<PAGE> 1
Fellow Shareholders:
After stellar gains in this year's first quarter, many investors wondered if
the markets could get any better. Well, they did.
Despite a few zigs and zags, the markets this period have continued to
seemingly move in just one direction: up. And why not? We're in the midst of a
great financial spectacle--restrained inflation, declining interest rates, and
moderate economic growth--all roughly converging at this extraordinary point in
history.
The current bull market is one of the strongest of this century. And
while it's been fun to watch, it's been particularly satisfying to have
participated...especially in light of such an uncomfortable 1994. Most
importantly, those investors who stuck with their investment strategies in the
face of last year's extreme volatility have reaped the measurable rewards of
long-term investing.
And just as the markets continue to move beyond their traditional boundaries,
so do we. Our commitment at IDEX Mutual Funds has always been to provide solid,
well-managed investment products, to bring you a "universe of
opportunity". Our unique strategy--to put our portfolios in the hands of some
of the best money managers in the world--led to the introduction last December
of four exciting new additions to IDEX II Series Fund--the Aggressive Growth,
Capital Appreciation, Equity-Income, and Balanced Portfolios. That continuing
pursuit of excellence has also brought us this period one of the industry's
finest growth stock managers. In June, Scott Schoelzel was officially
designated as Co-Portfolio Manager, along with Tom Marsico, of our flagship
fund, the Growth Portfolio.
On the following pages, Tom and Scott and all of our IDEX portfolio managers
discuss where they've positioned their respective portfolio's assets. We invite
you to evaluate these reports and review the data, including major equity
positions and industry weightings. All of this information is intended to
provide an insight into what has been some of the industry's finest
performances.
And our universe is still expanding. October 1, 1995 marked the introduction of
our tenth portfolio -- the Tactical Asset Allocation Portfolio, managed by
Dean Investment Associates. We are particularly delighted with the experience,
perspective, and professionalism Dean will bring to IDEX II Series Fund. Make
sure to talk with your Representative about this outstanding new option.
Of course our "Universe of Opportunity" involves more than just performance; it
includes superior service as well. At IDEX, we are constantly striving to
provide the kind of service that meets or exceeds expectations. We're proud to
say that IDEX has been identified as an "industry leader" in service
quality by DALBAR, Inc., an independent consulting firm to the financial
services industry. In fact, for 1995, we are ranked by DALBAR among the top 10
of mutual fund complex participants in 11 out of 17 service categories
assessed.
In addition, we'll continue to offer you convenient, state-of-the-art services
like our "Electronic Bank Link" Option. Electronic Bank Link allows you to
transfer money directly from your bank account to purchase shares in your IDEX
Mutual Fund, or for us to transfer funds upon redemption directly to your bank
account. In other words, no more need to mail checks.
Yes, these six months and this year have been historic periods in the financial
markets. We're pleased with our outstanding performance. But no matter how
gratifying, we must remember that it is only short-term. At the very least,
given the extraordinary 1995 stock market rise, it's possible we could see some
turbulence soon. But the last two years have been a powerful reminder that the
greatest risk to the investor is missing out on the wealth creation that comes
from investing for the long-term.
IDEX Mutual Funds are managed not only with long-term results in mind, but
long-term relationships as well. We respect your personal task of financial
planning and greatly appreciate the opportunity to help.
Sincerely yours,
/s/ Jack R. Kenny /s/ G. John Hurley
- ----------------- ------------------
Jack R. Kenny G. John Hurley
<PAGE> 2
Growth Portfolio
U.S. equities have continued to move higher. Market performance has been
supported by stable interest rates and low inflation against a background of
moderate economic growth. Within this excellent environment for growth stocks,
the Growth Portfolio Class A and Class C shares had total returns of 36.70% and
36.32%, respectively, for the year ended September 30, 1995. By comparison, the
Standard & Poor's 500 Index for the same period advanced 29.70%.
Several key factors have produced these conditions. American industry has
become highly efficient and increased its competitive position vis-a-vis
foreign companies. U.S. corporations are generating excess cash and using it
more effectively. They are either repurchasing stock, which returns value to
shareholders, or focusing on their higher margin businesses, either by spinning
off non-core holdings, or merging intelligently to reach critical mass. U.S.
fiscal policy has also taken a turn for the better. Both sides of the aisle in
Congress are focused on deficit reduction. The real question now is when, where
and to what extent spending will be reduced. All of these factors are coming
together to create positive synergies in the economy, in the financial markets,
and in individual companies.
The focus on efficiency is the major reason technology has led the rally in
stocks. Although technology stumbled in September, we're still comfortable with
the fundamentals of the sector. It appears we are beginning a new upgrade cycle
in the computer, telecommunications, and information processing areas,
which is being driven by Intel's Pentium chip and Microsoft's Windows 95. We
are also optimistic about health care and financial services.
During the period, our technology and "tech"-related holdings continued to make
progress. Although we trimmed or sold some of these positions when they hit
fair valuations, we are still enthusiastic about Nokia, the cellular
telephone and equipment manufacturer located in Finland, modem manufacturer
U.S. Robotics, and semi-conductor maker LSI Logic.
We had good performances from our financial stocks. Citicorp's stock repurchase
program and its dominant presence in emerging markets are driving earnings and
investor confidence. In the health care and medical sector, Oxford Health
Plans continues to gain market share and improve its operating margins and
earnings. Credit card processor First Data is in negotiations to acquire
competitor First Financial Management. Post merger, the company will combine
the major credit card transaction processor for banks with the major processor
for merchants and create enormous synergies.
After the excellent performance we have seen this year, a certain amount
of volatility would not be unexpected. But the current environment of moderate
economic growth, low inflation, and stable interest rates provides one of the
best conditions investors can expect for growth stocks. The Growth Portfolio
continues to be positioned to take advantage of this environment.
Thomas F. Marsico
Growth Portfolio Manager
Scott Schoelzel
Growth Portfolio Manager
A hypothetical $10,000 invested in Class A Shares at inception (05/08/86) was
worth $38,681.
A hypothetical $10,000 invested at
Class C inception (10/01/93) was worth
Growth Portfolio Class C $12,581
Growth Portfolio Class A $12,319
Standard & Poor's 500 Stock Index $13,360
<TABLE>
<CAPTION>
Average Annual Total Return*
Growth S&P 500
Class A** Class C Index***
<S> <C> <C> <C> <C>
1 Year Ended
09/30/95 29.15% 36.70% 36.32% 29.70%
5 Years Ended
09/30/95 16.84% 18.17% N/A 17.20%
Life of Class A
05/08/86 to 09/30/95 15.44% 16.17% N/A 13.60%
Life of Class C
10/01/93 to 09/30/95 10.99% 12.94% 12.16% 15.60%
</TABLE>
* Growth Portfolio Shares performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
** Growth Portfolio Class A Shares performance in column 1 reflects the
maximum sales charge of 5.5%.
*** The Standard & Poor's 500 Stock Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and
capital gains are reinvested and do not include any managerial
<PAGE> 3
expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percent of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials 1.4% 1.8%
Consumer Cyclical 5.0% 8.7%
Consumer Non-Cyclical 10.2% 12.9%
Financial 13.6% 13.3%
Industrial 0.4% 1.0%
Technology 58.6% 42.3%
Utilities -- 1.8%
Long-term U.S. Gov't securities 3.0% 3.6%
Short-term securities 8.3% 14.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies
and other facts about the Fund.
Growth Portfolio
Top Five Equity Holdings
September 30, 1995
SAP AG-Vorzug
" SAP is the world's leading provider of client-server business
applications. SAP is a pioneer in the development of integrated software
applications, collaborating with business and its executives worldwide to
develop software that meets the complex needs of today's global business.
" 1995 half-year net profits were up 80% to $100 million, with sales for
the half year rising 67% to $824 million, over the comparable period last year.
First Data Corp.
" First Data provides high-quality, high-volume information processing
and related services, including bankcard processing services, payment
instrument transactions processing and information management and data
processing for the cable industry.
" First Data recently received approval from the FTC and the SEC to
acquire First Financial Management Corp., owner of Western Union, which is the
dominant consumer money transfer company in the U.S.
Texas Instruments, Inc.
" Texas Instruments develops, produces and markets products in the
electrical and electronics industry for industrial, consumer, and governmental
use.
" Texas Instruments recently was named by PC Magazine as the Editors'
Choice for full-featured notebook-sized computers. Their notebook PC, the
Travelmate 5000, had the best battery life of all 80 notebooks tested, while
making no sacrifices to outstanding performance.
Microsoft Corp.
" Microsoft, founded in 1975, is the worldwide leader in software for
personal computers.
" With the recent release of Windows 95, a multi-tasking capable windows
operating system, the computer software consumer market went into a frenzy that
saw about one million copies sold in just four days.
" Microsoft recently announced a partnership venture with Paramount
Television that will provide Microsoft exclusive original material to show on
the Microsoft Network Service.
Merrill Lynch and Company, Inc.
" Merrill Lynch provides securities, commodities and other brokerage
services, clearing services for other broker-dealers, investment banking
services, as well as dealing in corporate and municipal securities and
obligations.
" Merrill Lynch is one of the largest underwriters of total debt and
equity both in the U.S. and globally with year to date market shares of 15.4%
and 11.9%, respectively.
<PAGE> 4
" Assets under management for the second quarter of 1995 were up 12%
compared to the 1994 second quarter.
Aggressive Growth Portfolio
From inception of the Portfolio (December 2, 1994) through September 30, 1995,
Class A and Class C shares had total return of 76.80% and 76.40%, respectively.
By comparison, the Standard & Poor's 500 Index advanced 31.60% for the same
period.
Over the course of the last six months, we added 37 new companies to the
Portfolio and eliminated 32. At period's end, the Aggressive Growth
Portfolio held 91 stocks, 54 of which were held for the entire six-month
period. Of these 54 companies, 52 advanced in price while only 2 declined. The
20 best companies in the Aggressive Growth Portfolio realized advances in
excess of 50% over the six-month period. The median price/earnings ratio of the
portfolio was 26.49 and the weighted market capitalization was $9.3 billion.
This has been an extremely exciting period for the market. September, however,
like other quarter-ending months, has been interesting. It has become the norm
in recent times for corporate management, eager to avoid the potential for
insider trading, to announce negative earnings as soon as they know that
possibility exists. As a result, the period prior to the end of a quarter is
frequently replete with bad earnings announcements. The most recent quarter
has been no exception. The economic slowdown has taken its toll on corporate
profitability. A number of weaker technology issues, such as Apple Computer,
have been hit by these problems. Moreover, other technology stocks, such as the
s-ram and d-ram manufacturers, have been hit by rumors of pricing weakness
which we believe to be unsubstantiated. The result of all this has been a
sell-off in most technology stocks during the last several weeks of the period.
Once good earnings for our companies are reported, however, we expect these
stocks to rebound sharply.
While economic signals continue to be mixed, there are clearly increasing signs
that the economy is stronger: Housing starts rose .6% in August for the
fifth monthly rise in a row; auto sales appear to be strengthening; the
recently reported durable goods orders were dramatically stronger than
expected. These higher economic numbers outweigh other numbers which would
indicate that the economy is still not that robust, like a drop in the Consumer
Confidence Index and sluggish retail sales. Nevertheless, there is sufficient
evidence of strengthening that the Federal Reserve Board ("Fed") declined to
lower rates again. Interestingly, the rate of inflation continues to be benign
despite the improving economy. The price of gold is an excellent proxy for the
inflation rate, and the price remains at a low level, recently $383 an ounce.
In addition, the yield on the long bond has declined from August levels. So,
despite the upward movement in the economy and the lack of Fed easing, the long
bond is actually higher than it was a month ago.
It is important to understand that even as the stock market went through its
quarter-end gyrations, we feel it still remains very undervalued. We use three
measures to determine the appropriate valuation for the market. The first is
simply to multiply our best guess of Dow earnings for 1995 by the average
multiple of the last ten years, which is 16. The result is an expected target
of the Dow of 5600. The second method relates the market to short-term
interest rates. Our own proprietary model multiplies the reciprocal of the
bottom-up forecast for the Dow earnings by the 90-day commercial paper rate
adjusted for some smoothing techniques. This model states that the Dow would be
correctly valued at 6200. The third technique involves the relationship
between estimated earnings for the S&P 500 and the 30-year bond yield. Using
the average relationship between these two variables for the period 1988
through 1994 suggests that the market could appreciate 33% next year. The Dow
equivalent to this would be 6300. While none of these forecasts may be
realized, it is interesting that they all agree that the market will appreciate
significantly next year using only average relationships. As to our stocks,
while we may experience a period of profit-taking in the near term, earnings
for our companies look very robust.
Aggressive Growth Portfolio
A hypothetical $10,000 invested in Class A and C
Shares at inception (12/2/94) was worth $16,720
and $17,640, respectively.
Total Return*
Aggressive Growth S&P 500
Class A ** Class C Index***
Life of Portfolio
<PAGE> 5
12/02/94 to 09/30/95 67.20% 76.80% 76.40% 31.60%
* Aggressive Growth Portfolio Shares performance includes dividends and
capital gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
** Aggressive Growth Portfolio Class A Shares performance in column 1
reflects the maximum sales charge of 5.5%.
*** The Standard & Poor's 500 Index is an unmanaged index used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percent of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Consumer Cyclical 11.8% 8.7%
Consumer Non-Cyclical 11.5% 12.9%
Financial 2.3% 13.3%
Industrial 3.0% 1.7%
Technology 82.9% 52.7%
Utilities -- 0.7%
Short-term securities -- 19.2%
</TABLE>
Aggressive Growth Portfolio
Top Five Equity Holdings
September 30, 1995
Altera Corp.
" Altera, founded in 1983, is a world-wide leader in high-performance
high-density programmable logic devices and associated computer-aided
engineering logic development tools. Programmable logic devices are
semiconductor chips that offer onsite programmability to customers.
OfficeMax, Inc..
" OfficeMax operates high-volume, deep-discount office products
superstores in the United States.
" OfficeMax, as of June 30, 1995, operates 403 superstores with
intentions in fiscal year 1995 to open approximately 80 more superstores, along
with 10 new delivery centers, and three new concepts: FurnitureMax, OfficeMax
Online, and CopyMax.
" OfficeMax recently reduced the price of a popular fax machine to a new
industry low of $200, making faxes more appealing to consumer users.
U.S. Robotics, Inc.
" U.S. Robotics designs, manufactures, markets and supports
high-performance data communications products and systems targeted to business
and professional users worldwide.
" U.S. Robotics sells dial-up modems, network management systems, and
data communications software.
" U.S. Robotics recently acquired ISDN Systems Corp. in a $40 million
tax-free exchange of stock.
Xilinx, Inc.
" Xilinx designs, develops, and markets programmable logic devices,
including field programmable gate arrays and erasable programmable logic
devices.
" Xilinx recently announced record levels of sales, operating income, net
income and earnings per share in its first quarter compared to the same quarter
a year earlier.
" Revenue rose by 67% to a record $125.8 million from $75.2 million
reported in the first quarter prior
<PAGE> 6
year.
Applied Materials, Inc.
" Applied Materials designs and manufactures processing systems used by
producers of semiconductor devices and wafer material suppliers in the wafer
fabrication portion of their manufacturing process.
" Net income for the third quarter was up 139% and sales were up 104%.
Capital Appreciation Portfolio
For the period from inception of the Portfolio (December 2, 1994) through
September 30, 1995, the Capital Appreciation Portfolio Class A and Class C
shares had total returns of 35.40% and 34.90%, respectively. By comparison, the
Standard & Poor's 500 Index advanced 31.60% for the same time. We outperformed
our benchmark because we experienced good advances in many of our core
holdings. Performance also benefited from our participation in several
successful initial public stock offerings.
The financial markets continued to perform well through the end of September.
Early in the third quarter, economic growth showed signs of a resurgence after
a weak second quarter. Subsequent economic numbers, however, had a more
consistently negative tone and interest rates declined. There now seems to be a
growing consensus that the economy is weakening and, in fact, some analysts are
beginning to use the "r" word -- recession. Technology, which has been leading
the market, stumbled in September when investors became concerned about a loss
in earnings momentum. In my view, the outlook for technology still remains
unclear at this point. What is unusual about the current economic cycle is that
interest rates are low, reflecting low inflation, which means that any downturn
in the economy should be short-lived. A slow-growth economy is a relatively
benevolent atmosphere for most growth stocks, which can still increase their
earnings even when the economy is weak.
Portfolio holdings that turned in good results during the period encompassed a
broad array of industries, including a number of wireless and paging companies
such as Arch Communications and Paging Network. Even though they moved higher,
I increased all three positions. Trigen Energy, a supplier of alternative
heating and cooling systems to commercial buildings, also appreciated, as did
Exide, the maker of automotive and industrial batteries. I am still holding
both of those positions and our position in First Data, a processor of credit
card transactions that is acquiring competitor First Financial Management.
Post-merger, the new company will be a dominant force in the processing of
credit card transactions, and will create significant synergies. I increased
the position in J.D. Wetherspoon, the British pub company that was another of
the Portfolio's strong performers. Our position in Hospitality Franchise, a
franchisor of popular hotel and motel chains, was increased. The company is
purchasing real estate broker Century 21 and I expect management to pursue many
innovative changes in its business.
New positions that acted well included Black Box, a distributor of catalogues
for networking products, and Medaphis, an outsourcer of physicians' billing. I
took profits in several telecommunications stocks--Nokia (Finnish), Vodaphone
(British), and AirTouch (U.S.) positions were all reduced or liquidated when
new cellular subscriber estimates came in weaker than expected. J.P. Food
Service, a food service distributor, was also sold after it hit my price
target.
As we enter the fourth quarter, I am somewhat cautious on the market. On the
positive side, interest rates are bumping up against the old lows and appear to
be heading down. But the more operative factor in the current market is
earnings. The economy has slowed and companies are facing some of their most
difficult earnings comparisons yet as they go up against the very strong third
and fourth quarters of 1994. The U.S. dollar, which had previously benefited
the earnings of companies with international operations, has strengthened and
is now a drag on earnings.
I am very pleased with this period's performance. But performance tends to come
in fits and starts, in part because this Portfolio does not closely resemble
any of the market indexes. While I cannot in any way predict what our
performance will look like in the future, I am still excited about the
companies our research is uncovering. If we stay focused on finding great
companies, we should continue to do well on a long-term basis.
<PAGE> 7
Capital Appreciation Portfolio
A hypothetical $10,000 invested in Class A and C Shares at inception (12/2/94)
was worth $12,798 and $13,490, respectively.
<TABLE>
<CAPTION>
Total Return*
Capital Appreciation S&P 500 S&P Midcap
Class A** Class C Index*** 400 Index***
<S> <C> <C> <C> <C> <C>
Life of Portfolio
12/02/94 to 09/30/95 27.98% 35.40% 34.90% 31.60% 29.00%
</TABLE>
* Capital Appreciation Portfolio Shares performance includes dividends
and capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results.
** Capital Appreciation Portfolio Class A Shares performance in column 1
reflects the maximum sales charge of 5.5%.
*** The Standard & Poor's 500 Index and Standard & Poor's MidCap 400 Index
are unmanaged indices used as a general measure of market performance.
Calculations assume dividends and capital gains are reinvested and do not
include any managerial expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percentage of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials 4.1% 4.4%
Consumer Cyclical 22.1% 26.2%
Consumer Non-Cyclical 17.6% 16.0%
Financial 15.0% 8.9%
Independent 2.4% 6.3%
Industrial 6.3% 6.2%
Technology 23.3% 16.2%
Utilities 5.1% 4.7%
Short-term securities 1.9% 11.1%
</TABLE>
Capital Appreciation Portfolio
Top Five Equity Holdings
September 30, 1995
Paging Network, Inc.
" Paging Network is the largest paging company in the U.S.
" Paging Network recently announced the purchase of operations of
Celpage, Inc., as well as finalizing a purchase of International Paging Corp.'s
paging assets. The two acquisitions are expected to add 60,000 pagers in
service to Paging Networks cache.
" Paging Network recently completed the acquisition of certain paging
assets from PageAmerica Group, Inc., adding an additional 77,000 subscribers.
R.P. Scherer Corp.
" R.P. Scherer is the world's largest producer of soft gelatin capsules.
" R.P. Scherer develops and makes oral drug delivery systems and produces
soft gelatin capsules used for drugs, vitamins, cosmetics and recreational
products.
" Operating earnings in the quarter ended June 30, 1995, were
$30.2 million, up 11% from the same period last year.
" R.P. Scherer entered into an agreement with Eli Lilly for a joint
venture to develop formulations of a
<PAGE> 8
new Eli Lilly drug for use with R.P. Scherer's oral fast dissolving dosage for
'2yd's.'
Hospitality Franchise System Corp.
" HFS is the world's largest hotel franchiser, with six nationally
recognized brand names: Days Inn, Ramada (in the U.S.), Howard Johnson, Super
8, Parks Inn Int'l. (in the U.S. and Canada), and Village Lodge.
" HFS does not own or operate hotels, but provides services to hotel
operators designed to increase hotel revenues and profitability.
Exide Corp.
" Exide founded in 1888 by Thomas Edison, is the world's largest
manufacturer and marketer of automotive and industrial batteries, as well as
battery accessories, chargers and remanufactured starters and alternators.
" Exide has quadrupled in size since 1989, boasting annual sales of
$2.5 billion.
" Exide is the primary battery supplier to Chrysler Corp. and supplies
Sears Roebuck and Company with its DieHard Weather Handler and specialty
batteries.
First Data Corp.
" First Data provides high-quality, high-volume information processing
and related services, including bankcard processing services, payment
instrument transactions processing and information management and data
processing for the cable industry.
" First Data recently received approval from the FTC and the SEC to
acquire First Financial Management Corp., owner of Western Union, which is the
dominant consumer money transfer company in the U.S.
Global Portfolio
Low interest rates and low inflation continued to fuel U.S. equities markets
during the third quarter of 1995. Moderate economic growth provided an
excellent backdrop for business in the U.S., for growth stocks in particular.
The U.S. economy has indeed landed softly. In Europe, several markets hit
records during the quarter, pushed higher by a decline in interest rates and
the dollar's appreciation against its major competitors, the Japanese yen and
the German mark.
For the year ended September 30, 1995, the Morgan Stanley Capital
International World Index gained 15.00%. By comparison, the Global Portfolio
Class A and Class C shares had total returns of 15.47% and 15.14%,
respectively, during the same period. While our non-technology holdings played
catch-up, we had good performances from a number of stocks across the
portfolio.
In general, our larger positions performed well. SAP, a German multinational
that provides the only fully-integrated business software applications package
that ties accounting, human resources, and manufacturing together, had a strong
showing. We also saw good results from Federated Department Stores, which
gained even though the retail group has been near the back of the pack
recently, and from the Dutch company Wolters Kluwer, a publisher of
professional, medical, legal and scientific journals.
A number of new additions to the Portfolio posted increases, including Chase
Manhattan, which is merging with Chemical Bank. The merger should produce
numerous operating efficiencies and a very strong competitor in the banking
markets. We liquidated several stocks profitably during the period as well.
Among those was Amway Asia, which distributes Amway products in the Pacific
Rim. One of the Portfolio' s few underachievers was DavCo, the largest owner of
Wendy's restaurants, which failed to meet expectations and was sold.
Some of our core positions now are: Kinnevik, the Swedish paper and
paper-packaging conglomerate that has exposure to telecommunications and
media; NTT Data Communications Systems, a software subsidiary of the Japanese
company Nippon Telegraph and Telephone; and Swiss drug developer Roche. All of
these appear quite inexpensive relative to their earnings growth rates.
As we approach year end, we're beginning to experience increased volatility in
the equity markets. This is not at all surprising after the excellent
results of the first nine months. Markets do not always go up as consistently
as they have this year, but if inflation and interest rates remain in check,
and economic growth is moderate, the markets could still make progress.
The trend toward deregulated and more open foreign markets should continue to
create excellent long-term investment opportunities globally. Our research
staff is generating good ideas and still finding stocks at
<PAGE> 9
reasonable prices with outstanding earnings prospects. I will continue to add
these companies to the Portfolio as we move through year end.
Global Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (10/01/92) was
worth $17,387.
A hypothetical $10,000 invested at
Class C inception (10/01/93) was worth
Global Portfolio Class C $13,515
Global Portfolio Class A $13,037
Morgan Stanley Capital International World Index $13,110
<TABLE>
<CAPTION>
Average Annual Total Return*
Global MSCIW
Class A** Class C Index***
<S> <C> <C> <C> <C>
1 Year Ended
09/30/95 9.10% 15.47% 15.14% 15.00%
Life of Class A
10/01/92 to 09/30/95 20.24% 22.53% N/A 14.50%
Life of Class C
10/01/93 to 09/30/95 14.18% 17.46% 16.25% 11.50%
</TABLE>
* Global Portfolio Shares performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
** Global Portfolio Class A Shares performance in column 1 reflects the
maximum sales charge of 5.5%.
*** The Morgan Stanley Capital International World (MSCIW) Index is an
unmanaged index used as a general measure of market performance. Calculations
assume dividends and capital gains are reinvested and do not include any
managerial expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percentage of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials 1.0% 0.3%
Consumer Cyclical 23.0% 31.6%
Consumer Non-Cyclical 14.6% 20.7%
Energy 0.6% 1.1%
Financial 10.8% 4.6%
Independent 7.1% 7.3%
Industrial 10.9% 5.5%
Technology 26.9% 24.4%
Utilities 1.4% 2.4%
Short-term Securities -- 2.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies
and other facts about the Fund.
Global Portfolio
Top Five Equity Holdings
September 30, 1995
<PAGE> 10
Kinnevik AB
" Kinnevik is a large worldwide conglomerate based in Denmark with a
concentration in the communications industry.
" Kinnevik reported that its subsidiary, Millicom International Cellular,
reported a 101% increase in subscribers compared to a year earlier.
" Sales are up in the first half of 1995 by over 24% over the first half
of 1994.
Astra AB
" Astra continues to be one of the fastest growing pharmaceutical
companies in the world with first half 1995 sales are up 35.6% over the first
half of 1994.
" Since the establishment of Astra Merck Inc., producer of Losec
(marketed in the U.S. as Prilosec) U.S. sales rose 74% from the same period a
year ago.
Roche Holding AG
" Roche Holding, based in Switzerland, is one of the world's largest drug
producers.
" The Company reported a better-than-expected increase in pharmaceutical
sales with a 16% increase during the 9 month period ended September 30, 1995.
" Roche Holding recently submitted an application for approval with the
U.S. Food and Drug Administration for its new drug Invirase, a drug that
appears to slow down the progression of the AIDS virus.
SAP AG-Vorzug
" SAP is the world's leading provider of client-server business
applications. SAP is a pioneer in the development of integrated software
applications, collaborating with business and its executives worldwide to
develop software that meets the complex needs of today's global businesses.
" 1995 half-year net profits were up 80% to $100 million, with sales for
the half year rising 67% to $824 million, over the comparable period last year.
Millicom International Cellular SA
" M.I.C. recently reported that it added 33,107 cellular subscribers
worldwide in the second quarter. Total subscribers have doubled over the past
12 months.
" M.I.C. recently announced the acquisition of an 18.5% interest in
Mobile Telecommunications, a Lithuanian cellular telephone operator.
Global Portfolio
Global Portfolio
Investment Holdings By Country
September 30, 1995
As a percentage of Net Assets
<TABLE>
<S> <C>
United States
Long-term securities 13.40%
Short-term securities and Other 3.70
17.10
Europe
Austria 1.21
Belgium 1.02
Denmark 0.23
Finland 5.90
France 2.20
Germany 10.24
Italy 0.75
Luxembourg 0.86
</TABLE>
<PAGE> 11
<TABLE>
<S> <C>
Netherlands 5.89
Norway 0.25
Spain 0.65
Sweden 13.88
Switzerland 3.61
United Kingdom 2.56
49.25
Africa
South Africa 0.04%
Latin America
Brazil 1.75
Mexico 2.45
4.20
Asia/Pacific Rim
Hong Kong 2.58
India 0.84
Indonesia 3.28
Japan 18.73
South Korea 0.68
Thailand 0.48
26.59
Australia
Australia 2.83
</TABLE>
Balanced Portfolio
The rally in the U.S. financial markets continued through the end of September.
Economic growth remained moderate, even though there were some signs of
strength as the economy worked off the inventory build-up that occurred earlier
in the year. The rate of inflation continued to be quite low, held down by
historically slow increases in unit labor costs. Together, these factors
produced a positive environment for growth stocks and a firm bond market.
For the period from inception of the Portfolio (December 2, 1994) through
September 30, 1995, the Balanced Portfolio Class A and Class C shares had total
returns of 15.27% and 14.77%, respectively. Over the same period, the Standard
& Poor's 500 Index gained 31.60% and the Lehman Brothers Long
Government/Corporate Index advanced 14.70%. The growth section of the Portfolio
generally performed well over the period, while the majority of the
fixed-income portion remained invested in three to five-year bonds. While these
maturities are shorter than our benchmark index, I am maintaining the position
because yields are competitive with those on longer maturities. And given the
current low level of interest rates, they do not run as much risk of price
declines should interest rates turn up.
Within the fixed-income sector of the portfolio, corporate bonds are the
largest component comprising more than 30% of assets. In a strong business
cycle with low interest rates, corporate bonds have an excellent risk/reward
profile because their higher yields are supported by solid corporate
fundamentals. Current cash level is around 14%.
The equity portion of the Portfolio remains around 50% and continues to
emphasize large growth stocks. I continue to focus on companies that are using
excess cash to buy back a significant portion of their stock as a means of
returning profits to shareholders. Outsourcing of complex operational
functions, such as data processing, also continues to be an area of emphasis.
The technology sector is being reduced. Technologies stumbled in September and
came under profit-taking when the market began to worry about the
sustainability of earnings momentum.
Many of our larger holdings have appreciated. Information processor EDS
(General Motors E) moved up on the
<PAGE> 12
news that General Motors was spinning off the company. First Data Corporation
is pursuing its acquisition of competitor First Financial Management; the
merger will combine the major credit card transaction processor for banks with
the major processor for merchants, creating enormous synergies. Our insurance
stocks also performed well; UNUM, which has a large segment of the disability
market, moved higher, as did reinsurer General Re. Hershey Foods also posted
good results. In the banking area, Bank of New York is building market share
via acquisitions of regional banks, while Citicorp, a new addition this period,
has a share repurchase program that is getting investors' attention.
Other additions to the Portfolio during the period included: chemical
manufacturer Hercules, also engaged in a major share repurchase program; NBD
Bancorp, which is merging with First Chicago; and reinsurer Risk Capital. On
the sell side, we took profits in Newell Corp., a distributor of consumer
products, and Minerals Technology, the sole supplier of a cost-reducing agent
(precipitated calcium carbonate) for the paper industry. We also reduced our
positions in J.P. Morgan and Federated Department Stores.
After such a sharp run-up in the equity markets, investor expectations are
high. It would not be too surprising to encounter volatility in the broad
market going into year end. In addition, the rally has been led by technology,
which is an especially volatile sector. I intend to take advantage of any
volatility to purchase stocks at lower prices than we might obtain when the
market is steadily rising. Greater price fluctuation can present a greater
opportunity to add value.
Balanced Portfolio
A hypothetical $10,000 invested in Class A and C Shares at inception (12/2/94)
was worth $10,893 and $11,477, respectively.
<TABLE>
<CAPTION>
Total Return*
Balanced LBLGCB S&P 500
Class A** Class C Index*** Index***
<S> <C> <C> <C> <C> <C>
Life of Portfolio
12/02/94 to 09/30/95 8.93% 15.27% 14.77% 14.70% 31.60%
</TABLE>
* Balanced Portfolio Shares performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
** Balanced Portfolio Class A Shares performance in column 1 reflects the
maximum sales charge of 5.5%.
*** The Standard & Poor's 500 Index and Lehman Brothers Long
Government/Corporate Bond (LBLGCB) Index are unmanaged indices used as a
general measure of market performance. Calculations assume dividends and
capital gains are reinvested and do not include any managerial expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percentage of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials 5.7% 1.9%
Consumer Cyclical 19.4% 22.9%
Consumer Non-Cyclical 13.7% 16.1%
Financial 23.0% 16.1%
Independent 0.7% --
Industrial 8.5% 4.3%
Technology 12.3% 6.2%
Long-term U.S. Gov't securities 5.2% 3.9%
Short-term securities 13.9% 20.6%
</TABLE>
This material must be preceded or accompanied by the Fund's current
prospectus which includes information about the sales commissions, objectives,
policies and other facts about the Fund.
<PAGE> 13
Balanced Portfolio
Top Five Equity Holdings
September 30, 1995
Robert Half International, Inc.
" Robert Half operates the world's largest specialized provider of
temporary and permanent personnel in the fields of accounting and finance. The
company has two main divisions, Accountemps and Robert Half, which provide
temporary and permanent personnel, respectively.
" Robert Half reported a 55% increase in service revenues in first
quarter 1995 compared to 1994, attributable to the rising need for specialized
staffing services.
SAP AG-Vorzug
" SAP is the world's leading provider of client-server business
applications. SAP is a pioneer in the development of integrated software
applications, collaborating with business and its executives worldwide to
develop software that meets the complex needs of today's global business.
" 1995 half-year net profits were up 80% to $100 million, with sales for
the half-year rising 67% to $824 million, over the comparable period last year.
General Motors Corp.
" General Motors is the largest manufacturer of automobiles in the world.
The Company also produces defense products such as military vehicles, radar and
weapons control systems, guided missile systems, and defense satellites.
" The Canadian Division, GM Canada, signed an agreement with Canadian
National Railways to sell 175 locomotives, the single largest locomotive order
Canadian National has ever placed.
" GM's subsidiary, Hughes Electronic Corp., reached an agreement with
Carlyle Group L.P. to purchase Magnavox Electronic Systems Co. for $370
million cash.
UNUM Corp.
" UNUM provides life, disability, and health insurance. Related products
include group pension products and reinsurance. UNUM's affiliates include UNUM
Life Insurance Company of America, the nation's leading provider of disability
insurance and retirement products.
" Revenues for the first quarter of 1995 were $955.1 million versus
$875.1 million for the same quarter in 1994, an increase of over 9%.
First Data Corp.
" First Data provides high-quality, high-volume information processing
and related services, including bankcard processing services, payment
instrument transactions processing and information management and data
processing for the cable industry.
" First Data recently received approval from the FTC and the SEC to
acquire First Financial Management Corp., owner of Western Union, which is the
dominant consumer money transfer company in the United States.
Equity-Income Portfolio
For the period from inception of the Portfolio (December 2, 1994) through
September 30, 1995, total returns for Class A and Class C shares was 18.43% and
17.95%, respectively. For comparative purposes, over the same period the
Standard &Poor's 500 Index advanced 31.60% and the Lehman Brothers Intermediate
Government/Corporate Bond Index gained 11.80%. The Portfolio is invested in
common stocks, convertible securities, intermediate-term corporate bonds, and
cash.
Stock market leadership broadened during the year's second and third quarters
to include groups that have lagged the market for several quarters. As various
industries warned investors of third quarter earnings shortfalls, companies
with more certain earnings growth characteristics may be emerging as the new
leadership. After strong corporate profit growth over the last four years, that
growth rate is expected to slow for the balance of this year and the next as
well. Reasons for the expected profit slowdown include slow economic growth,
poor
<PAGE> 14
growth in the economies of our trading partners, and strength in the U.S.
dollar. Companies that can deliver good earnings growth in late 1995 and into
1996 will be less plentiful than we've witnessed during the recent period when
overall corporate profits grew rapidly. During these slowdowns, companies that
can consistently deliver earnings growth become more attractive to investors as
the sustainability of profit growth across the economy is less certain.
In addition to investing in companies with consistent growth patterns, our
investment philosophy concentrates on companies that are well-financed and
attractively valued. Investing in companies with strong capital structures is
inherently less risky than depending on growth from financially leveraged
companies. As the economy has generally been in an expansion mode over the last
four years, the market has not placed a valuation premium on better capitalized
companies. As earnings and cash flow growth become more difficult to achieve,
well-capitalized companies should begin to command their historical premium as
investors attempt to control financial risk.
Based on our outlook, we have been adding to holdings in consumer goods,
beverages, financials, and convertible securities. We have maintained our bond
holdings but allowed cash reserves to build as the flattening of the yield
curve seems to be discounted. Yields at longer maturities are not providing
enough extra return to compensate for the risk. The Portfolio asset mix at
period end was 65.9% stocks, 8.6% convertible securities, 7.6% corporate bonds,
8.3% government bonds and 9.6% in cash and receivables minus liabilities.
The Equity-Income Portfolio remains focused on stocks of companies with strong
balance sheets, established market shares within their industries, and high and
sustainable returns on shareholders' equity. We continue to have an
above-average holding in medium-sized companies where valuations still appear
more reasonable than the large-capitalization issues. We also continue to focus
on consolidation within industries as a logical theme for several reasons:
corporate cash flows are strong, share prices are high for many companies
seeking to grow through acquisition, the dollar remains undervalued making
foreign purchases of U.S. businesses cheaper, and credit is widely available to
pursue deals.
Equity-Income Portfolio
A hypothetical $10,000 invested in Class A and C Shares at inception (12/2/94)
was worth $11,193 and $11,795, respectively.
<TABLE>
<CAPTION>
Total Return*
Equity-Income LBIGCB S&P 500
Class A** Class C Index*** Index***
<S> <C> <C> <C> <C> <C>
Life of Portfolio
12/02/94 to 09/30/95 11.93% 18.43% 17.95% 11.80% 31.60%
</TABLE>
* Equity-Income Portfolio Shares performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results.
** Equity-Income Portfolio Class A Shares performance in column 1 reflects
the maximum sales charge of 5.5%.
*** The Standard & Poor's 500 Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a
general measure of market performance. Calculations assume dividends and
capital gains are reinvested and do not include any managerial expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percentage of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials 13.5% 6.2%
</TABLE>
<PAGE> 15
<TABLE>
<S> <C> <C>
Consumer Cyclical 10.9% 5.8%
Consumer Non-Cyclical 18.2% 9.9%
Energy 8.6% 6.9%
Financial 9.3% 5.4%
Independent 3.4% 2.9%
Industrial 12.8% 18.4%
Technology 4.5% 6.7%
Utilities 0.9% 1.7%
Long-term U.S. Gov't securities 8.3% 20.0%
Short-term securities -- 16.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies
and other facts about the Fund.
Equity-Income Portfolio
Top Five Equity Holdings
September 30, 1995
Arcadian Corp.
" Arcadian, formed in 1989, is the largest producer and distributor of
nitrogen fertilizers and chemicals in the Western hemisphere.
" Revenues for the fiscal year ending 1994 were up 37% over the prior
year's revenues and operating income was up 89% over the same period of the
prior year.
General Electric Company
" General Electric is a diversified manufacturer and marketer engaged in
many lines of business including high technology consumer and commercial
electrical and related products, aerospace, electrical supply houses, financial
services, commercial leasing and entertainment.
" General Electric reported record earnings for the second quarter of
1995 with earnings per share up 12% over 1994's second quarter. Revenues also
made great advances, up 19% over 1994's second quarter.
RJR Nabisco Holdings Corp.
" RJR Nabisco, through wholly-owned RJR Nabisco, Inc., conducts tobacco
and food businesses. The company's largest selling cookie brands include Oreo,
Chips Ahoy and Newtons.
" RJR Nabisco has agreed to purchase 50% of Royal Beech-Nut Ltd. to help
bolster its world-wide distribution.
" Net income for the six months ended June 30, 1995 is up 53% compared to
the same period in 1994.
Olin Corp.
" Olin is a multi-segment company which operates primarily in chemical
production, metal fabrication, and defense and ammunition production.
" Olin has a metal cladding process that has made the company a large
supplier of metal to the U.S. Mint and foreign governments.
H.J. Heinz Company
" H.J. Heinz operates principally in the manufacture, packaging, and
marketing of an extensive line of processed food products. Most notable are
Heinz ketchup, Starkist tuna products, 9-Lives cat food, Weight Watchers,
Ore-Ida, and Steak-Umms.
" H.J. Heinz recently reported that half of its operating income in
fiscal 1994 came from foreign operations as the Company's products are widely
distributed around the world.
" Operating income rose 18% in the first quarter of 1995 compared to
first quarter 1994.
Income Plus Portfolio
<PAGE> 16
For the year ended September 30, 1995, total returns for the Income Plus
Portfolio Class A and C shares were 15.85% and 15.08%, respectively. The
Merrill Lynch High Yield Master Index for the same period was up 16.64%. The
performance of the Portfolio compared quite well with the average high-yield
fund. High-yield bonds and investment-grade securities performed well during
the period. During the early part of our fiscal year, investors were still
unsettled as a result of the dramatic rise in interest rates since the
beginning of 1994. This pessimistic mood of investors coupled with our belief
that the economy would eventually weaken led us to increase the Portfolio's
investment-grade exposure and its duration. At the same time, we upgraded the
quality of our high-yield bond holdings as we reduced their weighting as a
percentage of the Portfolio. When investors finally jumped on the market
bandwagon in early June, we became decidedly more cautious. Our caution
translated into a higher cash level for the Portfolio.
The Federal Reserve Board (the "Fed") has continued its policy of fine-tuning
the economy. Historically, "soft landings" often become recessions, but given
the low level of inflation in this particular cycle, the Fed has enjoyed an
extreme amount of flexibility. Unlike other cyclical upturns in the economy
that produced rising unit labor costs, this particular cycle has seen these
costs remain subdued. This is extremely important given the significant
correlation of unit labor costs and inflation. Altogether, we remain quite
optimistic regarding any near-term inflation threat.
While an increase in interest rates is the key risk to the Portfolio, we
continue to prefer interest rate risk over credit risk, although not at the
same enthusiastic levels of a year ago. And even though interest rates appear
to be at the lower end of the expected range for the intermediate future, we
remain long-term bullish on the secular trend of interest rates.
The valuation level and the optimistic outlook by investors for high-yield
bonds does not provide an adequate return for the comparative risks. With
spreads as tight as anytime in the past fifteen years, they will, at best, earn
just a coupon return over the foreseeable future. Our indicators that measure
short-term economic sensitivity imply potential disappoint-ment for future
reported corporate earnings. If so, the equity-like characteristics of
high-yield bonds should be reflected in their relative performance, i.e.,
higher quality high-yield bonds should outperform lower quality high-yield
bonds. More importantly, high-yield bonds may be entering a period of
underperformance relative to high-grade bonds.
The near-term outlook for the Income Plus Portfolio remains moderately
favorable. The long-term secular bull market in bonds appears intact. While
some short-term setbacks will always occur, long-term forces such as
demographics, debt contraction, and globalization of unit labor costs still
suggest interest rates could see much lower levels.
Income Plus Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (06/14/85) was
worth $27,624.
A hypothetical $10,000 invested at
Class C inception (10/01/93) was worth
Income Plus Portfolio Class C $10,985
Income Plus Portfolio Class A $10,672
Merrill Lynch High Yield Master Index $11,867
<TABLE>
<CAPTION>
Average Annual Total Return*
Income Plus MLHYM
Class A** Class C Index***
<S> <C> <C> <C> <C>
1 Year Ended
09/30/95 10.31% 15.85% 15.08% 16.64%
5 Years Ended
09/30/95 10.78% 11.87% N/A 16.33%
10 Years Ended
09/30/95 10.20% 10.74% N/A 12.05%
Life of Class C
10/01/93 to 09/30/95 3.31% 5.85% 4.80% 8.94%
</TABLE>
<PAGE> 17
* Income Plus Portfolio Shares performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
** Income Plus Portfolio Class A Shares performance in column 1 reflects
the maximum sales charge of 4.75%.
*** The Merrill Lynch High Yield Master (MLHYM) Index is an unmanaged
index used as a general measure of market performance. Calculations assume
dividends and capital gains are reinvested and do not include any managerial
expenses.
<TABLE>
<CAPTION>
Investments By Major Industry
As a percentage of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials 8.2% 8.2%
Consumer Cyclical 11.9% 17.4%
Consumer Non-Cyclical 23.3% 26.2%
Energy 11.0% 8.9%
Financial 5.5% 9.3%
Industrial 13.4% 15.1%
Technology 1.4% 1.4%
Utilities 7.8% 5.2%
Short-term securities 14.2% 3.0%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies
and other facts about the Fund.
Flexible Income Portfolio
The U.S. economy appears to have completed a soft landing. Growth is moderate,
with areas of strength offset by areas of weakness. Construction, housing and
housing-related items, such as furniture and appliances, have been strong, as
have technology and communications. Auto sales also rebounded during the
summer. Retail sales were weak when seasonal factors, such as back-to-school
sales, are factored in. Wage and income growth have also been anemic. The
Federal Reserve Board stayed on the sidelines during the summer in the face of
a very tame inflation picture.
For the year ended September 30, 1995, the Flexible Income Portfolio Class
A and Class C shares had total returns of 11.57% and 10.95%, respectively. For
the same period, the Lehman Brothers Long Government/Corporate Bond Index
advanced 14.40%. The Portfolio benefited from a slight decline in Treasury
issues, providing advances in our 10-year Treasury bonds. Corporate and
high-yield/high-risk bonds still make up the core of the Portfolio's holdings.
When business conditions are as favorable as they are right now, corporate
bonds offer better yields, often supported by improving fundamentals. Under
such conditions the risk/reward ratio places corporate credits in a favorable
light.
Investment-grade bonds have been performing in line with Treasuries but have
produced a higher yield. High-yield/high-risk (junk) bonds have been the best
performers due to their superior yields. Stable interest rates allow high-yield
debt to show its performance mettle because bond results are more affected by
yield than by price when rates hold in a narrow range. Portfolio performance
was also enhanced by our participation in the new issue convertible market
where we found a number of bargains.
A new holding in the Portfolio is U.S. Gypsum. USG is de-leveraging its balance
sheet after a difficult past. The bonds are rated BB by Standard & Poor's
Rating Services, but we believe management will reduce debt. Centerbank is
another addition. This issue is one of the cheapest bonds in the banking
industry, according to our analysis. We believe the bank will be helped by
broad consolidation in the banking industry.
Going forward we will focus closely on U.S. Congressional budget negotiations
and on any signs of accelerating economic growth. Significant budget reduction
would be a real positive for the financial markets. We will also
<PAGE> 18
continue to carefully monitor the bonds we invest in. Research is the key
to gaining an advantage in the corporate debt market, which is currently the
area of greatest fixed-income opportunity. And as long as economic growth is
moderate and inflation rates are low, this sector should remain strong. If
current conditions continue in place, I expect a firm bond market as we
approach year end 1995 and begin 1996.
Flexible Income Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (06/29/87) was
worth $18,245.
A hypothetical $10,000 invested at
Class C inception (10/01/93) was worth
<TABLE>
<S> <C>
Flexible Income Portfolio Class C $10,832
Flexible Income Portfolio Class A $10,439
Lehman Brothers Long Gov./Corp. Bond Index $10,960
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return*
Flexible Income LBLGCB
Class A** Class C Index***
<S> <C> <C> <C> <C>
1 Year Ended
09/30/95 6.27% 11.57% 10.95% 14.40%
5 Years Ended
09/30/95 11.38% 12.48% N/A 9.90%
Life of Class A
06/29/87 to 09/30/95 7.48% 8.19% N/A 9.30%
Life of Class C
10/01/93 to 09/30/95 2.17% 4.69% 4.07% 4.70%
</TABLE>
* Flexible Income Portfolio Shares performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results.
** Flexible Income Portfolio Class A Shares performance in column 1
reflects the maximum sales charge of 4.75%.
*** The Lehman Brothers Long Government/Corporate Bond (LBLGCB) Index is an
unmanaged index used as a general measure of market performance. Calculations
assume dividends and capital gains are reinvested and do not include any
managerial expenses.
Investments By Major Industry
<TABLE>
<CAPTION>
As a percentage of Net Assets
September 30, 1995
9/30/95 3/31/95
<S> <C> <C>
Basic Materials -- 1.2%
Consumer Cyclical 22.8% 10.8%
Consumer Non-Cyclical 10.0% 9.9%
Energy 6.1% 8.3%
Financial 22.1% 21.1%
Industrial 9.4% 15.0%
Technology 12.9% 14.6%
Utilities -- 1.6%
Long-term U.S. Gov't securities 12.6% 14.2%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies
and other facts about the Fund.
<PAGE> 19
Tax-Exempt Portfolio
Based on total return, the Tax-Exempt Portfolio performed adequately versus its
benchmark index during the latest period. For the year ended September 30,
1995, the Tax-Exempt Portfolio Class A and Class C shares had total returns of
7.75% and 7.48%, respectively. By comparison, the Lehman Brothers Long
Municipal Bond Index advanced 11.20% for the same period.
The tax-exempt bond market has seen marked volatility this year. Each step
forward has seemingly been followed by a step back. A recent short-term supply
surge has slowed the momentum that drove tax-exempt prices for the first half
of the year. Several factors account for the volatility seen during the last
six months: overall declining new issue supply, continued fallout from the
Orange County default, and the prospects of a radical tax reform plan.
The type of bonds investors are buying reflects the cautious tone of the
current tax-exempt market. Due in part to the Orange County default, high-grade
issues rated A and higher are in demand. Since the Portfolio remains 75%
invested in AAA-rated and AA-rated bonds with the remainder invested in A-rated
securities, we have benefited from the increased demand for high-grade bonds.
Many municipal investors have gotten caught up in the hype surrounding the
possibility of a flat tax and have shied away from municipal securities. As a
result, they have ignored the strong fundamentals that exist in the municipal
marketplace. Historically, the market has overreacted to negative news, and
this news is no different. Since April, tax-exempt investors have steadily
pulled cash out of mutual funds because of a concern over the prospects of a
radical tax reform plan. Such proposed reforms include the flat tax and the
consumption tax proposals, both of which could eliminate the tax advantage of
owning municipal bonds entirely.
Although I believe the odds of passing the most radical proposals are low, the
prospects for some type of fundamental reform of the nation's tax code
are rising. But the housing industry, charitable institutions, state and local
governments, large corporations, retailers, and social engineers in Washington
are all likely to voice strong opposition against the most radical reform
plans. In the end, it's likely that a compromise will be reached that will
water down the most objectionable aspects of the competing plans. My thought is
that taxpayers will not see a major tax law rewrite until 1997 or beyond. I do
believe the flat tax idea will play a major role in the 1996 presidential
campaigns, however, and as a result, municipal bond prices may fluctuate more
than usual once the campaigns begin in earnest. While some investors will worry
about the possible demise of municipal bonds in light of major tax reform,
savvy investors may recognize this situation as a buying opportunity. For high
earners with a long-term perspective, municipal bonds continue to offer good
value.
Tax-Exempt Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (04/01/85) was
worth $21,635.
A hypothetical $10,000 invested at
Class C inception (10/01/93) was worth
<TABLE>
<S> <C>
Tax-Exempt Portfolio Class C $10,670
Tax-Exempt Portfolio Class A $10,223
Lehman Brothers Long Municipal Bond Index $10,850
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return*
Tax-Exempt LBLMB
Class A** Class C Index***
<S> <C> <C> <C> <C>
1 Year Ended
09/30/95 2.66% 7.75% 7.48% 11.20%
5 Years Ended
09/30/95 6.18% 7.22% N/A 8.90%
10 Years Ended
09/30/95 7.70% 8.23% N/A 9.60%
Life of Class C
10/01/93 to 09/30/95 1.11% 3.60% 3.29% 4.10%
</TABLE>
<PAGE> 20
* Tax-Exempt Portfolio Shares performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
** Tax-Exempt Portfolio Class A Shares performance in column 1 reflects
the maximum sales charge of 4.75%.
*** The Lehman Brothers Long Municipal Bond (LBLMB) Index is an unmanaged
index used as a general measure of market performance. Calculations assume
dividends and capital gains are reinvested and do not include any managerial
expenses.
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies
and other facts about the Fund.
IDEX II Series Fund
TRUSTEES
Peter R. Brown
Largo, Florida
Chairman of the Board,
Peter Brown Construction Company
James L. Churchill
Hilton Head, South Carolina
Retired; former President of the Avionics
Group of Rockwell International Corporation
Charles C. Harris
Belleair, Florida
Retired; former Senior Vice President Western
Reserve Life Assurance Co. of Ohio
G. John Hurley
Largo, Florida
President and Chief Executive Officer
of the Fund;
President and Chief Executive Officer
of InterSecurities, Inc.
John R. Kenney
Largo, Florida
Chairman of the Board of the Fund;
Chairman of the Board of InterSecurities, Inc.
William W. Short, Jr.
Largo, Florida
Chairman, Southern Apparel Corporation
and S.A.C. Distributors
Jack E. Zimmerman
Dayton, Ohio
Retired; former Director, Regional Marketing,
Martin Marietta Corporation
TRANSFER AGENT
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, Florida 34618-9015
OFFICERS
<PAGE> 21
John R. Kenney
Chairman of the Board
G. John Hurley
President and Chief
Executive Officer
Thomas R. Moriarty
Senior Vice President
William H. Geiger
Vice President and
Assistant Secretary
Leslie E. Martin, III
Vice President - Marketing
Becky A. Ferrell
Vice President, Counsel
and Secretary
Christopher G. Roetzer
Assistant Vice President and
Principal Accounting Officer
Richard B. Franz II
Treasurer
Our corporate offices
are located at:
201 Highland Avenue
Largo, Florida 34640
CUSTOMER SERVICE
(800) 851-9777
Hours: 8 a.m. to 7 p.m. Eastern time
IDEX Assist Line
(800) 421-IDEX (4339)
24-hour automated account information
INVESTMENT
ADVISERS
Idex Management, Inc.
201 Highland Avenue
Largo, Florida 34640
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 34640
SUB-ADVISERS
AEGON USA
Investment Management, Inc.
4333 Edgewood Road, N.E.
<PAGE> 22
Cedar Rapids, Iowa 52499
Dean Investment Associates
2480 Kettering Tower
Dayton, Ohio 45423
Fred Alger & Company
30 Montgomery Street
Jersey City, New Jersey 07302
Janus Capital Corporation
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Luther King Capital
Management Corporation
301 Commerce Street, Suite 1600
Ft. Worth, Texas 76102
PRINCIPAL
UNDERWRITER
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 34640
CUSTODIAN
Investors Fiduciary Trust Company
Kansas City, Missouri 64105
Please send all correspondence to the Transfer Agent
INDEPENDENT
ACCOUNTANTS
Price Waterhouse LLP
1055 Broadway
Kansas City, Missouri 64105
If you receive duplicate mailings because you have more than one account in the
same Fund or in the IDEX II Series, at the same household, you may wish to save
your Fund money by consolidating your accounts by address. Please call IDEX
Customer Service at (800) 851-9777.
IN MEMORY OF
Truman H. Sims
Truman, who served the shareholders of the IDEX Mutual Funds since their
inception in 1985, died August 5, 1995. His contribution as a founding
trustee will be greatly missed by his fellow trustees, the officers and the
shareholders of the Funds.
<PAGE> 23
September 30, 1995
SCHEDULE OF INVESTMENTS
AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
COMMON STOCK (110.8%)
CONSUMER CYCLICAL (11.8%)
CASINOS (0.3%)
2,000 Circus Circus Enterprises, Inc. * $ 56,000
CLOTHING/FABRIC (0.6%)
3,400 Tommy Hilfiger Corp. * 110,500
ENTERTAINMENT (1.6%)
2,000 Walt Disney Company 114,750
3,500 Viacom Inc. Class B * 174,125
288,875
LODGING (1.5%)
10,000 La Quinta Inns, Inc. 280,000
RESTAURANTS (2.5%)
2,000 Apple South, Inc. 45,500
10,000 Lone Star Steakhouse & Saloon, Inc. 410,000
455,500
RETAILERS - DRUG BASED (1.0%)
3,400 Cardinal Health, Inc. 188,275
RETAILERS - SPECIALTY (4.3%)
10,000 Global DirectMail Corp. * 246,250
22,800 OfficeMax, Inc. * 552,900
799,150
CONSUMER NON-CYCLICAL (11.5%)
CONSUMER SERVICES (1.9%)
600 Loewen Group, Inc. 24,750
8,200 Service Corp. International 320,825
345,575
FOOD - OTHER (0.1%)
700 Cracker Barrel Old Country Store, Inc. 14,087
HEALTH CARE (3.8%)
500 Health Management Association, Inc.
Class A * 16,063
6,600 Healthsource, Inc. 317,625
3,300 Oxford Health Plans, Inc. * 240,075
3,900 Phycor, Inc. * 133,575
707,338
PHARMACEUTICALS (5.7%)
5,000 Biochem Pharmaceuticals, Inc. * 159,375
4,300 Eli Lilly and Company 386,462
4,100 Merck & Company, Inc. 229,600
600 Omnicare, Inc. 23,400
5,000 SmithKline Beecham PLC # 253,125
1,051,962
FINANCIAL (2.3%)
DIVERSIFIED (2.0%)
800 ADVANTA Corp. Class B 34,000
3,400 First Financial Management Corp. 331,925
365,925
SECURITIES BROKERS (0.3%)
1,100 Lehman Brothers Holdings, Inc. 25,438
600 Merrill Lynch and Company, Inc. 37,500
62,938
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
INDUSTRIAL (3.0%)
ELECTRONIC COMPONENTS AND EQUIPMENT (1.0%)
5,000 Read-Rite Corp. * $ 182,500
FACTORY EQUIPMENT (2.0%)
10,000 Kulicke and Soffa Industries, Inc. * 365,000
TECHNOLOGY (82.2%)
ADVANCED MEDICAL DEVICES (0.3%)
1,200 Medtronic, Inc. 64,500
AEROSPACE/DEFENSE (2.5%)
1,500 Lockheed Martin Corp. 100,687
2,900 McDonnell Douglas Corp. 239,975
7,700 Tracor, Inc. * 127,050
467,712
BIOTECHNOLOGY (0.5%)
1,800 Amgen, Inc. * 89,775
COMMUNICATIONS (14.0%)
6,900 ADC Telecommunications, Inc. * 313,950
1,000 Andrew Corp. * 61,125
8,400 DSC Communications Corp. * 497,700
6,850 Glenayre Technologies, Inc. * 493,200
4,300 Motorola, Inc. 328,413
1,800 Network Equipment Technologies, Inc. * 74,925
6,600 Tekelec * 148,500
3,000 Tellabs, Inc. * 126,375
6,400 US Robotics Corp. 545,600
2,589,788
COMPUTERS (14.5%)
6,000 Bay Networks, Inc. * 320,250
1,300 Cisco Systems, Inc. * 89,700
1,800 Dell Computer Corp. * 153,000
4,400 Hewlett-Packard Company 366,850
2,000 International Business Machines Corp. 188,750
6,000 Micron Technology, Inc. 477,000
5,300 Silicon Graphics, Inc. * 182,187
6,300 Storemedia, Inc. Class A * 285,075
14,500 Teradyne, Inc. * 522,000
2,000 3COM Corp. * 91,000
2,675,812
DIVERSIFIED (2.2%)
5,000 Texas Instruments, Inc. 399,375
INDUSTRIAL (13.1%)
6,400 AG Associates, Inc. * 163,200
8,000 ASM Lithography Holding N.V. # * 351,000
10,900 C.P. Clare Corp. * 277,950
10,300 FSI International, Inc. * 342,475
6,000 Gasonics International Corp. * 223,500
900 Lam Research Corp. * 53,775
9,600 OnTrak Systems, Inc. * 265,200
10,000 Opal Inc. * 182,500
2,100 PRI Automation, Inc. * 86,100
1,800 Silicon Valley Group, Inc. * 69,525
4,000 Tencor Instruments * 177,000
5,500 Ultratech Stepper, Inc. * 232,375
2,424,600
OFFICE EQUIPMENT (1.2%)
800 Alco Standard Corp. 67,800
3,800 Viking Office Products, Inc. * 158,650
226,450
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 24
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
TECHNOLOGY (CONTINUED)
SEMICONDUCTORS (25.5%)
5,000 Alliance Semiconductor Corp. * $ 198,750
8,900 Altera Corp. * 555,138
5,200 Applied Materials, Inc. * 531,700
5,600 Burr-Brown Corp. * 208,600
6,000 Cirrus Logic, Inc. * 343,500
2,600 Intel Corp. 156,325
1,600 Linear Technology Corp. 66,400
6,700 LSI Logic Corp. * 386,925
6,400 Maxim Integrated Products, Inc. * 473,600
9,200 MEMC Electronic Materials, Inc. * 249,550
13,800 Micro Linear Corp. * 215,625
6,700 Microchip Technology, Inc. * 253,762
10,200 Paradigm Technology, Inc. * 313,650
1,000 TriQuint Semiconductor, Inc. * 22,875
6,000 VLSI Technology, Inc. * 205,500
11,200 Xilinx, Inc. * 539,000
4,720,900
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
SOFTWARE (8.4%)
4,300 Electronics for Imaging, Inc. * $ 307,988
11,000 Informix Corp. * 357,500
4,000 Medic Computer Systems, Inc. * 203,000
2,800 Microsoft Corp. * 253,400
7,500 Pinnacle Systems, Inc. * 230,625
2,200 Softkey International, Inc. * 97,350
2,400 Wonderware Corp. * 93,300
1,543,163
TOTAL COMMON STOCK (COST $17,470,152) 20,475,700
PREFERRED STOCK (0.7%)
TECHNOLOGY
DIVERSIFIED
1,800 Nokia AB OY # (cost $73,395) 125,550
TOTAL INVESTMENTS (111.5%) (COST $17,543,547) 20,601,250
LIABILITIES IN EXCESS OF OTHER ASSETS (-11.5%) (2,118,650)
NET ASSETS (100.0%) $ 18,482,600
</TABLE>
<PAGE> 25
September 30, 1995
SCHEDULE OF INVESTMENTS
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
COMMON STOCK (93.0%)
BASIC MATERIALS (4.1%)
CHEMICAL - SPECIALTY
2,000 Cambrex Corp. $ 80,500
7,450 Minerals Technology, Inc. 280,306
360,806
CONSUMER CYCLICAL (22.1%)
AUTO PARTS & EQUIPMENT (6.5%)
8,200 APS Holding Corp. Class A * 198,850
7,500 Exide Corp. 375,000
573,850
LODGING (5.9%)
9,950 Hospitality Franchising System Corp. 521,131
RESTAURANTS (4.1%)
31,479 J.D. Wetherspoon PLC + * 307,167
1,400 Lonestar Steakhouse & Saloon, Inc. * 57,400
364,567
RETAILERS - DRUG-BASED (1.8%)
2,825 Cardinal Health, Inc. 156,434
RETAILERS - SPECIALTY (3.8%)
2,050 General Nutrition Companies, Inc. * 92,250
9,450 Petco Animal Supplies, Inc. * 245,700
337,950
CONSUMER NON-CYCLICAL (17.6%)
CONSUMER SERVICES (2.5%)
2,475 CUC International, Inc. * 86,316
1,119 Loewen Group, Inc. 46,159
2,225 Service Corp. International 87,053
219,528
FOOD - OTHER (0.8%)
1,990 Huhtamaki OY + 68,427
HEALTH CARE (2.5%)
3,675 HEALTHSOUTH Corp. * 93,713
2,100 Horizon Healthcare Corp. * 47,775
600 Oxford Health Plans, Inc. 43,650
450 Pacificare Health Systems, Inc. Class B * 30,600
215,738
PHARMACEUTICALS (10.3%)
4,800 Omnicare, Inc. 187,200
12,300 R.P. Scherer Corp. 533,513
10,875 TheraTech, Inc. * 187,594
908,307
TOBACCO (1.5%)
12,000 PT Hanjaya Mandala Sampoerna + 111,763
675 Societe de Exploitation Industrielle S.A. + 24,521
136,284
FINANCIAL (15.0%)
BANKS (0.8%)
5,875 Dime Bancorp, Inc. * 69,031
DIVERSIFIED (7.1%)
1,625 Credit Acceptance Corp. * 43,875
5,550 First Data Corp. 344,100
3,125 Medaphis Corp. * 85,938
3,775 United Asset Management Corp. 151,472
625,385
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
INSURANCE (3.7%)
5,875 Progressive Corp. of Ohio $ 262,906
2,125 Protective Life Corp. 62,156
325,062
REAL ESTATE (3.4%)
9,625 Insignia Financial Group, Inc. Class A * 298,375
INDEPENDENT (2.4%)
CONGLOMERATE
7,013 Kinnevik Investments AB B-Free + 213,512
INDUSTRIAL (6.3%)
CONTAINERS AND PACKAGING (2.0%)
3,125 Sealed Air Corp. * 172,266
OTHER INDUSTRIAL SERVICES (1.4%)
4,325 Manpower, Inc. 125,425
RAILROADS (2.9%)
3,850 Wisconsin Central Transportation Corp. * 256,988
TECHNOLOGY (20.4%)
ADVANCED MEDICAL DEVICES (1.0%)
2,275 I-Stat Corp. * 84,744
COMMUNICATIONS (13.8%)
7,675 Arch Communications Group, Inc. * 201,469
5,875 CommNet Cellular, Inc. * 170,375
2,700 Millicom International Cellular S.A. # * 86,738
14,650 Paging Network, Inc. * 703,200
3,625 Tel-Save Holdings, Inc. * 55,281
1,217,063
OFFICE EQUIPMENT (0.7%)
1,425 Viking Office Products, Inc. * 59,494
SEMICONDUCTORS (1.5%)
3,775 VLSI Technology, Inc. * 129,294
SOFTWARE (3.4%)
11,400 Black Box Corp. * 210,900
1,900 Intuit, Inc. * 89,300
300,200
UTILITIES (5.1%)
ELECTRIC (3.8%)
15,075 Trigen Energy Corp. 333,534
TELEPHONE (1.3%)
1,400 Cincinnati Bell, Inc. 37,800
2,400 WorldCom, Inc. * 77,100
114,900
TOTAL COMMON STOCK (COST $7,116,343) 8,188,295
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 26
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
CONVERTIBLE PREFERRED STOCK (2.0%)
TECHNOLOGY
DIVERSIFIED
2,500 Nokia AB OY # $ 174,375
NON-CONVERTIBLE PREFERRED STOCK (0.9%)
TECHNOLOGY
SOFTWARE
520 SAP AG Vorzug + 84,604
TOTAL PREFERRED STOCK (COST $221,859) 258,979
WARRANTS (0.4%)
1,250 Littlefuse, Inc. * (cost $23,750) 30,938
<CAPTION>
PRINCIPAL DESCRIPTION VALUE
<S> <C>
COMMERCIAL PAPER (1.9%)
$ 170,00 Household Finance Company
6.250%, 10-2-95, (cost $169,971) 169,971
TOTAL INVESTMENTS (98.2%) (COST $7,531,923) 8,648,183
<CAPTION>
PRINCIPAL DESCRIPTION VALUE
<S> <C>
UNREALIZED GAIN (LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (-0.1%) @
B 36,000 British Pound 10-26-95 Sell $ 351
B 17,000 British Pound 10-26-95 Buy 2
B 2,000 British Pound 12-14-95 Sell 33
B 50,000 British Pound 1-11-96 Sell (11)
B 102,425 British Pound 1-24-96 Sell 1,995
D 110,000 German Deutschmark 3-14-96 Sell (2,681)
D 10,000 German Deutschmark 3-14-96 Buy (26)
K 1,966,525 Swedish Krona 1-24-96 Sell (22,462)
K 1,966,525 Swedish Krona 1-24-96 Buy 15,257
K 1,775,000 Swedish Krona 2-8-96 Sell (13,785)
K 605,000 Swedish Krona 2-8-96 Buy 4,372
M 1,056,000 Finnish Marka 10-26-95 Sell 3,145
M 260,000 Finnish Marka 10-26-95 Buy (35)
M 57,000 Finnish Marka 12-14-95 Sell 128
TOTAL UNREALIZED LOSS ON FORWARD FOREIGN CURRENCY CONTRACTS (13,717)
OTHER ASSETS IN EXCESS OF LIABILITIES (1.9%) 171,176
NET ASSETS (100.0%) $ 8,805,642
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 27
September 30, 1995
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
COMMON STOCK (88.7%)
BASIC MATERIALS (1.0%)
FOREST PRODUCTS (1.0%)
5,102 Mo Och Domsojo AB + * $ 320,211
172,721 Rottneros Bruk AB + 298,356
20,715 Stora Koppartbergs Bergslags AB Class A + 281,790
900,357
STEEL (0.0%)
733 Ssab AB + * 7,808
CONSUMER CYCLICAL (22.4%)
AUTO MANUFACTURERS (2.8%)
18,100 General Motors Corp. Class E 823,550
5,458 Volkswagen AG + 1,768,407
2,591,957
AUTO PARTS AND EQUIPMENT (0.5%)
15,850 Bajaj Auto, Ltd. # 483,425
BROADCASTING (1.9%)
32,300 Central European Media Enterprises, Ltd.
Class A * 815,575
900 Grupo Televisa S.A. # 18,000
4,375 Heritage Media Corp. * 131,797
28,150 Scandinavian Broadcasting
System S.A. # * 795,237
1,760,609
CONSUMER ELECTRONICS (3.7%)
133,000 Hitachi Ltd. + 1,443,618
75,000 Matsushita Electric Industrial
Company, Ltd. + 1,145,729
2,075 Sony Corp. # 109,975
9,400 Sony Corp. + 485,588
23,000 Victor Company of Japan, Ltd. + * 233,467
3,418,377
ENTERTAINMENT (0.4%)
131,600 Tabcorp Holdings, Ltd. + 343,330
FURNITURE (0.7%)
19,600 Industrie Natuzzi SpA # * 698,250
LODGING (1.4%)
10,213 Accor + 1,264,383
PUBLISHING (5.2%)
13,756 Elsevier N.V. + 176,271
52,075 News Corp., Ltd. # 1,145,650
163,177 News Corp., Ltd. Class A + 908,183
28,140 Wolters Kluwer N.V. + 2,583,927
4,814,031
RETAILERS - APPAREL (0.4%)
5,583 Hennes and Mauritz AB B-Free + 358,436
RETAILERS - BROADLINE (2.8%)
47,400 Federated Department Stores, Inc. * 1,344,975
17,000 Ito-Yokado Company, Ltd. + 936,281
182,500 PT Matahari Putra Prima + * 330,280
6,221 Sears, Roebuck de Mexico S.A. + * 23,385
2,634,921
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
TOYS (2.6%)
45,086 Mattel, Inc. $ 1,324,401
47,497 Thom EMI PLC + 1,107,217
2,431,618
CONSUMER NON-CYCLICAL (14.6%)
BEVERAGES (0.2%)
555,000 Companhia Cervejaria Brahma + 225,413
CONSUMER SERVICES (0.0%)
79 Grand Optical Photoservice S.A. + * 7,856
FOOD - OTHER (1.8%)
12,870 Cultor OY Series 1 + * 487,700
18,829 Cultor OY Series 2 + * 713,512
14,227 Huhtamaki OY + 489,203
1,690,415
HEALTH CARE (0.5%)
131,255 Takare PLC + * 460,827
HOUSEHOLD PRODUCTS (0.5%)
12,300 Amway Japan, Ltd. + 477,166
PHARMACEUTICALS (9.1%)
83,011 Astra AB A-Free + 2,969,416
3,823 Gehe AG + 1,819,202
5,700 Pfizer, Inc. 304,237
475 Roche Holding AG + 3,354,392
TOBACCO (2.5%)
202,000 PT Hanjaya Mandala Sampoerna + 1,881,351
13,433 Societe Nationale De Exploration
Industriale S.A. + * 488,002
2,369,353
ENERGY (0.6%)
OILFIELD EQUIPMENT & SERVICES (0.6%)
9,325 Petroleum Geo-Services A/S # * 228,463
16,335 Reliance Industries, Ltd. * + 300,156
528,619
FINANCIAL (10.8%)
BANKS (7.6%)
22,250 Bangkok Bank Company, Ltd. + 250,030
511,650 PT Bank Dagang Nasional Indonesia + 468,627
27,875 Chase Manhattan Corp. 1,703,859
27,100 Citicorp 1,917,325
25,000 Dai-Ichi Kangyo Bank, Ltd. + * 452,261
34,000 HSBC Holdings PLC + 472,711
41,000 Mitsui Trust & Banking Company + 381,156
42,000 Sakura Bank, Ltd. + * 455,879
22,000 Sanwa Bank, Ltd. + 411,256
16,519 Sparbanken Sverige AB + * 160,508
31,000 Sumitomo Trust & Banking Company, Ltd. + * 423,719
7,097,331
DIVERSIFIED (1.6%)
1,000 First Data Corp. 62,000
16,000 First Pacific Company, Ltd. + 17,072
458,825 Grupo Financiero Inbursa S.A. Class C + * 1,444,496
1,523,568
REAL ESTATE (1.6%)
344,000 Citic Pacific, Ltd. + 1,038,852
35,000 Mitsui Fudosan Company + * 418,593
1,457,445
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 28
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
GLOBAL PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
INDEPENDENT (7.1%)
CONGLOMERATES
8,107 Barco N.V. + $ 948,728
133,425 Grupo Carso, S.A. de C.V. + * 789,955
159,022 Kinnevik Investments AB B-Free + 4,841,462
5,900 Malbak, Ltd. # * 39,993
6,620,138
INDUSTRIAL (10.9%)
BUILDING MATERIALS (0.4%)
137,000 PT Semen Cibinong + * 371,905
CONTAINERS & PACKAGING (1.5%)
35,500 Crown Cork & Seal Company, Inc. * 1,375,625
DIVERSIFIED (3.5%)
261 Mannesman AG + * 85,350
24,149 Metra Corp Class B + * 1,118,467
121,000 Mitsubishi Heavy Industries, Ltd. + * 924,221
12,119 OMV AG + 1,127,770
3,255,808
FACTORY EQUIPMENT (1.3%)
19,147 SGL Carbon AG + * 1,244,756
HEAVY MACHINERY (1.5%)
83,635 Iro AB + * 1,119,644
894 Sidel S.A.R.L. + * 285,511
1,405,155
OTHER SERVICES (2.7%)
125,287 Assa Abloy AB + 820,590
47,343 Securitas AB + 1,696,931
2,517,521
TECHNOLOGY (19.9%)
ADVANCED MEDICAL DEVICES (0.6%)
3,475 Gelman Sciences, Inc. * 76,450
10,000 Nellcor Puritan Bennett, Inc. * 497,500
573,950
COMMUNICATIONS (9.2%)
204 DDI Corp. + 1,677,106
17,563 Korea Mobile Telecom Corp. # * 627,877
83,925 Millicom International Cellular S.A. # * 2,696,091
160 Nippon Telegraph & Telephone Corp. + 1,372,858
3,725 Paging Network, Inc. * 178,800
20,681 Telecomunicacoes Braseleiras S.A. # 972,146
5,174 Telecomunicacoes Braseleiras S.A. + 243
8,225 Tele Danmark A/S # * 212,822
3,150 Telefonica De Espana S.A. # 130,331
34,640 Telefonica De Espana S.A. + 477,038
30,975 Total Access Communications, Inc. + * & 195,530
8,540,842
COMPUTERS (0.6%)
1,140 Frontec AB + * 29,374
7,850 Sun Microsystems, Inc. * 494,550
523,924
OFFICE EQUIPMENT (1.6%)
50,000 Canon, Inc. + 889,447
10,306 Oce-van der Grinten N.V. + 586,227
1,475,674
SEMICONDUCTORS (0.6%)
12,000 Tokyo Electron, Ltd. + * 519,799
SOFTWARE (7.3%)
43,150 Getronics N.V. + * $ 2,125,403
16,000 Kyocera Corp. + 1,308,945
90 NTT Data Communications Systems Corp. + * 2,089,447
20,000 Rohm Company + * 1,258,291
6,782,086
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
UTILITIES (1.4%)
ELECTRIC
1,398,000 Centrais Electricas Brasil S.A. + * 428,416
7,425 Consolidated Electric Power Asia, Ltd. # 148,854
359,900 Consolidated Electric Power Asia, Ltd. + 721,476
1,298,746
TOTAL COMMON STOCK (COST $71,927,088) 82,498,671
NON-CONVERTIBLE PREFERRED STOCK (4.7%)
CONSUMER CYCLICAL (0.6%)
PUBLISHING (0.3%)
47,087 News Corp., Ltd. + 233,586
RETAIL - BROADLINE (0.3%)
5,354 Fielmann + 273,507
TECHNOLOGY (4.1%)
ADVANCED MEDICAL DEVICES (1.0%)
1,193 Fresenius AG + 931,692
SOFTWARE (3.1%)
17,840 SAP AG Vorzug + 2,902,589
CONVERTIBLE PREFERRED STOCK (2.9%)
TECHNOLOGY
DIVERSIFIED
9,836 Nokia AB OY + 690,238
28,343 Nokia AB OY-Cumulative + 1,988,959
2,679,197
TOTAL PREFERRED STOCK (COST $3,622,004) 7,020,571
Total Investments (96.3%)(cost $75,549,092) 89,519,242
UNREALIZED GAIN (LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (1.0%) @
B 699,000 British Pound 1-25-96 Sell 2,101
D 7,751,000 German Deutschemark 10-26-95 Sell 227,194
D 986,000 German Deutschemark 1-25-96 Sell 14,571
E 1,801,494 Belgian Franc 10-10-95 Buy (184)
E 1,559,910 Belgian Franc 10-10-95 Buy 346
E 2,648,054 Belgian Franc 10-10-95 Buy (415)
F 284,115 French Franc 10-31-95 Sell (321)
F 1,385,054 French Franc 10-31-95 Sell 1,367
F 279,958 French Franc 10-31-95 Sell 119
F 1,900,000 French Franc 12-14-95 Sell (11,581)
J 58,089,000 Japanese Yen 10-26-95 Sell 86,539
J 721,000,000 Japanese Yen 11-21-95 Sell 794,952
J 200,000,000 Japanese Yen 11-21-95 Buy (12,647)
J 36,620,000 Japanese Yen 1-25-95 Sell 63,085
J 95,500,000 Japanese Yen 2-8-96 Sell 127,425
J 70,000,000 Japanese Yen 2-8-96 Sell 43,290
J 370,000,000 Japanese Yen 2-8-96 Sell 82,485
J 110,000,000 Japanese Yen 3-14-96 Sell (13,242)
J 100,000,000 Japanese Yen 3-14-96 Sell (29,819)
K 21,390,000 Swedish Krona 10-26-95 Sell (97,227)
K 26,659,000 Swedish Krona 11-9-95 Sell (82,685)
K 32,900,000 Swedish Krona 1-25-96 Sell (250,944)
M 5,453,000 Finish Markka 11-9-95 Sell 21,225
M 7,300,000 Finish Markka 1-25-96 Sell (12,947)
S 2,018,000 Swiss Franc 11-9-95 Sell (7,801)
Total Unrealized Gain on Forward Foreign Currency Contracts 944,886
Other Assets in Excess of Liabilities (2.7%) 2,499,412
Net Assets (100.0%) $ 92,963,540
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 29
September 30, 1995
SCHEDULE OF INVESTMENTS
GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Shares Description Value Shares Description Value
<S> <C> <C> <C>
COMMON STOCK (79.9%) Technology (49.3%)
Basic Materials (1.4%) Advanced Medical Devices (0.8%)
Forest Products (1.4%) 72,800 Medtronic, Inc. $ 3,913,000
(78,050)Georgia Pacific Corp. $ (6,829,375)
Biotechnology (1.7%)
Other Non-ferrous (0%) 164,225 Amgen, Inc. * 8,190,722
(2,625)Phelps Dodge Corp. (164,391) 3,222 US Bioscience, Inc. * 15,909
8,206,631
Consumer Cyclical (5.0%) Communications (17.6%)
Broadcasting (0.6%) (58,625)America Online, Inc. * 4,030,469
95,768 Infinity Broadcasting Corp. Class 3,136,402 (122,225)Ascend Communications, Inc. * 9,778,000
(158,175)AT&T Corp. 10,400,006
Casinos (0.6%) (81,000)DSC Communications Corp. * 4,799,250
102,550 Circus Circus Enterprises, Inc. * (2,871,400) (135,437)Glenyare Technologies, Inc. * 9,751,464
(575,325)L.M. Ericsson Telephone Company Cla 14,095,462
Consumer Electronics (0.2%) (141,125)Motorola, Inc. 10,778,422
5,890 Samsung Electronics Company, Ltd. 830,137 (145,275)PictureTel Corp. * 6,573,694
(23,725)Tellabs, Inc. * 999,416
Entertainment (1.9%) (179,850)US Robotics Corp. 15,332,213
161,375 Walt Disney Company (9,258,891) 86,538,396
Computers (10.7%)
Footware (0.5%) (148,675)Cisco Systems, Inc. * 10,258,575
22,350 Nike, Inc. Class B 2,483,644 (117,550)Hewlett-Packard Company (9,800,731)
(47,050)International Business Machines Cor (4,440,344)
Retailers - Specialty (1.2%) (185,550)StrataCom, Inc. * (10,182,056)
190,920 Lowe's Companies, Inc. 5,727,600 (266,100)Sun Microsystems, Inc. * 16,764,300
(23,450)3COM Corp. * 1,066,975
Consumer Non-Cyclical (10.2%) (52,512,981)
Beverages (3.0%) Diversified (4.0%)
210,975 Coca-Cola Company 14,557,275 (244,375)Texas Instruments, Inc. (19,519,453)
Health Care (2.7%) Semiconductors (4.0%)
121,725 Oxford Health Plans, Inc. * 8,855,494 116,775 Altera Corp. * (7,283,841)
23,425 Pacificare Health Systems, Inc. Cl 1,592,900 46,900 Intel Corp. (2,819,863)
58,575 United Healthcare Corp. 2,862,853 167,150 LSI Logic Corp. * 9,652,912
(13,311,247) (19,756,616)
Pharmaceuticals (4.5%) Software (10.5%)
39,950 Agouron Pharmaceuticals, Inc. * 1,148,562 65,850 Autodesk, Inc. (2,880,937)
101,848 Astra AB A-Free + 3,643,241 68,250 Broderbund Software, Inc. * (5,195,531)
(230,150)Pfizer, Inc. 12,284,256 19,150 Cerner Corp. * (655,888)
(103,250)SmithKline Beecham PLC # 5,227,031 98,000 HBO & Company (6,125,000)
(22,303,090) 262,050 Informix Corp. * (8,516,625)
Financial (13.6%) 77,550 Intuit, Inc. * (3,644,850)
Banks (3.7%) 200,250 Microsoft Corp. * (18,122,625)
147,185 Citicorp 10,413,339 64,725 Netscape Communications Corp. * (4,045,312)
79,500 First Interstate Bancorp 8,009,625 25,125 PeopleSoft, Inc. * (2,283,234)
(18,422,964) (51,470,002)
Diversified (6.4%) Total Common Stock (cost $285,768,388) ************
69,300 Federal Home Loan Mortgage Corp. (4,790,362)
56,205 Federal National Mortgage Associat 5,817,217 CONVERTIBLE PREFERRED STOCK (3.1%)
(320,325)First Data Corp. (19,860,150) Technology
(307,225)Grupo Financiero Inbursa S.A. Clas (967,221) Diversified
(31,434,950) (170,400)Nokia AB OY # (11,885,400)
Securities Brokers (3.5%) (45,968)Nokia AB OY Cumulative + (3,225,787)
278,850 Merrill Lynch and Company, Inc. (17,428,125) (15,111,187)
NON-CONVERTIBLE PREFERRED STOCK (6.2%)
Industrial (0.4%) Technology
Containers and Packaging Software
(75,075)Liqui-Box Corp. (2,224,097) (186,040)SAP AG Vorzug + (30,268,929)
Total Preferred Stock (cost $19,202,450) (45,380,116)
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 30
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
GROWTH PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION VALUE
<S> <C>
LONG-TERM U.S. GOVERNMENT SECURITIES (3.0%)
$15,000,000 United States Treasury Notes
5.500%, 9-30-97 (cost $15,101,099) $ 14,910,600
COMMERCIAL PAPER (8.3%)
20,000,000 Ford Motor Credit Company,
5.770%, 10-5-95 19,987,178
20,600,000 General Electric Capital Corp.,
6.500%, 10-2-95 20,596,280
TOTAL COMMERCIAL PAPER (COST $40,583,458) 40,583,458
<CAPTION>
PRINCIPAL DESCRIPTION VALUE
<S> <C>
Total Investments (100.5%) (cost $360,655,395) $493,774,841
UNREALIZED GAIN (LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (0.0%) @
D 11,000,0German Deutschemark 10-26-95 261,217
D 10,822,0German Deutschemark 11-17-95 (107,891)
TOTAL UNREALIZED GAIN ON FORWARD FOREIGN
CURRENCY CONTRACTS 153,326
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.5) (2,400,470)
NET ASSETS (100.0%) $491,527,697
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 31
September 30, 1995
SCHEDULE OF INVESTMENTS
EQUITY-INCOME PORTFOLIO
<TABLE>
<CAPTION>
Shares Description Value Shares Description Value
<S> <C> <C>
COMMON STOCK (65.9%) Pipelines (0.6%)
Basic Materials (12.6%) 1,100 Panhandle Eastern Corp. $ 29,975
Chemicals (10.3%)
5,500 Arcadian Corp. * $ 112,062 Financial (5.9%)
1,300 E.I. Du Pont De Nemours Banks (1.7%)
and Company 89,375 2,000 Mellon Bank Corp. 89,250
4,400 Lawter International, Inc. 49,500
1,600 Loctite Corp. 77,400 Diversified (2.7%)
2,000 M.A. Hanna Company 52,750 2,000 American General Corp. 74,750
2,300 Nalco Chemical Company 78,488 700 Federal National Mortgage Associa 72,450
1,500 Olin Corp. 103,125 147,200
562,700 Real Estate (1.5%)
Precious Metals (2.3%) 1,200 Crescent Real Estate Equities, In 36,900
2,105 Freeport-McMoran Copper & Gold 1,500 Storage USA, Inc. 46,313
Company, Inc. 53,941 83,213
13,000 Freeport-McMoran, Inc. 73,125 Independent (3.4%)
127,066 Conglomerate
Consumer Cyclical (7.1%) 1,700 General Electric Company 108,375
Entertainment (3.1%) 4,700 Hanson PLC # 76,375
1,400 Eastman Kodak Company 82,950 184,750
1,500 Walt Disney Company 86,062 Industrial (10.9%)
169,012 Building Materials (1.3%)
Publishing (1.6%) 2,100 Sherwin Williams Company 73,500
2,600 A.H. Belo Corp. 89,375
Diversified (3.1%)
Retailers - Broadline (1.3%) 2,500 ACME - Cleveland Corp. 66,875
1,400 J.C. Penney Company, Inc. 69,475 1,600 TYCO International Ltd. 100,800
167,675
Retailers - Specialty (1.1%) Electronic Components and Equipment (2.1%)
1,500 Home Depot, Inc. 59,813 2,200 AMP, Inc. 84,700
400 Emerson Electric Company 28,600
Consumer Non-Cyclical (14.5%) 113,300
Beverages (1.3%) Other Industrial Services (2.7%)
3,900 Adolph Coors Company Class B 70,687 2,200 National Service Industries, Inc. 64,350
2,100 Olsten Corp. 81,638
Consumer Services (1.4%) 145,988
2,000 H & R Block, Inc. 76,000 Pollution Control (1.7%)
3,300 WMX Technologies, Inc. 94,050
Food - Other (3.4%)
1,200 Kellogg Company 86,850 Technology (4.5%)
2,200 H.J. Heinz Company 100,650 Communications (1.4%)
187,500 2,600 Alltel Corp. 77,675
Health Care (2.3%)
1,500 Columbia/HCA Healthcare Corp. 72,937 Computers (1.2%)
5,500 Hooper Holmes Inc. 55,000 800 Hewlett-Packard Company 66,700
127,937
Household Products (1.4%) Diversified (1.1%)
400 Colgate-Palmolive Company 26,650 700 Raytheon Company 59,500
1,100 Duracell International, Inc. 49,362
76,012 Office Equipment (0.8%)
Medical Supplies (1.7%) 1,100 Danka Business System PLC # 39,600
3,000 C.R. Bard, Inc. 91,500
Utilities (0.9%)
Pharmaceuticals (3.0%) Telephone
1,600 Schering Plough Corp. 82,400 1,600 Airtouch Communications, Inc. * 49,000
1,800 Upjohn Company 80,325 Total Common Stock (cost $3,244,705) 3,591,853
162,725
Energy (6.1%)
Oil Companies - Major (4.3%)
1,400 Amoco Corp. 89,775
1,200 Exxon Corp. 86,700
600 Mobil Corp. 59,775
236,250
Oil Drilling (1.2%)
600 Atlantic Richfield Company 64,425
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 32
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
EQUITY-INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
CONVERTIBLE PREFERRED STOCK (6.7%)
BASIC MATERIALS (0.9%)
PAPER PRODUCTS
1,000 International Paper Company $ 47,500
CONSUMER NON-CYCLICAL (3.7%)
HOUSEHOLD PRODUCTS (1.7%)
1,900 James River Corp. of Virginia 95,000
TOBACCO (2.0%)
16,000 RJR Nabisco Holdings Corp. 108,000
ENERGY (0.6%)
OIL COMPANIES - SECONDARY
600 Valero Energy Corp. 30,825
FINANCIAL (1.5%)
DIVERSIFIED
2,500 Time Warner Financing Trust 81,250
TOTAL PREFERRED STOCK (COST $337,651) 362,575
<CAPTION>
SHARES DESCRIPTION VALUE
<S> <C>
CONVERTIBLE CORPORATE BONDS (1.9%)
FINANCIAL
INSURANCE
$ 100,000 American Travellers Corp.
6.500%, 10-1-05 (cost $100,000) $ 104,250
NON-CONVERTIBLE CORPORATE BONDS (7.6%)
CONSUMER CYCLICAL (3.8%)
ENTERTAINMENT (1.9%)
100,000 Walt Disney Company, 7.750% (until
1997, increasing thereafter), 10-5-09 101,935
RETAILERS - BROADLINE (1.9%)
100,000 May Department Stores Company
9.125%, 12-1-16 105,500
ENERGY (1.9%)
PIPELINES
100,000 Transcontinental Gas Pipeline Corp.
9.125%, 2-1-17 105,125
INDUSTRIAL (1.9%)
RAILROADS
100,000 Union Pacific Corp.
7.375%, 5-15-01 103,500
TOTAL NON-CONVERTIBLE CORPORATE BONDS (COST $410,908) 416,060
LONG-TERM U.S. GOVERNMENT SECURITIES (8.3%)
United States Treasury Notes
200,000 7.000%, 4-15-99 206,406
175,000 5.125%, 11-15-95 174,925
70,000 6.125%, 5-31-97 70,282
TOTAL LONG-TERM U.S. GOVERNMENT SECURITIES
(COST $445,497) 451,613
TOTAL INVESTMENTS (90.4%) (COST $4,538,761) 4,926,351
OTHER ASSETS IN EXCESS OF LIABILITIES (9.6%) 521,753
NET ASSETS (100.0%) $5,448,104
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 33
September 30, 1995
SCHEDULE OF INVESTMENTS
BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Shares Description Value Shares Description Value
<S> <C> <C> <C>
COMMON STOCK (46.8%) Pharmaceuticals (2.1%)
Basic Materials (5.7%) 1,716 Astra AB A-Free + $ 61,383
Chemicals (2.0%) 12 Roche Holding AG + 84,742
1,025 Hercules, Inc. $ 59,450 146,125
2,250 Minerals Technologies, Inc. 84,656 Financial (12.8%)
144,106 Banks (4.8%)
Mining - Diversified (0.4%) 1,825 Bank of New York, Inc. 84,863
395 Potash Corp. of Saskatchewan, Inc. 24,589 1,675 Citicorp 118,506
1,400 First Bank System, Inc. 67,375
Forest Products (1.5%) 1,775 NBD Bancorp, Inc. 67,894
1,225 Georgia Pacific Corp. 107,187 338,638
Diversified (2.7%)
Paper Products (1.8%) 1,275 Alexander & Alexander Services, Inc. 30,919
2,400 Champion International Corp. 129,300 2,575 First Data Corp. 159,650
190,569
Consumer Cyclical (6.5%) Insurance (5.3%)
Airlines (0.8%) 1,275 ACE Ltd. 43,828
350 AMR Corp. * 25,244 555 General RE Corp. 83,805
400 Delta Air Lines, Inc. 27,700 3,400 Risk Capital Holdings, Inc. * 72,250
52,944 3,200 UNUM Corp. 168,800
Entertainment (1.6%) 368,683
800 Viacom Inc. Class B * 39,800 Industrial (8.5%)
1,300 Walt Disney Company 74,588 Containers and Packaging (2.0%)
114,388 2,975 Crown, Cork, and Seal Company, Inc. * 115,281
Lodging (0.4%) 500 Sealed Air Corp. * 27,562
725 Marriott International, Inc. 27,097 142,843
Electronic Components and Equipment (1.8%)
Publishing (0.7%) 2,000 Pittway Corp. Class A 124,000
1,800 Times Mirror Company Class A 51,750
Heavy Machinery (0.4%)
Recreation Products - Other (0.5%) 625 AGCO Corp. 28,438
900 Coleman Company, Inc. * 33,750
Other Industrial Services (3.2%)
Retailers - Broadline (0.8%) 6,675 Robert Half International, Inc. * 227,784
2,025 Federated Department Stores, Inc. 57,459
Pollution Control (0.4%)
Toys (1.7%) 800 Browning Ferris Industries, Inc. 24,300
4,200 Mattel, Inc. 123,375
Railroads (0.7%)
Consumer Non-Cyclical (8.2%) 2,000 Southern Pacific Rail Corp. * 48,500
Food - Other (3.4%)
950 General Mills, Inc. 52,963 Technology (5.1%)
425 Hershey Foods Corp. 27,359 Aerospace/Defense (1.1%)
1,025 Kellogg Company 74,184 1,125 Boeing Company 76,781
2,825 Nabisco Holdings Corp. Class A 83,691
238,197 Software (4.0%)
Food Retailers (1.0%) 675 Adobe Systems, Inc. 34,931
1,650 Safeway, Inc. * 68,888 4,900 General Motors Corp. Class E 222,950
700 Reynolds and Reynolds Company 24,063
Household Products (1.7%) 281,944
1,425 Colgate-Palmolive Company 94,941 Total Common Stock (cost $2,973,013) 3,292,451
575 First Brands Corp. 25,875
120,816 PREFERRED STOCK (3.2%)
Technology
Software
1,400 SAP AG - Vorzug + (cost $148,653) 227,782
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 34
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Principal Description Value Principal Description Value
<S> <C> <C> <C>
CONVERTIBLE CORPORATE BONDS (3.1%) Technology (4.0%)
Consumer Cyclical Aerospace/Defense (0.4%)
Entertainment (2.8%) $ 25McDonnell Douglas Corp.
$ 200Time Warner, Inc. 8.625%, 4-1-97 $ 25,719
7.750%, 6-15-05 $ 201,250
Computers (2.9%)
Recreational Products - Other (0.3%) 200,000 International Business Machines Corp.
60,000 Coleman Worldwide Corp., 6.375%, 11-1-97 200,500
Zero Coupon, 5-27-13 18,375
Total Convertible Corporate Bonds (cost $214, 219,625 Diversified (0.7%)
50,000 Rockwell International Corp.
NON-CONVERTIBLE CORPORATE BONDS (30.2%) 7.625%, 2-17-98 51,437
Consumer Cyclical (9.8%) Total Non-Convertible Corporate Bonds (cost $2,092,121,981
Auto Manufacturers (1.7%)
120,000 Ford Motor Credit Company LONG-TERM U.S. GOVERNMENT SECURITIES (5.2%)
7.875%, 1-15-97 122,400 United States Treasury Notes
200,000 5.750%, 9-30-97 199,750
Publishing (3.1%) 100,000 7.250%, 2-15-98 102,956
200,000 News America Holdings, Inc. 30,000 7.500%, 10-31-99 31,587
8.500%, 2-15-05 217,000 30,000 7.375%, 11-15-97 30,872
Total Long-term U.S. Government Securities
Retailers - Broadline (5.0%) (cost $359,864) 365,165
150,000 Dayton Hudson Corp.
7.500%, 3-1-99 154,125 COMMERCIAL PAPER (13.9%)
300,000 Chevron Oil Finance Company
200,000 J.C. Penney Company, Inc. 5.750%, 10-5-95 299,808
6.375%, 9-15-00 199,000
353,125 300,000 Federal Home Loan Bank Corp.
Consumer Non-Cyclical (5.5%) 5.600%, 10-4-95 299,860
Beverages (2.8%)
200,000 Pepsico, Inc. 100,000 General Electric Capital Corp.
5.875%, 6-1-00 195,750 6.500%, 10-2-95 99,982
Pharmaceuticals (2.7%) 280,000 Household Finance Company
180,000 American Home Products Corp. 6.250%, 10-2-95 279,952
7.700%, 2-15-00 187,875 Total Commercial Paper (cost $979,602) 979,602
Financial (10.2%)
Banks (6.3%) Total Investments (102.4%) (cost $6,772,519) 7,206,606
200,000 Bank of Boston Corp.
6.625%, 12-1-05 195,250 UNREALIZED GAIN (LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (-0.1%) @
200,000 First USA, Inc. D 80,000German Deutschmark 11-13-95 Sell 2,197
5.750%, 1-15-99 195,000 D 150,000 German Deutschmark 12-14-95 Sell (3,914)
D 80,000German Deutschmark 12-14-95 Sell (1,654)
50,000 Norwest Corp. D 40,000German Deutschmark 12-14-95 Buy (114)
7.700%, 11-15-97 51,437 K 350,000 Swedish Krona 11-2-95 Sell (2,665)
441,687 Total Forward Foreign Currency Contracts (6,150)
Diversified (3.9%)
International Lease Finance Corp.
90,000 5.500%, 4-1-97 89,213
180,000 7.500%, 3-1-99 185,400 Liabilities in Excess of Other Assets (-2.3%) (165,379)
274,613 Net Assets (100.0%) $ 7,035,077
Independent (0.7%)
Conglomerate
50,000 General Electric Capital Corp.
8.000%, 1-15-98 51,875
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 35
September 30, 1995
SCHEDULE OF INVESTMENTS
FLEXIBLE INCOME PORTFOLIO
<TABLE>
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
NON-CONVERTIBLE CORPORATE BONDS (80.6%)
CONSUMER, CYCLICAL (21.8%)
AIRLINES (0.7%)
Delta Airlines, Inc.
9.000%, 5-15-16 $ 144,000 $ 152,280
AUTO MANUFACTURERS (2.3%)
Ford Motor Credit Company
7.750%, 3-15-05 250,000 264,375
General Motors Corp.
7.400%, 9-01-25 200,000 198,500
462,875
BROADCASTING (2.5%)
CF Cable T.V.
11.625%, 2-15-05 475,000 514,187
HOME FURNISHINGS (2.8%)
Selmer Company, Inc.
11.000%, 5-15-05 600,000 577,500
PUBLISHING (6.9%)
News Corp.
9.250%, 2-1-13 500,000 569,375
News America Holdings, Inc.
7.750%, 2-1-24 850,000 838,313
1,407,688
ENTERTAINMENT (2.5%)
Premier Parks, Inc.
12.000%, 8-15-03 250,000 255,625
Viacom, Inc.
8.000%, 7-7-06 250,000 246,875
502,500
RETAILERS - SPECIALTY (4.1%)
Pier 1 Imports, Inc.
11.500%, 7-15-03 799,000 824,967
CONSUMER, NON-CYCLICAL (10.0%)
FOOD - OTHER (4.5%)
Borden, Inc.
7.875%, 2-15-23 200,000 192,250
Ralston Purina Company
7.875%, 6-15-25 275,000 279,813
RJR Nabisco, Inc.
8.625%, 12-1-02 425,000 446,781
918,844
FOOD RETAILERS (3.2%)
Ralphs Supermarkets, Inc.
11.000%, 6-15-05 692,000 650,480
HEALTH CARE (2.3%)
Tenet Healthcare Corp.
10.125%, 3-1-05 445,000 470,031
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
ENERGY (6.1%)
OIL COMPANIES - MAJOR (3.5%)
Texaco Capital, Inc.
7.500%, 3-1-43 $ 700,000 $ 701,750
OIL COMPANIES - SECONDARY (2.6%)
Texas Eastern Transmission Corp.
10.000%, 10-1-11 500,000 530,625
FINANCIAL (22.1%)
BANKS (3.5%)
Anchor Bancorp, Inc.
8.937%, 7-9-03 500,000 506,875
Norwest Financial, Inc.
7.875%, 2-15-02 200,000 212,750
719,625
DIVERSIFIED (5.2%)
Centerbank, Inc.
8.375%, 10-1-02 500,000 498,750
International Lease Finance Corp.
8.375%, 12-15-04 500,000 549,375
INSURANCE (13.4%)
Delphi Financial Group, Inc.
8.000%, 10-1-03 1,000,000 947,500
Leucadia National Corp.
10.375, 6-15-02 475,000 514,188
Life Partners Group, Inc.
12.750%, 7-15-02 250,000 276,563
Orion Capital Corp.
7.250%, 7-15-05 1,000,000 988,750
2,727,001
INDUSTRIAL (7.7%)
CONTAINERS AND PACKAGING (2.5%)
Stone Container Corp.
11.000%, 8-15-99 500,000 516,250
DIVERSIFIED (5.2%)
Harvard Industries, Inc.
11.125%, 8-1-05 400,000 407,000
USG Corp.
8.500%, 8-15-05 225,000 228,937
9.250%, 9-15-01 400,000 419,500
1,055,437
TECHNOLOGY (12.9%)
AEROSPACE/DEFENSE (4.9%)
Alliant Techsystems, Inc.
11.750%, 3-1-03 400,000 436,000
McDonnell Douglas Corp.
9.250%, 4-1-02 500,000 560,625
996,625
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 36
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
FLEXIBLE INCOME PORTFOLIO
<TABLE>
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
COMMUNICATIONS (3.9%)
AT&T Corp.
8.350%, 1-15-25 $ 500,000 $ 543,125
TCI Communications, Inc.
8.000%, 8-1-05 250,000 256,563
799,688
COMPUTERS (2.6%)
International Business Machines Corp.
7.500%, 6-15-13 500,000 520,625
SOFTWARE (1.5%)
SHL Systemhouse, Inc.
12.250%, 9-1-01 250,000 306,250
TOTAL NON-CONVERTIBLE CORPORATE BONDS
(COST $15,750,840) 16,403,353
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS (2.7%)
CONSUMER, CYCLICAL (1.0%)
RESTAURANTS
Dominick's Finer Foods, Inc.
10.875%, 5-1-05 $ 200,000 $ 203,000
INDUSTRIAL (1.7%)
DIVERSIFIED
Pegasus Media and Communications, Inc.
12.500%, 7-1-05 350,000 352,625
TOTAL CONVERTIBLE CORPORATE BONDS
(cost $550,000) 555,625
LONG-TERM U.S. GOVERNMENT SECURITIES (12.6%)
United States Treasury Notes
7.875%, 11-15-04 1,900,000 2,113,541
United States Treasury Bonds
7.500%, 11-15-24 400,000 444,896
TOTAL LONG-TERM U.S. GOVERNMENT SECURITIES
(cost $2,380,773) 2,558,437
TOTAL INVESTMENTS (95.9%) (COST $18,681,613) 19,517,415
OTHER ASSETS IN EXCESS OF LIABILITIES (4.1%) 827,051
NET ASSETS (100.0%) $ 20,344,466
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 37
September 30, 1995
SCHEDULE OF INVESTMENTS
INCOME PLUS PORTFOLIO
<TABLE>
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
NON-CONVERTIBLE CORPORATE BONDS (82.0%)
BASIC MATERIALS (8.2%)
Mining - Diversified (6.7%)
Cyprus Amax Minerals Company
6.625%, 10-15-05 $ 2,000,000 $ 1,943,360
Inco, Ltd.
9.600%, 6-15-22 2,500,000 2,802,650
(4,746,010)
Steel (1.5%)
Armco, Inc.
11.375%, 10-15-99 1,000,000 1,040,000
CONSUMER CYCLICAL (11.9%)
AIRLINES (1.7%)
Piedmont Aviation, Inc.
10.100%, 5-13-07 1,048,000 868,530
USAir, Inc.
10.800%, 1-1-05 400,000 353,500
(1,222,030)
AUTO PARTS AND EQUIPMENT (3.5%)
Mark IV Industries, Inc.
8.750%, 4-1-03 2,430,000 2,490,750
CASINOS (1.3%)
Station Casinos, Inc.
9.625%, 6-1-03 1,000,000 948,750
PUBLISHING (5.4%)
News America Holdings, Inc.
8.625%, 2-1-03 (1,500,000) (1,637,100)
Western Publishing Group, Inc.
7.650%, 9-15-02 2,500,000 2,212,500
3,849,600
CONSUMER NON-CYCLICAL (23.3%)
CONSUMER SERVICES (1.6%)
Actava Group, Inc.
9.875%, 3-15-97 1,165,000 1,165,000
FOOD - OTHER (1.1%)
BFI Acquisition Corp.
12.000%, 12-1-01 1,000,000 750,000
FOOD RETAILERS (7.3%)
American Stores Company
9.125%, 4-1-02 1,000,000 1,121,790
Great Atlantic & Pacific Tea, Inc.
7.700%, 1-15-04 2,000,000 1,942,920
Ralph's Grocery Company
10.450%, 6-15-04 1,000,000 982,500
Super Rite Foods, Inc.
10.625%, 4-1-02 1,000,000 (1,085,000)
5,132,210
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
HEALTH CARE (4.8%)
FHP International Corp.
7.000%, 9-15-03 $ 2,000,000 $ 1,909,800
Mediq/PRN Life Support Svs., Inc.
11.125%, 7-1-99 1,463,000 1,463,000
HOUSEHOLD PRODUCTS (8.5%)
BAT Capital Corp.
6.500%, 11-24-03 2,000,000 1,965,880
Black & Decker Corp.
7.500%, 4-1-03 2,000,000 2,047,060
James River Corp. of Virginia
6.700%, 11-15-03 2,000,000 1,972,340
5,985,280
ENERGY (11.0%)
OIL DRILLING (4.1%)
Louisiana Land Exploration Company
7.625%, 4-15-13 2,000,000 1,972,640
Maxus Energy Corp.
11.250%, 5-1-13 905,000 923,100
2,895,740
OILFIELD EQUIPMENT & SERVICES (1.6%)
McDermott, Inc.
9.375%, 3-15-02 1,000,000 1,120,240
PIPELINES (5.3%)
Enron Corp.
6.750%, 7-1-05 2,500,000 2,455,150
Williams Companies, Inc.
10.250%, 7-15-20 1,000,000 1,288,260
3,743,410
FINANCIAL (5.0%)
Banks (1.6%)
Citicorp
9.500%, 2-1-02 1,000,000 1,140,290
DIVERSIFIED (3.2%)
Continental Bank N.A.
11.250%, 7-1-01 1,100,000 1,222,188
GNS Financial Corp.
9.250%, 3-15-03 1,000,000 1,067,500
2,289,688
INSURANCE (0.2%)
Reliance Financial Services Corp.
9.480%, 11-1-00 150,000 150,000
INDUSTRIAL (13.4%)
Air Freight (1.6%)
Federal Express Corp.
9.625%, 10-15-19 1,000,000 1,123,630
</TABLE>
See Notes to Schedule of Investments at page 44.
<PAGE> 38
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
INCOME PLUS PORTFOLIO
<TABLE>
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
INDUSTRIAL (CONTINUED)
DIVERSIFIED (1.5%)
Canadian Pacific Forest Products, Ltd.
9.250%, 6-15-02 $ 1,000,000 $ 1,075,090
ELECTRIC COMPONENTS & EQUIPMENT (3.2%)
Westinghouse Electric Corp.
6.875%, 9-1-03 2,500,000 2,246,775
FACTORY EQUIPMENT (1.5%)
Penn Central Corp.
10.625%, 4-15-00 1,000,000 1,037,720
INDUSTRIAL SERVICES - OTHER (1.4%)
Figgie International, Inc.
9.875%, 10-1-99 1,000,000 1,000,000
POLLUTION CONTROL (1.5%)
Allied Waste Industries, Inc.
12.000%, 2-1-04 1,000,000 1,067,500
TRANSPORTATION EQUIPMENT (2.7%)
AAR Corp.
7.250%, 10-15-03 2,000,000 1,902,980
TECHNOLOGY (1.4%)
COMPUTERS
Unisys Corp.
9.750%, 9-15-16 1,000,000 968,750
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
UTILITIES (7.8%)
ELECTRIC
Beaver Valley Power Station Funding
Corp. 8.330%, 12-1-07 $ 2,000,000 $ 1,960,540
First PV Funding Corp.
10.300%, 1-15-14 1,225,000 1,243,375
Texas Utilities Electric Company
10.350%, 1-1-18 750,000 807,202
6.750%, 4-1-03 1,500,000 1,499,160
TOTAL NON-CONVERTIBLE CORPORATE BONDS
(COST $56,546,692) 57,974,520
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
NON-CONVERTIBLE PREFERRED STOCKS (0.5%)
BANKS
Riggs National Corp. Class B, 10.750%
(cost $316,275) 12,651 349,484
<CAPTION>
DESCRIPTION PRINCIPAL VALUE
<S> <C> <C>
COMMERCIAL PAPER (14.2%)
Arizona Educational Loan Marketing
Corp. 5.770%, 10-23-95 $ 2,000,000 (1,992,948)
Kobe Steel International, Inc.
5.800%, 10-13-95 3,400,000 (3,393,427)
Redwood Receivable Corp.
5.800%, 10-3-95 2,700,000 (2,699,130)
Yamaha Motor Finance Corp.
5.840%, 10-12-95 2,000,000 (1,996,431)
TOTAL COMMERCIAL PAPER (COST $10,081,936) 10,081,936
TOTAL INVESTMENTS (96.7%) (COST $66,944,903) (68,405,940)
OTHER ASSETS IN EXCESS OF LIABILITIES (3.3%) 2,320,360
NET ASSETS (100.0%) $ 70,726,300
</TABLE>
See Notes to Schedule of Investments at page 44.
<PAGE> 39
September 30, 1995
SCHEDULE OF INVESTMENTS
TAX-EXEMPT PORTFOLIO
<TABLE>
<CAPTION>
DESCRIPTION ** PRINCIPAL VALUE
<S> <C> <C>
MUNICIPAL BONDS (99.8%)
ALASKA (2.4%)
Alaska Student Loan Corp.
Student Loan Revenue Bonds,
Series 1988A, AMBAC Insured,
AMT Bonds, 8.400%, 7-1-03,
AAA/Aaa $ 600,000 $ 656,928
ARIZONA (3.8%)
Maricopa County Arizona IDA
IDR - Citizens Utilities Company Project,
Series 1991, 6.650%, 4-1-26, AAA/NR 1,000,000 1,058,890
CALIFORNIA (0.2%)
Los Angeles, Convention and Exhibition
Center, Certificates of Participation,
9.000%, 12-1-20, AAA/Aaa 50,000 66,547
FLORIDA (2.6%)
Florida State Pollution Control Board,
Revenue Bonds, Series 1987Y,
7.625%, 7-1-10, AA/Aaa 500,000 553,820
Tampa, Capital Improvements Program
Revenue Bonds, Series 1988A,
8.250%, 10-1-18, AA/NR 165,000 181,774
735,594
GEORGIA (3.4%)
Atlanta School Improvement
General Obligation, 5.600%, 12-1-18,
AA/Aa 1,000,000 959,830
ILLINOIS (10.1%)
Chicago O'Hare International Airport,
Revenue Bonds, Series 1988A, AMT
Bonds, 8.200%, 1-1-18, AAA/Aaa 750,000 802,298
Illinois Education Facilities Authority
Revenues Refunding - Art Institute of
Chicago Project, 5.800%, 3-1-27, A/A1 1,000,000 938,350
Palatine, General Obligation Bonds,
Series 1985, 9.900%, 1-1-16, NR/A1 25,000 30,390
West Chicago, IDR-Leggett and Platt, Inc.
Project, Revenue Bonds, Series 1994,
6.900%, 9-1-24, A/NR 1,000,000 1,030,070
2,801,108
INDIANA (3.6%)
Indiana Transportation Finance Authority
Airport Facility Lease Revenue Series,
1992A, 6.250%, 11-1-16, A/A 1,000,000 997,590
IOWA (9.4%)
Iowa State Certificate of Participation,
Revenue Bonds, Series 1992A, 6.500%
7-1-06, AAA/Aaa 1,000,000 1,095,700
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue Bonds, Series
1993B, 5.800%, 12-1-08, NR/Aaa 1,000,000 997,160
West Des Moines Iowa Water Revenue Bonds,
6.450%, 12-1-07, AAA/Aaa 500,000 535,735
2,628,595
<CAPTION>
DESCRIPTION ** PRINCIPAL VALUE
<S> <C> <C>
KENTUCKY (5.8%)
Kentucky Housing Corp., Single Family
Mortgage Revenue Bonds, AMT Series
Bonds, 1991D-1, 6.800%, 1-1-24,
AAA/Aaa $ 1,000,000 $ 1,031,690
Kentucky State Turnpike Authority,
Revenue Bonds, 6.000%, 7-1-09,
AAA/Aaa 590,000 591,558
1,623,248
MASSACHUSETTS (3.6%)
Massachusetts State Housing Finance
Agency, Series 1993A
6.300%, 10-1-13, A+/A1 1,000,000 1,002,100
MICHIGAN (3.4%)
Michigan State Building Authority Revenue
Refunding Special Sinking Fund, Series
1992A, 6.800%, 10-1-21, AA-/A1 900,000 953,442
NEBRASKA (3.7%)
Nebraska Higher Education Loan Program,
Revenue Bonds, Series 1992A-6, AMT
Bonds, 6.950%, 6-1-08, NR/A 1,000,000 1,033,950
NEVADA (1.2%)
Nevada Housing Division,
Single Family Program, Series 1990B,
AMT Bonds, 7.900%, 4-1-22, AA/NR 310,000 325,695
NEW YORK (3.6%)
New York State Local Government
Assistance Corporation, Series 1995A,
6.000%, 4-1-16, A/A 1,000,000 991,840
PENNSYLVANIA (0.0%)
Pennsylvania Housing Finance Agency,
Multi-Family Mortgage Revenue
Bonds, Series 1985A, 9.375%,
8-1-28, AA/Aa 5,000 5,186
SOUTH CAROLINA (5.4%)
Richland County Solid Waste Disposal
Facilities Revenue Bonds, Series 1992A,
6.750%, 5-1-22, A-/A1 500,000 516,715
South Carolina Jobs Economic Development
Authority Hospital Facility Revenue -
Tuomey Regional Medical Center, 1,000,000 975,520
Series 1995A, 5.750%, 11-1-15, AAA/Aaa 1,492,235
SOUTH DAKOTA (3.6%)
Sioux Falls South Dakota School District
Number 49-5 Refunding Capital Outlay
Certificates, Series 1992B, 5.750%, 7-1-12,
AAA/Aaa 1,000,000 993,520
</TABLE>
See Notes to Schedules of Investments at page 44.
<PAGE> 40
September 30, 1995
SCHEDULE OF INVESTMENTS (continued)
TAX-EXEMPT PORTFOLIO
<TABLE>
<CAPTION>
DESCRIPTION ** PRINCIPAL VALUE
<S> <C> <C>
TEXAS (11.1%)
Brazos River Authority, Pollution
Control Revenue Bonds, Houston Light
and Power Company Project, Series
1988A, 8.250%, 5-1-19, A-/A3 $ 150,000 $ 165,486
Galveston, Industrial Development
Corporation Sales Tax Revenue, Series
1995, 5.750%, 9-1-15, AAA/Aaa 1,000,000 967,720
Houston Water Conveyance System,
Revenue Bonds, Series 1993C,
7.000%, 12-15-01, AAA/Aaa 1,000,000 1,131,750
Tarrant County, Housing Finance Corp.,
Single Family Mortgage Revenue
Bonds, GNMA, Series 1989A,
8.000%, 7-1-21, AAA/NR 780,000 834,436
3,099,392
UTAH (5.0%)
Utah State School District Finance,
Cooperative Revenue Bonds,
Mandatory Redemption, Series 1988,
8.375%, 2-15-10, AAA/NR 595,000 654,292
8.375%, 2-15-10, AAA/NR 660,000 725,743
1,380,035
VIRGINIA (3.6%)
Virginia State Housing Development
Authority Multi Family Housing, Series
1995 II, 6.300%, 11-1-15, AAA/Aaa 1,000,000 1,008,090
WASHINGTON (7.6%)
Washington Housing Finance Committee,
Single Family Mortgage Revenue Bonds
Series 1995A, 6.650%, 7-1-16, AAA/NR 1,000,000 1,042,120
Washington State Public Power Supply System
Nuclear Project #1 Revenue Refunding,
Series 1990A, 7.000%, 7-1-11, AA/Aa 1,000,000 1,062,640
2,104,760
WISCONSIN (3.3%)
Milwaukee County Wisconsin, Series A,
General Obligation, 5.250%, 12-1-10,
AAA/Aaa 950,000 908,732
WYOMING (3.4%)
Wyoming State Farm Loan Board, Capital
Facilities Revenue Bonds,
5.750%, 10-1-20, AA-/NR 1,000,000 959,080
TOTAL INVESTMENTS (99.8%)(COST $27,569,704) 27,786,387
OTHER ASSETS IN EXCESS OF LIABILITIES (0.2%) 68,621
NET ASSETS (100.0%) $ 27,855,008
</TABLE>
NOTES TO SCHEDULES OF INVESTMENTS
+ Foreign securities.
@ Notional amount of forward foreign currency contracts denominated in
indicated currency: B-British Pound; D-German Deutschemark;
E-Belgian Franc; F-French Franc; G-Dutch Guilder; J-Japanese Yen;
K-Swedish Krona; L-Italian Lira; M-Finish Marka; P-Spanish Peseta;
S-Swiss Franc.
# American Depository Receipts or Global Depository Receipts.
& Security is not yet available for delivery until October 13, 1995.
* Presently non-income producing.
** Ratings indicated are by Standard and Poor's/Moody's, respectively,
and are unaudited; NR: not rated by this service.
See Note 2 to financial statements for security valuation and other
significant accounting policies.
See Note 6 to financial statements for cost and unrealized appreciation
and depreciation of investments for Federal income tax purposes.
<PAGE> 41
September 30, 1995
STATEMENTS OF ASSETS AND LIABILITIES
All numbers (except per share amounts) in thousands
<TABLE>
<CAPTION>
Aggressive Capital
Assets: Growth Appreciation Global
<S> <C> <C> <C>
Investment securities, at market value $ 20,601 $ 8,648 $ 89,519
Cash - 1 2,300
Receivables:
Investment securities sold 283 407 705
Shares of beneficial interest sold 226 122 44
Interest - - -
Dividends 4 12 86
Due from investment adviser (Note 3) - 24 -
Forward foreign currency contracts (Notes 2,5) - 25 1,464
Other - 3 52
Total assets 21,114 9,242 94,170
Liabilities:
Accounts payable:
Investment securities purchased 858 323 401
Shares of beneficial interest redeemed 121 1 36
Due to custodian 1,569 - -
Accrued liabilities (Note 3):
Management and advisory fees 14 - 92
Distribution fees 6 4 28
Transfer agent fees and expenses - 4 43
Forward foreign currency contracts (Notes 2,5) - 39 519
Other 63 65 87
Total liabilities 2,631 436 1,206
Net Assets $ 18,483 $ 8,806 $ 92,964
Investment securities, at cost $ 17,544 $ 7,532 $ 75,549
Net asset value per share (net assets divided by
shares outstanding):
Class A shares $ 17.68 $ 13.54 $ 17.73
Class C shares $ 17.64 $ 13.49 $ 17.46
Offering price per share:
Class A shares (1) $ 18.71 $ 14.33 $ 18.76
Class C shares $ 17.64 $ 13.49 $ 17.46
STATEMENTS OF OPERATIONS
All numbers in thousands
Aggressive Capital
Investment Income: Growth (3) Appreciation (3) Global (2)
Interest $ 12 $ 29 $ 371
Dividends (net of foreign withholding taxes
of $77, $1 and $125 for Growth, Capital
Appreciation and Global, respectively) 17 130 1,090
29 159 1,461
Expenses (Note 3):
Management and advisory fees 62 44 874
Distribution fees:
Class A 21 12 293
Class C 3 9 32
Transfer agent fees and expenses 28 23 342
Custody fees and expenses 28 34 203
Registration fees 42 42 42
Audit fees and expenses 13 13 17
Trustees fees and expenses 1 1 10
Other 12 9 42
Less amounts waived/reimbursed by the investment
adviser (31) (55) -
179 132 1,855
Custodian earnings and brokerage credits - (2) (110)
Net expenses 179 130 1,745
Net investment income (loss) (150) 29 (284)
Realized and unrealized gain (loss) on investments
and foreign currency (Note 2):
Net realized gain (loss) on investments 1,358 485 3,820
Net realized gain (loss) from foreign currency
transactions - (9) (2,426)
Net realized gain (loss) 1,358 476 1,394
Net unrealized appreciation (depreciation) during
the period on:
Investments 3,058 1,116 9,561
Translation of assets and liabilities
denominated in foreign currency - (13) 1,723
Net unrealized appreciation (depreciation)
during the period 3,058 1,103 11,284
Net gain (loss) on investments and
foreign currency 4,416 1,579 12,678
Net increase (decrease) in net assets
resulting from operations $ 4,266 $ 1,608 $ 12,394
</TABLE>
(1) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on sales of $50,000 or more as set forth in
the Prospectus.
(2) For the year ended September 30, 1995.
(3) From the commencement of investment operations on December 2, 1994 through
September 30, 1995.
The notes to financial statements are an integral part of these statements.
<PAGE> 42
IDEX II Series Fund
<TABLE>
<CAPTION>
EQUITY- FLEXIBLE INCOME TAX-
GROWTH INCOME BALANCED INCOME PLUS EXEMPT
<S> <C> <C> <C> <C> <C>
$ 493,775 $ 4,926 $ 7,207 $ 19,517 $ 68,406 $ 27,786
3,098 480 - 74 476 175
6,708 - 100 852 - 6,626
202 47 32 407 424 -
415 23 38 418 1,560 573
212 9 3 - - -
- 15 19 - - 5
261 - 2 - - -
21 1 - 2 - 1
504,692 5,501 7,401 21,270 70,866 35,166
12,226 - 272 835 - 7,209
348 5 - 43 35 65
- - 21
59 - - 14 18 -
142 2 4 6 21 8
183 1 2 7 31 4
108 - 8 - - -
98 45 59 21 35 25
13,164 53 366 926 140 7,311
$ 491,528 $ 5,448 $ 7,035 $ 20,344 $ 70,726 $ 27,855
$ 360,655 $ 4,539 $ 6,773 $ 18,682 $ 66,945 $ 27,570
$ 22.84 $ 11.74 $ 11.47 $ 9.17 $ 10.36 $ 11.34
$ 22.64 $ 11.73 $ 11.47 $ 9.17 $ 10.35 $ 11.34
$ 24.17 $ 12.42 $ 12.14 $ 9.63 $ 10.88 $ 11.91
$ 22.64 $ 11.73 $ 11.47 $ 9.17 $ 10.35 $ 11.34
<CAPTION>
EQUITY- FLEXIBLE INCOME TAX-
GROWTH (2) INCOME (3) BALANCED (3) INCOME (2) PLUS (2) EXEMPT (2)
<S> <C> <C> <C> <C> <C>
$ 3,432 $ 50 $ 91 $ 1,765 $ 5,870 $ 1,651
3,435 46 19 72 38 -
6,867 96 110 1,837 5,908 1,651
4,292 25 32 186 402 169
1,488 8 6 70 228 98
38 1 13 6 17 2
1,741 11 10 54 119 35
156 7 24 22 26 13
37 42 43 42 41 39
25 13 13 13 13 13
51 1 1 2 8 3
203 8 7 10 18 9
- (40) (49) (16) - (91)
8,031 76 100 389 872 290
(121) (4) (2) (3) (14) (7)
7,910 72 98 386 858 283
(1,043) 24 12 1,451 5,050 1,368
57,232 78 150 (803) (534) 120
(1,299) - - - - -
55,933 78 150 (803) (534) 120
83,175 388 434 1,574 5,224 602
(1,334) - (6) - - -
81,841 388 428 1,574 5,224 602
137,774 466 578 771 4,690 722
$ 136,731 $ 490 $ 590 $ 2,222 $ 9,740 $ 2,090
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 43
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGGRESSIVE CAPITAL
GROWTH APPRECIATION GLOBAL
1995 (3) 1995 (3) 1995 (1) 1994 (2)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $ (150) $ 29 $ (284) $ (346)
Net realized gain (loss) on investments and
foreign currency transactions 1,358 476 1,394 3,253
Net unrealized appreciation (depreciation)
during period 3,058 1,103 11,284 2,160
Net increase (decrease) in net assets
resulting from operations 4,266 1,608 12,394 5,067
Distributions to shareholders:
From net investment income:
Class A - - - -
Class C - - - -
- - - -
From net realized gains on investments and
foreign currency transactions - - (3,199) -
In excess of net realized gains - - - -
- - (3,199) -
SHARES OF BENEFICIAL INTEREST TRANSACTIONS (NOTE 3):
Class A
Proceeds from sale of shares 14,370 6,467 20,086 69,000
Shares issued on reinvestment of distributions - - 2,979 -
Cost of shares repurchased (1,690) (1,451) (23,750) (10,201)
Net increase (decrease) from share transactions 12,680 5,016 (685) 58,799
Class C
Proceeds from sale of shares 2,108 2,407 1,228 4,062
Shares issued on reinvestment of distributions - - 133 -
Cost of shares repurchased (571) (225) (1,719) (546)
Net increase (decrease) from share transactions 1,537 2,182 (358) 3,516
Total net increase (decrease) from share
transactions 14,217 7,198 (1,043) 62,315
Net increase (decrease) in net assets 18,483 8,806 8,152 67,382
NET ASSETS:
Beginning of period - - 84,812 17,430
End of period $ 18,483 $ 8,806 $ 92,964 $ 84,812
NET ASSETS CONSIST OF (NOTE 2):
Shares of beneficial interest, unlimited shares
authorized 14,217 7,198 77,165 78,499
Undistributed net investment income (loss) - 29 (14) (21)
Undistributed net realized gain (loss) from
investments and
foreign currency transactions 1,208 476 899 2,704
Net unrealized appreciation (depreciation) of
investments and on translation of assets and
liabilities in foreign currencies 3,058 1,103 14,914 3,630
Total net assets $ 18,483 $ 8,806 $ 92,964 $ 84,812
SHARES OF BENEFICIAL INTEREST:
Class A
Shares sold 1,055 589 1,267 4,456
Shares issued on reinvestment of distributions - - 198 -
Shares redeemed (108) (128) (1,525) (660)
Net increase (decrease) in shares outstanding 947 461 (60) 3,796
Shares outstanding at beginning of period - - 5,102 1,306
Shares outstanding at end of period 947 461 5,042 5,102
Class C
Shares sold 137 210 78 263
Shares issued on reinvestment of distributions - - 9 -
Shares redeemed (39) (20) (110) (36)
Net increase (decrease) in shares outstanding 98 190 (23) 227
Shares outstanding at beginning of period - - 227 -
Shares outstanding at end of period 98 190 204 227
</TABLE>
(1) For the year ended September 30.
(2) For the year ended September 30, 1994. Class C investment operations
commenced October 1, 1993 (Note 1).
(3) From commencement of investment operations on December 2, 1994, through
September 30, 1995.
The notes to financial statements are an integral part of these statements.
<PAGE> 44
IDEX II Series Fund
<TABLE>
<CAPTION>
Equity-
Growth Income Balanced Flexible Income Income Plus Tax-Exempt
1995 (1) 1994 (2) 1995 (3) 1995 (3) 1995 (1) 1994 (2) 1995 (1) 1994 (2) 1995 (1) 1994 (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ (1,043) $ 170 $ 24 $ 12 $ 1,451 $ 1,715 $ 5,050 $ 5,140 $ 1,368 $ 1,460
55,933 771 78 150 (803) 32 (534) 829 120 108
81,841 (34,217) 388 428 1,574 (2,171) 5,224 (8,190) 602 (1,685)
136,731 (33,276) 490 590 2,222 (424) 9,740 (2,221) 2,090 (117)
- - (27) (11) (1,435) (1,644) (4,919) (4,970) (1,397) (1,405)
- - (1) (2) (43) (27) (131) (82) (14) (5)
- - (28) (13) (1,478) (1,671) (5,050) (5,052) (1,411) (1,410)
(1,732) (9,602) - - - - (676) (960) (91) (996)
- (3,945) - - - - - - - -
(1,732) (13,547) (28) (13) (1,478) (1,671) (5,726) (6,012) (1,502) (2,406)
30,383 58,595 5,203 3,672 1,747 4,010 6,337 10,809 1,594 2,531
1,639 13,125 25 11 1,089 1,241 3,940 4,164 993 1,686
(110,904) (142,515) (501) (319) (5,299) (10,790) (9,434) (15,337) (4,866) (3,322)
(78,882) (70,795) 4,727 3,364 (2,463) (5,539) 843 (364) (2,279) 895
1,872 4,338 325 3,134 250 813 658 2,587 387 292
15 21 1 2 36 22 124 75 10 4
(1,106) (675) (67) (42) (441) (215) (1,020) (359) (224) (12)
781 3,684 259 3,094 (155) 620 (238) 2,303 173 284
(78,101) (67,111) 4,986 6,458 (2,618) (4,919) 605 1,939 (2,106) 1,179
56,898 (113,934) 5,448 7,035 (1,874) (7,014) 4,619 (6,294) (1,518) (1,344)
434,630 548,564 - - 22,218 29,232 66,107 72,401 29,373 30,717
$ 491,528 $ 434,630 $ 5,448 $ 7,035 $ 20,344 $ 22,218 $ 70,726 $ 66,107 $ 27,855 $ 29,373
307,416 386,726 4,986 6,458 22,998 25,616 69,488 68,883 27,533 29,639
- 165 (4) (1) 22 49 158 158 68 111
50,839 (3,693) 78 150 (3,512) (2,709) (381) 829 37 8
133,273 51,432 388 428 836 (738) 1,461 (3,763) 217 (385)
$ 491,528 $ 434,630 $ 5,448 $ 7,035 $ 20,344 $ 22,218 $ 70,726 $ 66,107 $ 27,855 $ 29,373
1,662 3,314 483 348 196 414 629 1,027 143 221
101 738 2 1 123 134 401 400 90 146
(6,181) (8,071) (45) (29) (599) (1,158) (952) (1,463) (438) (291)
(4,418) (4,019) 440 320 (280) (610) 78 (36) (205) 76
25,691 29,710 - - 2,438 3,048 6,560 6,596 2,621 2,545
21,273 25,691 440 320 2,158 2,438 6,638 6,560 2,416 2,621
100 244 30 297 28 99 66 244 35 26
1 1 - - 4 2 12 8 1 -
(59) (40) (6) (4) (49) (23) (104) (35) (21) (1)
42 205 24 293 (17) 78 (26) 217 15 25
205 - - - 78 - 217 - 25 -
247 205 24 293 61 78 191 217 40 25
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 45
FINANCIAL HIGHLIGHTS
Selected per share data for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
Net Asset Net RealizTotal IncomeDividends Distribution
Year or Value Ne and Unrealiz(Loss) From From Net From Net
Period Beginning Investmen Gain (Loss) Investment Investment Realized
Ended of Period Income (Lo InvestmenOperations Income Capital Gain
<S> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth
Class A 9/30/95 (2) $10.00 ($0.14) $7.82 $7.68 - -
Class C 9/30/95 (2) 10.00 (0.18) 7.82 7.64 - -
Capital Appreciation
Class A 9/30/95 (2) 10.00 (0.03) 3.57 3.54 - -
Class C 9/30/95 (2) 10.00 (0.08) 3.57 3.49 - -
Global
Class A 9/30/95 15.93 (0.06) 2.42 2.36 - (0.56)
9/30/94 13.35 (0.04) 2.62 2.58 - -
9/30/93 10.00 (0.04) 3.39 3.35 - -
Class C 9/30/95 15.74 (0.14) 2.42 2.28 - (0.56)
9/30/94 13.35 (0.23) 2.62 2.39 - -
Growth (1)
Class A 9/30/95 16.78 (0.05) 6.18 6.13 - (0.07)
9/30/94 18.46 0.01 (1.22) (1.21) - (0.33)
9/30/93 16.46 0.04 2.42 2.46 (0.07) (0.39)
9/30/92 16.22 0.08 0.88 0.96 (0.07) (0.65)
9/30/91 13.77 0.14 5.32 5.46 (0.17) (2.84)
9/30/90 17.52 0.12 (2.21) (2.09) (0.09) (1.57)
Class C 9/30/95 16.68 (0.15) 6.18 6.03 - (0.07)
9/30/94 18.46 (0.09) (1.22) (1.31) - (0.33)
Equity-Income
Class A 9/30/95 (2) 10.00 0.09 1.75 1.84 (0.10) -
Class C 9/30/95 (2) 10.00 0.03 1.75 1.78 (0.05) -
Balanced
Class A 9/30/95 (2) 10.00 0.05 1.47 1.52 (0.05) -
Class C 9/30/95 (2) 10.00 0.01 1.47 1.48 (0.01) -
</TABLE>
See notes to the financial highlights.
The notes to financial statements are an integral part of these statements.
<PAGE> 46
<TABLE>
<CAPTION>
Ratio of Net
Distributions Net Asset Net Assets Ratio of Investment
In Excess of Value End Shares Expenses to Income (Loss) Portfolio
Net Realized Total End Total of Period Outstanding Average to Average Turnover
Capital Gain Distribution of Period Return (4) (000's) (000's) Net Assets (Net Assets Rate (5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- - $17.68 76.80% $16,747 947 2.85% (2.39%) 107.41%
- - 17.64 76.40 1,736 98 3.40 (2.94) 107.41
- - 13.54 35.40 6,241 461 2.90 0.75 319.95
- - 13.49 34.90 2,565 190 3.45 0.20 319.95
- (0.56) 17.73 15.47 89,397 5,042 2.10 (0.43) 161.48
- - 15.93 19.33 81,241 5,102 2.14 (0.55) 148.01
- - 13.35 33.52 17,430 1,306 2.84 (0.87) 116.98
- (0.56) 17.46 15.14 3,567 204 2.65 (0.98) 161.48
- - 15.74 17.90 3,571 227 4.04 (2.46) 148.01
- (0.07) 22.84 36.70 485,935 21,273 1.86 (0.26) 123.26
(0.14) (0.47) 16.78 (6.72) 431,207 25,691 1.76 0.04 63.73
- (0.46) 18.46 15.13 548,564 29,710 1.61 0.29 97.40
- (0.72) 16.46 6.10 403,361 24,507 1.61 0.69 56.21
- (3.01) 16.22 48.00 126,436 7,796 1.48 0.88 102.16
- (1.66) 13.77 (12.50) 74,594 5,415 1.35 0.75 127.79
- (0.07) 22.64 36.32 5,593 247 2.41 (0.81) 123.26
(0.14) (0.47) 16.68 (7.72) 3,423 205 3.48 (1.68) 63.73
- (0.10) 11.74 18.43 5,167 440 2.99 0.85 42.18
- (0.05) 11.73 17.95 281 24 3.54 0.30 42.18
- (0.05) 11.47 15.27 3,670 320 2.92 0.56 100.35
- (0.01) 11.47 14.77 3,365 293 3.47 0.01 100.35
</TABLE>
See notes to the financial highlights.
The notes to financial statements are an integral part of these statements.
<PAGE> 47
FINANCIAL HIGHLIGHTS (continued)
Selected per share data for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
Net Asset Net Realized Total Income Dividends Distribution
Year or Value Net and Unrealized (Loss) From From Net From Net
Period Beginning Investment Gain (Loss) on Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Capital Gains
<S> <C> <C> <C> <C> <C> <C> <C>
Flexible Income (3)
Class A 9/30/95 $8.83 $0.61 $0.37 $0.98 ($0.64) -
9/30/94 9.59 0.65 (0.81) (0.16) (0.60) -
9/30/93 8.95 0.70 0.60 1.30 (0.66) -
10/31/92 8.73 0.80 0.22 1.02 (0.80) -
10/31/91 7.74 0.82 1.10 1.92 (0.80) (0.13)
10/31/90 9.55 0.90 (1.80) (0.90) (0.91) -
Class C 9/30/95 8.83 0.56 0.37 0.93 (0.59) -
9/30/94 9.59 0.60 (0.81) (0.21) (0.55) -
Income Plus
Class A 9/30/95 9.75 0.75 0.71 1.46 (0.75) (0.10)
9/30/94 10.98 0.76 (1.10) (0.34) (0.75) (0.14)
9/30/93 10.55 0.83 0.46 1.29 (0.81) (0.05)
9/30/92 10.04 0.76 0.64 1.40 (0.76) (0.13)
11/30/91 9.20 0.98 0.87 1.85 (0.98) (0.03)
11/30/90 9.99 1.04 (0.79) 0.25 (1.04) -
Class C 9/30/95 9.74 0.69 0.71 1.40 (0.69) (0.10)
9/30/94 10.98 0.66 (1.10) (0.44) (0.66) (0.14)
Tax-Exempt
Class A 9/30/95 11.10 0.55 0.29 0.84 (0.56) (0.04)
9/30/94 12.07 0.56 (0.60) (0.04) (0.54) (0.39)
9/30/93 11.62 0.56 0.45 1.01 (0.54) (0.02)
9/30/92 11.46 0.54 0.28 0.82 (0.54) (0.12)
11/30/91 11.27 0.75 0.26 1.01 (0.75) (0.07)
11/30/90 11.39 0.78 (0.12) 0.66 (0.78) -
Class C 9/30/95 11.10 0.52 0.29 0.81 (0.53) (0.04)
9/30/94 12.07 0.53 (0.60) (0.07) (0.51) (0.39)
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
Ratio of Net
Distributions Net Asset Net Assets Ratio of Investment
In Excess of Value End Shares Expenses to Income (Loss) Portfolio
Net Realized Total End Total of Period Outstanding Average to Average Turnover
Capital Gains Distributions of Period Return (4) (000's) (000's) Net Assets(6) (Net Assets Rate (5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ($0.64) $9.17 11.57% $19,786 2,158 1.87% 7.03% 149.58%
- (0.60) 8.83 (1.54) 21,527 2,438 1.85 6.57 105.40
- (0.66) 9.59 13.66 29,232 3,048 1.50 7.76 138.86
- (0.80) 8.95 12.17 26,676 2,982 1.50 8.55 140.23
- (0.93) 8.73 26.38 18,696 2,142 1.50 9.84 130.73
- (0.91) 7.74 (10.22) 18,760 2,424 1.50 10.51 72.40
- (0.59) 9.17 10.95 558 61 2.42 6.48 149.58
- (0.55) 8.83 (2.15) 691 78 2.40 6.03 105.40
- (0.85) 10.36 15.85 68,746 6,638 1.29 7.53 25.07
- (0.89) 9.75 (3.28) 63,995 6,560 1.33 7.35 48.12
- (0.86) 10.98 12.80 72,401 6,596 1.33 7.73 54.51
- (0.89) 10.55 14.40 54,647 5,181 1.17 8.79 91.01
- (1.01) 10.04 21.00 47,334 4,716 1.15 10.20 52.79
- (1.04) 9.20 2.50 33,182 3,607 0.69 11.12 18.54
- (0.79) 10.35 15.08 1,980 191 1.84 6.98 25.07
- (0.80) 9.74 (4.55) 2,112 217 3.52 5.16 48.12
- (0.60) 11.34 7.75 27,401 2,416 1.02 4.83 126.48
- (0.93) 11.10 (0.41) 29,096 2,621 1.00 4.83 59.84
- (0.56) 12.07 8.97 30,717 2,545 1.00 4.83 91.03
- (0.66) 11.62 7.20 28,363 2,442 1.00 5.49 106.89
- (0.82) 11.46 9.20 28,242 2,464 0.95 6.67 117.92
- (0.78) 11.27 6.00 22,708 2,016 0.68 6.92 81.17
- (0.57) 11.34 7.48 454 40 1.27 4.58 126.48
- (0.90) 11.10 (0.73) 277 25 1.25 4.58 59.84
</TABLE>
<PAGE> 49
As of October 1, 1992, Growth Class A discontinued the practice of
equalization accounting. On October 1, 1993, Growth Class A changed its
distribution rate to 0.35% from 0.25%; prior to May 1, 1991, no
distribution fees were incurred by Growth Class A (Note 3).
(2) From commencement of operations, December 2, 1994.
(3) As of October 1, 1992, Flexible Income Class A discontinued the practice of
equalization accounting. On October 1, 1993, Flexible Income Class A
initiated a plan of distribution.
(4) Total return has been calculated for the period ending September 30, 1995
without deduction of a sales load, if any, on an initial purchase. Short
periods (where applicable) are not annualized.
(5) This rate is calculated by dividing the average value of the Portfolio's
long-term investments during the period into the lesser of its respective
long-term purchases or sales during the period. Short periods (where
applicable) are annualized.
The notes to financial statements are an integral part of these statements.
<PAGE> 50
(6) Expense ratios reduced by affiliated brokerage and custody earnings credits
for Growth Class A and Class C, Aggressive Growth Class A and Class C,
Capital Appreciation Class A and Class C, Global Class A and Class C,
Balanced Class A and Class C, Equity-Income Class A and Class C, Income
Plus Class A and Class C, Flexible Income Class A and Class C and
Tax-Exempt Class A and Class C would have been 1.84% and 2.38%, 2.85% and
3.40%, 2.85% and 3.40%, 1.97% and 2.52%, 2.85% and 3.40%, 2.85% and 3.40%,
1.26% and 1.81%, 1.85% and 2.40% and 1.00 and 1.25% respectively, for the
period ended September 30, 1995. For the periods prior to 1995, expense
ratios have not been grossed up by these credits. The following summarizes
the expense ratios without expense reimbursement by the investment adviser
for those Portfolios which are net of expense reimbursement. Short periods
(where applicable) are annualized (See Note 3).
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Class A 3.35% - - - -
Class C 3.91% - - - -
Capital Appreciation Class A 4.17% - - - -
Class C 4.72% - - - -
Global Class A - - 3.65% - -
Class C - - - - -
Equity-Income Class A 4.57% - - - -
Class C 5.12% - - - -
Balanced Class A 4.48% - - - -
Class C 5.03% - - - -
Flexible Income Class A 1.94% 2.13% 1.56% 1.66% 1.75%
Class C 2.49% 8.59% - - -
Income Plus Class A - - - - 1.21%
Class C - - - - -
Tax-Exempt Class A 1.35% 1.30% 1.43% 1.20% 1.24%
Class C 1.60% 20.88% - - -
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 51
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
NOTE 1. Organization:
IDEX II Series Fund ("IDEX II Series") is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end management investment company. IDEX
II Series is comprised of nine portfolios (each a "Portfolio" and
collectively the "Portfolios"): IDEX II Growth Portfolio ("Growth"),
IDEX II Aggressive Growth Portfolio ("Aggressive Growth"), IDEX II
Capital Appreciation Portfolio ("Capital Appreciation"), IDEX II
Global Portfolio ("Global"), IDEX II Balanced Portfolio ("Balanced"),
IDEX II Equity-Income Portfolio ("Equity-Income"), IDEX II Income Plus
Portfolio ("Income Plus"), IDEX II Flexible Income Portfolio
("Flexible Income") and IDEX II Tax-Exempt Portfolio ("Tax-Exempt").
All
Portfolios are diversified except Capital Appreciation. Aggressive
Growth, Capital Appreciation, Balanced, and Equity-Income commenced
investment operations on December 2, 1994.
Effective October 1, 1993, each Portfolio of IDEX II Series was
authorized to offer investors a choice of two classes of shares, each
with a public offering price that reflects different sales charges, if
any, and expense levels. A comprehensive discussion of the terms
under which shares of either class are offered is contained within the
Prospectus.
NOTE 2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed
consistently by the Portfolios in the preparation of their financial
statements; the policies are in conformity with generally accepted
accounting principles.
A. Security valuations: Investments of the Portfolios traded on a
national securities exchange and the NASDAQ National Market System are
stated at the last reported sales price on the day of valuation;
securities traded in the over-the-counter market and listed securities
for which no sale was reported on that date are valued at
the last quoted bid price. Foreign securities are converted to U.S.
dollars using exchange rates at the close of the New York Stock
Exchange. Long-term debt securities are valued by major independent
providers of pricing services. Short-term debt securities are valued
at amortized cost, which approximates market. Other securities for
which quotations are not readily available are valued at fair values
determined in such manner as the sub-advisers, under the supervision
of the Board of Trustees, decide in good faith.
B. Security transactions and related investment income: Security
transactions are accounted for on the trade date (date the order to
buy or sell is executed). Securities gains and losses are calculated
on the specific identification basis and dividend income is recorded
on the ex-dividend date for both financial and Federal tax reporting
purposes; interest income is recorded on the accrual basis, including
amortization of premium and discount. Original issue discount (as
defined in the Internal Revenue Code) and market premium and discount
are amortized for both financial and Federal tax reporting purposes
over the remaining life of the related bonds.
C. Foreign currency translation: Securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollars at the closing exchange rate each day. The cost of foreign
securities is translated at the exchange rate in effect when the
investment was acquired. The Portfolios combine fluctuations from
currency exchange rates and fluctuations in market value when
computing net realized and unrealized gain or loss from investments.
Transaction gains or losses resulting from changes in exchange rates
during the reporting period or upon settlement of the foreign currency
transactions are reported in the Statement of Operations for the
current period. Foreign denominated assets and the use of forward
contracts may involve risks not typically associated with domestic
transactions, including unanticipated movements in exchange rates, the
degree of government supervision and regulation of security markets,
and the possibility of political or economic instability.
D. Federal taxes: It is the policy of the Portfolios to distribute all
income and net capital gains to shareholders and otherwise qualify as
regulated investment companies under the Internal Revenue Code. In
addition, the Portfolios intend to pay distributions as required to
avoid excise taxes. Accordingly, no provisions have been made for
Federal taxes.
E. Distributions to shareholders: Dividends and distributions are
recorded by the Portfolios on the ex-dividend date. Income and
capital gain distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted
accounting principles. Accordingly, permanent book and tax basis
differences relating to Portfolio earnings and shareholder
distributions are reclassified as necessary among components of net
assets. Reclassifications from net investment income to realized
capital gains have been made to Growth and Aggressive Growth for
$878,067 and $150,135 respectively. Permanent book and tax
differences have been reclassified as necessary from undistributed net
investment income to shares of beneficial interest in the amounts of
$291,497 and $1,209,454 for Global and Growth, respectively.
<PAGE> 52
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 1995
NOTE 3. Investment Advisory and Other Payments To/From Affiliates:
Idex Management, Inc. ("IMI") is the investment adviser for Growth,
Capital Appreciation, Global, Balanced and Flexible Income;
InterSecurities, Inc. ("ISI") is the investment adviser for Aggressive
Growth, Equity-Income, Income Plus and Tax-Exempt. In addition, ISI
is the Portfolios' underwriter. Idex Investor Services, Inc. ("IIS")
is the Portfolios' transfer agent. IMI is owned equally by AUSA
Holding Company ("AUSA") and Janus Capital Corporation ("JCC"). ISI
and IIS are 100% owned by AUSA. AUSA is a wholly-owned subsidiary of
AEGON N.V., a Netherlands corporation.
Under each Portfolio's Management and Investment Advisory Agreement,
the Portfolios pay annual management fees based upon average daily net
assets to their respective investment advisers. The Portfolios will
be reimbursed by their advisers to the extent that certain operating
expenses exceed the lesser of a stated annual limitation or any
limitation imposed by the most restrictive state law. The Portfolios
have a 12b-1 distribution plan under the 1940 Act pursuant to which an
annual fee based on daily net assets is paid to ISI for various
disbursements such as broker-dealer account servicing fees and other
promotional expenses of the Portfolios. The 12b-1 fee for all
Portfolios is comprised of a 0.25% service fee and the remaining
amount is an asset-based sales charge/distribution fee. The
Portfolios pay IIS a monthly per open account fee of $1.185 plus $2.48
for each new account opened. Proceeds from sale of shares for Income
Plus include $49,927 contributed by its sub- adviser to reimburse the
Portfolio for an investment trade error during the period.
For the period ended September 30, 1995:
<TABLE>
<CAPTION>
Aggressive Capital Equity- Flexible Income Tax-
Growth Appreciation Global Growth Income Balanced Income Plus Exempt
------ ------------ ------ ------ ------ -------- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual management 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 0.90% 0.60% 0.60%
fee rate (1)
Annual expense limit 2.50% 2.50% 2.50% 1.50% 2.50% 2.50% 1.50% 1.25% 0.65%
(excluding 12b-1
fees) (2)
Class A annual 12b-1 0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35%
distribution fee
rate
Class C annual 12b-1 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.60%
distribution fee
rate
Class A: (3)
Underwriting
commissions received
by ISI (not a $228,229 $73,332 $491,761 $1,155,639 $90,604 $61,824 $28,794 $142,265 $22,502
Portfolio expense)
Underwriting 33,478 10,921 73,278 167,446 14,667 10,074 5,736 26,821 4,491
commissions retained
by ISI
Expense offset
arrangements:
Custodian - $2,040 $110,004 $121,069 $4,176 $2,317 $3,308 $14,555 $6,647
Earnings Credits
Affiliated - 11 431 - - - - -
brokerage credits -
</TABLE>
(1) The rates for Growth, Aggressive Growth, Capital Appreciation, Global,
Balanced and Equity-Income apply to the
first $750 million in average net assets.
The rate for Flexible Income applies to the first $100 million in
average net assets.
(2) The rate for Global, Capital Appreciation, Aggressive Growth,
Equity-Income and Balanced is 2.50% on the first
$30 million and 2.00% on the next $70 million of average net assets.
(3) Class A imposes a front-end sales charge.
NOTE 4. Investment Transactions:
The cost of securities purchased and proceeds from securities sold
(excluding non-U.S. Government short-term securities) for the period
ended September 30, 1995 were as follows:
<TABLE>
<CAPTION>
Non-U.S. Non-U.S. U.S. U.S.
Government Government Government Government
purchases sales purchases sales
--------- ----- --------- -----
<S> <C> <C> <C> <C>
Aggressive $ 23,709,633 $ 7,529,460
$ --
$ --
Growth
Capital 20,065,894 13,188,456 2,344,861 2,349,055
Appreciation
Global 124,364,820 126,901,951 46,644,748 47,000,000
Growth 490,852,139 579,628,812 92,772,273 122,958,873
Equity-Income 4,750,664 736,123 792,780 350,000
Balanced 8,409,760 2,928,019 2,954,388 2,799,480
Flexible 23,559,354 27,629,464 11,366,766 9,595,579
Income
Income Plus 15,069,060 22,517,775 -- --
Tax-Exempt 33,070,373 33,578,769 -- --
</TABLE>
<PAGE> 53
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 1995
NOTE 5. Futures, Forward Currency Contracts And Other Derivative
Transactions: When a Portfolio enters into a stock index or U.S. Treasury
securities futures contract, the Portfolio is required to pledge to the
broker an amount of U.S. Government securities, equal to a portion of
the contract's value, as "initial margin" on the contract. Subsequently,
the Portfolio receives or makes delivery of cash equal to a specific
dollar amount times the difference between the stock index value (or for
Treasury securities futures, the per-contract value) at the close of the
valuation day and the contract's opening strike price. These payments,
called "variation margin", are recorded by the Portfolio as unrealized
gains or losses. To the extent variation margin is unsettled and is due
to or owed by the Portfolio on open futures contracts, a receivable or
payable will exist and will be indicated in the Statement of Assets and
Liabilities and the Schedule of Investments. When a futures contract
expires or is closed, the Portfolio may realize a gain or loss. Realized
net gains (losses) on futures contracts for the year ended September 30,
1995 were $154,728 and ($90,169) for Global and Flexible Income,
respectively. Forward foreign currency contracts are contracts for
delayed delivery of financial interests in which the seller agrees to
make delivery at a specified future date of a specified financial
instrument, at a specified price or yield. Risks arise from changes in
the market value of the underlying instruments and from the possible
inability of counterparties to meet the terms of their contracts.
Forward foreign currency contracts are valued at the forward rate, and
are marked to market daily. The change in market value is recorded by a
Portfolio as an unrealized gain or loss. When the contract is closed,
the Portfolio records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value
at the time it was closed.
NOTE 6. Information for Federal Income Tax Purposes:
<TABLE>
<CAPTION>
Realized net capital gain At September 30, 1995:
(loss) for the period Unrealized Unrealized Net unrealized
ended September 30, appreciation of depreciation of appreciation
1995 Cost of securities investments investments (depreciation)
<S> <C> <C> <C> <C> <C>
Aggressive $ 1,384,738 $ 17,569,931 $ 3,409,602 $ (378,283) $ 3,031,319
Growth
Capital 580,768 7,653,966 1,075,285 (64,559) 1,010,726
Appreciation
Global 2,789,298 75,690,542 14,005,704 (1,544,720) 12,460,984
Growth 56,154,859 360,811,200 134,484,382 (1,674,068) 132,810,314
Equity-Income 78,482 4,538,761 435,123 (47,533) 387,590
Balanced 149,411 6,777,582 472,814 (37,640) 435,174
Flexible Income (813,262) 18,681,613 942,454 (106,652) 835,802
Income Plus (534,363) 66,944,996 2,447,681 (986,735) 1,460,946
Tax-Exempt 119,597 27,569,704 341,233 (124,550) 216,683
</TABLE>
Realized net capital gains available to distribute will be paid to shareholders
in December, 1995. Capital loss carryforwards for Flexible Income aggregated
$2,870,174 and are available to offset future realized net capital gains
through September 30, 1998; of this amount, $480,919 is available through
September 30, 1999 and $186,837 is available through September 30, 2003.
Capital loss carryforwards for Income Plus are $158,472 and are available
through September 30, 2003. Flexible Income and Income Plus will elect to
treat approximately $626,425 and $375,891, respectively, of net capital losses
incurred in the 11 month period ended September 30, 1995 as having been
incurred in the following fiscal year. Flexible Income and Income Plus will
make net capital gain distributions in future years to the extent that net
capital gains are realized in excess of available loss carry forwards.
<PAGE> 54
IDEX II SERIES FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
IDEX II Series Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of each of the
portfolios constituting IDEX II Series Fund (hereafter referred to as the
"Fund") at September 30, 1995, the results of each of their operations, the
changes in each of their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above. The financial highlights of the Tax-Exempt
Portfolio and the Income Plus Portfolio for the year ended November 30, 1991
were audited by other independent accountants whose report dated December 20,
1991 expressed an unqualified opinion thereon.
PRICE WATERHOUSE LLP
Kansas City, Missouri
November 17, 1995
<PAGE> 55
IDEX II SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION (continued)
September 30, 1995
(unaudited)
FOR INDIVIDUALS / OTHERS
<TABLE>
<CAPTION>
EXEMPT-
RECORD ORDINARY INTEREST LONG-TERM
DATE TOTAL INCOME DIVIDENDS CAPITAL GAIN
<S> <C> <C> <C> <C> <C>
TAX-EXEMPT PORTFOLIO
CLASS A SHARES 10-14-94 0.04741 - 0.04741 -
11-14-94 0.05211 - 0.05211 -
12-22-94 0.09137 - 0.05617 0.03520
1-13-95 0.02537 - 0.02537 -
2-14-95 0.04571 - 0.04571 -
3-14-95 0.04407 - 0.04407 -
4-13-95 0.04529 - 0.04529 -
5-12-95 0.04233 - 0.04233 -
6-13-95 0.05186 - 0.05186 -
7-14-95 0.05419 - 0.05419 -
8-14-95 0.04876 - 0.04876 -
9-14-95 0.04515 - 0.04515 -
0.59362 - 0.55842 0.03520
<CAPTION>
EXEMPT-
RECORD ORDINARY INTEREST LONG-TERM
DATE TOTAL INCOME DIVIDENDS CAPITAL GAIN
<S> <C> <C> <C> <C> <C>
TAX-EXEMPT PORTFOLIO
CLASS C SHARE 10-14-94 0.04511 - 0.04511 -
11-14-94 0.04984 - 0.04984 -
12-22-94 0.08809 - 0.05289 0.03520
1-13-95 0.02368 - 0.02368 -
2-14-95 0.04347 - 0.04347 -
3-14-95 0.04193 - 0.04193 -
4-13-95 0.04275 - 0.04275 -
5-12-95 0.04016 - 0.04016 -
6-13-95 0.04938 - 0.04938 -
7-14-95 0.05162 - 0.05162 -
8-14-95 0.04650 - 0.04650 -
9-14-95 0.04278 - 0.04278 -
0.56531 - 0.53011 0.03520
<CAPTION>
QUALIFYING DIVIDENDS - FOR CORPORATIONS ONLY
Record Date
10-14-94 11-14-94 12-22-94 1-13-95 2-14-95 3-14-95
<S> <C> <C> <C> <C> <C> <C>
Equity-Income Portfolio
Class A Shares - - - - - 0.02211
Class C Shares - - - - - 0.01530
Balanced Portfolio
Class A Shares - - - - - 0.00285
Class C Shares - - - - - 0.00069
Flexible Income Portfolio
Class A Shares 0.00227 0.00223 0.00238 0.00097 0.00197 0.00210
Class C Shares 0.00211 0.00207 0.00215 0.00085 0.00182 0.00196
Income Plus Portfolio
Class A Shares 0.00038 0.00038 0.00069 0.00022 0.00043 0.00043
Class C Shares 0.00028 0.00035 0.00065 0.00020 0.00040 0.00041
4-13-95 5-12-95 6-13-95 7-14-95 8-14-95 9-14-95
Equity-Income Portfolio
Class A Shares - - 0.01251 - - 0.00864
Class C Shares - - 0.00581 - - 0.00156
Balanced Portfolio
Class A Shares - - 0.00224 - - 0.00232
Class C Shares - - 0.00016 - - 0.00012
Flexible Income Portfolio
Class A Shares 0.00205 0.00199 0.00237 0.00257 0.00216 0.00195
Class C Shares 0.00187 0.00185 0.00220 0.00239 0.00201 0.00179
Income Plus Portfolio
Class A Shares 0.00041 0.00039 0.00037 0.00039 0.00038 0.00037
Class C Shares 0.00037 0.00036 0.00034 0.00036 0.00035 0.00034
</TABLE>
Corporate Deductions: Under Federal tax law, the amounts reportable as
qualifying dividends are eligible for the dividends received deduction in
year received as provided by section 243 of the Internal Revenue Code.
The tax status of dividends paid will be reported to recipients of form
1099- after the close of the applicable calendar year. Shareholders are
advised to consult their tax adviser concerning the tax treatment of
dividends and distributions paid by the Portfolios.
<PAGE> 56
IDEX II SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION
September 30, 1995
(unaudited)
The following dividend information for the period ended September 30, 1995 is
being provided according to notice requirements under Internal Revenue Code
section 852; however, use Form 1099-DIV information to prepare income tax
returns.
FOR INDIVIDUALS / OTHERS
<TABLE>
<CAPTION>
Record Ordinary Long-term Record Ordinary Long-term
Date Total Income Capital Gain Date Total Income Capital Gain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Global Portfolio Global Portfolio
Class A Shares 12-22-94 0.56370 0.37960 0.18410 Class C Share 12-22-94 0.56370 0.37960 0.18410
Growth Portfolio Growth Portfolio
Class A Shares 12-22-94 0.07020 - 0.07020 Class C Share 12-22-94 0.07020 - 0.07020
Equity-Income Portfolio Equity-Income Portfolio
Class A Shares 3-14-95 0.04895 0.04895 - Class C Share 3-14-95 0.03388 0.03388 -
6-13-95 0.02770 0.02770 - 6-13-95 0.01286 0.01286 -
9-14-95 0.01913 0.01913 - 9-14-95 0.00346 0.00346 -
0.09578 0.09578 - 0.05020 0.05020 -
Balanced Portfolio Balanced Portfolio
Class A Shares 3-14-95 0.01983 0.01983 - Class C Share 3-14-95 0.00477 0.00477 -
6-13-95 0.01556 0.01556 - 6-13-95 0.00108 0.00108 -
9-14-95 0.01611 0.01611 - 9-14-95 0.00084 0.00084 -
0.05150 0.05150 - 0.00669 0.00669 -
Flexible Income Portfolio Flexible Income Portfolio
Class A Shares 10-14-94 0.05774 0.05774 - Class C Share 10-14-94 0.05372 0.05372 -
11-14-94 0.05663 0.05663 - 11-14-94 0.05265 0.05265 -
12-22-94 0.06059 0.06059 - 12-22-94 0.05472 0.05472 -
1-13-95 0.02470 0.02470 - 1-13-95 0.02175 0.02175 -
2-14-95 0.05022 0.05022 - 2-14-95 0.04635 0.04635 -
3-14-95 0.05355 0.05355 - 3-14-95 0.04988 0.04988 -
4-13-95 0.05205 0.05205 - 4-13-95 0.04771 0.04771 -
5-12-95 0.05067 0.05067 - 5-12-95 0.04697 0.04697 -
6-13-95 0.06033 0.06033 - 6-13-95 0.05598 0.05598 -
7-14-95 0.06544 0.06544 - 7-14-95 0.06090 0.06090 -
8-14-95 0.05506 0.05506 - 8-14-95 0.05108 0.05108 -
9-14-95 0.04968 0.04968 - 9-14-95 0.04550 0.04550 -
0.63666 0.63666 - 0.58721 0.58721 -
Income Plus Portfolio Income Plus Portfolio
Class A Shares 10-14-94 0.05970 0.05970 - Class C Share 10-14-94 0.04383 0.04383 -
11-14-94 0.05985 0.05985 - 11-14-94 0.05545 0.05545 -
12-22-94 0.20698 0.10808 0.09890 12-22-94 0.20047 0.10157 0.09890
1-13-95 0.03386 0.03386 - 1-13-95 0.03059 0.03059 -
2-14-95 0.06681 0.06681 - 2-14-95 0.06251 0.06251 -
3-14-95 0.06754 0.06754 - 3-14-95 0.06347 0.06347 -
4-13-95 0.06345 0.06345 - 4-13-95 0.05854 0.05854 -
5-12-95 0.06040 0.06040 - 5-12-95 0.05621 0.05621 -
6-13-95 0.05763 0.05763 - 6-13-95 0.05273 0.05273 -
7-14-95 0.06091 0.06091 - 7-14-95 0.05575 0.05575 -
8-14-95 0.05937 0.05937 - 8-14-95 0.05486 0.05486 -
9-14-95 0.05856 0.05856 - 9-14-95 0.05381 0.05381 -
0.85506 0.75616 0.09890 0.78822 0.68932 0.09890
</TABLE>
