<PAGE> 1
MONY SERIES FUND, INC.
PROSPECTUS
DATED MAY 1, 1999
MONY Series Fund, Inc. provides a wide range of investment options through its
separate portfolios. The available portfolios are:
INTERMEDIATE TERM BOND PORTFOLIO
LONG TERM BOND PORTFOLIO
GOVERNMENT SECURITIES PORTFOLIO
MONEY MARKET PORTFOLIO
MONY SERIES FUND, INC. PORTFOLIOS ARE NOT AVAILABLE DIRECTLY TO INDIVIDUAL
INVESTORS BUT MAY BE OFFERED ONLY THROUGH CERTAIN INSURANCE PRODUCTS AND PENSION
AND RETIREMENT PLANS.
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION DOES NOT
GUARANTEE THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE, NOR
HAS IT JUDGED THIS FUND FOR INVESTMENT MERIT. IT IS A CRIMINAL OFFENSE TO STATE
OTHERWISE.
<PAGE> 2
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 3
MONY SERIES FUND, INC.
PROSPECTUS
DATED MAY 1, 1999
NO PERSON MAY GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS. IF ANY OTHER INFORMATION IS GIVEN OR OTHER
REPRESENTATIONS ARE MADE, YOU MUST NOT RELY ON THEM AS HAVING BEEN AUTHORIZED BY
THE FUND OR THE INVESTMENT ADVISER. THIS PROSPECTUS IS NOT AN OFFER IN ANY STATE
WHERE SUCH OFFERING MAY NOT LAWFULLY BE MADE.
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE FUND.................................................... 1
Portfolio Information Key................................. 1
Intermediate Term Bond Portfolio.......................... 2
Long Term Bond Portfolio.................................. 4
Government Securities Portfolio........................... 6
Money Market Portfolio.................................... 8
Financial Highlights...................................... 10
MANAGEMENT OF THE FUND...................................... 14
Investment Adviser........................................ 14
Custodian, Transfer Agent and Dividend Disbursing Agent... 15
Year 2000 Issue........................................... 15
Legal Proceedings......................................... 15
PURCHASE AND REDEMPTION OF SHARES........................... 15
DIVIDENDS, DISTRIBUTIONS AND TAXES.......................... 16
SHARES IN THE FUND.......................................... 17
THE ACCOUNTS AND THE CONTRACTS.............................. 18
STATE LAW RESTRICTIONS...................................... 18
DETERMINATION OF NET ASSET VALUE............................ 19
Valuation of Intermediate Term Bond, Long Term Bond and
Government Securities Portfolios....................... 19
Valuation of Money Market Portfolio....................... 20
Appendix A.................................................. A-1
Appendix B.................................................. B-1
</TABLE>
i
<PAGE> 4
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 5
THE FUND
MONY Series Fund, Inc. (the "Fund") currently has seven (7) separate
portfolios, four of which are available. Each portfolio is in effect a separate
investment fund for investment and federal tax purposes. In other respects the
Fund is treated as one entity. For more detailed information, see "Structure of
the Fund," at page . Information on each of the portfolios of the Fund is
provided below.
PORTFOLIO INFORMATION KEY
Investment Objective
The portfolio's particular investment goals.
Investment Strategies
The strategies it intends to use in pursuing these investment objectives
and the primary types of securities in which the portfolio invests.
Risk Factors
The major risk factors associated with the portfolio.
Investment Adviser Fees
The investment adviser fee for each portfolio.
Portfolio Management
The individual or group (including sub-advisers, if any) designated by the
investment adviser to handle the portfolio's day-to-day management.
Performance Bar Chart and Table
Provides information on returns over a period of time.
Financial Highlights
A table showing the portfolio's financial performance for up to ten years,
by share class. A bar chart showing total return allows you to compare the
portfolio's historical risk level to those of other funds.
1
<PAGE> 6
INTERMEDIATE TERM BOND PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE The portfolio is a bond account that seeks to maximize
income and capital appreciation through the investment in intermediate-maturity
debt obligations. The investment objective may only be change with shareholder
approval.
INVESTMENT STRATEGIES The portfolio seeks to achieve its investment objective
by investing in investment-grade fixed-income securities issued by a diverse mix
of corporations, the U.S. Government and its agencies or instrumentalities, as
well as mortgage-backed and asset-backed securities. The portfolio is expected
to have a dollar weighted average maturity between four and eight years under
most circumstances. The portfolio's benchmark objectives are to outperform the
Lehman Brothers Intermediate Government/Corporate index and competing funds. All
securities in the portfolio will be investment-grade. An investment-grade
security carries a minimum rating of credit quality issued by an independent
rating agency at the time of purchase. Specific securities in the portfolio can
have expected maturities as short as one day, or as long as 30 years or more,
but the portfolio as a whole is expected to have an average maturity of four to
eight years. The portfolio will not take temporary defensive positions
inconsistent with its principal investment strategies.
Currently, the portfolio does not engage in active and frequent trading of
portfolio securities to achieve its investment objective. However, if at any
time the portfolio were to engage in such active and frequent trading, it may
result in the generation of capital gains in the portfolio. Since the only
shareholders of the portfolio will be MONY Life Insurance Company and MONY Life
Insurance Company of America, there is no discussion in this Prospectus of the
federal income tax consequences at the shareholder level. For information
concerning the federal tax consequences to Contract holders, see the attached
prospectus for the Contracts. Higher portfolio turnover (e.g. over 100% per
year) may result from active and frequent trading. Higher portfolio turnover
will cause the portfolio to incur additional transaction costs.
RISK FACTORS As with any fixed-income fund, the value of investments in the
portfolio can be expected to change with daily changes in the market level of
interest rates. The portfolio is expected to have an effective duration between
2 and 4 years. In general, bond prices move inversely with interest rate
changes. Duration is a common measurement of how sensitive a bond price is to a
movement in interest rates. Additionally, while the portfolio will invest only
in investment-grade securities, market prices for those securities can still
vary independent of interest rate changes, depending on the market evaluation of
general credit conditions and liquidity. The loss of money is a risk of
investing in the portfolio.
INVESTMENT ADVISER FEE Annual rate of .50% of the first $400 million, 0.35% of
the next $400 million, and 0.30% in excess of $800 million of the portfolio's
aggregate average daily net assets.
2
<PAGE> 7
PERFORMANCE BAR CHART AND TABLE
The bar chart and table shown below provide an indication of the risks of
investing in the Intermediate Term Bond Portfolio by showing changes in the
Portfolio's performance from year-to-year over a ten-year period and by showing
how the Portfolio's average annual returns for one, five and ten years compare
to those of a broad-based securities market index. How the Portfolio has
performed in the past is not necessarily an indication of how the Portfolio will
perform in the future. Assumes reinvestment of dividends.
[Intermediate Term Bond Portfolio Graph]
<TABLE>
<CAPTION>
Intermediate Term Bond Portfolio
<S> <C>
1989 11.63
1990 6.90
1991 15.27
1992 6.85
1993 7.84
1994 -1.52
1995 14.82
1996 3.69
1997 7.70
1998 7.44
</TABLE>
During the ten-year period shown in the bar chart, the highest return for a
quarter was 6.61% (quarter ending June 30, 1989) and the lowest return for a
quarter was -1.90% (quarter ending March 31, 1994).
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING DECEMBER 31, 1998) 1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Intermediate Term Bond Portfolio 7.44% 6.29% 7.97%
- ------------------------------------------------------------------------------------------------
Lehman Brothers Intermediate Gov/Corp Index 8.44% 6.60% 8.52%
- ------------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIO MANAGEMENT MONY Life Insurance Company of America manages the
portfolio. Investment decisions are made by a committee.
3
<PAGE> 8
LONG TERM BOND PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE The portfolio is a bond account that seeks to maximize
income and capital appreciation through the investment in long-maturity debt
obligations. The portfolio's benchmark objectives are to outperform the Lehman
Brothers Long Government/Corporate index and other competing funds. The
investment objective may only be changed with shareholder approval.
INVESTMENT STRATEGIES The portfolio seeks to achieve its investment objective
by investing in investment-grade fixed-income securities issued by a diverse mix
of corporations, the U.S. Government and its agencies or instrumentalities, as
well as mortgage-backed and asset-backed securities. The portfolio is expected
to have a dollar weighted average maturity of more than eight years under most
circumstances. All securities in the portfolio will be investment-grade. An
investment-grade security carries a minimum rating of credit quality issued by
an independent rating agency at the time of purchase. Specific securities in the
portfolio can have expected maturities as short as one day, or as long as 30
years or more, but the portfolio as a whole is expected to have an average
maturity of longer than eight years. The portfolio will not take temporary
defensive positions inconsistent with its principal investment strategy.
Currently, the portfolio does not engage in active and frequent trading of
portfolio securities to achieve its investment objective. However, if at any
time the portfolio were to engage in such active and frequent trading, it may
result in the generation of capital gains in the portfolio. Since the only
shareholders of the portfolio will be MONY Life Insurance Company and MONY Life
Insurance Company of America, there is no discussion in this Prospectus of the
federal income tax consequences at the shareholder level. For information
concerning the federal tax consequences to Contract holders, see the attached
prospectus for the Contracts. Higher portfolio turnover (e.g. over 100% per
year) may result from active and frequent trading. Higher portfolio turnover
will cause the portfolio to incur additional transaction costs.
RISK FACTORS As with any fixed-income fund, the value of the investments in the
portfolio can be expected to change with daily changes in the market level of
interest rates. The portfolio is expected to have an effective duration between
8 and 15 years. In general, bond prices move inversely with interest rate
changes. Duration is a common measurement of how sensitive a bond price is to a
movement in interest rates. Higher durations can be expected to be more price
sensitive. Additionally, while the portfolio will invest only in
investment-grade securities, market prices for those securities can still vary
independent of interest rate changes, depending on the market evaluation of
general credit conditions and liquidity. The loss of money is a risk of
investing in the portfolio.
INVESTMENT ADVISER FEE Annual rate of .50% of the first $400 million, 0.35% of
the next $400 million, and 0.30% in excess of $800 million of the portfolio's
aggregate average daily net assets.
4
<PAGE> 9
PERFORMANCE BAR CHART AND TABLE
The bar chart and table shown below provide an indication of the risks of
investing in the Long Term Bond Portfolio by showing changes in the Portfolio's
performance from year-to-year over a ten-year period and by showing how the
Portfolio's average annual returns for one, five and ten years compare to those
of a broad-based securities market index. How the Portfolio has performed in the
past is not necessarily an indication of how the Portfolio will perform in the
future. Assumes reinvestment of dividends.
[Long Term Bond Portfolio Graph]
<TABLE>
<CAPTION>
Long Term Bond Portfolio
<S> <C>
1989 16.95
1990 6.26
1991 17.57
1992 8.79
1993 14.21
1994 -6.14
1995 30.04
1996 -0.31
1997 13.44
1998 10.08
</TABLE>
During the ten-year period shown in the bar chart, the highest return for a
quarter was 11.44% (quarter ending June 30, 1989) and the lowest return for a
quarter was -6.29% (quarter ending March 31, 1996).
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING DECEMBER 31, 1998) 1 YEAR 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Long Term Bond Portfolio 10.08% 8.72% 10.68%
- ----------------------------------------------------------------------------------------------
Lehman Brothers Long Gov/Corp Index 11.77% 9.13% 11.30%
- ----------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIO MANAGEMENT MONY Live Insurance Company of America manages the
portfolio. Investment decisions are made by a committee.
5
<PAGE> 10
GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE The portfolio is a bond account that seeks to maximize
income and capital appreciation through the investment in the highest credit
quality debt obligations. The portfolio's benchmark objectives are to outperform
the Lehman Brothers Intermediate Government Index and other competing funds. The
investment objective may only be changed with shareholder approval.
INVESTMENT STRATEGIES The portfolio seeks to achieve its investment objective
by investing in bonds, notes and other obligations either issued or guaranteed
by the U.S. Government, its agencies or instrumentalities. This may include
obligations such as mortgage-backed securities that carry full agency or
instrumentality guarantees. Specific securities in the portfolio can have
expected maturities as short as one day or as long as 30 years or more, but the
portfolio as a whole is expected to have an average maturity of four to eight
years. The portfolio will not take temporary defensive positions inconsistent
with its principal investment strategies.
Currently, the portfolio does not engage in active and frequent trading of
portfolio securities to achieve its investment objective. However, if at any
time the portfolio were to engage in such active and frequent trading, it may
result in the generation of capital gains in the portfolio. Since the only
shareholders of the portfolio will be MONY Life Insurance Company and MONY Life
Insurance Company of America, there is no discussion in this Prospectus of the
federal income tax consequences at the shareholder level. For information
concerning the federal tax consequences to Contract holders, see the attached
prospectus for the Contracts. Higher portfolio turnover (e.g. over 100% per
year) may result from active and frequent trading. Higher portfolio turnover
will cause the portfolio to incur additional transaction costs.
RISK FACTORS While the portfolio invests in securities of the highest possible
credit quality, the value of those investments can still be expected to change
with daily changes in the market level of interest rates. The portfolio is
expected to have an effective duration between 2 and 4 years. In general, bond
prices move inversely with interest rate changes. Duration is a common
measurement of how sensitive a bond price is to movement in interest rates. The
U.S. Government or its agencies do not guarantee investments in the portfolio.
The loss of money is a risk of investing in the portfolio.
INVESTMENT ADVISER FEE Annual rate of .50% of the first $400 million, 0.35% of
the next $400 million, and 0.30% in excess of $800 million of the portfolio's
aggregate average daily net assets.
6
<PAGE> 11
PERFORMANCE BAR CHART AND TABLE
The bar chart and table shown below provide an indication of the risks of
investing in the Government Securities Portfolio by showing changes in the
Portfolio's performance from year-to-year from May 1, 1991 to December 31, 1998
and by showing how the Portfolio's average annual returns for one, five and
since inception compare to those of a broad-based securities market index. How
the Portfolio has performed in the past is not necessarily an indication of how
the Portfolio will perform in the future. Assumes reinvestment of dividends.
[Government Securities Portfolio Graph]
<TABLE>
<CAPTION>
Government Securities Portfolio
<S> <C>
1991 9.70
1992 7.01
1993 8.18
1994 -2.68
1995 10.89
1996 3.62
1997 7.18
1998 6.85
</TABLE>
During the period since inception shown in the bar chart, the highest return for
a quarter was 7.64% (quarter ending September 30, 1991) and the lowest return
for a quarter was -3.01% (quarter ending June 30, 1991).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS SINCE
(FOR THE PERIODS ENDING DECEMBER 31, 1998) 1 YEAR 5 YEARS INCEPTION
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Government Securities Portfolio 6.85% 5.30% 6.69%
- -------------------------------------------------------------------------------------------------
Lehman Brothers Intermediate US Gov 8.49% 6.45% N/A
- -------------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIO MANAGEMENT MONY Life Insurance Company of America manages the
portfolio. Investment decisions are made by a committee.
7
<PAGE> 12
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE The portfolio seeks to maximize current income while
preserving capital and maintaining liquidity. The investment objective may only
be changed with shareholder approval.
INVESTMENT STRATEGIES To pursue its investment objective, the portfolio
invests primarily in high quality short-term money market instruments. The
portfolio invests primarily in U.S. dollar-denominated issues of corporations,
U.S. Government and agency obligations, and asset-backed securities with
remaining maturities of 397 days or less. The dollar-weighted average life to
maturity of the securities held in the portfolio will be 90 days or less. These
securities include commercial paper, bankers' acceptances, certificates of
deposit, time deposits, and other debt obligations. The portfolio holds fixed
and floating interest rate instruments. The portfolio does not hold more than 5%
of its assets in any one issuer. The portfolio will not take temporary defensive
positions inconsistent with its principal investment strategies.
RISK FACTORS As with any money market fund, the fund will be subject to
fluctuations in the level of current income due to reinvestment risk. Securities
in the portfolio may not yield as high a level of current income as securities
with longer maturities or of lower quality. Such other securities generally
possess a lesser degree of liquidity and greater market risk. The portfolio
seeks to minimize credit risk through careful selection of securities of
approved issuers. Nevertheless, reinvestment risk and credit risk cannot be
eliminated and these factors will affect the net asset value of the fund. An
investment in the portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the portfolio
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the portfolio.
INVESTMENT ADVISER FEE Annual rate of .40% of the first $400 million, 0.35% of
the next $400 million, and 0.30% in excess of $800 million of the portfolio's
aggregate average daily net assets.
8
<PAGE> 13
PERFORMANCE BAR CHART AND TABLE
The bar chart and table shown below provide an indication of the risks of
investing in the Money Market Portfolio by showing changes in the Portfolio's
performance from year-to-year over a ten-year period and by showing the
Portfolio's average annual returns for one, five and ten years.
How the Portfolio has performed in the past is not necessarily an indication of
how the Portfolio will perform in the future. Assumes reinvestment of dividends.
BAR CHART
<TABLE>
<CAPTION>
DIVERSIFIED PORTFOLIO
---------------------
<S> <C>
'1989' 8.20
'1990' 7.22
'1991' 5.60
'1992' 3.31
'1993' 2.75
'1994' 3.82
'1995' 5.50
'1996' 5.00
'1997' 5.15
'1998' 5.09
</TABLE>
During the ten-year period shown in the bar chart, the highest return for a
quarter was 2.15% (quarter ending June 30, 1989) and the lowest return for a
quarter was .66% (quarter ending June 30, 1993).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS 10
(FOR THE PERIODS ENDING DECEMBER 31, 1998) 1 YEAR 5 YEARS YEARS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Portfolio 5.09% 4.91% 5.15%
- -------------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIO MANAGEMENT MONY Life Insurance Company of America manages the
portfolio. Investment decisions are made by a committee.
9
<PAGE> 14
INTERMEDIATE TERM BOND PORTFOLIO FINANCIAL HIGHLIGHTS Set forth below is
highlights of the operations of the Intermediate Term Bond Portfolio. Additional
financial information is contained in the Statement of Additional Information of
the Fund and in its Annual Report. Both of these documents are available at the
address or phone number on the back cover of this prospectus. The Annual Report
also contains a discussion of the performance of the Fund during 1998 a well as
line graphs which show the value at inception and for each year after inception
of a $10,000 investment made in each portfolio of the Fund. These graphs also
show the performance of an investment over the same period in securities that
comprise a broad based, unmanaged securities market index.
MONY SERIES FUND, INC.
INTERMEDIATE TERM BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year... $ 11.12 $ 10.96 $ 10.57 $ 9.75 $ 10.51
----------- ----------- ----------- ----------- -----------
Income from investment operations
Net investment income.............. 0.51 0.63 0.62 0.63 0.60
Net gains (losses) on investments
(both realized and unrealized)... 0.28 0.16 (0.23) 0.82 (0.76)
----------- ----------- ----------- ----------- -----------
Total from investment
operations.................... 0.79 0.79 0.39 1.45 (0.16)
----------- ----------- ----------- ----------- -----------
Less distributions
Dividends (from net investment
income).......................... (0.58) (0.63) 0.00 (0.63) (0.60)
Distributions (from realized
capital gains)................... 0.00 0.00 0.00 0.00 0.00
Distributions (from additional
paid-in capital)................. 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
Total distributions.............. (0.58) (0.63) 0.00 (0.63) (0.60)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year......... $ 11.33 $ 11.12 $ 10.96 $ 10.57 $ 9.75
=========== =========== =========== =========== ===========
Total return..................... 7.44% 7.70% 3.69% 14.82% (1.52%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year.............. $59,531,453 $44,216,994 $40,045,253 $37,519,833 $32,283,693
Ratio of net investment income to
average net assets................. 5.61% 5.98% 5.88% 6.10% 5.66%
Ratio of expenses to average net
assets............................. 0.62% 0.51% 0.48% 0.49% 0.52%
Portfolio turnover rate.............. 17.56% 79.25% 33.59% 32.07% 25.41%
</TABLE>
10
<PAGE> 15
LONG TERM BOND PORTFOLIO FINANCIAL HIGHLIGHTS Set forth below is highlights of
the operations of the Long Term Bond Portfolio. Additional financial information
is contained in the Statement of Additional Information of the Fund and in its
Annual Report. Both of these documents are available at the address or phone
number on the back cover of this prospectus. The Annual Report also contains a
discussion of the performance of the Fund during 1998 a well as line graphs
which show the value at inception and for each year after inception of a $10,000
investment made in each portfolio of the Fund. These graphs also show the
performance of an investment over the same period in securities that comprise a
broad based, unmanaged securities market index.
MONY SERIES FUND, INC.
LONG TERM BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
1998 1997 1996 1995 1994
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year.............................. $ 13.64 $ 12.84 $ 12.88 $ 10.47 $ 12.05
------------ ----------- ----------- ----------- -----------
Income from investment operations
Net investment income............. 0.56 0.76 0.79 0.74 0.84
Net gains (losses) on investments
(both realized and
unrealized)..................... 0.75 0.83 (0.83) 2.41 (1.58)
------------ ----------- ----------- ----------- -----------
Total from investment
operations................... 1.31 1.59 (0.04) 3.15 (0.74)
------------ ----------- ----------- ----------- -----------
Less distributions
Dividends (from net investment
income)......................... (0.72) (0.79) 0.00 (0.74) (0.84)
Distributions (from realized
capital gains).................. (0.06) 0.00 0.00 0.00 0.00
Distributions (from additional
paid-in capital)................ 0.00 0.00 0.00 0.00 0.00
------------ ----------- ----------- ----------- -----------
Total distributions............. (0.78) (0.79) 0.00 (0.74) (0.84)
------------ ----------- ----------- ----------- -----------
Net asset value, end of year........ $ 14.17 $ 13.64 $ 12.84 $ 12.88 $ 10.47
============ =========== =========== =========== ===========
Total return.................... 10.08% 13.44% (.31%) 30.04% (6.14%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year............. $122,956,790 $75,352,764 $62,098,817 $62,017,889 $44,012,329
Ratio of net investment income to
average net assets................ 5.50% 6.33% 6.40% 6.58% 6.45%
Ratio of expenses to average net
assets............................ 0.58% 0.49% 0.46% 0.48% 0.49%
Portfolio turnover rate............. 40.77% 37.08% 59.78% 79.45% 110.19%
</TABLE>
11
<PAGE> 16
GOVERNMENT SECURITIES PORTFOLIO FINANCIAL HIGHLIGHTS Set forth below is
highlights of the operations of the Government Securities Portfolio. Additional
financial information is contained in the Statement of Additional Information of
the Fund and in its Annual Report. Both of these documents are available at the
address or phone number on the back cover of this prospectus. The Annual Report
also contains a discussion of the performance of the Fund during 1998 as well as
line graphs which show the value at inception and for each year after inception
of a $10,000 investment made in each portfolio of the Fund. These graphs also
show the performance of an investment over the same period in securities that
comprise a broad based, unmanaged securities market index.
MONY SERIES FUND, INC.
GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 10.89 $ 10.58 $ 10.21 $ 9.51 $ 9.72
----------- ----------- ----------- ---------- ----------
Income from investment operations
Net investment income................ 0.33 0.45 0.45 0.34 0.05
Net gains (losses) on investments
(both realized and unrealized)..... 0.39 0.28 (0.08) 0.70 (0.21)
----------- ----------- ----------- ---------- ----------
Total from investment operations... 0.72 0.73 0.37 1.04 (0.16)
----------- ----------- ----------- ---------- ----------
Less distributions
Dividends (from net investment
income)............................ (0.44) (0.42) 0.00 (0.34) (0.05)
Distributions (from realized capital
gains)............................. 0.00 0.00 0.00 (0.00)* 0.00
Distributions (in excess of realized
capital gains)..................... 0.00 0.00 0.00 (0.00) 0.00
----------- ----------- ----------- ---------- ----------
Total distributions................ (0.44) (0.42) 0.00 (0.34) (0.05)
----------- ----------- ----------- ---------- ----------
Net asset value, end of period......... $ 11.17 $ 10.89 $ 10.58 $ 10.21 $ 9.51
=========== =========== =========== ========== ==========
Total return....................... 6.85% 7.18% 3.62% 10.89% (2.68%)+
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period.............. $54,614,813 $25,065,893 $16,383,300 $8,555,893 $1,204,231
Ratio of net investment income to
average net assets................... 5.10% 5.52% 5.59% 6.10% 5.43%+
Ratio of expenses to average net
assets............................... 0.64% 0.56% 0.55% 0.74% 0.57%+
Portfolio turnover rate................ 29.55% 19.14% 12.52% 0.28% 7.82%
</TABLE>
- ---------------
* Less than $.01 per share.
+ Annualized since Portfolio was dormant from June 24, 1994 to November 18,
1994.
12
<PAGE> 17
MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS Set forth below is highlights of
the operations of the Money Market Portfolio. Additional financial information
is contained in the Statement of Additional Information of the Fund and in its
Annual Report. Both of these documents are available at the address or phone
number on the back cover of this prospectus. The Annual Report also contains a
discussion of the performance of the Fund during 1998 a well as line graphs
which show the value at inception and for each year after inception of a $10,000
investment made in each portfolio of the Fund. These graphs also show the
performance of an investment over the same period in securities that comprise a
broad based, unmanaged securities market index.
MONY SERIES FUND, INC.
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ -----------
Income from investment
operations
Net investment income..... 0.05 0.05 0.05 0.05 0.04
Less distributions
Dividends (from net
investment income)..... (0.05) (0.05) (0.05) (0.05) (0.04)
------------ ------------ ------------ ------------ -----------
Net asset value, end of
year...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ ===========
Total return........... 5.09% 5.15% 5.00% 5.50% 3.82%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year..... $349,421,360 $158,286,237 $144,932,159 $110,366,978 $83,352,731
Ratio of net investment
income to average net
assets.................... 5.09% 5.11% 4.95% 5.30% 3.77%
Ratio of expenses to average
net assets................ 0.45% 0.46% 0.45% 0.46% 0.49%
</TABLE>
13
<PAGE> 18
MANAGEMENT OF THE FUND
INVESTMENT ADVISER
The Fund's investment adviser is MONY Life Insurance Company of America
("MONY America"). MONY America's principal business address is 1740 Broadway,
New York, New York 10019. MONY America is a wholly owned subsidiary of MONY Life
Insurance Company ("MONY"). MONY America will carry on the overall day-to-day
management of the seven current portfolios under an Investment Advisory
Agreement with the Fund. Not all portfolios are available to contract and
policyholders. It also will provide investment advice and related services for
each of the portfolios. MONY America registered as an investment adviser under
the Investment Advisers Act of 1940 in 1985. Prior to 1985 MONY America had not
performed services as an investment adviser. MONY America has entered into a
Services Agreement with MONY to provide it with personnel, services, facilities,
supplies and equipment in order to carry out many of its duties. MONY America
pays MONY for these services.
Because the Investment Advisory Agreement and the Services Agreement are
interrelated and dependent on each other, MONY may be considered to be an
investment advisor of the Fund for certain federal regulatory purposes. MONY is
registered as an investment adviser under the Investment Advisers Act of 1940.
Its principal business address is 1740 Broadway, New York, New York 10019.
MONY is a life insurance company organized under the laws of New York in
1842 as The Mutual Life Insurance Company of New York. In 1998, The Mutual Life
Insurance Company of New York converted to a stock company through
demutualization and was renamed MONY Life Insurance Company. MONY manages the
investment assets held in its own general account, various separate accounts
established by MONY, and the assets of its employee thrift plan trust. From 1969
to 1981, MONY provided investment advisory services for MONY Advisers, Inc. (a
wholly owned subsidiary of MONY). MONY Advisers, Inc. acted as investment
adviser to The MONY Fund, Inc., a registered, diversified, open-end, management
investment company. As of December 31, 1998, total assets under management in
the accounts managed by MONY and MONY America were about $25.0 billion. These
assets included common stocks with a value of about $1.3 billion, and long and
medium term publicly traded fixed income securities with a value of about $8.2
billion, and short-term debt obligations with a value of about $717.5 million.
The size of the accounts and portfolios managed by MONY or its personnel does
not assure that a shareholder of the Fund will realize any gain or be protected
from any loss.
MONY America and MONY serve as investment managers or advisers in managing
their own assets and, in the case of MONY, the assets of separate accounts and
certain of its subsidiaries. In the future, MONY America and MONY may serve as
investment manager or adviser to other investment companies. Investment
opportunities may arise that are appropriate for more than one account or entity
for which MONY America or MONY serves as investment manager or adviser,
including for their own accounts. When this occurs, MONY America and MONY and
their personnel will not favor one over the another. Investments will be
allocated among them in an impartial manner believed to be equitable to each
entity involved. The allocations will be based on each entity's investment
objectives and its current cash and investment positions. Because these various
entities have different investment objectives and positions, MONY America or
MONY may from time to time buy a particular security for one or more of such
entities when it sells such securities for another.
14
<PAGE> 19
The fee for each of the available portfolios is shown in the table below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT FEE
- --------------------------------------------------------------------------------------------
<S> <C>
Intermediate Term Bond Portfolio Annual rate of .50% of the first $400
million, .35% of the next $400 million and
.30% of amounts in excess of $800 million.
- --------------------------------------------------------------------------------------------
Long Term Bond Portfolio Annual rate of .50% of the first $400
million, .35% of the next $400 million and
.30% of amounts in excess of $800 million.
- --------------------------------------------------------------------------------------------
Government Securities Portfolio Annual rate of .50% of the first $400
million, .35% of the next $400 million and
.30% of amounts in excess of $800 million.
- --------------------------------------------------------------------------------------------
Money Market Portfolio Annual rate of .40% of the first $400
million, .35% of the next $400 million and
.30% of amounts in excess of $800 million.
- --------------------------------------------------------------------------------------------
</TABLE>
MONY America has agreed to bear all expenses (1) for the Fund's
organization, (2) related to initial registration and qualification under
federal and state securities laws, and (3) for compensation of the Fund's
directors, officers and employees who are interested persons (as defined by the
1940 Act) of MONY America. All other expenses, including those associated with
calculating net asset value of the portfolios and any extraordinary or
non-recurring expenses will be borne by the Fund. With respect to the expenses
of printing and mailing prospectuses, see "Purchase and Redemption of Shares" on
page 16.
MONY America receives an investment management fee as compensation for its
services to each of the portfolios.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT
Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004 is the
custodian of the securities held by the portfolios of the Fund. It is authorized
to use the facilities of the Depository Trust Company and the facilities of the
book-entry system for the Federal Reserve Bank. The Fund acts as its own
transfer agent and dividend-disbursing agent.
YEAR 2000 ISSUE
MONY America has conducted a comprehensive review of the computer systems
used in connection with the Fund. A new Year 2000 compliant software program
used for fund accounting has been bought to replace the system currently used.
Currently, it is being tested. MONY America has received assurances from
suppliers of services that systems used in connection with the Fund are being
modified and converted. MONY America will monitor the status of these efforts.
LEGAL PROCEEDINGS
The Fund, its investment adviser and its principal underwriter are not a
party to any legal proceedings at December 31, 1998.
PURCHASE AND REDEMPTION OF SHARES
Shares in the Fund are currently being offered continuously to MONY and
MONY America at prices equal to the net asset values of each portfolio. MONY and
MONY America buy the shares for allocation to the Variable Accounts (as that
term is defined on page 18.) to fund benefits payable under the contracts
described in the attached prospectus. There is no sales charge for shares at the
Fund level. The
15
<PAGE> 20
Fund sells its shares through MONY Securities Corporation ("MSC") (which acts as
"principal underwriter" of the contracts and therefore of the shares of the
Fund). MSC is registered as a broker-dealer under the Securities Exchange Act of
1934 and is a member of the National Association of Securities Dealers. It is
expected that there will be no distribution expenses for the Fund, other than
expenses for preparing, printing and mailing prospectuses. These expenses, and
any other distribution expenses, will be paid by MSC pursuant to an underwriting
agreement. The underwriting agreement will comply with pertinent provisions of
the 1940 Act and rules of the Securities and Exchange Commission ("SEC") under
the Act. The Fund may at some later date also offer its shares to other separate
accounts of MONY, MONY America, or other MONY subsidiaries.
The Fund is required to redeem all full and fractional shares of the Fund
for cash within seven days of receipt of proper notice of redemption. The
redemption price is the net asset value per share next determined after the
initial receipt of proper notice of redemption.
The right to redeem shares or receive payment with respect to any
redemption may be suspended only (i) for any period during which trading on the
New York Stock Exchange is restricted as determined by the SEC or when the New
York Stock Exchange is closed (other than customary weekend and holiday
closings), (ii) for any period during which an emergency exists as defined by
the SEC as a result of which disposal of a portfolio's securities or
determination of the net asset value of each portfolio is not reasonably
practicable, and (iii) for such other periods as the SEC may by order permit for
the protection of shareholders of each portfolio.
A portfolio may hold securities that are listed on foreign exchanges. These
securities may trade on weekends or other days when the portfolio does not
calculate net asset value. As a result, the value of these investments may
change on days when shares cannot be purchased or sold by MONY and/or MONY
America.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund and each of its portfolios intend to qualify as "regulated
investment companies" under the applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"). For a description of the restrictions
that apply to qualifying as a regulated investment company, see the Statement of
Additional Information. Under those provisions, there are certain cases in which
the Fund and each of its portfolios will not be subject to federal income tax.
Federal income tax will not apply on the part of the net ordinary income and net
realized capital gains that each portfolio distributes to MONY and MONY America,
for allocation to the Variable Accounts. Federal income tax will also not apply
to MONY with respect to shares acquired with initial or additional capital.
Since the only shareholders of the Fund will be MONY and MONY America, there is
no discussion in this Prospectus of the federal income tax consequences at the
shareholder level. For information on the federal tax results to Contract
holders, see the attached prospectus for the Contracts.
The Fund intends to distribute as dividends substantially all the net
ordinary income, if any, of each portfolio. For dividend purposes, net ordinary
income of each portfolio, consists of:
(1) All dividends received (other than stock dividends), plus
(2) All interest and other ordinary income accrued, plus
(3) All short-term capital gains realized, less
(4) The expenses of the portfolio (including fees payable to the
investment adviser).
Net ordinary income of the Money Market Portfolio and the short-term debt part
of any other portfolio consist of:
(1) Interest accrued and/or discount earned (including both original
issue and market discount), plus
(2) All realized net short-term capital gains, less
(3) The expenses of the portfolio (including the fees payable to the
investment adviser).
16
<PAGE> 21
Dividends on the Money Market Portfolio will be declared and reinvested daily in
additional full and fractional shares of the portfolio. Shares corresponding to
the Money Market Portfolio will begin accruing dividends on the day following
the date on which they are issued. Dividends from investment income of the other
portfolios will be declared and reinvested in additional full and fractional
shares annually, although the Fund may make distributions more frequently. MONY
may elect to receive dividends on the shares acquired to provide operating
capital in cash.
The Fund will normally declare and distribute annually all net realized
capital gains of each portfolio of the Fund (other than short-term gains of the
Money Market Portfolio, which are declared as dividends daily). In determining
the amount of capital gains to be distributed, the realized capital gains and
losses of each of the portfolios are computed separately. This will not cause
any of the portfolios to have a different investment performance than it would
if it were taxed, together with the other portfolios, as a single investment
company. It will also not affect the value of Contract holders' interests under
the Contracts.
The Fund and each of its portfolios intend to declare dividends for each
calendar year payable to shareholders of record as of a specified date. These
dividends will be distributed in March of the following calendar year. In
determining the capital gains distribution, the Fund and each of its portfolios
will compute net realized capital gains for each calendar year.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations currently in effect. For the
complete provisions, you should refer to the pertinent Code Sections and
Treasury Regulations. The Code and these Regulations are subject to change by
legislative, administrative or judicial actions.
SHARES IN THE FUND
The authorized capital stock of the Fund consists of 2 billion shares, par
value $.01 per share. The shares of capital stock are divided into seven
classes: Equity Income Portfolio Capital Stock (150 million shares); Equity
Growth Portfolio Capital Stock (150 million shares); Intermediate Bond Portfolio
Capital Stock (150 million shares); Long Term Bond Portfolio Capital Stock (150
million shares); Government Securities Portfolio Capital Stock (150 million
shares); Money Market Portfolio Capital Stock (750 million shares); and
Diversified Portfolio Capital Stock (150 million shares). In the future, the
Fund may allocate some of the remaining authorized shares to these classes, or
create new classes and then issue shares of such new classes. Each share of
stock will have a pro-rata interest in the assets of the portfolio to which the
stock of that class relates and will have no interest in the assets of any other
portfolio. Each portfolio bears its own liabilities and also its proportionate
share of the general liabilities of the Fund. Holders of shares of any portfolio
are entitled to redeem their shares (see "Purchase and Redemption of Shares" at
page 15). The shares of each portfolio, when issued, will be fully paid and
non-assessable, will have no preemptive, conversion, exchange or similar rights,
and will be freely transferable. The shares do not have cumulative voting
rights.
MONY provided the initial capital for each of the Fund's portfolios.
Additional shares may be acquired by MONY during the Fund's operation or any new
portfolio's start-up period. The acquisition of shares by MONY will enable the
portfolios (or any new portfolios) to avoid an unrealistically poor investment
performance. Poor investment performance might otherwise result because the
amounts available for investment were too small. The acquisition of shares by
MONY also enables the portfolios to satisfy the net worth requirements of the
1940 Act. MONY may also acquire additional shares through dividend reinvestment
in connection with the shares acquired during the start-up period. Any shares
acquired by MONY (other than for allocation to the Variable Accounts described
in "The Accounts and the Contracts," on page 18) will be acquired for investment
and can be disposed of only be redemption. They will not be redeemed by MONY
until the other assets of the portfolios are large enough so that redemption
will not have an adverse effect upon investment performance. MONY will vote
these shares in the same proportion as the shares held in the Variable Accounts,
which generally are voted in accordance with the instructions of contract
holders.
17
<PAGE> 22
THE ACCOUNTS AND THE CONTRACTS
Shares of all portfolios in the Fund are currently sold to MONY America and
MONY for allocation to MONY America Variable Account L and MONY Variable Account
L to fund benefits under Flexible Premium Variable Life Insurance Contracts
issued by those companies. The shares are also sold to those companies for
allocation to MONY America Variable Account A and MONY Variable Account A to
fund benefits under Flexible Payment Variable Annuity Contracts that they issue.
Shares of all portfolios, other than the Government Securities Portfolio, are
sold to MONY America and MONY for allocation to MONY America Variable Account S
and MONY Variable Account S to fund benefits under Variable Life Insurance with
Additional Premium Option contracts issued by them. In addition, shares of the
Fund are sold to MONY for allocation to Keynote Series Account ("Keynote") to
fund benefits under Individual Variable Annuity Contracts. Until June 24, 1994,
shares were sold to MONY for allocation to Keynote to fund benefits under Group
Annuity Contracts issued by MONY. Each contract holder allocates the net
premiums and the assets relating to these Contracts, within contract
limitations, among the subaccounts of these variable accounts ("Variable
Accounts"). The subaccount assets are invested in the corresponding portfolios
of the Fund. Contract holders should consider that the investment return
experience of the portfolios will affect the value of the Contracts and may
affect the amount of benefits received under the Contracts. The attached
prospectus for the Contracts describes the Contracts and the relationship
between changes in the value of shares of each portfolio and changes in the
benefits payable under the Contracts. The rights of the Variable Accounts as
shareholders should be distinguished from the rights of a Contract holder, which
are described in the contracts. Because the shares of the Fund will be sold to
MONY America and MONY for allocation to the Variable Accounts, the terms
"shareholder" or "shareholders" in this prospectus refer to those companies.
STATE LAW RESTRICTIONS
The investments of Keynote and the MONY Variable Accounts, and MONY America
Variable Accounts are subject to the provisions of New York and Arizona
insurance law, respectively, applicable to the investments of life insurance
separate accounts. State law investment restrictions do not apply directly to
the Fund. However, the portfolios will comply, without the approval of
shareholders, with such statutory requirements, as they exist or may be amended.
Currently under New York law, the assets of Keynote and the MONY Variable
Accounts may be invested in any investments:
(1) permitted by agreement between these Variable Accounts and their
contract holders, and
(2) acquired in good faith and with that degree of care that an ordinary
prudent person in a like position would use under similar
circumstances.
The only agreement with contract holders pertaining to investments
permitted for the Variable Accounts is as described in the prospectuses for the
contracts, namely that the Variable Accounts will invest only in shares of the
Fund. The investment assets of the Fund are subject to the investment objective,
policies and restrictions applicable to the Portfolios, as described in this
prospectus. (see The Fund at page ) and in the Statement of Additional
Information (Investment Restrictions).
The following is a summary of the current provisions of Arizona law:
The assets of variable accounts established by MONY America may be invested
in any investments that are of the kind permitted and that satisfy qualitative
requirements, but without regard to quantitative restrictions. The following
instruments must receive an investment grade rating approved by the Director of
Insurance: (1) bonds, (2) debentures, (3) notes, (4) commercial paper and other
evidences of indebtedness, and (6) preferred, guaranteed or preference stocks.
Funds may not be invested in foreign
18
<PAGE> 23
banks (other than foreign branches of domestic banks) except that investments
may be made in obligations issued, assumed or guaranteed by the International
Bank for Reconstruction and Development. Investments not otherwise permitted
under Arizona law may be made in an amount not exceeding in the aggregate 10% of
assets and not exceeding 2% of assets as to any one such investment.
Compliance with the New York and Arizona laws described above will
ordinarily result in compliance with any applicable laws of other states.
However, under some circumstances the laws of other states could impose
additional restrictions. Accordingly, if any state or other jurisdiction in
which the Variable Accounts propose to do business imposes additional limits
applicable to the Variable Accounts, the Fund will comply with such further
investments limits.
DETERMINATION OF NET ASSET VALUE
The Investment Adviser once daily will determine the net asset value of the
shares of each portfolio. The determination will occur immediately after the
declaration of dividends, if any, at a time determined by the Fund's Board of
Directors. Currently, net asset value is determined at 4:00 p.m. New York City
time on each day the New York Stock Exchange is open for business. It may also
be determined on any other day in which there is sufficient trading in the
securities held by a portfolio to result in a material change in the value of
such shares. The net asset value per share of each portfolio except the Money
Market Portfolio is computed as follows:
(1) Add the sum of the value of the securities held by the portfolio
plus any cash or assets it holds.
(2) Subtract all the portfolio's liabilities.
(3) Divide the result by the total number of shares outstanding of
that portfolio at the time of the determination.
Expenses, including the investment management fee payable to MONY America, are
accrued daily.
High-quality, short-term debt obligations held in any of the portfolios
with a remaining maturity of 60 days or less will be valued on an amortized-cost
basis. This means that each obligation will be valued initially at its purchase
price. Thereafter, it will be valued by amortizing any discount or premium
uniformly to maturity, regardless of the impact of fluctuating interest rates on
the market value of the obligation. This highly practical method of valuation is
in widespread use and almost always results in a value that is extremely close
to the actual market value. The Fund's Board of Directors will review
obligations valued under this method where: (1) credit or other factors may
indicate the method is not appropriate, or (2) the rules of the SEC require a
review. Short-term debt obligations with a remaining maturity of more than 60
days will be valued in the same way as are debt securities held in the
Intermediate Term Bond, Long Term Bond and Government Securities portfolios, as
described below in "Valuation of Intermediate Term Bond, Long Term Bond and
Government Securities Portfolios."
VALUATION OF INTERMEDIATE TERM BOND, LONG TERM BOND AND GOVERNMENT SECURITIES
PORTFOLIOS
Securities will be valued based on a decision as to the broadest and most
representative market for such security. The value will be based on:
(i) the last available sales price on a national securities exchange,
or
(ii) in the absence of recorded sales, the average of readily
available closing bid and asked prices on national securities exchanges, or
(iii) the average of the quoted bid and asked prices in the
over-the-counter market.
Securities or assets for which market quotations are not readily available will
be valued at fair value as determined by the Investment Adviser under the
direction of the Board of Directors of the Fund.
19
<PAGE> 24
VALUATION OF MONEY MARKET PORTFOLIO
The net asset value of shares of the Money Market Portfolio will normally
remain at $1.00 per share because the net investment income of this portfolio
(including realized and unrealized gains and losses on its holdings) will be
declared as a dividend each time its net income is determined. (See "Dividends,
Distributions and Taxes," at page 16.) If the Board of Directors of the Fund
considers it inadvisable to continue to maintain the net asset value of the
portfolio at $1.00 per share, the Board reserves the right to alter the
procedure. The Fund will notify shareholders of any such alteration.
The Fund will value all short-term debt obligations held in the Money
Market Portfolio on an amortized cost basis. The regulations of the SEC require
as a condition for using amortized cost valuation that the portfolio:
(i) maintain a dollar-weighted average portfolio maturity not
exceeding 90 days, and
(ii) limit its portfolio investments to those United States
dollar-denominated instruments determined to present minimal credit risks
and which are Eligible Securities when acquired.
Eligible Securities include any security:
(i) issued with, or with a remaining maturity of, 397 days or less,
and
(ii) which is rated (or, if unrated, the issuer also issues short-term
securities any one of which, comparable in priority and security, is rated)
by an SEC designated statistical rating organization in one of the two
highest rating categories for short-term debt obligations; or
(iii) the issuer of which does not have any securities which have a
short term rating but which security is:
(a) comparable in priority and security to a security which has
been rated in one of the two highest rating categories for short term
debt obligations by an SEC designated statistical rating organization,
and
(b) not a security which had an original maturity in excess of 397
days and which received a rating as a long term debt obligation form
such rating organization that was not within the two highest rating
categories.
In the event of sizable changes in interest rates, the value determined by
amortized cost valuation may be higher or lower than the price that would be
received if the obligation were sold. On these occasions (if any should occur)
as a further condition to using amortized-cost valuation, procedures have been
established by the Board of Directors. The procedures determine whether the
deviation might be enough to affect the value of shares in the Money Market
Portfolio by more than one-half of one percent. If it does, an appropriate
adjustment will be made in the value of the obligations.
20
<PAGE> 25
APPENDIX A
SECURITIES IN WHICH THE MONEY MARKET
PORTFOLIO MAY CURRENTLY INVEST
The Money Market Portfolio, and the other Portfolios to the extent their
investment policies so provide, may invest in the following short-term, debt
securities regularly bought and sold by financial institutions:
1. Debt securities (including bills, certificates of indebtedness, notes,
and bonds) issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government that is established under the authority
of an act of Congress. These include:
- U.S. Treasury Bills,
- Other obligations issued or guaranteed by the U.S. Government,
- Obligations of U.S. agencies or instrumentalities which are backed by the
U.S. Treasury, and
- Obligations issued or guaranteed by U.S. agencies or instrumentalities
and backed solely by the issuing agency or instrumentality.
Such agencies or instrumentalities include, but are not limited to: (1)
The Federal National Mortgage Association, (2) the Federal Farm Credit
Bank, (3) the Federal Home Loan Bank and (4) the Government National
Mortgage Association.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on them
is generally backed directly or indirectly by the U.S. Treasury. This support
can range from the backing of the full faith and credit of the United States, to
U.S. Treasury guarantees, or to the backing solely of the issuing agency or
instrumentality itself.
2. Obligations (including certificates of deposit, bankers' acceptances and
time deposits) of any bank which has, at the time of the Portfolio's investment,
total investment assets of at least $1 billion or the equivalent. The bank may
be organized under the laws of the United States or any state or foreign
branches of such banks or foreign banks. The term "certificates of deposit"
includes:
- Eurodollar certificates of deposit, which are traded in the
over-the-counter market,
- Eurodollar time deposits, for which there is generally not a market, and
- Yankee certificates of deposit.
"Eurodollars" are dollars deposited in banks outside the United States. Yankee
certificates of deposit are certificates of deposit denominated in U. S. dollars
and issued in the United States by the domestic branch of a foreign bank and are
primarily traded in the United States. An investment in Eurodollar instruments
involves risks that are different in some respects from an investment in debt
obligations of domestic issuers. These risks include future political and
economic developments such as possible expropriation or confiscatory taxation
that might adversely affect the payment of principal and interest on the
Eurodollar instruments. In addition, foreign branches of domestic banks and
foreign banks may not be subject to the same accounting, auditing and financial
standards and requirements as domestic banks. Finally, in the event of default,
judgments against a foreign branch or foreign bank might be difficult to obtain
or enforce. Yankee certificates have risks substantially similar to those of
Eurodollar certificates.
"Certificates of deposit" are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 14 days to one year). "Bankers' acceptances" are credit
instruments evidencing the obligation of a bank to pay a draft which has been
drawn on it by a customer. These instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument upon maturity.
"Time deposits" are non-negotiable deposits in a bank for a fixed period of
time.
A-1
<PAGE> 26
3. Commercial paper issued by corporations which at the date of investment
is rated (a) by any two SEC designated statistical rating organizations in one
of the two highest rating categories for short-term debt obligations or, (b) if
not rated, issued by domestic or foreign corporations which have an outstanding
senior long-term debt issue rated by any two SEC designated statistical rating
organizations in one of the two highest rating categories for short-term debt
obligations. "Commercial paper" consists of short-term (usually from 1 to 270
days) unsecured promissory notes issued by corporations in order to finance
their current operations. If the commercial paper is issued by a foreign
corporation, it must be U.S. Dollar denominated.
4. Other corporate obligations issued by domestic or foreign corporations
which at the date of investment are rated by any two SEC designated statistical
rating organizations in one of the two highest rating categories for short-term
debt obligations.
"Corporate obligations" are bonds and notes issued by corporations and other
business organizations, including business trusts, in order to finance their
long-term credit needs. If the obligation is issued by a foreign corporation, it
must be U.S. Dollar denominated.
5. Repurchase Agreements. When the Money Market Portfolio purchases money
market securities of the types described above, it may on occasion enter into a
repurchase agreement with the seller. In a repurchase agreement, the seller and
the buyer agree at the time of sale to a repurchase of the security at a
mutually agreed upon time and price. The period of maturity is usually quite
short, possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the purchase price. This resale price
reflects an agreed-upon market rate of interest effective for the period of time
the Portfolio's money is invested in the security, and is not related to the
coupon rate of the purchased security. Repurchase agreements may be considered
loans of money to the seller of the underlying security, which are
collateralized by the securities underlying the repurchase agreement. The Fund
will not enter into repurchase agreements unless the agreement is "fully
collateralized," i.e., the value of the securities is, and during the entire
term of the agreement remains, at least equal to the amount of the "loan"
including accrued interest. The Fund's custodian bank will take possession of
the securities underlying the agreement, and the Fund will value them daily to
assure that this condition is met. The Fund has adopted standards for the
parties with whom it will enter into repurchase agreements. It believes these
standards are reasonably designed to assure that such a party presents no
serious risk of becoming involved in bankruptcy proceedings within the time
frame contemplated by the repurchase agreement. In the event that a seller
defaults on a repurchase agreement, the Fund may incur a loss in the market
value of the collateral, as well as disposition costs. If a party with whom the
Fund had entered into a repurchase agreement becomes involved in bankruptcy
proceedings, the Fund's ability to realize on the collateral may be limited or
delayed and a loss may be incurred if the collateral security of the repurchase
agreement declines in value during the bankruptcy proceedings.
6. Reverse Repurchase Agreements. The Portfolio may enter into reverse
repurchase agreements with banks. Reverse repurchase agreements have the
characteristics of borrowing. They involve the sale of securities held by the
Portfolio with an agreement to repurchase the securities at an agreed-upon price
and date. The price reflects a rate of interest paid for the use of funds for
the period. Generally, the effect of such a transaction is that the Portfolio
can recover all or most of the cash invested in the securities involved during
the term of the reverse repurchase agreement. In many cases the Portfolio will
be able to keep some of the interest income associated with those securities.
Such transactions are only advantageous if the Portfolio has an opportunity to
earn a greater rate of interest on the cash derived from the transaction than
the interest cost of obtaining that cash. The Portfolio may be unable to realize
a return from the use of the proceeds equal to or greater than the interest
required to be paid. Opportunities to achieve this advantage may not always be
available, and the Portfolio intends only to use the reverse repurchase
technique when it appears to be to its advantage to do so. The use of reverse
repurchase agreements may magnify any increase or decrease in the value of the
Portfolio's securities. The Fund's custodian bank will maintain in a separate
account securities of the Portfolio that have a value equal to or greater than
the Portfolio's commitments under reverse repurchase agreements.
A-2
<PAGE> 27
7. Asset backed securities are securities that have been structured to
receive payment from an identified pool of assets. These pools are typically
over-collateralized or they have some sort of financial guaranty such as a
letter of credit or a third party guaranty to ensure full and timely repayment.
8. Limited liquidity securities/securities sold under SEC Rule 144A. A
substantial market of qualified institutional buyers may develop under Rule 144A
of the 1933 Act for securities that are subject to legal or contractual
restrictions on resale. If such a market develops, these securities may be
treated as liquid securities. To the extent that for a period of time qualified
institutional buyers cease purchasing such securities pursuant to Rule 144A,
there may be an increase in the level of illiquidity in the portfolio during
such period.
Notwithstanding the above, it is the present intention of the Fund that the
Money Market Portfolio continue to qualify under the requirements of Rule 2a-7
of the Securities and Exchange Commission ("SEC"). This Rule permits the
Portfolio to use the amortized cost method of valuation to calculate net asset
value if the Portfolio's funds are invested in accordance with its guidelines.
Briefly, those guidelines require investment in Eligible Securities (see
VALUATION OF MONEY MARKET PORTFOLIO at page for a discussion of Eligible
Securities) which qualify as First or Second Tier securities under the Rule.
First Tier securities include any Eligible Security which:
(i) is rated (or, if unrated, the issuer of which also issues short-term
securities any one of which, comparable in priority and security, is rated)
by an SEC designated statistical rating organization in its highest
category for short-term debt obligations, or
(ii) is a security having:
- a remaining maturity of 397 days or less when acquired but which has
an original maturity in excess of 397 days, and
- which is now comparable in priority and security to a short-term
security of the same issuer which is rated by an SEC designated
statistical rating organization in the highest category for short-term
debt obligations; or
(iii) is unrated as a short-term security (and, if rated as a long-term
security, received a rating in one of the two highest categories) and is
issued by an issuer which has no rated short-term debt obligations
comparable in priority and security.
A Second Tier security is any Eligible Security (see VALUATION OF MONEY MARKET
PORTFOLIO at page 20 for a discussion of Eligible Securities) which is not a
First Tier security.
A-3
<PAGE> 28
APPENDIX B
DESCRIPTION OF COMMERCIAL PAPER AND
CORPORATE BOND RATINGS
COMMERCIAL PAPER RATINGS
Moody's commercial paper ratings are opinions of the ability of issuers to
repay promissory obligations when due. Moody's employs the following three
designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers:
- Prime 1-Superior Ability for Repayment;
- Prime 2-Strong Ability for Repayment;
- Prime 3-Acceptable Ability for Repayment.
S&P's commercial paper rating is a current assessment of the likelihood of
timely payment. Ratings are graded into four categories, ranging from "A" for
the highest quality obligations to "D" for the lowest. Issues assigned the
highest rating, "A", are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the numbers "1", "2", and
"3" to indicate the relative degree of safety. The designation "A-1" indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. The "A+" designation is applied to those issues rate "A-1" which
possess overwhelming safety characteristics. Capacity for timely payment on
issues with the designation "A-2" is strong. However, the relative degree of
safety is not as high as for issues designated "A-1."
Fitch's commercial paper ratings represent Fitch's assessment of the
issuer's ability to meet its obligations in a timely manner. The assessment
places emphasis on the existence of liquidity. Ratings range from "F-1+" which
represents exceptionally strong credit quality to "F-4" which represents weak
credit quality.
Duff's short-term ratings apply to all obligations with maturities of under
one year, including commercial paper, the uninsured portion of certificates of
deposit, unsecured bank loans, master notes, bankers acceptances, irrevocable
letters of credit and current maturities of long-term debt. Emphasis is placed
on liquidity. Ratings range for Duff 1+ are regarded as having the highest
certainty of time payment. Issues rated Duff 1 are regarded as having very high
certainty of timely payment.
Thomson's BankWatch, Inc. assigns only one Issuer Rating to each company,
based upon a qualitative and quantitative analysis of the consolidated
financials of an issuer and its subsidiaries. The rating incorporates TBW's
opinion of the vulnerability of the company to adverse developments which may
impact the marketability of its securities, as well as the issuer's ability to
repay principal and interest. Ratings range from "TBW-1" for highest quality to
"TBW-3" for the lowest, companies with very serious problems.
BOND RATINGS
A bond rated "Aaa" by Moody's is judged to be the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is deemed secure. While
the various protective elements may change, such foreseeable changes are
unlikely to impair the fundamentally strong position of such issues. 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.
Margins of protection on "Aa" bonds may not be as large as on "Aaa" securities
or fluctuations of protective elements may be of greater magnitude or there may
be other elements present which make the long-term risks appear somewhat larger
than "Aaa" securities. Bonds which are rated "A" possess many favorable
investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment some time in the future. Bonds
B-1
<PAGE> 29
rated "Baa" are considered medium grade obligations whose interest payments and
principal security appear adequate for the present but may lack certain
protective elements or may be characteristically unreliable over any great
length of time. Moody's applies numerical modifiers "1", "2" and "3" in each
generic rating classifications from "Aa" through "B" in its corporate bond
rating system. The modifier "1" indicates that the security ranks in the higher
end of its generic rating category; the modifier "2" indicates a mid-range
ranking; and the modifier "3" indicates that the issue ranks in the lower end of
its generic rating category. Bonds rated "Ba" are judged to have speculative
elements and bonds rated below "Ba" are speculative to a higher degree.
Debt rate "AAA" by S&P has the highest rating assigned by it. Capacity to
pay interest and repay principal is extremely strong. Debt rated "AA" has a
strong capacity to pay interest and repay principal and differs from "AAA"
issues only in small degree. Debt rated "A" has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories. Debt
rated "BB" and below is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
Debt rated "AAA", the highest rating by Fitch, is considered to be of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. Debt rated "AA" is regarded as very high credit quality. The
obligor's ability to pay interest and repay principal is very strong. Debt rated
"A" is of high credit quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable to adverse
changes in economic conditions and circumstances than debt with higher ratings.
Debt rated "BBB" is of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is adequate, however a change in economic
conditions may adversely affect timely payment. Plus (+) and minus (-) signs are
used with a rating symbol (except "AAA") to indicate the relative position
within the category.
Debt rated "AAA", the highest rating by Duff is considered to be of the
highest credit quality. The risk factors are negligible being only slightly more
than for risk-free U.S. Treasury debt. Debt rated "AA" is regarded as high
credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Debt rated "A" is
considered to have average but adequate protection factors. Bonds rated "BBB"
are considered to have below average protection factors but still sufficient for
prudent investment. Bonds rated "BB" and below are below investment grade and
possess fluctuating protection factors and risk.
B-2
<PAGE> 30
MONY SERIES FUND, INC.
ADMINISTRATIVE OFFICES
1740 BROADWAY, NEW YORK, NEW YORK 10019
The Statement of Additional Information has more information about the Fund. The
Statement of Additional Information is incorporated by reference into this
prospectus.
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the last fiscal year.
You may get a Statement of Additional Information, annual report or semi-annual
report without charge by calling 1-800-487-6669 or by sending a request to: MONY
Series Fund, Inc., 1740 Broadway, New York, New York 10019. Requests for other
information about the Fund or any shareholder inquiries should be made by
calling or writing to the above phone number or address.
Information about the Fund (including the Statement of Additional Information)
can be reviewed and copied at the Securities and Exchange Commissions Public
Reference Room in Washington, D.C. You may get information on the operation of
the public reference room by calling the Securities and Exchange Commission at
1-800-SEC-0330. Reports and other information about the Fund are available on
the Securities and Exchange Commission's Internet site at http://www.sec.gov.
You may get copies of this information by paying a duplicating fee, and writing
the Public Reference Section of the Securities and Exchange Commission,
Washington, D.C. 20549-6009.
File Number: 2-95501
811-04209
