86 13.793036 11/30/86 11/30/86 13.793036 0.00 0.000000
12/31/86 13.590663 12/31/86 12/31/86 13.590663 0.00 0.000000
01/31/87 15.971436 01/31/87 01/31/87 15.971436 0.00 0.000000
02/28/87 18.008619 02/28/87 02/28/87 18.008619 0.00 0.000000
03/31/87 22.073838 03/31/87 03/31/87 22.073838 0.00 0.000000
04/30/87 23.392579 04/30/87 04/30/87 23.392579 0.00 0.000000
05/31/87 20.912506 05/31/87 05/31/87 20.912506 0.00 0.000000
06/30/87 20.309814 06/30/87 06/30/87 20.309814 0.00 0.000000
07/31/87 24.062335 07/31/87 07/31/87 24.062335 0.00 0.000000
08/31/87 23.364187 08/31/87 08/31/87 23.364187 0.00 0.000000
09/30/87 24.660495 09/30/87 09/30/87 24.660495 0.00 0.000000
10/31/87 16.328519 10/31/87 10/31/87 16.328519 0.00 0.000000
11/30/87 18.917959 11/30/87 11/30/87 18.917959 0.00 0.000000
12/31/87 18.244344 12/31/87 12/31/87 0.006300 18.244344 1,321.00 6.350909
01/31/88 15.238558 01/31/88 01/31/88 15.238558 0.00 0.000000
02/29/88 15.320911 02/29/88 02/29/88 15.320911 0.00 0.000000
03/31/88 16.827233 03/31/88 03/31/88 16.827233 0.00 0.000000
04/30/88 16.637987 04/30/88 04/30/88 16.637987 0.00 0.000000
05/31/88 16.446398 05/31/88 05/31/88 16.446398 0.00 0.000000
06/30/88 16.681648 06/30/88 06/30/88 16.681648 0.00 0.000000
07/31/88 16.880585 07/31/88 07/31/88 16.880585 0.00 0.000000
08/31/88 15.861418 08/31/88 08/31/88 15.861418 0.00 0.000000
<CAPTION>
SHARES TOTALS
DATE REINV. SHARES
<S> <C> <C>
12/31/85 1000.000000
01/31/86 0.000000 1000.000000
02/28/86 0.000000 1000.000000
03/31/86 0.000000 1000.000000
04/01/86 8.080808 1008.080808
04/30/86 0.000000 1008.080808
05/31/86 0.000000 1008.080808
06/30/86 0.000000 1008.080808
07/31/86 0.000000 1008.080808
08/31/86 0.000000 1008.080808
09/30/86 0.000000 1008.080808
10/31/86 0.000000 1008.080808
11/30/86 0.000000 1008.080808
12/31/86 0.000000 1008.080808
01/31/87 0.000000 1008.080808
02/28/87 0.000000 1008.080808
03/31/87 0.000000 1008.080808
04/30/87 0.000000 1008.080808
05/31/87 0.000000 1008.080808
06/30/87 0.000000 1008.080808
07/31/87 0.000000 1008.080808
08/31/87 0.000000 1008.080808
09/30/87 0.000000 1008.080808
10/31/87 0.000000 1008.080808
11/30/87 0.000000 1008.080808
12/31/87 0.348103 1008.428911
01/31/88 0.000000 1008.428911
02/29/88 0.000000 1008.428911
03/31/88 0.000000 1008.428911
04/30/88 0.000000 1008.428911
05/31/88 0.000000 1008.428911
06/30/88 0.000000 1008.428911
07/31/88 0.000000 1008.428911
08/31/88 0.000000 1008.428911
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/30/88 14.701129 09/30/88 09/30/88 14.701129 0.00 0.000000
10/31/88 14.887833 10/31/88 10/31/88 14.887833 0.00 0.000000
11/30/88 15.070704 11/30/88 11/30/88 15.070704 0.00 0.000000
12/31/88 14.369903 12/31/88 12/31/88 14.369903 0.00 0.000000
01/31/89 14.951000 01/31/89 01/31/89 14.951000 0.00 0.000000
02/28/89 15.585000 02/28/89 02/28/89 15.585000 0.00 0.000000
03/31/89 15.182000 03/31/89 03/31/89 15.182000 0.00 0.000000
04/30/89 14.349388 04/30/89 04/30/89 14.349388 0.00 0.000000
05/31/89 13.582000 05/31/89 05/31/89 13.582000 0.00 0.000000
06/30/89 14.301000 06/30/89 06/30/89 14.301000 0.00 0.000000
07/31/89 14.386000 07/31/89 07/31/89 14.386000 0.00 0.000000
08/31/89 14.713000 08/31/89 08/31/89 14.713000 0.00 0.000000
09/30/89 14.940000 09/30/89 09/30/89 14.940000 0.00 0.000000
10/31/89 15.041000 10/31/89 10/31/89 15.041000 0.00 0.000000
11/30/89 17.327000 11/30/89 11/30/89 17.327000 0.00 0.000000
12/31/89 16.950000 12/31/89 12/31/89 0.067820 0.116290 16.950000 64,139.42 185.661847
01/31/90 17.270054 01/31/90 01/31/90 17.270054 0.00 0.000000
02/28/90 16.498380 02/28/90 02/28/90 16.498380 0.00 0.000000
03/31/90 15.573094 03/31/90 03/31/90 15.573094 0.00 0.000000
04/30/90 14.180843 04/30/90 04/30/90 14.180843 0.00 0.000000
05/31/90 14.726217 05/31/90 05/31/90 14.726217 0.00 0.000000
06/30/90 13.577403 06/30/90 06/30/90 13.577403 0.00 0.000000
07/31/90 14.838629 07/31/90 07/31/90 14.838629 0.00 0.000000
08/31/90 14.578930 08/31/90 08/31/90 14.578930 0.00 0.000000
09/30/90 14.622013 09/30/90 09/30/90 14.622013 0.00 0.000000
10/31/90 12.114504 10/31/90 10/31/90 12.114504 0.00 0.000000
11/30/90 11.903974 11/30/90 11/30/90 11.903974 0.00 0.000000
12/31/90 12.763909 12/31/90 12/31/90 0.074160 12.763909 31,137.00 75.597400
01/31/91 11.290000 01/31/91 01/31/91 11.290000 0.00 0.000000
02/28/91 12.250000 02/28/91 02/28/91 12.250000 0.00 0.000000
03/31/91 12.080000 03/31/91 03/31/91 0.000800 12.080000 314.51 0.820244
04/30/91 11.760000 04/30/91 04/30/91 11.760000 0.00 0.000000
05/31/91 12.310000 05/31/91 05/31/91 12.310000 0.00 0.000000
06/30/91 13.250000 06/30/91 06/30/91 13.250000 0.00 0.000000
07/31/91 13.010000 07/31/91 07/31/91 0.000000 13.010000 0.00 0.000000
08/31/91 11.730000 08/31/91 08/31/91 0.000000 11.730000 0.00 0.000000
09/30/91 11.940000 09/30/91 09/30/91 0.000000 11.940000 0.00 0.000000
10/31/91 12.490000 10/31/91 10/31/91 12.490000 0.00 0.000000
11/30/91 12.480000 11/30/91 11/30/91 12.480000 0.00 0.000000
12/31/91 11.990000 12/31/91 12/31/91 0.069530 11.990000 26,801.64 71.294189
01/31/92 12.537230 01/31/92 01/31/92 12.537230 0.00 0.000000
02/28/92 12.465343 02/28/92 02/28/92 12.465343 0.00 0.000000
03/31/92 11.512562 03/31/92 03/31/92 11.512562 0.00 0.000000
04/30/92 10.665906 04/30/92 04/30/92 10.665906 0.00 0.000000
05/31/92 11.609132 05/31/92 05/31/92 11.609132 0.00 0.000000
06/30/92 12.422040 06/30/92 06/30/92 12.422040 0.00 0.000000
07/31/92 13.000353 07/31/92 07/31/92 13.000353 0.00 0.000000
08/31/92 12.614457 08/31/92 08/31/92 12.614457 0.00 0.000000
09/30/92 12.503699 09/30/92 09/30/92 12.503699 0.00 0.000000
10/31/92 11.893408 10/31/92 10/31/92 11.893408 0.00 0.000000
<CAPTION>
<S> <C> <C>
09/30/88 0.000000 1008.428911
10/31/88 0.000000 1008.428911
11/30/88 0.000000 1008.428911
12/31/88 0.000000 1008.428911
01/31/89 0.000000 1008.428911
02/28/89 0.000000 1008.428911
03/31/89 0.000000 1008.428911
04/30/89 0.000000 1008.428911
05/31/89 0.000000 1008.428911
06/30/89 0.000000 1008.428911
07/31/89 0.000000 1008.428911
08/31/89 0.000000 1008.428911
09/30/89 0.000000 1008.428911
10/31/89 0.000000 1008.428911
11/30/89 0.000000 1008.428911
12/31/89 10.953501 1019.382412
01/31/90 0.000000 1019.382412
02/28/90 0.000000 1019.382412
03/31/90 0.000000 1019.382412
04/30/90 0.000000 1019.382412
05/31/90 0.000000 1019.382412
06/30/90 0.000000 1019.382412
07/31/90 0.000000 1019.382412
08/31/90 0.000000 1019.382412
09/30/90 0.000000 1019.382412
10/31/90 0.000000 1019.382412
11/30/90 0.000000 1019.382412
12/31/90 5.922747 1025.305159
01/31/91 0.000000 1025.305159
02/28/91 0.000000 1025.305159
03/31/91 0.067901 1025.373060
04/30/91 0.000000 1025.373060
05/31/91 0.000000 1025.373060
06/30/91 0.000000 1025.373060
07/31/91 0.000000 1025.373060
08/31/91 0.000000 1025.373060
09/30/91 0.000000 1025.373060
10/31/91 0.000000 1025.373060
11/30/91 0.000000 1025.373060
12/31/91 5.946138 1031.319197
01/31/92 0.000000 1031.319197
02/28/92 0.000000 1031.319197
03/31/92 0.000000 1031.319197
04/30/92 0.000000 1031.319197
05/31/92 0.000000 1031.319197
06/30/92 0.000000 1031.319197
07/31/92 0.000000 1031.319197
08/31/92 0.000000 1031.319197
09/30/92 0.000000 1031.319197
10/31/92 0.000000 1031.319197
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
10 YEAR PREPARED ON: 12/31/95
ROLLING
.....................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/92 10.920135 11/30/92 11/30/92 10.920135 0.00 0.000000
12/31/92 11.574689 12/31/92 01/04/93 0.026120 11.574689 9,790.26 26.938057
01/31/93 11.259309 01/31/93 01/31/93 11.259309 0.00 0.000000
02/28/93 12.041281 02/28/93 02/28/93 12.041281 0.00 0.000000
03/31/93 13.707730 03/31/93 03/31/93 13.707730 0.00 0.000000
04/30/93 15.032484 04/30/93 04/30/93 15.032484 0.00 0.000000
05/31/93 17.307920 05/31/93 05/31/93 17.307920 0.00 0.000000
06/30/93 17.755083 06/30/93 06/30/93 17.755083 0.00 0.000000
07/31/93 19.380805 07/31/93 07/31/93 19.380805 0.00 0.000000
08/31/93 17.495044 08/31/93 08/31/93 17.495044 0.00 0.000000
09/30/93 15.186717 09/30/93 09/30/93 15.186717 0.00 0.000000
10/31/93 17.110323 10/31/93 10/31/93 17.110323 0.00 0.000000
11/30/93 16.950429 11/30/93 11/30/93 16.950429 0.00 0.000000
12/31/93 19.000000 12/31/93 12/31/93 0.016533 0.000000 19.000000 0 17.089278
01/31/94 19.505582 01/31/94 01/31/94 19.505582 0.000000
02/28/94 18.694719 02/28/94 02/28/94 18.694719 0.000000
03/31/94 19.057402 03/31/94 03/31/94 0.001700 0.000000 19.057402 738.50 1.758728
04/30/94 17.233519 04/30/94 04/30/94 0.000000 0.000000 0.00 0.000000
05/31/94 18.028666 05/31/94 05/31/94 0.000000 0.000000 0.00 0.000000
06/30/94 17.022927 06/30/94 06/30/94 0.000000 0.000000 17.022927 0.00 0.000000
09/30/94 19.326626 09/14/94 09/14/94 0.017529 17.922432 8,614.00 18.136127
12/31/94 16.253582 12/31/94 01/03/95 0.112518 0.000000 16.253582 50,892.72 116.529285
03/31/95 16.573346 03/31/95 03/31/95 0.000059 0.000000 16.573346 33.66 0.061269
05/31/95 16.573346 05/31/95 05/31/95 0.000000 16.573346 0.000000
06/30/95 16.677838 06/30/95 06/30/95 0.000000 16.677838 0.000000
09/30/95 17.476544 09/30/95 09/30/95 0.000000 0.000000 17.476544 0.00 0.000000
10/31/95 15.430857 10/31/95 10/31/95 0.000000 0.000000 15.430857 0.00 0.000000
11/30/95 16.558341 11/30/95 11/30/95 0.000000 0.000000 16.558341 0.00 0.000000
12/31/95 16.611311 12/31/95 12/31/95 0.090755 0.000000 16.611311 37,520.90 94.641430
<CAPTION>
<S> <C> <C>
11/30/92 0.000000 1031.319197
12/31/92 2.327325 1033.646522
01/31/93 0.000000 1033.646522
02/28/93 0.000000 1033.646522
03/31/93 0.000000 1033.646522
04/30/93 0.000000 1033.646522
05/31/93 0.000000 1033.646522
06/30/93 0.000000 1033.646522
07/31/93 0.000000 1033.646522
08/31/93 0.000000 1033.646522
09/30/93 0.000000 1033.646522
10/31/93 0.000000 1033.646522
11/30/93 0.000000 1033.646522
12/31/93 0.899436 1034.545958
01/31/94 0.000000 1034.545958
02/28/94 0.000000 1034.545958
03/31/94 0.092286 1034.638243
04/30/94 0.000000 1034.638243
05/31/94 0.000000 1034.638243
06/30/94 0.000000 1034.638243
09/30/94 1.011923 1035.650167
12/31/94 7.169453 1042.819619
03/31/95 0.003697 1042.823316
05/31/95 0.000000 1042.823316
06/30/95 0.000000 1042.823316
09/30/95 0.000000 1042.823316
10/31/95 0.000000 1042.823316
11/30/95 0.000000 1042.823316
12/31/95 5.697409 1048.520725
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN 08/01/85
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATEX (NAV +NOT REINVESTE GROSS VALUE
1044.343352 16.61 17347.9122
PURCHASE DATE: 08/01/85
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.04 17347.9122 10,000.00 (7347.9122)
SHARES PURCHASED 996.016
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(7347.9122) 10,000.00 0.7348
GROSS RATE OF RETURN SINCE INCEPTION: 73.48%
ANNUALIZED GROSS RATE OF RETURN SINCE INCE 5.43%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
08/01/85 10.040000 08/01/85 08/01/85 10.270000
08/30/85 10.606109 08/30/85 08/30/85 9.862001
09/30/85 9.640605 09/30/85 09/30/85 9.357841
10/31/85 9.570376 10/31/85 10/31/85 9.772022
11/30/85 10.174766 11/30/85 11/30/85 10.370973
12/31/85 10.000000 12/31/85 12/31/85 10.000000
01/31/86 10.878179 01/31/86 01/31/86 10.883980
02/28/86 10.125862 02/28/86 02/28/86 12.195507
03/31/86 10.258072 03/31/86 03/31/86 13.280718
04/01/86 9.900000 04/01/86 04/01/86 0.080000 9.900000 8,360.00 79.681275 8.048614
04/30/86 9.966539 04/30/86 04/30/86 13.385027
05/31/86 9.828679 05/31/86 05/31/86 9.828679
06/30/86 10.100434 06/30/86 06/30/86 10.100434
07/31/86 10.406548 07/31/86 07/31/86 10.406548
08/31/86 11.830752 08/31/86 08/31/86 11.830752
09/30/86 12.934295 09/30/86 09/30/86 12.934295
10/31/86 13.449433 10/31/86 10/31/86 13.449433
11/30/86 13.793036 11/30/86 11/30/86 13.793036
12/31/86 13.590663 12/31/86 12/31/86 13.590663
01/31/87 15.971436 01/31/87 01/31/87 15.971436
02/28/87 18.008619 02/28/87 02/28/87 18.008619
03/31/87 22.073838 03/31/87 03/31/87 22.073838
04/30/87 23.392579 04/30/87 04/30/87 23.392579
05/31/87 20.912506 05/31/87 05/31/87 20.912506
06/30/87 20.309814 06/30/87 06/30/87 20.309814
07/31/87 24.062335 07/31/87 07/31/87 24.062335
08/31/87 23.364187 08/31/87 08/31/87 23.364187
09/30/87 24.660495 09/30/87 09/30/87 24.660495
10/31/87 16.328519 10/31/87 10/31/87 16.328519
11/30/87 18.917959 11/30/87 11/30/87 18.917959
12/31/87 18.244344 12/31/87 12/31/87 0.006300 18.244344 1,321.00 6.325607 0.346716
01/31/88 15.238558 01/31/88 01/31/88 15.238558
02/29/88 15.320911 02/29/88 02/29/88 15.320911
03/31/88 16.827233 03/31/88 03/31/88 16.827233
<CAPTION>
TOTAL ACCOUNT
DATE SHARES VALUE
<S> <C> <C>
08/01/85 996.015936 10,000
08/30/85 996.015936 10,564
09/30/85 996.015936 9,602
10/31/85 996.015936 9,532
11/30/85 996.015936 10,134
12/31/85 996.015936 9,960
01/31/86 996.015936 10,835
02/28/86 996.015936 10,086
03/31/86 996.015936 10,217
04/01/86 1004.064550 9,940
04/30/86 1004.064550 10,007
05/31/86 1004.064550 9,869
06/30/86 1004.064550 10,141
07/31/86 1004.064550 10,449
08/31/86 1004.064550 11,879
09/30/86 1004.064550 12,987
10/31/86 1004.064550 13,504
11/30/86 1004.064550 13,849
12/31/86 1004.064550 13,646
01/31/87 1004.064550 16,036
02/28/87 1004.064550 18,082
03/31/87 1004.064550 22,164
04/30/87 1004.064550 23,488
05/31/87 1004.064550 20,998
06/30/87 1004.064550 20,392
07/31/87 1004.064550 24,160
08/31/87 1004.064550 23,459
09/30/87 1004.064550 24,761
10/31/87 1004.064550 16,395
11/30/87 1004.064550 18,995
12/31/87 1004.411266 18,325
01/31/88 1004.411266 15,306
02/29/88 1004.411266 15,388
03/31/88 1004.411266 16,901
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN 08/01/85
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/30/88 16.637987 04/30/88 04/30/88 16.637987
05/31/88 16.446398 05/31/88 05/31/88 16.446398
06/30/88 16.681648 06/30/88 06/30/88 16.681648
07/31/88 16.880585 07/31/88 07/31/88 16.880585
08/31/88 15.861418 08/31/88 08/31/88 15.861418
09/30/88 14.701129 09/30/88 09/30/88 14.701129
10/31/88 14.887833 10/31/88 10/31/88 14.887833
11/30/88 15.070704 11/30/88 11/30/88 15.070704
12/31/88 14.369903 12/31/88 12/31/88 14.369903
01/31/89 14.951000 01/31/89 01/31/89 14.951000
02/28/89 15.585000 02/28/89 02/28/89 15.585000
03/31/89 15.182000 03/31/89 03/31/89 15.182000
04/30/89 14.349388 04/30/89 04/30/89 14.349388
05/31/89 13.582000 05/31/89 05/31/89 13.582000
06/30/89 14.301000 06/30/89 06/30/89 14.301000
07/31/89 14.386000 07/31/89 07/31/89 14.386000
08/31/89 14.713000 08/31/89 08/31/89 14.713000
09/30/89 14.940000 09/30/89 09/30/89 14.940000
10/31/89 15.041000 10/31/89 10/31/89 15.041000
11/30/89 17.327000 11/30/89 11/30/89 17.327000
12/31/89 16.950000 12/31/89 12/31/89 0.067820 0.116290 16.950000 64,139.42 184.922158 10.909862
01/31/90 17.270054 01/31/90 01/31/90 17.270054
02/28/90 16.498380 02/28/90 02/28/90 16.498380
03/31/90 15.573094 03/31/90 03/31/90 15.573094
04/30/90 14.180843 04/30/90 04/30/90 14.180843
05/31/90 14.726217 05/31/90 05/31/90 14.726217
06/30/90 13.577403 06/30/90 06/30/90 13.577403
07/31/90 14.838629 07/31/90 07/31/90 14.838629
08/31/90 14.578930 08/31/90 08/31/90 14.578930
09/30/90 14.622013 09/30/90 09/30/90 14.622013
10/31/90 12.114504 10/31/90 10/31/90 12.114504
11/30/90 11.903974 11/30/90 11/30/90 11.903974
12/31/90 12.763909 12/31/90 12/31/90 0.074160 12.763909 31,137.00 75.296215 5.899150
01/31/91 11.290000 01/31/91 01/31/91 11.290000
02/28/91 12.250000 02/28/91 02/28/91 12.250000
03/31/91 12.080000 03/31/91 03/31/91 0.000800 12.080000 314.51 0.816976 0.067630
04/30/91 11.760000 04/30/91 04/30/91 11.760000
05/31/91 12.310000 05/31/91 05/31/91 12.310000
06/30/91 13.250000 06/30/91 06/30/91 13.250000
07/31/91 13.010000 07/31/91 07/31/91 13.010000
08/31/91 11.730000 08/31/91 08/31/91 11.730000
09/30/91 11.940000 09/30/91 09/30/91 11.940000
10/31/91 12.490000 10/31/91 10/31/91 12.490000
11/30/91 12.480000 11/30/91 11/30/91 12.480000
12/31/91 11.990000 12/31/91 12/31/91 0.069530 11.990000 26,801.64 71.010148 5.922448
01/31/92 12.537230 01/31/92 01/31/92 12.537230
02/28/92 12.465343 02/28/92 02/28/92 12.465343
03/31/92 11.512562 03/31/92 03/31/92 11.512562
04/30/92 10.665906 04/30/92 04/30/92 10.665906
05/31/92 11.609132 05/31/92 05/31/92 11.609132
<CAPTION>
<S> <C> <C>
04/30/88 1004.411266 16,711
05/31/88 1004.411266 16,519
06/30/88 1004.411266 16,755
07/31/88 1004.411266 16,955
08/31/88 1004.411266 15,931
09/30/88 1004.411266 14,766
10/31/88 1004.411266 14,954
11/30/88 1004.411266 15,137
12/31/88 1004.411266 14,433
01/31/89 1004.411266 15,017
02/28/89 1004.411266 15,654
03/31/89 1004.411266 15,249
04/30/89 1004.411266 14,413
05/31/89 1004.411266 13,642
06/30/89 1004.411266 14,364
07/31/89 1004.411266 14,449
08/31/89 1004.411266 14,778
09/30/89 1004.411266 15,006
10/31/89 1004.411266 15,107
11/30/89 1004.411266 17,403
12/31/89 1015.321128 17,210
01/31/90 1015.321128 17,535
02/28/90 1015.321128 16,751
03/31/90 1015.321128 15,812
04/30/90 1015.321128 14,398
05/31/90 1015.321128 14,952
06/30/90 1015.321128 13,785
07/31/90 1015.321128 15,066
08/31/90 1015.321128 14,802
09/30/90 1015.321128 14,846
10/31/90 1015.321128 12,300
11/30/90 1015.321128 12,086
12/31/90 1021.220278 13,035
01/31/91 1021.220278 11,530
02/28/91 1021.220278 12,510
03/31/91 1021.287908 12,337
04/30/91 1021.287908 12,101
05/31/91 1021.287908 12,572
06/30/91 1021.287908 13,532
07/31/91 1021.287908 13,287
08/31/91 1021.287908 11,980
09/30/91 1021.287908 12,194
10/31/91 1021.287908 12,756
11/30/91 1021.287908 12,746
12/31/91 1027.210356 12,316
01/31/92 1027.210356 12,878
02/28/92 1027.210356 12,805
03/31/92 1027.210356 11,826
04/30/92 1027.210356 10,956
05/31/92 1027.210356 11,925
</TABLE>
<PAGE>
GROSS CAF: GOLD FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 08/01/85
INCEPTION 12/31/95
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/92 12.422040 06/30/92 06/30/92 12.422040
07/31/92 13.000353 07/31/92 07/31/92 13.000353
08/31/92 12.614457 08/31/92 08/31/92 12.614457
09/30/92 12.503699 09/30/92 09/30/92 12.503699
10/31/92 11.893408 10/31/92 10/31/92 11.893408
11/30/92 10.920135 11/30/92 11/30/92 10.920135
12/31/92 11.574689 12/31/92 01/04/93 0.026120 11.574689 9,790.26 26.830735 2.318052
01/31/93 11.259309 01/31/93 01/31/93 11.259309
02/28/93 12.041281 02/28/93 02/28/93 12.041281
03/31/93 13.707730 03/31/93 03/31/93 13.707730
04/30/93 15.032484 04/30/93 04/30/93 15.032484
05/31/93 17.307920 05/31/93 05/31/93 17.307920
06/30/93 17.755083 06/30/93 06/30/93 17.755083
07/31/93 19.380805 07/31/93 07/31/93 19.380805
08/31/93 17.495044 08/31/93 08/31/93 17.495044
09/30/93 15.186717 09/30/93 09/30/93 15.186717
10/31/93 17.110323 10/31/93 10/31/93 17.110323
11/30/93 16.950429 11/30/93 11/30/93 16.950429
12/31/93 19.000000 12/31/93 12/31/93 0.016533 19.000000 17.021193 0.895852
01/31/94 19.505582 01/31/94 01/31/94 19.505582
02/28/94 18.694719 02/28/94 02/28/94 18.694719
03/31/94 19.057402 03/31/94 03/31/94 0.001700 19.057402 738.50 1.751721 0.091918
04/30/94 17.233519 04/30/94 04/30/94
05/31/94 18.028666 05/31/94 05/31/94
06/30/94 17.022927 06/30/94 06/30/94 17.022927
09/30/94 19.326626 09/14/94 09/14/94 0.017529 17.922432 8,614.00 18.063871 1.007892
12/31/94 16.253582 12/31/94 01/03/95 0.112518 16.253582 50,892.72 116.065025 7.140889
03/31/95 16.573346 03/31/95 03/31/95 0.000059 16.573346 33.66 0.061024 0.003682
05/31/95 16.573346 05/31/95 05/31/95 16.573346
06/30/95 16.677838 06/30/95 06/30/95 16.677838
09/30/95 17.476544 09/30/95 09/30/95 17.476544
10/31/95 15.430857 10/31/95 10/31/95 15.430857
11/30/95 16.558341 11/30/95 11/30/95 16.558341
12/31/95 16.611311 12/31/95 12/31/95 0.090755 16.611311 37,520.90 94.264373 5.674710
<CAPTION>
<S> <C> <C>
06/30/92 1027.210356 12,760
07/31/92 1027.210356 13,354
08/31/92 1027.210356 12,958
09/30/92 1027.210356 12,844
10/31/92 1027.210356 12,217
11/30/92 1027.210356 11,217
12/31/92 1029.528408 11,916
01/31/93 1029.528408 11,592
02/28/93 1029.528408 12,397
03/31/93 1029.528408 14,112
04/30/93 1029.528408 15,476
05/31/93 1029.528408 17,819
06/30/93 1029.528408 18,279
07/31/93 1029.528408 19,953
08/31/93 1029.528408 18,012
09/30/93 1029.528408 15,635
10/31/93 1029.528408 17,616
11/30/93 1029.528408 17,451
12/31/93 1030.424261 19,578
01/31/94 1030.424261 20,099
02/28/94 1030.424261 19,263
03/31/94 1030.516179 19,639
04/30/94 1030.516179 17,759
05/31/94 1030.516179 18,579
06/30/94 1030.516179 17,542
09/30/94 1031.524071 19,936
12/31/94 1038.664960 16,882
03/31/95 1038.668642 17,214
05/31/95 1038.668642 17,214
06/30/95 1038.668642 17,323
09/30/95 1038.668642 18,152
10/31/95 1038.668642 16,028
11/30/95 1038.668642 17,199
12/31/95 1044.343352 17,348
</TABLE>
<PAGE>
GROSS CAF: DOMESTIC GROWTH
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED)= GROSS VALUE
726.086523 17.87 12972.1849
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 15.94 12972.1849 10,000.00 (2972.1849)
SHARES PURCHASED: 627.4518072
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(2972.1849) 10,000.00 0.2972
ONE YEAR NET RATE OF RETURN: 29.72%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 15.937479 12/31/94 01/03/95 0.0948 0.8663 15.937479 1,896,978.99
03/31/95 16.304901 03/31/95 03/31/95 0.4686 16.304901 1,027,481.30 294.022850
06/30/95 17.168069 06/30/95 06/30/95 17.168069
09/30/95 19.147250 09/30/95 09/30/95 19.147250
10/31/95 18.495201 10/31/95 10/31/95 18.495201
11/30/95 19.528515 11/30/95 11/30/95 19.528515
12/31/95 17.865894 12/31/95 12/31/95 0.1490 2.0819 17.865894 6,058,448.01 1440.025465
<CAPTION>
SHARES TOTALS
REINV. SHARES
<S> <C>
627.451807
18.032790 645.484597
645.484597
645.484597
645.484597
645.484597
80.601926 726.086523
726.086523
726.086523
726.086523
726.086523
726.086523
726.086523
</TABLE>
<PAGE>
GROSS CAF: DOMESTIC GROWTH
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED)= GROSS VALUE
1526.994118 17.87 27281.1151
PURCHASE DATE: 12/31/90
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.15 27281.1151 10,000.00 (17281.1151)
SHARES PURCHASED: 985.5779395
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(17281.1151) 10,000.00 1.7281
GROSS 5 YEAR RETURN: 172.81%
ANNUALIZED GROSS 5 YEAR RETURN: 22.23%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS
<S> <C> <C> <C> <C> <C>
12/31/90 10.146331 12/31/90 12/31/90 0.261670 0.310930
01/31/91 10.870000 01/31/91 01/31/91
02/28/91 11.760000 02/28/91 02/28/91
03/31/91 12.190000 03/31/91 03/31/91 0.002110 0.002870
04/30/91 12.250000 04/30/91 04/30/91
05/31/91 13.060000 05/31/91 05/31/91
06/30/91 12.450000 06/30/91 06/30/91
07/31/91 13.010000 07/31/91 07/31/91
08/31/91 13.170000 08/31/91 08/31/91
09/30/91 12.800000 09/30/91 09/30/91
10/31/91 12.820000 10/31/91 10/31/91
11/30/91 12.400000 11/30/91 11/30/91
12/31/91 12.960000 12/31/91 12/31/91 0.235430 0.316700
01/31/92 13.675530 01/31/92 01/31/92
02/28/92 14.430921 02/28/92 02/28/92
03/31/92 14.112158 03/31/92 03/31/92 0.1440
04/30/92 14.140495 04/30/92 04/30/92
05/31/92 14.105116 05/31/92 05/31/92
06/30/92 13.578563 06/30/92 06/30/92
07/31/92 14.194976 07/31/92 07/31/92
08/31/92 13.943753 08/31/92 08/31/92
09/30/92 13.982111 09/30/92 09/30/92
10/31/92 14.538375 10/31/92 10/31/92
11/30/92 15.571509 11/30/92 11/30/92
12/31/92 15.161860 12/31/92 12/31/92 0.1433 0.9256
01/31/93 15.501407 01/31/93 01/31/93
02/28/93 15.527260 02/28/93 02/28/93
03/31/93 15.978463 03/31/93 03/31/93 0.0185
04/30/93 15.613121 04/30/93 04/30/93
05/31/93 15.995905 05/31/93 05/31/93
06/30/93 15.861024 06/30/93 06/30/93
07/31/93 15.644269 07/31/93 07/31/93
08/31/93 16.443016 08/31/93 08/31/93
09/30/93 16.836855 09/30/93 09/30/93
<CAPTION>
SHARES TOTAL
DATE REINVEST NAV AMOUNT $ TO DIST. REINV. SHARES
<S> <C> <C> <C> <C> <C>
12/31/90 10.146331 561,868.00 985.577939
01/31/91 10.870000 985.577939
02/28/91 11.760000 985.577939
03/31/91 12.190000 5,351.13 4.908178 0.402640 985.980579
04/30/91 12.250000 985.980579
05/31/91 13.060000 985.980579
06/30/91 12.450000 985.980579
07/31/91 13.010000 985.980579
08/31/91 13.170000 985.980579
09/30/91 12.800000 985.980579
10/31/91 12.820000 985.980579
11/30/91 12.400000 985.980579
12/31/91 12.960000 636,943.64 544.389457 42.005359 1027.985939
01/31/92 13.675530 1027.985939
02/28/92 14.430921 1027.985939
03/31/92 14.112158 172,821.71 148.029975 10.489535 1038.475474
04/30/92 14.140495 1038.475474
05/31/92 14.105116 1038.475474
06/30/92 13.578563 1038.475474
07/31/92 14.194976 1038.475474
08/31/92 13.943753 1038.475474
09/30/92 13.982111 1038.475474
10/31/92 14.538375 1038.475474
11/30/92 15.571509 1038.475474
12/31/92 15.161860 1,409,007.13 1110.047203 73.213128 1111.688602
01/31/93 15.501407 1111.688602
02/28/93 15.527260 1111.688602
03/31/93 15.978463 26,288.19 20.521772 1.284340 1112.972941
04/30/93 15.613121 1112.972941
05/31/93 15.995905 1112.972941
06/30/93 15.861024 1112.972941
07/31/93 15.644269 1112.972941
08/31/93 16.443016 1112.972941
09/30/93 16.836855 1112.972941
</TABLE>
<PAGE>
GROSS CAF: DOMESTIC GROWTH
RATE OF RETURN
5 YEAR
ROLLING PREPARED ON: 12/31/95
...................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
10/31/93 17.333372 10/31/93 10/31/93
11/30/93 17.356363 11/30/93 11/30/93
12/31/93 16.144659 12/31/93 12/31/93 0.1165 1.2903
01/31/94 16.880870 01/31/94 01/31/94
02/28/94 17.017107 02/28/94 02/28/94
03/31/94 15.732500 03/31/94 03/31/94 0.4493
04/30/94 15.600181 04/30/94 04/30/94
05/31/94 15.683237 05/31/94 05/31/94
06/30/94 15.326167 06/30/94 06/30/94
09/30/94 16.668750 09/29/94 09/29/94
12/31/94 15.937479 12/31/94 01/03/95 0.0948 0.8663
03/31/95 16.304901 03/31/95 03/31/95 0.4686
06/30/95 17.168069 06/30/95 06/30/95
09/30/95 19.147250 09/30/95 09/30/95
10/31/95 18.495201 10/31/95 10/31/95
11/30/95 19.528515 11/30/95 11/30/95
12/31/95 17.865894 12/31/95 12/31/95 0.1490 2.0819
<CAPTION>
<S> <C> <C> <C> <C> <C>
10/31/93 17.333372 1112.972941
11/30/93 17.356363 1112.972941
12/31/93 16.144659 2,211,099.49 1565.832728 96.987662 1209.960603
01/31/94 16.880870 1209.960603
02/28/94 17.017107 1209.960603
03/31/94 15.732500 792,232.75 543.635299 34.554921 1244.515525
04/30/94 1244.515525
05/31/94 1244.515525
06/30/94 15.326167 1244.515525
09/30/94 16.668750 1244.515525
12/31/94 15.937479 1,896,978.99 1196.030444 75.045146 1319.560671
03/31/95 16.304901 1,027,481.30 618.343887 37.923805 1357.484476
06/30/95 17.168069 1357.484476
09/30/95 19.147250 1357.484476
10/31/95 18.495201 1357.484476
11/30/95 19.528515 1357.484476
12/31/95 17.865894 6,058,448.01 3028.441303 169.509642 1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
1526.994118
</TABLE>
<PAGE>
GROSS CAF: DOMESTIC GROWTH
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 04/18/86
INCEPTION 12/31/95
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV +NOT REINVESTED GROSS VALUE
1948.350493 17.87 34809.0234
PURCHASE DATE: 04/18/86
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.00 34809.0234 10,000.00 (24809.0234)
SHARES PURCHASED 1,000.000
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(24809.0234) 10,000.00 2.4809
GROSS RATE OF RETURN SINCE INCEPTION: 248.09%
ANNUALIZED GROSS RATE OF RETURN SINCE INCEPTION 13.71%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/18/86 10.000000 04/18/86 04/18/86 10.270000
04/30/86 10.096763 04/30/86 04/30/86 13.385027
05/31/86 10.366798 05/31/86 05/31/86 10.366798
06/30/86 10.372049 06/30/86 06/30/86 10.372049
07/31/86 9.554896 07/31/86 07/31/86 9.554896
08/31/86 10.230943 08/31/86 08/31/86 10.230943
09/30/86 9.863223 09/30/86 09/30/86 9.863223
10/31/86 10.349308 10/31/86 10/31/86 10.349308
11/30/86 10.696110 11/30/86 11/30/86 10.696110
12/31/86 10.565075 12/31/86 12/31/86 10.565075
01/31/87 11.642576 01/31/87 01/31/87 11.642576
02/28/87 11.844339 02/28/87 02/28/87 11.844339
03/31/87 11.914436 03/31/87 03/31/87 11.914436
04/01/87 11.910000 04/01/87 04/01/87 0.095800 0.536900 11.910000 70,530.00 632.700000
04/30/87 11.717310 04/30/87 04/30/87 11.717310
05/31/87 11.832248 05/31/87 05/31/87 11.832248
06/30/87 12.166809 06/30/87 06/30/87 12.166809
07/31/87 12.681919 07/31/87 07/31/87 12.681919
08/31/87 13.168272 08/31/87 08/31/87 13.168272
09/30/87 13.006987 09/30/87 09/30/87 13.006987
10/31/87 9.689781 10/31/87 10/31/87 9.689781
11/30/87 9.801571 11/30/87 11/30/87 9.801571
12/31/87 9.540000 12/31/87 12/31/87 0.0277 0.302500 9.540000 115,431.00 347.741355
01/31/88 10.039353 01/31/88 01/31/88 10.039353
02/28/88 10.951058 02/28/88 02/28/88 10.951058
03/31/88 11.122950 03/31/88 03/31/88 11.122950
04/30/88 11.461451 04/30/88 04/30/88 11.461451
05/31/88 11.284545 05/31/88 05/31/88 11.284545
06/30/88 12.092718 06/30/88 06/30/88 12.092718
07/31/88 11.949203 07/31/88 07/31/88 11.949203
08/31/88 11.596872 08/31/88 08/31/88 11.596872
09/30/88 12.069623 09/30/88 09/30/88 12.069623
10/31/88 12.106846 10/31/88 10/31/88 12.106846
11/30/88 11.623761 11/30/88 11/30/88 11.623761
<CAPTION>
SHARES TOTALS ACCOUNT
DATE REINV. SHARES VALUE
04/18/86 1000.000000 10,000
04/30/86 1000.000000 10,097
05/31/86 1000.000000 10,367
06/30/86 1000.000000 10,372
07/31/86 1000.000000 9,555
08/31/86 1000.000000 10,231
09/30/86 1000.000000 9,863
10/31/86 1000.000000 10,349
11/30/86 1000.000000 10,696
12/31/86 1000.000000 10,565
01/31/87 1000.000000 11,643
02/28/87 1000.000000 11,844
03/31/87 1000.000000 11,914
04/01/87 53.123426 1053.123426 12,543
04/30/87 1053.123426 12,340
05/31/87 1053.123426 12,461
06/30/87 1053.123426 12,813
07/31/87 1053.123426 13,356
08/31/87 1053.123426 13,868
09/30/87 1053.123426 13,698
10/31/87 1053.123426 10,205
11/30/87 1053.123426 10,322
12/31/87 36.450876 1089.574301 10,395
01/31/88 1089.574301 10,939
02/28/88 1089.574301 11,932
03/31/88 1089.574301 12,119
04/30/88 1089.574301 12,488
05/31/88 1089.574301 12,295
06/30/88 1089.574301 13,176
07/31/88 1089.574301 13,020
08/31/88 1089.574301 12,636
09/30/88 1089.574301 13,151
10/31/88 1089.574301 13,191
11/30/88 1089.574301 12,665
</TABLE>
<PAGE>
GROSS CAF: DOMESTIC GROWTH
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 04/18/86
INCEPTION 12/31/95
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/88 11.709817 12/31/88 12/31/88 0.100000 0.240000 11.709817 197,020.00 370.455263
01/31/89 12.191000 01/31/89 01/31/89 12.191000
02/28/89 12.199000 02/28/89 02/28/89 12.199000
03/31/89 12.398000 03/31/89 03/31/89 0.251300 12.398000 169,212.00 281.760224
04/30/89 12.916926 04/30/89 04/30/89 12.916926
05/31/89 13.520000 05/31/89 05/31/89 13.520000
06/30/89 13.160000 06/30/89 06/30/89 13.160000
07/31/89 13.863000 07/31/89 07/31/89 13.863000
08/31/89 14.266000 08/31/89 08/31/89 14.266000
09/30/89 14.184176 09/30/89 09/30/89 14.184176
10/31/89 13.477000 10/31/89 10/31/89 13.477000
11/30/89 13.538000 11/30/89 11/30/89 13.538000
12/31/89 13.248000 12/31/89 12/31/89 0.205240 0.243870 13.248000 371,155.25 513.753485
01/31/90 12.239163 01/31/90 01/31/90 12.239163
02/28/90 12.549188 02/28/90 02/28/90 12.549188
03/31/90 12.852757 03/31/90 03/31/90 0.083060 12.852757 74,662.00 98.236438
04/30/90 12.307467 04/30/90 04/30/90 12.307467
05/31/90 13.157329 05/31/90 05/31/90 13.157329
06/30/90 13.025380 06/30/90 06/30/90 13.025380
07/31/90 12.762958 07/31/90 07/31/90 12.762958
08/31/90 11.070103 08/31/90 08/31/90 11.070103
09/30/90 10.140362 09/30/90 09/30/90 10.140362
10/31/90 9.496491 10/31/90 10/31/90 9.496491
11/30/90 10.439730 11/30/90 11/30/90 10.439730
12/31/90 10.146331 12/31/90 12/31/90 0.261670 0.310930 10.146331 561,868.00 681.600013
01/31/91 10.870000 01/31/91 01/31/91 10.870000
02/28/91 11.760000 02/28/91 02/28/91 11.760000
03/31/91 12.190000 03/31/91 03/31/91 0.002110 0.002870 12.190000 5,351.13 6.262533
04/30/91 12.250000 04/30/91 04/30/91 12.250000
05/31/91 13.060000 05/31/91 05/31/91 13.060000
06/30/91 12.450000 06/30/91 06/30/91 12.450000
07/31/91 13.010000 07/31/91 07/31/91 13.010000
08/31/91 13.170000 08/31/91 08/31/91 13.170000
09/30/91 12.800000 09/30/91 09/30/91 12.800000
10/31/91 12.820000 10/31/91 10/31/91 12.820000
11/30/91 12.400000 11/30/91 11/30/91 12.400000
12/31/91 12.960000 12/31/91 12/31/91 0.235430 0.316700 12.960000 636,943.64 694.607434
01/31/92 13.675530 01/31/92 01/31/92 13.675530
02/28/92 14.430921 02/28/92 02/28/92 14.430921
03/31/92 14.112158 03/31/92 03/31/92 0.1440 14.112158 172,821.71 188.877135
04/30/92 14.140495 04/30/92 04/30/92 14.140495
05/31/92 14.105116 05/31/92 05/31/92 14.105116
06/30/92 13.578563 06/30/92 06/30/92 13.578563
07/31/92 14.194976 07/31/92 07/31/92 14.194976
08/31/92 13.943753 08/31/92 08/31/92 13.943753
09/30/92 13.982111 09/30/92 09/30/92 13.982111
10/31/92 14.538375 10/31/92 10/31/92 14.538375
11/30/92 15.571509 11/30/92 11/30/92 15.571509
12/31/92 15.161860 12/31/92 12/31/92 0.1433 0.9256 15.161860 1,409,007.13 1416.351896
01/31/93 15.501407 01/31/93 01/31/93 15.501407
<CAPTION>
12/31/88 31.636298 1121.210600 13,129
01/31/89 1121.210600 13,669
02/28/89 1121.210600 13,678
03/31/89 22.726264 1143.936864 14,183
04/30/89 1143.936864 14,776
05/31/89 1143.936864 15,466
06/30/89 1143.936864 15,054
07/31/89 1143.936864 15,858
08/31/89 1143.936864 16,319
09/30/89 1143.936864 16,226
10/31/89 1143.936864 15,417
11/30/89 1143.936864 15,487
12/31/89 38.779701 1182.716565 15,669
01/31/90 1182.716565 14,475
02/28/90 1182.716565 14,842
03/31/90 7.643219 1190.359784 15,299
04/30/90 1190.359784 14,650
05/31/90 1190.359784 15,662
06/30/90 1190.359784 15,505
07/31/90 1190.359784 15,193
08/31/90 1190.359784 13,177
09/30/90 1190.359784 12,071
10/31/90 1190.359784 11,304
11/30/90 1190.359784 12,427
12/31/90 67.176994 1257.536778 12,759
01/31/91 1257.536778 13,669
02/28/91 1257.536778 14,789
03/31/91 0.513743 1258.050522 15,336
04/30/91 1258.050522 15,411
05/31/91 1258.050522 16,430
06/30/91 1258.050522 15,663
07/31/91 1258.050522 16,367
08/31/91 1258.050522 16,569
09/30/91 1258.050522 16,103
10/31/91 1258.050522 16,128
11/30/91 1258.050522 15,600
12/31/91 53.596253 1311.646774 16,999
01/31/92 1311.646774 17,937
02/28/92 1311.646774 18,928
03/31/92 13.384001 1325.030775 18,699
04/30/92 1325.030775 18,737
05/31/92 1325.030775 18,690
06/30/92 1325.030775 17,992
07/31/92 1325.030775 18,809
08/31/92 1325.030775 18,476
09/30/92 1325.030775 18,527
10/31/92 1325.030775 19,264
11/30/92 1325.030775 20,633
12/31/92 93.415445 1418.446220 21,506
01/31/93 1418.446220 21,988
</TABLE>
<PAGE>
GROSS CAF: DOMESTIC GROWTH
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 04/18/86
INCEPTION 12/31/95
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
02/28/93 15.527260 02/28/93 02/28/93 15.527260
03/31/93 15.978463 03/31/93 03/31/93 0.0185 15.978463 26,288.19 26.184517
04/30/93 15.613121 04/30/93 04/30/93 15.613121
05/31/93 15.995905 05/31/93 05/31/93 15.995905
06/30/93 15.861024 06/30/93 06/30/93 15.861024
07/31/93 15.644269 07/31/93 07/31/93 15.644269
08/31/93 16.443016 08/31/93 08/31/93 16.443016
09/30/93 16.836855 09/30/93 09/30/93 16.836855
10/31/93 17.333372 10/31/93 10/31/93 17.333372
11/30/93 17.356363 11/30/93 11/30/93 17.356363
12/31/93 16.144659 12/31/93 12/31/93 0.1165 1.2903 16.144659 2,211,099.49 1997.906167
01/31/94 16.880870 01/31/94 01/31/94 16.880870
02/28/94 17.017107 02/28/94 02/28/94 17.017107
03/31/94 15.732500 03/31/94 03/31/94 0.4493 15.732500 792,232.75 693.645175
04/30/94 15.600181 04/30/94 04/30/94
05/31/94 15.683237 05/31/94 05/31/94
06/30/94 15.326167 06/30/94 06/30/94 15.326167
09/30/94 16.668750 09/29/94 09/29/94 16.668750
12/31/94 15.937479 12/31/94 01/03/95 0.0948 0.8663 15.937479 1,896,978.99 1526.061219
03/31/95 16.304901 03/31/95 03/31/95 0.4686 16.304901 1,027,481.30 788.968734
06/30/95 17.168069 06/30/95 06/30/95 17.168069
09/30/95 19.147250 09/30/95 09/30/95 19.147250
10/31/95 18.495201 10/31/95 10/31/95 18.495201
11/30/95 19.528515 11/30/95 11/30/95 19.528515
12/31/95 17.865894 12/31/95 12/31/95 0.1490 2.0819 17.865894 6,058,448.01 3864.104671
<CAPTION>
02/28/93 1418.446220 22,025
03/31/93 1.638738 1420.084958 22,691
04/30/93 1420.084958 22,172
05/31/93 1420.084958 22,716
06/30/93 1420.084958 22,524
07/31/93 1420.084958 22,216
08/31/93 1420.084958 23,350
09/30/93 1420.084958 23,910
10/31/93 1420.084958 24,615
11/30/93 1420.084958 24,648
12/31/93 23.750286 1543.835244 24,925
01/31/94 1543.835244 26,061
02/28/94 1543.835244 26,272
03/31/94 44.089952 1587.925196 24,982
04/30/94 1587.925196 24,772
05/31/94 1587.925196 24,904
06/30/94 1587.925196 24,337
09/30/94 1587.925196 26,469
12/31/94 95.752987 1683.678183 26,834
03/31/95 48.388441 1732.066624 28,241
06/30/95 1732.066624 29,736
09/30/95 1732.066624 33,164
10/31/95 1732.066624 32,035
11/30/95 1732.066624 33,825
12/31/95 216.283869 1948.350493 34,809
</TABLE>
<PAGE>
GROSS CAF: BOND FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1102.569493 10.59 11676.2925
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 9.70 11676.2925 10,000.00 (1676.2925)
SHARES PURCHASED: 1030.564694
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(1676.2925) 10,000.00 0.1676
ONE YEAR NET RATE OF RETURN: 16.76%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C>
12/31/94 9.703418 12/31/94 01/03/95 0.350525 9.703418 472,010.99
03/31/95 10.148515 03/31/95 03/31/95 10.148515
05/31/95 10.148515 05/31/95 05/31/95 10.148515
06/30/95 10.700860 06/30/95 06/30/95 10.700860
09/30/95 10.871226 09/30/95 09/30/95 10.871226
10/31/95 11.017642 10/31/95 10/31/95 11.017642
11/30/95 11.168842 11/30/95 11/30/95 11.168842
12/31/95 10.590074 12/31/95 12/31/95 0.739921 10.590074 644,899.59
<CAPTION>
SHARES TOTALS
$ TO DIST. REINV. SHARES
<C> <C> <C>
1030.564694
1030.564694
1030.564694
1030.564694
1030.564694
1030.564694
1030.564694
762.536150 72.004799 1102.569493
1102.569493
1102.569493
1102.569493
1102.569493
1102.569493
</TABLE>
<PAGE>
GROSS CAF: BOND FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1451.280901 10.59 15369.1721
PURCHASE DATE: 12/31/90
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 9.83 15369.1721 10,000.00 (5369.1721)
SHARES PURCHASED: 1017.741576
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(5369.1721) 10,000.00 0.5369
GROSS 5 YEAR RETURN: 53.69%
ANNUALIZED GROSS 5 YEAR RETURN: 8.98%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/90 9.825677 12/31/90 12/31/90 0.736970 9.825677 202,726.00
01/31/91 9.950000 01/31/91 01/31/91 9.950000
02/28/91 10.040000 02/28/91 02/28/91 10.040000
03/31/91 10.070000 03/31/91 03/31/91 0.007670 10.070000 2,222.88 7.806078 0.775182
04/30/91 10.150000 04/30/91 04/30/91 10.150000
05/31/91 10.210000 05/31/91 05/31/91 10.210000
06/30/91 10.180000 06/30/91 06/30/91 10.180000
07/31/91 10.300000 07/31/91 07/31/91 10.300000
08/31/91 10.540000 08/31/91 08/31/91 10.540000
09/30/91 10.740000 09/30/91 09/30/91 10.740000
10/31/91 10.860000 10/31/91 10/31/91 10.860000
11/30/91 10.960000 11/30/91 11/30/91 10.960000
12/31/91 10.610000 12/31/91 12/31/91 0.719570 10.610000 223,317.48 732.894104 69.075787
01/31/92 10.364336 01/31/92 01/31/92 10.364336
02/28/92 10.379409 02/28/92 02/28/92 10.379409
03/31/92 10.325922 03/31/92 03/31/92 10.325922
04/30/92 10.407260 04/30/92 04/30/92 10.407260
05/31/92 10.601537 05/31/92 05/31/92 10.601537
06/30/92 10.782767 06/30/92 06/30/92 10.782767
07/31/92 11.052732 07/31/92 07/31/92 11.052732
08/31/92 11.156762 08/31/92 08/31/92 11.156762
09/30/92 11.347966 09/30/92 09/30/92 11.347966
10/31/92 11.290826 10/31/92 10/31/92 11.290826
11/30/92 11.240816 11/30/92 11/30/92 11.240816
12/31/92 10.205609 12/31/92 12/31/92 0.658520 0.532550 10.205609 471,791.77 1295.398853 126.930088
01/31/93 10.396176 01/31/93 01/31/93 10.396176
02/28/93 10.441580 02/28/93 02/28/93 10.441580
03/31/93 10.507183 03/31/93 03/31/93 10.507183
04/30/93 10.626950 04/30/93 04/30/93 10.626950
05/31/93 10.643979 05/31/93 05/31/93 10.643979
06/30/93 10.812965 06/30/93 06/30/93 10.812965
07/31/93 10.847245 07/31/93 07/31/93 10.847245
08/31/93 11.006825 08/31/93 08/31/93 11.006825
09/30/93 10.896467 09/30/93 09/30/93 10.896467
<CAPTION>
TOTALS
DATE SHARES
<S> <C>
12/31/90 1017.741576
01/31/91 1017.741576
02/28/91 1017.741576
03/31/91 1018.516758
04/30/91 1018.516758
05/31/91 1018.516758
06/30/91 1018.516758
07/31/91 1018.516758
08/31/91 1018.516758
09/30/91 1018.516758
10/31/91 1018.516758
11/30/91 1018.516758
12/31/91 1087.592545
01/31/92 1087.592545
02/28/92 1087.592545
03/31/92 1087.592545
04/30/92 1087.592545
05/31/92 1087.592545
06/30/92 1087.592545
07/31/92 1087.592545
08/31/92 1087.592545
09/30/92 1087.592545
10/31/92 1087.592545
11/30/92 1087.592545
12/31/92 1214.522634
01/31/93 1214.522634
02/28/93 1214.522634
03/31/93 1214.522634
04/30/93 1214.522634
05/31/93 1214.522634
06/30/93 1214.522634
07/31/93 1214.522634
08/31/93 1214.522634
09/30/93 1214.522634
</TABLE>
<PAGE>
GROSS CAF: BOND FUND
RATE OF RETURN
5 YEAR PREPARED ON: 12/31/95
ROLLING
................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/93 11.121095 10/31/93 10/31/93 11.121095
11/30/93 10.944861 11/30/93 11/30/93 10.944861
12/31/93 10.288953 12/31/93 12/31/93 0.738479 0.063669 10.288953 426,035.79 974.226902 94.686690
01/31/94 10.434721 01/31/94 01/31/94 10.434721
02/28/94 10.282937 02/28/94 02/28/94 10.282937
03/31/94 10.074059 03/31/94 03/31/94 10.074059
04/30/94 10.029890 04/30/94 04/30/94
05/31/94 10.061489 05/31/94 05/31/94
06/30/94 10.039993 06/30/94 06/30/94 10.039993
08/31/94 10.228198 08/31/94 08/31/94 10.228198
09/30/94 10.090424 09/30/94 09/30/94 10.090424
12/31/94 9.703418 12/31/94 01/03/95 0.350525 9.703418 472,010.99 458.910598 47.293706
03/31/95 10.148515 03/31/95 03/31/95 10.148515
05/31/95 10.148515 05/31/95 05/31/95 10.148515
06/30/95 10.700860 06/30/95 06/30/95 10.700860
09/30/95 10.871226 09/30/95 09/30/95 10.871226
10/31/95 11.017642 10/31/95 10/31/95 11.017642
11/30/95 11.168842 11/30/95 11/30/95 11.168842
12/31/95 10.590074 12/31/95 12/31/95 0.739921 10.590074 644,899.59 1003.704671 94.777871
<CAPTION>
<S> <C>
10/31/93 1214.522634
11/30/93 1214.522634
12/31/93 1309.209324
01/31/94 1309.209324
02/28/94 1309.209324
03/31/94 1309.209324
04/30/94 1309.209324
05/31/94 1309.209324
06/30/94 1309.209324
08/31/94 1309.209324
09/30/94 1309.209324
12/31/94 1356.503030
03/31/95 1356.503030
05/31/95 1356.503030
06/30/95 1356.503030
09/30/95 1356.503030
10/31/95 1356.503030
11/30/95 1356.503030
12/31/95 1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
1451.280901
</TABLE>
<PAGE>
GROSS CAF: BOND FUND
RATE OF RETURN 04/18/86
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATEX (NAV +NOT REINVESTE GROSS VALUE
1940.315350 10.59 20548.0831
PURCHASE DATE: 04/18/86
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.02 20548.0831 10,000.00 (10548.0831)
SHARES PURCHASED 998.004
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(10548.0831) 10,000.00 1.0548
GROSS RATE OF RETURN SINCE INCEPTION: 105.48%
ANNUALIZED GROSS RATE OF RETURN SINCE INCE 7.70%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/18/86 10.020000 04/18/86 04/18/86 10.270000
04/30/86 10.044833 04/30/86 04/30/86 13.385027
05/31/86 10.087796 05/31/86 05/31/86 10.087796
06/30/86 10.136403 06/30/86 06/30/86 10.136403
07/31/86 10.291391 07/31/86 07/31/86 10.291391
08/31/86 10.302465 08/31/86 08/31/86 10.302465
09/30/86 10.330913 09/30/86 09/30/86 10.330913
10/31/86 10.367638 10/31/86 10/31/86 10.367638
11/30/86 10.403175 11/30/86 11/30/86 10.403175
12/31/86 10.467900 12/31/86 12/31/86 10.467900
01/31/87 10.515286 01/31/87 01/31/87 10.515286
02/28/87 10.176610 02/28/87 02/28/87 10.176610
03/31/87 10.254520 03/31/87 03/31/87 10.254520
04/01/87 10.250000 04/01/87 04/01/87 0.387300 0.048500 10.250000 44,932.00 434.930140 42.432209
04/30/87 9.862522 04/30/87 04/30/87 9.862522
05/31/87 9.748931 05/31/87 05/31/87 9.748931
06/30/87 9.879700 06/30/87 06/30/87 9.879700
07/31/87 9.830480 07/31/87 07/31/87 9.830480
08/31/87 9.756463 08/31/87 08/31/87 9.756463
09/30/87 9.573253 09/30/87 09/30/87 9.573253
10/31/87 9.763217 10/31/87 10/31/87 9.763217
11/30/87 9.821544 11/30/87 11/30/87 9.821544
12/31/87 9.380374 12/31/87 12/31/87 0.556600 9.380374 72,958.00 579.106789 61.736002
01/31/88 9.655658 01/31/88 01/31/88 9.655658
02/28/88 9.802955 02/28/88 02/28/88 9.802955
03/31/88 9.629260 03/31/88 03/31/88 9.629260
04/30/88 9.590887 04/30/88 04/30/88 9.590887
05/31/88 9.525979 05/31/88 05/31/88 9.525979
06/30/88 9.708801 06/30/88 06/30/88 9.708801
07/31/88 9.637854 07/31/88 07/31/88 9.637854
08/31/88 9.645629 08/31/88 08/31/88 9.645629
09/30/88 9.808541 09/30/88 09/30/88 9.808541
10/31/88 9.957737 10/31/88 10/31/88 9.957737
11/30/88 9.891693 11/30/88 11/30/88 9.891693
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<S> <C> <C>
04/18/86 998.003992 10,000
04/30/86 998.003992 10,025
05/31/86 998.003992 10,068
06/30/86 998.003992 10,116
07/31/86 998.003992 10,271
08/31/86 998.003992 10,282
09/30/86 998.003992 10,310
10/31/86 998.003992 10,347
11/30/86 998.003992 10,382
12/31/86 998.003992 10,447
01/31/87 998.003992 10,494
02/28/87 998.003992 10,156
03/31/87 998.003992 10,234
04/01/87 1040.436201 10,664
04/30/87 1040.436201 10,261
05/31/87 1040.436201 10,143
06/30/87 1040.436201 10,279
07/31/87 1040.436201 10,228
08/31/87 1040.436201 10,151
09/30/87 1040.436201 9,960
10/31/87 1040.436201 10,158
11/30/87 1040.436201 10,219
12/31/87 1102.172203 10,339
01/31/88 1102.172203 10,642
02/28/88 1102.172203 10,805
03/31/88 1102.172203 10,613
04/30/88 1102.172203 10,571
05/31/88 1102.172203 10,499
06/30/88 1102.172203 10,701
07/31/88 1102.172203 10,623
08/31/88 1102.172203 10,631
09/30/88 1102.172203 10,811
10/31/88 1102.172203 10,975
11/30/88 1102.172203 10,902
</TABLE>
<PAGE>
GROSS CAF: BOND FUND
RATE OF RETURN 04/18/86
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/88 9.287353 12/31/88 12/31/88 0.620000 9.287353 108,564.00 683.346766 73.578205
01/31/89 9.386000 01/31/89 01/31/89 9.386000
02/28/89 9.346000 02/28/89 02/28/89 9.346000
03/31/89 9.330000 03/31/89 03/31/89 9.330000
04/30/89 9.504834 04/30/89 04/30/89 9.504834
05/31/89 9.729000 05/31/89 05/31/89 9.729000
06/30/89 10.068000 06/30/89 06/30/89 10.068000
07/31/89 10.289000 07/31/89 07/31/89 10.289000
08/31/89 10.085000 08/31/89 08/31/89 10.085000
09/30/89 10.123473 09/30/89 09/30/89 10.123473
10/31/89 10.372000 10/31/89 10/31/89 10.372000
11/30/89 10.465000 11/30/89 11/30/89 10.465000
12/31/89 9.756000 12/31/89 12/31/89 0.730230 9.756000 159,458.32 858.568221 88.004123
01/31/90 9.637354 01/31/90 01/31/90 9.637354
02/28/90 9.652223 02/28/90 02/28/90 9.652223
03/31/90 9.641818 03/31/90 03/31/90 9.641818
04/30/90 9.509274 04/30/90 04/30/90 9.509274
05/31/90 9.813398 05/31/90 05/31/90 9.813398
06/30/90 9.996726 06/30/90 06/30/90 9.996726
07/31/90 10.127276 07/31/90 07/31/90 10.127276
08/31/90 9.920391 08/31/90 08/31/90 9.920391
09/14/90 9.960000 09/14/90 09/14/90 0.015730 9.960000 4,089.00 19.878859 1.995869
09/30/90 10.016618 09/30/90 09/30/90 10.016618
10/31/90 10.158372 10/31/90 10/31/90 10.158372
11/30/90 10.408633 11/30/90 11/30/90 10.408633
12/31/90 9.825677 12/31/90 12/31/90 0.736970 9.825677 202,726.00 932.820072 94.936977
01/31/91 9.950000 01/31/91 01/31/91 9.950000
02/28/91 10.040000 02/28/91 02/28/91 10.040000
03/31/91 10.070000 03/31/91 03/31/91 0.007670 10.070000 2,222.88 10.436472 1.036392
04/30/91 10.150000 04/30/91 04/30/91 10.150000
05/31/91 10.210000 05/31/91 05/31/91 10.210000
06/30/91 10.180000 06/30/91 06/30/91 10.180000
07/31/91 10.300000 07/31/91 07/31/91 10.300000
08/31/91 10.540000 08/31/91 08/31/91 10.540000
09/30/91 10.740000 09/30/91 09/30/91 10.740000
10/31/91 10.860000 10/31/91 10/31/91 10.860000
11/30/91 10.960000 11/30/91 11/30/91 10.960000
12/31/91 10.610000 12/31/91 12/31/91 0.719570 10.610000 223,317.48 979.855573 92.352080
01/31/92 10.364336 01/31/92 01/31/92 10.364336
02/28/92 10.379409 02/28/92 02/28/92 10.379409
03/31/92 10.325922 03/31/92 03/31/92 10.325922
04/30/92 10.407260 04/30/92 04/30/92 10.407260
05/31/92 10.601537 05/31/92 05/31/92 10.601537
06/30/92 10.782767 06/30/92 06/30/92 10.782767
07/31/92 11.052732 07/31/92 07/31/92 11.052732
08/31/92 11.156762 08/31/92 08/31/92 11.156762
09/30/92 11.347966 09/30/92 09/30/92 11.347966
10/31/92 11.290826 10/31/92 10/31/92 11.290826
11/30/92 11.240816 11/30/92 11/30/92 11.240816
12/31/92 10.205609 12/31/92 12/31/92 0.658520 0.532550 10.205609 471,791.77 1731.906123 169.701399
<CAPTION>
<S> <C> <C>
12/31/88 1175.750408 10,920
01/31/89 1175.750408 11,036
02/28/89 1175.750408 10,989
03/31/89 1175.750408 10,970
04/30/89 1175.750408 11,175
05/31/89 1175.750408 11,439
06/30/89 1175.750408 11,837
07/31/89 1175.750408 12,097
08/31/89 1175.750408 11,857
09/30/89 1175.750408 11,903
10/31/89 1175.750408 12,195
11/30/89 1175.750408 12,304
12/31/89 1263.754531 12,329
01/31/90 1263.754531 12,179
02/28/90 1263.754531 12,198
03/31/90 1263.754531 12,185
04/30/90 1263.754531 12,017
05/31/90 1263.754531 12,402
06/30/90 1263.754531 12,633
07/31/90 1263.754531 12,798
08/31/90 1263.754531 12,537
09/14/90 1265.750400 12,607
09/30/90 1265.750400 12,679
10/31/90 1265.750400 12,858
11/30/90 1265.750400 13,175
12/31/90 1360.687377 13,370
01/31/91 1360.687377 13,539
02/28/91 1360.687377 13,661
03/31/91 1361.723770 13,713
04/30/91 1361.723770 13,821
05/31/91 1361.723770 13,903
06/30/91 1361.723770 13,862
07/31/91 1361.723770 14,026
08/31/91 1361.723770 14,353
09/30/91 1361.723770 14,625
10/31/91 1361.723770 14,788
11/30/91 1361.723770 14,924
12/31/91 1454.075850 15,428
01/31/92 1454.075850 15,071
02/28/92 1454.075850 15,092
03/31/92 1454.075850 15,015
04/30/92 1454.075850 15,133
05/31/92 1454.075850 15,415
06/30/92 1454.075850 15,679
07/31/92 1454.075850 16,072
08/31/92 1454.075850 16,223
09/30/92 1454.075850 16,501
10/31/92 1454.075850 16,418
11/30/92 1454.075850 16,345
12/31/92 1623.777249 16,572
</TABLE>
<PAGE>
GROSS CAF: BOND FUND
RATE OF RETURN 04/18/86
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01/31/93 10.396176 01/31/93 01/31/93 10.396176
02/28/93 10.441580 02/28/93 02/28/93 10.441580
03/31/93 10.507183 03/31/93 03/31/93 10.507183
04/30/93 10.626950 04/30/93 04/30/93 10.626950
05/31/93 10.643979 05/31/93 05/31/93 10.643979
06/30/93 10.812965 06/30/93 06/30/93 10.812965
07/31/93 10.847245 07/31/93 07/31/93 10.847245
08/31/93 11.006825 08/31/93 08/31/93 11.006825
09/30/93 10.896467 09/30/93 09/30/93 10.896467
10/31/93 11.121095 10/31/93 10/31/93 11.121095
11/30/93 10.944861 11/30/93 11/30/93 10.944861
12/31/93 10.288953 12/31/93 12/31/93 0.738479 0.063669 10.288953 426,035.79 1302.509673 126.593024
01/31/94 10.434721 01/31/94 01/31/94 10.434721
02/28/94 10.282937 02/28/94 02/28/94 10.282937
03/31/94 10.074059 03/31/94 03/31/94 10.074059
04/30/94 10.029890 04/30/94 04/30/94
05/31/94 10.061489 05/31/94 05/31/94
06/30/94 10.039993 06/30/94 06/30/94 10.039993
08/31/94 10.228198 08/31/94 08/31/94 10.228198
09/30/94 10.090424 09/30/94 09/30/94 10.090424
12/31/94 9.703418 12/31/94 01/03/95 0.350525 9.703418 472,010.99 613.548540 63.230146
03/31/95 10.148515 03/31/95 03/31/95 10.148515
05/31/95 10.148515 05/31/95 05/31/95 10.148515
06/30/95 10.700860 06/30/95 06/30/95 10.700860
09/30/95 10.871226 09/30/95 09/30/95 10.871226
10/31/95 11.017642 10/31/95 10/31/95 11.017642
11/30/95 11.168842 11/30/95 11/30/95 11.168842
12/31/95 10.590074 12/31/95 12/31/95 0.739921 10.590074 644,899.59 1341.920492 126.714931
<CAPTION>
<S> <C> <C>
01/31/93 1623.777249 16,881
02/28/93 1623.777249 16,955
03/31/93 1623.777249 17,061
04/30/93 1623.777249 17,256
05/31/93 1623.777249 17,283
06/30/93 1623.777249 17,558
07/31/93 1623.777249 17,614
08/31/93 1623.777249 17,873
09/30/93 1623.777249 17,693
10/31/93 1623.777249 18,058
11/30/93 1623.777249 17,772
12/31/93 1750.370273 18,009
01/31/94 1750.370273 18,265
02/28/94 1750.370273 17,999
03/31/94 1750.370273 17,633
04/30/94 1750.370273 17,556
05/31/94 1750.370273 17,611
06/30/94 1750.370273 17,574
08/31/94 1750.370273 17,903
09/30/94 1750.370273 17,662
12/31/94 1813.600419 17,598
03/31/95 1813.600419 18,405
05/31/95 1813.600419 18,405
06/30/95 1813.600419 19,407
09/30/95 1813.600419 19,716
10/31/95 1813.600419 19,982
11/30/95 1813.600419 20,256
12/31/95 1940.315350 20,548
</TABLE>
<PAGE>
GROSS CAF: GROWTH & INCOME FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
926.879418 14.41 13357.6560
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 11.22 13357.6560 10,000.00 (3357.6560)
SHARES PURCHASED: 891.0330709
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(3357.6560) 10,000.00 0.3358
ONE YEAR NET RATE OF RETURN: 33.58%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 11.222928 12/31/94 01/03/95 0.130871 0.256322 11.222928 193,562.13
03/31/95 12.129015 03/31/95 03/31/95 0.000002 12.129015 1.05 0.001546 0.000127
05/31/95 12.129015 05/31/95 05/31/95 12.129015
06/30/95 13.524255 06/30/95 06/30/95 13.524255
09/30/95 14.602920 09/30/95 09/30/95 14.602920
10/31/95 14.299785 10/31/95 10/31/95 14.299785
11/30/95 14.839057 11/30/95 11/30/95 14.839057
12/31/95 14.411428 12/31/95 12/31/95 0.145211 0.434560 14.411428 528,058.91 516.595208 35.846219
<CAPTION>
TOTALS
DATE SHARES
<S> <C>
12/31/94 891.033071
03/31/95 891.033198
05/31/95 891.033198
06/30/95 891.033198
09/30/95 891.033198
10/31/95 891.033198
11/30/95 891.033198
12/31/95 926.879418
926.879418
926.879418
926.879418
926.879418
926.879418
</TABLE>
<PAGE>
GROSS CAF: GROWTH & INCOME FUND
RATE OF RETURN 05/01/92
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATEX (NAV +NOT REINVESTE GROSS VALUE
1103.870459 14.41 15908.3496
PURCHASE DATE: 05/01/92
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.28 15908.3496 10,000.00 (5908.3496)
SHARES PURCHASED 972.763
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(5908.3496) 10,000.00 0.5908
GROSS RATE OF RETURN SINCE INCEPTION: 59.08%
ANNUALIZED GROSS RATE OF RETURN SINCE INCE 13.49%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/01/92 10.280000 05/01/92 05/01/92 10.270000
05/31/92 10.347465 05/31/92 05/31/92 10.347465
06/30/92 9.967004 06/30/92 06/30/92 9.967004
07/31/92 10.273171 07/31/92 07/31/92 10.273171
08/31/92 9.935852 08/31/92 08/31/92 9.935852
09/30/92 10.099468 09/30/92 09/30/92 10.099468
10/31/92 10.366682 10/31/92 10/31/92 10.366682
11/30/92 10.946706 11/30/92 11/30/92 10.946706
12/31/92 11.098443 12/31/92 12/31/92 0.022740 0.001570 11.098443 3,260.84 23.647860 2.130737
01/31/93 11.287423 01/31/93 01/31/93 11.287423
02/28/93 11.363512 02/28/93 02/28/93 11.363512
03/31/93 11.566575 03/31/93 03/31/93 11.566575
04/30/93 11.371852 04/30/93 04/30/93 11.371852
05/31/93 11.437193 05/31/93 05/31/93 11.437193
06/30/93 11.591291 06/30/93 06/30/93 11.591291
07/31/93 11.729813 07/31/93 07/31/93 11.729813
08/31/93 12.128264 08/31/93 08/31/93 12.128264
09/30/93 12.201715 09/30/93 09/30/93 12.201715
10/31/93 12.424078 10/31/93 10/31/93 12.424078
11/30/93 12.227070 11/30/93 11/30/93 12.227070
12/31/93 12.353706 12/31/93 12/31/93 0.123247 0.279617 12.353706 92,335.42 392.749448 31.792035
01/31/94 12.713560 01/31/94 01/31/94 12.713560
02/28/94 12.511762 02/28/94 02/28/94 12.511762
03/31/94 11.766922 03/31/94 03/31/94 0.223300 11.766922 64,199.82 224.792854 19.103794
04/30/94 11.911093 04/30/94 04/30/94
05/31/94 11.899970 05/31/94 05/31/94
06/30/94 11.694551 06/30/94 06/30/94 11.694551
09/30/94 11.940350 09/29/94 09/29/94 11.940350
12/31/94 11.222928 12/31/94 01/03/95 0.130871 0.256322 11.222928 193,562.13 397.178402 35.389909
03/31/95 12.129015 03/31/95 03/31/95 0.000002 12.129015 1.05 0.001841 0.000152
05/31/95 12.129015 05/31/95 05/31/95 12.129015
06/30/95 13.524255 06/30/95 06/30/95 13.524255
09/30/95 14.602920 09/30/95 09/30/95 14.602920
10/31/95 14.299785 10/31/95 10/31/95 14.299785
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<S> <C> <C>
05/01/92 972.762646 10,000
05/31/92 972.762646 10,066
06/30/92 972.762646 9,696
07/31/92 972.762646 9,993
08/31/92 972.762646 9,665
09/30/92 972.762646 9,824
10/31/92 972.762646 10,084
11/30/92 972.762646 10,649
12/31/92 974.893383 10,820
01/31/93 974.893383 11,004
02/28/93 974.893383 11,078
03/31/93 974.893383 11,276
04/30/93 974.893383 11,086
05/31/93 974.893383 11,150
06/30/93 974.893383 11,300
07/31/93 974.893383 11,435
08/31/93 974.893383 11,824
09/30/93 974.893383 11,895
10/31/93 974.893383 12,112
11/30/93 974.893383 11,920
12/31/93 1006.685417 12,436
01/31/94 1006.685417 12,799
02/28/94 1006.685417 12,595
03/31/94 1025.789211 12,070
04/30/94 1025.789211 12,218
05/31/94 1025.789211 12,207
06/30/94 1025.789211 11,996
09/30/94 1025.789211 12,248
12/31/94 1061.179120 11,910
03/31/95 1061.179272 12,871
05/31/95 1061.179272 12,871
06/30/95 1061.179272 14,352
09/30/95 1061.179272 15,496
10/31/95 1061.179272 15,175
</TABLE>
<PAGE>
GROSS CAF: GROWTH & INCOME FUND
RATE OF RETURN 05/01/92
SINCE PREPARED ON: 12/31/95 12/31/95
INCEPTION
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/95 14.839057 11/30/95 11/30/95 14.839057
12/31/95 14.411428 12/31/95 12/31/95 0.145211 0.434560 14.411428 528,058.91 615.240968 42.691187
<CAPTION>
<S> <C> <C>
11/30/95 1061.179272 15,747
12/31/95 1103.870459 15,908
</TABLE>
<PAGE>
GROSS CAF: CAPITAL GROWTH FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
815.786753 17.38 14174.4988
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 13.38 14174.4988 10,000.00 (4174.4988)
SHARES PURCHASED: 747.4218059
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(4174.4988) 10,000.00 0.4174
ONE YEAR NET RATE OF RETURN: 41.74%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 13.379326 12/31/94 01/03/95 0.025965 0.202028 13.379326 469,710.53
03/31/95 13.982348 03/31/95 03/31/95 13.982348
05/31/95 13.982348 05/31/95 05/31/95 13.982348
06/30/95 15.232015 06/30/95 06/30/95 15.232015
09/30/95 17.554143 09/30/95 09/30/95 17.554143
10/31/95 17.263599 10/31/95 10/31/95 17.263599
11/30/95 18.315685 11/30/95 11/30/95 18.315685
12/31/95 17.375250 12/31/95 12/31/95 0.028857 1.560417 17.375250 *********** 1187.858043 68.364947
<CAPTION>
TOTALS
DATE SHARES
<S> <C>
12/31/94 747.421806
03/31/95 747.421806
05/31/95 747.421806
06/30/95 747.421806
09/30/95 747.421806
10/31/95 747.421806
11/30/95 747.421806
12/31/95 815.786753
815.786753
815.786753
815.786753
815.786753
815.786753
</TABLE>
<PAGE>
GROSS CAF: CAPITAL GROWTH FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 05/01/92
INCEPTION 12/31/95
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATEX (NAV +NOT REINVESTE GROSS VALUE
1252.458830 17.38 21761.7853
PURCHASE DATE: 05/01/92
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 9.93 21761.7853 10,000.00 (11761.7853)
SHARES PURCHASED 1,007.049
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(11761.7853) 10,000.00 1.1762
GROSS RATE OF RETURN SINCE INCEPTION: 117.62%
ANNUALIZED GROSS RATE OF RETURN SINCE INCE 23.61%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/01/92 9.930000 05/01/92 05/01/92 10.270000
05/31/92 10.254229 05/31/92 05/31/92 10.254229
06/30/92 10.016744 06/30/92 06/30/92 10.016744
07/31/92 10.435153 07/31/92 07/31/92 10.435153
08/31/92 10.501541 08/31/92 08/31/92 10.501541
09/30/92 10.848935 09/30/92 09/30/92 10.848935
10/31/92 11.413636 10/31/92 10/31/92 11.413636
11/30/92 12.342512 11/30/92 11/30/92 12.342512
12/31/92 12.416921 12/31/92 12/31/92 0.217530 12.416921 93,617.72 219.063444 17.642332
01/31/93 12.553733 01/31/93 01/31/93 12.553733
02/28/93 12.425379 02/28/93 02/28/93 12.425379
03/31/93 13.070798 03/31/93 03/31/93 0.205850 13.070798 128,872.31 210.932782 16.137713
04/30/93 12.545382 04/30/93 04/30/93 12.545382
05/31/93 12.897747 05/31/93 05/31/93 12.897747
06/30/93 13.100565 06/30/93 06/30/93 13.100565
07/31/93 13.122456 07/31/93 07/31/93 13.122456
08/31/93 13.655179 08/31/93 08/31/93 13.655179
09/30/93 14.173054 09/30/93 09/30/93 14.173054
10/31/93 14.487483 10/31/93 10/31/93 14.487483
11/30/93 14.607984 11/30/93 11/30/93 14.607984
12/31/93 14.258266 12/31/93 12/31/93 0.988703 14.258266 1,204,052 1029.071141 72.173653
01/31/94 14.296112 01/31/94 01/31/94 14.296112
02/28/94 14.216043 02/28/94 02/28/94 14.216043
03/31/94 13.637311 03/31/94 03/31/94 0.187100 13.637311 244,098.06 208.242869 15.270083
04/30/94 13.651531 04/30/94 04/30/94
05/31/94 13.543518 05/31/94 05/31/94
06/30/94 13.046232 06/30/94 06/30/94 13.046232
09/30/94 13.785036 09/29/94 09/29/94 13.785036
12/31/94 13.379326 12/31/94 01/03/95 0.025965 0.202028 13.379326 469,710.53 257.238375 19.226557
03/31/95 13.982348 03/31/95 03/31/95 13.982348
05/31/95 13.982348 05/31/95 05/31/95 13.982348
06/30/95 15.232015 06/30/95 06/30/95 15.232015
09/30/95 17.554143 09/30/95 09/30/95 17.554143
10/31/95 17.263599 10/31/95 10/31/95 17.263599
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<S> <C> <C>
05/01/92 1007.049345 10,000
05/31/92 1007.049345 10,327
06/30/92 1007.049345 10,087
07/31/92 1007.049345 10,509
08/31/92 1007.049345 10,576
09/30/92 1007.049345 10,925
10/31/92 1007.049345 11,494
11/30/92 1007.049345 12,430
12/31/92 1024.691678 12,724
01/31/93 1024.691678 12,864
02/28/93 1024.691678 12,732
03/31/93 1040.829390 13,604
04/30/93 1040.829390 13,058
05/31/93 1040.829390 13,424
06/30/93 1040.829390 13,635
07/31/93 1040.829390 13,658
08/31/93 1040.829390 14,213
09/30/93 1040.829390 14,752
10/31/93 1040.829390 15,079
11/30/93 1040.829390 15,204
12/31/93 1113.003043 15,869
01/31/94 1113.003043 15,912
02/28/94 1113.003043 15,822
03/31/94 1128.273126 15,387
04/30/94 1128.273126 15,403
05/31/94 1128.273126 15,281
06/30/94 1128.273126 14,720
09/30/94 1128.273126 15,553
12/31/94 1147.499683 15,353
03/31/95 1147.499683 16,045
05/31/95 1147.499683 16,045
06/30/95 1147.499683 17,479
09/30/95 1147.499683 20,143
10/31/95 1147.499683 19,810
</TABLE>
<PAGE>
GROSS CAF: CAPITAL GROWTH FUND
RATE OF RETURN
SINCE PREPARED ON: 12/31/95 05/01/92
INCEPTION 12/31/95
...............
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/95 18.315685 11/30/95 11/30/95 18.315685
12/31/95 17.375250 12/31/95 12/31/95 0.028857 1.560417 17.375250 ************ 1823.691411 104.959147
<CAPTION>
<S> <C> <C>
11/30/95 1147.499683 21,017
12/31/95 1252.458830 21,762
</TABLE>
<PAGE>
<TABLE>
GROSS CAF: BALANCED FUND
RATE OF RETURN
1 YEAR PREPARED ON: 12/31/95
................
<S> <C> <C> <C>
SHARES TO DATE X (NAV + NOT REINVESTED) GROSS VALUE
1027.550067 11.91 12235.4579
PURCHASE DATE: 12/31/94
INITIAL INVESTMENT: $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.62 12235.4579 10,000.00 (2235.4579)
SHARES PURCHASED: 941.9131575
NET VALUE / INITIAL INVESTMENT NET RATE OF RETURN
(2235.4579) 10,000.00 0.2235
ONE YEAR NET RATE OF RETURN: 22.35%
</TABLE>
<TABLE>
<CAPTION>
INCOME CAPITAL SHARES
DATE NAV EX-DATE PAYABLE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 10.616690 12/31/94 01/03/95 0.322389 0.057255 10.616690 527,979.13
03/31/95 11.009063 03/31/95 03/31/95 0.054252 11.009063 79,628.92 51.100896 4.641712
05/31/95 11.009063 05/31/95 05/31/95 11.009063
06/30/95 11.606999 06/30/95 06/30/95 11.606999
09/30/95 12.178795 09/30/95 09/30/95 12.178795
10/31/95 12.267735 10/31/95 10/31/95 12.267735
11/30/95 12.670689 11/30/95 11/30/95 12.670689
12/31/95 11.907408 12/31/95 12/31/95 0.372800 0.646098 11.907408 *********** 964.442863 80.995198
<CAPTION>
TOTALS
DATE SHARES
<S> <C>
12/31/94 941.913157
03/31/95 946.554869
05/31/95 946.554869
06/30/95 946.554869
09/30/95 946.554869
10/31/95 946.554869
11/30/95 946.554869
12/31/95 1027.550067
1027.550067
1027.550067
1027.550067
1027.550067
1027.550067
</TABLE>
<PAGE>
GROSS CAF: BALANCED FUND 05/01/92
RATE OF RETURN 12/31/95
SINCE PREPARED ON: 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C>
SHARES TO DATEX (NAV +NOT REINVESTE GROSS VALUE
1201.606099 11.91 14308.0141
PURCHASE DATE: 05/01/92
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.10 14308.0141 10,000.00 (4308.0141)
SHARES PURCHASED 990.099
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(4308.0141) 10,000.00 0.4308
GROSS RATE OF RETURN SINCE INCEPTION: 43.08%
ANNUALIZED GROSS RATE OF RETURN SINCE INCE 10.26%
</TABLE>
<TABLE>
<CAPTION>
PAYABLE INCOME CAPITAL SHARES
DATE NAV EX-DATE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/01/92 10.100000 05/01/92 05/01/92 10.270000
05/31/92 10.188421 05/31/92 05/31/92 10.188421
06/30/92 10.181371 06/30/92 06/30/92 10.181371
07/31/92 10.429048 07/31/92 07/31/92 10.429048
08/31/92 10.422009 08/31/92 08/31/92 10.422009
09/30/92 10.572145 09/30/92 09/30/92 10.572145
10/31/92 10.578896 10/31/92 10/31/92 10.578896
11/30/92 10.811937 11/30/92 11/30/92 10.811937
12/31/92 10.771608 12/31/92 12/31/92 0.183560 10.771608 118,343.40 181.742574 16.872372
01/31/93 10.970768 01/31/93 01/31/93 10.970768
02/28/93 11.110940 02/28/93 02/28/93 11.110940
03/31/93 11.122930 03/31/93 03/31/93 0.176810 11.122930 130,083.84 178.042610 16.006808
04/30/93 10.955757 04/30/93 04/30/93 10.955757
05/31/93 11.086170 05/31/93 05/31/93 11.086170
06/30/93 11.266733 06/30/93 06/30/93 11.266733
07/31/93 11.300731 07/31/93 07/31/93 11.300731
08/31/93 11.524167 08/31/93 08/31/93 11.524167
09/30/93 11.589339 09/30/93 09/30/93 11.589339
10/31/93 11.621304 10/31/93 10/31/93 11.621304
11/30/93 11.519782 11/30/93 11/30/93 11.519782
12/31/93 11.219396 12/31/93 12/31/93 0.254692 0.111421 11.219396 381,923.94 374.525614 33.381977
01/31/94 11.331436 01/31/94 01/31/94 11.331436
02/28/94 11.245656 02/28/94 02/28/94 10.958543
03/31/94 10.958543 03/31/94 03/31/94 0.073400 10.958543 84,113.53 77.536836 7.075469
04/30/94 11.005295 04/30/94 04/30/94
05/31/94 11.030908 05/31/94 05/31/94
06/30/94 10.860720 06/30/94 06/30/94 10.860720
09/30/94 11.000526 09/29/94 09/29/94 11.000526
12/31/94 10.616690 12/31/94 01/03/95 0.322389 0.057255 10.616690 527,979.13 403.726959 38.027573
03/31/95 11.009063 03/31/95 03/31/95 0.054252 11.009063 79,628.92 59.756844 5.427968
05/31/95 11.009063 05/31/95 05/31/95 11.009063
06/30/95 11.606999 06/30/95 06/30/95 11.606999
09/30/95 12.178795 09/30/95 09/30/95 12.178795
10/31/95 12.267735 10/31/95 10/31/95 12.267735
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<C> <C> <C>
05/01/92 990.099010 10,000
05/31/92 990.099010 10,088
06/30/92 990.099010 10,081
07/31/92 990.099010 10,326
08/31/92 990.099010 10,319
09/30/92 990.099010 10,467
10/31/92 990.099010 10,474
11/30/92 990.099010 10,705
12/31/92 1006.971382 10,847
01/31/93 1006.971382 11,047
02/28/93 1006.971382 11,188
03/31/93 1022.978190 11,379
04/30/93 1022.978190 11,208
05/31/93 1022.978190 11,341
06/30/93 1022.978190 11,526
07/31/93 1022.978190 11,560
08/31/93 1022.978190 11,789
09/30/93 1022.978190 11,856
10/31/93 1022.978190 11,888
11/30/93 1022.978190 11,784
12/31/93 1056.360167 11,852
01/31/94 1056.360167 11,970
02/28/94 1056.360167 11,879
03/31/94 1063.435636 11,654
04/30/94 1063.435636 11,703
05/31/94 1063.435636 11,731
06/30/94 1063.435636 11,550
09/30/94 1063.435636 11,698
12/31/94 1101.463210 11,694
03/31/95 1106.891178 12,186
05/31/95 1106.891178 12,186
06/30/95 1106.891178 12,848
09/30/95 1106.891178 13,481
10/31/95 1106.891178 13,579
</TABLE>
<PAGE>
GROSS CAF: BALANCED FUND 05/01/92
RATE OF RETURN 12/31/95
SINCE PREPARED ON: 12/31/95
INCEPTION
...............
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/95 12.670689 11/30/95 11/30/95 12.670689
12/31/95 11.907408 12/31/95 12/31/95 0.372800 0.646098 11.907408 ********** 1127.809207 94.714921
<CAPTION>
<S> <C> <C>
11/30/95 1106.891178 14,025
12/31/95 1201.606099 14,308
</TABLE>
<PAGE>
GROSS CAF: EMERGING GROWTH 12/31/94
RATE OF RETURN 12/31/95
SINCE PREPARED ON: 12/31/95
INCEPTION
...............
<TABLE>
<C> <C> <C> <C> <C>
SHARES TO DATEX (NAV +NOT REINVESTE GROSS VALUE
1000.000000 13.29 13291.4840
PURCHASE DATE: 05/01/92
INITIAL INVESTME $10,000.00 GROSS VALUE - INITIAL INVESTMENT NET VALUE
INITIAL VALUE: 10.00 13291.4840 10,000.00 (3291.4840)
SHARES PURCHASED 1,000.000
NET VALUE / INITIAL INVESTMENT GROSS RATE OF RETURN
(3291.4840) 10,000.00 0.3291
GROSS RATE OF RETURN SINCE INCEPTION: 32.91%
ANNUALIZED GROSS RATE OF RETURN SINCE INCE 53.06%
</TABLE>
<TABLE>
<CAPTION>
PAYABLE INCOME CAPITAL SHARES
DATE NAV EX-DATE DATE DISTRIBUTION DISTRIBUTIONS REINVEST NAV AMOUNT $ TO DIST. REINV.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/01/95 10.000000 05/01/95 05/01/95 10.270000
06/30/95 11.606996 06/30/95 06/30/95 11.606996
08/31/95 12.208568 08/31/95 08/31/95
09/30/95 12.821304 09/30/95 09/30/95
10/31/95 12.752744 10/31/95 10/31/95
11/30/95 13.374111 11/30/95 11/30/95
12/31/95 13.291484 12/31/95 12/31/95 13.291484
<CAPTION>
TOTALS ACCOUNT
DATE SHARES VALUE
<C> <C> <C>
05/01/95 1000.000000 10,000
06/30/95 1000.000000 11,607
08/31/95 1000.000000 12,209
09/30/95 1000.000000 12,821
10/31/95 1000.000000 12,753
11/30/95 1000.000000 13,374
12/31/95 1000.000000 13,291
</TABLE>
<PAGE>
SUBSIDIARIES OF THE CHUBB CORPORATION
-------------------------------------
at September 1, 1995
--------------------
Chubb & Son, Inc.
- Associated Aviation Underwriters (affiliate)
- Chubb Services Corporation
- Chubb & Son Inc. (Illinois)
- Chubb Customer Center, Inc.
The Chubb Corporation, a Delaware corporation
- Bhakdikij Company Limited (affiliate)
- Chubb de Mexico, Compania de Seguros S.A. de S.V. (affiliate)
- Chubb Insurance Company (Thailand), Limited (affiliate)
Personal Lines Insurance Brokerage, Inc.
- Personal Lines Insurance Brokerage II, Inc.
- Personal Lines Insurance Brokerage of Massachusetts, Inc.
- ECCO General Agency, Inc.
- Personal Lines Insurance Brokerage, Inc., a Texas corporation
Chubb Life Insurance Company of America
- Chubb America Service Corporation
- ChubbHealth Holdings, Inc.
- ChubbHealth, Inc.
- Chubb Investment Advisory Corporation
- Chubb Securities Corporation
- Chubb Sovereign Life Insurance Company
- Chubb Colonial Life Insurance Company
- Hampshire Funding, Inc.
- Hampshire Syndications, Inc.
- Volunteer Garage, Inc.
Federal Insurance Company
- Bellemead Development Corporation
- C.C. Canada Holdings Ltd.
- Chubb Insurance Company of Canada
- Chubb de Mexico, Compania Afianzadora, S.A. de S.V.
- Chubb de Mexico, Compania de Seguros, S.A. de S.V. (affiliate)
- Chubb Custom Insurance Company
- Chubb de Mexico Servicios de Suscripcion y Administatives,
S.A. de C.V.
- Chubb Indemnity Insurance Company
- Chubb Insurance Company of Europe, S.A.
- Chubb Insurance Company of New Jersey
- Chubb Lloyd's Insurance Company of Texas (affiliate)
- Chubb National Insurance Company
- Chubb Pacific Underwriting Management Services Pte. Ltd.
- Chubb Seguros-Holdings Chile, S.A.
- Chubb de Chile Compania de Seguros Generales, S.A.
- Great Northern Insurance Company
- Pacific Indemnity Company
<PAGE>
- Northwestern Pacific Indemnity Company
- Texas Pacific Indemnity Company
- Seguros La Federacion, C.A. - Venezuela (affiliate)
- Vigilant Insurance Company
- Chubb de Colombia Compania de Seguros, S.A.
- Chubb Insurance Company of Australia Limited
<PAGE>
<TABLE>
<CAPTION>
CHUBB AMERICA FUND
PRICE CALCULATIONS
12/31/95
N.A.V. AND
OUTSTANDING OFFERING PRICE
PORTFOLIO NET ASSETS SHARES PER SHARE
- ------------------------------------------------------- ------------------ ------------------
<S> <C> <C> <C>
WORLD GROWTH STOCK PORTFOLIO........ $73,692,357 3,475,276 $21.20
MONEY MARKET PORTOLIO............... $8,312,676 809,271 $10.27
GOLD STOCK PORTFOLIO................ $6,867,645 413,432 $16.61
DOMESTIC GROWTH STOCK PORTFOLIO... $48,517,886 2,715,671 $17.87
BOND PORTFOLIO...... $9,230,090 871,579 $10.59
GROWTH AND INCOME PORTFOLIO...... $13,126,023 910,807 $14.41
CAPITAL GROWTH PORTFOLIO...... $49,853,029 2,869,198 $17.38
BALANCED PORTFOLIO...... $14,532,268 1,220,439 $11.91
EMERGING GROWTH PORTFOLIO...... $11,439,524 860,878 $13.29
</TABLE>
file name: N1APRICE
