<PAGE> 1
IDEX II SERIES FUND
A UNIVERSE OF OPPORTUNITY
MARCH 31, 1995
<PAGE> 2
(PICTURE)
JOHN R. KENNEY
Chairman of the Board
(PICTURE)
G. JOHN HURLEY
President and
Chief Executive Officer
(LOGO)
Where Time Is
On Your Side.
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FELLOW SHAREHOLDERS:
What a difference a quarter makes!
It's been a pleasant change, these first three months of 1995. In fact, the
financial markets have seemingly gone through a complete transformation from
what was an often uncomfortable 1994. Investors somehow have cast aside the
continued instability in Mexico, the collapse of the British banking concern
Barings Securities, a free-falling dollar, and congressional failure to pass a
balanced budget amendment, focusing instead on a healthy domestic economy. More
importantly, most liked what they saw.
It seems, at least for the moment, the Federal Reserve is on target in its
efforts to engineer the fabled "soft landing." Indeed, the Fed's tightening
spree seems to be slowing the too-vigorous pace of U.S. economic expansion at
last. Moreover, inflation has apparently remained in check while corporate
earnings have continued to grow robustly. This view, along with falling
intermediate and long-term interest rates, has helped propel the stock market
to record heights, with the Dow Industrial Average rumbling past one century
mark after another.
Away from home, however, things were not as sweet. Even as U.S. stock funds
surged to their strongest quarterly gain in two years, financial markets abroad
stumbled and fell, sometimes badly. Disillusioned by political upheaval and
economic gridlock across the globe, investors turned their backs on markets
they once embraced. And, unfortunately, far too many are probably
questioning--wrongfully so--the wisdom of international diversification of
their portfolios.
The rapid moves of the first quarter have come, to say the least, faster and
sooner than most anticipated. Money managers and their particular investing
styles have fared quite differently in this market. On the following pages, our
nine IDEX portfolio managers each discuss how they have responded to this
period's dramatic changes, where they've invested their respective portfolio's
assets and why. We encourage you to review these reports to help you better
understand your investment and its performance. Here, too, you will find the
pertinent data for the period, including new graphics on the major equity
positions and industry weightings. Together, the Top Five Equity Holdings
graphic and the Industry Pie Chart will give you further insight into some of
the most important factors that are driving your investment's performance. You
will also see that our industry classifications have changed to a more
standardized industry listing: The Dow Jones World Industry Groups. Major
financial publications like The Wall Street Journal use these same
classifications when discussing particular industry performance.
"OUR COMMITMENT REMAINS TO PROVIDE YOU WITH SOLID, WELL-MANAGED INVESTMENT
PRODUCTS."
This period was also marked by the addition of four new Portfolios to the
IDEX II Series Fund: the Aggressive Growth Portfolio, managed by Fred Alger
Management, Inc.; the Capital Appreciation Portfolio, managed by Janus Capital
Corporation; the Equity-Income Portfolio, managed by Luther King Capital
Management Corporation; and the Balanced Portfolio, managed by Janus Capital
Corporation. As the performance of these Portfolios was so uniquely influenced
by their December inception, the comments from these Portfolios' managers
should be particularly interesting.
With all that's gone on in the markets recently, this may be a good time to
review your goals and holdings to ensure your investments reflect your current
financial picture, especially with an eye towards prevailing market conditions.
And it's important to remember that no matter how gratifying the results of
this first quarter may have been, they are only short-term. There will almost
surely come other periods that will be less satisfying. But the splendid
turnaround of the first quarter of 1995 reminds us once again that the greatest
risk in investing is quite simply not to be invested.
Just as we reminded you a year ago when the financial markets were so
decidedly negative, IDEX Funds are intended for long-term investments and are
managed with long-term results in mind. Our commitment remains to provide you
with solid, well-managed investment products; our goal continues to be to
provide you with superior service. We respect your personal task of financial
planning and greatly appreciate the opportunity to assist.
Sincerely yours,
/s/ John R. Kenney
/s/ G. John Hurley
<PAGE> 4
GROWTH PORTFOLIO
The U.S. markets enjoyed a powerful rally in the first quarter of 1995, as the
U.S. economy began to show signs of slowing from the robust pace it set in
1994. Long and intermediate interest rates softened, and soon stocks followed
bonds by moving higher.
For the six-month period ended March 31, 1995, the Growth Portfolio Class A
and Class C shares had a total return of 3.24% and 2.96%, respectively, while
the Standard & Poor's 500 Index for the same period advanced 9.70%. While many
of the Growth Portfolio's holdings put in very good performances, we missed the
rally in major integrated oil stocks, which are a significant segment of the
S&P 500. Our lack of participation in this group was the primary reason the
Portfolio underperformed its benchmark. I believe the long-term prospects for
the oil industry remain very weak, however, because the industry is at a
competitive disadvantage with countries that have lower finding costs. I
consider the current strength in that group to be unsustainable.
Also, one of the major holdings in the portfolio, Lowe's Corporation, was
flat for the quarter. Lowe's operates a large chain of home improvement and
builders' supply centers in the Southeast. Unusually wet weather in the region
slowed sales of outdoor products such as paint, gardening, and landscaping
supplies. Lowe's continues to grow at almost 30% annually, however, and the
stock began performing better as the weather improved near the quarter's end.
Although we have already enjoyed an excellent rally this year, I believe
that the environment for stocks is still very positive, especially for large
growth stocks. The economy is moderating to more sustainable levels, while
inflation remains benign. Most price increases at the raw materials and
feedstock end of the production pipeline have not been passed through to
finished goods at the retail end. One reason is that manufacturing and
administrative operations are now much more efficient in many industries, and
costs have been dramatically reduced. A second cause is fierce international
competition, which has not only held down the price of domestic goods, but has
also kept import prices in check despite a historic decline in the dollar.
In fact, many of the Portfolio's large multinational holdings are benefiting
from the weak dollar, which has made their products less expensive and more
competitive abroad. I expect that Pfizer, a major pharmaceutical developer and
manufacturer, will take much of the dollar's weakness directly to the bottom
line, as will Coca-Cola and Microsoft. All three stocks posted substantial
gains during the quarter, as investors realized how these companies' strong
competitive positions would be enhanced by the dollar's decline. Other stocks
that gained included Merrill Lynch and Hewlett Packard, which dominates the
desk-top printer market and is rapidly expanding its position in the personal
computer market. A number of the financial stocks in the portfolio, such as
Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation, were helped by declining interest rates. And finally, Intel, a
computer chip manufacturer, and Texas Instruments, a designer and manufacturer
of electronic circuits and semi-conductors, appreciated along with a strong
technology group. Technology continued to lead the market during the first
quarter of this year just as it did through much of 1994.
"IN FACT, MANY OF THE PORTFOLIO'S LARGE MULTINATIONAL HOLDINGS ARE BENEFITING
FROM THE WEAK DOLLAR, WHICH HAS MADE THEIR PRODUCTS LESS EXPENSIVE AND MORE
COMPETITIVE ABROAD."
Several positions were sold at a profit during the period. Among these
stocks were Compaq Computer and Chrysler. Lone Star Steakhouse was cut but
continued to rise after the portfolio position had been eliminated.
The Portfolio's technology exposure has been increased, although I have been
careful not to become overly concentrated in this area. Disney, whose latest
hit, "The Lion King", is selling far above expectations, was also added to the
Portfolio. Disney has a number of other exciting films in the pipeline and has
improved the ride offerings at its Florida and California theme parks. Paper
stock Georgia Pacific was also added to the Portfolio. The long-term demand for
paper is well ahead of supply, and the current earnings cycles of these
companies should be much longer and more enduring than previous cycles.
This quarter saw the first significant move by investors away from cyclical
stocks into traditional growth companies. I believe this trend has much further
to go as economic growth moderates and the weak dollar makes many growth
companies more competitive overseas. If the dollar declines too much, of
course, it will harm our trading partners and may lead to price increases in
imported goods, but at present that threat seems to be muted. The turmoil in
Latin America, which we were able to avoid, is also cautionary. I do not see an
early resolution to the current uncertainty in that region.
Overall, however, I am very optimistic, and expect stocks to continue their
strong performance against a backdrop of economic moderation and interest rate
stability.
/s/ THOMAS F. MARSICO
---------------------
THOMAS F. MARSICO
GROWTH PORTFOLIO MANAGER
<PAGE> 5
GROWTH PORTFOLIO
(GRAPH)
AVERAGE ANNUAL TOTAL RETURN**
GROWTH STANDARD & POOR'S
CLASS A CLASS C 500 INDEX*
1 Year Ended
03/31/95 -5.23% -0.27% 15.50%
5 Years Ended
03/31/95 9.34% N/A 11.40%
Life of Class A
05/08/86 to 03/31/95 12.77% N/A 11.90%
Life of Class C
10/01/93 to 03/31/95 -6.07%*** -3.35% 9.00%
*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 expenses.
**Growth Portfolio Class A Shares performance reflect the maximum sales charge
of 5.5% with dividends and capital gains paid in additional shares. Growth
Portfolio Class C Shares performance includes dividends and capital gains paid
in additional shares. 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.
***Average annual return of Class A shares since Class C's inception.
(GRAPH)
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> 6
GROWTH PORTFOLIO
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials ....................... 1.8%
Consumer Cyclical ..................... 8.7%
Consumer Non-Cyclical ................. 12.9%
Financial ............................. 13.3%
Industrial ............................ 1.0%
Technology ............................ 42.3%
Utilities ............................. 1.8%
Long Term U.S. Gov't Securities........ 3.6%
Short-term Securities ................. 14.1%
Other ................................. 0.5%
TOP FIVE EQUITY HOLDINGS
MARCH 31, 1995
MICROSOFT CORPORATION
- Microsoft Corp., founded in 1975, is the worldwide leader in software
for personal computers.
- Microsoft currently is serving as a corporate supporter for the White
House Conference on Small Business. Studies show that small businesses
produce twice as many innovations per employee as large firms.
Microsoft believes that technology is key to that innovation.
LOWE'S COMPANIES, INC.
- Lowe's Companies, Inc., a North Carolina-based company, currently
operates 341 stores in 20 states. This represents an increase of 17
stores in the last 6 months.
- March sales grew 18% in comparison to March of 1994.
- Lowe's and 40 important industry vendors have joined to sponsor a
one-hour block of prime time programming entitled "At Home With
Lowe's" which will air on Home and Garden Television. The show will
feature a variety of different do-it-yourself and home improvement
topics.
FIRST DATA CORPORATION
- First Data Corporation 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 signed an agreement to handle all credit card
software systems and backoffice operations, including account-level
and transaction level processing for PNC Bank, one of the largest
banking organizations in the U.S.
- First Data and CellTel Data recently signed an agreement to market a
new service which allows credit and debit transactions using cellular
rather than traditional telephone line transmission.
INTEL CORPORATION
- Intel Corporation designs, develops, produces and markets advanced
microcomputer components and related products.
- On March 27, 1995, Intel introduced a new higher performance version
of its Pentium processor which uses a 0.35 micron process technology
(a micron is approximately 1/100th the diameter of a human hair). This
new technology translates into higher performance, higher reliability
and lower cost products for computer users.
TEXAS INSTRUMENTS, INC.
- Texas Instruments, Inc. develops, produces and markets products in the
electrical and electronics industry for industrial, consumer and
government use.
- Texas Instruments was named as a finalist in DISCOVER magazine's 1995
Technology Award for Technological Innovation. Both the Digital Light
Processing technology, which uses 400,000 small mirrors to project
images, and the Nightsight Thermal Vision System, which can see in the
dark and find objects through smoke, were named as finalists.
<PAGE> 7
AGGRESSIVE GROWTH PORTFOLIO
The Aggressive Growth Portfolio seeks to achieve long-term capital
appreciation. From its inception date of December 2, 1994 through the period
ended March 31, 1995, Class A and Class C shares had a total return of 21.10%
and 20.90%, respectively. By comparison, the Standard & Poor's 500 Index
advanced 11.40% for the same period. The Portfolio's strong performance
relative to the S&P 500 reflects an overall improvement in the performance of
growth stocks in 1995.
Led by the technology sector, the general market advance in growth stocks
was broad-based, with health care, communications, and selected retail stocks
each a strong contributor. This stands in contrast to 1994 when most
non-technology growth stocks experienced losses for the year. The primary
fundamental forces behind the strength of technology stocks has been the
increased technological component of consumer and industrial products and the
increased applications for computers systems. The increase in health care
stocks was driven during the period by industry consolidation, modest health
care reform, and recovery following the abandonment of extensive federally
mandated health care reform.
There were several other macro-economic factors that contributed to the
strong growth stock performance during the first quarter as well: a stabilizing
but slowing economic outlook; recognition of current undervaluation of growth
stocks; the flight to U.S. equities; the possibility of more favorable capital
gains tax treatment; and the net reduction in shares outstanding. Moreover, we
believe these factors remain in place to positively impact performance going
forward.
The top three weighted industry sectors in the Portfolio were technology,
47%; health care, 13%, with 7% of exposure related to pharmaceutical companies;
and communications, 12%. During the period, the Portfolio purchased 44 new
stocks and sold 10 stocks; we held 42 stocks for the full quarter, of which 32
advanced and 10 declined in price.
"THE PORTFOLIO'S BEST PERFORMING STOCKS FOR THE PERIOD - THERE WERE 15 ISSUES
WITH GAINS OF 15% OR GREATER-FELL PRIMARILY INTO TWO INDUSTRY SECTORS,
TECHNOLOGY AND HEALTH CARE."
The Portfolio's best performing stocks for the period--there were 15 issues
with gains of 15% or greater--fell primarily into two industry sectors,
technology and health care. The technology sector was led by Orbit
Semiconductor with a 110.17% price increase, while LSI Logic, Intel, Altera and
Micro Linear all experienced increases ranging from 30% to 40%; Micrel
increased 20.69%. The best performers in the health care sector included
Medtronic with a 24.72% increase, and Health Management Associates,
Columbia/HCA Heath Care, and Omnicare, with increases ranging from 15.50% to
20.00%. The Portfolio also realized good performance in two telecommunication
stocks, ADC Telecommunications and Glenayre Technologies, with increases of
18.00% and 18.18%, respectively. Other top-performing stocks included special
situations like: Alco Standard, a distributor of paper and office equipment, up
15.54%; Cracker Barrel Old Country Stores, a restaurant stock, up 20.95%; and
Lockheed, recently acquired by Martin Marietta, up 18.31%.
We were disappointed with the significant decline, 55.34%, in Sports and
Recreation, which experienced an unanticipated earnings shortfall, and declines
in Chrysler, down 14.80%, and Compaq Computer, down 12.97%.
/s/ DAVID ALGER
----------------
DAVID ALGER
AGGRESSIVE GROWTH PORTFOLIO MANAGER
<PAGE> 8
AGGRESSIVE GROWTH PORTFOLIO
(GRAPH)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN**
AGGRESSIVE GROWTH STANDARD & POOR'S
CLASS A CLASS C 500 INDEX*
<S> <C> <C> <C>
Life of Portfolio
12/02/94 to 03/31/95 14.46% 20.90% 11.40%
</TABLE>
*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.
**Aggressive Growth Portfolio Class A Shares performance reflect the maximum
sales charge of 5.5% with dividends and capital gains paid in additional
shares. Aggresive Growth Portfolio Class C Shares performance includes
dividends and capital gains paid in additional shares. 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
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Consumer Cyclical ............................ 12.7%
Consumer Non-Cyclical ........................ 10.6%
Financial .................................... 2.2%
Industrial ................................... 1.7%
Technology ................................... 52.7%
Utilities .................................... 0.7%
Short-term Securities ........................ 19.2%
Other ........................................ 0.2%
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> 9
AGGRESSIVE GROWTH PORTFOLIO
TOP FIVE EQUITY HOLDINGS
MARCH 31, 1995
TEKELEC
- The California-based company designs, produces and markets diagnostic
and switching systems for data communications, telecommunications and
integrated digital communications devices and networks.
- Fourth quarter revenue rose 61% and orders for the company's products
rose 134% compared to the fourth quarter of 1993.
GYMBOREE CORPORATION
- The California-based company designs, produces and markets high
quality apparel and accessories under the Gymboree brand name for
children ages newborn to seven years old. Gymboree's products are sold
exclusively through its nationwide chain of 226 stores in 42 states.
- March 1995 sales increased 42% compared to a year ago.
HEWLETT-PACKARD COMPANY
- Hewlett-Packard Company makes computer systems, peripheral products,
analysis instruments and computation instruments.
- Hewlett-Packard Company said it cut prices by up to 16% on its
Omnibook personal computers, by up to 11% on Vectra desktop personal
computers and by up to 13% on its Netserver server lines. Further, the
company said increasingly efficient manufacturing and broader
distribution channels have enabled it to pass on significant savings
to customers.
ELI LILLY AND COMPANY
- Eli Lilly and Company develops, produces and markets pharmaceuticals,
medical devices, diagnostic products, and animal health products to
120 countries around the world.
- First quarter pharmaceutical sales and services grew 33% led by strong
growth of Axid, Cefaclor, Humulin and Prozac compared to the first
quarter of 1993.
- Favorable exchange rates contributed 3% to the growth in sales.
BAY NETWORKS, INC.
- Bay Networks, Inc. develops, produces, markets and supports high
performance, multi-protocol internetworking products that interconnect
multiple types of local area networks (LANs) comprised of computer
equipment of the same or different manufacturers to form an
interworking system.
- First quarter revenue rose 27% compared to the first quarter of 1994.
<PAGE> 10
CAPITAL APPRECIATION PORTFOLIO
The Capital Appreciation Portfolio seeks long-term growth of capital in a
manner consistent with the preservation of capital by emphasizing investments
in common stocks of companies with market capitalizations between $1 billion
and $5 billion. Strategy focuses on finding those companies able to produce
earnings through franchises, products, and management. Since its inception
December 2, 1994, through March 31, 1995, Class A and Class C shares had a
total return of 10.10% and 9.90%, respectively. The Standard & Poor's 500 Index
for the same period was up 11.40%.
While the first quarter of 1995 saw a strong rally in U.S. markets, weakness
in several core holdings slightly dampened the performance of the Portfolio.
The biggest disappointment was Exide Corp., the largest maker of automotive and
industrial batteries in the world. The stock faltered when an historically warm
winter, both here and in Europe, led to fewer automotive battery replacements.
Though the company suffered an earnings shortfall for the quarter, its
long-term prospects are unchanged and I remain enthusiastic about the stock.
Nevertheless, for the sake of investment discipline, the position was trimmed.
The warm winter also affected auto parts supplier APS Holdings, although not
as drastically. Once again, unseasonably warm temperatures meant fewer car
repairs and less demand for parts. Heilig Meyers, a furniture retailer with
locations in many small towns throughout the Southeast, was also disappointing
as industry demand proved to be weaker than expected.
The last of the disappointing news this quarter was Kinnevik, the Swedish
conglomerate that manufactures paper and paper packaging, but also has
significant exposure to telecommunications and media. Kinnevik declined
moderately, a victim of the European equity markets, which were much weaker
than the U.S. during the period.
Because the Capital Appreciation Portfolio is a non-diversified portfolio,
results tend to be more volatile--having fewer positions can exaggerate moves
either up or down. Over time, however, intensive research focused on fewer
companies can generate returns that justify the risks of the concentrated
approach.
"I LOOK FOR COMPANIES THAT DOMINATE THEIR MARKETS, ARE UNDERFOLLOWED BY WALL
STREET, AND HAVE EXCEPTIONAL GROWTH PROSPECTS."
Despite the somewhat underperforming returns this quarter, I am optimistic
about the prospects for equities going forward. At the end of 1994, the economy
was surging, inflation was evident in raw materials prices, there was evidence
of labor shortages, and interest rates were threatening to go higher. Much of
that environment abated during the quarter, however, as the economy showed
signs of moderating, inflation remained benign at the retail level, and
interest rates declined. Indeed, we now have a relatively friendly backdrop for
stocks, especially for growth companies which tend to generate higher earnings
regardless of economic conditions. Economically sensitive companies, or the
cyclicals, will likely suffer a re-evaluation and downgrading in the face of
slower economic growth and lower earnings.
Two current holdings expected to benefit from a stable economy are Paging
Network, the large low-cost paging services company, and Trigen, a provider of
steam heating and cooling services to commercial buildings. Both stocks were
basically unchanged during the quarter. Stocks that performed well and should
continue to perform in coming quarters are Minerals Technology, whose products
lower the cost of paper products, and World Acceptance Corporation, a consumer
finance company.
I remain committed to a strategy based on careful research. I look for
companies that dominate their markets, are underfollowed by Wall Street, and
have exceptional growth prospects. I evaluate these companies as though I were
intending to buy the entire company. Despite potential short-term setbacks, I
believe this strategy will produce strong results in the long run.
/s/ JAMES P. GOFF
-----------------
JAMES P. GOFF
CAPITAL APPRECIATION PORTFOLIO MANAGER
<PAGE> 11
CAPTIAL APPRECIATION PORTFOLIO
(GRAPH)
AVERAGE ANNUAL TOTAL RETURN**
CAPITAL APPRECIATION STANDARD & POOR'S
CLASS A CLASS C 500 INDEX*
Life of Portfolio
12/02/94 to 03/31/95 4.06% 9.90% 11.40%
*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.
**Capital Appreciation Portfolio Class A Shares performance reflect the maximum
sales charge of 5.5% with dividends and capital gains paid in additional
shares. Capital Appreciation Portfolio Class C Shares performance includes
dividends and capital gains paid in additional shares. 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
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials ........................ 4.4%
Consumer Cyclical ...................... 26.2%
Consumer Non-Cyclical .................. 16.0%
Financial .............................. 8.9%
Independent ............................ 6.3%
Industrial ............................. 6.2%
Technology ............................. 16.2%
Utilities .............................. 4.7%
Short-term Securities and Other ........ 11.1%
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> 12
CAPITAL APPRECIATION PORTFOLIO
TOP FIVE EQUITY HOLDINGS
MARCH 31, 1995
J.D. WETHERSPOON PLC
- J.D. Wetherspoon PLC develops and manages one of the largest chain
"public houses" or pubs throughout London and elsewhere in England.
The company also provides catering services.
KINNEVIK AB
- Kinnevik AB is a large worldwide conglomerate with a concentration in
the communications industry, based in Denmark.
- Net income for the year 1994 rose approximately 32% as compared to
1993.
- Kinnevik and Ericsson Telefon are expected to sign a deal to supply
equipment for a nationwide mobile telephone service in Vietnam.
EXIDE CORPORATION
- Exide Corporation is the world's leading manufacturer and marketer of
lead acid batteries and automotive accessories.
- Exide Corporation is the primary battery supplier to the Chrysler
Corp. and supplies Sears Roebuck and Company with its DieHard Weather
Handler and specialty batteries.
- Exide Corporation recently acquired Evanite Fiber Corp., a leading
manufacturer of high technology battery separators. The acquisition
positions Exide as the only battery manufacturer that is totally
vertically integrated.
PAGING NETWORK, INC.
- Paging Network, Inc. provides paging services through 78 offices
located in 23 states and Washington, D.C.
- Paging Network purchased International Paging Corp., which has 45,000
paging subscribers.
APS HOLDING CORPORATION
- APS Holding Corporation is a Texas-based automotive part distributor.
- Revenue for the month of January 1995 increased 19% from January 1994.
<PAGE> 13
GLOBAL PORTFOLIO
For the six months ended March 31, 1995, the total return for the Global
Portfolio Class A and Class C shares was -3.03% and -3.26%, respectively. For
the same period, the Morgan Stanley Capital International World Index advanced
4.10% and the Standard & Poor's 500 Index advanced 9.70%.
U.S. stocks posted strong gains in the first quarter of 1995 following a
flat fourth quarter last year. The impetus for the rally in domestic equities
was the decline in U.S. interest rates, brought on by signs of a decelerating
economy. Meanwhile, foreign stocks grappled with a series of obstacles, most
notably the peso crisis in Mexico. The Portfolio's performance was constrained
by its large cash position at the beginning of the year, weakness in a few
individual positions, and the mixed returns in foreign markets.
Technology stocks continued to lead the market; semiconductor manufacturers
were especially strong. Financials, pharmaceuticals, and airlines also gained,
but telecommunications stocks were weak. For the telecom sector good news was
bad news; new subscriptions were up sharply, which is very positive long-term,
but start-up expenses cause new subscriptions to depress earnings over the
short run, so the telecom group sold off.
Foreign markets generally fared worse than the U.S. in spite of the weak
dollar. In Europe most markets were down--some sharply--when measured in local
currencies. When measured in U.S. dollars, however, many of these markets were
able to post gains. The dollar's spectacular drop also raises questions about
Europe's competitive position against cheaper U.S. goods and services. In
addition, interest rates remain relatively high on the Continent, where most
economies are still very robust, although at quarter's end, Germany did lower
short-term rates. The Japanese market continued to struggle under the currency
cloud as well, while the economy is recessionary with no clear end in sight.
Certainly, the Portfolio's emphasis on the common stocks of strong European
companies was advantageous to performance. Funds with substantial asset
concentrations in Latin American and other emerging markets fell sharply during
the peso devaluation crisis. The impact of the crisis on our portfolio was
minimal, as indicated below.
"IN THE LONG-TERM, A WEAK DOLLAR WILL BE INFLATIONARY, AS FOREIGN GOODS BECOME
MORE EXPENSIVE, BUT CURRENTLY IT IS HELPING U.S. PHARMACEUTICALS AND OTHER
MULTINATIONALS."
In the long-term, a weak dollar will be inflationary, as foreign goods
become more expensive, but currently it is helping U.S. pharmaceuticals and
other multinationals. Among the Portfolio's best performers was pharmaceutical
manufacturer Pfizer. The company has an impressive array of new products and is
increasing market share in a tough, competitive environment. We also saw gains
from some new names in the portfolio, including Roche, the Swiss pharmaceutical
giant, Millipore, a manufacturer of electronic instruments, and Getronics, a
large Dutch information technology company.
Companies that were weak were Cato Corporation, a specialty retailer,
AirTouch and Millicom, two telecommunications companies, and Grupo Finaciero
Inbursa, the Mexican financial services holding company. The Portfolio was also
hurt by a drop in Inbursa early in the quarter. I believe the loss of
confidence in the Mexican market may take longer to re-establish than investors
first expected.
During the last six months, I increased the Portfolio's position in
Kinnevik, the Swedish conglomerate that manufactures paper and paper packaging.
The company has significant exposure to telecommunications and media, and
should benefit from the deregulation of both the cellular and long-distance
markets in Sweden. I am willing to be patient with our European holdings. These
companies sell at relatively low valuations to their growth rates and in many
cases are compelling international presences.
The cash position has been reduced since year-end, and I believe the Global
Portfolio is poised to take advantage of any additional strength in the U.S.
equity markets. Once the dollar stabilizes, I am hopeful that rates will begin
to fall in Europe, which should create significant opportunities as the year
progresses.
/s/ HELEN YOUNG HAYES
---------------------
HELEN YOUNG HAYES
GLOBAL PORTFOLIO MANAGER
<PAGE> 14
GLOBAL PORTFOLIO
(GRAPH)
AVERAGE ANNUAL TOTAL RETURN**
<TABLE>
<CAPTION>
GLOBAL MORGAN STANLEY
CLASS A CLASS C INDEX*
<S> <C> <C> <C>
1 Year Ended
03/31/95 -4.41% -0.09% 9.80%
Life of Class A
10/01/92 to 03/31/95 16.34% N/A 13.01%
Life of Class C
10/01/93 to 03/31/95 6.23%*** 8.84% 8.20%
</TABLE>
*The Morgan Stanley Capital International World 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.
**Global Portfolio Class A Shares performance reflect the maximum sales charge
of 5.5% with dividends and capital gains paid in additional shares. Global
Portfolio Class C Shares performance includes dividends and capital gains paid
in additional shares. 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.
*** Average annual return of Class A shares since Class C's inception.
(GRAPH)
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> 15
GLOBAL PORTFOLIO
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials ............................. 0.3%
Consumer Cyclical ........................... 31.6%
Consumer Non-Cyclical ....................... 20.7%
Energy ...................................... 1.1%
Financial ................................... 4.6%
Independent ................................. 7.3%
Industrial .................................. 5.5%
Technology .................................. 24.4%
Utilities ................................... 2.4%
Short-term Securities and Other ............. 2.1%
TOP FIVE EQUITY HOLDINGS
MARCH 31, 1995
KINNEVIK AB
- Kinnevik AB is a large worldwide conglomerate with a concentration in
the communications industry, based in Denmark.
- Net income for the year 1994 rose approximately 32% as compared to
1993.
- Kinnevik and Ericsson Telefon are expected to sign a deal to supply
equipment for nationwide mobile telephone service in Vietnam.
ASTRA AB
- Astra is one of the fastest growing pharmaceutical companies in the
world, highly-research oriented, with worldwide revenues totaling $3.7
billion in 1994, an increase of 24% from 1993.
- Astra currently has joint ventures with Alanex Corp. and Merck & Co.
that is allowing Astra to not only increase its research capabilities,
but also expand on the company's marketability, making it potentially
well-positioned for expanding growth and opportunity.
ROCHE HOLDING AG
- Roche Holding AG is one of the world's largest drug producers based in
Switzerland.
- Roche is buying Roussel Velaf's unit, Soekami Le Francq which
distributes over-the-counter products in France.
- Roche has gained approval from EU drug regulators for its Newpogen
medication to be used in the treatment of cancer. Newpogen is seen by
some as one of the promising methods of heamotological support in
tumor patients undergoing chemotherapy.
ELSEVIER N.V.
- Elsevier N.V. is a leading publishing firm based in the Netherlands.
- Elsevier maintains fifty percent ownership in merged Reed Elsevier
publishing business.
- Continued growth in the volume of published scientific research should
continue to create good demand for Elsevier's traditional products and
opportunities in electronic dissemination of scientific information.
WOLTERS KLUWER N.V.
- Wolters Kluwer N.V. is a Netherlands-based publishing company with
worldwide operations.
- Wolters recently bought the Hungarian publisher NOVORG.
- Wolters acquired Prentice Hall Law & Business in November of 1994.
<PAGE> 16
GLOBAL PORTFOLIO
DISCOVERS A WORLD OF OPPORTUNITY
(PICTURE)
Global Portfolio
Investment Holdings By Country
March 31, 1995
UNITED STATES
Invested ............................ 25.27%
Short-term Securities and Other ..... 2.05
-----
27.32
-----
EUROPE
Austria ............................. 1.46%
Denmark ............................. 1.81
Finland ............................. 6.16
France .............................. 3.52
Germany ............................. 6.71
Italy ............................... 2.32
Luxembourg .......................... 0.78
Netherlands ......................... 11.14
Portugal ............................ 0.19
Sweden .............................. 17.38
Switzerland ......................... 5.50
United Kingdom ...................... 3.35
-----
60.32
-----
LATIN AMERICA
Chile ............................... 0.16%
Mexico .............................. 1.12
Peru ................................ 0.03
----
1.31
----
ASIA/PACIFIC RIM
China ............................... 0.17%
Hong Kong ........................... 1.20
India ............................... 0.15
Indonesia ........................... 1.62
Japan ............................... 5.24
South Korea ......................... 0.31
----
8.69
----
AUSTRALIA
Australia ........................... 2.36%
----
<PAGE> 17
BALANCED PORTFOLIO
The Balanced Portfolio seeks long-term capital growth, consistent with
preservation of capital and balanced by current income. From its inception
December 2, 1994 through the period ended March 31, 1995, Class A and Class C
shares had a total return of 4.30% and 4.15%, respectively. For the same period
of time, the Standard & Poor's 500 Index advanced 11.40% and the Lehman
Brothers Long Government/Corporate Bond Index increased 5.40%.
During the first quarter of 1995, the stock and bond markets rallied sharply
as the U.S. economy showed signs of slowing. Throughout the quarter, signs
emerged that the dangerous pace of economic growth might be decelerating. But
even as housing and retail sales softened and automobile sales declined,
consumer confidence, durable goods spending, and business investment remained
strong. Inflation remained subdued and interest rates declined in January,
improving the overall risk profile in the equities market.
We invested the Portfolio's assets in companies such as EDS, the large
information processor, and Minerals Technology, whose products reduce the cost
of paper. Other additions to the Portfolio include First Bank Systems, Mattel,
and an HMO company, United Healthcare, which should benefit from the trend
towards managed health care. On the fixed-income side, corporate bonds make up
approximately 20% of the Portfolio's assets; 3.2% are invested in convertible
and high-yield bonds. Cash and three- to five-year Treasury Notes make up
approximately 27% of the Portfolio.
"LOOKING FORWARD, I AM REASONABLY OPTIMISTIC ABOUT THE FINANCIAL MARKETS..."
Looking forward, I am reasonably optimistic about the financial markets, so
long as rates are stable and economic growth continues to moderate. The weak
dollar is currently making several of the Portfolio's holdings, such as
Nabisco, very competitive abroad, because a declining dollar makes their
products less expensive to foreign buyers. If the dollar weakens too much, it
could eventually be harmful to our trading relationships, but at present it is
enriching the bottom line of domestic exporters and multi-nationals.
As the year progresses, I will continue to look for good opportunities in
both growth stocks and the fixed-income market in an effort to achieve solid
and consistent returns through a balanced investment approach.
/s/ JAMES P. CRAIG
------------------
JAMES P. CRAIG
BALANCED PORTFOLIO MANAGER
<PAGE> 18
BALANCED PORTFOLIO
(GRAPH)
<TABLE>
<Cation>
AVERAGE ANNUAL TOTAL RETURN**
LEHMAN BROTHERS
BALANCED LONG GOV'T/CORP. STANDARD & POOR'S
CLASS A CLASS C BOND INDEX* 500 INDEX*
<S> <C> <C> <C> <C>
Life of Portfolio
12/02/94 to 03/31/95 -1.42% 4.15% 5.40% 11.40%
</TABLE>
*The Standard & Poor's 500 Index and Lehman Brothers Long Government/Corporate
Bond 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.
**Balanced Portfolio Class A Shares performance reflect the maximum sales
charge of 5.5% with dividends and capital gains paid in additional shares.
Balanced Portfolio Class C Shares performance includes dividends and capital
gains paid in additional shares. 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
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials ........................ 1.9%
Consumer Cyclical ...................... 22.9%
Consumer Non-Cyclical .................. 16.1%
Financial .............................. 16.1%
Industrial ............................. 4.3%
Technology ............................. 6.2%
Utilities .............................. 0.7%
Independent ............................ 1.2%
Long Term U.S. Gov't Securities ........ 3.9%
Short-term Securities .................. 20.6%
Other .................................. 6.1%
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
BALANCED PORTFOLIO
TOP FIVE EQUITY HOLDINGS
MARCH 31, 1995
GENERAL MOTORS CORPORATION
- General Motors Corporation is the largest manufacturer of automobiles
in the world. The company also produces defense products such as
military vehicles, radar and weapon control systems, guided missile
systems and defense satellites.
- Net earnings rose in the first quarter of 1995 to 2.51 dollars per
share from 81 cents per share a year earlier.
UNUM CORPORATION
- UNUM Corporation provides life, disability, and health insurance.
Related products include group pension products and reinsurance.
- On April 11, 1995, UNUM announced an increase of 2.5 cents to 26.5
cents on its quarterly dividend.
ALEXANDER & ALEXANDER SERVICES, INC.
- Alexander & Alexander Services, Inc. conducts an insurance brokerage,
risk management and human resource management consulting business in
over 80 countries worldwide.
- Currently, Alexander & Alexander is undergoing a restructuring program
in which the company intends to sell off certain non-core businesses
such as Alexis, one of the three largest U.S. property-casualty third
party administrators.
MATTEL, INC.
- Mattel, Inc. took over the top position as the world's largest
toymaker last year. This climb can be attributed to the company's
acquisition of Fisher-Price Inc. in November 1993.
- Mattel, Inc. had sales of $3.2 billion in 1994 and experienced
increased profits by 34%.
- Mattel, Inc.'s ability to cater to a more diversified consumer base
with new innovative Barbie, Hot Wheels and "The Lion King" merchandise
among other creative ventures, should lead the company into the future
with a solid core and a mindset for tomorrow.
MARRIOTT INTERNATIONAL, INC.
- Marriott International, Inc. operates and franchises hotels, develops
and operates retirement communities and vacation timesharing resorts,
and provides institutional food service and facilities management.
- Net earnings rose in the first quarter of 1995 to 40 cents per share
from 32 cents per share a year earlier.
- Marriott entered into an agreement to purchase a majority stake in
Ritz-Carlton Hotel Company this spring.
<PAGE> 20
EQUITY-INCOME PORTFOLIO
The Equity-Income Portfolio seeks to provide current income, long-term growth
of income and capital appreciation. Since its inception December 2, 1994,
through the period ended March 31, 1995, Class A and Class C shares had a total
return of 8.10% and 7.94%, respectively. For comparative purposes, the Standard
& Poor's 500 Index advanced 11.40% including dividends and the Lehman Brothers
Intermediate Government/Corporate Bond Index advanced 4.80% during the
corresponding period. As a result of its December funding and structuring, the
Portfolio experienced above-average cash holdings during the first full quarter
of its operation.
During the first quarter, investor expectations shifted toward a belief that
the Federal Reserve was finished tightening, that economic growth would slow to
a sustainable pace between 2 and 3%, and that long-term interest rates had
peaked for this cycle. As a result, interest rates declined 50 to 100 basis
points across the yield curve, providing a strong backdrop for equity
valuations. Stock market leadership shifted away from companies dependent on
the economic cycle towards large capitalization, multinational, growth
companies. This trend has benefited the Portfolio's investment style.
The Portfolio remains focused on stocks of companies with strong balance
sheets, established market shares within their industries, and high,
sustainable returns on shareholders' equity. We have increasingly found more
value in the stock market as price/earnings multiples have contracted with the
increase in corporate profits. Where earnings estimates have been reduced, many
franchise companies continue to trade at substantial discounts to their
underlying business value and now meet our replacement-cost investment
discipline. The asset mix at the end of the period was: 58.0% common stock,
2.0% convertible securities, 20.9% government bonds, 3.9% convertible corporate
bonds, and 36.1% in cash, treasury securities and other assets in excess of
liabilities.
"THE PORTFOLIO REMAINS FOCUSED ON STOCKS OF COMPANIES WITH STRONG BALANCE
SHEETS, ESTABLISHED MARKET SHARES WITHIN THEIR INDUSTRIES, AND HIGH,
SUSTAINABLE RETURNS ON SHAREHOLDERS' EQUITY."
We believe the primary risk in the stock market now is related to the
structural weakness in the U.S. dollar and the policies that may result from
attempting to stabilize it against our primary creditors in Germany and Japan.
If the policy prescription involves further interest rate increases
domestically, corporate profits may decline in 1996 from peak levels this year.
In that scenario, investment returns in 1995 will be more difficult to achieve
than the first quarter would indicate. Additionally, although corporate profit
expectations for 1995 continue to be revised upward, confidence in 1996
forecasts is extremely low in light of the possibility that the economy will
slow materially due to the level of Fed tightening that has already occurred.
Our long-term outlook for stocks still remains constructive. Valuations in
many industries remain attractive, corporate profits are still rising, dividend
increases are following rising cash flows, and increased business investment
should augment the economic expansion. We expect sustained merger and
acquisition activity during 1995 due to the availability of credit, the low
valuation of the dollar, and reasonable valuations. Many industries will
undergo consolidation as larger firms seek growth through vertical and
horizontal expansion of their businesses with their healthy cash flows.
/s/ LUTHER KING
---------------
LUTHER KING
EQUITY-INCOME PORTFOLIO MANAGER
<PAGE> 21
EQUITY-INCOME PORTFOLIO
(GRAPH)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN**
LEHMAN BROTHERS
EQUITY-INCOME INTERMEDIATE GOV'T/CORP. STANDARD & POOR'S
CLASS A CLASS C BOND INDEX* 500 INDEX*
<S> <C> <C> <C> <C>
Life of Portfolio
12/02/94 to 03/31/95 2.17% 7.94% 4.80% 11.40%
</TABLE>
*The Standard & Poor's 500 Index and Lehman Brothers Intermediate
Government/Corporate Bond 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.
**Equity-Income Portfolio Class A Shares performance reflect the maximum sales
charge of 5.5% with dividends and capital gains paid in additional shares.
Equity-Income Portfolio Class C Shares performance includes dividends and
capital gains paid in additional shares. Investment return and principal value
will fluctuate; shares when redeemed may be worth more or less than original
cost. Past performance does not guarantee future results.
EQUITY-INCOME PORTFOLIO
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials ............................. 6.2%
Consumer Cyclical ........................... 5.8%
Consumer Non-Cyclical ....................... 9.9%
Energy ...................................... 6.9%
Financial ................................... 5.4%
Independent ................................. 2.9%
Industrial .................................. 18.4%
Technology .................................. 6.7%
Utilities ................................... 1.7%
Long Term U.S. Gov't Securities ............. 20.0%
Short-term Securities and Other ............. 16.1%
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> 22
EQUITY-INCOME PORTFOLIO
TOP FIVE EQUITY HOLDINGS
MARCH 31, 1995
M.A. HANNA COMPANY
- M.A. Hanna Company, a producer of specialty rubber and plastic
materials and a distributor of plastic resins, reported record sales
and a 60% earnings increase in 1994.
- M.A. Hanna Company, with 62 locations in North America, has completed
17 acquisitions since 1986 when it began a transformation from natural
resources to polymers.
- M.A. Hanna Company is planning more global expansion in 1995, with
plans to establish processing capability in Asia.
GENERAL ELECTRIC COMPANY
- General Electric Company 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.
- Revenues rose 18% for the year 1994 as compared to 1993.
- 1995 first quarter earnings rose 28% as compared to first quarter
1994.
E.I. DU PONT DE NEMOURS AND COMPANY
- DuPont is engaged in five principal business segments: petroleum
operations; polymers; fibers; chemicals; and diversified businesses.
- 1995 first quarter net rose 49% to a record of $959 million.
- On April 6, 1995 DuPont bought back 156 million of its shares from
Seagram.
AMERICAN GENERAL CORPORATION
- American General Corporation is one of the nation's largest consumer
financial services organizations which offers a range of insurance
products and financial services.
- 1994 net income rose over 100% in comparison to 1993.
SHERWIN-WILLIAMS COMPANY
- Sherwin-Williams Company owns and operates 2,030 paint stores in 48
states, Canada and Puerto Rico which distribute company products.
Sherwin-Williams also manufactures and distributes a variety of
coatings.
- On February 15, 1995 the company raised its quarterly dividend to 16
cents per share from 14 cents per share.
- Sherwin-Williams acquired FLR Paints, Inc., which produces concrete
stains and sealers.
<PAGE> 23
INCOME PLUS PORTFOLIO
For the six months ended March 31, 1995, the total return on the Income Plus
Portfolio Class A and Class C shares was 6.66% and 6.35%, respectively. By
comparison, the Merrill Lynch High Yield Master Index advanced 6.57% for the
same period.
Both high-yield and investment-grade bonds performed well during the first
six months of the fiscal year, and each contributed to the Portfolio's
performance. Investors' perceptions of a gradual economic slowdown provided an
environment where not only could long rates fall, but economically-sensitive
high-yield bonds could advance as well.
The Federal Reserve Board (the "Fed") continued its policy of tightening
monetary conditions, as exemplified by the steadily flattening yield curve
during the past six months. Short rates increased over 100 basis points (two
discount rate increases) while rates beyond five-year maturities fell. There
are signs, however, that the Fed may now have more flexibility than last year;
certain sectors of the economy, most notably the interest-sensitive sectors,
have begun to show signs of weakness. Mitigating these positive factors for
interest rates, however, are a falling dollar and pressure on the Fed from weak
economies abroad to ease its policy.
An increase in interest rates is the key to sensitivity in the Portfolio
right now. While we had proposed last period that assuming more interest rate
risk was preferable to credit risk, current market conditions are suggesting a
softening of that stance. As investors have watched interest rates fall at the
longer end of the yield curve, they have been lengthening the duration of their
portfolios. Because we believe that investors' expectations are based on very
soft evidence, our current strategy is to do just the opposite. But as we
proceed through the year, there is a likelihood that events could unfold in
such a fashion that would lead us to once again lengthen the duration of the
Portfolio.
The valuation level and the optimistic outlook by investors for high-yield
bonds does not provide an adequate return for their comparative risks. Spreads
are as tight as anytime in the past fifteen years and from a long-term
perspective we believe high-yield bonds will, at best, earn just a coupon
return over the remaining part of the year.
If interest rates rise, we see limited upside unless higher inflation begins
to emerge. Also, while the upside potential for high-yield assets may appear
limited, there are a few signs that the economy may be about to enter a period
of substantial contraction. The outlook for 1995 remains moderately favorable
for the Income Plus Portfolio.
/s/ DAVID R. HALFPAP
--------------------
DAVID R. HALFPAP
INCOME PLUS PORTFOLIO MANAGER
INCOME PLUS PORTFOLIO
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials .................................... 8.2%
Consumer Cyclical .................................. 17.4%
Consumer Non-Cyclical .............................. 26.2%
Energy ............................................. 8.9%
Financial .......................................... 9.3%
Industrial ......................................... 15.1%
Technology ......................................... 1.4%
Utilities .......................................... 5.2%
Short-term Securities .............................. 3.0%
Other .............................................. 5.3%
<PAGE> 24
INCOME PLUS PORTFOLIO
(GRAPH)
AVERAGE ANNUAL TOTAL RETURN**
<TABLE>
<CAPTION>
INCOME PLUS MERRILL LYNCH
CLASS A CLASS C INDEX*
<S> <C> <C> <C>
1 Year Ended
03/31/95 0.06% 3.97% 7.60%
5 Years Ended
03/31/95 9.49% N/A 14.20%
Life of Class A
06/14/85 to 03/31/95 10.04% N/A 12.11%
Life of Class C
10/01/93 to 03/31/95 -1.14%*** 1.01% 6.80%
</TABLE>
*The Merrill Lynch High Yield Master 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.
**Income Plus Portfolio Class A Shares performances reflect the maximum sales
charge of 4.75% with dividends and capital gains paid in additional shares.
Income Plus Portfolio Class C Shares performance includes dividends and capital
gains paid in additional shares. 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.
***Average annual return of Class A shares since Class C's inception.
(GRAPH)
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> 25
FLEXIBLE INCOME PORTFOLIO
The first quarter of 1995 witnessed an unusually strong bond market. While at
year end 1994 I thought there was cause for optimism in 1995, the drop in
interest rates that began late last November and carried through most of the
first quarter was much steeper than I had anticipated. For the six month period
ended March 31, 1995, the Flexible Income Portfolio Class A and Class C shares
had a total return of 2.26% and 1.97%, respectively. For the same six months,
the Lehman Brothers Long Government/Corporate Bond Index advanced 5.40%.
Because bonds suffered one of the worst bear markets on record in 1994, I
entered 1995 very cautiously. At the beginning of the quarter, the Portfolio
contained a relatively large cash position and had a shorter weighted average
maturity than the Lehman Brothers Index. This defensive posture in January
explains much of the difference in performance between the Index and the
Portfolio. But given the strength in the economy in 1994, I was willing to
sacrifice some upside potential in order to protect the Portfolio against
further rises in interest rates. Indeed, the Federal Reserve Board did raise
short-term rates by 50 basis points (0.5%)--the seventh increase in twelve
months--during the period.
However, in February signs of economic slowing began to appear; retail and
housing sales declined, and more recently durable good orders have slowed.
After the Federal Reserve's final rate hike, the Portfolio's cash position was
reduced and the weighted average maturity lengthened. With that, the Portfolio
is better positioned to take advantage of any further gains in bonds. Holdings
in short-term notes, which were carrying some very attractive yields, were
increased, as were holdings in high-yield/high-risk securities, whose
substantial yields made them very attractive in a declining rate environment.
In the high-yield category, a recent addition was National Medical Enterprises,
a health care service provider. A new investment-grade bond to the Portfolio
was RJR Nabisco, the large food conglomerate. At the end of the period, the
Portfolio's security mix was similar to year end, proportionately deployed
among Treasury issues, investment-grade bonds, and high-yield bonds.
"... I WAS WILLING TO SACRIFICE SOME UPSIDE POTENTIAL IN ORDER TO PROTECT THE
PORTFOLIO AGAINST FURTHER RISES IN INTEREST RATES."
Going forward, I expect signs of economic slowing to continue, as the higher
rates of 1994 continue to slow industrial and consumer spending. The financial
crises in Latin America and the demise of the British banking concern Baring
Securities, while cautionary, may also help to slow economic growth in the U.S.
because investors will become more cautious. Although I am somewhat skeptical
of the "soft landing" that many investors are now expecting, I am still hopeful
that the economy will continue to slow and that inflation will remain under
control, despite the weakness in the U.S. dollar. And while I am cautious in
the short-term due to the mixed signals in the U.S. economy and the declining
dollar, I have a very positive outlook for the long-term.
/s/ RONALD V. SPEAKER
---------------------
RONALD V. SPEAKER
FLEXIBLE INCOME PORTFOLIO MANAGER
FLEXIBLE INCOME PORTFOLIO
INVESTMENTS BY MAJOR INDUSTRY
MARCH 31, 1995
(GRAPH)
Basic Materials .................................. 1.2%
Consumer Cyclical ................................ 10.8%
Consumer Non-Cyclical ............................ 9.9%
Energy ........................................... 8.3%
Financial ........................................ 21.1%
Industrial ....................................... 15.0%
Technology ....................................... 14.6%
Utilities ........................................ 1.6%
Long Term U.S. Gov't Securities .................. 14.2%
Other ............................................ 3.3%
<PAGE> 26
FLEXIBLE INCOME PORTFOLIO
(GRAPH)
AVERAGE ANNUAL TOTAL RETURN**
<TABLE>
<CAPTION>
LEHMAN BROTHERS
FLEXIBLE INCOME LONG GOV'T/CORP.
CLASS A CLASS C BOND INDEX*
<S> <C> <C> <C>
1 Year Ended
03/31/95 -3.61% 0.72% 4.60%
5 Years Ended
03/31/95 9.17% N/A 9.00%
Life of Class A
06/29/87 to 03/31/95 6.81% N/A 8.78%
Life of Class C
10/01/93 to 03/31/95 -2.74%*** -0.15% 0.70%
</TABLE>
*The Lehman Brothers Long Government/Corporate Bond 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.
**Flexible Income Portfolio Class A Shares performance reflect the maximum
sales charge of 4.75% with dividends and capital gains paid in additional
shares. Flexible Income Portfolio Class C Shares performance includes dividends
and capital gains paid in additional shares. 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.
*** Average annual return of Class A shares since Class C's inception.
(GRAPH)
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> 27
TAX-EXEMPT PORTFOLIO
For the six-month period ended March 31,1995, the total return for the
Tax-Exempt Portfolio Class A and Class C shares was 4.40% and 4.18%,
respectively. By comparison, the Lehman Brothers Long Municipal Bond Index
advanced 5.50% for the same period.
Mexico's move to a fully floating currency had the potential to negatively
impact the Portfolio, in that at the end of last September, 18% of its assets
were invested in Texas-dominciled bonds. We lowered that exposure to 7% during
October and November, prior to the peso devaluation. Of the Texas-domiciled
bonds we currently hold (investments in the housing and utility sectors
primarily) 90% are AAA-rated, insured bonds. Housing and utility sector bonds
are less likely to be adversely affected by continuing currency problems in
Mexico and their insurance will reduce our risk of holding defaulting bonds.
The peso devaluation affected municipal bonds in two ways: it lowered the
demand for imports from the U.S. to Mexico, and it placed a considerable strain
on the Texas border cities such as El Paso, Laredo, McAllen, and Brownsville,
whose local economies are closely tied to the Mexican economy. In addition, the
border cities also serve as important trade routes for goods flowing between
the U.S. and Mexico, and the bridges connecting the two countries are, in most
cases, municipal operations. Currently, Moody's does not expect to lower credit
ratings for any of the border cities. It will be more difficult, however, to
judge the impact the devaluation has on states which anticipated increased
exports due to NAFTA. The January trade data showed U.S. exports to Mexico down
10% and a 17% decline in exports to South and Central America.
The dollar has fallen significantly over the past twelve months. It is a
widely held belief that a weakening dollar means a corresponding decline in
bond prices. While this could have some impact on the U.S. credit markets,
other factors, including domestic growth, inflation, and fiscal and monetary
policy will have more impact on interest rates right now.
The instability in Mexico and Latin America has increased the recent
weakness in the dollar. Because of the close economic ties between the U.S. and
the rest of North and South America, any increase in U.S. interest rates may
add to the instability of the region by causing a further devaluation of the
peso and an increase in Mexican interest rates. A trend of declining exports to
developing markets could threaten the predicted soft landing for the U.S.
economy and could be the wild card that threatens our current interest rate
levels.
"... I EXPECT TO SEE SOME ATTRACTIVE OPPORTUNITIES TO BUY LONG-TERM BONDS AT
CHEAPER LEVELS THAN ARE CURRENTLY SEEN."
In the past three months, bonds have earned more than half of what they
typically make in a year. Without fresh evidence of an economic slowdown,
interest rates are not likely to fall below their nine-month low of 7.31% set
March 27 this year. All together, I believe bonds have taken about 75% of their
return for this rally. As a result, I have increased the Portfolio's short-term
and cash position to 17% and swapped additional positions into securities with
less interest-rate risk. At the same time, the spread between AAA-rated and A-
rated securities has widened somewhat. While we have taken advantage of that
widening as a way to increase total portfolio yield, overall the Portfolio
remains 75% invested in AAA-rated and AA-rated bonds, with the remainder
invested in A-rated securities.
Given the likelihood of political gridlock on reducing the Federal budget
deficit this year, the continued weakness in the dollar, and the condition of
U.S. fiscal and monetary policy, I expect to see some attractive opportunities
to buy long-term bonds at cheaper levels than are currently seen.
/s/ RACHEL DENNIS
-----------------
RACHEL DENNIS
TAX-EXEMPT PORTFOLIO MANAGER
<PAGE> 28
TAX-EXEMPT PORTFOLIO
(GRAPH)
AVERAGE ANNUAL TOTAL RETURN**
<TABLE>
<CAPTION>
LEHMAN BROTHERS
TAX-EXEMPT LONG MUNICIPAL BOND
CLASS A CLASS C INDEX*
<S> <C> <C> <C>
1 Year Ended
03/31/95 1.08% 5.78% 7.40%
5 Years Ended
03/31/95 5.92% N/A 8.20%
Life of Class A
04/01/85 to 03/31/95 7.74% N/A 10.62%
Life of Class C
10/01/93 to 03/31/95 -0.60%*** 2.27% 2.00%
</TABLE>
*The Lehman Brothers Long Municipal Bond 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.
**Tax-Exempt Portfolio Class A Shares performance reflect the maximum sales
charge of 4.75% with dividends and capital gains paid in additional shares.
Tax-Exempt Portfolio Class C Shares performance includes dividends and capital
gains paid in additional shares. 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.
*** Average annual return of Class A shares since Class C's inception.
(GRAPH)
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> 29
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
GROWTH PORTFOLIO
- - ---------------------------------------------------------------- ----------------------------------------------------------------
Shares Description Value Shares Description Value
- - ---------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (76.8%) TECHNOLOGY (37.3%)
BASIC MATERIALS (1.8%) --------------------
- - ------------------------ BIOTECHNOLOGY (2.1%)
FOREST PRODUCTS 125,675 Amgen, Inc. * $ 8,467,353
91,800 Georgia Pacific Corp. $ 7,321,050 ------------
------------ COMMUNICATIONS (11.1%)
CONSUMER CYCLICAL (8.7%) 59,150 America Online, Inc. * 4,391,888
- - -------------------------- 15,925 Ascend Communications, Inc. * 1,031,144
AUTO MANUFACTURERS (0.7%) 48,525 Cascade Communications Corp. * 3,348,225
70,025 General Motors Corp. Class E 2,722,222 137,600 Cisco Systems, Inc. * 5,246,000
------------ 93,775 DSC Communications Corp. * 3,053,548
BROADCASTING (1.1%) 80,100 L.M. Ericsson Telephone Company Class B # 4,951,181
67,450 British Sky Broadcasting PLC # * 1,660,956 151,565 General Instrument Corp. * 5,266,884
69,595 Infinity Broadcasting Corp. Class A * 2,905,591 213,175 Motorola, Inc. 11,644,684
------------ 36,617 Northern Telecom, Ltd. 1,386,869
4,566,547 3,850 Paging Network, Inc. * 128,975
------------ 24,475 PictureTel Corp. * 930,050
ENTERTAINMENT (1.8%) 47,800 QUALCOMM, Inc. * 1,565,450
73,300 Eastman Kodak Company 3,894,063 7,400 Vodafone Group PLC # 245,125
62,800 Walt Disney Company 3,351,950 387,147 Vodafone Group PLC + 1,248,022
------------ ------------
7,246,013 44,438,045
------------ ------------
RETAILERS - SPECIALTY (5.1%) COMPUTERS (6.0%)
66,041 Home Depot, Inc. 2,922,314 67,200 Digital Equipment Corp. * 2,545,200
500,995 Lowe's Companies, Inc. 17,284,328 122,850 Hewlett Packard Company 14,788,069
------------ 15,050 Shiva Corp. * 481,600
20,206,642 143,325 StrataCom, Inc. * 6,162,975
------------ ------------
CONSUMER NON-CYCLICAL (12.9%) 23,977,844
- - ------------------------------- ------------
BEVERAGES (3.1%) DIVERSIFIED (6.0%)
216,050 Coca-Cola Company 12,206,825 259,550 Philips Electronics nv # 8,857,144
------------ 169,875 Texas Instruments, Inc. 15,033,938
FOOD - OTHER (0.6%) ------------
122,300 Archer-Daniels-Midland Company 2,277,838 23,891,082
------------ ------------
HEALTH CARE (4.4%) INDUSTRIAL (0.2%)
205,100 Oxford Healthcare Plans, Inc. * 11,485,600 26,625 Spectrian Corp. * 802,078
129,350 United Healthcare Corp. 6,047,113 ------------
------------ SEMICONDUCTORS (4.6%)
17,532,713 84,350 Intel Corp. 15,646,706
------------ 56,050 LSI Logic Corp. * 2,942,625
HOUSEHOLD PRODUCTS (1.6%) ------------
146,800 Duracell International, Inc. 6,569,300 18,589,331
------------ ------------
PHARMACEUTICALS (3.2%) SOFTWARE (7.3%)
101,848 Astra AB A-Free + 2,705,071 106,775 Autodesk, Inc. 4,497,896
117,300 Pfizer, Inc. 10,058,475 47,850 Ceridan Corp. * 1,596,994
------------ 40,650 LEGENT Corp. * 1,341,450
12,763,546 245,000 Microsoft Corp. * 17,425,625
------------ 142,662 Oracle Systems Corp. * 4,458,203
FINANCIAL (13.3%) ------------
- - ------------------- 29,320,168
BANKS (1.6%) ------------
147,185 Citicorp 6,255,363 UTILITIES (1.8%)
------------ ------------------
DIVERSIFIED (8.9%) TELEPHONE
139,600 Federal Home Loan Mortgage Corp. 8,445,800 264,700 Airtouch Communications, Inc. * 7,213,075
101,855 Federal National Mortgage Association 8,288,451 ------------
312,425 First Data Corp. 16,207,047
1,956,600 Grupo Financiero Inbursa SA Class C + 2,739,528 TOTAL COMMON STOCK (COST $260,022,884) 307,158,514
------------ ------------
35,680,826 CONVERTIBLE PREFERRED STOCK (1.4%)
------------ TECHNOLOGY
SECURITIES BROKERS (2.8%) ----------
257,775 Merrill Lynch and Company, Inc. 10,987,659 DIVERSIFIED
------------ 52,525 Nokia AB OY # 3,860,588
11,492 Nokia AB OY Cumulative + 1,674,947
INDUSTRIAL (1.0%) ------------
- - ------------------- 5,535,535
CONTAINERS AND PACKAGING (0.6%) ------------
75,075 Liqui-Box Corp. 2,515,013 NON-CONVERTIBLE PREFERRED STOCK (3.6%)
------------ TECHNOLOGY
RAILROADS (0.4%) ----------
28,650 Conrail, Inc. 1,607,981 SOFTWARE
------------ 18,604 SAP AG Vorzug + 14,431,456
------------
TOTAL PREFERRED STOCK (COST $16,487,777) 19,966,991
------------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 30
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
GROWTH PORTFOLIO
- - ---------------------------------------------------------------- ----------------------------------------------------------------
Principal Description Value Principal Description Value
- - ---------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM U.S. GOVERNMENT SECURITIES (3.6%) TOTAL INVESTMENTS (99.5%) (COST $348,104,659) $398,120,993
$15,000,000 United States Treasury Notes
5.500%, 9-30-97, (cost $15,124,810) $ 14,526,300
------------
UNREALIZED GAIN (LOSS) ON FORWARD
COMMERCIAL PAPER (14.1%) FOREIGN CURRENCY CONTRACTS (-0.3%)
15,000,000 Federal National Mortgage K 16,212,572 Swedish Krona 4-12-95 Sell (59,883)
Association, 5.890%, 4-4-95 14,992,638 M 6,736,511 Finish Marka 4-3-95 Sell (15,033)
20,200,000 Ford Motor Credit Company, 6.050%, M 5,279,220 Finish Marka 4-5-95 Sell (19,053)
4-3-95 20,193,210 M 58,741,877 Finish Marka 4-10-95 Sell (1,328,775)
8,000,000 General Electric Capital Corp., M 32,175,597 Finish Marka 4-10-95 Buy 103,385
5.900%, 4-7-95 7,992,133 ------------
13,300,000 Household Finance Corp., 5.820%, TOTAL FORWARD FOREIGN CURRENCY CONTRACTS (1,319,359)
4-5-95 13,291,207 ------------
------------
Total Commercial Paper (cost $56,469,188) 56,469,188 OTHER ASSETS IN EXCESS OF LIABILITIES (0.8%) 3,169,223
------------ ------------
NET ASSETS (100.0%) $399,970,857
============
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 31
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
- - ---------------------------------------------------------------- -----------------------------------------------------------------
Shares Description Value Shares Description Value
- - ---------------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (79.2%) FINANCIAL (2.2%)
CONSUMER CYCLICAL (12.7%) ------------------
- - --------------------------- DIVERSIFIED (1.2%)
AUTO MANUFACTURERS (0.3%) 800 ADVANTA Corp. - Class B $ 25,000
300 Chrysler Corp. $ 12,562 400 First Financial Management Corp. 28,900
-------- --------
53,900
--------
CLOTHING/FABRIC (3.2%) SECURITIES BROKERS (1.0%)
3,800 Gymboree Corp. * 96,425 1,100 Lehman Brothers Holdings, Inc. 19,800
2,300 Tommy Hilfiger Corp. * 50,600 600 Merrill Lynch and Company, Inc. 25,575
-------- --------
147,025 45,375
-------- --------
ENTERTAINMENT (2.8%) INDUSTRIAL (1.7%)
2,600 Carnival Corp. - Class A 60,775 Electronic Components and Equipment (0.9%)
1,300 Walt Disney Company 69,388 2,000 Adflex Solutions, Inc. * 40,000
-------- --------
130,163
RESTAURANTS (0.7%) TRUCKING (0.8%)
2,000 Apple South, Inc. 31,250 1,200 Landstar Systems, Inc. * 37,800
-------- --------
RETAILERS - APPAREL (0.6%) TECHNOLOGY (51.3%)
700 Ann Taylor Stores Corp. * 26,075 Advanced Medical Devices (0.9%)
-------- 600 Medtronic, Inc. 41,625
RETAILERS - DRUG BASED (0.4%) --------
400 Cardinal Health, Inc. 19,050 AEROSPACE/DEFENSE (1.6%)
-------- 463 Lockheed Martin Corp. 24,481
RETAILERS - SPECIALTY (4.7%) 600 Loral Corp. 25,500
3,000 Circuit City Stores, Inc. 79,125 400 McDonnell Douglas Corp. 22,300
1,500 Home Depot, Inc. 66,375 --------
2,100 OfficeMax, Inc. * 53,813 72,281
1,700 Sports & Recreation, Inc. * 19,550 BIOTECHNOLOGY (1.3%) --------
-------- 900 Amgen, Inc. * 60,638
218,863 --------
--------
CONSUMER NON-CYCLICAL (10.6%) COMMUNICATIONS (11.6%)
- - ------------------------------- 1,600 ADC Telecommunications, Inc. * 47,200
Beverages (1.2%) 1,000 Andrew Corp. * 40,750
1,000 Coca-Cola Company * 56,500 1,400 DSC Communications Corp. * 45,587
-------- 2,000 General Instrument Corp. * 69,500
CONSUMER SERVICES (0.4%) 1,800 Glenayre Technologies, Inc. * 81,900
600 Loewen Group, Inc. 16,350 700 Motorola, Inc. 38,237
-------- 1,800 Network Equipment Technologies, Inc. * 45,675
FOOD - OTHER (1.5%) 4,600 Tekelec * 98,900
700 Cracker Barrel Old Country Store, Inc. 15,662 1,000 Tellabs, Inc. * 58,250
1,900 Nabisco Holdings Corp. - Class A * 54,388 200 Vodafone Group PLC # 6,625
-------- --------
70,050 532,624
-------- --------
HEALTH CARE (0.7%) COMPUTERS (11.8%)
400 Columbia/HCA Healthcare Corp. 17,200 700 Adaptec, Inc. * 23,100
500 Health Management Association, Inc. 2,500 Bay Networks, Inc. * 92,188
Class A * 14,437 1,100 Chipcom Corp. * 41,525
-------- 1,300 Cisco Systems, Inc. * 49,563
31,637 800 Compaq Computer Corp. * 27,600
MEDICAL SUPPLIES (0.8%) -------- 900 Dell Computer Corp. * 39,375
1,900 Medisense, Inc. * 37,525 800 Hewlett-Packard Company 96,300
-------- 600 International Business Machines Corp. 49,125
PHARMACEUTICALS (6.0%) 1,900 Silicon Graphics, Inc. * 67,450
1,300 Eli Lilly and Company 95,063 1,000 3COM Corp. * 56,625
500 Forest Laboratories, Inc. * 23,812 --------
600 Johnson & Johnson 35,700 542,851
1,400 Merck & Company, Inc. 59,675 OFFICE EQUIPMENT (1.2%) --------
300 Omnicare, Inc. 15,750 400 Alco Standard Corp. 29,000
500 Pfizer, Inc. 42,875 800 Viking Office Products, Inc. * 24,800
-------- --------
272,875 53,800
-------- --------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 32
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
- - ---------------------------------------------------------------- -----------------------------------------------------------------
Shares Description Value Shares Description Value
- - ---------------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
TECHNOLOGY (CONTINUED) SOFTWARE (3.7%)
- - ---------------------- 600 Electronics for Imaging, Inc. * $ 32,100
SEMICONDUCTORS (19.2%) 1,900 Informix Corp. * 65,313
1,800 Advanced Micro Devices, Inc. * $ 60,975 600 Parametric Technology Corp. * 24,000
500 Altera Corp. * 27,937 1,600 Wonderware Corp. * 50,800
1,000 Applied Materials, Inc. * 55,125 ----------
1,100 FSI International, Inc. * 44,413 172,213
2,000 Information Storage Devices, Inc. * 43,000 UTILITIES (0.7%) ----------
900 Integrated Device Technology, Inc. * 33,300 TELEPHONE
1,000 Integrated Silicon Solutions * 35,000 600 Airtouch Communications, Inc. * 16,350
1,000 Intel Corp. 84,875 500 Century Telephone Enterprises, Inc. 15,187
800 Linear Technology Corp. 44,800 ----------
400 LSI Logic Corp. * 21,000 31,537
1,400 Maxim Integrated Products, Inc. * 51,100 ----------
3,300 Micrel, Inc. * 57,750 TOTAL COMMON STOCK (COST $3,453,219) 3,634,019
4,600 Micro Linear Corp. * 54,625 ----------
2,000 Microchip Technology, Inc. * 56,250 PREFERRED STOCK (1.4%)
2,400 Orbit Semiconductor, Inc. * 37,200 TECHNOLOGY
2,100 PRI Automation, Inc. * 46,725 ----------
3,000 Semitool, Inc. * 63,000 DIVERSIFIED
1,800 Silicon Valley Group, Inc. * 50,625 600 Nokia AB OY # (cost $69,067) 66,150
1,000 TriQuint Semiconductor, Inc. * 11,750 ----------
-------- ----------------------------------------------------------------
879,450 Principal Description Value
-------- ----------------------------------------------------------------
SHORT-TERM SECURITIES (19.2%)
$ 884,070 Investors Fiduciary Trust Company
Demand Deposit Sweep Account
5.0687%, 4-3-95, (cost $884,070) 884,070
----------
TOTAL INVESTMENTS (99.8%) (COST $4,406,356) 4,584,239
OTHER ASSETS IN EXCESS OF LIABILITIES (0.2%) 8,051
NET ASSETS (100.0%) ----------
$4,592,290
==========
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 33
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
- - ---------------------------------------------------------------- -----------------------------------------------------------------
Shares Description Value Shares Description Value
- - ---------------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (85.4%) PHARMACEUTICALS (5.7%)
BASIC MATERIALS (4.4%) 2,550 Astra AB A-Free + $ 67,727
- - ------------------------ 625 Bindley Western Industries, Inc. 10,078
Chemical - Specialty (3.2%) 3,350 R.P. Scherer Corp. 168,338
5,625 Minerals Technology, Inc. $181,406 6,375 TheraTech Inc. * 73,313
-------- --------
Paper Products (1.2%) 319,456
1,950 Bowater, Inc. 69,713 FINANCIAL (8.9%)
-------- ------------------
DIVERSIFIED (4.7%)
CONSUMER CYCLICAL (26.2%) 1,250 First Data Corp. 64,844
- - --------------------------- 350 Franklin Resources, Inc. 13,606
Auto Parts & Equipment (10.4%) 3,225 United Asset Management Corp. 123,759
8,200 APS Holding Corp. - Class A * 209,100 2,275 World Acceptance Corp. * 59,434
9,275 Exide Corp. 340,856 --------
1,625 Mark IV Industries, Inc. 33,313 261,643
-------- --------
583,269
ENTERTAINMENT (2.0%) -------- INSURANCE (2.6%)
6,275 Speedway Motorsports, Inc. * 112,950 2,825 Progressive Corp. of Ohio 114,766
-------- 700 Protective Life Corp. 32,550
--------
OTHER RECREATIONAL (0.8%) 147,316
1,800 Harley-Davidson, Inc. 43,200 --------
-------- REAL ESTATE (1.6%)
RESTAURANTS (7.4%) 3,700 Insignia Financial Group, Inc. - Class A * 88,800
50,379 J.D. Wetherspoon PLC + * 377,988 --------
75 Lonestar Steakhouse & Saloon, Inc. * 2,034 INDEPENDENT (6.3%)
925 Papa John's International, Inc. * 33,069 --------------------
-------- CONGLOMERATE
413,091 11,621 Kinnevik Investments AB B-Free + 354,320
RETAILERS - SPECIALTY (4.9%) -------- --------
2,575 Autozone, Inc. * 64,053 INDUSTRIAL (5.7%)
4,450 Heilig-Meyers Company 97,344 -------------------
500 Home Depot, Inc. 22,125 CONTAINERS AND PACKAGING (0.8%)
1,750 Pep Boys - Manny, Moe, and Jack 54,250 2,200 Intertape Polymer Group, Inc. 45,100
1,725 Petco Animal Supplies, Inc. * 36,225 --------
-------- ELECTRONIC COMPONENTS AND EQUIPMENT (0.4%)
273,997 775 Littlefuse, Inc. * 22,088
TOYS (0.7%) -------- --------
1,656 Mattel, Inc. 40,779 FACTORY EQUIPMENT (0.1%)
-------- 250 TriMas Corp. 5,562
CONSUMER NON-CYCLICAL (16.0%) --------
- - ------------------------------- POLLUTION CONTROL (2.0%)
BEVERAGES (1.7%) 8,025 Wheelabrator Technologies, Inc. 109,341
2,250 Canandaigua Wine Company, Inc. - Class A 94,500 --------
-------- RAILROADS (1.4%)
FOOD - OTHER (1.1%) 1,700 Wisconsin Central Transportion Corp. * 80,963
5,450 J.P. Foodservice, Inc. * 62,675 --------
-------- TRUCKING (1.0%)
HEALTH CARE (6.0%) 1,825 Cannon Express, Inc. - Class A * 27,831
1,625 Coram Healthcare Corp. * 41,234 1,350 Cannon Express, Inc. - Class B * 18,225
350 Healthsource, Inc. * 16,581 225 Wabash National Corp. 7,369
1,350 Hillhaven Corp. * 35,775 --------
325 Homedco Group, Inc. * 17,794 53,425
50 Horizon Healthcare Corp. * 1,337 --------
2,350 Oxford Health Plans, Inc. * 131,600
400 Pacificare Health Systems, Inc. - Class B * 28,900 TECHNOLOGY (13.2%)
2,550 Sun Healthcare Group, Inc. * 65,025 --------------------
-------- ADVANCED MEDICAL DEVICES (3.6%)
338,246 5,075 Corvita Corp. * 20,300
HOUSEHOLD PRODUCTS (1.0%) -------- 150 DENTSPLY International, Inc. 5,212
1,250 American Standard Companies, Inc. * 30,937 425 I-Stat Corp. * 10,625
450 Juno Lighting, Inc. 8,803 25,175 Quidel Corp. * 113,288
1,025 Renters Choice, Inc. * 15,887 500 St. Jude Medical, Inc. 21,625
-------- 1,300 Sofamor Danek Group, Inc. * 31,850
55,627 --------
MEDICAL SUPPLIES (0.5%) -------- 202,900
675 STERIS Corp. * 27,000 --------
--------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 34
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)(unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO
- - ---------------------------------------------------------------- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE SHARES DESCRIPTION VALUE
- - ---------------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
TECHNOLOGY (CONTINUED) CONVERTIBLE PREFERRED STOCK (1.9%)
- - ---------------------- TECHNOLOGY
COMMUNICATIONS (8.0%) ----------
2,375 Arch Communications Group, Inc. * $ 46,313 Diversified
1,250 Associated Group, Inc. - Class A * 5,431 744 Nokia AB OY + $ 108,437
3,225 CommNet Cellular, Inc. * 79,416 ----------
664 Korea Mobile Telecommunications Corp. # * 17,430 NON-CONVERTIBLE PREFERRED STOCK (1.1%)
225 LDDS Communications, Inc. of Georgia * 5,259 TECHNOLOGY
500 Millicon International Cellular SA # * 13,250 ----------
6,325 Paging Network, Inc. * 211,888 SOFTWARE
2,075 Vodafone Group PLC # 68,734 76 SAP AG Vorzug + 58,954
---------- ----------
447,721 TOTAL PREFFERED STOCK (COST $180,329) 167,391
---------- ----------
OFFICE EQUIPMENT (1.6%) WARRANTS (0.5%)
4,000 Daisytek International Corp. * 86,500 1,250 Littlefuse, Inc. * (cost $23,750) 25,625
---------- ----------
UTILITIES (4.7%) ------------------------------------------------------------------
- - ------------------- PRINCIPAL DESCRIPTION VALUE
ELECTRIC (3.5%) ------------------------------------------------------------------
2,775 California Energy Company * 44,400 COMMERCIAL PAPER (23.2%)
7,675 Trigen Energy Corp. 153,500 $ 1,000,000 Federal National Mortgage Association
---------- 5.880%, 04-07-95 999,020
197,900
---------- 300,000 Ford Motor Credit Corp.
TELEPHONE (1.2%) 5.950%, 04-05-95 299,802
2,450 Airtouch Communications, Inc. * 66,763 ----------
---------- TOTAL COMMERCIAL PAPER (COST $1,298,822) 1,298,822
TOTAL COMMON STOCK (COST $4,675,077) 4,786,251 ----------
---------- TOTAL INVESTMENTS (112.1%) (COST $6,177,978) 6,278,089
----------
UNREALIZED LOSS ON FORWARD
FOREIGN CURRENCY CONTRACTS (-0.1%)
B 136,990 British Pound 7-3-95 Sell (3,260)
----------
OTHER LIABILITIES IN EXCESS OF ASSETS (-12.0%) (671,110)
----------
NET ASSETS (100.0%) $5,603,719
==========
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 35
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - -----------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - -----------------------------------------------------------------------
GLOBAL PORTFOLIO
- - -----------------------------------------------------------------------
Shares Description Value
- - -----------------------------------------------------------------------
<S> <C>
COMMON STOCK (92.6%)
BASIC MATERIALS (0.3%)
- - ------------------------
FOREST PRODUCTS (0.3%)
154,459 Rottneros Bruk AB + $ 223,958
----------
PAPER PRODUCTS (0.0%)
64 Cartiere Burgo SpA + 435
----------
CONSUMER CYCLICAL (31.1%)
- - ---------------------------
AUTO MANUFACTURERS (0.9%)
10,225 General Motors Corp. Class E 397,497
16,000 Toyota Motor Corp. + 326,267
----------
723,764
----------
AUTO PARTS AND EQUIPMENT (1.3%)
4,350 Bajaj Auto, Ltd. # 120,713
21,389 Michelin Class B + 923,109
----------
1,043,822
----------
BROADCASTING (2.1%)
152,197 British Sky Broadcasting Group PLC + * 629,042
32,300 Central European Media Enterprises, Ltd.
Class A * 298,775
11,200 Grupo Televisa S.A. # 186,200
28,150 Scandinavian Broadcasting System S.A. # * 647,450
----------
1,761,467
----------
CLOTHING/FABRICS (0.9%)
4,550 Fossil, Inc. * 81,331
38,750 Warnaco Group, Inc. Class A * 692,656
----------
773,987
----------
CONSUMER ELECTRONICS (1.7%)
41,000 Hitachi Ltd. + * 425,115
40,000 Matsushita Electric Industrial Company, Ltd. + 645,161
2,075 Sony Corp. # 101,416
23,000 Victor Company of Japan, Ltd. + * 257,027
----------
1,428,719
----------
ENTERTAINMENT (0.7%)
11,000 Circus Circus Enterprises, Inc. * 354,750
131,600 Tabcorp Holdings, Ltd. + 266,964
----------
621,714
----------
FOOTWEAR (2.0%)
47,125 Reebok International, Ltd. 1,678,828
----------
FURNITURE (0.9%)
19,600 Industrie Natuzzi SpA # * 722,750
----------
LODGING (1.3%)
8,889 Accor + * 1,064,307
63,925 Guangdong Investment, Ltd. + 31,003
----------
1,095,310
----------
PUBLISHING (8.4%)
4,827 Aamulehti Yhtymae OY II + 77,053
16,550 Arnoldo Mondadori Editore SpA + 99,649
242,950 Elsevier N.V. + 2,557,368
37,000 News Corp., Ltd. # 707,625
163,177 News Corp., Ltd. Class A + 783,176
2,200 Reuters Holdings PLC # 101,200
28,697 Reuters Holdings PLC + 221,835
31,036 Wolters Kluwer N.V. + 2,393,745
----------
6,941,651
----------
RETAILERS - APPAREL (3.4%)
14,675 Ann Taylor, Inc. * 546,644
29,075 Gap, Inc. 1,032,163
20,550 Hennes and Mauritz AB B-Free + 1,241,986
----------
2,820,793
----------
<CAPTION>
- - -----------------------------------------------------------------------
SHARES DESCRIPTION VALUE
- - -----------------------------------------------------------------------
<S> <C>
RETAILERS - BROADLINE (3.5%)
67,675 Federated Department Stores, Inc. * $ 1,497,309
1,556 Karstadt AG + 635,184
6,221 Sears, Roebuck de Mexico S.A. + * 13,753
31,090 Wal-Mart Stores, Inc. 792,795
----------
2,939,041
----------
RETAILERS - SPECIALTY (1.0%)
5,225 Best Buys Company, Inc. * 112,991
20,650 Lowe's Companies, Inc. 712,425
----------
825,416
----------
TOYS (3.0%)
71,612 Mattel, Inc. 1,763,446
41,294 Thom EMI PLC + 734,993
----------
2,498,439
----------
CONSUMER NON-CYCLICAL (20.7%)
- - -------------------------------
FOOD - OTHER (6.0%)
12,870 Cultor OY Series 1 + * 384,090
18,829 Cultor OY Series 2 + * 548,862
14,227 Huhtamaeki OY + 424,588
64,425 Nabisco Holding Corp. Class A * 1,786,916
1,770 Nestle S.A. + * 1,727,783
81,340 Smart Corp. + 88,136
----------
4,960,375
----------
HEALTH CARE (0.4%)
4,125 Pacificare Health Systems, Inc. Class B * 298,031
----------
HOUSEHOLD PRODUCTS (1.1%)
450 Amway Asia, Ltd. # 16,763
19,350 Dial Corp. 491,006
8,725 Duracell International, Inc. 390,444
----------
898,213
----------
PHARMACEUTICALS (12.4%)
187,085 Astra AB A-Free + 4,968,956
3,059 Gehe AG + 1,272,081
475 Roche Holding AG + 2,744,259
26,100 R.P. Scherer Corp. * 1,311,525
----------
10,296,821
----------
TOBACCO (0.8%)
127,500 PT Hanjaya Mandala Sampoerna + 675,100
----------
ENERGY (1.1%)
- - ---------------
OIL COMPANIES - SECONDARY
15,682 Total S.A. Class B + 938,172
----------
FINANCIAL (4.6%)
- - ------------------
BANKS (2.2%)
3,659 Banco Weise, Ltd. # * 25,613
365,800 Bank Dagang Nasional + 580,245
27,100 Citicorp 1,151,750
1,547 Unidanmark A/S + * 62,801
----------
1,820,409
----------
DIVERSIFIED (1.9%)
15,575 Espirito Santo Financial Holdings S.A. # 161,591
1,000 First Data Corp. 51,875
16,000 First Pacific Corp., Ltd. + 11,691
11,100 Grupo Financiero GBM Atlantico S.A. + 7,918
463,125 Grupo Financiero Inbursa S.A. Class C + * 648,443
5,350 Household International Corp. 232,725
8,865 Internationale Netherlanden Groep N.V. + 438,354
----------
1,552,597
----------
INSURANCE (0.4%)
36,769 Trygg-Hansa SPP AB + * 321,375
----------
REAL ESTATE (0.1%)
22,000 Citic Pacific, Ltd. + 54,346
----------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 36
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - --------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - --------------------------------------------------------------------------
GLOBAL PORTFOLIO
- - --------------------------------------------------------------------------
Shares Description Value
- - --------------------------------------------------------------------------
<S> <C>
INDEPENDENT (7.3%)
- - --------------------
CONGLOMERATES
16,500 Grupo Carso, S.A. de C.V. + * $ 72,104
195,975 Kinnevik AB B-Free + 5,975,212
----------
6,047,316
----------
INDUSTRIAL (5.5%)
- - -------------------
DIVERSIFIED (3.2%)
2,522 Metra Corp Class A + * 89,853
25,053 Metra Corp Class B + * 904,168
63,000 Mitsubishi Heavy Industries, Ltd. + * 452,177
12,119 OMV AG + 1,213,437
----------
2,659,635
----------
ELECTRONIC COMPONENTS AND EQUIPMENT (0.5%)
95 BBC Brown Boveri AG + 90,300
1,768 Varta AG + * 356,042
----------
446,342
----------
OTHER SERVICES (1.8%)
52,643 Assa Abloy AB + 208,302
47,343 Securitas AB + 1,270,256
----------
1,478,558
----------
POLLUTION CONTROL (0.0%)
8,696 Rentokil PLC + 34,317
----------
TECHNOLOGY (19.6%)
- - --------------------
ADVANCED MEDICAL DEVICES (0.2%)
3,577 Arjo AB + 58,651
3,475 Gelman Sciences, Inc. * 59,509
4,500 Ventritex, Inc. + * 85,781
----------
203,941
----------
COMMUNICATIONS (10.3%)
2,025 Compania de Telefonos de Chile S.A. # 135,169
169 DDI Corp -Second Section + 1,460,253
340 Grupo Iusacell, S.A. de C.V. # * 4,038
9,663 Korea Mobile Telecom Corp. # 253,654
83,925 Millicom International Cellular S.A. + * 2,224,013
16,025 Motorola, Inc. 875,366
79 Nippon Telegraph & Telephone Corp. + 680,783
14,048 Nordictel Holdings AB + 152,291
7,800 Paging Network, Inc. * 261,300
54,175 Tele Danmark A/S # * 1,435,638
5 Telecomunicacoes Braseleiras S.A. # 131
6,975 Vodafone Group PLC # 1,040,125
----------
8,522,761
----------
COMPUTERS (1.5%)
4,525 Compaq Computer Corp. * 156,113
1,175,086 Olivetti & C. SpA + * 1,101,750
----------
1,257,863
----------
DIVERSIFIED (3.0%)
20,889 Phillips Electronics N.V. + 711,230
3,822 Siemens AG + 1,800,550
----------
2,511,780
----------
INDUSTRIAL (0.4%)
6,775 Millipore Corp. 377,706
----------
OFFICE EQUIPMENT (1.3%)
20,613 Oce-van der Grinten N.V. + 1,052,750
----------
SEMICONDUCTORS (0.4%)
21,900 National Semiconductor Corp. * 383,250
----------
SOFTWARE (2.5%)
52,399 Getronics N.V. + * 2,093,917
----------
<CAPTION>
- - --------------------------------------------------------------------------
Shares Description Value
- - --------------------------------------------------------------------------
<S> <C>
UTILITIES (2.4%)
- - ------------------
ELECTRIC (1.3%)
7,425 Consolidated Electric Power Asia, Ltd. # $ 153,643
359,900 Consolidated Electric Power Asia, Ltd. + 744,749
8,800 Huaneng Power International, nc. # * 139,700
-----------
1,038,092
-----------
Telephone (1.1%)
32,050 Airtouch Communications, Inc. * 873,363
-----------
Total Common Stock (cost $73,507,752) 76,897,124
-----------
NON-CONVERTIBLE PREFERRED STOCK (2.1%)
ADVANCED MEDICAL DEVICES (1.1%)
1,506 Fresenius AG + 886,849
-----------
PUBLISHING (0.2%)
47,087 News Corp., Ltd. + 204,887
-----------
RETAIL - BROADLINE (0.3%)
6,493 Fielmann + 240,744
-----------
SOFTWARE (0.5%)
488 SAP AG Vorzug + 378,550
-----------
CONVERTIBLE PREFERRED STOCK (3.2%)
DIVERSIFIED TECHNOLOGY
2,459 Nokia AB OY + 361,241
15,948 Nokia AB OY-Cumulative + 2,324,405
-----------
2,685,646
-----------
TOTAL PREFERRED STOCK (COST $2,685,054) 4,396,676
-----------
- - --------------------------------------------------------------------------
Principal Description Value
- - --------------------------------------------------------------------------
COMMERCIAL PAPER (2.8%)
$ 2,300,000 Ford Motor Credit Company,
6.050%, 10-3-94, (cost $2,299,227) 2,299,227
-----------
TOTAL INVESTMENTS (100.7%)(COST $78,492,033) 83,593,027
-----------
UNREALIZED GAIN (LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (-0.7%)
B 206,485 British Pound 4-4-95 Buy 7,888
B 149,577 British Pound 4-5-95 Buy 5,088
B 81,066 British Pound 4-6-95 Buy 2,393
D 515,530 German Deutschemark 4-6-95 Sell (9,440)
D 8,454,650 German Deutschemark 6-8-95 Sell (141,082)
D 1,646,952 German Deutschemark 6-12-95 Sell (14,711)
G 32,346 Dutch Guilder 4-3-95 Buy 517
G 58,100 Dutch Guilder 4-3-95 Sell (928)
G 57,612 Dutch Guilder 4-4-95 Sell (357)
K 32,900,000 Swedish Krona 4-12-95 Sell (83,350)
K 45,026,500 Swedish Krona 4-28-95 Sell (62,126)
M 7,300,000 Finish Marka 4-12-95 Sell (167,940)
M 4,050,914 Finish Marka 4-28-95 Sell (85,374)
P 56,016,478 Spanish Peseta 4-18-95 Sell (24,325)
P 56,016,478 Spanish Peseta 4-18-95 Buy 8,427
S 406,877 Swiss Franc 4-3-95 Sell (9,008)
S 343,862 Swiss Franc 4-4-95 Sell (3,606)
-----------
TOTAL FORWARD FOREIGN CURRENCY CONTRACTS (577,934)
-----------
OTHER LIABILITIES IN EXCESS OF ASSETS (0.0%) (22,870)
-----------
NET ASSETS (100.0 %) $82,992,223
===========
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 37
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - -----------------------------------------------------------------------------------------------------------------------------------
BALANCED PORTFOLIO
- - ---------------------------------------------------------------- ----------------------------------------------------------------
Shares Description Value Shares Description Value
- - ---------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (46.8%) HEALTH CARE (2.7%)
BASIC MATERIALS (1.9%) 1,175 United Healthcare Corp. $ 54,931
- - ------------------------ 1,250 US Healthcare, Inc. 55,313
CHEMICALS (0.9%) -------------
1,150 Minerals Technologies, Inc. $ 37,088 110,244
------------ -------------
HOUSEHOLD PRODUCTS (2.8%)
MINING, DIVERSIFIED (0.2%) 1,550 American Standard Companies, Inc. * 38,363
200 Potash Corp. of Saskatchewan, Inc. 8,900 225 Colgate-Palmolive Company 14,850
------------ 550 Dial Corp. 13,956
575 Duracell International, Inc. 25,731
FOREST PRODUCTS (0.8%) 875 Newell Company 22,313
400 Georgia Pacific Corp. 31,900 -------------
------------ 115,213
-------------
CONSUMER CYCLICAL (15.8%) PHARMACEUTICALS (3.0%)
- - --------------------------- 2,000 Astra AB A-Free + 53,119
AUTO MANUFACTURERS (3.4%) 12 Roche Holding AG + 69,328
3,600 General Motors Corp. - Class E 139,950 -------------
------------ 122,447
-------------
AUTO PARTS AND EQUIPMENT (0.5%) FINANCIAL (10.6%)
1,025 Mark IV Industries, Inc. 21,013 -------------------
------------ BANKS (1.6%)
100 Bancorp Hawaii, Inc. 2,837
BROADCASTING (1.1%) 1,775 Bank of New York, Inc. 58,353
275 Lin Television Corp. * 9,144 100 First Bank System, Inc. 4,037
1,650 Tele Communications, Inc. - Class A * 34,650 -------------
------------ 65,227
43,794 -------------
------------ DIVERSIFIED (2.8%)
--------------------
CASINOS (0.9%) 3,375 Alexander & Alexander Services, Inc. 79,734
1,025 Promus Companies, Inc. * 38,438 250 Finova Group, Inc. * 8,250
------------ 300 First Data Corp. 15,562
225 Household International Corp. 9,788
-------------
113,334
ENTERTAINMENT (1.7%) -------------
1,300 Walt Disney Company 69,388
------------ INSURANCE (6.2%)
350 American International Group, Inc. 36,488
FOOTWEAR (0.9%) 555 General RE Corp. 73,260
1,050 Reebok International Ltd. 37,406 1,375 Progressive Corp. of Ohio 55,859
------------ 2,050 UNUM Corp. 92,763
-------------
258,370
LODGING (1.8%) -------------
2,125 Marriott International, Inc. 73,844
------------ INDUSTRIAL (1.7%)
-------------------
PUBLISHING (0.1%) CONTAINERS AND PACKAGING (0.6%)
100 Reuters Holdings PLC # 4,600 250 Crown, Cork, and Seal Company, Inc. * 10,969
------------ 550 Stone Container Corp. * 12,581
-------------
23,550
RECREATION PRODUCTS - OTHER (1.0%) -------------
1,700 Harley Davidson, Inc. 40,800 ELECTRONIC COMPONENTS AND EQUIPMENT (0.4%)
------------ 1,250 Westinghouse Electric Corp. 17,656
-------------
RETAILERS - BROADLINE (1.7%) POLLUTION CONTROL (0.7%)
2,525 Federated Department Stores, Inc. * 55,866 825 Browning Ferris Industries, Inc. 28,050
375 May Department Stores Company 13,875 -------------
------------ TECHNOLOGY (4.4%)
69,741 -------------------
------------ ADVANCED MEDICAL DEVICES (0.3%)
RETAILERS - SPECIALTY (0.8%) 325 St. Jude Medical, Inc. 14,056
800 Home Depot, Inc. 35,400 -------------
------------
COMMUNICATIONS (1.5%)
TOYS (1.9%) 275 Motorola, Inc. 15,022
3,150 Mattel, Inc. 77,569 300 Paging Network, Inc. * 10,050
------------ 800 Viacom, Inc. - Class B * 36,600
-------------
CONSUMER NON-CYCLICAL (11.7%) 61,672
- - ------------------------------- -------------
FOOD - OTHER (1.5%)
975 Nabisco Holdings Corp. - Class A * 27,909
36 Nestle S.A. + * 35,141
------------
63,050
------------
FOOD RETAILERS (1.7%)
2,075 Safeway, Inc. * 72,106
------------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 38
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
BALANCE PROTFOLIO
- - ---------------------------------------------------------------- ----------------------------------------------------------------
Shares Description Value Principal Description Value
- - ---------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C>
Technology (continued) Technology (1.8%)
- - ---------------------- -------------------
Computers (0.2%) Aerospace/Defense (0.6%)
75 Hewlett-Packard Company $ 9,028 25,000 McDonnell Douglas Corp.
------------ 8.625%, 4-1-97 $ 25,531
Diversified (0.5%) -------------
600 Diebold, Inc. 21,375 Diversified (1.2%)
------------ 50,000 Rockwell International Corp.
Industrial (0.3%) 7.625%, 2-17-98 50,437
250 Millipore Corp. 13,937 TOTAL NON-CONVERTIBLE CORPORATE BONDS -------------
------------ (cost $916,451) 915,159
-------------
Office Equipment (0.9%) LONG-TERM U.S. GOVERNMENT SECURITIES (3.9%)
525 Alco Standard Corp. 38,063 United States Treasury Notes
------------ 30,000 7.375%, 11-15-97 30,304
Software (0.7%) 100,000 7.250%, 2-15-98 100,807
3,100 Platinum Software Corp. * 30,225 30,000 7.500%, 10-31-99 30,475
------------ TOTAL LONG-TERM U.S. GOVERNMENT SECURITIES -------------
Utilities (0.7%) (cost $160,394) 161,586
- - ------------------ -------------
Telephone COMMERCIAL PAPER (20.6%)
1,000 Airtouch Communications, Inc. * 27,250 150,000 American Express Credit Corp.
------------ 6.000%, 4-4-95 149,925
Total Common Stock (cost $1,875,619) 1,934,684
------------
- - ---------------------------------------------------------------
Principal Description Value 200,000 Chevron Oil Finance Company
- - --------------------------------------------------------------- 6.000%, 4-3-95 199,933
CONVERTIBLE CORPORATE BONDS (0.5%)
Recreational Products - Other 500,000 Federal National Mortgage Association
$ 60,000 Coleman Worldwide Corp., 5.885%, 4-13-95 499,020
Zero Coupon (cost $16,544) 18,225 -------------
------------ TOTAL COMMERCIAL PAPER (COST $848,878) 848,878
-------------
NON-CONVERTIBLE CORPORATE BONDS (22.1%)
Consumer Cyclical (6.6%) TOTAL INVESTMENTS (93.9%) (COST $3,817,886) 3,878,532
- - -------------------------- OTHER ASSETS IN EXCESS OF LIABILITIES (6.1%) 253,701
Auto Manufacturers (3.0%) -------------
120,000 Ford Motor Credit Company NET ASSETS (100.0%) $ 4,132,233
7.875%, 1-15-97 121,350 =============
------------
Retailers - Broadline (3.6%)
150,000 Dayton Hudson Corp.
7.500%, 3-1-99 149,625
------------
Consumer Non-Cyclical (4.4%)
- - ------------------------------
Pharmaceuticals
180,000 American Home Products Corp.
7.700%, 2-15-00 181,125
------------
Financial (5.5%)
- - ------------------
Banks (1.2%)
50,000 Norwest Corp.
7.700%, 11-15-97 50,500
------------
Diversified (4.3%)
180,000 International Lease Finance Corp.
7.500%, 3-1-99 178,875
------------
Independent (1.2%)
- - --------------------
Conglomerate
50,000 General Electric Capital Corp.
8.000%, 1-15-98 50,938
------------
Industrial (2.6%)
- - -------------------
Diversified (1.9%)
76,000 Great Dane Holdings, Inc.
12.750%, 8-1-01 76,665
------------
Railroads (0.7%)
30,000 Southern Pacific Rail Corp.
9.375%, 8-15-05 30,113
------------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 39
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
EQUITY-INCOME PORTFOLIO
- - ---------------------------------------------------------------- ----------------------------------------------------------------
Shares Description Value Shares Description Value
- - ---------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (58.0%) INDEPENDENT (2.9%)
BASIC MATERIALS (6.2%) --------------------
- - ------------------------ CONGLOMERATE
CHEMICALS 900 General Electric Company $ 48,713
800 E.I. Du Pont De Nemours 1,700 Hanson PLC # 32,087
and Company $ 48,400 -----------
2,900 Lawter International, Inc. 38,063 80,800
700 Loctite Corp. 33,687 INDUSTRIAL (14.5%)
2,000 M.A. Hanna Company 50,250 --------------------
------------ BUILDING MATERIALS (1.7%)
170,400 1,400 Sherwin Williams Company 47,425
------------ -----------
CONSUMER CYCLICAL (5.8%) CONTAINERS AND PACKAGING (1.2%)
- - -------------------------- 700 Temple-Inland, Inc. 31,412
PUBLISHING (1.7%) -----------
800 A.H. Belo Corp. 46,400 DIVERSIFIED (3.6%)
------------ 2,200 ACME - Cleveland Corp. 35,200
ENTERTAINMENT (1.4%) 700 Tenneco, Inc. 32,987
700 Eastman Kodak Company 37,188 600 TYCO International Ltd. 31,725
------------ -----------
RETAILERS - BROADLINE (1.1%) 99,912
700 J.C. Penney Company, Inc. 31,412 ELECTRONIC COMPONENTS AND EQUIPMENT (2.4%)
------------ 1,100 AMP, Inc. 39,600
RETAILERS - SPECIALTY (1.6%) 400 Emerson Electric Company 26,600
1,000 Home Depot, Inc. 44,250 -----------
------------ 66,200
OTHER INDUSTRIAL SERVICES (3.2%)
CONSUMER NON-CYCLICAL (8.8%) 1,500 National Service Industries, Inc. 40,500
- - ------------------------------ 1,300 Olsten Corp. 45,663
BEVERAGES (0.9%) -----------
1,500 Adolph Coors Company - Class B 24,562 86,163
------------ -----------
FOOD - OTHER (0.4%) POLLUTION CONTROL (1.6%)
200 Kellogg Company 11,675 1,600 WMX Technologies, Inc. 44,000
------------ RAILROADS (0.8%) -----------
HEALTH CARE (1.4%) 400 Union Pacific Corp. 22,000
900 Columbia/HCA Healthcare Corp. 38,700 -----------
------------ TECHNOLOGY (6.7%)
HOUSEHOLD PRODUCTS (3.4%) -------------------
600 Colgate-Palmolive Company 39,600 COMMUNICATIONS (2.7%)
300 Duracell International, Inc. 13,425 1,200 Alltel Corp. 34,500
900 Premark International, Inc. 39,713 800 Cellular Communications, Inc.-Class A * 38,200
------------ -----------
92,738 72,700
------------ -----------
MEDICAL SUPPLIES (1.5%) DIVERSIFIED (2.3%)
1,500 C.R. Bard, Inc. 41,438 600 Minnesota Mining and Manufacturing
------------ Company 34,875
PHARMACEUTICALS 400 Raytheon Company 29,150
900 Upjohn Company 32,176 -----------
------------ 64,025
ENERGY (6.0%) -----------
- - --------------- OFFICE EQUIPMENT (1.0%)
OIL COMPANIES - MAJOR (4.2%) 1,100 Danka Business System PLC # 28,737
500 Amoco Corp. 31,812 -----------
700 Exxon Corp. 46,725 SOFTWARE (0.7%)
1,700 Occidental Petroleum Corp. 37,188 500 Compuware Corp. * 18,500
------------ -----------
115,725 UTILITIES (1.7%)
------------ -------------------
OIL DRILLING (0.9%) TELEPHONE
200 Atlantic Richfield Company 23,000 800 Airtouch Communications, Inc. * 21,800
------------ 600 Telephone and Data Systems, Inc. 23,700
PIPELINES (0.9%) -----------
1,100 Panhandle Eastern Corp. 25,300 TOTAL COMMON STOCK (COST $1,509,554) 1,590,721
------------ -----------
FINANCIAL (5.4%)
- - ------------------ CONVERTIBLE PREFERRED STOCK (2.0%)
DIVERSIFIED (2.7%) CONSUMER NON-CYCLICAL (1.1%)
1,500 American General Corp. 48,375 ------------------------------
300 Federal National Mortgage Association 24,412 HOUSEHOLD PRODUCTS
------------ 700 James River Corp. of Virginia 29,925
72,787 -----------
------------ ENERGY (0.9%)
INSURANCE (1.5%) ---------------
3,990 Gainsco, Inc. 41,396 OIL COMPANIES - SECONDARY
------------ 600 Valero Energy Corp. 25,650
REAL ESTATE (1.2%) -----------
1,200 Crescent Real Estate Equities, Inc. 34,200 TOTAL PREFERRED STOCK (COST $54,229) 55,575
------------ -----------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 40
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
EQUITY-INCOME PORTFOLIO
- - --------------------------------------------------------------------
Principal Description Value
- - --------------------------------------------------------------------
<S> <C>
NON-CONVERTIBLE CORPORATE BONDS (3.9%)
INDUSTRIAL
- - ----------
DIVERSIFIED
$ 100,000 Trinova Corp.
9.550%, 2-1-18 (cost $105,660) $ 106,250
------------
SHORT-TERM SECURITIES (26.4%)
726,745 Investors Fiduciary Trust Company
Demand Deposit Sweep Account
5.0687%, 4-3-95, (cost $726,745) 726,745
------------
LONG-TERM U.S. GOVERNMENT SECURITIES (20.0%)
United States Treasury Notes
200,000 7.000%, 4-15-99 199,936
175,000 5.875%, 5-15-95 174,974
175,000 5.125%, 11-15-95 173,742
TOTAL LONG-TERM U.S. GOVERNMENT SECURITIES
------------
(COST $548,516) 548,652
------------
TOTAL INVESTMENTS (110.3%) (COST $2,944,704) 3,027,943
OTHER LIABLITIES IN EXCESS OF ASSETS (-10.3%) (283,450)
------------
NET ASSETS (100.0%) $ 2,744,493
============
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 41
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - -------------------------------------------------------------------------------
INCOME PLUS PORTFOLIO
- - -------------------------------------------------------------------------------
Description Principal Value
- - -------------------------------------------------------------------------------
<S> <C> <C>
NON-CONVERTIBLE CORPORATE BONDS (91.2%)
BASIC MATERIALS (8.2%)
- - ------------------------
MINING - DIVERSIFIED (6.7%)
Cyprus Minerals Company
6.625%, 10-15-05 $ 2,000,000 $ 1,784,840
Inco, Ltd.
9.600%, 6-15-22 2,500,000 2,641,400
------------
4,426,240
------------
STEEL (1.5%)
Armco, Inc.
11.375%, 10-15-99 1,000,000 991,250
------------
CONSUMER CYCLICAL (17.4%)
- - ---------------------------
AIRLINES (1.7%)
Piedmont Aviation, Inc.
10.100%, 5-13-07 1,048,000 812,200
USAir, Inc.
10.800%, 1-1-05 400,000 333,000
------------
(1,145,200)
------------
CLOTHING/FABRIC (3.0%)
Fruit of the Loom, Inc.
7.000%, 3-15-11 2,000,000 1,707,220
Movie Star, Inc.
12.875%, 10-1-01 315,000 280,350
------------
(1,987,570)
------------
AUTO PARTS AND EQUIPMENT (3.6%)
Mark IV Industries, Inc.
8.750%, 4-1-03 2,430,000 2,375,325
------------
BROADCASTING (1.5%)
Cablevision Industries Corp.
9.250%, 4-1-08 1,000,000 981,250
------------
PUBLISHING (5.2%)
News America Holdings, Inc.
8.625%, 2-1-03 1,500,000 1,522,575
Western Publishing Group, Inc.
7.650%, 9-15-02 2,500,000 1,950,000
------------
3,472,575
------------
RESTAURANTS (1.4%)
American Restaurant Group, Inc.
12.000%, 9-15-98 1,000,000 915,000
------------
RETAILERS - DRUG BASED (1.0%)
Eckerd Corp.
11.125%, 5-1-01 658,000 664,580
------------
CONSUMER NON-CYCLICAL (26.2%)
- - -------------------------------
CONSUMER SERVICES (1.8%)
Actava Group, Inc.
9.875%, 3-15-97 $ 1,165,000 $ 1,165,000
------------
FOOD - OTHER (1.5%)
BFI Acquisition Corp.
12.000%, 12-1-01 1,000,000 960,000
------------
FOOD RETAILERS (7.3%)
American Stores Company
9.125%, 4-1-02 1,000,000 1,062,760
Food 4 Less Supermarkets, Inc.
10.450%, 4-15-00 1,000,000 980,000
Great Atlantic & Pacific Tea, Inc.
7.700%, 1-15-04 2,000,000 1,797,500
Super Rite Foods, Inc.
10.625%, 4-1-02 1,000,000 (1,020,000)
------------
4,860,260
------------
HEALTH CARE (7.2%)
FHP International Corp.
7.000%, 9-15-03 2,000,000 1,803,820
Healthtrust, Inc. - The Hospital Company
8.750%, 3-15-05 2,000,000 2,045,000
Mediq/PRN Life Support Svs., Inc.
11.125%, 7-1-99 1,000,000 940,000
------------
4,788,820
------------
HOUSEHOLD PRODUCTS (8.4%)
BAT Capital Corp.
6.500%, 11-24-03 2,000,000 1,825,500
Black & Decker Corp.
7.500%, 4-1-03 2,000,000 1,917,860
James River Corp. of Virginia
6.700%, 11-15-03 2,000,000 1,831,920
------------
5,575,280
------------
ENERGY (8.9%)
- - ---------------
OIL DRILLING (3.9%)
Louisiana Land Exploration Company
7.625%, 4-15-13 2,000,000 1,796,780
Maxus Energy Corp.
11.250%, 5-1-13 905,000 796,400
------------
2,593,180
OILFIELD EQUIPMENT & SERVICES (1.6%)
McDermott, Inc.
9.375%, 3-15-02 1,000,000 1,061,950
------------
PIPELINES (3.4%)
ENRON CORP.
6.750%, 7-1-05 2,500,000 2,271,350
------------
</TABLE>
See Notes to Schedule of Investments at page 18.
<PAGE> 42
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)(unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
INCOME PLUS PORTFOLIO
- - ---------------------------------------------------------------- --------------------------------------------------------------
Description Principal Value Description Principal Value
- - ---------------------------------------------------------------- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FINANCIAL (8.8%) POLLUTION CONTROL (1.5%)
- - ------------------ Allied Waste Industries,
BANKS (5.1%) Inc. $ 1,000,000 $ 997,500
Chevy Chase Savings 12.000%, 2-1-04 -------------
Bank, Inc.
9.250%, 12-1-05 $ 1,250,000 $ 1,134,375 TRANSPORTATION EQUIPMENT
(5.5%) AAR Corp.
Citicorp 7.250%, 10-15-03 2,000,000 1,777,500
9.500%, 2-1-02 1,000,000 1,081,170
Overseas Shipholding Group,
Williams Companies, Inc. Inc.
10.250%, 7-15-20 1,000,000 1,163,450 8.000%, 12-1-03 2,000,000 1,895,760
------------ -------------
3,378,995 3,673,260
------------ -------------
DIVERSIFIED (3.3%)
Continental Bank N.A. TECHNOLOGY (1.4%)
11.250%, 7-1-01 1,100,000 1,204,962 --------------------
COMPUTERS
GNS Financial Corp. Unisys Corp.
9.250%, 3-15-03 1,000,000 985,000 9.750%, 9-15-16 1,000,000 945,000
------------ --------------
2,189,962
INSURANCE (0.4%) ------------ UTILITIES (5.2%)
Reliance Financial ----------------
Services Corp. ELECTRIC
9.480%, 11-1-00 300,000 297,000 First PV Funding Corp.
------------ 10.300%, 1-15-14 1,225,000 1,223,468
INDUSTRIAL (15.1%)
- - -------------------- Texas Utilities Electric Company
AIR FREIGHT (1.6%) 10.350%, 1-1-18 757,000 806,978
Federal Express Corp. 6.750%, 4-1-03 1,500,000 1,400,190
9.625%, 10-15-19 1,000,000 1,057,710 --------------
------------ 3,430,636
ELECTRIC COMPONENTS & --------------
EQUIPMENT (3.4%) TOTAL NON-CONVERTIBLE CORPORATE BONDS
Westinghouse Electric Corp. (cost $62,223,791) 60,504,513
6.875%, 9-1-03 2,500,000 2,249,950 --------------
------------ NON-CONVERTIBLE PREFERRED STOCKS (0.5%)
FACTORY EQUIPMENT (1.6%)
Penn Central Corp. BANKS SHARES
10.625%, 4-15-00 1,000,000 1,057,240 ------
------------ Riggs National Corp. Class B, 10.750%
DIVERSIFIED (1.5%) (cost $316,275) 12,651 325,764
Canadian Pacific Forest --------------
Products, Ltd.
9.250%, 6-15-02 1,000,000 992,430 COMMERCIAL PAPER (3.0%) PRINCIPAL
------------ ---------
New England Education Loan Marketing Corp.
6.000%, 4-3-95,
(cost $1,999,333) $ 2,000,000 1,999,333
--------------
TOTAL INVESTMENTS (94.7%) (cost $64,539,399) 62,829,610
OTHER ASSETS IN EXCESS OF LIABILITIES (5.3%) 3,498,475
-------------
NET ASSETS (100.0%) $ 66,328,085
=============
</TABLE>
See Notes to Schedule of Investments at page 18.
<PAGE> 43
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - --------------------------------------------------------------------------------
FLEXIBLE INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
Description Principal Value
- - --------------------------------------------------------------------------------
<S> <C> <C>
NON-CONVERTIBLE CORPORATE BONDS (79.2%)
BASIC MATERIALS (1.2%)
- - ------------------------
PAPER PRODUCTS
Williamhouse Regency, Inc.
11.500%, 6-15-05 $ 250,000 $ 241,250
------------
CONSUMER, CYCLICAL (10.8%)
- - ----------------------------
AIRLINES (0.8%)
United Airlines, Inc.
10.670%, 5-1-04 150,000 161,250
------------
AUTO MANUFACTURERS (1.2%)
Ford Motor Credit Company
7.750%, 3-15-05 250,000 249,062
------------
PUBLISHING (3.8%)
News America Holdings, Inc.
9.250%, 2-01-13 750,000 771,563
------------
RECREATIONAL - OTHER (0.5%)
Stratosphere Corp.
14.250%, 5-15-02 95,000 97,137
------------
RETAILERS - SPECIALTY (4.5%)
Pier 1 Imports, Inc.
11.500%, 7-15-03 900,000 927,000
------------
CONSUMER, NON-CYCLICAL (9.9%)
- - -------------------------------
FOOD - OTHER (5.1%)
Borden, Inc.
7.875%, 2-15-23 200,000 174,750
Pilgrim's Pride Corp.
10.875%, 8-1-03 500,000 453,750
RJR Nabisco, Inc.
8.625%, 12-1-02 425,000 418,625
------------
1,047,125
------------
FOOD RETAILERS (2.5%)
Super Rite Foods, Inc.
10.625%, 4-1-02 500,000 510,000
------------
HEALTH CARE (2.3%)
National Medical Enterprises, Inc.
10.125%, 3-1-05 445,000 457,238
------------
ENERGY (8.3%)
- - ---------------
OIL COMPANIES - MAJOR (3.1%)
Texaco Capital, Inc.
7.500%, 3-1-43 700,000 639,625
------------
OIL COMPANIES - SECONDARY (5.2%)
Texas Eastern Transmission Corp.
10.000%, 10-1-11 1,000,000 1,060,000
------------
FINANCIAL (17.8%)
- - -------------------
BANKS (1.0%)
Norwest Financial Corp.
7.875%, 2-15-02 200,000 202,250
------------
<CAPTION>
- - --------------------------------------------------------------------------------
Decription Principal Value
- - --------------------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED (2.5%)
International Lease Finance Corp.
8.375%, 12-15-04 $ 500,000 $ 520,625
------------
INSURANCE (14.3%)
Delphi Financial Group, Inc.
8.000%, 10-1-03 1,000,000 887,500
Leucadia National Corp.
10.375, 6-15-02 475,000 508,844
Life Partners Group, Inc.
12.750%, 7-15-02 250,000 271,875
Orion Capital Corp.
9.125%, 9-1-02 1,220,000 1,256,600
------------
2,924,819
------------
INDUSTRIAL (15.0%)
- - --------------------
CONTAINERS AND PACKAGING (3.5%)
Stone Container Corp.
10.750%, 6-15-97 100,000 102,125
11.000%, 8-15-99 500,000 510,000
11.500%, 9-1-99 100,000 103,000
------------
715,125
------------
ELECTRONIC COMPONENTS AND EQUIPMENT (2.4%)
Westinghouse Electric Corp.
8.625%, 8-1-12 500,000 486,875
------------
DIVERSIFIED (2.5%)
Great Dane Holdings, Inc.
14.500%, 1-1-06 500,000 505,625
------------
MARINE TRANSPORT (2.2%)
American President Companies, Ltd.
8.000%, 1-15-24 500,000 448,125
------------
POLLUTION CONTROL (2.1%)
Envirosource, Inc.
9.750%, 6-15-03 500,000 440,625
------------
RAILROADS (2.3%)
Southern Pacific Rail Corp.
9.375%, 8-15-05 475,000 476,781
------------
TECHNOLOGY (14.6%)
- - --------------------
AEROSPACE/DEFENSE (7.2%)
Alliant Techsystems, Inc.
11.750%, 3-1-03 400,000 409,000
McDonnell Douglas Corp.
9.250%, 4-1-02 1,000,000 1,072,500
------------
1,481,500
------------
COMMUNICATIONS (2.5%)
AT&T Corp.
8.350%, 1-15-25 500,000 505,000
------------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 44
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - --------------------------------------------------------------------------------
FLEXIBLE INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
Description Principal Value
- - --------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
- - ----------------------
COMPUTERS (2.3%)
International Business Machines Corp.
7.500%, 6-15-13 $ 500,000 $ 468,750
------------
INDUSTRIAL (2.6%)
Kenetech Corp.
12.750%, 12-15-02 500,000 525,000
------------
UTILITY (1.6%)
- - ----------------
GAS
Southeastern Public Service Company
11.875%, 2-1-98 321,000 320,599
------------
TOTAL NON-CONVERTIBLE CORPORATE BONDS
(COST $16,095,999) 16,182,949
------------
<CAPTION>
- - --------------------------------------------------------------------------------
Description Principal Value
- - --------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM U.S. GOVERNMENT SECURITIES (14.2%)
United States Treasury Notes
7.875%, 11-15-04 $ 2,000,000 $ 2,086,760
United States Treasury Bonds
7.500%, 11-15-24 400,000 400,648
7.625%, 2-15-25 400,000 408,996
TOTAL LONG-TERM U.S GOVERNMENT SECURITIES ------------
(COST $2,806,745) 2,896,404
------------
<CAPTION>
- - --------------------------------------------------------------------------------
Description Shares Value
- - --------------------------------------------------------------------------------
<S> <C> <C>
NON-CONVERTIBLE PREFERRED STOCKS (3.3%)
BANKS
Chevy Chase Savings Bank, Inc.
(cost $760,000) 25,000 687,500
------------
TOTAL INVESTMENTS (96.7%) (COST $19,662,744) 19,766,853
OTHER ASSETS IN EXCESS OF LIABILITIES (3.3%) 674,675
------------
NET ASSETS (100.0 %) $ 20,441,528
============
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 45
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
- - ------------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
- - ------------------------------------------------------------------------------------
Description ** Principal Value
- - ------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (96.3%)
ALASKA (2.3%)
Alaska Student Loan Corp.
Student Loan Revenue Bonds,
Series 1988A, AMBAC Insured,
AMT Bonds, 8.400%, 7-1-03,
AAA/Aaa $ 600,000 $ 659,604
------------
ARIZONA (3.7%)
Maricopa County Arizona IDA
IDR - Citizens Utilities Company Project,
Series 1991, 6.650%, 4-1-26, AAA/NR 1,000,000 1,063,340
------------
CALIFORNIA (0.2%)
Los Angeles, Convention and Exhibition
Center, Certificates of Participation,
9.000%, 12-1-20, AAA/Aaa 50,000 65,255
------------
FLORIDA (6.2%)
Florida State Pollution Control Board,
Revenue Bonds, Series 1987Y,
7.625%, 7-1-10, AA/Aaa 500,000 549,595
Jacksonville Electric Authority
St. Johns River Park System Revenue
Bonds, 7.000%, 10-1-09, AA/Aa1 1,000,000 1,069,580
Tampa, Capital Improvements Program
Revenue Bonds, Series 1988A,
8.250%, 10-1-18, AA/NR 165,000 180,748
------------
1,799,923
------------
ILLINOIS (12.0%)
Chicago O'Hare International Airport,
Revenue Bonds, Series 1988A, AMT
Bonds, 8.200%, 1-1-18, AAA/Aaa 750,000 800,917
Cook and Will Counties, Illinois TWP High
School District #206, General Obligation
Bonds, 7.100%, 12-1-97, AAA/Aaa 500,000 509,160
Development Finance Authority Pollution
Control, Central Illinois Public Service
Company Project, Series 1990B
7.600%, 9-1-13, AA/Aa2 1,000,000 1,101,540
Palatine, General Obligation Bonds,
Series 1985, 9.900%, 1-1-16, NR/A1 25,000 30,031
West Chicago, IDR-Leggett and Platt, Inc.
Project, Revenue Bonds, Series 1994,
6.900%, 9-1-24, A/NR 1,000,000 1,013,320
------------
3,454,968
------------
IOWA (9.0%)
Iowa State Certificate of Participation,
Revenue Bonds, Series 1992A, 6.500%
7-1-06, AAA/Aaa 1,000,000 1,071,620
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue Bonds, Series
1993B, 5.800%, 12-1-08, NR/Aaa 1,000,000 990,610
West Des Moines Iowa Water Revenue Bonds,
6.450%, 12-1-07, AAA/Aaa 500,000 526,465
------------
2,588,695
------------
<CAPTION>
- - ------------------------------------------------------------------------------------
Description ** Principal Value
- - ------------------------------------------------------------------------------------
<S> <C> <C>
KENTUCKY (5.6%)
Kentucky Housing Corp., Single Family
Mortgage Revenue Bonds, AMT Series
Bonds, 1991D-1, 6.800%, 1-1-24,
AAA/Aaa $ 1,000,000 $ 1,019,100
Kentucky State Turnpike Authority,
Revenue Bonds, 6.000%, 7-1-09,
AAA/Aaa 590,000 588,248
------------
1,607,348
------------
MASSACHUSETTS (3.4%)
Massachusetts State Housing Finance
Agency, Series 1993A
6.300%, 10-1-13, A+/A1 1,000,000 993,520
------------
MICHIGAN (3.5%)
Michigan State Strategic Fund,
Ford Motor Company Project Revenue
Bonds, Series 1992A, 6.550%, 10-1-22
A+/A2 1,000,000 1,010,540
------------
MINNESOTA (3.6%)
Western Minnesota Municipal Power
Agency, 7.000%, 1-1-13, A/A1 1,000,000 1,041,750
------------
NEBRASKA (3.6%)
Nebraska Higher Education Loan Program,
Revenue Bonds, Series 1992A-6, AMT
Bonds, 6.950%, 6-1-08, NR/A 1,000,000 1,024,140
------------
NEVADA (1.1%)
Nevada Housing Division,
Single Family Program, Series 1990B,
AMT Bonds, 7.900%, 4-1-22, AA/NR 310,000 322,109
------------
NEW MEXICO (3.5%)
Albuquerque Hospital Revenue Bonds,
3.950% (rate adjusts weekly), 5-15-22
NR/NR 1,000,000 1,000,000
------------
NORTH CAROLINA (3.5%)
Wake County Industrial Facility Financing
Authority, Pollution Control, Carolina
Power and Light, 4.030%
(rate adjusts weekly), 5-1-24, NR/NR 1,000,000 1,000,000
------------
PENNSYLVANIA (3.5%)
Pennsylvania Housing Finance Agency,
Multi-Family Mortgage Revenue
Bonds, Series 1985A, 9.375%,
8-1-28, AA/Aa 5,000 5,229
Pennsylvania State Higher Education
Assistance Agency, Student Loan Revenue
Bonds, 4.200% (rate adjusts weekly),
7-1-18, AAA/Aaa 1,000,000 1,000,000
------------
1,005,229
------------
</TABLE>
See Notes to Schedules of Investments at page 18.
<PAGE> 46
<TABLE>
<CAPTION>
March 31, 1995 IDEX II Series Fund
- - ------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued) (unaudited)
- - ------------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO
- - ------------------------------------------------------------------------------------
Description ** Principal Value
- - ------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH CAROLINA (5.3%)
Richland County Solid Waste Disposal
Facilities Revenue Bonds, Series 1992A,
6.750%, 5-1-22, A-/A1 $ 500,000 $ 510,845
South Carolina State Public Service
Authority, Electric Revenue Bonds,
Series 1987, 6.900%, 7-1-21, AA-/A1 1,000,000 1,026,000
------------
1,536,845
------------
TEXAS (10.8%)
Brazos River Authority, Pollution
Control Revenue Bonds, Houston Light
and Power Company Project, Series
1988A, 8.250%, 5-1-19, A-/A3 150,000 162,981
Houston Water Conveyance System,
Revenue Bonds, Series 1993C,
7.000%, 12-15-01, AAA/Aaa 1,000,000 1,100,110
North Texas Higher Education Authority,
Inc., Student Loan Revenue Bonds,
4.100% (rate adjusts weekly), 4-1-20
NR/NR 1,000,000 1,000,000
Tarrant County, Housing Finance Corp.,
Single Family Mortgage Revenue
Bonds, GNMA, Series 1989A,
8.000%, 7-1-21, AAA/NR 805,000 850,265
------------
3,113,356
------------
UTAH (4.8%)
Utah State School District Finance,
Cooperative Revenue Bonds,
Mandatory Redemption, Series 1988,
8.375%, 2-15-04, AAA/NR 595,000 653,405
8.375%, 2-15-03, AAA/NR 660,000 723,881
------------
1,377,286
------------
WASHINGTON (7.4%)
Grant County Public Utility
District, Columbia River Priest Rapids
Revenue Bonds, Series 1990, 7.700%,
1-1-18, A+/A1 1,000,000 1,085,610
Washington Housing Finance Committee,
Single Family Mortgage Revenue Bonds
Series 1995A, 6.650%, 7-1-16, AAA/NR 1,000,000 1,032,420
------------
2,118,030
------------
WYOMING (3.3%)
Wyoming State Farm Loan Board, Capital
Facilities Revenue Bonds,
5.750%, 10-1-20, AA-/NR 1,000,000 955,010
------------
TOTAL INVESTMENTS (96.3%)(COST $27,442,018) 27,736,948
OTHER ASSETS IN EXCESS OF LIABILITIES (3.7%) 1,067,912
------------
NET ASSETS (100.0%) $ 28,804,860
============
<CAPTION>
- - ------------------------------------------------------------------------------------
Notes to Schedules of Investments
- - ------------------------------------------------------------------------------------
<S> <C>
+ Foreign securities. Principal amount of forward foreign currency contracts
denominated in indicated currency: B-British Pound; D-German
Deutschemark; F-French Franc; G-Dutch Guilder; K-Swedish Krona;
L-Italian Lira; M-Finish Marka; P-Spanish Peseta; S-Swiss Franc.
# American Depository Receipts or Global Depository Receipts.
* Presently non-income producing.
** Ratings indicated are by Standard and Poor's/Moody's, respectively,
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.
</TABLE>
See Notes to Schedules of Investments above.
<PAGE> 47
<TABLE>
<CAPTION>
March 31, 1995
- - ----------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
- - ----------------------------------------------------------------------------------------------------------------------------
All numbers (except per share amounts) in thousands
AGGRESSIVE CAPITAL
ASSETS: GROWTH GROWTH APPRECIATION
--------- ----------- --------------
<S> <C> <C> <C>
Investment securities, at market value $ 398,121 $ 4,584 $ 6,278
Cash 2,685 184 376
Receivables:
Investment securities sold 13,174 18 63
Shares of beneficial interest sold 1 - -
Interest 415 - -
Dividends 313 2 2
Other 76 1 -
--------- ----------- --------------
Total assets 414,785 4,789 6,719
--------- ----------- --------------
LIABILITIES:
Accounts payable:
Investment securities purchased 12,847 190 1,090
Shares of beneficial interest redeemed 228 - -
Accrued liabilities (Note 3):
Management and advisory fees 6 5 9
Distribution fees 121 1 2
Transfer agent fees and expenses 78 1 2
Forward foreign currency contracts (Note 2) 1,319 - 3
Other 215 - 9
--------- ----------- --------------
Total liabilities 14,814 197 1,115
--------- ----------- --------------
NET ASSETS $ 399,971 $ 4,592 $ 5,604
========= =========== ==============
Investment securities, at cost $ 348,105 $ 4,406 $ 6,178
========= =========== ==============
NET ASSET VALUE PER SHARE (NET ASSETS DIVIDED BY SHARES OUTSTANDING)(NOTE 3):
Class A shares $ 17.25 $ 12.11 $ 11.01
Class C shares $ 17.10 $ 12.09 $ 11.00
OFFERING PRICE PER SHARE:
Class A shares (1) $ 18.25 $ 12.81 $ 11.65
Class C shares $ 17.10 $ 12.09 $ 11.00
</TABLE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (unaudited)
- - -----------------------------------------------------------------------------------------------------------------------------
All numbers in thousands
AGGRESSIVE CAPITAL
GROWTH (2) GROWTH (3) APPRECIATION (3)
INVESTMENT INCOME: --------- ----------- ----------------
<S> <C> <C> <C>
Interest $ 1,572 $ 5 $ 13
Dividends (net of foreign withholding taxes of $4
and $23 for Growth and Global, respectively) 1,639 3 3
--------- ----------- --------------
3,211 8 16
--------- ----------- --------------
EXPENSES (NOTE 3):
Management and advisory fees 2,056 5 9
Distribution fees:
Class A 713 2 3
Class C 16 - 1
Transfer agent fees and expenses 716 3 4
Custody fees and expenses 37 1 2
Trustees fees and expenses 23 - -
Audit fees and expenses 11 1 1
Registration fees - 3 -
Other 171 1 7
--------- ----------- --------------
3,743 16 27
Less amounts waived by the investment adviser - (1) (1)
--------- ----------- --------------
Net expenses 3,743 15 26
--------- ----------- --------------
Net investment income (loss) (532) (7) (10)
--------- ----------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY (NOTE 2):
Net realized gain (loss) on investments 15,795 158 44
Net realized gain (loss) from foreign currency transactions 53 - -
--------- ----------- --------------
Net realized gain (loss) 15,848 158 44
--------- ----------- --------------
Net unrealized appreciation (depreciation) during the period on:
Investments (1,416) 178 100
Translation of assets and liabilities in foreign currency (1,257) - (8)
--------- ----------- --------------
Net unrealized appreciation (depreciation) during the period (2,673) 178 92
--------- ----------- --------------
Net gain (loss) on investments and foreign currency 13,175 336 136
--------- ----------- --------------
Net increase (decrease) in net assets resulting from operations $ 12,643 $ 329 $ 126
========= =========== ==============
</TABLE>
(1) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on sales of $25,000 or more as set forth
in the Prospectus.
(2) For the six months ended March 31, 1995.
(3) From the commencement of investment operations on December 2, 1994 through
March 31, 1995.
The notes to financial statements are an integral part of these statements.
<PAGE> 48
<TABLE>
<CAPTION>
IDEX II Series Fund
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Equity- Income Flexible Tax-
Global Balanced Income Plus Income Exempt
- - --------- ----------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 83,593 $ 3,879 $ 3,028 $ 62,830 $ 19,767 $ 27,737
- 270 80 577 261 639
3,758 69 - 1,417 895 1,009
93 2 - - - -
- 14 16 1,577 507 523
108 - 3 - - -
177 - - - 2 1
- - --------- ----------- --------- --------- ----------- -----------
87,729 4,234 3,127 66,401 21,432 29,909
- - --------- ----------- --------- --------- ----------- -----------
3,029 94 375 - 895 1,070
855 - - - - -
82 5 5 16 33 10
26 1 1 21 6 9
28 - 1 36 5 3
578 - - - - -
139 2 1 - 52 12
- - --------- ----------- --------- --------- ----------- -----------
4,737 102 383 73 991 1,104
- - --------- ----------- --------- --------- ----------- -----------
$ 82,992 $ 4,132 $ 2,744 $ 66,328 $ 20,441 $ 28,805
========= =========== ========= ========= =========== ===========
$ 78,492 $ 3,818 $ 2,945 $ 64,539 $ 19,663 $ 27,442
========= =========== ========= ========= =========== ===========
$ 14.89 $ 10.41 $ 10.77 $ 9.88 $ 8.74 $ 11.27
$ 14.67 $ 10.41 $ 10.76 $ 9.88 $ 8.74 $ 11.27
$ 15.76 $ 11.02 $ 11.40 $ 10.37 $ 9.18 $ 11.83
$ 14.67 $ 10.41 $ 10.76 $ 9.88 $ 8.74 $ 11.27
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Equity- Income Flexible Tax-
Global (2) Balanced (3) Income (3) Plus (2) Income (2) Exempt (2)
- - --------- ----------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 348 $ 13 $ 14 $ 2,996 $ 905 $ 848
244 2 7 21 52 -
- - --------- ----------- --------- --------- ----------- -----------
592 15 21 3,017 957 848
- - --------- ----------- --------- --------- ----------- -----------
432 5 5 194 94 84
145 1 2 110 35 49
16 1 - 9 3 1
142 2 2 48 32 14
28 1 1 15 21 9
6 - - 8 3 4
4 1 1 4 8 4
3 3
19 - - 19 28 4
- - --------- ----------- --------- --------- ----------- -----------
792 14 14 407 224 169
- (1) (1) - (29) (28)
- - --------- ----------- --------- --------- ----------- -----------
792 13 13 407 195 141
- - --------- ----------- --------- --------- ----------- -----------
(200) 2 8 2,610 762 707
- - --------- ----------- --------- --------- ----------- -----------
(1,908) 6 28 (560) (1,115) (206)
(1,583) - - - - -
- - --------- ----------- --------- --------- ----------- -----------
(3,491) 6 28 (560) (1,115) (206)
- - --------- ----------- --------- --------- ----------- -----------
692 60 83 2,053 842 680
223 - - - - -
- - --------- ----------- --------- --------- ----------- -----------
915 60 83 2,053 842 680
- - --------- ----------- --------- --------- ----------- -----------
(2,576) 66 111 1,493 (273) 474
- - --------- ----------- --------- --------- ----------- -----------
$ (2,776) $ 68 $ 119 $ 4,103 $ 489 $ 1,181
========= =========== ========= ========= =========== ===========
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 49
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- - ------------------------------------------------------------------------------------------------------------------------------------
Aggressive Capital
Growth Growth Appreciation
------------------------- ---------- ------------
1995 (1) 1994 (2) 1995 (3) 1995 (3)
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $ (532) $ 170 $ (7) $ (10)
Net realized gain (loss) on investments and foreign currency
transactions 15,848 771 158 44
Net unrealized appreciation (depreciation) during period (2,673) (34,217) 178 92
-------- --------- ------ ------
Net increase (decrease) in net assets resulting from operations 12,643 (33,276) 329 126
-------- --------- ------ ------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A - - - -
Class C - - - -
-------- --------- ------ ------
From net realized gains on investments and foreign currency transactions (1,733) (9,602) - -
In excess of net realized gains - (3,945) - -
-------- --------- ------ ------
(1,733) (13,547) - -
-------- --------- ------ ------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Class A
Proceeds from sale of shares 14,917 58,595 3,993 4,460
Shares issued on reinvestment of distributions 1,639 13,125 - -
Cost of shares repurchased (62,512) (142,515) (64) (317)
-------- --------- ------ ------
Net increase (decrease) from share transactions (45,956) (70,795) 3,929 4,143
-------- --------- ------ ------
Class C
Proceeds from sale of shares 757 4,338 336 1,463
Shares issued on reinvestment of distributions 15 21 - -
Cost of shares repurchased (385) (675) (2) (128)
-------- --------- ------ ------
Net increase (decrease) from share transactions 387 3,684 334 1,335
-------- --------- ------ ------
Total net increase (decrease) from share transactions (45,569) (67,111) 4,263 5,478
-------- --------- ------ ------
Net increase (decrease) in net assets (34,659) (113,934) 4,592 5,604
NET ASSETS:
Beginning of period 434,630 548,564 - -
-------- --------- ------ ------
End of period $399,971 $ 434,630 $4,592 $5,604
======== ========= ====== ======
NET ASSETS CONSIST OF (NOTE 2):
Shares of beneficial interest, unlimited shares authorized 341,157 386,726 4,263 5,478
Undistributed net investment income (loss) (367) 165 (7) (10)
Undistributed net realized gain (loss) from investments and
foreign currency transactions 10,422 (3,693) 158 44
Net unrealized appreciation (depreciation) of investments and on
translation of assets and liabilities in foreign currencies 48,759 51,432 178 92
-------- --------- ------ ------
Total net assets $399,971 $ 434,630 $4,592 $5,604
======== ========= ====== ======
SHARES OF BENEFICIAL INTEREST:
Class A
Shares sold 892 3,314 357 416
Shares issued on reinvestment of distributions 101 738 - -
Shares redeemed (3,727) (8,071) (6) (29)
-------- --------- ------ ------
Net increase (decrease) in shares outstanding (2,734) (4,019) 351 387
Shares outstanding at beginning of period 25,691 29,710 - -
-------- --------- ------ ------
Shares outstanding at end of period 22,957 25,691 351 387
======== ========= ====== ======
Class C
Shares sold 45 244 28 134
Shares issued on reinvestment of distributions 1 1 - -
Shares redeemed (23) (40) - (12)
-------- --------- ------ ------
Net increase (decrease) in shares outstanding 23 205 28 122
Shares outstanding at beginning of period 205 - - -
-------- --------- ------ ------
Shares outstanding at end of period 228 205 28 122
======== ========= ====== ======
</TABLE>
(1) For the six months ended March 31, 1995. Unaudited.
(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
March 31, 1995. Unaudited.
The notes to financial statements are an integral part of these statements.
<PAGE> 50
<TABLE>
<CAPTION>
IDEX II Series Fund
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
Equity-
Global Balanced Income Income Plus Flexible Income 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>
$ (200) $ (346) $ 2 $ 8 $ 2,610 $ 5,140 $ 762 $ 1,715 $ 707 $ 1,460
(3,491) 3,253 6 28 (560) 829 (1,115) 32 (206) 108
915 2,160 60 83 2,053 (8,190) 842 (2,171) 680 (1,685)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
(2,776) 5,067 68 119 4,103 (2,221) 489 (424) 1,181 (117)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
- - (3) (11) (2,560) (4,970) (708) (1,644) (689) (1,405)
- - (1) - (69) (82) (22) (27) (5) (5)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
(4) (11) (2,629) (5,052) (730) (1,671) (694) (1,410)
(3,199) - - - (676) (960) - - (91) (996)
- - - - - - - - - -
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
(3,199) - (4) (11) (3,305) (6,012) (730) (1,671) (785) (2,406)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
13,571 69,000 1,945 2,549 2,593 10,809 608 4,010 1,158 2,531
2,979 - 3 9 2,299 4,164 534 1,241 525 1,686
(12,471) (10,201) (17) (46) (5,150) (15,337) (2,646) (10,790) (2,682) (3,322)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
4,079 58,799 1,931 2,512 (258) (364) (1,504) (5,539) (999) 895
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
713 4,062 2,139 124 271 2,587 122 813 219 292
133 - 1 - 74 75 19 22 4 4
(770) (546) (3) - (664) (359) (173) (215) (188) (12)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
76 3,516 2,137 124 (319) 2,303 (32) 620 35 284
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
4,155 62,315 4,068 2,636 (577) 1,939 (1,536) (4,919) (964) 1,179
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
(1,820) 67,382 4,132 2,744 221 (6,294) (1,777) (7,014) (568) (1,344)
84,812 17,430 - - 66,107 72,401 22,218 29,232 29,373 30,717
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
$ 82,992 $ 84,812 $4,132 $2,744 $66,328 $ 66,107 $ 20,441 $ 22,218 $ 28,805 $ 29,373
======== ======== ====== ====== ======= ======== ======== ======== ======== ========
82,654 78,499 4,068 2,636 68,306 68,883 24,080 25,616 28,675 29,639
(221) (21) (2) (3) 139 158 81 49 124 111
(3,986) 2,704 6 28 (407) 829 (3,824) (2,709) (289) 8
4,545 3,630 60 83 (1,710) (3,763) 104 (738) 295 (385)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
$ 82,992 $ 84,812 $4,132 $2,744 $66,328 $ 66,107 $ 20,441 $ 22,218 $ 28,805 $ 29,373
======== ======== ====== ====== ======= ======== ======== ======== ======== ========
872 4,456 191 246 263 1,027 70 414 105 221
198 - 1 1 240 400 62 134 48 146
(825) (660) (2) (4) (532) (1,463) (306) (1,158) (245) (291)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
245 3,796 190 243 (29) (36) (174) (610) (92) 76
5,102 1,306 - - 6,560 6,596 2,438 3,048 2,621 2,545
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
5,347 5,102 190 243 6,531 6,560 2,264 2,438 2,529 2,621
======== ======== ====== ====== ======= ======== ======== ======== ======== ========
47 263 207 12 28 244 14 99 20 26
9 - - - 8 8 2 2 - -
(52) (36) - - (69) (35) (20) (23) (17) (1)
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
4 227 207 12 (33) 217 (4) 78 3 25
227 - - - 217 - 78 - 25 -
-------- -------- ------ ------ ------- -------- -------- -------- -------- --------
231 227 207 12 184 217 74 78 28 25
======== ======== ====== ====== ======= ======== ======== ======== ======== ========
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 51
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- - ----------------------------------------------------------------------------------------------------------------------------------
Selected per share data for a share of beneficial interest outstanding throughout each period:
Net Asset Net Realized Total Income Dividends Distributions
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>
GROWTH (1)
Class A 3/31/95 (2) $16.78 ($0.03) $0.57 $0.54 $ - ($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 3/31/95 (2) 16.68 (0.08) 0.57 0.49 - (0.07)
9/30/94 18.46 (0.09) (1.22) (1.31) - (0.33)
--------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH
Class A 3/31/95 (2,3) 10.00 (0.02) 2.13 2.11 - -
Class C 3/31/95 (2,3) 10.00 (0.04) 2.13 2.09 - -
--------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION
Class A 3/31/95 (2,3) 10.00 (0.02) 1.03 1.01 - -
Class C 3/31/95 (2,3) 10.00 (0.03) 1.03 1.00 - -
--------------------------------------------------------------------------------------------------------
GLOBAL
Class A 3/31/95 (2) 15.93 (0.04) (0.44) (0.48) - (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 3/31/95 (2) 15.74 (0.07) (0.44) (0.51) - (0.56)
9/30/94 13.35 (0.23) 2.62 2.39 - -
--------------------------------------------------------------------------------------------------------
BALANCED
Class A 3/31/95 (2,3) 10.00 0.03 0.40 0.43 (0.02) -
Class C 3/31/95 (2,3) 10.00 0.02 0.40 0.42 (0.01) -
--------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 4).
(2) Unaudited.
(3) From commencement of operations, December 2, 1994.
(4) Total return has been calculated without deduction of sales load, if any,
on an initial purchase. Short periods (where applicable) are not
annualized.
(5) The following summarizes the expense ratios without expense reimbursement
by the investment adviser for those Portfolios which are net of expense
reimbursement.
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C> <C>
Aggressive Growth Class A 3.04% - -
Class C 3.55% - -
Capital Appreciation Class A 2.97% - -
Class C 3.50% - -
Global Class A - - 3.65%
Class C - - -
Balanced Class A 3.10% - -
Class C 3.61% - -
</TABLE>
(6) 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> 52
<TABLE>
<CAPTION>
IDEX II Series Fund
- - -----------------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------------
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 (5) Net Assets Rate (6)
- - ----------------------------------------- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ - ($0.07) $17.25 3.24% $396,070 22,957 1.82% (0.25)% 57.02%
(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 0.75 127.29
- (0.07) 17.10 2.96 3,901 228 2.37 (0.80) 57.02
(0.14) (0.47) 16.68 (7.72) 3,423 205 3.48 (1.68) 63.73
- - ----------------------------------------- -------------------------------------------------------------------------------------
- - 12.11 21.10 4,248 351 2.85 (1.33) 151.15
- - 12.09 20.90 344 28 3.40 (1.88) 151.15
- - ----------------------------------------- -------------------------------------------------------------------------------------
- - 11.01 10.10 4,267 387 2.85 (1.07) 63.70
- - 11.00 10.00 1,337 122 3.40 (1.62) 63.70
- - ----------------------------------------- -------------------------------------------------------------------------------------
- (0.56) 14.89 (3.03) 79,611 5,347 1.86 (0.44) 202.78
- - 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) 14.67 (3.26) 3,381 231 2.41 (0.99) 202.78
- - 15.74 17.90 3,571 227 4.04 (2.46) 148.01
- - ----------------------------------------- -------------------------------------------------------------------------------------
- (0.02) 10.41 4.30 1,977 190 2.85 0.46 51.07
- (0.01) 10.41 4.15 2,155 207 3.40 (0.09) 51.07
- - ----------------------------------------- -------------------------------------------------------------------------------------
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 53
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- - ----------------------------------------------------------------------------------------------------------------------------------
Selected per share data for a share of beneficial interest outstanding throughout each period:
Net Asset Net Realized Total Income Dividends Distributions
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>
EQUITY INCOME
Class A 3/31/95 (2,3) $10.00 $0.06 $0.76 $0.82 ($0.05) $ -
Class C 3/31/95 (2,3) 10.00 0.03 0.76 0.79 (0.03) -
----------------------------------------------------------------------------------------------------------
INCOME PLUS
Class A 3/31/95 (2) 9.75 0.39 0.23 0.62 (0.39) (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 3/31/95 (2) 9.74 0.36 0.23 0.59 (0.35) (0.10)
9/30/94 10.98 0.66 (1.10) (0.44) (0.66) (0.14)
----------------------------------------------------------------------------------------------------------
FLEXIBLE INCOME (7)
Class A 3/31/95 (2) 8.83 0.32 (0.11) 0.21 (0.30) -
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 3/31/95 (2) 8.83 0.28 (0.11) 0.17 (0.26) -
9/30/94 9.59 0.60 (0.81) (0.21) (0.55) -
----------------------------------------------------------------------------------------------------------
TAX-EXEMPT
Class A 3/31/95 (2) 11.10 0.28 0.20 0.48 (0.27) (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 3/31/95 (2) 11.10 0.27 0.20 0.47 (0.26) (0.04)
9/30/94 12.07 0.53 (0.60) (0.07) (0.51) (0.39)
----------------------------------------------------------------------------------------------------------
</TABLE>
(7) As of October 1, 1992, Flexible Income Class A discontinued the practice of
equalization accounting.
(8) The following summarizes the expense ratios without expense reimbursement
by the investment adviser for those Portfolios which are net of expense
reimbursement. On October 1, 1993, Flexible Income Class A initiated plan
of distribution. Short periods (where applicable) are annualized.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Equity-Income Class A 3.10% - - - -
Class C 3.63% - - - -
Income Plus Class A - - - - 1.21%
Class C - - - - -
Flexible Income Class A 2.13% 2.13% 1.56% 1.66% 1.75%
Class C 2.68% 8.59% - - -
Tax Exempt Class A 1.20% 1.30% 1.43% 1.20% 1.24%
Class C 1.45% 2.88% - - -
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 54
<TABLE>
<CAPTION>
IDEX II Series Fund
- - -----------------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------------
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 (8) Net Assets Rate (6)
- - ----------------------------------------- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ - ($0.05) $10.77 8.10% $ 2,617 243 2.85% 1.69% 49.04%
- (0.03) 10.76 7.94 128 12 3.40 1.14 49.04
- - ----------------------------------------- -------------------------------------------------------------------------------------
- (0.49) 9.88 6.66 64,515 6,531 1.24 8.07 21.97
- (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
- (0.45) 9.88 6.35 1,814 184 1.79 7.52 21.97
- (0.80) 9.74 (4.55) 2,112 217 3.52 5.16 48.12
- - ----------------------------------------- -------------------------------------------------------------------------------------
- (0.30) 8.74 2.26 19,791 2,264 1.85 7.33 139.88
- (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
- (0.26) 8.74 1.97 651 74 2.40 6.78 139.88
- (0.55) 8.83 (2.15) 691 78 2.40 6.03 105.40
- - ----------------------------------------- -------------------------------------------------------------------------------------
- (0.31) 11.27 4.40 28,492 2,529 1.00 5.04 96.30
- (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
- (0.30) 11.27 4.18 313 28 1.25 4.79 96.30
- (0.90) 11.10 (0.73) 277 25 1.25 4.58 59.84
- - ----------------------------------------- -------------------------------------------------------------------------------------
</TABLE>
The notes to financial statements are an integral part of these statements.
<PAGE> 55
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 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 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 a
major independent provider 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 to 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 at each fiscal year-end.
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 nv, a Netherlands corporation.
<PAGE> 56
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
MARCH 31, 1995
NOTE 3. Investment Advisory and Other Payments To/From Affiliates
(continued):
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. Further,
effective October 1, 1993, Growth Class A changed its total 12b-1 annual
rate to 0.35%. 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 $1.166667 plus $2.43 for each new account opened. Transfer agent
fees and expenses of Global and Capital Appreciation reflect reductions of
$431 and $11, respectively, for commission credits received through
affiliated brokers during the period.
<TABLE>
<CAPTION>
For the period ended March 31, 1995:
Aggressive Capital Equity- Income Flexible Tax-
Growth Growth Appreciation Global Balanced Income Plus Income Exempt
------ ---------- ------------ ------ -------- ------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual management fee rate (1) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 0.60% 0.90% 0.60%
Annual expense limit (excluding 12b-1 1.50% 2.50% 2.50% 2.50% 2.50% 2.50% 1.25% 1.50% 0.65%
fees) (2)
Class A annual 12b-1 distribution fee 0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35%
rate
Class C annual 12b-1 distribution fee 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.60%
rate
Class A (3):
Underwriting commissions received
by ISI (not a Portfolio expense) $565,401 $22,042 $25,202 $298,611 $15,816 $24,026 $49,396 $9,906 $11,047
Underwriting commissions retained 81,531 3,710 3,718 44,283 2,519 4,009 8,762 1,918 2,329
by ISI
Custody earnings credits (4) 56,534 837 2,332 111,969 1,753 875 9,233 3,027 10,298
</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
(3) Class A imposes a front-end sales charge.
(4) Custody fees in the Statements of Operations are net of custody earnings
credits.
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
March 31, 1995 were as follows:
<TABLE>
<CAPTION>
Non-U.S. Non-U.S. U.S. U.S.
Government purchases Government sales Government purchases Government sales
-------------------- ---------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Growth $ 215,249,115 $ 291,047,946 $ 79,789,221 $ 109,958,873
Aggressive Growth 4,222,558 858,275 -- --
Capital Appreciation 5,338,901 553,621 2,046,482 2,049,490
Global 74,739,144 70,904,986 46,644,748 47,000,000
Balanced 2,991,093 188,903 2,754,913 2,599,480
Equity-Income 1,698,910 57,000 722,469 175,000
Income Plus 6,702,757 8,411,077 -- --
Flexible Income 9,996,400 13,319,165 13,664,550 11,351,853
Tax-Exempt 12,534,881 16,922,964 -- --
</TABLE>
Losses on the sale of U.S. Government securities in Flexible Income totaled
$3,668 for the six months ended March 31, 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 as
"initial Margin" on the contract an amount of U.S. Government securities
equal to a portion of the contract's value. 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 losses on futures
contracts aggregated $90,169 for the six months ended March 31, 1995 for
Flexible Income.
<PAGE> 57
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
MARCH 31, 1995
NOTE 5. Futures, Forward Currency Contracts And Other Derivative
Transactions:
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. Credit risk to a Portfolio is limited to amounts recorded as
unrealized appreciation on open 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>
At March 31, 1995:
Realized net -------------------------------------------------------
capital gains for Unrealized Unrealized Net unrealized
the year ended Cost of appreciation of depreciation of appreciation
September 30, 1994 securities investments investments (depreciation)
------------------ ------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Growth $ 1,086,495 $ 348,104,659 $ 55,839,353 $ (5,823,019) $ 50,016,334
Aggressive Growth - 4,406,357 240,064 (62,182) 177,882
Capital Appreciation - 6,177,978 268,882 (168,770) 100,112
Global 3,703,142 78,492,033 7,962,042 (2,861,048) 5,100,994
Balanced - 3,817,886 84,655 (24,010) 60,645
Equity-Income - 2,944,704 89,297 (6,059) 83,238
Income Plus 828,879 64,539,399 1,301,257 (3,011,046) (1,709,789)
Flexible Income 31,423 19,662,744 397,392 (293,284) 104,108
Tax Exempt 108,211 27,442,018 442,478 (147,548) 294,930
</TABLE>
Realized net capital gains available to distribute were paid to shareholders in
December, 1994. The realized net capital gains of Flexible Income were
entirely offset by the utilization of capital loss carryforwards for the period
ended September 30, 1994. The remaining prior year capital loss carryforwards
for Flexible Income aggregated $2,693,806 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. Flexible Income will begin net
capital gain distributions in future years to the extent that net capital gains
are realized in excess of available loss carryforwards.
<PAGE> 58
Notes
-----
<PAGE> 59
Notes
-----
<PAGE> 60
<TABLE>
<CAPTION>
TRUSTEES OFFICERS INVESTMENT
ADVISERS
<S> <C> <C>
PETER R. BROWN JOHN R. KENNEY IDEX MANAGEMENT, INC.
Largo, Florida Chairman of the Board 201 Highland Avenue
Chairman of the Board, Largo, Florida 34640
Peter Brown Construction G. JOHN HURLEY
Company President and Chief INTERSECURITIES, INC.
Executive Officer 201 Highland Avenue
JAMES L. CHURCHILL Largo, Florida 34640
Hilton Head, South Carolina THOMAS R. MORIARTY
Retired; former President of Senior Vice President SUB-ADVISERS
the Avionics Group of Rockwell
International Corporation WILLIAM H. GEIGER AEGON USA
Vice President and INVESTMENT MANAGEMENT, INC.
CHARLES C. HARRIS Assistant Secretary 4333 Edgewood Road, N.E.
Belleair, Florida Cedar Rapids, Iowa 52499
Retired; former Senior Vice LESLIE E. MARTIN, III
President Western Reserve Life Vice President - Marketing FRED ALGER & COMPANY
Assurance Co. of Ohio 30 Montgomery Street
BECKY A. FERRELL Jersey City, New Jersey 07302
G. JOHN HURLEY Assistant Vice President,
Largo, Florida Counsel and Secretary JANUS CAPITAL CORPORATION
President and Chief Executive 100 Fillmore Street, Suite 300
Officer of the Fund; CHRISTOPHER G. ROETZER Denver, Colorado 80206
President and Chief Executive Assistant Vice President and
Officer of InterSecurities, Inc. Principal Accounting Officer LUTHER KING CAPITAL
MANAGEMENT CORPORATION
JOHN R. KENNEY RICHARD B. FRANZ II 301 Commerce Street, Suite 1600
Largo, Florida Treasurer Ft. Worth, Texas 76102
Chairman of the Board of the Fund;
Chairman of the Board of PRINCIPAL
InterSecurities, Inc. Our corporate offices are UNDERWRITER
located at:
WILLIAM W. SHORT, JR. INTERSECURITIES, INC.
Largo, Florida 201 Highland Avenue
Chairman, Southern Apparel 201 Highland Avenue Largo, Florida 34640
Corporation and S.A.C. Distributors Largo, Florida 34640
CUSTODIAN
TRUMAN H. SIMS
Clearwater, Florida CUSTOMER SERVICE INVESTORS FIDUCIARY TRUST COMPANY
President, Truman Sims, Inc. Kansas City, Missouri 64105
(800) 851-9777 Send all correspondence to the Transfer Agent
JACK E. ZIMMERMAN HOURS: 8 A.M. TO 7 P.M.
Dayton, Ohio EASTERN TIME INDEPENDENT
Retired; former Director, Regional ACCOUNTANTS
Marketing, Martin Marietta IDEX ASSIST LINE
Corporation PRICE WATERHOUSE LLP
(800) 421-IDEX (4339) 1055 Broadway
TRANSFER AGENT 24-HOUR AUTOMATED ACCOUNT Kansas City, Missouri 64105
INFORMATION
IDEX INVESTOR SERVICES, INC.
P.O. Box 9015
Clearwater, Florida 34618-9015
</TABLE>
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.
<PAGE> 61
Where Time Is On Your Side
(LOGO) IDEX(R)
MUTUAL FUNDS
P.O. Box 9015 - Clearwater, FL - 34618-9015
------------------
Principal Underwriter: InterSecurities, Inc.
<PAGE> 62
(Page) 1
(Photo Upper Left) John R. Kenney, Chairman of the Board
(Photo Upper Left) G. John Hurley, President and CEO
(Page) 3
(Graph Upper-Center) - Two lines detailing how $10,000 invested on the
inception date of IDEX II Growth Portfolio Class A share (May 8, 1986) in each
of IDEX II Growth Portfolio Class A shares and the Standard and Poor's 500
Index has grown to $29,214 and $27,202, respectively, as of March 31, 1995.
(Graph Lower-Left) - Three lines detailing how $10,000 invested on the
inception date of IDEX II Growth Portfolio Class C shares (October 1, 1993) has
grown in each of IDEX II Growth Portfolio Class A shares, IDEX II Growth
Portfolio Class C shares and the S&P 500 Index to $9,104, $9,502 and $11,374,
respectively, as of March 31, 1995.
(Page) 4
(Graph Upper-Left) - A pie chart detailing composition of net assets of IDEX II
Growth Portfolio by major industry segments as of March 31, 1995.
(Page) 6
(Graph Upper-Center) - Three lines detailing how $10,000 invested on the
inception date of IDEX II Aggressive Growth Class A and Class C shares
(December 2, 1994) in each of IDEX II Aggressive Growth Class A shares, IDEX II
Aggressive Growth Class C shares and in the S&P 500 Index has grown to $11,446,
$12,090 and $11,140, respectively, as of March 31, 1995.
(Graph Lower-Center) - A pie chart detailing composition of net assets of IDEX
II Aggressive Growth Portfolio by major including segments as of March 31,
1995.
(Page) 9
(Graph Upper-Center) - Three lines detailing how $10,000 invested on the
inception date of IDEX II Capital Appreciation Portfolio Class A and Class C
shares (December 2, 1994) in each of IDEX II Capital Appreciation Portfolio
Class A shares, IDEX II Capital Appreciation Class C shares and the S&P 500
Index has grown to $10,406, $10,990 and $11,140, respectively, as of March 31,
1995.
(Graph Lower-Center) - A pie chart detailing composition of net assets of IDEX
II Capital Appreciation by major industry segments as of March 31, 1995.
(Page) 12
(Graph Upper-Center) - Two lines detailing how $10,000 invested on the
inception date of IDEX II Global Class A shares (October 1, 1992) in IDEX II
Global Portfolio Class A shares and the Morgan Stanley Capital International
World Index has grown to $14,602 and $13,576, respectively, as of March 31,
1995.
(Graph Lower-Left) - Three lines detailing how $10,000 invested on the
inception date of IDEX II Global Portfolio Class C shares (October 1, 1993) in
each of IDEX II Global Portfolio Class A shares, IDEX II Global Portfolio Class
C shares and the Morgan Stanley Capital International World Index has grown to
$10,949, $11,355 and $11,197, respectively, as of March 31, 1995.
(Page) 13
(Graph Upper-Center) - A pie chart detailing composition of net assets of IDEX
II Global Portfolio by major industry segments as of March 31, 1995.
<PAGE> 63
(Page) 14
(Graph Upper-Center) - A map detailing composition of net assets of IDEX II
Global Portfolio by continent as of March 31, 1995.
(Page) 16
(Graph Upper-Center) - Four lines detailing how $10,000 invested on the
inception date of IDEX II Balanced Portfolio Class A and Class C shares
(December 2, 1995) in each of IDEX II Balanced Portfolio Class A shares IDEX II
Balanced Portfolio Class C shares, the S&P 500 Index and Lehman Brothers Long
Government/Corporate Bond Index has grown to $9,858, $10,415, $11,140 and
$10,540, respectively, as of March 31, 1995.
(Graph Lower-Center) - A pie chart detailing composition of net assets of IDEX
II Balanced Portfolio by major industry segments as of March 31, 1995.
(Page) 19
(Graph Upper-Center) - Four lines detailing how $10,000 invested on the
inception date of IDEX II Equity-Income Portfolio Class A and Class C shares
(December 2, 1995) in each of IDEX II Equity-Income Portfolio Class A shares,
the S&P 500 Index and the Lehman Brothers Intermediate Government/Corporate
Bond Index has grown to $10,217, $10,794, $11,140 and $10,480, respectively, as
of March 31, 1995.
(Graph Lower-Center) - A pie chart detailing composition of net assets of IDEX
II Equity-Income Portfolio by major industry segments as of March 31, 1995.
(Page) 22
(Graph Upper-Center) - Two lines detailing how $10,000 invested on the
inception date of IDEX II Income Plus Portfolio Class A shares (June 14, 1995)
in each of IDEX II Income Plus Portfolio Class A and the Merrill Lynch High
Yield Master Index has grown to $25,433 and $30,655, respectively, as of March
31, 1995.
(Graph Lower-Right) - Three lines detailing how $10,000 invested on the
inception date of IDEX II Income Plus Portfolio Class C shares (October 1,
1993) in each of IDEX II Income Plus Portfolio Class A shares, IDEX II Income
Plus Portfolio Class C shares and Merrill Lynch High Yield Master Index has
grown to $9,890, $10,152 and $11,041, respectively, as of March 31, 1995.
(Page) 23
(Graph Upper-Center) - A pie chart detailing composition of net assets of IDEX
II Income Plus Portfolio by major industry segments as of March 31, 1995.
(Graph Lower-Center) - A pie chart detailing composition of net assets of IDEX
II Flexible Income Portfolio by major industry segments as of March 31, 1995.
<PAGE> 64
(Page) 25
(Graph Upper-Center) - Two lines detailing how $10,000 invested on the
inception date of IDEX II Flexible Income Portfolio Class A shares (June 29,
1987) in each of IDEX II Flexible Income Portfolio Class A shares and the
Lehman Brothers Long Government/Corporate Bond Index has grown to $16,762 and
19,216, respectively, as of March 31, 1995.
(Graph Lower-Right) - Two lines detailing how $10,000 invested on the
inception date of IDEX II Flexible Income Portfolio Class C shares (October 1,
1993) in each of IDEX II Flexible Income Portfolio Class A shares, IDEX II
Flexible Income Portfolio Class C and the Lehman Brothers Long Government/
Corporate Bond Index has grown to $9,592, $9,979 and $10,104, respectively, as
of March 31, 1995.
(Page) 27
(Graph Upper-Center) - Two lines detailing how $10,000 invested on the
inception dated of IDEX II Tax-Exempt Portfolio Class A shares (April 1, 1985)
in each of IDEX II Tax-Exempt Portfolio Class A shares and the Lehman Brothers
Long Municipal Bond Index has grown to $20,963 and $27,429, respectively, as of
March 31, 1995.
(Graph Lower-Right) - Three lines detailing how $10,000 invested on the
inception date of IDEX II Tax-Exempt Portfolio Class C shares (October 1, 1993)
in each of IDEX II Tax-Exempt Portfolio Class A shares, IDEX II Tax-Exempt
Portfolio Class C shares and the Lehman Brothers Long Municipal Bond Index has
grown to $9,981, $10,343 and $9,963, respectively, as of March 31, 1995.
