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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Registration No. 33-2659
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 18
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
1940 Act File No. 811-4556
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Amendment No. 20
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(Check appropriate box or boxes.)
IDEX II SERIES FUND
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(Exact Name of Registrant as Specified in Charter)
201 Highland Avenue, Largo, Florida 34640
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (813) 585-6565
G. John Hurley, P.O. Box 5068, Clearwater, Florida 34618-5068
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(Name and Address of Agent for Service)
Approximate date of proposed public offering: It is proposed that this filing
will become effective:
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a) (2) of Rule 485.
[ ] On (date) pursuant to paragraph (a) (1) of Rule 485.
[x] On September 28, 1995 pursuant to paragraph (a) (2) of Rule 485.
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[ ] On (date) pursuant to paragraph (b) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2(a) and filed a Rule 24f-2 Notice
on November 15, 1994 for the fiscal year ended September 30, 1994.
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IDEX II SERIES FUND
Cross Reference Sheet
Between Prospectus and Statement of
Additional Information and Form N-1A Item
<TABLE>
<CAPTION>
Form N-1A Item Caption
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<S> <C>
Part A Prospectus
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1. Cover Page Cover Page
2. Synopsis Summary of Information; Summary of Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Investment Objectives and Policies;
Additional Investment Practices; Risk
Factors; Other Portfolio Policies;
Miscellaneous Information
5. Management of Fund Investment Advisory and Other Services; Miscellaneous Information
5A. Management's Discussion of
Fund Performance Not Applicable
6. Capital Stock and Other Securities Shareholders' Manual - How to Purchase Shares;
Distributions and Taxes; Miscellaneous Information
7. Purchase of Securities Being Offered Alternative Purchase Arrangements;
Shareholders' Manual - Opening an Account;
Shareholders' Manual - How to Purchase Shares;
Shareholders' Manual - How to Exchange Shares; Shareholders' Manual - Other
Information; Investment Advisory and Other Services
8. Redemption or Repurchase Shareholders' Manual - How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
</TABLE>
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<TABLE>
<CAPTION>
Part B Statement of Additional Information
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<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Miscellaneous Information
13. Investment Objectives and Policies Investment Objectives; Policies and Practices
Investment Restrictions
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Principal Shareholders
Holders of Securities
16. Investment Advisory and Investment Advisory and Other Services;
Other Services Administrative Services; Custodian, Transfer Agent
and Other Affiliates
17. Brokerage Allocation and Portfolio Transactions and Brokerage
Other Practices
18. Capital Stock and Other Securities Miscellaneous Information
19. Purchase, Redemption and Purchase of Shares; Distribution Plans; Net
Pricing of Securities Being Offered Asset Value Determination; Dividends and Other
Distributions; Shareholder Accounts; Retirement
Plans; Redemption of Shares
20. Tax Status Taxes
21. Underwriter Distributor
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
</TABLE>
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IDEX II SERIES FUND ----------------------------------------------------
SUMMARY OF INFORMATION.........................................................1
SUMMARY OF EXPENSES............................................................3
FINANCIAL HIGHLIGHTS...........................................................5
ALTERNATIVE PURCHASE ARRANGEMENTS..............................................8
INVESTMENT OBJECTIVES AND POLICIES.............................................9
ADDITIONAL INVESTMENT PRACTICES...............................................19
RISK FACTORS..................................................................23
OTHER PORTFOLIO POLICIES......................................................25
PERFORMANCE...................................................................26
INVESTMENT ADVISORY AND OTHER SERVICES........................................27
DISTRIBUTIONS AND TAXES.......................................................32
MISCELLANEOUS INFORMATION.....................................................35
SHAREHOLDERS' MANUAL..........................................................36
APPENDIX A-SECURITIES RATINGS.................................................48
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
- ---------------------------------------------------- OCTOBER 1, 1995
<PAGE> 5
IDEX II SERIES FUND
201 HIGHLAND AVENUE, LARGO, FL 34640
CUSTOMER SERVICE: (800) 851-9777
PROSPECTUS DATED OCTOBER 1, 1995
IDEX II AGGRESSIVE GROWTH PORTFOLIO (the "Aggressive Growth Portfolio")
seeks long-term capital appreciation. The Portfolio seeks to achieve its
objective by investing in a diversified, actively managed portfolio of equity
securities.
IDEX II CAPITAL APPRECIATION PORTFOLIO (the "Capital Appreciation
Portfolio") is a nondiversified portfolio that seeks long-term growth of capital
in a manner consistent with the preservation of capital by emphasizing
investments in common stocks of companies which will normally have an average
market capitalization between $1 billion and $5 billion. Realization of income
is not a significant investment consideration, and any income realized on the
Capital Appreciation Portfolio's investments will be incidental to its primary
objective.
IDEX II GLOBAL PORTFOLIO (the "Global Portfolio") seeks long-term growth of
capital in a manner consistent with preservation of capital, primarily through
investments in common stocks of foreign and domestic issuers. The Global
Portfolio's holdings in foreign securities involve special risks that should be
considered carefully before investing and which are described in this Prospectus
under "Risk Factors -- Foreign Securities."
IDEX II GROWTH PORTFOLIO (the "Growth Portfolio") seeks only growth of
capital. The Growth Portfolio pursues its objective primarily by investing in
common stocks listed on a national securities exchange or on NASDAQ and which
the Portfolio's sub-adviser believes have a good potential for capital growth.
IDEX II EQUITY-INCOME PORTFOLIO (the "Equity-Income Portfolio") seeks to
provide current income, long-term growth of income and capital appreciation. The
Equity-Income Portfolio seeks to achieve its objective by investing primarily in
common stocks offering above-average dividend yields, income producing
securities convertible into common stock, and fixed-income securities.
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO (the "Tactical Asset Allocation
Portfolio") seeks preservation of capital and competitive investment returns.
The Portfolio seeks to achieve its objective by investing primarily in stocks,
United States Treasury bonds, notes and bills, and money market funds.
IDEX II BALANCED PORTFOLIO (the "Balanced Portfolio") seeks long-term
capital growth, consistent with preservation of capital and balanced by current
income. The Portfolio is designed for investors who want to participate in the
equity markets through a more moderate investment than a pure growth fund. The
Portfolio normally invests 40% - 60% of its assets in equity securities selected
primarily for their growth potential and 40% - 60% of its assets in fixed income
securities.
IDEX II FLEXIBLE INCOME PORTFOLIO (the "Flexible Income Portfolio") seeks to
obtain maximum total return for its shareholders, consistent with preservation
of capital, by actively managing a portfolio of income-producing securities.
Securities are selected because they offer the potential for the highest total
return from a combination of current income and capital appreciation, with an
emphasis on the income component of total return.
IDEX II INCOME PLUS PORTFOLIO (the "Income Plus Portfolio") seeks to provide
as high a level of current income as is consistent with the avoidance of
excessive risk. The Income Plus Portfolio pursues its objective primarily by
investing in a diversified portfolio of high-yield, fixed-income securities,
including convertible debt securities.
IDEX II TAX-EXEMPT PORTFOLIO (the "Tax-Exempt Portfolio") seeks to provide
maximum current interest income exempt from federal income tax in a manner
consistent with preservation of capital. The Tax-Exempt Portfolio pursues its
objective primarily by investing in high quality municipal obligations the
income from which is exempt from federal income tax.
This Prospectus sets forth concise information which investors should
consider before investing in a Portfolio. Investors should read and retain this
Prospectus for future reference. Additional and more detailed information about
each Portfolio is contained in the Statement of Additional Information dated
October 1, 1995 which is filed with the Securities and Exchange Commission in
Washington, D.C. and incorporated by reference in this Prospectus. A copy of the
Statement of Additional Information may be obtained without charge by calling or
writing the Fund at the address or phone number indicated above.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY.
THE FLEXIBLE INCOME PORTFOLIO MAY INVEST WITHOUT LIMIT, AND THE INCOME PLUS
PORTFOLIO MAY INVEST UP TO 50% OF ITS ASSETS, IN LOWER RATED BONDS, COMMONLY
REFERRED TO AS "JUNK BONDS." BONDS OF THIS TYPE ARE CONSIDERED TO BE SPECULATIVE
WITH REGARD TO THE PAYMENT OF INTEREST AND RETURN OF PRINCIPAL. INVESTMENTS IN
THESE TYPES OF SECURITIES HAVE GREATER RISKS, INCLUDING THE RISK OF DEFAULT,
THAN HIGHER RATED BONDS AND THEREFORE MAY NOT BE SUITABLE FOR ALL INVESTORS.
THESE RISKS ARE DESCRIBED IN THE "RISK FACTORS -- HIGH YIELD/HIGH RISK BONDS"
SECTION OF THIS PROSPECTUS. INVESTORS SHOULD CAREFULLY ASSESS THE RISKS
ASSOCIATED WITH INVESTMENTS IN THOSE PORTFOLIOS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 6
IDEX II SERIES FUND
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SUMMARY OF INFORMATION
Each Portfolio (a "Portfolio") is a separate series of IDEX II Series Fund
(the "Fund"), an open-end management investment company offering a selection of
separate investment portfolios. All Portfolios other than the Capital
Appreciation Portfolio are diversified, while the Capital Appreciation Portfolio
is nondiversified. Each Portfolio has a distinct investment objective and
policies which are summarized below.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of IDEX II AGGRESSIVE GROWTH PORTFOLIO is
long-term capital appreciation. The Aggressive Growth Portfolio seeks to achieve
its objective by investing in a diversified, actively managed portfolio of
equity securities.
The investment objective of IDEX II CAPITAL APPRECIATION PORTFOLIO is
long-term growth of capital in a manner consistent with the preservation of
capital by emphasizing investment in common stocks of companies which will
normally have an average market capitalization between $1 billion and $5
billion. Realization of income is not a significant investment consideration,
and any income realized on the Capital Appreciation Portfolio's investments will
be incidental to its primary objective.
The investment objective of IDEX II GLOBAL PORTFOLIO is to provide
long-term growth of capital in a manner consistent with preservation of capital
primarily through investments in common stocks of foreign and domestic issuers.
The Global Portfolio offers investors the ability to diversify their own
investment portfolios by investing in companies and economies located throughout
the world. The Global Portfolio is designed for long-term investors who can
accept certain investment risks. Generally, the Global Portfolio's investments
in securities of foreign issuers involve greater risks than are present in U.S.
investments. Investments in foreign securities may be denominated in foreign
currencies. Thus, the Global Portfolio's share value will also be affected by
changes in exchange rates. A further discussion of the special considerations of
investments in foreign securities can be found under "Risk Factors -- Foreign
Securities."
The only investment objective of IDEX II GROWTH PORTFOLIO is to provide
growth of capital. The Growth Portfolio seeks to achieve its objective primarily
through investment in common stocks listed on a national securities exchange or
on NASDAQ and which the Portfolio's sub-adviser believes have a good potential
for capital growth.
The investment objective of IDEX II EQUITY-INCOME PORTFOLIO is to provide
current income, long-term growth of income and capital appreciation. The
Equity-Income Portfolio seeks to achieve its objective by investing primarily in
common stocks offering above-average dividend yields, income producing
securities convertible into common stocks, and fixed-income securities.
The investment objective of IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO is
preservation of capital and competitive investment returns. The Portfolio seeks
to achieve its objective by investing primarily in stocks, United States
Treasury bonds, notes and bills, and money market funds.
The investment objective of IDEX II BALANCED PORTFOLIO is long-term capital
growth, consistent with preservation of capital and balanced by current income.
The Balanced Portfolio is designed for investors who want to participate in the
equity markets through a more moderate investment than a pure growth fund. The
Portfolio normally invests 40% - 60% of its assets in equity securities selected
primarily for their growth potential and 40% - 60% of its assets in fixed income
securities.
The investment objective of IDEX II FLEXIBLE INCOME PORTFOLIO is to obtain
maximum total return for its shareholders, consistent with preservation of
capital, by actively managing a portfolio of income-producing securities. The
Flexible Income Portfolio seeks to maximize total return from a combination of
current income and capital appreciation, with an emphasis on the income
component of total return. The Flexible Income Portfolio may invest in all types
of income-producing securities and may have substantial holdings of debt
securities rated below investment grade. The risks of investing in such
securities are described under "Risk Factors -- High Yield/High Risk Bonds."
The investment objective of IDEX II INCOME PLUS PORTFOLIO is to provide as
high a level of current income as is consistent with the avoidance of excessive
risk. The Portfolio's efforts to avoid excessive risk may preclude the
realization of the highest available income yields. In seeking a high level of
income, the Income Plus Portfolio may nevertheless invest in securities whose
degree of investment risk may make investment in the Portfolio unsuitable for
investors without alternate sources of income unless such investment is made as
part of a diversified personal investment portfolio. The Income Plus Portfolio
seeks to achieve its objective by investing in a diversified portfolio
consisting primarily of high-yield, fixed-income securities, including
convertible debt securities. In pursuing its investment objective, the Income
Plus Portfolio may invest up to 50% of its securities (other than commercial
paper) in non-investment grade securities. Investment in these securities has
special risks which are described under "Risk Factors -- High Yield/High Risk
Bonds."
The investment objective of IDEX II TAX-EXEMPT PORTFOLIO is to provide
maximum current interest income exempt from federal income tax in a manner
consistent with preservation of capital. The Tax-Exempt Portfolio seeks to
achieve its objective through investment in a diversified portfolio of
1
<PAGE> 7
municipal bonds and notes, including industrial development bonds.
There can be, of course, no assurance that a Portfolio will achieve its
investment objective. For a further description of each Portfolio's objective
and a discussion of investment policies, see "Investment Objectives and
Policies."
PROFESSIONAL MANAGEMENT
Idex Management, Inc. ("IMI") is the investment adviser to the Growth,
Global, Flexible Income, Balanced and Capital Appreciation Portfolios. Janus
Capital Corporation ("Janus Capital") is the investment sub-adviser to the
Growth, Global, Flexible Income, Balanced and Capital Appreciation Portfolios
and provides IMI with investment advice and recommendations consistent with the
investment objectives and policies of those Portfolios. InterSecurities, Inc.
("ISI") is the investment adviser to the Tax-Exempt, Income Plus, Aggressive
Growth, Equity-Income and Tactical Asset Allocation Portfolios. AEGON USA
Investment Management, Inc. ("AEGON Management") is the investment sub-adviser
to the Tax-Exempt and Income Plus Portfolios. Fred Alger Management, Inc.
("Alger Management") is the investment sub-adviser to the Aggressive Growth
Portfolio. Luther King Capital Management, Inc. ("Luther King") is the
investment sub-adviser to the Equity-Income Portfolio. Dean Investment
Associates ("Dean Investment"), a Division of C.H. Dean and Associates, Inc., is
the investment sub-adviser to the Tactical Asset Allocation Portfolio. AEGON
Management, Alger Management, Luther King and Dean Investment provide ISI with
investment advice and recommendations consistent with the investment objective
and policies of the particular Portfolio that each sub-advises. ISI also serves
as principal underwriter of each Portfolio's shares. The fees for these
management and distribution services are described under "Investment Advisory
and Other Services."
INVESTMENT IN THE PORTFOLIOS
The minimum initial investment in the Portfolios is ordinarily $500.
Purchases through plans for regular investment, such as the Automatic Investment
Plan, payroll deduction plans or comparable plans, ordinarily do not require a
minimum initial investment. Additional investments in each Portfolio must be at
least $50, with certain exceptions as described in the Shareholders' Manual
section of this Prospectus. Each Portfolio offers investors a choice of three
classes of shares, each with a public offering price that reflects different
sales charges, if any, and expense levels. Class A shares are offered at net
asset value plus any applicable sales charge (the maximum of which for the
Growth, Global, Balanced, Capital Appreciation, Aggressive Growth, Equity-Income
and Tactical Asset Allocation Portfolios is 5.5% of a Portfolio's public
offering price, and for the Flexible Income, Tax-Exempt and Income Plus
Portfolios is 4.75% of a Portfolio's public offering price). Class B shares are
offered at net asset value per share and are subject to a maximum contingent
deferred sales charge of 5% of the original purchase price of shares redeemed or
of redemption proceeds, whichever is lower, during the first year, with the
percentage declining thereafter to 0% after the sixth year. Class B shares will
convert automatically to Class A shares of the same IDEX II Portfolio eight
years after the end of the calendar month in which the shareholder's order to
purchase such Class B shares was accepted, on the basis of the relative net
asset values per share. ORDERS FOR CLASS B SHARES OF $500,000 OR MORE WILL BE
DECLINED. Class C shares are offered at net asset value, without a sales charge.
Each class of shares is subject to asset-based distribution and service fees.
(See "Alternative Purchase Arrangements", "Investment Advisory and Other
Services" and "Shareholders' Manual -- How to Purchase Shares and How to Redeem
Shares.")
DIVIDENDS AND OTHER DISTRIBUTIONS
The Growth, Global, Capital Appreciation and Aggressive Growth Portfolios
ordinarily pay semi-annual dividends from their net investment income available
for distribution. The Flexible Income, Tax-Exempt and Income Plus Portfolios
ordinarily pay monthly dividends from their net investment income available for
distribution. The Balanced, Equity-Income and Tactical Asset Allocation
Portfolios ordinarily pay quarterly dividends from their net investment income
available for distribution. Distributions of net capital gain, to the extent
available for distribution, will be paid by each Portfolio annually. All income,
dividends and capital gain distributions will be distributed in additional
shares at net asset value unless the shareholder has elected to receive cash as
described under "Distributions and Taxes."
REDEMPTION OF SHARES
Shareholders may redeem shares of a Portfolio directly through the Fund's
transfer agent by mail or telephone, through dealers by confirmed order or
telephone or through a Systematic Withdrawal Plan. (See "Shareholders'
Manual -- How to Redeem Shares.") Shares may be redeemed at any time at a price
based on the net asset value next determined after a proper redemption request
is received by the Fund's transfer agent. Certain redemptions of Class B shares
may be subject to a contingent deferred sales charge. (See "Shareholders'
Manual -- How to Purchase Shares -- Purchasing Class B Shares.")
MISCELLANEOUS INFORMATION
Each Portfolio is a series of IDEX II Series Fund, a Massachusetts business
trust that was formed by a Declaration of Trust dated January 7, 1986. The Fund
is a series company whose operations are governed by a Restatement of
Declaration of Trust dated as of August 30, 1991. (See "Miscellaneous
Information.")
2
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SUMMARY OF EXPENSES
IDEX II SERIES FUND
<TABLE>
<CAPTION>
IDEX II IDEX II IDEX II
Aggressive Growth Capital Appreciation Global
Portfolio Portfolio Portfolio
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Class Class Class
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A B C A B C A B C
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)(1).... 5.50% None None 5.50% None None 5.50% None None
Exchange Fees(2)............................ None None None None None None None None None
Redemption Fees(3).......................... None None None None None None None None None
Deferred Sales Charge (as a percentage of
original purchase price or redemption
proceeds, whichever is lower)(4).......... None 5% None None 5% None None 5% None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees............................. 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
12b-1 Service and Distribution Fees(5)...... .35% 1.00% .90% .35% 1.00% .90% .35% 1.00% .90%
Other Expenses (net of expense
reimbursements and/or fee waivers, if
any)(6)................................... 1.00% 1.50% 1.05% 1.00% 1.50% 1.05% .79% 1.50% 2.14%
------ ------ ------ ------ ------ ------ ------ ------ ------
Total Operating Expenses (net of expense
reimbursements and/or fee waivers, if
any)(6)................................... 2.35% 3.50% 2.95% 2.35% 3.50% 2.95% 2.14% 3.50% 4.04%
EXAMPLES(7):
You would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return, and (2) redemption at the end of
each period:
1 year.................................... $ 78 $ 85 $ 30 $ 78 $ 85 $ 30 $ 76 $ 85 $ 41
3 years................................... 124 137 91 124 137 91 118 137 123
5 years................................... 174 192 155 174 192 155 164 192 207
10 years.................................. 309 351 327 309 351 327 289 346 424
You would pay the following expenses on the same investment, assuming no redemption and therefore no deferred sales charge:
1 year.................................... $ 78 $ 35 $ 30 $ 78 $ 35 $ 30 $ 76 $ 35 $ 41
3 years................................... 124 107 91 124 107 91 118 107 123
5 years................................... 174 182 155 174 182 155 164 182 207
10 years.................................. 309 351 327 309 351 327 289 346 424
<CAPTION>
IDEX II
Growth
Portfolio
------------------------
Class
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A B C
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<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)(1).... 5.50% None None
Exchange Fees(2)............................ None None None
Redemption Fees(3).......................... None None None
Deferred Sales Charge (as a percentage of
original purchase price or redemption
proceeds, whichever is lower)(4).......... None 5% None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees............................. 1.00% 1.00% 1.00%
12b-1 Service and Distribution Fees(5)...... .35% 1.00% .90%
Other Expenses (net of expense
reimbursements and/or fee waivers, if
any)(6)................................... .41% 1.50% 1.58%
------ ------ ------
Total Operating Expenses (net of expense
reimbursements and/or fee waivers, if
any)(6)................................... 1.76% 3.50% 3.48%
EXAMPLES(7):
You would pay the following expenses on a $1,
each period:
1 year.................................... $ 72 $ 85 $ 35
3 years................................... 107 137 107
5 years................................... 145 192 181
10 years.................................. 251 338 376
You would pay the following expenses on the s
1 year.................................... $ 72 $ 35 $ 35
3 years................................... 107 107 107
5 years................................... 145 182 181
10 years.................................. 251 338 376
</TABLE>
(1) On certain purchases of Class A shares, the sales load may be reduced. (See
"Shareholders' Manual -- How to Purchase Shares.")
(2) A $5 service fee is charged for each exchange transaction under $1,000. (See
"Shareholders' Manual -- How to Exchange Shares.")
(3) A $20 service fee is charged for each redemption transaction paid by Federal
funds bank wire or for overnight mail delivery of check redemptions. (See
"Shareholders' Manual -- How to Redeem Shares.")
(4) The deferred sales charge for Class B shares is 5% during the first year, 4%
during the second year, 3% during the third year, 2% during the fourth year,
1% during the fifth and sixth years and 0% during the seventh year and
later. No deferred sales charge is assessed on Class B shares acquired
through the reinvestment of dividends or capital gain distributions.
(5) After eight years, Class B shares will automatically convert to Class A
shares. For the current fiscal year, 12b-1 service and distribution fees for
the Tax-Exempt Portfolio's Class C shares will not exceed 0.60%, rather than
the maximum 0.90% authorized pursuant to its 12b-1 plan.
(6) Other Expenses and Total Operating Expenses for the Class A and Class C
shares of the Growth, Global, Flexible Income, Tax-Exempt and Income Plus
Portfolios are based on actual expenses during the fiscal year ended
September 30, 1994, while Other Expenses and Total Operating Expenses for
the Class B shares of those Portfolios and the Class A, B and C shares of
the Balanced, Capital Appreciation, Aggressive Growth and Equity-Income
Portfolios are based on annualized estimates of expenses for the fiscal year
ending September 30, 1995. Other Expenses and Total Operating Expenses for
the Class A, B and C shares of the Tactical Asset Allocation Portfolio are
based on annualized estimates of expenses for the fiscal year ending
September 30, 1996. For the Flexible Income and Tax-Exempt Portfolios only,
Other Expenses and Total Operating Expenses are stated net of expense
reimbursements and/or fee waivers. Without expense reimbursements and/or fee
waivers, Total Operating Expenses for the Class A shares of the Flexible
Income and Tax-Exempt Portfolios would have been 2.13% and 1.30%,
respectively, and for the Class C shares of those Portfolios would have been
8.59% and 20.88%, respectively. It is not anticipated that expense
reimbursements and/or fee waivers for the Balanced, Capital Appreciation,
Aggressive Growth and Equity-Income Portfolios will be made for the fiscal
year ending September 30, 1995. Expense reimbursements and/or fee waivers
are not anticipated for the Tactical Asset Allocation Portfolio for the
fiscal year ended September 30, 1996. For the Growth and Global Portfolios,
Other Expenses of Class A and Class C shares are net of credits earned
through use of affiliated broker-dealers, which credits amounted to .14% and
.02%, respectively, of the Other Expenses of those Portfolios.
(7) The Examples assume all dividends and distributions are paid in additional
shares and no payment of exchange or redemption fees. With respect to Class
B shares, the examples reflect conversion to Class A shares eight years
after purchase and are calculated based upon the assumption that the
shareholder was an owner of the shares on the first day of the first year.
The contingent deferred sales charge was applied as follows: 1 year (5%), 3
years (3%), 5 years (1%) and 10 years (0%). (See "Alternative Purchase
Arrangements," "Investment Advisory and Other Services" and "Shareholders'
Manual -- How to Purchase Shares and How to Redeem Shares.")
3
<PAGE> 9
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SUMMARY OF EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
IDEX II
IDEX II Tactical Asset IDEX II IDEX II
Equity-Income Allocation Balanced Flexible Income
Portfolio Portfolio Portfolio Portfolio
------------------------ ------------------------ ------------------------ ------------------------
Class Class Class Class
------------------------ ------------------------ ------------------------ ------------------------
A B C A B C A B C A B C
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5.50% None None 5.50% None None 5.50% None None 4.75% None None
None None None None None None None None None None None None
None None None None None None None None None None None None
None 5% None None 5% None None 5% None None 5% None
1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .90% .90% .90%
.35% 1.00% .90% .35% 1.00% .90% .35% 1.00% .90% .35% 1.00% .90%
1.02% 1.50% 1.07% 1.50% 1.50% 1.50% 1.02% 1.50% 1.07% .60% .60% .60%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
2.37% 3.50% 2.97% 2.85% 3.50% 3.40% 2.37% 3.50% 2.97% 1.85% 2.50% 2.40%
$ 78 $ 85 $ 30 $ 82 $ 85 $ 34 $ 78 $ 85 $ 30 $ 65 $ 75 $ 24
125 137 92 138 137 104 125 137 92 103 108 75
175 192 156 197 192 177 175 192 156 143 143 128
311 352 329 355 363 368 311 352 329 254 267 274
$ 78 $ 35 $ 30 $ 82 $ 35 $ 34 $ 78 $ 35 $ 30 $ 65 $ 25 $ 24
125 107 92 138 107 104 125 107 92 103 78 75
175 182 156 197 182 177 175 182 156 143 133 128
311 352 329 355 363 368 311 352 329 254 267 274
<CAPTION>
IDEX II IDEX II
Income Plus Tax Exempt
Portfolio Portfolio
------------------------ ------------------------
Class Class
------------------------ ------------------------
A B C A B C
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
4.75% None None 4.75% None None
None None None None None None
None None None None None None
None 5% None None 5% None
.60% .60% .60% .60% .60% .60%
.35% 1.00% .90% .35% 1.00% .60%
.38% .65% 2.02% .05% .05% .05%
------ ------ ------ ------ ------ ------
1.33% 2.25% 3.52% 1.00% 1.65% 1.25%
$ 60 $ 73 $ 35 $ 57 $ 67 $ 13
88 100 108 78 82 40
117 130 183 100 100 69
200 235 379 164 178 151
$ 60 $ 23 $ 35 $ 57 $ 17 $ 13
88 70 108 78 52 40
117 120 183 100 90 69
200 235 379 164 178 151
</TABLE>
Long-term shareholders may pay more in 12b-1 service and distribution fees
than the economic equivalent of the maximum front-end sales charge permitted
under the Rules of Fair Practice adopted by the National Association of
Securities Dealers, Inc.
The purpose of the preceding table is to assist investors in understanding
the various costs and expenses an investor in a Portfolio may bear directly or
indirectly. These expenses are described in greater detail under "Investment
Advisory and Other Services" and in the Shareholders' Manual section of this
Prospectus.
THE EXPENSES SET FORTH IN THE PRECEDING TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY
BE GREATER OR LESS THAN THE ASSUMED AMOUNT.
4
<PAGE> 10
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The information contained in the table below for a share of beneficial interest
outstanding throughout each fiscal year and other periods shown through
September 30, 1994 has been audited by Price Waterhouse LLP, independent
accountants, whose report is incorporated by reference into the Statement of
Additional Information. The information for the period ended March 31, 1995 is
unaudited. Previous periods ended on or before November 30, 1991 for the
Tax-Exempt and Income Plus Portfolios were audited by other independent
accountants....(Continued on next page)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED TOTAL INCOME
YEAR OR VALUE NET AND UNREALIZED (LOSS) FROM
PERIOD BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENTS
ENDED OF PERIOD INCOME (LOSS) INVESTMENTS INCOME
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II AGGRESSIVE GROWTH PORTFOLIO
Class A 3/31/95(1) $10.00 ($0.02) $2.13 $2.11
Class C 3/31/95(1) 10.00 (0.04) 2.13 2.09
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II CAPITAL APPRECIATION PORTFOLIO
Class A 3/31/95(1) $10.00 ($0.02) $1.03 $1.01
Class C 3/31/95(1) 10.00 (0.03) 1.03 1.00
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II GLOBAL PORTFOLIO
Class A 3/31/95 $15.93 ($0.04) ($0.44) ($0.48)
9/30/94 13.35 (0.04) 2.62 2.58
9/30/93(1) 10.00 (0.04) 3.39 3.35
Class C 3/31/95 15.74 (0.07) (0.44) (0.51)
9/30/94(1) 13.35 (0.23) 2.62 2.39
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II GROWTH PORTFOLIO
Class A (2) 3/31/95 $16.78 ($0.03) $0.57 $0.54
9/30/94(3) 18.46 0.01 (1.22) (1.21)
9/30/93 16.46 0.04 2.42 2.46
9/30/92 16.22 0.08 0.88 0.96
9/30/91(3) 13.77 0.14 5.32 5.46
9/30/90 17.52 0.12 (2.21) (2.09)
9/30/89 11.48 0.09 6.18 6.27
9/30/88 14.08 0.25 (1.59) (1.34)
9/30/87 9.90 0.14 4.11 4.25
9/30/86(1) 10.00 0.07 (0.17) (0.10)
Class C 3/31/95 16.68 (0.08) 0.57 0.49
9/30/94(1) 18.46 (0.09) (1.22) (1.31)
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II EQUITY-INCOME PORTFOLIO
Class A 3/31/95(1) $10.00 $0.06 $0.76 $0.82
Class C 3/31/95(1) 10.00 0.03 0.76 0.79
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II BALANCED PORTFOLIO
Class A 3/31/95(1) $10.00 $0.03 $0.40 $0.43
Class C 3/31/95(1) 10.00 0.02 0.40 0.42
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II FLEXIBLE INCOME PORTFOLIO
Class A (2)(4) 3/31/95 $ 8.83 $0.32 ($0.11) $0.21
9/30/94(3) 9.59 0.65 (0.81) (0.16)
9/30/93 8.95 0.70 0.60 1.30
10/31/92 8.73 0.80 0.22 1.02
10/31/91 7.74 0.82 1.10 1.92
10/31/90 9.55 0.90 (1.80) (0.90)
10/31/89 10.15 0.95 (0.46) 0.49
10/31/88 9.60 0.91 0.55 1.46
10/31/87(1) 10.00 0.25 (0.40) (0.15)
Class C 3/31/95 8.83 0.28 (0.11) 0.17
9/30/94(1) 9.59 0.60 (0.81) (0.21)
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II INCOME PLUS PORTFOLIO
Class A (5) 3/31/95 $ 9.75 $0.39 $0.23 $0.62
9/30/94 10.98 0.76 (1.10) (0.34)
9/30/93 10.55 0.83 0.46 1.29
9/30/92 10.04 0.76 0.64 1.40
11/30/91 9.20 0.98 0.87 1.85
11/30/90 9.99 1.04 (0.79) 0.25
11/30/89 9.89 1.04 0.10 1.14
11/30/88 9.85 1.04 0.06 1.10
11/30/87 10.94 1.08 (1.03) 0.05
11/30/86 10.28 1.06 0.73 1.79
11/30/85(1) 10.00 0.44 0.29 0.73
Class C 3/31/95 9.74 0.36 0.23 0.59
9/30/94(1) 10.98 0.66 (1.10) (0.44)
- ----------------------------------------------------------------------------------------------------------------------------
IDEX II TAX-EXEMPT PORTFOLIO
Class A (6) 3/31/95 $11.10 $0.28 $0.20 $0.48
9/30/94 12.07 0.56 (0.60) (0.04)
9/30/93 11.62 0.56 0.45 1.01
9/30/92 11.46 0.54 0.28 0.82
11/30/91 11.27 0.75 0.26 1.01
11/30/90 11.39 0.78 (0.12) 0.66
11/30/89 10.97 0.78 0.42 1.20
11/30/88 10.44 0.79 0.53 1.32
11/30/87 11.81 0.77 (1.37) (0.60)
11/30/86 10.56 0.79 1.42 2.21
11/30/85(1) 10.00 0.60 0.56 1.16
Class C 3/31/95 11.10 0.27 0.20 0.47
9/30/94(1) 12.07 0.53 (0.60) (0.07)
<CAPTION>
DIVIDENDS DISTRIBUTIONS
FROM NET FROM
INVESTMENT REALIZED NET
INCOME CAPITAL GAINS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
IDEX II AGGRESSIVE GROWTH PORTFOLIO
Class A $ - $ -
Class C - -
- ------------------------------------------------------------------------------------
IDEX II CAPITAL APPRECIATION PORTFOLIO
Class A $ - $ -
Class C - -
- ------------------------------------------------------------------------------------
IDEX II GLOBAL PORTFOLIO
Class A $ - ($0.56)
- -
- -
Class C - (0.56)
- -
- ------------------------------------------------------------------------------------
IDEX II GROWTH PORTFOLIO
Class A (2) $ - ($0.07)
- (0.33)
(0.07) (0.39)
(0.07) (0.65)
(0.17) (2.84)
(0.09) (1.57)
(0.23) -
(0.16) (1.10)
(0.07) -
- -
Class C - (0.07)
- (0.33)
- ------------------------------------------------------------------------------------
IDEX II EQUITY-INCOME PORTFOLIO
Class A ($ 0.05) $ -
Class C (0.03) -
- ------------------------------------------------------------------------------------
IDEX II BALANCED PORTFOLIO
Class A ($ 0.02) $ -
Class C (0.01) -
- ------------------------------------------------------------------------------------
IDEX II FLEXIBLE INCOME PORTFOLIO
Class A (2)(4) ($ 0.30) $ -
(0.60) -
(0.66) -
(0.80) -
(0.80) (0.13)
(0.91) -
(0.93) (0.16)
(0.91) -
(0.25) -
Class C (0.26) -
(0.55) -
- ------------------------------------------------------------------------------------
IDEX II INCOME PLUS PORTFOLIO
Class A (5) ($ 0.39) ($0.10)
(0.75) (0.14)
(0.81) (0.05)
(0.76) (0.13)
(0.98) (0.03)
(1.04) -
(1.04) -
(1.04) (0.02)
(1.08) (0.06)
(1.06) (0.07)
(0.44) (0.01)
Class C (0.35) (0.10)
(0.66) (0.14)
- ------------------------------------------------------------------------------------
IDEX II TAX-EXEMPT PORTFOLIO
Class A (6) ($ 0.27) ($0.04)
(0.54) (0.39)
(0.54) (0.02)
(0.54) (0.12)
(0.75) (0.07)
(0.78) -
(0.78) -
(0.79) -
(0.77) -
(0.79) (0.17)
(0.60) -
Class C (0.26) (0.04)
(0.51) (0.39)
</TABLE>
5
<PAGE> 11
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
The Statement of Additional Information is incorporated by reference in this
Prospectus and may be obtained without charge by calling or writing the Fund.
Further information about performance of the Fund's Portfolios is contained in
the Fund's Annual Report to shareholders, which may also be obtained without
charge by calling or writing the Fund.
<TABLE>
<CAPTION>
DISTRIBUTIONS NET ASSET NET ASSETS SHARES RATIO OF
IN EXCESS OF VALUE END OUTSTANDING AT EXPENSES TO
NET REALIZED TOTAL END TOTAL OF PERIOD END OF PERIOD AVERAGE
CAPITAL GAINS DISTRIBUTIONS OF PERIOD RETURN (7) (000'S) (000'S) NET ASSETS (8)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
$ - $ - $ 12.11 21.10% $ 4,248 351 2.85%
- - 12.09 20.90 344 28 3.40
- -------------------------------------------------------------------------------------------------------------------
$ - $ - $ 11.01 10.10% $ 4,267 387 2.85%
- - 11.00 10.00 1,337 122 3.40
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.56) $ 14.89 (3.03%) $ 79,611 5,347 1.86%
- - 15.93 19.33 81,241 5,102 2.14
- - 13.35 33.52 17,430 1,306 2.84
- (0.56) 14.67 (3.26) 3,381 231 2.41
- - 15.74 17.90 3,571 227 4.04
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.07) $ 17.25 3.24% $396,070 22,957 1.82%
(0.14) (0.47) 16.78 (6.72) 431,207 25,691 1.76
- (0.46) 18.46 15.13 548,564 29,710 1.61
- (0.72) 16.46 6.10 403,361 24,507 1.61
- (3.01) 16.22 48.00 126,436 7,796 1.48
- (1.66) 13.77 (12.50) 74,594 5,415 1.35
- (0.23) 17.52 55.70 89,494 5,107 1.41
- (1.26) 11.48 (8.00) 65,463 5,704 1.47
- (0.07) 14.08 44.10 78,979 5,610 1.32
- - 9.90 (1.70) 19,745 1,995 2.02
- (0.07) 17.10 2.96 3,901 228 2.37
(0.14) (0.47) 16.68 (7.72) 3,423 205 3.48
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.05) $ 10.77 8.10% $ 2,617 243 2.85%
- (0.03) 10.76 7.94 128 12 3.40
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.02) $ 10.41 4.30% $ 1,977 190 2.85%
- (0.01) 10.41 4.15 2,155 207 3.40
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.30) $ 8.74 2.26% $ 19,791 2,264 1.85%
- (0.60) 8.83 (1.54) 21,527 2,438 1.85
- (0.66) 9.59 13.66 29,232 3,048 1.50
- (0.80) 8.95 12.17 26,676 2,982 1.50
- (0.93) 8.73 26.38 18,696 2,142 1.50
- (0.91) 7.74 (10.22) 18,760 2,424 1.50
- (1.09) 9.55 5.20 27,645 2,895 1.29
- (0.91) 10.15 15.60 20,469 2,018 1.00
- (0.25) 9.60 (1.90) 4,676 487 1.14
- (0.26) 8.74 1.97 651 74 2.40
- (0.55) 8.83 (2.15) 691 78 2.40
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.49) $ 9.88 6.66% $ 64,515 6,531 1.24%
- (0.89) 9.75 (3.28) 63,995 6,560 1.33
- (0.86) 10.98 12.80 72,401 6,596 1.33
- (0.89) 10.55 14.40 54,647 5,181 1.17
- (1.01) 10.04 21.00 47,334 4,716 1.15
- (1.04) 9.20 2.50 33,182 3,607 0.69
- (1.04) 9.99 12.10 23,416 2,343 0.70
- (1.06) 9.89 11.50 17,078 1,726 0.68
- (1.14) 9.85 0.30 11,349 1,152 0.64
- (1.13) 10.94 17.90 4,221 386 1.29
- (0.45) 10.28 8.80 2,282 222 0.60
- (0.45) 9.88 6.35 1,814 184 1.79
- (0.80) 9.74 (4.55) 2,112 217 3.52
- -------------------------------------------------------------------------------------------------------------------
$ - ($ 0.31) $ 11.27 4.40% $ 28,492 2,529 1.00%
- (0.93) 11.10 (0.41) 29,096 2,621 1.00
- (0.56) 12.07 8.97 30,717 2,545 1.00
- (0.66) 11.62 7.20 28,363 2,442 1.00
- (0.82) 11.46 9.20 28,242 2,464 0.95
- (0.78) 11.27 6.00 22,708 2,016 0.68
- (0.78) 11.39 11.20 15,916 1,398 0.70
- (0.79) 10.97 12.90 11,805 1,076 0.70
- (0.77) 10.44 (5.20) 8,833 846 0.64
- (0.96) 11.81 21.40 3,112 264 1.21
- (0.60) 10.56 7.80 1,294 123 0.93
- (0.30) 11.27 4.18 313 28 1.25
- (0.90) 11.10 (0.73) 277 25 1.25
<CAPTION>
RATIO OF NET
INCOME (LOSS) PORTFOLIO
TO AVERAGE TURNOVER
NET ASSETS RATE(9)
<C> <C>
- ----------------------------------------------------------------------------------------------------
(1.33%) 151.15%
(1.88) 151.15
- ----------------------------------------------------------------------------------------------------
(1.07%) 63.70%
(1.62) 63.70
- ----------------------------------------------------------------------------------------------------
(0.44%) 202.78%
(0.55) 148.01
(0.87) 116.98
(0.99) 202.78
(2.46) 148.01
- ----------------------------------------------------------------------------------------------------
(0.25%) 57.02%
0.04 63.73
0.29 97.40
0.69 56.21
0.88 102.16
0.75 127.79
0.67 98.88
2.45 133.28
0.94 167.58
2.35 19.57
(0.80) 57.02
(1.68) 63.73
- ----------------------------------------------------------------------------------------------------
1.69% 49.04%
1.14 49.04
- ----------------------------------------------------------------------------------------------------
0.46% 51.07%
(0.09) 51.07
- ----------------------------------------------------------------------------------------------------
7.33% 139.88%
6.57 105.40
7.76 138.86
8.55 140.23
9.84 130.73
10.51 72.40
9.63 71.44
9.22 54.42
7.88 68.21
6.78 139.88
6.03 105.40
- ----------------------------------------------------------------------------------------------------
8.07% 21.97%
7.35 48.12
7.73 54.51
8.79 91.01
10.20 52.79
11.12 18.54
10.59 57.50
10.55 34.29
10.82 34.13
9.93 29.80
10.80 25.08
7.52 21.97
5.16 48.12
- ----------------------------------------------------------------------------------------------------
5.04% 96.30%
4.83 59.84
4.83 91.03
5.49 106.89
6.67 117.92
6.92 81.17
6.98 67.45
7.28 35.44
7.16 87.03
6.89 38.00
8.18 20.15
4.79 96.30
4.58 59.84
</TABLE>
6
<PAGE> 12
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
(1) Commencement of operations for Growth Class A, Global Class A, IDEX Total
Income Trust (predecessor to Flexible Income Class A), AEGON USA Tax-Exempt
Portfolio (predecessor to Tax-Exempt Class A) and AEGON USA High Yield
Portfolio (predecessor to Income Plus Class A) was May 8, 1986, October 1,
1992, June 29, 1987, April 1, 1985 and June 14, 1985, respectively.
Commencement of operations for the Class C shares of Growth, Global,
Flexible Income, Tax Exempt and Income Plus was October 1, 1993.
Commencement of operations for Class A and Class C shares of Balanced,
Capital Appreciation, Aggressive Growth and Equity-Income was December 2,
1994. (See Notes (4), (5) and (6) to Financial Highlights.)
(2) As of October 1, 1992, Growth Class A and Flexible Income Class A
discontinued the practice of equalization accounting.
(3) Prior to May 1, 1991, no 12b-1 fees were incurred by Growth Class A shares.
Effective May 1, 1991, Growth Portfolio Class A shares incurred 12b-1 fees
at the rate of 0.25% in accordance with the Plan of Distribution under Rule
12b-1 of the Investment Company Act of 1940 applicable to those shares.
Effective October 1, 1993 Growth Class A shares' 12b-1 fee rate changed from
0.25% to 0.35%. Prior to October 1, 1993, no 12b-1 fees were incurred by
Flexible Income Class A shares. Effective October 1, 1993, Flexible Income
Portfolio Class A shares incurred 12b-1 fees at the rate of 0.35% in
accordance with the Plan of Distribution under Rule 12b-1 of the Investment
Company Act of 1940 applicable to those shares.
(4) On October 1, 1993, IDEX Total Income Trust ("IDEX Total") was reorganized
into IDEX II Flexible Income Portfolio, which had no prior operating history
as of that date. Pursuant to the Agreement and Plan of Reorganization and
Liquidation, Flexible Income acquired all of the assets and assumed all of
the liabilities of IDEX Total in exchange for Class A shares of Flexible
Income. All historical financial information relates to IDEX Total prior to
the date it was reorganized into Flexible Income.
(5) On August 5 1992, shareholders of AEGON USA High Yield Portfolio ("AEGON
High Yield") approved an Agreement and Plan of Reorganization and
Liquidation ("Reorganization Agreement") whereby, on August 7, 1992, AEGON
High Yield was reorganized into IDEX II Income Plus (formerly known as IDEX
II High Yield Portfolio), which had no prior operating history as of that
date. Pursuant to the Reorganization Agreement, Income Plus acquired all of
the assets and assumed all the liabilities of AEGON High Yield in exchange
for shares of Income Plus. All historical financial information prior to
August 7, 1992 relates to AEGON High Yield.
(6) On August 5, 1992, shareholders of AEGON USA Tax-Exempt Portfolio ("AEGON
Tax-Exempt") approved an Agreement and Plan of Reorganization and
Liquidation ("Reorganization Agreement") whereby, on August 7, 1992, AEGON
Tax-Exempt was reorganized into IDEX II Tax-Exempt Portfolio, which had no
prior operating history as of that date. Pursuant to the Reorganization
Agreement, Tax-Exempt acquired all of the assets and assumed all of the
liabilities of AEGON Tax-Exempt in exchange for shares of Tax-Exempt. All
historical financial information prior to August 7, 1992 relates to AEGON
Tax-Exempt.
(7) Total return has been calculated without deduction of a sales load, if any,
on an initial purchase and assumes all dividends and distributions are paid
in additional shares. Short periods (where applicable) are not annualized.
(8) For the period ended March 31, 1995, the annualized expense ratios for
Tax-Exempt Class A and Class C, Flexible Income Class A and Class C,
Balanced Class A and Class C, Equity-Income Class A and Class C, Capital
Appreciation Class A and Class C and Aggressive Growth Class A and Class C
would have been 1.20% and 1.45%, 2.13% and 2.68%, 3.10% and 3.61%, 3.10% and
3.63%, 2.97% and 3.50%, 3.04% and 3.55%, respectively, without expense
reimbursement by the investment adviser. The following summarizes the
expense ratios without expense reimbursement by the investment adviser for
those Portfolios whose ratios are net of expense reimbursement for prior
periods. Short periods (where applicable) are annualized.
<TABLE>
<CAPTION>
Growth Global Flexible Income Tax-Exempt Income Plus
----------------- ----------------- ----------------- ----------------- -----------------
Class A Class C Class A Class C Class A Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 - - - - 2.13% 8.59% 1.30% 20.88% - -
1993 - - 3.65% - 1.56% - 1.43% - - -
1992 - - - - 1.66% - 1.20% - - -
1991 - - - - 1.75% - 1.24% - 1.21% -
1990 - - - - 1.60% - 0.92% - 1.44% -
1989 - - - - 1.56% - 1.11% - 1.09% -
1988 - - - - 1.96% - 1.13% - 1.11% -
1987 1.39% - - - - - 1.37% - 1.20% -
1986 2.21% - - - - - 2.92% - 2.25% -
1985 - - - - - - 5.62% - 3.96% -
</TABLE>
(9) 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.
7
<PAGE> 13
- -----------------------------------------------------------------
ALTERNATIVE PURCHASE ARRANGEMENTS
Each Portfolio offers investors a choice of three classes of shares, each
with a public offering price that reflects different sales charges, if any, and
expense levels. Each class has distinct advantages and disadvantages for
different investors, and investors may choose the class that best suits their
circumstances and objectives.
Class A shares may be appropriate for investors who prefer to pay the sales
charge up front, want to take advantage of the reduced sales charges available
on larger investments, wish to maximize their current income from the start,
prefer not to pay redemption charges and/or have a longer-term investment
horizon.
Because no initial sales charges are deducted at the time of purchase,
Class B and Class C shares provide the benefit of putting all of the investor's
dollars to work from the time the investment is made. Class B or Class C shares
may be appropriate for investors who do not qualify for a reduction in initial
sales charges. Both Class B and Class C shares are subject to ongoing service
and distribution fees; however, these ongoing fees potentially may be offset to
the extent any return is realized on the additional funds initially invested in
Class B or Class C shares. In addition, Class B shares will be converted into
Class A shares after a conversion period of approximately eight years, and
thereafter investors will be subject to lower ongoing service and distribution
fees.
Certain investors may elect to purchase Class B shares if they determine it
to be most advantageous to have all their funds invested initially and intend to
hold their shares for an extended period of time. Investors in Class B shares
should take into account whether they intend to remain invested until the end of
the conversion period and thereby take advantage of the reduction in ongoing
fees resulting from the conversion into Class A shares. Other investors,
however, may elect to purchase Class C shares if they determine that it is
advantageous to have all their assets invested initially and they are uncertain
as to the length of time they intend to hold their assets in the Fund.
CLASS A SHARES
Class A shares are offered at net asset value plus any applicable sales
charge (the maximum of which for the Growth, Global, Balanced, Capital
Appreciation, Aggressive Growth, Equity-Income and Tactical Asset Allocation
Portfolios is 5.50% of the public offering price and for the Flexible Income,
Tax-Exempt and Income Plus Portfolios is 4.75% of the public offering price).
Certain purchases of Class A shares qualify for reduced sales charges. Class A
shares of each Portfolio also bear annual service and distribution fees of up to
.35% of the average daily net assets of that class. (See "Summary of Expenses,"
"Investment Advisory and Other Services -- Distributor and Distribution and
Service Plans" and "Shareholders' Manual -- How to Purchase Shares -- Purchasing
Class A Shares.")
CLASS B SHARES
Class B shares are offered at net asset value per share and are subject to
a deferred sales charge if redeemed within six years of purchase. Class B shares
are subject to ongoing service and distribution fees at an annual rate of up to
1.00% of the average daily net assets of that class. Class B shares enjoy the
benefit of permitting all of the investor's dollars to work from the time the
investment is made. The ongoing distribution fee paid by Class B shares will
cause such shares to have a higher expense ratio and to pay lower dividends than
those related to Class A or Class C shares.
Class B shares will convert automatically to Class A shares of the same
IDEX II Portfolio eight years after the end of the calendar month in which the
shareholder's order to purchase such Class B shares was accepted. Such
conversion will be on the basis of the relative net asset value per share,
without the imposition of any sales load, fee or other charge. The purpose of
the conversion feature is to relieve the holders of the Class B shares from the
burden of the higher service and distribution fees imposed on those shares after
they have been outstanding for a period of time sufficient for ISI to have been
substantially compensated for distribution expenses related to the Class B
shares.
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid on Class B shares in a
shareholder's Portfolio account will be considered to be held in a separate sub-
account. Each time any Class B shares in the shareholder's Portfolio account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B shares in the sub-account will also convert to Class A.
(See "Summary of Expenses," "Investment Advisory and Other
Services -- Distributor and Distribution and Service Plans" and "Shareholders'
Manual -- How to Purchase Shares -- Purchasing Class B Shares").
Orders for Class B shares of $500,000 or more will be declined.
CLASS C SHARES
Class C shares are offered at net asset value, without a sales charge.
Class C shares of all Portfolios other than the Tax-Exempt Portfolio bear annual
service and distribution fees of up to .90% of the average daily net assets of
that class. Class C shares of the Tax-Exempt Portfolio may bear annual service
and distribution fees of up to .90% of the average daily net assets of that
class, although the Tax-
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Exempt Portfolio currently intends to limit the total of these fees to .60% of
the average daily net assets of that Portfolio's Class C shares. The higher
service and distribution fees paid by Class C shares are expected to cause that
class to have a higher expense ratio and pay lower dividends than Class A shares
of the same Portfolio. (See "Summary of Expenses," "Investment Advisory and
Other Services -- Distributor and Distribution and Service Plans" and
"Shareholders' Manual -- How to Purchase Shares -- Purchasing Class C Shares.")
CHOOSING A CLASS OF SHARES
The alternative purchase arrangements offered by each Portfolio enable the
investor to choose the method of purchasing Portfolio shares that is most
beneficial given the amount of the purchase, the length of time the investor
intends to hold the shares, and other circumstances. An investor should consider
whether, during the anticipated life of his or her investment in the Portfolio,
the cumulative service and distribution fees on Class B shares prior to
conversion and Class C shares, and contingent deferred sales charges on Class B
shares would be less than the applicable initial sales charge and cumulative
service and distribution fees on Class A shares purchased at the same time, and
to what extent such differential may be offset by the anticipated higher return
of Class A shares.
For example, investors who qualify for significantly reduced sales charges
might elect to purchase Class A shares which are subject to lower service and
distribution fees and accordingly, are expected to pay correspondingly higher
dividends, if any, per share. Investors not qualifying for reduced initial sales
charges may nonetheless wish to consider the Class A initial sales charge
alternative if they expect to hold their shares for an extended period of time
because the cumulative service and distribution fees on Class B and Class C
shares may exceed the initial sales charge plus the cumulative service and
distribution fees on Class A shares during the life of the investment. Class B
and Class C shares are sold without an initial sales charge. Class B shares are
subject to a declining contingent deferred sales charge upon certain
redemptions. Class B and Class C investors, however, enjoy the benefit of
permitting all their dollars to work from the time the investments are made. Any
positive investment return on the additional invested amount may offset the
higher annual service and distribution fees borne by Class B and Class C shares.
There can be, however, no assurance that such a positive return will be
achieved. The example under "Summary of Expenses" shows the cumulative expenses
an investor would pay over time on a hypothetical $1,000 investment in each
class of shares, assuming an annual return of 5%. Actual annual returns, of
course, may be higher or lower than 5%.
Distribution and service expenses incurred by ISI in connection with the
sale of Portfolio shares will be paid (1) in the case of Class A shares, from
the proceeds of the initial sales charge and the ongoing service and
distribution fees on Class A shares; (2) in the case of Class B shares, from the
proceeds of the ongoing service and distribution fees on Class B shares and any
contingent deferred sales charge incurred upon redemption within six years of
purchase; and (3) in the case of Class C shares, from the ongoing service and
distribution fees on Class C shares. Brokers and dealers distributing Portfolio
shares and other financial institutions entitled to receive compensation for
selling such shares may receive different levels of compensation for selling a
particular class of shares of the Portfolio rather than the other. INVESTORS
SHOULD UNDERSTAND THAT THE PURPOSE AND FUNCTION OF THE CONTINGENT DEFERRED SALES
CHARGE AND ONGOING SERVICE AND DISTRIBUTION FEES WITH RESPECT TO THE CLASS B
SHARES, AND THE ONGOING SERVICE AND DISTRIBUTION FEES WITH RESPECT TO THE CLASS
C SHARES, ARE THE SAME AS THOSE OF THE INITIAL SALES CHARGE AND ONGOING SERVICE
AND DISTRIBUTION FEES WITH RESPECT TO CLASS A SHARES.
Class A, Class B and Class C shares of a Portfolio represent interests in
the same portfolio of investments and generally have the same rights, except
that each class bears the separate expenses of its service and distribution plan
and any other expenses attributable only to that class, has exclusive voting
rights with respect to such plan (or any other matters pertaining solely to that
class), and has a separate exchange privilege. Dividends and other distributions
paid by a Portfolio with respect to its Class A, Class B and Class C shares are
calculated in the same manner and declared and paid at the same time. The per
share dividends from net investment income on Class B and Class C shares are
anticipated to be lower than the per share dividends from net investment income
on Class A shares as a result of the higher service and distribution fees
applicable to the Class B and Class C shares.
See "Shareholders' Manual -- How to Purchase Shares -- Purchasing Class A
Shares" for a more complete description of the initial sales charges applicable
to Class A shares. See "Shareholders' Manual -- How to Purchase
Shares -- Purchasing Class B Shares" for a more complete description of the
contingent deferred sales charge applicable to Class B shares. In addition, see
"Investment Advisory and Other Services" and "Distributions and Taxes" for
information regarding other differences among the three classes.
- -----------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
Each Portfolio is a series of IDEX II Series Fund, an open-end management
investment company registered under the Investment Company Act of 1940 (the
"1940
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Act"). All Portfolios other than the Capital Appreciation
Portfolio are diversified, while the Capital Appreciation Portfolio is
nondiversified. (See "Additional Investment Practices -- Diversification
Policies.") Each Portfolio has its own investment objective and policies which
are described below. As all investments are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors,
there can be no assurance that a Portfolio will, in fact, achieve its investment
objective. Each Portfolio's investment objective and unless otherwise noted, its
investment policies and practices, may be changed by the Board of Trustees
without shareholder approval. A change in the investment objective or policies
of a Portfolio may result in the Portfolio having an investment objective or
policies different from that which the shareholder deemed appropriate at the
time of investment. A Portfolio will not change its investment objective without
30 days prior notice to its shareholders nor will it charge shareholders an
exchange fee or redemption fee after such notice and prior to the expiration of
such 30 day notice period. However, should a shareholder decide to redeem
Portfolio shares because of a change in its investment objective, the
shareholder may realize a taxable gain or loss.
IDEX II AGGRESSIVE GROWTH PORTFOLIO
The investment objective of the Aggressive Growth Portfolio is to seek
long-term capital appreciation. The Aggressive Growth Portfolio seeks to achieve
its objective by investing in a diversified, actively managed portfolio of
equity securities, such as common or preferred stocks, or securities convertible
into or exchangeable for equity securities, including warrants and rights. The
Aggressive Growth Portfolio may engage in leveraging and options and futures
transactions, which are deemed to be speculative and which may cause the
Aggressive Growth Portfolio's net asset value to be more volatile than the net
asset value of a fund which does not engage in these activities. (See
"Additional Investment Practices -- Futures, Options and Other Derivative
Instruments" and "Borrowing and Lending." See also "Risk Factors -- Futures,
Options and Other Derivative Instruments.")
Except during temporary defensive periods, the Portfolio invests at least
85% of its net assets in equity securities. It is anticipated that the
Aggressive Growth Portfolio will invest primarily in companies whose securities
are traded on domestic stock exchanges or in the over-the-counter market. These
companies may still be in the developmental stage, may be older companies that
appear to be entering a new stage of growth owing to factors such as management
changes or development of new technology, products or markets, or may be
companies providing products or services with a high unit volume growth rate. In
order to afford the Aggressive Growth Portfolio the flexibility to take
advantage of new opportunities for investments in accordance with its investment
objective, the Aggressive Growth Portfolio may hold up to 15% of its net assets
in money market instruments and repurchase agreements and in excess of that
amount (up to 100% of its assets) during temporary defensive periods. This
amount may be higher than that maintained by other funds with similar investment
objectives. To the extent that the Portfolio invests in such securities,
investment income may increase and may constitute a large portion of the return
realized by the Portfolio and the Portfolio probably will not participate in
market advances or declines to the extent that it would if it remained fully
invested in common stocks. The Aggressive Growth Portfolio will only invest in
convertible debt securities rated in one of the three highest rating categories
as determined by Moody's (Aaa, Aa, or A) or S&P (AAA, AA or A).
The Aggressive Growth Portfolio may invest in both domestic and foreign
companies, and may invest up to 25% of its net assets at the time of purchase in
the securities of foreign issuers and obligors. (See "Additional Investment
Practices -- Foreign Securities.") Investments in foreign securities involve
risks that are different in some respects from investments in securities of U.S.
issuers. (See "Risk Factors -- Foreign Securities.")
For further information about the Aggressive Growth Portfolio's investment
policies, see "Additional Investment Practices" and the Statement of Additional
Information.
IDEX II CAPITAL APPRECIATION PORTFOLIO
The investment objective of the IDEX II Capital Appreciation Portfolio is
long-term growth of capital in a manner consistent with the preservation of
capital. Realization of income is not a significant investment consideration and
any income realized on the Capital Appreciation Portfolio's investments will be
incidental to its primary objective.
The Capital Appreciation Portfolio will pursue its objective by emphasizing
investment in common stocks of companies which will normally have an average
market capitalization between $1 billion and $5 billion. Although the Capital
Appreciation Portfolio expects to emphasize such securities, it may also invest
in smaller or larger companies. Common stock investments are selected in
industries and companies that the portfolio manager believes are experiencing
favorable demand for their products and services, and which operate in a
favorable competitive environment and regulatory climate. The portfolio
manager's analysis and selection process focuses on stocks with earnings growth
potential that may not be recognized by the market. Such securities are selected
solely for their capital growth potential; investment income is not a
consideration. Medium-sized companies may suffer more significant losses as well
as realize more substantial growth than larger issuers. Thus, investments in
such companies tend to be more vola-
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tile than investments in companies with larger market capitalization, and
somewhat speculative.
The Capital Appreciation Portfolio is a nondiversified investment company
within the meaning of the 1940 Act, and therefore may be subject to additional
risks. (See "Additional Investment Practices -- Diversification Policies.")
The Capital Appreciation Portfolio may invest in both domestic and foreign
companies, although the Capital Appreciation Portfolio will not invest more than
25% of its net assets at the time of purchase in the securities of foreign
issuers and obligors. The selection criteria for domestic issuers apply equally
to stocks of foreign issuers. In addition, factors such as expected levels of
inflation, government policies influencing business conditions, the outlook for
currency relationships, and prospects for relative economic growth among
countries, regions or geographic areas may warrant greater consideration in
selecting foreign stocks. (See "Additional Investment Practices -- Foreign
Securities" and "Risk Factors -- Foreign Securities.")
Although the Capital Appreciation Portfolio normally invests in common
stocks, its cash position may increase when its portfolio manager is unable to
locate investment opportunities with desirable risk/reward characteristics. The
Capital Appreciation Portfolio may also invest in preferred stocks, warrants,
U.S. and foreign government securities, corporate bonds and debentures,
high-grade commercial paper, certificates of deposit, other debt securities or
repurchase agreements when its portfolio manager perceives an opportunity for
capital growth from such securities or so that the Capital Appreciation
Portfolio may receive a return on its idle cash. To the extent that the
Portfolio invests in such securities, investment income may increase and may
constitute a large portion of the return realized by the Portfolio and the
Portfolio probably will not participate in market advances or declines to the
extent that it would if it remained fully invested in common stocks. To the
extent that the Capital Appreciation Portfolio invests in debt securities, such
securities will primarily be of "investment grade." Investment grade debt
securities are considered to be securities rated Baa or higher by Moody's or BBB
or higher by S&P, and unrated debt securities that are of comparable quality
based on the credit analysis of the Portfolio's sub-adviser. Unrated debt
securities are not necessarily of lower grade than rated securities, but they
may not be as attractive to many buyers. The Portfolio relies more on the credit
analysis of its sub-adviser when investing in debt securities that are unrated.
The considerations discussed in the Statement of Additional Information for
lower rated debt securities also applies to lower quality unrated debt
securities of all types.
The Capital Appreciation Portfolio may also invest in futures, options and
other derivative instruments. (See "Additional Investment Practices -- Futures,
Options and Other Derivative Instruments" and "Risk Factors -- Futures, Options
and Other Derivative Instruments.") For further information about the Capital
Appreciation Portfolio's investment policies, see "Additional Investment
Practices" and the Statement of Additional Information.
IDEX II GLOBAL PORTFOLIO
The investment objective of IDEX II Global Portfolio is long-term growth of
capital in a manner consistent with preservation of capital primarily through
investments in common stocks of foreign and domestic issuers. The Global
Portfolio seeks to invest in companies and other organizations on a worldwide
basis regardless of country of organization or place of principal business
activity, as well as domestic and foreign governments, government agencies and
other governmental entities.
The Global Portfolio may be appropriate for investors who are seeking a
variety of investment goals, including:
* Long-term growth of capital without being limited to investments in U.S.
issuers.
* Returns from potential increases in the Portfolio's underlying securities
relative to the value of U.S. securities.
* Hedging to an extent against a decline in the value of U.S. securities
relative to other countries' securities.
* Diversifying domestic investments by including other countries' securities in
the investment portfolio.
The Global Portfolio seeks to invest substantially all of its assets in
common stocks when its portfolio manager believes that the relevant market
environment favors profitable investing in those securities. Common stock
investments are selected from industries and companies that the portfolio
manager believes are experiencing favorable demand for their products and
services, and which operate in a favorable competitive environment and
regulatory climate. These securities are selected solely for their capital
growth potential; investment income is not a consideration.
Although the assets of the Global Portfolio are ordinarily invested in
common stocks at most times, the cash position of the Portfolio may increase
when the portfolio manager is unable to locate investment opportunities with
desirable risk/reward characteristics. The Global Portfolio may also invest in
government securities, corporate bonds and debentures, high-grade commercial
paper, preferred stocks, certificates of deposit, other debt securities or
repurchase agreements when its portfolio manager perceives an opportunity for
capital growth from such securities, or so that the Portfolio may receive a
competitive return on its uninvested cash. The Global Portfolio's investment in
the foregoing types of debt securities will be limited to securities of U.S.
companies, the U.S. government and foreign governments, and U.S. and foreign
governmental agencies and instrumentalities and other governmental entities.
When the Global
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Portfolio invests in such securities, investment income may increase and may
constitute a larger portion of the return on the Portfolio's investments, and
the Portfolio may not participate in market advances or declines to the extent
that it would if it were fully invested in common stock.
The Global Portfolio's assets are normally invested in securities of
issuers from at least five different countries, including the United States,
although the Portfolio may at times invest all its assets in fewer than five
countries or even a single country. When recommending allocations of the
Portfolio's investments among geographic regions and individual countries, and
among assets denominated in U.S. and foreign currencies, the portfolio manager
considers various factors which may include: prospects for relative economic
growth among countries, regions or geographic areas; expected levels of
inflation; government policies influencing business conditions; and the outlook
for currency relationships. Investments in foreign securities involve risks that
are different in some respects from investments in securities of U.S. issuers.
(See "Additional Investment Practices -- Foreign Securities" and "Risk
Factors -- Foreign Securities.")
The Global Portfolio may also invest in futures, options and other
derivative instruments. (See "Additional Investment Practices -- Futures,
Options and Other Derivative Instruments" and "Risk Factors -- Futures, Options
and Other Derivative Instruments.") For further information about the Global
Portfolio's investment policies, see "Additional Investment Practices" and the
Statement of Additional Information.
IDEX II GROWTH PORTFOLIO
The only investment objective of IDEX II Growth Portfolio is growth of
capital. The Growth Portfolio seeks to achieve its objective primarily through
investment in common stocks listed on a national securities exchange or on
NASDAQ and which the Portfolio's sub-adviser believes have a good potential for
capital growth. The Growth Portfolio seeks to invest substantially all of its
assets in common stocks when its portfolio manager believes that the relevant
market environment favors profitable investing in those securities. Common stock
investments are selected from industries and companies that the portfolio
manager believes are experiencing favorable demand for their products and
services, and which operate in a favorable competitive environment and
regulatory climate. The portfolio manager's analysis and selection process
focuses on stocks with earnings growth potential that may not be recognized by
the market. These securities are selected solely for their capital growth
potential; investment income is not a consideration.
Although the Growth Portfolio's assets will be invested primarily in common
stocks at most times, the cash position of the Portfolio may increase when the
portfolio manager is unable to locate investment opportunities with desirable
risk/reward characteristics. The Portfolio may also invest in U.S. government
securities, high grade commercial paper, corporate bonds and debentures,
warrants, preferred stocks, certificates of deposit of commercial banks, other
debt securities or repurchase agreements when its portfolio manager perceives an
opportunity for capital growth from such securities, or so that the Growth
Portfolio may receive a return on its uninvested cash. When the Growth Portfolio
invests in such securities, investment income will likely increase and may
constitute a larger portion of the return on the Portfolio's investments than if
the Portfolio were fully invested in common stocks. (See "Distributions and
Taxes.")
The Growth Portfolio may invest in both domestic and foreign companies,
although the Growth Portfolio will not invest more than 25% of its net assets at
the time of purchase in the securities of foreign issuers and obligors. (See
"Additional Investment Practices -- Foreign Securities.") Investments in foreign
securities involve risks that are different in some respects from investments in
securities of U.S. issuers. (See "Risk Factors -- Foreign Securities.")
The Growth Portfolio may also invest in futures, options and other
derivative instruments. (See "Additional Investment Practices -- Futures,
Options and Other Derivative Instruments" and "Risk Factors -- Futures, Options
and Other Derivative Instruments.") For further information about the Growth
Portfolio's investment policies, see "Additional Investment Practices" and the
Statement of Additional Information.
IDEX II EQUITY-INCOME PORTFOLIO
The investment objective of the Equity-Income Portfolio is to provide
current income, long-term growth of income and capital appreciation. The
Equity-Income Portfolio seeks to achieve its objective by investing primarily in
common stocks, income producing securities convertible into common stock, and
fixed-income securities. In seeking current income and growth opportunities, the
Equity-Income Portfolio will primarily select companies with established
operating histories and potential for dividend growth. The Equity-Income
Portfolio seeks to achieve an income yield in excess of the dividend income
yield of the Standard & Poor's 500 Index.
In selecting equity securities and securities convertible into equity
securities for the Equity-Income Portfolio, the portfolio manager typically
seeks companies which exhibit strong fundamental characteristics and considers
factors such as balance sheet quality, cash flow generation, earnings and
dividend growth record and outlook, and profitability levels. The portfolio
manager presently intends to consider these and other fundamental
characteristics in
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determining attractive investment opportunities. However, the portfolio manager
may select securities based on factors other than those described above. Shares
of companies with undervalued assets may also be owned by the Equity-Income
Portfolio; the portfolio manager's objective in investing in such undervalued
companies is to purchase shares of these companies at a discount to net asset
value and have the investment accrue to that value over time.
The Equity-Income Portfolio seeks to invest its assets primarily in income
producing common or preferred stock when the portfolio manager believes that the
relevant market environment favors profitable investing in those securities. The
remaining assets of the Equity-Income Portfolio will ordinarily be invested in
debt obligations, typically many of which will be convertible into common stock,
and other fixed-income securities. However, the Equity-Income Portfolio may
increase its cash position when the portfolio manager determines that investment
opportunities with desirable risk/reward characteristics are unavailable. The
Equity-Income Portfolio does not presently intend to invest more than 20% of its
total assets in equity securities which do not pay a dividend. It is anticipated
that a majority of the equity securities in which the Equity-Income Portfolio
invests will be listed on a national securities exchange or traded on NASDAQ or
in the U.S. over-the-counter market.
The Equity-Income Portfolio may invest in U.S. government securities,
corporate bonds and debentures, high-grade commercial paper, preferred stocks or
certificates of deposit when the portfolio manager perceives attractive
opportunities from such securities, or so that the Equity-Income Portfolio may
receive a competitive return on its uninvested cash. The Portfolio may invest in
debt securities of U.S. and foreign issuers.
To the extent that the Equity-Income Portfolio invests in debt securities,
such securities will primarily be of "investment grade." Investment grade debt
securities are considered to be securities rated Baa or higher by Moody's
Investors Service, Inc. ("Moody's") or BBB or higher by Standard & Poor's
Corporation ("S&P"), and unrated debt securities that are of comparable quality
based on the credit analysis of the Portfolio's sub-adviser. Unrated debt
securities are not necessarily of lower grade than rated securities, but they
may not be as attractive to many buyers. The Portfolio relies more on the credit
analysis of its sub-adviser when investing in debt securities that are unrated.
The considerations discussed in the Statement of Additional Information for
lower rated debt securities also applies to lower quality unrated debt
securities of all types. When the Portfolio invests in fixed-income debt
securities, regardless of investment grade, investment income may increase and
may constitute a larger portion of the return on the Equity-Income Portfolio's
investments, and the Equity-Income Portfolio may not participate in stock market
advances or declines to the extent that it would if it were fully invested in
equity securities.
Investments in commercial paper are limited to obligations rated Prime-1 by
Moody's or A-1 by S&P.
The Equity-Income Portfolio may invest in both domestic and foreign
companies, although the Equity-Income Portfolio may not invest more than 10% of
its net assets at the time of purchase in the securities of foreign issuers and
obligors. (See "Additional Investment Practices -- Foreign Securities.")
Investments in foreign securities involve risks that are different in some
respects from investments in securities of U.S. issuers. (See "Risk
Factors -- Foreign Securities.")
For more information about the Equity-Income Portfolio's investment
policies, see "Additional Investment Practices" and the Statement of Additional
Information.
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
The investment objective of the Tactical Asset Allocation Portfolio is
preservation of capital and competitive investment returns. The Tactical Asset
Allocation Portfolio will strive to maintain positive performance in market
declines through a reduction in equity exposure. In market advances, the
portfolio manager attempts to enhance the value of the Portfolio by
overweighting the amount of equity exposure as a percentage of total assets. The
Tactical Asset Allocation Portfolio seeks to achieve its objective by investing
primarily in stocks, United States Treasury bonds, notes and bills, and money
market funds. The Portfolio will seek to achieve income yield in excess of the
dividend income yield of the S&P's Index of 500 Common Stocks.
The principles by which the Portfolio makes its stock selections are based
on value investing -- combining safety of principal with above average returns.
A company is attractive if it is reasonably priced and the portfolio manager
believes it will perform better than the current expectations for earnings/cash
flow over the next several years.
The Portfolio's focus is on primarily high quality, liquid, large
capitalization stocks. The selection process starts with a "bottoms up"
screening of the market in an attempt to identify stocks that are statistically
undervalued based on financial characteristics such as Price to Cash Flow, Price
to Sales, Price to Earnings, Dividend Yield, and Return on Equity relative to
the stock's historical norms. The portfolio manager seeks to preserve a "margin
of safety" which is critical to the preservation of capital. However, the
portfolio manager believes that investors' expectations and the company's
operating performance ultimately determine which statistically "undervalued"
stocks make good investments. The portfolio manager's research staff seeks to
identify stocks that are likely to provide investors with consistently positive
investment performance, taking into account
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projected future cash flows, earnings and dividends. Finally, undervalued
stocks, by definition, are out of favor with most investors. Therefore, the
analysis of the portfolio manager includes a thorough review of the risks
surrounding the stocks. The portfolio manager's goal is to choose stocks which
the market has undervalued based on "overreaction" to perceived risks. A stock's
fundamentals dominate the selection process. However, technical analysis is used
to improve the timeliness of the portfolio manager's trading decisions.
The portfolio manager utilizes a series of linear statistical models that
attempt to forecast total stock market returns for both short (12 to 18 months)
and long (36 to 60 months) run time periods. These time series models are
developed by the sub-adviser to assist in comparing the anticipated risks and
rewards of holding stocks versus treasury notes and money market funds, and to
determine when the sub-adviser "tactically" adjusts asset allocation through a
gradual shifting of assets among stocks, U.S. Treasury bonds and notes, and
money market funds. A combination of fundamental, technical, subjective and
monetary variables are used in the forecasting models.
The Portfolio seeks to invest its assets primarily in income producing
common or preferred stock when the portfolio manager believes that the relevant
market environment favors profitable investing in those securities. The
remainder of the Portfolio will ordinarily be invested in debt obligations,
typically some of which will be convertible into common stock. However, the
Portfolio may increase its cash position when the portfolio manager determines
that investment opportunities with desirable risk/reward characteristics are
unavailable. The Portfolio does not presently intend to invest more than 20% of
its total assets in equity securities which do not pay a dividend. It is
anticipated that almost all of the equity securities in which the Portfolio
invests will be listed on a national securities exchange or on NASDAQ or will be
traded in the U.S. over-the-counter market.
The Tactical Asset Allocation Portfolio may invest in both domestic and
foreign companies, although it will not invest more than 25% of its total assets
at the time of purchase in the securities of foreign issuers and obligers. The
selection criteria for domestic issuers apply equally to stocks of foreign
issuers. In addition, factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for relative economic growth among countries,
regions or geographic areas may warrant greater consideration in selecting
foreign stocks. (See "Additional Investment Practices -- Foreign Securities" and
"Risk Factors -- Foreign Securities.")
The Portfolio may invest in U.S. government securities, corporate bonds and
debentures, high-grade commercial paper, preferred stocks, certificates of
deposit or other securities of U.S. issuers when the portfolio manager perceives
attractive opportunities from such securities, or so that the Portfolio may
receive a competitive return on its uninvested cash. The Portfolio may only
invest in debt securities of U.S. issuers. U.S. government securities are
securities issued by or guaranteed by the U.S. government or its agencies or
instrumentalities. U.S. government securities have varying degrees of government
backing. They may be backed by the credit of the U.S. government as a whole or
only by the issuing agency or instrumentality. For example, securities issued by
the Financing Corporation are supported only by the credit of the Financing
Corporation, and not by the U.S. government. Securities issued by the Federal
Home Loan Banks and the Federal National Mortgage Association (FNMA) are
supported by the agency's right to borrow money from the U.S. Treasury under
certain circumstances. U.S. Treasury bonds, notes, and bills, and some agency
securities, such as those issued by the Government National Mortgage Association
(GNMA), are backed by the full faith and credit of the U.S. government as to
payment of principal and interest and are the highest quality U.S. government
securities. The Portfolio itself, and its share price and yield, are not
guaranteed by the U.S. government.
Corporate debt securities in which the Portfolio may invest will have a
rating within the four highest grades as determined by Moody's (Aaa, Aa, A, or
Baa) or S&P (AAA, AA, A, or BBB). Bonds rated Baa by Moody's or BBB by S&P are
considered medium grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security for such bonds appear
adequate for the present, but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and, in fact, have speculative
characteristics. In the event that ratings decline after the Portfolio's
investment in securities, the portfolio manager will consider all such factors
as it deems relevant to the advisability of retaining such securities. To the
extent that the Portfolio invests in fixed-income debt securities, regardless of
investment grade, investment income may increase and may constitute a larger
portion of the return on the Portfolio's investments, and the Portfolio may not
participate in stock market advances or declines to the extent that it would if
it were fully invested in equity securities.
Investments in commercial paper are limited to obligations rated Prime-1 by
Moody's or A-1 by S&P.
The Portfolio may invest up to 10% of its total assets in money market
funds, within limits imposed by the 1940 Act upon investment by the Portfolio in
other investment companies. The Portfolio will indirectly bear its proportionate
share of any investment advisory fees and expenses paid by the funds in which it
invests, in addition to the investment advi-
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<PAGE> 20
sory fee and expenses paid by the Portfolio. If the forecasting models predict a
decline in the stock market, the portfolio manager will reduce equity exposure
which will increase the Portfolio's cash position, including investment in money
market funds. (See the Statement of Additional Information -- "Other Policies
and Practices of the Portfolios.")
The Portfolio may invest in convertible securities. Convertible securities
may include corporate notes or preferred stock, but ordinarily are a long-term
debt obligation of the issuer convertible at a stated exchange rate into common
stock of the issuer. As with all debt securities, the market value of
convertible securities tends to decline as interest rates increase and,
conversely, to increase as interest rates decline. Convertible securities
generally offer lower interest or dividend yields than non-convertible
securities of similar quality. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the price
of the convertible security tends to reflect the value of the underlying common
stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus may
not depreciate to the same extent as the underlying common stock. Convertible
securities generally rank senior to common stocks in an issuer's capital
structure and are consequently of higher quality and entail less risk of decline
in market value than the issuer's common stock. However, the extent to which
such risk is reduced depends in large measure upon the degree to which the
convertible security sells above its value as a fixed income security. In
evaluating investment in a convertible security, primary emphasis will be given
to the attractiveness of the underlying common stock. The convertible debt
securities in which the Portfolio may invest are subject to the same rating
criteria as the Portfolio's investment in non-convertible debt securities.
For more information about the Tactical Asset Allocation Portfolio's
investment policies, see "Additional Investment Practices" and the Statement of
Additional Information.
IDEX II BALANCED PORTFOLIO
The investment objective of the Balanced Portfolio is long-term capital
growth, consistent with preservation of capital and balanced by current income.
The Balanced Portfolio is designed for investors who want to participate in the
equity markets through a more moderate investment than a pure growth fund.
Investments in income-producing securities are intended to result in a portfolio
that provides a more consistent total return than may be attainable through
investing solely in growth stocks. The Balanced Portfolio is not designed for
investors who desire a consistent level of income.
The Balanced Portfolio normally invests 40 - 60% of its assets in equity
securities selected primarily for growth potential and 40 - 60% of its assets in
fixed income securities. At least 25% of its assets will be invested in fixed
income senior securities, which include corporate debt and preferred stocks. The
Balanced Portfolio may shift assets between the growth and income portions of
its portfolio based on its portfolio manager's analysis of the relevant market,
financial and economic conditions. If the portfolio manager believes that growth
securities will provide better returns than the yields then available or
expected on income-producing securities, then the Balanced Portfolio will place
a greater emphasis on that component.
The growth component of the Balanced Portfolio is expected to consist
primarily of common stocks. Common stock investments are selected in industries
and companies that the portfolio manager believes are experiencing favorable
demand for their products and services, and which operate in a favorable
competitive environment and regulatory climate. The portfolio manager's analysis
and selection process focuses on stocks with earnings growth potential that may
not be recognized by the market. The Balanced Portfolio may invest for capital
growth in any type of equity security that its portfolio manager believes will
benefit from economic trends, promising technologies, products or other
opportunities.
Although the growth component of the Balanced Portfolio's assets will be
invested primarily in common stocks at most times, the cash position of the
Portfolio may increase when the portfolio manager is unable to locate investment
opportunities with desirable risk/reward characteristics. The Portfolio may also
invest in U.S. government, high grade commercial paper, corporate bonds and
debentures, warrants, preferred stocks, certificates of deposit of commercial
banks, other debt securities or repurchase agreements when its portfolio manager
perceives an opportunity for capital growth from such securities, or so that the
Balanced Portfolio may receive a return on its uninvested cash. When the
Balanced Portfolio invests in such securities, investment income will likely
increase and may constitute a larger portion of the return on the Portfolio's
investments than if the growth component of the portfolio were fully invested in
common stocks. (See "Distributions and Taxes.")
The income component of the Balanced Portfolio may consist of all types of
income-producing securities, including common stocks selected primarily for
their dividend payments, preferred stocks, convertible securities and debt
securities of corporate and government issuers. Because income is a
consideration in selecting securities, the Balanced Portfolio may select equity
securities on the basis of growth potential, dividend-paying properties, or some
combination of both. To the extent that the Balanced Portfolio invests in debt
securities, such securities will primarily be of
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<PAGE> 21
"investment grade." Investment grade debt securities are considered to be
securities rated Baa or higher by Moody's or BBB or higher by S&P, and unrated
debt securities that are of comparable quality based on the credit analysis of
the Portfolio's sub-adviser. Unrated debt securities are not necessarily of
lower grade than rated securities, but they may not be as attractive to many
buyers. The Portfolio relies more on the credit analysis of its sub-adviser when
investing in debt securities that are unrated. The considerations discussed in
the Statement of Additional Information for lower rated debt securities also
applies to lower quality unrated debt securities of all types.
The Balanced Portfolio may invest in both domestic and foreign companies,
although the Balanced Portfolio will not invest more than 25% of its net assets
at the time of purchase in the securities of foreign issuers and obligors. The
selection criteria for domestic issuers apply equally to securities of foreign
issuers. In addition, factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for relative economic growth among countries,
regions or geographic areas may warrant greater consideration in selecting
foreign stocks. (See "Additional Investment Practices -- Foreign Securities" and
"Risk Factors -- Foreign Securities.")
The Balanced Portfolio may also invest in futures, options and other
derivative instruments. (See "Additional Investment Practices -- Futures,
Options and Other Derivative Instruments" and "Risk Factors -- Futures, Options
and Other Derivative Instruments.") For further information about the Balanced
Portfolio's investment policies, see "Additional Investment Practices" and the
Statement of Additional Information.
IDEX II FLEXIBLE INCOME PORTFOLIO
The investment objective of IDEX II Flexible Income Portfolio is to obtain
maximum total return for its shareholders, consistent with preservation of
capital, by actively managing a portfolio of income-producing securities.
Securities are selected because they offer the potential for the highest total
return from a combination of current income and capital appreciation. The
Flexible Income Portfolio is designed for those investors who want participation
in a broad array of income-producing securities, and/or those investors who
desire a more consistent level of income from their securities investments.
Because of this emphasis, income rather than capital appreciation will normally
be the dominant component of total return. In evaluating investment
opportunities, the portfolio manager gives special emphasis to corporate debt
securities which offer higher yield but more risk than higher grade securities.
The Flexible Income Portfolio may invest in virtually all types of
income-producing securities. The Portfolio may purchase domestic or foreign
securities issued by companies or by governments or governmental agencies. As a
fundamental policy, the Flexible Income Portfolio will invest at least 80% of
its assets in income-producing securities. The Flexible Income Portfolio may
purchase debt securities of any maturity and the average maturity of its
portfolio may vary substantially, depending on its portfolio manager's analysis
of market, economic and financial conditions. The Portfolio has no
pre-established quality standards and may invest in debt securities of any
quality, including lower rated bonds that may offer higher yields because of the
greater risks involved in such investments. Debt securities rated below
investment grade by the primary rating agencies (Moody's Investor Service, Inc.
("Moody's") and Standard and Poor's Ratings Group ("S&P")) generally constitute
lower rated securities.
The Flexible Income Portfolio may also invest in unrated debt securities of
foreign and domestic issuers. Unrated debt, while not necessarily of lower
quality than rated securities, may not have as broad a market. Sovereign debt of
foreign governments is generally rated by country. Because these ratings do not
take into account individual factors relevant to each issue and may not be
updated regularly, the portfolio manager may treat such securities as unrated
debt.
Appendix A of this Prospectus contains a description of bond rating
categories and includes a table showing the portfolio composition of the
Flexible Income Portfolio at March 31, 1995. The Portfolio may deliberately vary
the overall quality of its portfolio and at times, may have substantial holdings
of high-yield/high risk bonds or unrated bonds of foreign and domestic issuers.
These securities involve additional risks, which are described in detail under
"Risk Factors -- High Yield/High Risk Bonds."
The Flexible Income Portfolio may invest up to 50% of its assets in foreign
securities denominated in foreign currency and not publicly traded in the United
States, provided that no more than 25% of its assets may be invested in the
securities of the government or private issuers of any one foreign country. In
addition, the Flexible Income Portfolio may invest in foreign issuers through
the purchase of American Depositary Receipts and similar securities. (See
"Additional Investment Practices -- Foreign Securities.") Investments in foreign
securities involve risks that are different in some respects from investments in
securities of U.S. issuers. (See "Risk Factors -- Foreign Securities.")
The Flexible Income Portfolio may also purchase mortgage and other
asset-backed securities, preferred stocks, income-producing common stocks or
securities convertible into common stocks if such securities appear to offer the
best opportunity for maximum total return.
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<PAGE> 22
The Flexible Income Portfolio may also invest in futures, options and other
derivative instruments. (See "Additional Investment Practices -- Futures,
Options and Other Derivative Instruments" and "Risk Factors -- Futures, Options
and Other Derivative Instruments.") For further information about the Flexible
Income Portfolio's investment policies, see "Additional Investment Practices"
and the Statement of Additional Information, including Appendix A.
IDEX II INCOME PLUS PORTFOLIO
The investment objective of IDEX II Income Plus Portfolio is to provide as
high a level of current income as is consistent with the avoidance of excessive
risk. The Portfolio's efforts to avoid excessive risk may preclude the
realization of the highest available income yields. In seeking a high level of
income, the Income Plus Portfolio may nevertheless invest in securities whose
degree of investment risk may make investment in the Portfolio unsuitable for
investors without alternate sources of income unless such investment is made as
part of a diversified personal investment portfolio.
The Income Plus Portfolio attempts to invest in securities that offer the
highest yield without excessive risk at the time of investment. The Income Plus
Portfolio seeks to achieve its objective by investing in a diversified portfolio
of fixed-income and convertible debt securities and dividend paying common,
preferred and convertible preferred stocks. Although yields on convertible
securities are often lower than yields on nonconvertible bonds and preferred
stocks of comparable investment quality, the Income Plus Portfolio may invest in
convertible securities if the total return is expected to provide higher current
income than nonconvertible securities. The Income Plus Portfolio may also hold
or invest in common stocks which are acquired in conversion or exchange of, or
in a unit offering with, fixed-income securities. Appendix A of the Statement of
Additional Information contains a brief description of the principal types of
short-term securities in which the Income Plus Portfolio may invest.
When consistent with the Portfolio's investment objective and policies and
in the judgment of the portfolio manager warranted by market conditions, or when
deemed appropriate by the portfolio manager for defensive purposes under certain
market and economic conditions, the Income Plus Portfolio may temporarily invest
some or all of its assets in short-term obligations such as (a) commercial paper
and bankers' acceptances of U.S. banks; (b) U.S. dollar-denominated obligations
of U.S. bank branches located outside the United States and of U.S. branches of
foreign banks; (c) U.S. dollar-denominated time deposits (subject to certain
limitations -- see "Investment Restrictions of the IDEX II Income Plus
Portfolio" in the Statement of Additional Information) and certificates of
deposit; and (d) obligations of, or guaranteed as to principal and interest by,
the U.S. government or its agencies or instrumentalities. (See the Statement of
Additional Information, "Appendix A -- Short-Term Obligations.") Before
acquiring any of the foreign short-term bank obligations noted above, the
portfolio manager will consider a variety of factors which may include the
political and economic condition in a country, the prospect for changes in the
value of its currency or currency controls, expropriation or nationalization,
and interest payment limitations, based on existing or prior actions of the
foreign government. Such risks, however, cannot be entirely eliminated for any
foreign obligation. (See "Risk Factors -- Foreign Securities.")
In addition to the investment policy described below which prohibits
investments by the Income Plus Portfolio in securities rated below "B" or "b"
(or unrated issues determined to be of comparable quality to securities rated
below such ratings), the Portfolio is subject to an operating policy intended to
reduce certain investment risks. Under this operating policy, (a) the Income
Plus Portfolio may not invest in commercial paper of corporate issuers which is
rated below Prime-2 by Moody's or A-2 by S&P (or if unrated, determined by the
portfolio manager to be of comparable quality to securities rated below Prime-2
or A-2); and (b) the Income Plus Portfolio may not invest in other rated
corporate securities if, after such investment, more than 50% of the Portfolio's
total holdings of securities (other than commercial paper) would then be rated
below the four highest rating categories of either Moody's or S&P, or if
unrated, are determined by the portfolio manager to be of comparable quality.
Appendix A of this Prospectus contains a description of bond rating
categories and includes a table showing the portfolio composition of the Income
Plus Portfolio at March 31, 1995. These securities involve certain risks, which
are described in detail under "Risk Factors -- High Yield/Risk Bonds."
Securities rated in the fourth rating category for bonds (Moody's "Baa";
S&P's "BBB") and preferred stocks (Moody's "baa"; S&P's "BBB") are considered
medium grade investments with certain speculative characteristics; and although
they have adequate earnings and asset protection at the time the rating is
accorded, such protection may be questionable over any great length of time.
Adverse economic conditions or changing circumstances are more likely to weaken
the payment or repayment capacity of such securities than that of higher rated
securities. There is no specific limitation on the proportion of the Income Plus
Portfolio's securities which may be made up of securities rated in Moody's or
S&P's fourth highest rating category.
The Income Plus Portfolio will not invest in rated securities that, at the
time of investment, are rated below "B" by Moody's or "B" by S&P ("b" in the
case of Moody's preferred stock ratings) or, if unrated, are judged by the
portfo-
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<PAGE> 23
lio manager not to possess investment qualities at least equivalent to a "B" or
"b" rating. In the event that ratings decline after the Income Plus Portfolio's
investment in securities, the portfolio manager will consider such factors as it
deems relevant to the advisability of retaining such securities. The portfolio
manager uses but does not place sole reliance on credit ratings in evaluating
bonds and determining the credit quality of the issuer.
The Income Plus Portfolio may also invest in certain types of derivative
instruments. (See "Additional Investment Practices -- Futures, Options and Other
Derivative Instruments" and "Risk Factors -- Futures, Options and Other
Derivative Instruments.") For further information about the Income Plus
Portfolio's investment policies, see "Additional Investment Practices" and the
Statement of Additional Information.
IDEX II TAX-EXEMPT PORTFOLIO
The investment objective of IDEX II Tax-Exempt Portfolio is to provide
maximum current interest income exempt from federal income tax in a manner
consistent with preservation of capital. Securities in which the Tax-Exempt
Portfolio invests may not yield as high a level of current income as securities
of lower quality which generally have less liquidity, greater market risk and
more fluctuation. The Portfolio's goal of preserving capital may preclude
realization of the highest available income yields. The Portfolio's tax-exempt
income objective may make it an unsuitable investment for tax-exempt entities or
persons in low income tax brackets.
The tax-exempt securities in which the Tax-Exempt Portfolio invests include
obligations issued by states, territories or possessions of the United States,
the District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities, the interest from which, in the opinion of
bond counsel, is exempt from federal income tax ("Municipal Obligations").
Income from Municipal Obligations which is exempt from federal income tax may be
subject to state and local tax and may constitute an item of preference for
determining the federal alternative minimum tax. Municipal Obligations with
maturities of at least one year when issued are generally referred to as
"Municipal Bonds," while those with shorter maturities of from 6 months to 3
years are generally referred to as "Municipal Notes." It is anticipated that the
weighted average maturity of securities in the Tax-Exempt Portfolio will be
between 20 and 35 years in non-defensive periods.
Ordinarily, at least 80% of the Tax-Exempt Portfolio's total net assets
will be invested in Municipal Obligations, except to the extent the Portfolio
invests in Temporary Investments, as discussed below. In addition, the
Tax-Exempt Portfolio normally invests at least 75% of its total net assets in
one or a combination of (a) Municipal Obligations which at the time of purchase
are rated within the four highest ratings assigned by Moody's or S&P; (b)
municipal commercial paper rated at the time of purchase within the highest
grade assigned by Moody's or S&P; and (c) unrated Municipal Notes of issuers
which at the time of purchase have outstanding at least one issue of Municipal
Bonds rated within the four highest ratings of Moody's or S&P. The Tax-Exempt
Portfolio may invest up to 25% of its total net assets in unrated Municipal
Obligations when in the opinion of its portfolio manager such unrated securities
are comparable in quality to securities rated within the four highest ratings of
Moody's or S&P.
The Tax-Exempt Portfolio may also invest in floating and variable rate
Municipal Obligations or participation interests therein, provided the interest
thereon is exempt from federal income tax and when, in the opinion of its
portfolio manager, the quality of the underlying creditor or bank is equivalent
to the four highest ratings of Moody's or S&P for long-term bonds and/or the two
highest ratings of Moody's for short-term Municipal Notes.
At times, the Tax-Exempt Portfolio may temporarily invest up to 20% of its
total net assets in taxable securities ("Temporary Investments") due to market
conditions, pending the investment of proceeds from purchases of its shares or
proceeds from sales of portfolio securities, or to provide highly liquid
securities to meet anticipated redemptions. The Tax-Exempt Portfolio may also
temporarily invest more than 20% of its total net assets in Temporary
Investments when, in the judgment of the portfolio manager, a defensive position
is required in anticipation of a decline in the market value of portfolio
securities. Temporary Investments may consist of the following fixed-income,
short-term securities: (a) obligations of, or guaranteed as to principal and
interest by, the United States Government or its agencies or instrumentalities
("Government securities"); (b) certificates of deposit issued by domestic banks
with assets of at least $1 billion and having deposits insured by the Federal
Deposit Insurance Corporation; (c) repurchase agreements with respect to
Government securities; and (d) commercial paper rated P-1 by Moody's or A-1 by
S&P.
The ratings of Moody's and S&P represent their respective opinions of the
quality of the Municipal Obligations they undertake to rate and such ratings are
general and are not absolute standards or warranties of quality. Consequently,
Municipal Obligations with the same maturity, coupon and rating may have
different yields, while Municipal Obligations of the same maturity and coupon
with different ratings may have the same yield. An investor interested in the
characteristics of securities carrying the various investment ratings of Moody's
and S&P is referred to Appendix A of this Prospectus.
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<PAGE> 24
Municipal Bonds and Notes rated in Moody's or S&P's fourth rating category
are considered medium-grade obligations, have an "adequate" capacity to pay
interest and repay principal and are neither highly protected nor poorly
secured. Such bonds lack outstanding investment characteristics and have certain
speculative characteristics. Bonds in this category may be more adversely
affected by changes in circumstances and economic conditions than higher rated
bonds. The Tax-Exempt Portfolio's operating policies place no specific
limitations on the proportion of its portfolio which may be made up of such
bonds, so long as the portfolio manager believes that the Portfolio's objective
of preserving invested capital is being met.
While ratings at the time of purchase will determine which securities are
eligible to be acquired by the Tax-Exempt Portfolio, a subsequent reduction in
rating will not require the Tax-Exempt Portfolio to dispose of the securities.
Unrated municipal securities may be less liquid and therefore, their purchase by
the Tax-Exempt Portfolio may entail somewhat greater risk than comparable but
rated Municipal Obligations. Investment in Municipal Obligations with lower
Moody's or S&P ratings may produce a higher yield than securities rated within
the four highest ratings of Moody's or S&P (or judged of comparable quality).
However, the added risk of lower quality securities might not be consistent with
the Tax-Exempt Portfolio's objective of preservation of capital.
A period of rising commercial interest rates may adversely affect the value
of the Tax-Exempt Portfolio and the net asset value per share and may require
rapid portfolio turnover. Temporary Investments which may have lower yields and
produce income taxable to shareholders may also be made in periods of rising
commercial interest rates, as the risk of issuer default on principal and
interest payments increases in the tax-exempt securities market. Portfolio
values will tend to increase in periods of falling commercial interest rates.
Because yields from Municipal Obligations are typically lower than yields
on securities of comparable quality producing taxable income, the Tax-Exempt
Portfolio is not well suited as an investment vehicle for tax-exempt retirement
programs (e.g., individual retirement accounts and qualified pension trusts)
which cannot benefit from tax-exempt income and whose distributions are taxable
to recipients as ordinary income, despite the underlying source of the
distribution (that is, tax-exempt or capital gain dividends and redemption
proceeds) when received by the retirement plan. Similarly, the benefits of
tax-exempt income from investment in the Tax-Exempt Portfolio will be greater
for persons with higher taxable incomes than for persons in lower income tax
brackets.
Congress has periodically considered proposals to restrict or eliminate the
federal income tax exemption for interest on certain types of or on all
Municipal Obligations. Enactment of legislation affecting the tax-exempt status
of Municipal Obligations would affect their availability for investment and the
value of the Tax-Exempt Portfolio's assets.
For more information about the Tax-Exempt Portfolio's investment policies,
see "Additional Investment Practices" and the Statement of Additional
Information. For a further discussion of various types of Municipal Obligations
and Temporary Investments and certain risks relating to each, see Appendix A of
the Statement of Additional Information.
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ADDITIONAL INVESTMENT PRACTICES
FOREIGN SECURITIES
Each of the Growth, Balanced, Capital Appreciation, Aggressive Growth and
Tactical Asset Allocation Portfolios may invest up to 25% of its assets,
directly or indirectly, in foreign securities. The Global Portfolio may invest
without limit in foreign securities. The Equity Income Portfolio may invest up
to 25% of its assets, directly or indirectly, in foreign securities, provided
that no more than 10% of its assets may be invested directly in foreign
securities which are denominated in foreign currency and not publicly traded in
the United States. The Flexible Income Portfolio may invest up to 50% of its
assets, directly or indirectly, in foreign securities, provided that no more
than 25% of its assets may be invested in the securities of the government or
private issuers of any one foreign country.
Subject to the foregoing limitations, these Portfolios may invest directly
in foreign securities denominated in a foreign currency and not publicly traded
in the United States. If appropriate and available, in addition to investing
directly in foreign securities, and subject to each Portfolio's particular
investment objectives, policies and practices, these Portfolios may also
purchase foreign securities through American Depositary Receipts ("ADRs") or
American Depositary Shares ("ADSs"), which are dollar-denominated receipts that
are issued by domestic banks or securities firms, are publicly traded in the
United States, and may not involve the same direct currency and liquidity risks
as securities denominated in foreign currency. These Portfolios may also
indirectly invest in foreign securities through European Depositary Receipts
("EDRs"), which are typically issued by European banks, Global Depositary
Receipts ("GDRs"), which may be issued by either domestic or foreign banks, and
other types of receipts evidencing ownership of the underlying foreign
securities. Investments in foreign securities involve risks that are different
in some respects from
19
<PAGE> 25
investments in securities of U.S. issuers. (See "Risk Factors -- Foreign
Securities.")
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
Subject to certain limitations described in the Statement of Additional
Information, the Growth, Global, Flexible Income, Balanced, Capital
Appreciation, Aggressive Growth, Equity-Income and Tactical Asset Allocation
Portfolios may write and purchase options on securities as well as engage in
transactions involving options on securities or foreign currencies, futures
contracts, options on futures contracts, forward currency contracts, and
interest rate swaps, caps and floors for hedging and other appropriate purposes.
These instruments are commonly referred to as "derivatives." Each of these
Portfolios may engage in such strategies to attempt to reduce the overall level
of investment risk that normally would be expected to be associated with a
Portfolio's securities and, in particular, to attempt to manage the Portfolio's
foreign currency exposure and to attempt to protect the Portfolio against market
movements that might adversely affect the value of the Portfolio's securities or
the price of securities that the Portfolio is considering purchasing. The
Growth, Global, Balanced and Capital Appreciation Portfolios will limit their
use of futures contracts and related options for purposes other than bona fide
hedging such that the aggregate initial margin and premiums required to
establish any non-hedging positions will not exceed 5% of the fair market value
of a Portfolio's net assets.
The Flexible Income Portfolio may also write and purchase options on
securities to enhance income. The Flexible Income Portfolio may write call
options on futures contracts when it owns equivalent securities that it is
willing to sell at the level of the exercise price of the call. The writing of
such options creates an obligation, but offers the Flexible Income Portfolio the
opportunity to enhance income or to purchase or sell securities at prices more
favorable than might otherwise be obtained. The Flexible Income Portfolio will
limit its use of futures contracts and related options for purposes other than
bona fide hedging such that the aggregate initial margin and premiums required
to establish any non-hedging positions will not exceed 5% of the fair market
value of a Portfolio's net assets.
The Income Plus Portfolio may purchase and sell contracts for the future
delivery of fixed-income securities at an established price, commonly referred
to as "interest rate futures contracts," to attempt to hedge against declines in
the value of its holdings of long-term debt securities. The Income Plus
Portfolio may invest in interest rate futures contracts only as a hedge against
anticipated interest rate changes that would adversely affect the value of
portfolio securities. The Income Plus Portfolio will not use futures contracts
for speculation or to leverage the Portfolio. The Income Plus Portfolio will
maintain cash or cash equivalents equal in value to the market value of futures
contracts purchased (less related margin deposits) to assure that the
Portfolio's position is fully collateralized and that its use of futures
contracts is unleveraged.
Subject to the following limitations, the Aggressive Growth Portfolio
intends to use derivative instruments for hedging purposes as well as to enhance
income. The Aggressive Growth Portfolio may write covered call options on common
stocks that it owns or has an immediate right to acquire through conversion or
exchange of other securities in an amount not to exceed 25% of total assets. The
Aggressive Growth Portfolio does not intend to write any put options. The
Aggressive Growth Portfolio may only buy options that are listed on a national
securities exchange. The Aggressive Growth Portfolio will not purchase options
if, as a result, the aggregate cost of all outstanding options exceeds 10% of
the Portfolio's total assets, although no more than 5% will be committed to
transactions entered into for non-hedging purposes.
The Aggressive Growth Portfolio will purchase and sell stock index futures
contracts and options on stock index futures contracts solely for hedging or
other permissible risk-management purposes, such as protecting the price of a
security the Aggressive Growth Portfolio intends to buy, but not for purposes of
speculation. Aggregate initial margins and premiums on such investments may not
constitute more than 5% of the Aggressive Growth Portfolio's assets.
The Equity-Income and Tactical Asset Allocation Portfolios currently do not
intend to purchase or sell any of these types of instruments, although they may
do so in the future.
There can be no assurance that the use of these instruments by a Portfolio
will assist it in achieving its investment objective. The use of futures
contracts, options and other derivative instruments also involves certain risks.
(See "Risk Factors -- Futures, Options and Other Derivative Instruments.")
Further information on these instruments, hedging strategies and risk
considerations relating to them is set forth in the Statement of Additional
Information.
MORTGAGE-AND OTHER ASSET-BACKED SECURITIES
Each Portfolio may invest up to 25% of its net assets in mortgage-and other
asset-backed securities. These securities are subject to prepayment risk, that
is, the possibility that prepayments on the underlying mortgages or other loans
will cause the principal and interest on the securities to be paid prior to
their stated maturities. Unscheduled prepayments are more likely to accelerate
during periods of declining long-term interest rates. In the event of a
prepayment during a period of declining interest rates, a Portfolio may be
required to invest the unanticipated proceeds at a
20
<PAGE> 26
lower interest rate. Prepayments during such periods will also limit a
Portfolio's ability to participate in as large a market gain as may be
experienced with a comparable government security not subject to prepayment.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS
Each Portfolio, other than the Tax-Exempt and Tactical Asset Allocation
Portfolios, may purchase securities on a when-issued or delayed delivery basis
and may enter into contracts to purchase securities for a fixed price at a
future date beyond normal settlement time ("forward commitments"). However, each
of the Growth, Global and Flexible Income Portfolios does not intend to invest
more than 20% of its assets in when-issued securities. The Tax-Exempt Portfolio
may purchase Municipal Bonds on a "when-issued" or "delayed delivery" basis. The
Portfolios bear the risk that the value of such securities may change prior to
delivery of the security and the risk that the seller may not complete the
transaction.
ILLIQUID SECURITIES
Each of the Growth, Global, Flexible Income, Balanced, Capital
Appreciation, Aggressive Growth, Equity-Income and Tactical Asset Allocation
Portfolios may invest up to 15%, and each of the Tax-Exempt and Income Plus
Portfolios may invest up to 10%, of its net assets in securities that are
considered illiquid because of the absence of a readily available market or due
to legal or contractual restrictions on resale. The sale of illiquid securities
often requires more time and results in higher brokerage charges or dealer
discounts and other selling expenses than does the sale of securities eligible
for trading on national securities exchanges or in the over-the-counter markets.
A Portfolio may be restricted in its ability to sell such securities at a time
when the sub-advisor deems it advisable to do so. In addition, in order to meet
redemption requests, a Portfolio may have to sell other assets, rather than such
illiquid securities, at a time which is not advantageous. Certain restricted
securities that are not registered for sale to the general public but that can
be resold to institutional investors ("Rule 144A Securities") may not be
considered illiquid, provided that a dealer or institutional trading market
exists. Securities eligible for resale under Rule 144A of the Securities Act of
1933 may be determined to be liquid by a Portfolio's sub-adviser pursuant to
procedures adopted by the Board of Trustees of the Fund. For each of the
Tax-Exempt Portfolio and the Flexible Income Portfolio, the sub-adviser may also
determine municipal lease obligations held by the Portfolio to be liquid
pursuant to procedures adopted by the Board of Trustees. Securities previously
determined to be liquid pursuant to these procedures may be subsequently deemed
to be illiquid, and investment in Rule 144A securities and municipal lease
obligations could have the effect of increasing portfolio illiquidity. The
Tactical Asset Allocation Portfolio does not currently intend to invest in
securities that are considered illiquid.
ZERO COUPON BONDS AND OTHER SECURITIES
Although it is the policy of the Flexible Income, Income Plus and Tactical
Asset Allocation Portfolios to invest in income-producing securities, each of
the Portfolios other than the Aggressive Growth Portfolio may invest up to 10%
of their assets in zero coupon bonds, step coupon bonds, pay-in-kind securities
or strips. Zero coupon bonds do not make regular interest payments; rather, they
are sold at a discount from face value. Principal and accreted discount
(representing interest accrued but not paid) are paid at maturity. Step coupon
bonds sell at a discount and pay a low coupon rate for an initial period and a
higher coupon rate thereafter. Pay-in-kind securities may pay interest in cash
or a similar bond. The Flexible Income Portfolio may also invest in "strips,"
which are debt securities that are stripped of their interest after the
securities are issued, but otherwise are comparable to zero coupon bonds. The
market value of zero coupon bonds, step coupon bonds, pay-in-kind securities and
"strips" generally fluctuates in response to changes in interest rates to a
greater degree than interest-paying securities of comparable term and quality.
The Portfolios may realize greater gains or losses as a result of such
fluctuations. In order to pay cash distributions from income earned on zero
coupon, step coupon bonds, pay-in-kind securities and "strips", the Portfolios
may sell certain portfolio securities and may incur a capital gain or loss on
such sales.
BORROWING AND LENDING
Each Portfolio may borrow money from banks for temporary or emergency
purposes in an amount not to exceed 25% of its total assets in the case of the
Growth, Global, Flexible Income, Balanced, Capital Appreciation, Equity-Income
and Tactical Asset Allocation Portfolios, and 33 1/3% of its total assets in the
case of the Tax-Exempt and Income Plus Portfolios. To secure borrowings, a
Portfolio may not mortgage or pledge its securities in amounts that exceed 15%
of its net assets in the case of the Growth, Global, Flexible Income, Balanced,
Capital Appreciation, Equity-Income and Tactical Asset Allocation Portfolios and
10% of its net assets in the case of the Income Plus Portfolio. The Tactical
Asset Allocation Portfolio has no present intention of borrowing. In addition,
each of the Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios may borrow money from or lend money to other funds that permit such
transactions and are advised or sub-advised by Janus Capital, provided that the
Portfolio seeks and obtains permission to do so from the Securities and Exchange
Com-
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<PAGE> 27
mission ("SEC"). There is no assurance that such permission will be sought or
granted.
The Aggressive Growth Portfolio may borrow only from banks for investment
purposes. This borrowing is known as leveraging. The 1940 Act requires the
Aggressive Growth Portfolio to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of borrowings) of
300% of the amount borrowed. If such asset coverage should decline to below 300%
as a result of market fluctuations or other reasons, the Aggressive Growth
Portfolio may be required to sell some of the portfolio holdings within three
days to reduce the debt and restore the 300% asset coverage, even though it may
be disadvantageous from an investment standpoint to sell securities at that
time. Leveraging may exaggerate the effect on net asset value of any increase or
decrease in the market value of the Portfolio's securities. Money borrowed for
leveraging will be subject to interest costs which may or may not be recovered
by appreciation of the securities purchased; in certain cases, interest costs
may exceed the return received on the securities purchased. The Aggressive
Growth Portfolio also may be required to maintain minimum average balances in
connection with such borrowing or to pay a commitment or other fee to maintain a
line of credit; either of these requirements would increase the cost of
borrowing over the stated interest rate. Additional limitations on borrowing
that are imposed by state law and regulations may apply.
Each of the Portfolios other than the Tax-Exempt and Income Plus Portfolios
may also lend their portfolio securities to broker-dealers and financial
institutions for the purpose of realizing additional income. As a fundamental
policy, each such Portfolio, other than the Aggressive Growth Portfolio, will
not lend securities or other assets if, as a result, more than 25% of its total
assets would be lent to other parties, although none of these Portfolios
presently intends to lend securities or make any other loans valued at more than
5% of its total assets. As a fundamental policy, the Aggressive Growth Portfolio
may not make loans to others, except through purchasing qualified debt
obligations, lending portfolio securities or entering into repurchase
agreements. The Aggressive Growth Portfolio will not lend securities or other
assets if, as a result, more than 20% of its total assets would be lent to other
parties. Securities lending may involve some credit risk to a Portfolio if the
borrower defaults and the Portfolio is delayed or prevented from recovering the
collateral or is otherwise required to cover a transaction in the security
loaned. If portfolio securities are loaned, collateral values will be
continuously maintained at no less than 100% by marking to market daily. If a
material event is to be voted upon affecting a Portfolio's investment in
securities which are on loan, the Portfolio will take such action as may be
appropriate in order to vote its shares. For further information about the
Portfolios' policies relating to borrowing and lending, see the Statement of
Additional Information.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
Each of the Portfolios may invest in repurchase and reverse repurchase
agreements. A repurchase agreement involves the purchase of a security by a
Portfolio and a simultaneous agreement by the seller (generally a bank or
broker-dealer) to repurchase that security from the Portfolio at a specified
price and date or upon demand. This technique offers a method of earning income
on idle cash. The repurchase agreement is effectively secured by the value of
the underlying security. A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed, which may cause a
Portfolio to suffer a loss if the market value of such securities declines
before they can be liquidated on the open market. In the event of bankruptcy of
the seller, a Portfolio may encounter delays and incur costs in liquidating the
underlying security. Repurchase agreements maturing in more than seven days are
subject to the previously stated limit on illiquid securities.
When a Portfolio invests in a reverse repurchase agreement, it sells a
portfolio security to another party, such as a bank or broker-dealer, in return
for cash, and agrees to buy the security back at a future date and price.
Reverse repurchase agreements may be used to provide cash to satisfy unusually
heavy redemption requests or for other temporary or emergency purposes without
the necessity of selling portfolio securities or to earn additional income on
portfolio securities, such as treasury bills and notes.
SHORT SALES
Each of the Portfolios may sell securities "short against the box". While a
short sale is the sale of a security that a Portfolio does not own, it is
"against the box" if at all times when the short position is open, a Portfolio
owns an equal amount of the securities or securities convertible into, or
exchangeable without further consideration for, securities of the same issue as
the securities sold short.
HIGH-YIELD/HIGH-RISK BONDS
High-yield/high-risk, below investment grade securities (commonly known as
"junk bonds") involve significant credit and liquidity concerns and fluctuating
yields and are not suitable for short-term investing. None of the Portfolios
other than the Flexible Income and Income Plus Portfolios may invest more than
5% of its net assets in junk bonds. See "Risk Factors -- High-Yield/High-Risk
Bonds" and the Statement of Additional Information for further information
concerning the risks associated with investing in junk bonds.
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<PAGE> 28
DIVERSIFICATION POLICIES
Each of the Portfolios other than the Capital Appreciation Portfolio is a
diversified investment company under the 1940 Act as a matter of fundamental
policy, while the Capital Appreciation Portfolio is a nondiversified investment
company. For more specific information concerning the diversification policies
of each of the Portfolios, see the Statement of Additional Information.
As a fundamental policy, with respect to 50% of its total assets, the
Capital Appreciation Portfolio will not purchase securities of any one issuer
(other than cash items and U.S. government securities) if immediately after and
as a result of such purchase (a) the Capital Appreciation Portfolio owns more
than 10% of the outstanding voting securities of that issuer, or (b) the value
of the Capital Appreciation Portfolio's holdings of that issuer exceeds 5% of
the value of the Capital Appreciation Portfolio's total assets. The other 50% of
the Capital Appreciation Portfolio's assets may be invested in the securities of
as few as two issuers. The Capital Appreciation Portfolio is therefore deemed to
be a nondiversified investment company under the 1940 Act, although it reserves
the right to become a diversified company by investing no more than 25% of its
assets in issuers which represent more than 5% of its total assets. Although the
Capital Appreciation Portfolio may invest up to 50% of its assets in the
securities of as few as two issuers, it does not anticipate doing so unless its
sub-adviser believes a security has the potential for substantial capital
appreciation consistent with the Capital Appreciation Portfolio's investment
objective and policies. It does, however, intend to take advantage of the
flexibility of nondiversification to invest more than 5% of its total assets in
the securities of one issuer. To the extent that the Capital Appreciation
Portfolio invests more than 5% of its assets in a particular issuer, its
exposure to credit risks and/or market risks associated with that issuer
increases. The Capital Appreciation Portfolio may also realize greater benefits
from increases in the value of one or a small number of securities than a
diversified mutual fund.
As an additional fundamental policy, the Portfolios will not invest more
than 25% of the value of their respective total assets in any particular
industry (other than U.S. government securities).
OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund may in the future seek to achieve the investment objective of the
Growth, Global, Flexible Income, Balanced, Capital Appreciation, Aggressive
Growth, Equity-Income or Tactical Asset Allocation Portfolios by investing all
of a Portfolio's assets in another investment company having the same investment
objective and substantially the same investment policies and restrictions as
those applicable to that Portfolio. Shareholders of the Growth, Global, Flexible
Income, Balanced, Capital Appreciation, Aggressive Growth, Equity-Income or
Tactical Asset Allocation Portfolios will be given at least 30 days prior notice
of any such investment. Such investment would be made only if the Board of
Trustees of the Fund determines it to be in the best interests of a Portfolio
and its shareholders. In making that determination, the Board of Trustees will
consider, among other things, the benefits to shareholders and/or the
opportunity to reduce costs and achieve operational efficiencies.
Each Portfolio is subject to investment restrictions, certain of which are
fundamental policies of that Portfolio and as such may not be changed without
approval of that Portfolio's shareholders. Non-fundamental investment
restrictions and operating policies may be changed by the Board of Trustees
without shareholder approval. The investment restrictions of each Portfolio are
described in the Statement of Additional Information.
The securities and financial instruments markets in the United States and
worldwide have been characterized in recent years by rapid change and innovation
in the creation of new instruments and securities. The sub-advisers reserve the
right to evaluate new financial instruments as they are developed and become
actively traded, and subject to any applicable investment restriction of a
Portfolio, a Portfolio may invest in any such investment products that its
portfolio manager believes will further the Portfolio's particular investment
objective.
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RISK FACTORS
FOREIGN SECURITIES
Investments in foreign securities involve risks that are different in some
respects from investments in securities of U.S. issuers. For example, changes in
currency exchange rates and exchange rate controls may affect the value of
foreign securities and the value of their dividend or interest payments and,
therefore, a Portfolio's share price and returns. Foreign companies generally
are subject to tax laws and accounting, auditing, and financial reporting
standards, practices and requirements that differ from those applicable to U.S.
companies. There is generally less publicly available information about foreign
companies and less securities and other governmental regulation and supervision
of foreign companies, stock exchanges and securities brokers and dealers. A
Portfolio may encounter difficulties in enforcing obligations in foreign
countries and in negotiating favorable brokerage commission rates. Securities of
some foreign companies are less liquid, and their prices more volatile, than
securities of comparable U.S. companies. Delays may be encountered in settling
securities transactions in certain foreign markets and a Portfolio will incur
costs in converting foreign currencies into U.S. dollars. Custody charges are
generally higher for foreign securities than
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<PAGE> 29
for domestic securities. In addition, with respect to some foreign countries,
there is the possibility of expropriation or confiscatory taxation, limitations
on the removal of securities, property or other assets of a Portfolio, political
or social instability or war, or diplomatic developments, any or all of which
could affect U.S. investments in those countries. ADRs do not involve the same
direct currency and liquidity risks as securities denominated in foreign
currency.
The considerations noted above may be intensified in the case of investment
in developing countries or countries with limited or developing capital markets.
In particular, developing countries may have relatively unstable governments,
economies based on only a few industries and securities markets that trade a
small number of securities. Securities of issuers located in developing
countries may have limited marketability and may be subject to more abrupt or
erratic price fluctuations.
At times, securities held by the Portfolios may be listed on foreign
exchanges or traded in foreign markets which are open on days (such as Saturday)
when the Portfolios do not compute a price or accept orders for the purchase,
redemption or exchange of shares. As a result, the net asset value of the
Portfolios may be significantly affected by trading on days when shareholders
cannot make transactions.
To the extent that a Portfolio invests in foreign securities, its share
price reflects the movements of both the prices of securities in which it is
invested and the currencies in which the investments are denominated. For a
Portfolio that invests in both U.S. and foreign securities markets, changes in
the Portfolio's share price may have a low correlation with movements in the
U.S. markets. If most of the foreign securities in which a Portfolio invests are
denominated in foreign currencies, or otherwise have values that depend on the
performance of foreign currencies relative to the U.S. dollar, the relative
strength of the U.S. dollar may be an important factor in the performance of the
Portfolio.
To the extent that a Portfolio invests in foreign securities, it may employ
certain strategies in order to manage exchange rate risks. For example, a
Portfolio may seek to hedge some or all of its investments denominated in a
foreign currency against a decline in the value of that currency. The Portfolios
may exchange foreign currencies for U.S. dollars and for other foreign
currencies in the normal course of business and may buy or sell securities
through forward currency contracts in order to fix a price for securities it has
agreed to buy or sell ("transaction hedge"). The Portfolios may also enter into
contracts to sell that foreign currency for U.S. dollars (not exceeding the
value of that Portfolio's assets denominated in that currency) or by
participating in options or futures contracts with respect to such currency
("position hedge"). The Portfolio could also seek to hedge that position by
selling a second currency, which is expected to perform similarly to the
currency in which portfolio investments are denominated, for U.S. dollars
("proxy hedge"). The Portfolios may also enter into a forward contract to sell
the currency in which the security is denominated for a second currency that is
expected to perform better relative to the U.S. dollar if the portfolio manager
believes there is a reasonable degree of correlation between movements in the
two currencies ("cross-hedge"). As an operating policy, a Portfolio will not
commit more than 10% of its assets to the consummation of cross-hedge contracts
and will either cover such transactions with liquid portfolio securities
denominated in the applicable currency or segregate high-grade, liquid assets in
the amount of such commitments. In addition, when the Portfolio anticipates
purchasing securities denominated in a particular currency, it may enter into a
forward contract to purchase such currency in exchange for the dollar or another
currency ("anticipatory hedge").
These strategies seek to minimize the effect of currency appreciation as
well as depreciation, but do not protect against a decline in the underlying
value of the hedged security. In addition, such strategies may reduce or
eliminate the opportunity to profit from increases in the value of the original
currency and may adversely impact a Portfolio's performance if the portfolio
manager's projection of future exchange rates is inaccurate.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
Generally, the use of strategies involving options, futures contracts,
forward contracts and swap-related products ("derivative instruments") involves
additional investment risks and transaction costs, and draws upon skills and
experience which are different from those needed to select the other instruments
in which a Portfolio invests. If a portfolio manager seeks to protect a
Portfolio against potential adverse movements in the securities, foreign
currency or interest rate markets using these instruments, and if such markets
do not move in a direction adverse to the Portfolio, the Portfolio may not
achieve the desired benefits of the foregoing instruments, and could be left in
a less favorable position than if such strategies had not been used. The use of
such strategies involves special risks, which include: 1) the risk that interest
rates, securities prices and currency markets will not move in the directions
anticipated by the portfolio manager, and thus that the use of these instruments
as hedging techniques may fail and/or losses may result; 2) imperfect
correlation between the price of the instruments and movements in the prices of
the securities, interest rates or currencies being hedged; 3) the fact that
there are not daily price fluctuation limits with respect to options on
currencies, forward contracts and other negotiated or over-the-counter
instruments, and adverse market movements could therefore continue to an
unlimited extent over a period of time; 4) the possible absence of a liquid
secondary market for any particular instrument at any time,
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<PAGE> 30
and thus the Portfolio being unable to control losses by closing out a position;
and 5) the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences. The loss from investing in futures is potentially
unlimited. See the Statement of Additional Information for further information
concerning the use of options, futures and other derivative instruments, and the
associated risks.
FIXED-INCOME INVESTING
The performance of the debt component of a Portfolio depends primarily on
interest rate changes, the average weighted maturity of that Portfolio and the
quality of the securities held. The debt component of a Portfolio will tend to
decrease in value when interest rates rise and increase when interest rates
fall. A Portfolio may vary the average maturities of its portfolio based on the
portfolio manager's analysis of interest rate trends and other factors.
Generally, shorter term securities are less sensitive to interest rate changes,
but longer term securities offer higher yields. A Portfolio's share price and
yield also depend, in part, on the quality of its investments in debt
securities. For example, while U.S. government securities generally are of high
quality, government securities that are not backed by the full faith and credit
of the United States and other debt securities, including those of foreign
governments, may be affected by changes in the creditworthiness of the issuer of
the security. The extent that such changes are reflected in a Portfolio's share
price will depend upon the extent of the Portfolio's investment in such
securities. For further information about a Portfolio's policies relating to
fixed-income investing, see the Statement of Additional Information.
HIGH-YIELD/HIGH-RISK BONDS
High-yield/high-risk, below investment grade securities (commonly known as
"junk bonds") involve significant credit and liquidity concerns and fluctuating
yields and are not suitable for short-term investing. Lower rated bonds also
involve the risk that the issuer will not make interest or principal payments
when due. In the event of an unanticipated default, a Portfolio owning such
bonds would experience a reduction in its income, and could expect a decline in
the market value of the securities so affected. More careful analysis of the
financial condition of each issuer of lower rated securities is therefore
necessary. During an economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest payments
obligations, to meet projected business goals and to obtain additional
financing.
The market prices of lower grade securities are generally less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic or political changes or individual developments specific to the
issuer. Periods of economic or political uncertainty and change can be expected
to result in volatility of prices of these securities. Since the last major
economic recession, there has been a substantial increase in the use of high-
yield debt securities to fund highly leveraged corporate acquisitions and
restructurings, so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of future performance
during such periods. Lower rated securities also may have less liquid markets
than higher rated securities, and their liquidity as well as their value may be
more severely affected by adverse economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a greater
negative impact on the market for lower rated bonds.
Higher yields are ordinarily available on fixed-income securities which are
unrated or are rated in the lower rating categories of recognized rating
services such as Moody's and S&P. Unrated securities are not necessarily of
lower quality than rated securities, but the markets for lower rated and
nonrated securities are more limited than those in which higher rated securities
are traded. In addition, an economic downturn or increase in interest rates is
likely to have a greater negative effect on the market for lower rated and
nonrated securities, the value of high yield debt securities held by a
Portfolio, the net asset value of a Portfolio holding such securities and the
ability of the bonds' issuers to repay principal and interest, meet projected
business goals and obtain additional financing than on higher rated securities.
SPECIAL SITUATIONS
Each Portfolio may invest in "special situations" from time to time. A
special situation arises when, in the opinion of the portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
management change, a technological breakthrough or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on a Portfolio will depend on
that Portfolio's size and the extent of the holdings of the special situation
company relative to the Portfolio's total assets.
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OTHER PORTFOLIO POLICIES
Although it is the policy of each of the Growth, Global, Flexible Income,
Balanced, Capital Appreciation, Aggressive Growth, Equity-Income and Tactical
Asset Allocation Portfo-
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<PAGE> 31
lios to purchase and hold securities for its stated investment objective,
changes in these holdings will generally be made whenever their respective
portfolio managers believe they are advisable. Portfolio changes in the Growth,
Global, Flexible Income, Balanced, Capital Appreciation, Aggressive Growth,
Equity-Income and Tactical Asset Allocation Portfolios may result from liquidity
needs, securities having reached a price or yield objective, anticipated changes
in interest rates or the credit standing of an issuer or by reason of
developments not foreseen at the time of the investment decision. To a limited
extent, the Growth, Global, Flexible Income, Balanced, Capital Appreciation,
Aggressive Growth, Equity-Income and Tactical Asset Allocation Portfolios each
may engage in short-term transactions if such transactions further their
investment objectives. Because investment changes ordinarily will be made
without reference to the length of time a security has been held, a significant
number of short-term transactions may result, and the rate of portfolio turnover
will not be a limiting factor when changes are deemed to be appropriate. The
estimated annual portfolio turnover rates of the Balanced and Capital
Appreciation Portfolios are anticipated to be up to 200%. The estimated annual
portfolio turnover rate of the Aggressive Growth Portfolio is anticipated to be
less than 150%. The estimated annual portfolio turnover rates of the Equity-
Income and Tactical Asset Allocation Portfolios are anticipated to be under
100%.
The investment policies of the Tax-Exempt and Income Plus Portfolios may
lead to frequent changes in investments, particularly in periods of rapidly
fluctuating interest rates. Securities may be sold in anticipation of a decline
in portfolio value (a rise in interest rates) or purchased in anticipation of a
portfolio value rise (decline in interest rates). In addition, a security may be
sold and another purchased at approximately the same time to take advantage of
what the portfolio manager believes to be a temporary disparity in the normal
yield relationship between the two securities. Yield disparities may occur for
reasons not directly related to the investment quality of particular issues or
the general movement of interest rates, due to such factors as changes in the
overall demand for or supply of various types of securities or changes in the
investment objectives of investors. This rate will not be a limiting factor when
the portfolio manager deems it desirable to sell or purchase securities for
either of these Portfolios.
Certain tax rules may restrict a Portfolio's ability to sell securities in
some circumstances when the security has been held for less than three months.
Increased portfolio turnover necessarily results in correspondingly higher
brokerage costs or mark-up charges for a Portfolio which are ultimately borne by
the shareholders and may also result in short-term capital gains which are taxed
as ordinary income to the shareholders. (See "Distributions and Taxes -- Tax
Information.") For annual portfolio turnover rates, see "Financial Highlights"
and the Statement of Additional Information.
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PERFORMANCE
Each Portfolio's performance is calculated separately for Class A, Class B
and Class C shares of that Portfolio. Performance may be measured in terms of
average annual total return which is calculated by finding the average annual
compounded rates of return over a period of time that would equate the initial
amount invested to the ending redeemable value. The calculation assumes the
deduction of the maximum sales load from the initial investment and the payment
of all dividends and other distributions in additional shares on the
reinvestment dates during the period. An average annual total return reflects
the hypothetical annually compounded return that would have produced the same
cumulative return if performance had been constant over the entire period.
Because average annual returns for more than one year tend to smooth out
variations in performance, such figures are not the same as actual year-by-year
results. The Statement of Additional Information contains a description of the
method used to compute average annual total return of each Portfolio.
A Portfolio may also advertise non-standardized performance information
which is for periods in addition to those required to be presented, or which
provides cumulative total return, actual year-by-year return, or any combination
thereof. A Portfolio may also advertise nonstandardized performance which does
not reflect deduction of the maximum sales charge applicable to Class A shares
or the contingent deferred sales charge applicable to Class B shares. The
exclusion of an applicable sales charge from a performance calculation produces
a higher return.
The current yield for a particular class of shares of the Flexible Income
Portfolio, the Tax-Exempt Portfolio, or the Income Plus Portfolio is based on
the investment income during a particular 30-day period (including dividends, if
any, and interest), expenses accrued during the period, average shares
outstanding during the 30-day period and the maximum offering price per share on
the last day of the base period, and then annualizing the result. Each class of
shares of the Tax-Exempt Portfolio may also advertise its tax equivalent yield
which is calculated by applying the stated income tax rate to only the net
investment income exempt from taxation, according to a standardized formula. See
the formulas described in greater detail in the Statement of Additional
Information. In addition to the above standardized yields, each of these
Portfolios may also advertise non-standardized yields.
From time to time in advertisements or sales materials, each Portfolio may
present and discuss its performance rankings and/or ratings or other information
as published by recognized mutual fund statistical services, such as Lipper
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<PAGE> 32
Analytical Services, Inc., or by publications of general interest such as
Forbes, Money, The Wall Street Journal, Business Week, Barron's, Changing Times,
Fortune, Institutional Investor, or Morningstar Mutual Fund Values. Ratings may
include criteria relating to portfolio characteristics in addition to
performance information. In connection with a ranking, a Portfolio will also
provide additional information with respect to the ranking, including the
particular category to which it relates, the number of funds in the category,
the period and criteria on which the ranking is based, and the effect of sales
charges, fee waivers and/or expense reimbursements. A Portfolio may compare its
performance to that of other selected mutual funds or recognized market
indicators, including the Standard & Poor's 500 Stock Index, the Dow Jones
Industrial Average, the Standard & Poor's Midcap Index, the Russell 2000, the
NASDAQ Composite, the Lehman Brothers Intermediate Government Corporate Bond
Index, the Lehman Brothers Long Government Corporate Bond Index, the Merrill
Lynch High Yield Master Index and the Morgan Stanley Capital International World
Index. In addition, a Portfolio may as appropriate compare its performance to
that of other types of investments such as certificates of deposit, savings
accounts and U.S. Treasury securities, or to certain interest rate and inflation
indices, such as the Consumer Price Index. The Global Portfolio's performance
may also be compared to the record of global market indicators such as the
Morgan Stanley Capital International Europe, Australia, Far East Index ("EAFE
Index"). The EAFE Index is an unmanaged Index of foreign common stock prices
translated into U.S. dollars.
All performance figures are based upon historical results and are not
intended to indicate future performance. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
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INVESTMENT ADVISORY AND OTHER SERVICES
TRUSTEES
The Board of Trustees is responsible for managing the business and affairs
of the Fund, and it oversees the operation of the Fund by its officers.
Information concerning the Trustees and officers of the Fund is contained in the
Statement of Additional Information.
INVESTMENT ADVISERS
GROWTH, GLOBAL, FLEXIBLE INCOME, BALANCED AND CAPITAL APPRECIATION
PORTFOLIOS. The Growth, Global, Flexible Income, Balanced and Capital
Appreciation Portfolios have each entered into a Management and Investment
Advisory Agreement ("Advisory Agreement") with Idex Management, Inc. ("IMI"),
whose address is 201 Highland Avenue, Largo, Florida 34640, to act as its
investment adviser. IMI has served as investment adviser to IDEX Fund, IDEX II
Series Fund Growth, Global, Flexible Income (and its predecessor, IDEX Total
Income Trust), Balanced and Capital Appreciation Portfolios and IDEX Fund 3
since inception of each fund or portfolio. Fifty percent (50%) of the
outstanding stock of IMI and 100% of the outstanding stock of InterSecurities,
Inc., principal underwriter of the Fund's shares, is owned by AUSA Holding
Company ("AUSA"). AUSA is a holding company which is wholly-owned by AEGON USA,
Inc. ("AEGON USA"), a financial services holding company whose primary emphasis
is on life and health insurance and annuity and investment products. AEGON USA
is a wholly-owned indirect subsidiary of AEGON nv, a Netherlands corporation and
publicly traded international insurance group. Janus Capital Corporation ("Janus
Capital"), the sub-adviser of the Growth, Global, Flexible Income, Balanced and
Capital Appreciation Portfolios, owns the remaining 50% of the outstanding
shares of IMI. Kansas City Southern Industries, Inc., a publicly-owned holding
company whose primary subsidiaries are engaged in transportation and financial
services, owns approximately 83% of Janus Capital.
IMI is responsible for furnishing or causing to be furnished to each of
these five Portfolios investment advice and recommendations and supervising the
purchase and sale of securities as directed by appropriate Fund officers. In
addition, IMI is responsible for the administration of each of these five
Portfolios. For services furnished to the Growth, Global, Balanced and Capital
Appreciation Portfolios, respectively, IMI receives an annual fee, computed
daily and paid monthly, equal to 1.00% of the first $750 million of that
Portfolio's average daily net assets, 0.9% of the next $250 million of that
Portfolio's average daily net assets, and 0.85% of the average daily net assets
of that Portfolio in excess of $1 billion. For its services to the Flexible
Income Portfolio, IMI receives an annual fee, computed daily and paid monthly,
equal to 0.9% of the first $100 million of that Portfolio's average daily net
assets, 0.8% of the next $150 million of that Portfolio's average daily net
assets and 0.7% of the average daily net assets of that Portfolio in excess of
$250 million. The investment advisory fees paid by each of the Growth, Global,
Flexible Income, Balanced and Capital Appreciation Portfolios are higher than
those paid by many other funds.
For the fiscal year ended September 30, 1994, the investment advisory fee
paid by the Growth and Global Portfolios was 1.00% of each Portfolio's
respective average daily net assets. For the fiscal year ended September 30,
1994, the investment advisory fee incurred by the Flexible Income Portfolio was
.52% of that Portfolio's average daily net assets, net of fees waived by IMI. No
investment advisory fees were paid for the fiscal year ended September 30, 1994
by the Balanced and Capital Appreciation Portfolios, as those Portfolios did not
commence operations until December 2, 1994.
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<PAGE> 33
In addition to the investment advisory fee, under its Advisory Agreement,
the Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios each pay most of its operating costs, including administrative,
bookkeeping and clerical expenses, legal fees, auditing and accounting fees,
shareholder services and transfer agent fees, custodian fees, costs of complying
with federal and state regulations, preparing, printing and distributing reports
to shareholders, non-interested trustees' fees and expenses, interest,
insurance, dues for trade associations and taxes. Each Portfolio also pays all
brokers' commissions in connection with its portfolio transactions. IMI will
reimburse any of these Portfolios or waive fees, or both, to the extent that the
Portfolio's normal operating expenses, including investment advisory fees but
excluding interest, taxes, brokerage commissions and 12b-1 fees, exceed on an
annual basis the lesser of the most restrictive expense limitation imposed by
any state in which its shares are offered or, with respect to the Growth
Portfolio and the Flexible Income Portfolio, 1.50% of that Portfolio's average
daily net assets, and with respect to the Balanced Portfolio and the Capital
Appreciation Portfolio, 2.50% of that Portfolio's average daily net assets for
the fiscal year ended September 30, 1995, and 1.50% thereafter.
For the fiscal year ended September 30, 1994, the total expenses of the
Growth Portfolio Class A and Class C shares, including the investment advisory
fee, amounted to 1.76% and 3.48%, respectively, of each Class's respective
average daily net assets. For the fiscal year ended September 30, 1994, the
total expenses of the Global Portfolio Class A and Class C shares, including the
investment advisory fee, amounted to 2.14% and 4.04%, respectively, of each
Class's respective average daily net assets. For the fiscal year ended September
30, 1994, the total expenses of the Flexible Income Portfolio Class A and Class
C shares, including the investment advisory fee, amounted to 1.85% and 2.40%,
respectively, of each Class's respective average daily net assets during that
period (net of fees waived by IMI). No expenses were paid for the fiscal year
ended September 30, 1994 by the Balanced and Capital Appreciation Portfolios, as
those Portfolios did not commence operations until December 2, 1994.
TAX-EXEMPT, INCOME PLUS, AGGRESSIVE GROWTH, EQUITY-INCOME AND TACTICAL
ASSET ALLOCATION PORTFOLIOS. The Tax-Exempt, Income Plus, Aggressive Growth,
Equity-Income and Tactical Asset Allocation Portfolios have each entered into an
Advisory Agreement with InterSecurities, Inc. ("ISI"), whose address is 201
Highland Avenue, Largo, Florida 34640, to act as the investment adviser. ISI has
served as investment adviser to the Tax-Exempt and Income Plus Portfolios since
1992, and to the Aggressive Growth and Equity-Income Portfolios since their
inception, December 1994. In addition, its affiliate, IMI, is and has served as
investment adviser to IDEX Fund, IDEX II Series Fund Growth, Global, Flexible
Income (and its predecessor, IDEX Total Income Trust), Balanced and Capital
Appreciation Portfolios and IDEX Fund 3 since inception of each fund or
portfolio. All of the outstanding stock of ISI is owned by AUSA, a wholly-owned
subsidiary of AEGON USA and thus, ISI is an affiliate of IMI.
ISI is responsible for furnishing or causing to be furnished to the
Tax-Exempt, Income Plus, Aggressive Growth, Equity-Income and Tactical Asset
Allocation Portfolios investment advice and recommendations and supervising the
purchase and sale of securities as directed by appropriate Fund officers. In
addition, ISI provides all administrative services and facilities to each of
these Portfolios, including furnishing all executive and managerial personnel,
office space and equipment, regulatory compliance, financial reports,
supervising preparation of tax returns and recordkeeping. For services furnished
to the Tax-Exempt and Income Plus Portfolios, respectively, ISI receives an
annual fee, computed daily and paid monthly, equal to 0.60% of the average daily
net assets of that Portfolio. For services furnished to the Aggressive Growth,
Equity-Income and Tactical Asset Allocation Portfolios, respectively, ISI
receives an annual fee, computed daily and paid monthly, equal to 1.00% of the
first $750 million of that Portfolio's average daily net assets, 0.90% of the
next $250 million of that Portfolio's average daily net assets, and 0.85% of the
average daily net assets of the Portfolio in excess of $1 billion. The
investment advisory fees paid by the Tax-Exempt, Income Plus, Aggressive Growth,
Equity-Income and Tactical Asset Allocation Portfolios are higher than those
paid by many other funds.
For the fiscal year ended September 30, 1994, the investment advisory fee
paid by the Tax-Exempt Portfolio was .22% of that Portfolio's average daily net
assets, net of fees waived by ISI. For the fiscal year ended September 30, 1994,
the investment advisory fee paid by the Income Plus Portfolio was .60% of that
Portfolio's average daily net assets. No investment advisory fees were paid for
the fiscal year ended September 30, 1994 by the Equity-Income, Aggressive Growth
and Tactical Asset Allocation Portfolios, as those Portfolios had not yet
commenced operations as of that date.
In addition to the investment advisory fee, under its Advisory Agreement
the Tax-Exempt, Income Plus, Aggressive Growth, Equity-Income and Tactical Asset
Allocation Portfolios each pay most of its operating costs, including
administrative, bookkeeping and clerical expenses, legal fees, auditing and
accounting fees, shareholder services and transfer agent fees, custodian fees,
costs of complying with federal and state regulations, preparing, printing and
distributing reports to shareholders, non-interested trustees' fees, interest,
insurance, dues for trade associations and taxes. Each Portfolio also pays all
brokers' com-
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<PAGE> 34
missions in connection with its portfolio transactions. Pursuant to an expense
limitation voluntarily adopted by ISI, ISI plans to reimburse each of the
Tax-Exempt, Income Plus, Aggressive Growth, Equity-Income and Tactical Asset
Allocation Portfolios or waive fees, or both, to the extent that the Portfolio's
normal operating expenses, including investment advisory fees but excluding
interest, taxes, brokerage commissions and 12b-1 fees, exceed on an annual
basis, with respect to the Tax-Exempt Portfolio and the Income Plus Portfolio,
.65% and 1.25%, respectively, of the average daily net assets of the Portfolio,
and with respect to the Aggressive Growth Portfolio, the Equity-Income Portfolio
and the Tactical Asset Allocation Portfolio, the lesser of the most restrictive
expense limitation imposed by any state in which its shares are offered or 2.50%
of that Portfolio's average daily net assets for the first full fiscal year of
the Portfolio, and 1.50% thereafter.
For the fiscal year ended September 30, 1994, the total expenses of the
Tax-Exempt Portfolio Class A and Class C shares, including the investment
advisory fee, amounted to 1.00% and 1.25%, respectively, of each Class's
respective average net assets (net of voluntary expense reimbursements and/or
fee waivers). For the fiscal year ended September 30, 1994, the total expenses
of the Income Plus Portfolio Class A and Class C shares, including the
investment advisory fee, amounted to 1.33% and 3.52%, respectively, of each
Class's respective average daily net assets. No expenses were paid for the
fiscal year ended September 30, 1994 by the Equity-Income, Aggressive Growth and
Tactical Asset Allocation Portfolios, as those Portfolios had not yet commenced
operations as of that date.
SUB-ADVISERS
GROWTH, GLOBAL, FLEXIBLE INCOME, BALANCED AND CAPITAL APPRECIATION
PORTFOLIOS. IMI has entered into an Investment Counsel Agreement for each of
the Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios with Janus Capital, whose address is 100 Fillmore Street, Suite 300,
Denver, Colorado 80206. Janus Capital is a registered investment adviser which
serves as the investment adviser or sub-adviser to other mutual funds and
private accounts. Janus Capital provides IMI with investment advice and
recommendations for each Portfolio consistent with that Portfolio's investment
objective, policies and restrictions, and supervises the purchase and sale of
all security transactions on behalf of the Portfolio, including the negotiation
of commissions and the allocation of principal business and portfolio brokerage.
In allocating such portfolio transactions, Janus Capital may consider research
and other services furnished to it and may place portfolio transactions with
broker-dealers that are affiliated with IMI or Janus Capital. In placing
portfolio business with all dealers, Janus Capital seeks the best execution of
each transaction and all brokerage placement must be consistent with the Rules
of Fair Practice of the National Association of Securities Dealers, Inc. While
Janus Capital carries out most of IMI's advisory functions, IMI retains
responsibility for the performance of such functions. For its services, Janus
Capital receives 50% of the fees received by IMI under each of the Growth,
Global, Flexible Income, Balanced and Capital Appreciation Portfolios'
respective Advisory Agreements less 50% of any amount reimbursed to the
Portfolio or waived by IMI pursuant to that Portfolio's expense limitation. IMI
may pay additional compensation to Janus Capital under certain circumstances
depending on the level of the aggregate net assets of certain mutual funds in
the IDEX Group of Mutual Funds, as described in the Statement of Additional
Information.
Thomas F. Marsico has served as portfolio manager of the Growth Portfolio
since its inception. Mr. Marsico also serves as portfolio manager of other
mutual funds in the IDEX Group: IDEX Fund and IDEX Fund 3. Mr. Marsico is an
Executive Vice President of Janus Investment Fund and has been a Vice President
of Janus Capital since 1986.
Scott W. Schoelzel has served as co-portfolio manager of the Growth
Portfolio since 1995. Mr. Schoelzel also serves as co-portfolio manager of other
mutual funds in the IDEX group: IDEX Fund and IDEX Fund 3. Mr. Schoelzel is Vice
President of Janus Capital, where he has been employed since 1994. From 1991 to
1993, Mr. Schoelzel was a portfolio manager with Founders Asset Management,
Denver, Colorado. Prior to 1991, he was a general partner of Ivy Lane
Investments, Denver, Colorado (a real estate investment brokerage).
Helen Y. Hayes has served as portfolio manager of the Global Portfolio
since its inception. Ms. Hayes is also an Executive Vice President of Janus
Investment Fund and Janus Aspen Series. Ms. Hayes has been employed by Janus
Capital since 1987.
Ronald V. Speaker has served as portfolio manager of the Flexible Income
Portfolio since its inception, and served as portfolio manager of the Flexible
Income Portfolio's predecessor, IDEX Total Income Trust since February 1992. Mr.
Speaker is also an Executive Vice President of Janus Investment Fund and Janus
Aspen Series and previously served as a securities analyst and research
associate at Janus Capital, since 1986.
James P. Craig has served as portfolio manager of the Balanced Portfolio
since its inception. Mr. Craig has been active in the investment management
business for twelve years and has managed Janus Fund since 1986, Janus Venture
Fund from its inception in April 1985 to December 1993 and Janus Balanced Fund
since December 1993. He holds a Bachelor of Arts in Business from the University
of
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<PAGE> 35
Alabama and a Master of Arts in Finance from the Wharton School of the
University of Pennsylvania.
James P. Goff has served as portfolio manager of the Capital Appreciation
Portfolio since its inception. Mr. Goff joined Janus Capital in 1988 and has
managed Janus Enterprise Fund since its inception in September 1992 and has
co-managed Janus Venture Fund since December 1993. He holds a Bachelor of Arts
in Economics from Yale University and is a Chartered Financial Analyst.
TAX-EXEMPT AND INCOME PLUS PORTFOLIOS. AEGON USA Investment Management,
Inc. ("AEGON Management"), 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499,
serves as the investment sub-adviser to each of the Tax-Exempt and Income Plus
Portfolios pursuant to an Investment Counsel Agreement relating to each
Portfolio. Each Investment Counsel Agreement was entered into between ISI and
AEGON USA Securities, Inc. ("AEGON Securities") (formerly known as MidAmerica
Management Corporation), which assigned each Agreement to AEGON Management, on
September 30, 1992. AEGON Securities previously served as the investment adviser
to each series of AEGON USA Managed Portfolios, Inc. AEGON Management is a
wholly-owned indirect subsidiary of AEGON USA and thus is an affiliate of ISI
and IMI.
AEGON Management provides ISI with investment advice and recommendations
for the Tax-Exempt and Income Plus Portfolios consistent with each Portfolio's
investment objective, policies and restrictions, and supervises the purchase and
sale of all security transactions on behalf of each Portfolio, including the
negotiation of commissions and the allocation of principal business and
portfolio brokerage. In allocating such portfolio transactions, AEGON Management
may consider research and other services furnished to it and may place portfolio
transactions with broker-dealers that are affiliated with ISI or AEGON
Management. In placing portfolio business with all dealers, AEGON Management
seeks the best execution of each transaction and all brokerage placement must be
consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. While AEGON Management carries out most of ISI's
advisory functions, ISI retains responsibility for the performance of such
functions. For its services, AEGON Management receives 50% of the fees received
by ISI under the Tax-Exempt and the Income Plus Portfolio's Advisory Agreement
less 50% of any amount reimbursed to that Portfolio or waived by ISI pursuant to
the Portfolio's expense limitation.
Rachel A. Dennis has served as portfolio manager of the Tax-Exempt
Portfolio since its inception. Ms. Dennis is also a Vice President of AEGON
Management. Ms. Dennis has been employed by AEGON Management and its affiliates
in various positions since 1977.
David R. Halfpap has served as portfolio manager of the Income Plus
Portfolio since its inception. Mr. Halfpap is a Vice President of AEGON
Management and has been employed by AEGON Management and its affiliates in
various positions since 1975.
AGGRESSIVE GROWTH PORTFOLIO. Fred Alger Management, Inc., located at 75
Maiden Lane, New York, NY 10038 ("Alger Management"), serves as the investment
sub-adviser to the Aggressive Growth Portfolio pursuant to an Investment Counsel
Agreement relating to the Portfolio. Alger Management, a registered investment
adviser, is a wholly-owned subsidiary of Fred Alger & Company, Incorporated
("Alger, Inc."), which in turn is a wholly-owned subsidiary of Alger Associates,
Inc., a financial services holding company controlled by Fred M. Alger and David
D. Alger. As of December 31, 1994, Alger Management had approximately $2.9
billion in assets under management for investment companies and private
accounts. Alger Management has served as the investment sub-adviser to the WRL
Series Fund, Inc. Aggressive Growth Portfolio since its inception in February
1994. See the Statement of Additional Information for a more detailed
description of the previous experience of Alger Management as an investment
adviser.
Alger Management provides ISI with investment advice and recommendations
for the Aggressive Growth Portfolio consistent with that Portfolio's investment
objective, policies and restrictions, and supervises the purchase and sale of
all security transactions on behalf of the Portfolio, including the negotiation
of commissions and the allocation of principal business and portfolio brokerage.
In allocating such portfolio transactions, Alger Management may consider
research and other services furnished to it. It is anticipated that Alger, Inc.,
an affiliate of Alger Management, will serve as the Aggressive Growth
Portfolio's broker in effecting substantially all of the Aggressive Growth
Portfolio's transactions on securities exchanges and will retain commissions in
accordance with certain regulations of the SEC. In placing portfolio business
with all dealers, Alger Management seeks the best execution of each transaction
and all brokerage placement must be consistent with the Rules of Fair Practice
of the National Association of Securities Dealers, Inc. While Alger Management
carries out most of ISI's advisory functions, ISI retains responsibility for the
performance of such functions. For its services, Alger Management receives 40%
of the fees received by ISI under the Aggressive Growth Portfolio's Advisory
Agreement less 40% of any amount reimbursed to that Portfolio or waived by ISI
pursuant to the Portfolio's expense limitation.
David Alger has served as portfolio manager of the Aggressive Growth
Portfolio since its inception. Mr. Alger has served as an Executive Vice
President and Director of Research of Alger Management since 1971, and as
President since 1995. He serves as portfolio manager for other
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<PAGE> 36
mutual funds and investment accounts managed by Alger Management. Mr. Alger has
also served as the portfolio manager of the WRL Series Fund, Inc. Aggressive
Growth Portfolio since its inception in February 1994.
Shelton Y. Swei serves as co-manager of the Aggressive Growth Portfolio. He
has been employed by Alger Management since 1984 and he serves as a senior
analyst providing research for other mutual funds and investment accounts
managed by Alger Management.
EQUITY-INCOME PORTFOLIO. Luther King Capital Management Corporation
("Luther King"), located at 301 Commerce Street, Suite 1600, Fort Worth, Texas
76102, serves as the investment sub-adviser to the Equity-Income Portfolio
pursuant to an Investment Counsel Agreement relating to the Portfolio. Ultimate
control of the sub-adviser is exercised by J. Luther King, Jr. Luther King is a
registered investment adviser and provides investment management services to
accounts of individual and other institutional investors. Luther King has served
as the investment sub-adviser to the WRL Series Fund, Inc. Equity-Income
Portfolio since its inception in February 1993. See the Statement of Additional
Information for a more detailed description of the previous experience of Luther
King as an investment adviser.
Luther King provides ISI with investment advice and recommendations for the
Equity-Income Portfolio consistent with that Portfolio's investment objective,
policies and restrictions and supervises the purchase and sale of all security
transactions on behalf of the Portfolio, including the negotiation of
commissions and the allocation of principal business and portfolio brokerage. In
allocating such portfolio transactions, Luther King may consider research and
other services furnished to it and may place portfolio transactions with
broker-dealers that are affiliated with ISI or Luther King. In placing portfolio
business with all dealers, Luther King seeks the best execution of each
transaction and all brokerage placement must be consistent with the Rules of
Fair Practice of the National Association of Securities Dealers, Inc. While
Luther King carries out most of ISI's advisory functions, ISI retains
responsibility for the performance of such functions. For its services, Luther
King receives 40% of the fees received by ISI under the Equity-Income
Portfolio's Advisory Agreement less 40% of any amount reimbursed to that
Portfolio or waived by ISI pursuant to the Portfolio's expense limitation.
Luther King, Jr., Scot C. Hollmann and John Patrick Clegg have served as
portfolio managers of the Equity-Income Portfolio since its inception. Mr. King
has been President of Luther King since 1979. Mr. Hollmann has served as Vice
President of Luther King since 1983 and Mr. Clegg has served as Vice President
of Luther King since 1991. From 1986 to 1991, Mr. Clegg served as Assistant
Portfolio Manager to various investment companies advised by American Capital
Management & Research, Inc. Messrs. King, Hollman and Clegg have also served as
portfolio managers of the WRL Series Fund, Inc. Equity-Income Portfolio since
its inception in February 1993.
TACTICAL ASSET ALLOCATION PORTFOLIO. ISI has entered into an Investment
Counsel Agreement for the Tactical Asset Allocation Portfolio with Dean
Investment Associates ("Dean Investment"), a Division of C.H. Dean and
Associates, Inc., whose address is 2480 Kettering Tower, Dayton, Ohio
45423-2480. Founded in 1972, Dean Investment manages portfolios for individuals
and institutional clients worldwide, and provides a full range of investment
advisory services with currently over $4 billion of assets under management.
Dean Investment has served as the investment sub-adviser to the WRL Series Fund,
Inc. Tactical Asset Allocation Portfolio since its inception in January 1995.
See the Statement of Additional Information for a more detailed description of
the previous experience of Dean Investment as investment adviser.
John C. Riazzi, CFA is the Senior Portfolio Manager of the Tactical Asset
Allocation Portfolio. Mr. Riazzi joined Dean Investment in March of 1989. Before
being promoted to Vice President and Director of Consulting Services at Dean
Investment, Mr. Riazzi was responsible for client servicing, portfolio execution
and trading operations. Mr. Riazzi has been a member of the Central Investment
Committee and a Senior Institutional Portfolio Manager for the past four years.
He received a B.A. in Economics from Kenyon College in 1985 and was awarded the
Chartered Financial Analyst designation in 1993.
Arvind Sachdeva, CFA is the Senior Equity Strategist of the Tactical Asset
Allocation Portfolio. Mr. Sachdeva joined Dean Investment in 1993. Prior to
working at Dean Investment, he was the Senior Security Analyst and Equity
Portfolio Manager for Carillon Advisors, Inc., from January 1985-September 1993.
Carillon Advisors, Inc. is an investment subsidiary of the Union Central Life
Insurance Co.
Dean Investment provides ISI with investment advice and recommendations for
the Tactical Asset Allocation Portfolio consistent with that Portfolio's
investment objective, policies and restrictions, and supervises the purchase and
sale of all security transactions on behalf of the Portfolio, including the
negotiation of commissions and the allocation of principal business and
portfolio brokerage. In allocating such portfolio transactions, Dean Investment
may consider research and other services furnished to it and may place portfolio
transactions with broker-dealers that are affiliated with ISI or Dean
Investment. In placing portfolio business with all dealers, Dean Investment
seeks the best execution of each transaction and all brokerage placement must be
consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. While Dean Investment carries out most of ISI's
advisory functions, ISI retains responsibility for the performance of such
functions. For its
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services, Dean Investment receives 40% of the fees received by ISI under the
Tactical Asset Allocation Portfolio's Advisory Agreement less 40% of any amount
reimbursed to that Portfolio or waived by ISI pursuant to the Portfolio's
expense limitation.
Janus Capital, AEGON Management, Alger Management, Luther King and Dean
Investment may be referred to herein collectively as the "sub-advisers" and
individually as a "sub-adviser."
ADMINISTRATOR
IMI has entered into an Administrative Services Agreement ("Administrative
Agreement") pursuant to which ISI serves as administrator to each of the Growth,
Global, Flexible Income, Balanced and Capital Appreciation Portfolios. Under the
Administrative Agreements, ISI provides all services required to carry on the
general administrative and corporate affairs of these Portfolios. These services
include furnishing all executive and managerial personnel, office space and
equipment, arrangements for and supervision of all shareholder services, federal
and state regulatory compliance and responsibility for accounting and
recordkeeping. For its services under an Administrative Agreement, ISI receives
50% of the fees received by IMI under the corresponding Advisory Agreement.
Under certain circumstances, the amounts payable to ISI under an Administrative
Agreement will be reduced by any additional compensation payable by IMI to Janus
Capital, as described in the Statement of Additional Information.
DISTRIBUTOR AND DISTRIBUTION AND SERVICE PLANS
The Fund has entered into an Underwriting Agreement with ISI pursuant to
which ISI serves as principal underwriter and performs services and bears
expenses relating to the offering of Fund shares for sale to the public. ISI
also serves as principal underwriter of IDEX Fund and IDEX Fund 3. As
compensation for the expenses borne by ISI and the distribution services
provided, ISI receives the sales charges imposed on Class A shares and reallows
a portion of such charges to brokers or dealers that have sold Class A shares.
See "Shareholders' Manual -- How to Purchase Shares" for a more complete
description of the sales charges for Class A shares. ISI may also receive annual
service and distribution fees in accordance with the Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act, adopted with respect to each class of
shares of a Portfolio.
Under its Plan of Distribution for Class A shares ("Class A Plan"), a
Portfolio may pay ISI an annual distribution fee of up to 0.35%, and an annual
service fee of up to 0.25%, of the average daily net assets of that Portfolio's
Class A shares; however, to the extent that a Portfolio pays service fees, the
amount which the Portfolio may pay as a distribution fee is reduced accordingly
so that the total fees payable under the Class A Plan may not exceed on an
annualized basis 0.35% of the average daily net assets of that Portfolio's Class
A shares.
Under its Plan of Distribution for Class B shares ("Class B Plan"), a
Portfolio may pay ISI an annual distribution fee of up to 0.75%, and an annual
service fee of up to 0.25%, of the average daily net assets of that Portfolio's
Class B shares.
Under its Plan of Distribution for Class C shares ("Class C Plan"), a
Portfolio may pay ISI an annual distribution fee of up to 0.75%, and an annual
service fee of up to 0.25%, of the average daily net assets of that Portfolio's
Class C shares; however, the total fee payable pursuant to a Class C Plan may
not on an annualized basis exceed 0.90% of the average daily net assets of each
Portfolio, and the Tax-Exempt Portfolio currently intends to limit the total
fees payable pursuant to its Class C Plan to 0.60% of the average daily net
assets of that Portfolio's Class C shares.
ISI may use the fees payable under the Class A, Class B and Class C Plans
as it deems appropriate to pay for activities or expenses primarily intended to
result in the sale of Class A, Class B or Class C shares, respectively, or in
personal service to and/or maintenance of Class A, Class B or Class C
shareholder accounts, respectively. For each class, these activities and
expenses may include, but are not limited to: compensation to employees of ISI;
compensation to and expenses of ISI and other selected dealers who engage in or
otherwise support the distribution of shares or who service shareholder
accounts; the costs of printing and distributing prospectuses, statements of
additional information and reports for other than existing shareholders; and the
costs of preparing, printing and distributing sales literature and advertising
materials.
Of the distribution and service fees received by ISI for Class A and Class
B shares, ISI currently reallows an annual amount of 0.25% of the average daily
net assets of that Portfolio's Class A or Class B shares to brokers or dealers
that have sold such Class A or Class B shares. Of the distribution and service
fees received by ISI for Class C shares, ISI currently reallows the total fees
to brokers or dealers that have sold such Class C shares.
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DISTRIBUTIONS AND TAXES
DISTRIBUTION PAYMENT POLICY
Each of the Growth, Global, Aggressive Growth and Capital Appreciation
Portfolios ordinarily declares and pays semi-annual dividends from its net
investment income available for distribution, and each of the Flexible Income,
Tax-Exempt and Income Plus Portfolios ordinarily declares and pays monthly
dividends from its net investment income available for distribution. The
Balanced, Equity-Income and
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<PAGE> 38
Tactical Asset Allocation Portfolios ordinarily pay quarterly dividends from
their net investment income available for distribution. Each Portfolio makes
annual distributions of any net realized short-term capital gains, net gains
from certain foreign currency transactions and net capital gain (the excess of
net long-term capital gain over net short-term capital loss). Capital gain
distributions realized during each fiscal year (ending on September 30) normally
will be declared and paid in the subsequent fiscal year. To avoid a 4% excise
tax on undistributed amounts of ordinary income and capital gains, as described
in the Statement of Additional Information, a Portfolio may, to the extent
permitted by applicable rules adopted by the SEC, pay additional distributions
of capital gain in any year and make additional dividend distributions.
Dividends and other distributions paid by a Portfolio with respect to its
Class A, Class B and Class C shares are calculated in the same manner and
declared and paid at the same time. The per share dividends from net investment
income on Class B and Class C shares of a Portfolio are expected to be lower
than the per share dividends from net investment income on Class A shares of
that Portfolio as a result of the higher service and distribution fees
applicable to Class B and Class C shares.
All dividends and capital gain distributions, if any, with respect to a
particular class, will be paid automatically in additional shares of that class
at the net asset value per share determined as of the next business day
following the record date, unless the shareholder elects on his or her New
Account Application or by written request to ISI, one of the following options:
1. to receive or direct to another payee all dividends and capital gain
distributions in cash;
2. to receive or direct to another payee all dividends in cash and to receive
all capital gain distributions in additional shares at net asset value; or
3. to invest all dividends and capital gain distributions in the shares of the
same class of another IDEX portfolio or fund on which an initial sales charge
is imposed held by the shareholder in the same type of account (either
retirement or non-retirement).
Checks for cash distributions and distribution confirmations are usually
mailed to shareholders within ten days of the record date. Checks for cash
distributions will be made payable to the shareholder of record and sent by
first class mail to the shareholder's address of record unless otherwise
requested by the shareholder on the New Account Application or by a separate
written request. Any checks which are unable to be delivered and are returned to
the Fund or Idex Investor Services, Inc. (the "Transfer Agent") will be
reinvested into the shareholder's account in full or fractional shares at the
net asset value next computed after the check has been received by the Transfer
Agent. To reduce costs to a Portfolio, checks outstanding and uncashed for over
180 days may be "stop-paid" and reinvested back into the shareholder/payee's
account at the discretion of the Transfer Agent. Also at the discretion of the
Transfer Agent, cash distribution checks less than $5.00 may be reinvested back
into the account and the distribution option changed to automatic payment of
distributions in additional shares of the Portfolio.
Each shareholder of the Flexible Income, Tax-Exempt and Income Plus
Portfolios whose dividends are automatically paid in additional shares will
receive quarterly statements that confirm the dividend transactions during the
period, unless the shareholder elects to receive confirmation at the time of
each transaction.
Further information concerning dividends and distributions may be obtained
by calling Customer Service at (800) 851-9777. Shareholders may change their
dividend or distribution options any time before the record date of any dividend
or distribution by calling Customer Service or writing to Idex Investor
Services, Inc., P.O. Box 9015, Clearwater, FL 34618-9015.
TAX INFORMATION
Each Portfolio is treated as a separate entity for federal tax purposes. As
a result, each Portfolio must separately meet, and intends to meet, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as amended,
for treatment as a regulated investment company so as to avoid paying federal
income tax on that portion of its investment company taxable income (consisting
generally of net investment income and net short-term capital gain) and net
capital gain distributed to its shareholders. Dividends paid from a Portfolio's
investment company taxable income are taxable to its shareholders (other than
those exempt from income tax) as ordinary income, whether received in cash or in
additional shares, to the extent of the Portfolio's earnings and profits.
Distributions paid from a Portfolio's net capital gain, when designated as such
by the Portfolio, are taxable to shareholders (other than those exempt from
income tax) as long-term capital gains, whether received in cash or in
additional shares and regardless of how long shareholders have held their
shares. If a Portfolio declares a dividend or other distribution in October,
November or December payable to shareholders of record on a specified date in
such a month, and if the Portfolio pays the distribution to the shareholders
during January of the following year, then each shareholder will be treated as
receiving the distribution on December 31 of that year, and the Portfolio will
be treated as having paid the distribution on that date.
As a general rule, a shareholder's gain or loss on a sale (redemption or
exchange out of a Portfolio) of his or her shares will be a long-term capital
gain or loss if the shares
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<PAGE> 39
have been held for more than one year and a short-term capital gain or loss if
held for one year or less. Individuals are subject to a maximum federal tax rate
of 28% on net capital gain. The maximum rate of 28% applies to both capital gain
distributions from the Portfolio to individual shareholders and to net long-term
capital gains on the disposition of shares by individual shareholders. For most
accounts (other than retirement plan accounts which will receive Form 1099-B),
the Transfer Agent will provide basis information incorporated within Form
1099-B on the gain or loss on sale of Portfolio shares based upon the Internal
Revenue Service single category average cost method. Shareholders are encouraged
to keep regular account statements to use in conjunction with average cost
information (if received) in order to determine gain or loss on the sale of
Portfolio shares for tax purposes.
To the extent that dividends paid by a Portfolio are attributable to
qualifying dividend income received from U.S. corporations, dividends paid by
the Portfolio will qualify for the dividends-received deduction for
corporations. However, dividends received by a corporate shareholder and
deducted by it pursuant to the dividends-received deduction are subject
indirectly to the alternative minimum tax.
If shares of a Portfolio are redeemed at a loss after being held for six
months or less, the loss will be disallowed to the extent of any exempt-interest
dividends received with respect to those shares; any portion of the loss that is
allowed will be treated as long-term capital loss to the extent of any capital
gain distributions on those shares. It is anticipated that this situation could
only occur for shareholders in the Tax-Exempt Portfolio.
Generally, shareholders should be aware that if shares of a non-retirement
plan account are purchased on or shortly before the record date for a dividend
or other taxable distribution, the shareholder will pay full price for the
shares and receive some portion of the price back as a taxable distribution.
Generally a redemption of Portfolio shares will result in taxable gain or
loss to the redeeming shareholder, depending on whether the redemption proceeds
are more or less than the shareholder's adjusted basis for the redeemed shares
(which normally includes any sales charge paid on Class A shares). An exchange
of Portfolio shares for shares of any other IDEX portfolio or fund generally
will have similar tax consequences. However, special rules apply when a
shareholder (1) disposes of Class A shares through a redemption or exchange
within 90 days after his or her purchase thereof and (2) subsequently acquires
Class A shares of the Portfolio or another IDEX portfolio or fund on which an
initial sales charge normally is imposed, without paying a sales charge due to
the exchange privilege or 90-day reinvestment privilege. (See "Shareholders'
Manual -- How to Exchange Shares" and "Shareholders' Manual -- How to Redeem
Shares -- Reinvestment Privilege.") In these cases, any gain on the disposition
of the Class A shares would be increased, or loss decreased, by the amount of
the sales charge paid when those shares were acquired, and that amount will
increase the adjusted basis of the shares subsequently acquired. In addition, if
Portfolio shares are purchased (whether pursuant to the reinvestment privilege
or otherwise) within 30 days before or after redeeming other shares of the
Portfolio at a loss, that loss ("wash sale loss") will be deferred rather than
currently deductible, and thus will increase the basis of the newly purchased
shares. The Transfer Agent currently is able to calculate and track for
shareholders' wash sale adjustments, but is unable to adjust shareholders' basis
information for any applicable 90 day sales load deferral adjustment as
described above.
The Tax-Exempt Portfolio intends to continue to qualify to pay "exempt
interest" dividends which are distributions from that Portfolio's investment
income attributable to interest on Municipal Obligations, designated as such by
the Portfolio to its shareholders on a statement provided in January.
Exempt-interest dividends are generally treated as excludable from the gross
income of recipients for federal income tax purposes. (However, shareholders who
are "substantial users" or persons related to "substantial users" of certain
facilities financed by industrial development bonds may not exclude
exempt-interest dividends relating to those bonds.) Interest on indebtedness
incurred or continued to purchase or carry Tax-Exempt Portfolio shares is not
deductible to the extent attributable to exempt-interest dividends. Some
securities held by the Tax-Exempt Portfolio may be specified private activity
bonds the interest on which is a specific item of tax preference for purposes of
computing the federal alternative minimum tax for both individuals and
corporations. Therefore, to the extent the Tax-Exempt Portfolio receives income
from such securities, a portion of the dividends paid by the Tax-Exempt
Portfolio will be subject to the alternative minimum tax. In addition, for
certain corporate shareholders, all tax-exempt income, including all
exempt-interest dividends, to the extent not treated as an item of tax
preference, as discussed above, will be included in determining the
corporation's alternative minimum tax.
Shareholders of the Tax-Exempt Portfolio should note that they may, in
addition to receiving exempt-interest dividends, receive additional dividends
that are taxable as ordinary income or capital gains.
Up to 85% of social security and railroad retirement benefits may be
included in taxable income for a benefit recipient if the sum of his or her
adjusted gross income, income from tax-exempt sources such as exempt interest
dividends from the Tax-Exempt Portfolio, plus 50% of his or
34
<PAGE> 40
her benefits exceeds certain base amounts. Exempt interest
dividends from the Tax-Exempt Portfolio still are tax-exempt to the extent
described above; they are only included in the calculation of whether a
recipient's income exceeds established amounts.
In many states, shareholders are not subject to state income taxation on
distributions made by a registered investment company that were derived from
interest on direct obligations of the U.S. government (although dividends
derived from interest on obligations issued by agencies or instrumentalities of
the U.S., or interest earned on repurchase obligations secured by such
obligations or direct obligations of the U.S. may be subject to state income
taxation).
Statements as to the tax status of the dividends and other distributions
paid by a Portfolio are mailed annually. For most types of accounts, the
Transfer Agent will report the proceeds of redemptions to shareholders and the
Internal Revenue Service annually. Average cost basis information on
non-retirement plan account redemptions is not currently reported to the IRS.
Each Portfolio, except the Tax-Exempt Portfolio, is required to withhold
31% of all dividends, and each Portfolio, including the Tax-Exempt Portfolio, is
required to withhold 31% of capital gain distributions and redemption proceeds,
paid on behalf of any individuals and certain other noncorporate shareholders
who do not furnish the Portfolio with a correct taxpayer identification number.
Withholding from dividends and capital gain distributions also is required for
shareholders who otherwise are subject to backup withholding.
The foregoing is only a summary of some of the important federal tax
considerations under current tax law generally affecting each Portfolio and its
shareholders; see the Statement of Additional Information for further
discussion. Because there may be other federal, state or local tax
considerations applicable to a particular shareholder, shareholders are urged to
consult their own tax advisers.
- -----------------------------------------------------------------
MISCELLANEOUS INFORMATION
ORGANIZATION
Each Portfolio is a series of IDEX II Series Fund (the "Fund"), a
Massachusetts business trust that was formed by a Declaration of Trust dated
January 7, 1986 and whose operations are governed by a Restatement of
Declaration of Trust dated as of August 30, 1991 ("Declaration of Trust"), a
copy of which is on file with the Secretary of the Commonwealth of
Massachusetts. Prior to its organization as a series company, the name of the
Fund was IDEX II.
The Fund is managed by its Board of Trustees pursuant to the Declaration of
Trust. The Declaration of Trust permits the Board of Trustees to issue an
unlimited number of shares of beneficial interest in the Fund. The shares of
beneficial interest of each Portfolio are currently divided into three classes
in reliance on Rule 18f-3 of the 1940 Act, Class A, Class B and Class C. Each
class represents interests in the same assets of the Portfolio and differ as
follows: each class of shares has exclusive voting rights on matters pertaining
to its plan of distribution or any other matters appropriately limited to that
class; Class A shares are subject to an initial sales charge, or front-end load;
Class B shares are subject to a contingent deferred sales charge, or back-end
load, at a declining rate; Class C shares are subject to higher ongoing
distribution and service fees; each class may bear differing amounts of certain
class-specific expenses; and each class has a separate exchange privilege. The
Fund does not anticipate that there will be any conflicts between the interests
of holders of the different classes of shares of the same Portfolio by virtue of
those classes. On an ongoing basis, the Board of Trustees will consider whether
any such conflict exists and, if so, take appropriate action. Each share of a
series is entitled to equal voting, dividend, liquidation and redemption rights,
except that due to the differing expenses borne by the three classes, dividends
and liquidation proceeds of Class B and Class C shares are expected to be lower
than for Class A shares of the same Portfolio.
The Fund permits "Access Persons" as defined by Rule 17j-1 of the
Investment Company Act of 1940 to engage in personal securities transactions,
subject to the terms of the Code of Ethics and Insider Trading Policy (the
"Policy") which has been adopted by the Board of Trustees of the Fund pursuant
to Rule 17j-1 and other applicable laws. Pursuant to the Policy, Access Persons
generally must preclear all personal securities transactions prior to trading,
and are subject to certain prohibitions on personal trading.
The Fund does not intend to hold annual meetings of shareholders, unless
required to do so by the 1940 Act or by the Declaration of Trust. A meeting will
be called for the election of trustees upon the written request of holders of
10% of the outstanding shares of the Fund. Shareholders have neither preemptive
nor cumulative voting rights.
On August 7, 1992, in a tax-free reorganization, IDEX II Tax-Exempt
Portfolio acquired all of the assets and assumed all of the liabilities of AEGON
USA Tax-Exempt Portfolio in exchange for shares of IDEX II Tax-Exempt Portfolio
which were then distributed to the AEGON USA Tax-Exempt Portfolio shareholders,
and IDEX II Income Plus Portfolio acquired all of the assets and assumed all of
the liabilities of AEGON USA High Yield Portfolio in exchange for shares of IDEX
II Income Plus Portfolio which were then distributed to
35
<PAGE> 41
the AEGON USA High Yield Portfolio shareholders. All historical financial
information set forth in this Prospectus relates to the AEGON USA Tax-Exempt
Portfolio and the AEGON USA High Yield Portfolio prior to the date they were
reorganized into the IDEX II Tax-Exempt Portfolio and the IDEX II Income Plus
Portfolio, respectively. On August 21, 1992, in a tax-free reorganization, IDEX
II Growth Portfolio acquired all of the assets and assumed all of the
liabilities of AEGON USA Growth Portfolio and AEGON USA Capital Appreciation
Portfolio in exchange for shares of IDEX II Growth Portfolio which were then
distributed on a pro rata basis to the respective AEGON USA Growth Portfolio and
AEGON USA Capital Appreciation shareholders.
On October 1, 1993, in a tax-free reorganization, IDEX II Flexible Income
Portfolio acquired all of the assets and assumed all of the liabilities of IDEX
Total Income Trust in exchange for shares of IDEX II Flexible Income Portfolio
which were then distributed to the IDEX Total Income Trust shareholders. All
historical financial information in this Prospectus pertaining to IDEX II
Flexible Income Portfolio relates to IDEX Total Income Trust prior to the date
it was reorganized into that Portfolio.
CERTAIN LIABILITIES
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for acts or
obligations of the trust. The Declaration of Trust contains an express
disclaimer of shareholder liability for acts, obligations or affairs of the
Fund. The Declaration of Trust also provides for indemnification out of Fund
assets for all loss and expense of any shareholder held personally liable by
reason of being or having been a shareholder. Liability is limited to
circumstances in which the Fund itself would be unable to meet its obligations,
a possibility that the adviser believes is remote.
TRANSFER AGENT
Idex Investor Services, Inc., P.O. Box 9015, Clearwater, Florida
34618-9015, an affiliate of IMI and ISI, is the Fund's Transfer Agent,
withholding agent and dividend paying agent. All written correspondence relating
to a shareholder's account should be sent to the Transfer Agent.
CUSTODIAN
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, is custodian of the Fund's assets and serves as custodian or
trustee for qualified retirement plans and individual retirement plan accounts.
However, correspondence regarding a shareholder's account should be sent to the
Transfer Agent at the address shown above.
SHAREHOLDER INQUIRIES
Any inquiries by shareholders relating to a Portfolio or the Fund or
requests for forms for establishing or changing shareholder accounts or plans
should be made by calling Customer Service at (800) 851-9777 or writing the
Transfer Agent at P.O. Box 9015, Clearwater, Florida 34618-9015.
SHAREHOLDER REPORTS, PROSPECTUSES AND CONSOLIDATED STATEMENTS
The Fund sends annual and semi-annual reports and updated prospectuses to
shareholders. The annual reports contain audited financial statements. To reduce
costs, a shareholder who has more than one account in the Fund, each with the
same taxpayer identification number, will be sent only one copy (rather than
multiple copies) of certain shareholder mailings and will receive a consolidated
statement with respect to such accounts. Further, two or more shareholders may
elect to receive a consolidated statement and only one copy (rather than
multiple copies) of certain shareholder mailings for their accounts as long as
the shareholders have the same surname and address of record and each of the
affected shareholders so elects on the New Account Application or by written
request to the Transfer Agent. Additional copies of shareholder reports and
prospectuses may be obtained by calling Customer Service at (800) 851-9777.
- -----------------------------------------------------------------
SHAREHOLDERS' MANUAL
- -----------------------------------------------------------------
OPENING AN ACCOUNT
To open an account, complete and sign the New Account Application. Each
Portfolio currently offers three classes of shares. You can buy Class A, Class B
and Class C shares of a Portfolio in several ways which are described below.
Additional documentation may be required for corporations, associations and
certain fiduciaries. A special application is required for IDEX IRA's and other
retirement plans. If you have an account in another IDEX fund or portfolio, you
may open an account in a Portfolio of this Fund with the same features by
sending a written request to the Transfer Agent. If you have any questions or
need extra forms, please call Customer Service at (800) 851-9777 or write the
Transfer Agent.
TAX IDENTIFICATION NUMBER. To avoid being subject to a 31% federal
withholding tax on dividends, capital gain distributions and proceeds of
redemption, an individual or other non-exempt investor must furnish the Fund
with the investor's taxpayer identification number and certify in writing that
the number furnished is correct and that the investor is not subject to backup
withholding. The appropriate number may be furnished and certified on the
application to
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<PAGE> 42
purchase shares or on IRS Form W-9. To avoid the additional expense of
withholding taxes on dividends and other distributions, the Fund may
involuntarily redeem any accounts for which certified taxpayer identification
numbers have not been furnished within 60 days of the initial purchase of shares
in those accounts. Foreign shareholders ordinarily must recertify their foreign
status to the Transfer Agent every three years on IRS Form W-8.
- -----------------------------------------------------------------
HOW TO PURCHASE SHARES
Class A, Class B and Class C shares of a Portfolio may be purchased at the
public offering price through ISI or through dealers who have sales agreements
with ISI. WHEN PLACING PURCHASE ORDERS, INVESTORS SHOULD SPECIFY WHETHER THE
ORDER IS FOR CLASS A, CLASS B OR CLASS C SHARES OF A PORTFOLIO. Investments by
check should be payable in dollars and drawn on U.S. institutions. Ordinarily,
the minimum initial investment in the Portfolios, inclusive of the applicable
sales charge for Class A shares, is $500. Purchases through plans for regular
investment, such as the Automatic Investment Plan, payroll deduction plans or
comparable plans, ordinarily do not require a minimum initial investment.
Subsequent investments must ordinarily be at least $50. The minimum initial and
subsequent investment for military allotment programs and for shares purchased
along with other products offered by an affiliate of ISI is $10. A $15 service
charge will be charged (through a redemption of shares) when a check,
pre-authorized draft or an electronic transfer of monies through Automated
Clearing House ("ACH") (or other similar means of purchasing shares) is returned
or rejected by the paying bank because of insufficient or uncollected funds or
because of a stop payment order.
All orders to purchase shares are subject to acceptance by the Fund and are
not binding until so accepted, and are subject to ultimate collectibility of
funds. The Fund may decline to accept a purchase order when in the judgment of
management the acceptance of an order is not in the best interest of existing
shareholders. All orders are processed at the appropriate offering price based
on the net asset value of a Portfolio's shares next computed after receipt and
acceptance of the order. Purchases of shares generally must be settled within
three business days of receipt by the Fund of a complete purchase order.
Accordingly, the Fund must receive payment for shares within three business days
of receipt of a purchase order.
BY MAIL
Once an account is established, shareholders may purchase additional Class
A, Class B or Class C shares at any time by sending checks for subsequent
investments directly to the Transfer Agent:
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, FL 34618-9015
Make your check payable to IDEX Mutual Funds and indicate the class of
shares. Please note your account number on the check.
BY AUTOMATIC INVESTMENT PLAN
Shareholders may purchase either Class A, Class B or Class C shares through
an IDEX Automatic Investment Plan under which investments may be made
periodically by means of a pre-authorized charge on their bank accounts on
approximately the 5th and/or the 20th day of the month. The monies are
electronically transferred through ACH or through a pre-authorized draft. Such
transactions will be confirmed on the shareholder's bank statement as an ACH
debit or a pre-authorized withdrawal. The shareholder's quarterly IDEX statement
will reflect the shares so purchased. A shareholder may change the amount of the
shareholder's regular investment or discontinue investments under the Automatic
Investment Plan without penalty by calling Customer Service at (800) 851-9777 or
writing the Transfer Agent. A shareholder may also request that the amount of
his or her regular investment under the Automatic Investment Plan be
automatically increased monthly, quarterly, semi-annually or annually. The
periodic increases may be stated as a percentage of the automatic investment
amount or as a specified dollar amount. Shareholders may participate in an
Automatic Investment Plan by completing the appropriate section on the New
Account Application or by written request to the Transfer Agent. Forms for
establishing an Automatic Investment Plan may be obtained by calling Customer
Service or writing the Transfer Agent.
BY TELEPHONE
Once an account is established, shareholders may purchase additional Class
A, Class B or Class C shares by telephone request and make payment by means of a
pre-authorized charge on their bank accounts. The shareholder may elect this
additional purchase option on the New Account Application or by written request
to the Transfer Agent. Payments for telephone purchases are automatically
transferred from the shareholder's bank account to his or her IDEX account
through ACH on approximately the second bank business day after the purchase
request is effected. The purchase is confirmed on the shareholder's bank
statement as a pre-authorized charge or withdrawal. The share-
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<PAGE> 43
holder's IDEX confirmation will reflect the shares purchased. See "Other
Information -- Telephone Transactions" for further information relating to the
purchase of shares by telephone request.
PURCHASES THROUGH AUTHORIZED DEALERS
Purchase orders of at least $1,000 may be made by telephone by authorized
dealers ("confirmed purchases"). Confirmed purchases can be paid to the Transfer
Agent by a check or Federal funds bank wire. Dealers who wish to pay for orders
with a Federal funds bank wire are referred to the wire instructions described
below. If the confirmed purchase is for a new account, registration instructions
including dealer certification of the shareholder's tax identification number
must be mailed to the Transfer Agent. If the confirmed purchase is for an
existing account, no additional documentation is needed. (It is the dealer's
responsibility to transmit such orders promptly.)
As described above, confirmed purchases of at least $1,000 can be paid by
dealers to the Transfer Agent through a Federal funds bank wire. Dealers that
pay for orders with a bank wire should instruct their bank to wire Federal funds
as follows:
NationsBank, N.A.
Tampa, Florida
ABA #063100277
DDA #3601194554
ATTN: Idex Investor Services, Inc.
Confirmed purchase order number(s)
Shareholder's account name(s)
There may be a charge by the dealer's bank for sending out a bank wire, but
the Transfer Agent currently does not charge for this convenience.
PUBLIC OFFERING PRICE AND NET ASSET VALUE
The public offering price of a Class A, Class B or Class C share of a
Portfolio is the net asset value per share next determined after receipt and
acceptance of the order plus, if Class A shares, the applicable sales charge, if
any. Net asset value is determined separately for each class of shares of a
Portfolio. The net asset value ("NAV") per share of a Portfolio's Class A, Class
B or Class C shares refers to the value of one share of that class and is
determined by the Fund's custodian once daily as of the close of the regular
session of business on the New York Stock Exchange (the "Exchange"), usually
4:00 p.m. Eastern time, on each day the Exchange is open, and at such other
times as the Fund may determine. The per share NAV of each class of shares of a
Portfolio is determined by dividing the total value of the Portfolio's
securities and other assets, less liabilities, allocable to that class by the
total number of shares outstanding of that class. In determining NAV, securities
and other portfolio investments are valued at market value. Investments for
which quotations are not readily available are valued at fair value determined
in good faith by the sub-advisers under the supervision of the Board of
Trustees. The different expenses borne by each class of shares will result in
different NAV's and dividends. The per share NAV of Class B and Class C shares
will generally be lower than the Class A shares of that Portfolio because of the
higher expenses borne by the Class B and Class C shares.
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<PAGE> 44
PURCHASING CLASS A SHARES
SALES CHARGES
The public offering price of a Class A share is equal to the net asset
value per share plus a sales charge determined in accordance with the following
schedules:
IDEX II AGGRESSIVE GROWTH PORTFOLIO -- CLASS A SHARES
IDEX II CAPITAL APPRECIATION PORTFOLIO -- CLASS A SHARES
IDEX II GLOBAL PORTFOLIO -- CLASS A SHARES
IDEX II GROWTH PORTFOLIO -- CLASS A SHARES
IDEX II EQUITY-INCOME PORTFOLIO -- CLASS A SHARES
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO -- CLASS A SHARES
IDEX II BALANCED PORTFOLIO -- CLASS A SHARES
<TABLE>
<CAPTION>
Sales Charge Reallowance Sales Charge
as % of Offering to Dealers as a % of as % of Amount
Amount of Purchase Price Offering Price Invested
---------------- -------------------- --------------
<S> <C> <C> <C>
Less than $50,000......................... 5.50% 4.75% 5.82%
$50,000 but less than $100,000............ 4.75% 4.00% 4.99%
$100,000 but less than $250,000........... 4.25% 3.75% 4.44%
$250,000 but less than $500,000........... 3.00% 2.50% 3.09%
$500,000 but less than $1,000,000......... 2.00% 1.75% 2.04%
$1,000,000 or more........................ 0.00% 0.25%* 0.00%
</TABLE>
* This amount is not a charge incurred by shareholders. ISI, at its own expense,
may make such a payment in accordance with its procedures as may be in effect
from time to time. ISI's procedures currently provide for a payment in the
amount shown.
IDEX II FLEXIBLE INCOME PORTFOLIO -- CLASS A SHARES
IDEX II INCOME PLUS PORTFOLIO -- CLASS A SHARES
IDEX II TAX-EXEMPT PORTFOLIO -- CLASS A SHARES
<TABLE>
<CAPTION>
Sales Charge Reallowance Sales Charge
as % of Offering to Dealers as a % of as % of Amount
Amount of Purchase Price Offering Price Invested
---------------- -------------------- --------------
<S> <C> <C> <C>
Less than $50,000......................... 4.75% 4.00% 4.99%
$50,000 but less than $100,000............ 4.00% 3.25% 4.17%
$100,000 but less than $250,000........... 3.25% 2.75% 3.36%
$250,000 but less than $500,000........... 2.25% 1.75% 2.30%
$500,000 but less than $1,000,000......... 1.25% 1.00% 1.27%
$1,000,000 or more........................ 0.00% 0.25%* 0.00%
</TABLE>
* This amount is not a charge incurred by shareholders. ISI, at its own expense,
may make such a payment in accordance with its procedures as may be in effect
from time to time. ISI's procedures currently provide for a payment in the
amount shown.
Each Portfolio receives the entire NAV of all of its shares sold. ISI
retains the sales charge from which it reallows discounts from the applicable
public offering price to dealers which are uniform for all dealers in the United
States and its territories. From time to time, ISI may reallow up to the full
applicable sales charge on Class A shares, as shown in the above tables, to
selected dealers who sell or are expected to sell significant amounts of shares
during specified time periods or who render designated training services. During
periods when substantially the entire sales charge is reallowed, such dealers
may be deemed to be underwriters as that term is defined in the Securities Act
of 1933, as amended. In addition, ISI from time to time provides noncash
compensation to dealers that employ registered representatives that sell a
minimum dollar amount of shares of funds in the IDEX Group of Funds. Such
noncash
39
<PAGE> 45
compensation is in the form of merchandise and attendance by registered
representatives at seminars conducted by ISI, including lodging and travel
expenses. ISI may also pay amounts equal to the applicable reallowance, as shown
in the above tables, to selected banks and other financial institutions to
compensate such institutions for their services in connection with the purchase
of Class A shares of a Portfolio and servicing of shareholder accounts. In
addition, ISI may pay fees from its own funds to certain dealers and financial
institutions whose clients maintain significant account balances in one or more
IDEX portfolios or funds to compensate such dealers and financial institutions
for rendering administrative and shareholder services.
The above sales charge schedules are applicable to purchases of Class A
shares of a Portfolio by any "purchaser" which includes: (i) an individual, (ii)
an individual, his or her spouse and children under the age of 21, and (iii) a
trustee or other fiduciary of a single trust estate or single fiduciary account
(including pension, profit-sharing and other employee benefit trusts qualified
under Section 401 of the Internal Revenue Code of 1986 ("Code")) although more
than one beneficiary is involved.
REDUCED SALES CHARGE PLANS FOR CLASS A SHARES
RIGHT OF ACCUMULATION
The sales charges described above also apply to current purchases of Class
A shares of a Portfolio by a purchaser, as defined above, where the aggregate
value of Class A shares of a Portfolio plus the value of certain shares of other
IDEX portfolios or funds held by the shareholder, as determined at their
respective NAVs at the time of the current purchase of Class A shares, amounts
to more than the specified amounts in the sales charge schedules, provided ISI
or the Transfer Agent is notified by such investor or the investor's dealer that
such purchase is made under the Right of Accumulation privilege. THE FOREGOING
RIGHT OF ACCUMULATION APPLIES ONLY TO CLASS A SHARES OF A PORTFOLIO AND OTHER
FUNDS OR PORTFOLIOS IN THE IDEX GROUP ON WHICH AN INITIAL SALES CHARGE IS
IMPOSED.
LETTER OF INTENTION
The above sales charges are also applicable to the total value of purchases
of Class A shares of a Portfolio (excluding any dividends and capital gain
distributions received in additional shares) made by a purchaser, as defined
above, pursuant to a Letter of Intention ("LOI") to invest a certain amount
within a 13-month period. AN LOI WILL APPLY ONLY TO CLASS A SHARES OF A
PORTFOLIO, AND TO OTHER FUNDS OR PORTFOLIOS IN THE IDEX GROUP ON WHICH AN
INITIAL SALES CHARGE IS IMPOSED. THE VALUE OF CLASS B OR CLASS C SHARES OF ANY
PORTFOLIO OF THE FUND WILL NOT BE COUNTED TOWARD THE FULFILLMENT OF AN LOI.
Subject to the terms of escrow described below, each purchase made under an LOI
will be made at the current public offering price applicable to the full amount
covered by the LOI. In the event of a change in the sales charges set forth
above, any purchases made under an existing LOI after the effective date of the
change will be subject to the revised sales charge. Should the amount actually
purchased during the 13-month period be more or less than that indicated in the
LOI, an adjustment in the sales charge will be made. A purchase not made
pursuant to an LOI may be included thereunder if the LOI is filed within 90 days
of such purchase and the 13-month period will commence on the date of such
purchase. Any shareholder also may obtain the reduced sales charge by including
the value (at the NAV) of all of his or her Class A shares in a Portfolio,
together with shares of other IDEX funds or portfolios on which an initial sales
charge is imposed, held of record as of the date of his or her LOI as a credit
toward determining the applicable scale of sales charges for the shares to be
purchased under the LOI. If the total purchases made under an LOI plus any
credit under the Right of Accumulation described above, are large enough to
qualify for a lower sales charge category than specified in the LOI, all
transactions will be recomputed on the expiration date of the LOI to effect the
lower sales charge.
An LOI authorizes the Transfer Agent to escrow Class A shares having a
purchase price of 5% of the minimum dollar amount specified in the LOI. All
dividends and capital gain distributions on shares held in escrow will be paid
in additional shares unless the shareholder elects another distribution option
on the New Account Application or by written request to the Transfer Agent. When
the minimum investment specified in the LOI is completed, the shares held in
escrow will remain on deposit unless the shareholder requests a certificate for
such shares. Shares held in escrow can be redeemed by the Transfer Agent to
retroactively adjust upward the sales charge which results when the amount
invested differs from the amount intended to be invested. In any retroactive
reduction in sales charge, the amount of the reduction will be invested in
additional shares at NAV, or remitted to the shareholder if otherwise requested
by the shareholder.
An LOI is not a binding obligation upon the investor to purchase, nor a
Portfolio to sell, the full amount indicated. To insure that all purchases will
receive a quantity discount, the shareholder or the shareholder's dealer should
notify the Fund or Transfer Agent that an LOI is in effect at the time an
initial investment in shares is made. Forms and other information concerning
LOIs may be obtained by calling Customer Service or writing the Transfer Agent.
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<PAGE> 46
CERTAIN GROUPS
An individual who is a member of a qualified group may purchase Class A
shares of a Portfolio at the reduced sales charge which ISI anticipates will be
applicable to the group as a whole within a specified period. The applicable
sales charge is determined by ISI by taking into account the anticipated
aggregate amount of purchases by members of the group of Class A shares of a
Portfolio and of all other IDEX funds or portfolios available for sale to the
public on which an initial sales charge is imposed. A "qualified group" is one
which (i) has been in existence for more than six months, (ii) has a purpose
other than to acquire shares of the Portfolio or similar investments (e.g.,
investment clubs), and (iii) satisfies uniform criteria which allows ISI and/or
other dealers offering Portfolio shares to realize economies of scale in
distributing such shares. A qualified group does not include one whose sole
organizational nexus, for example, is that its participants are credit card
holders of the same institution. Pension or other employee benefit plan
participants may qualify for group purchases. The Fund reserves the right to
modify this privilege at any time. Further information about qualifying groups
may be obtained by calling Customer Service at (800) 851-9777.
CERTAIN PURCHASES
Class A shares of a Portfolio may be sold at NAV per share without a sales
charge, if such shares are purchased for investment purposes and may not be
resold except to the Fund, to: (a) current or former trustees, trustees emeriti,
directors, officers, full-time employees or sales representatives of the Fund,
IMI, Janus Capital, ISI, AEGON Management, Alger Management, Luther King, Dean
Investment or of any of their affiliates; (b) directors, officers, full-time
employees and sales representatives of any dealer having a sales agreement with
ISI; (c) any trust, pension, profit-sharing or other benefit plan for any of the
foregoing persons; (d) any members of the family (e.g., spouse, children,
siblings, parents and parents-in-law) of any of the foregoing persons; or (e)
IMI, Janus Capital, ISI, AEGON Management, Alger Management, Luther King, Dean
Investment or any of their affiliates. Any person who was eligible to purchase
Class A shares of a Portfolio at NAV pursuant to (a) through (e) above, who
subsequently becomes ineligible may continue to purchase Class A shares of the
Portfolio at NAV for accounts opened prior to such ineligibility. Any person
eligible to purchase shares pursuant to (a) through (e) above is restricted to
the purchase of Class A shares only. The Fund reserves the right to modify or
eliminate this privilege at any time.
Class A shares of a Portfolio may also be sold at NAV per share without a
sales charge to "wrap" accounts for the benefit of clients of certain
broker-dealers, financial institutions or financial planners, who have entered
into arrangements with the Fund or ISI.
PURCHASING CLASS B SHARES
The public offering price of Class B shares of a Portfolio is the net asset
value per share. Class B shares are subject to ongoing service and distribution
fees at an annual rate of up to 1.00% of the average daily net assets of that
Portfolio's Class B shares. Class B investors enjoy the benefit of permitting
all of the investor's dollars to work from the time the investment is made.
Class B shares which are redeemed within six years of purchase are subject to a
contingent deferred sales charge at the rates set forth in the table below
charged as a percentage of the dollar amount subject thereto. The charge is
assessed on an amount equal to the lesser of the then current market value or
the original cost of the shares being redeemed. Accordingly, no sales charge is
imposed on increases in net asset value above the initial purchase price. In
addition, no charge is assessed on shares acquired from reinvestment of
dividends or capital gains distributions.
In the case of the IDEX II Growth, Global, Balanced, Capital Appreciation,
Aggressive Growth, Equity-Income and Tactical Asset Allocation Portfolios, ISI
compensates dealers for sales of Class B shares at the time of sale at a
commission rate of 4.00% of the amount of Class B shares purchased up to
$250,000, and 2.50% of the amount of Class B shares purchased in excess of
$250,000, and up to $500,000. In the case of the IDEX II Flexible Income, Tax-
Exempt and Income Plus Portfolios, ISI compensates dealers for sales of Class B
shares at the time of sale at a commission rate of 3.00% of the amount of Class
B shares purchased up to $250,000, and 2.00% of the amount of Class B shares
purchased in excess of $250,000, and up to $500,000. ORDERS FOR CLASS B SHARES
OF $500,000 OR MORE WILL BE DECLINED. Dealers will begin earning an annual
service fee of up to 0.25% of the average daily net assets of a Portfolio's
Class B (based on Class B shares purchased and retained by the dealer's
customers) shares beginning in the thirteenth month following a sale, which will
be payable after the end of each calendar quarter thereafter. ISI is compensated
by each Portfolio for services as distributor and principal underwriter for
Class B shares of each Portfolio.
The amount of the contingent deferred sales charge, if any, varies
depending on the number of years from the time of payment for the purchase of
Class B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the purchase
of shares, all payments during a month are
41
<PAGE> 47
aggregated and deemed to have been made on the last day
of the month.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE
OF DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CHARGE
-------------------------------- --------------------
<S> <C>
First........................... 5%
Second.......................... 4%
Third........................... 3%
Fourth.......................... 2%
Fifth and Sixth................. 1%
Seventh and later............... 0%
</TABLE>
The following example will illustrate the operation of the contingent
deferred sales charge. Assume that an investor makes a single purchase of
$10,000 of a Portfolio's Class B shares and that 16 months later the value of
the shares has grown by $1,000 through reinvested dividends and by an additional
$1,000 in appreciation to a total of $12,000. If the investor were then to
redeem the entire $12,000 in share value, the contingent deferred sales charge
would be payable only with respect to $10,000 because neither the $1,000 of
reinvested dividends nor the $1,000 of share appreciation is subject to the
charge. The charge would be at the rate of 4% ($400) because it was imposed
during in the second year after the purchase was made.
In determining whether a contingent deferred sales charge is applicable to
a redemption, the calculation is determined in the manner that results in the
lowest possible rate being charged. Therefore, it is assumed that the redemption
is first, of any Class B shares in the shareholder's Portfolio account that are
not subject to a contingent deferred sales charge as a result of one of the
waiver provisions described below; second, of Class B shares held for at least
six years or acquired pursuant to reinvestment of dividends or distributions;
and third, of Class B shares held longest during the six-year period.
The contingent deferred sales charge is waived on redemption of Class B
shares (i) following the death or total disability (as evidenced by a
determination of the federal Social Security Administration) of a shareholder,
but in the case of total disability, only as to shares owned at the time of the
initial determination of disability, and (ii) made pursuant to the Fund's
systematic withdrawal plan, but limited to 12% annually of the value of the
account on the date the systematic withdrawal plan is established. The
contingent deferred sales charge is also waived on redemption of Class B shares
as it relates to the reinvestment of redemption proceeds in shares of the same
class of a Portfolio within 90 days after redemption. See the Statement of
Additional Information for further discussion of waiver provisions.
The Fund may expand, restrict or otherwise modify the circumstances under
which the contingent deferred sales charge is waived; in such case, the Fund's
Prospectus and Statement of Additional Information will be updated and
shareholders will be notified of the change to the extent required by regulatory
requirements.
PURCHASING CLASS C SHARES
The public offering price of Class C shares of a Portfolio is the net asset
value per share. Since Class C shares are sold without an initial sales charge,
Class C investors enjoy the benefit of permitting all of their investment
dollars to work from the time the investments are made. Class C shares are
subject to ongoing service and distribution fees at an annual rate of up to
0.90% of the average daily net assets of that class, although the Tax-Exempt
Portfolio currently intends to limit the total of these fees to .60% of the
average daily net assets of the Tax-Exempt Portfolio's Class C shares. ISI
currently pays dealers for sales of Class C shares a distribution fee at an
annual rate not to exceed 0.90% of the average daily net assets attributable to
Class C shares sold by such broker. ISI is compensated by each Portfolio for
services as distributor and principal underwriter for Class C shares.
- -----------------------------------------------------------------
HOW TO EXCHANGE SHARES
EXCHANGE PRIVILEGE
CLASS A SHARES OF A PORTFOLIO MAY BE EXCHANGED ONLY FOR SHARES OF OTHER
FUNDS OR PORTFOLIOS IN THE IDEX GROUP ON WHICH AN INITIAL SALES CHARGE IS
IMPOSED. CLASS B AND CLASS C SHARES MAY BE EXCHANGED ONLY FOR CLASS B AND CLASS
C SHARES, RESPECTIVELY, OF OTHER PORTFOLIOS OF THE FUND. Class A or Class C
shares of a Portfolio may also be exchanged for shares of any of the three
portfolios of the Cash Equivalent Fund or the California Tax-Exempt Money Market
Fund, money market mutual funds managed by Kemper Financial Services, Inc. Class
B shares of a Portfolio may also be exchanged only for the Cash Equivalent Fund
Money Market Portfolio. (See "Money Market Fund Exchange Privilege.")
Class B shares are exchangeable on the basis of relative net asset value
per share without the payment of any contingent deferred sales charge that might
otherwise be due on the redemption of such Class B shares. For purposes of
computing the contingent deferred sales charge that may be payable upon a
disposition of the Class B shares acquired in the exchange, the holding period
for the previously owned Class B shares is "tacked" to the holding period of the
Class B shares acquired through the exchange.
Any IDEX exchange will be based on the respective NAV's of the shares
involved and may be made in amounts
42
<PAGE> 48
of $1,000 or more. If an exchange transaction is less than $1,000, a $5 service
charge may be deducted from the shareholder's account through a redemption of
Portfolio shares. There is no sales commission involved in an exchange of Class
A, Class B or Class C shares.
A shareholder will automatically have exchange privileges unless the
shareholder gives instructions to the contrary on the shareholder's New Account
Application or by written notice to the Transfer Agent. Exchange requests may be
made by either: 1) submitting written instructions to the Transfer Agent, or 2)
providing telephone exchange instructions to Customer Service. A shareholder may
make a full exchange to a new account by written request and in that case all
special account features such as an Automatic Investment Plan, Letter of
Intention or Systematic Withdrawal/Exchange Plan will be transferred to the new
account unless the Transfer Agent is otherwise instructed. A shareholder may
make a partial exchange to a new account by written request and in that case all
special account features except the Automatic Investment Plan and the Systematic
Withdrawal/Exchange Plan will be transferred to the new account unless the
Transfer Agent is otherwise instructed. Before making an exchange, the investor
should consider the investment objective of the fund or portfolio whose shares
are to be purchased, which can be found in the current prospectus of that fund
or portfolio. A prospectus for any of the IDEX funds may be obtained by calling
Customer Service at (800) 851-9777 or writing the Transfer Agent.
All exchange requests will be processed at the NAV per share next
determined after the request is received. The Fund reserves the right to
establish limitations as to the amounts or frequency of such exchanges, to
change the service charge for such exchanges and to impose such other
restrictions as may be necessary to assure that such exchanges do not
disadvantage the Fund and its shareholders. The Fund reserves the right to
reject any exchange request and to modify or terminate the exchange privilege at
any time. For further information concerning the exchange privilege, or to
obtain appropriate forms, please call Customer Service or write the Transfer
Agent.
TELEPHONE EXCHANGES
To place a telephone exchange request, call Customer Service at (800)
851-9777 before 4:00 p.m. Eastern Time. Shares acquired by telephone exchange
must be registered exactly as the account from which the exchange was made.
Certificated shares are not eligible for the telephone exchange privilege. See
"Other Information -- Telephone Transactions" for further information relating
to the telephone exchange privilege.
SYSTEMATIC EXCHANGES
A shareholder who owns Class A, Class B or Class C shares of a Portfolio
worth at least $10,000 at the current public offering price may elect on his or
her New Account Application or by written request to the Transfer Agent a
systematic exchange option providing for monthly exchanges of that class of
shares of the Portfolio for shares of the same class of shares of any other IDEX
fund or portfolio which is then offering shares for sale in the shareholder's
state of residence, and for Class A shares, on which an initial sales charge is
imposed. Shareholders may also systematically redeem shares of a Portfolio and
invest the proceeds in various portfolios of the Cash Equivalent Fund or the
California Tax-Exempt Money Market Fund (or in the case of Class B shares, the
Cash Equivalent Fund Money Market Portfolio only). (See "Money Market Fund
Exchange Privilege".) Shares acquired by systematic exchange must be registered
exactly as the account from which the exchange is made. Certificated shares are
not eligible for the systematic exchange privilege.
MONEY MARKET FUND EXCHANGE PRIVILEGE
Shareholders may redeem Class A or Class C shares of a Portfolio having a
value of at least $1,000 and automatically invest the proceeds in any of the
three portfolios of the Cash Equivalent Fund or the California Tax-Exempt Money
Market Fund (collectively, the "Money Market Funds"), which are separately
managed, diversified open-end money market mutual funds. Class B shares of a
Portfolio having a value of at least $1,000 may be exchanged into the Cash
Equivalent Fund Money Market Portfolio only. Shareholders may subsequently
redeem their shares of any of the Money Market Funds in minimum amounts of
$1,000 and automatically invest the proceeds of such redemption in the same
class of shares of the Portfolio at the then applicable NAV per share. If an
exchange transaction is less than $1,000, a $5 service charge may be deducted
from the shareholder's account through a redemption of Portfolio shares. The
Fund reserves the right to change this service charge or the amount of such
exchanges at any time. Shareholders may also elect a systematic exchange option
providing for monthly exchanges of shares between a Portfolio and any of the
Money Market Funds (or in the case of Class B shares, the Cash Equivalent Fund
Money Market Portfolio only).
Redemptions of shares in connection with Money Market Fund exchanges will
be effected as of the end of the day on which an exchange request is received,
if received before 4:00 p.m., Eastern time. This exchange privilege does not
constitute an offering or recommendation of Money Market Fund shares by the
Fund. Before making such an exchange, the investor should consider the
investment objective of the fund or portfolio whose shares are to be purchased,
which can be found in the current prospectus of that fund or portfo-
43
<PAGE> 49
lio. Shareholders will receive a Money Market Fund Prospectus with their initial
confirmation statement. Exchanges may be requested by writing the Transfer Agent
or calling Customer Service at (800) 851-9777.
Class B shares of any Portfolio exchanged for shares of the Cash Equivalent
Fund ("Exchanged B Shares") will not be subject to any contingent deferred sales
charge at the time of this exchange. Upon the redemption of the Cash Equivalent
Fund shares acquired with Exchanged B Shares, the contingent deferred sales
charge that was waived at the time of the exchange into the Cash Equivalent Fund
will be applied. (The contingent deferred sales charge assessed will be based on
the period that the Exchanged B Shares, but not the Cash Equivalent Fund shares,
were held.) If a shareholder who acquired the Cash Equivalent Fund shares with
Exchanged B Shares subsequently elects to exchange those Cash Equivalent Fund
shares for Class B shares of any Portfolio ("Reacquired B Shares"), such
exchange will be effected at the then applicable net asset value of the Cash
Equivalent Fund Shares and the Class B shares. Upon redemption of Reacquired B
Shares, a contingent deferred sales charge will be assessed based on the period
that both Exchanged and Reacquired B Shares, but not the Cash Equivalent Fund
shares, were held.
To the extent that the Cash Equivalent Fund shares were originally acquired
other than pursuant to an exchange of Fund shares, purchases of shares of any of
the Portfolios of the Fund with the proceeds of Money Market Fund shares will
not be considered to be made in accordance with the exchange privilege described
above. Accordingly, the purchase of shares of a Portfolio subsequent to the
redemption of Money Market Fund shares not originally acquired pursuant to an
exchange of Fund shares shall be subject to the otherwise applicable sales
charge which will be imposed in accordance with its terms.
- -----------------------------------------------------------------
HOW TO REDEEM SHARES
GENERAL INFORMATION
Shareholders may redeem their shares at any time at a price equal to the
NAV per share next determined following receipt of a valid redemption request by
the Transfer Agent. Payment of redemption proceeds will normally be made within
three business days of the Transfer Agent's receipt of a valid redemption
request, as described below. IF SHARES HAVE BEEN PURCHASED BY CHECK OR OTHER
MEANS THAT ARE SUBJECT TO FINAL COLLECTION, THE TRANSFER AGENT WILL NOT MAKE
REDEMPTION PROCEEDS AVAILABLE UNTIL SUCH SHARES HAVE BEEN OWNED FOR 15 DAYS, OR
MORE IN SOME CASES. Redemption proceeds will be sent by regular first class
mail, or for a $20 service charge, by overnight mail, if requested. A
shareholder can pay the $20 by check. Otherwise, the charge will be deducted
from the shareholder's account by a redemption of Portfolio shares. The Transfer
Agent may be unable to provide overnight mail service when mailing to addresses
other than street addresses or if this delivery is not available to a given
location.
The value of Portfolio shares on redemptions may be more or less than the
shareholder's cost or basis, depending upon the Portfolio's NAV at the time of
redemption. Shares will normally be redeemed for cash, except under unusual
circumstances as described in the Statement of Additional Information under
"Redemption of Shares." Redemption and repurchase of shares may be suspended or
payment postponed during any period in which the Exchange is closed (other than
on weekends or customary holidays) or trading on the Exchange is restricted, or
during periods of an emergency or other periods during which the SEC permits
such suspension.
AS DESCRIBED HEREIN UNDER "HOW TO PURCHASE SHARES -- PURCHASING CLASS B
SHARES", REDEMPTIONS OF CLASS B SHARES ARE SUBJECT TO A CONTINGENT DEFERRED
SALES CHARGE. The contingent deferred sales charge incurred upon redemption is
paid to the Distributor in reimbursement for distribution related expenses.
REDEMPTIONS REQUESTED IN WRITING
To redeem shares in writing, the shareholder must send a written redemption
request, together with any outstanding certificates representing the shares to
be redeemed, to:
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, Florida 34618-9015
The written request must be signed by the owner(s) of the account (or a
person authorized to act on behalf of such owner(s)) and should specify the name
of the Portfolio, the class of shares, the number of shares or dollars of that
class of shares being redeemed, the account number and the name(s) on the
account. Any outstanding certificates must be endorsed by the registered owner
or owners, with signatures guaranteed, if required. FOR YOUR PROTECTION,
SIGNATURE GUARANTEES ARE REQUIRED IF THE AMOUNT OF THE REDEMPTION IS MORE THAN
$50,000, IF THE REDEMPTION PROCEEDS ARE BEING MAILED TO AN ADDRESS OTHER THAN
THE ADDRESS OF RECORD OR IF ANY REDEMPTION BY CHECK IS REQUESTED WITHIN 30 DAYS
OF A CHANGE IN THE ACCOUNT REGISTRATION ADDRESS OF RECORD. All required
guarantees of signatures must be made by a national or state bank, a member firm
of a national stock exchange or any other institution which is an eligible
guarantor institution as defined by rules and regulations of the SEC. If shares
are held of record in the name of a corporation, partnership, trust or
fiduciary, evidence of the authority of the person seeking redemption is
required before the request for redemption is
44
<PAGE> 50
accepted, including redemptions under $50,000. For additional information, call
Customer Service at (800) 851-9777.
TELEPHONE AND EXPEDITED REDEMPTIONS
Shareholders may automatically redeem Portfolio shares by telephone and
have redemption proceeds paid by check unless instructions to the contrary are
indicated on the shareholder's New Account Application or by written request to
the Transfer Agent. These privileges are not available for newly purchased
shares (within the prior 15 days), retirement plan accounts or for shares
represented by certificate. The Fund reserves the right to modify or eliminate
these privileges without prior notice to shareholders at any time. If an account
has multiple owners, the Transfer Agent may rely on the instructions of any one
owner. See "Other Information -- Telephone Transactions" for further information
relating to the telephone redemption privilege.
TELEPHONE REDEMPTIONS. Shareholders may redeem Portfolio shares in amounts
up to $25,000 by telephone by calling Customer Service at (800) 851-9777 if this
privilege is in effect for your account. Redemption proceeds paid by check will
be made payable to the shareholder(s) of record and may only be sent to the
address of record for the account. A redemption requested by telephone and
payable by check will not be made if the address of record has been changed
within 30 days of the telephone redemption request. Only one telephone
redemption is permitted in each 30-day period.
EXPEDITED REDEMPTIONS. Shareholders may elect to have the privilege of
receiving redemption proceeds by ACH or Federal funds bank wire to a designated
bank account by completing the appropriate section of the New Account
Application. This privilege may be added to an existing account by mailing a
signature guaranteed request with complete bank information (usually a voided
check) to the Transfer Agent. Redemption proceeds of up to $25,000 may be
electronically transferred through ACH whereby the redemption proceeds are
credited directly to the shareholder's pre-designated bank account by the third
business day after the redemption request is effected. The Transfer Agent
currently does not charge for the convenience of paying redemptions
electronically through ACH.
If the expedited redemption privilege has been elected, redemption proceeds
up to $25,000 may also be electronically transferred to a pre-designated bank
account through a Federal funds bank wire for a $20 service charge. The charge
will be deducted from the shareholder's account through a redemption of
Portfolio shares. The minimum redemption amount for a Federal funds bank wire is
$1,000. The bank wire for the redemption proceeds normally will be transmitted
by the Transfer Agent to the designated bank account on the next bank business
day after the redemption request is effected. The bank routing and account
numbers for standing expedited redemption privileges must be provided on the New
Account Application or by written request to the Transfer Agent and may be
changed only by signature guaranteed instructions by all registered owners.
Expedited redemption requests may be made by calling Customer Service or by
writing the Transfer Agent. Shareholder accounts without standing expedited
redemption privileges can request redemptions to be sent by Federal funds bank
wire for a $20 charge to a U.S. bank account by submitting an original, written
request to the Transfer Agent with all Fund account owners' signatures
guaranteed. The request must specify the necessary bank routing and account
numbers and the names on the bank account.
REDEMPTIONS THROUGH AN AUTHORIZED DEALER
Shareholders may also request dealers to place confirmed redemption orders
(including those through the National Securities Clearing Corporation ("NSCC")
electronic order system). It is the responsibility of dealers to transmit such
orders promptly. For shareholders redeeming through dealers, payment will be
made directly to the dealer within three business days after receipt by the
Transfer Agent of the written settlement instructions and certificates for
shares, properly endorsed and with signatures guaranteed as described above.
Redemptions through NSCC are settled after review by the Transfer Agent for good
order.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders who own Class A, Class B or Class C shares of a Portfolio
worth at least $10,000 at the current public offering price may establish a
Systematic Withdrawal Plan ("SWP") providing for monthly, quarterly or annual
payments of at least $50. Under an SWP, sufficient Class A, Class B or Class C
shares of a Portfolio are in most instances redeemed to provide the amount of
the periodic payment. The maximum annual rate at which Class B shares may be
redeemed under an SWP, without imposition of the contingent deferred sales
charge otherwise applicable, is 12% of the value of the account on the date the
systematic withdrawal plan is established. Such payments may be paid through
ACH, whereby the redemption proceeds are credited directly to the shareholder's
bank account or, upon request, paid by a check from the Fund. Redemptions of
shares in connection with an SWP are normally effected approximately seven to
ten days prior to the first day of the month; however, the Fund cannot guarantee
that payment will be received by the date selected. Dividends and capital gain
distributions on shares in an account with an active SWP are usually paid in
additional shares only of the Portfolio. If the requested payments under an SWP
require redemption of more shares than have been credited through the payment of
dividends and capital gain distributions in additional shares, the shareholder's
original investment may be de-
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<PAGE> 51
pleted and ultimately exhausted. The amounts received by a shareholder under an
SWP cannot be considered an actual yield or income on investment since such
payments may include a return of the shareholder's original investment. It may
be disadvantageous to an investor to maintain an SWP concurrently with the
additional purchase of shares because a sales charge may apply to such
purchases. An SWP may be amended or terminated at any time upon written notice
to the Transfer Agent, and will be terminated when all shares in an account with
an active SWP have been redeemed or upon notification of the shareholder's
death. Forms for establishing an SWP may be obtained by calling Customer
Service.
REINVESTMENT PRIVILEGE
A shareholder who has redeemed Class A shares of a Portfolio may reinvest
in that class of shares of any of the Portfolios of the Fund or in the shares of
IDEX Fund, an amount not to exceed the amount of redemption proceeds, without a
sales commission. A shareholder who redeems Class B shares and incurs a
contingent deferred sales charge may reinvest up to the full amount redeemed at
net asset value at the time of the reinvestment in Class B shares of any of the
Portfolios of the Fund. The amount of any contingent deferred sales charge
previously imposed also will be reinvested. These reinvested shares will retain
their original cost and purchase date for purposes of calculating the contingent
deferred sales charge applicable to Class B shares acquired through the
reinvestment privilege. Also, a holder of Class B shares who has redeemed shares
may reinvest up to the full amount redeemed, less any applicable contingent
deferred sales charge that may have been imposed upon the redemption of such
shares, at net asset value in Class A shares of any of the Portfolios of the
Fund or in the shares of IDEX Fund without incurring the sales charge applicable
to Class A shares. To exercise this reinvestment privilege, the shareholder must
send a written request to the Transfer Agent within 90 days after the
redemption. The redemption proceeds will be reinvested on the basis of the NAV
of the shares in effect immediately after receipt of the written request. This
reinvestment privilege may be exercised only once by a shareholder upon
redemption of Class A or Class B shares of a Portfolio.
MINIMUM ACCOUNT BALANCE
The Fund may redeem shares in any account and pay the proceeds to the
shareholder if, due to redemptions, the account balance falls below $500, and
the account reflects no purchases of shares, other than through the payment of
dividends or capital gains in additional shares, during the sixty days prior to
the mailing of the notice of intent to redeem. Any applicable contingent
deferred sales charge will be deducted from the proceeds of this redemption. The
Fund will give the shareholder sixty days written notice of intent to redeem
prior to any such redemption, unless the account is less than 24 months old.
During the sixty-day period following mailing of the notice, the shareholder may
increase the value of his or her account through additional purchases and avoid
involuntary redemption.
REPURCHASE
For the convenience of shareholders, the Fund has authorized ISI to act as
its agent in the repurchase of Fund shares. The Fund reserves the right to
terminate this procedure at any time. Offers to sell shares to the Fund may be
communicated to ISI by wire or telephone from dealers for their customers. The
Fund's practice will be to repurchase shares offered to it at the NAV per share
determined as of the close of the regular session of business on the Exchange on
the day the offer for repurchase is received and accepted by the dealer, if the
offer is received by the dealer before the close of the regular session of
business on the Exchange and is received by ISI before the close of ISI's
business on that day. The dealer will be responsible for the prompt transmission
of orders.
Payment of the repurchase proceeds will be made in cash to the dealer
placing the order. Neither the Fund nor ISI charges any fee or commission upon
such repurchase which is then settled as an ordinary transaction with the dealer
delivering the shares repurchased. However, dealers may charge a fee. Payment
will normally be made within seven days after receipt of an order to repurchase
provided that the certificates, or stock powers if no certificates have been
issued, have been delivered to the Transfer Agent in proper form as described
above.
OTHER INFORMATION
RETIREMENT PLANS. Class A, Class B and Class C shares of a Portfolio may
be purchased in conjunction with individual retirement accounts, Simplified
Employee Pension Plans, 401(k) Plans, corporate and self-employed pension and
profit sharing plans and 403(b)(7) programs. These plans require the completion
of a separate application and a prototype agreement which are available without
charge upon request to the Transfer Agent. Ordinarily, the annual maintenance
fee for retirement plan accounts is $12 per account with a maximum of $24 per
tax identification number. However, this annual fee will be waived if the
Investors Fiduciary Trust Company ("IFTC") trusteed retirement plan account
balances combined per tax identification number are greater than $50,000 as of a
valuation date determined by the Transfer Agent. Accounts that are not
retirement plan accounts trusteed by IFTC are not counted toward the $50,000
limit. Additional information about retirement plans is included in the
Statement of Additional Information, and may also be obtained by calling
Customer Service at (800) 851-9777. With respect to plans intended to provide
46
<PAGE> 52
tax deferred benefits, investors may wish to consult with their own tax counsel
or advisors.
TELEPHONE TRANSACTIONS. As described above under "How to Purchase Shares,"
"How to Exchange Shares," and "How to Redeem Shares", shareholders may purchase,
exchange and/or redeem shares by telephone request. The registered
representative of record may also purchase, exchange and/or redeem shares on a
shareholder's behalf pursuant to a shareholder's instructions. The Fund, ISI and
the Transfer Agent will not be liable for complying with telephone instructions
and investors will bear the risk of any such loss. The Fund, ISI and/or the
Transfer Agent will employ reasonable procedures to determine that telephone
instructions are genuine. If the Fund, ISI and/or the Transfer Agent do not
employ such procedures, they may be liable for losses due to unauthorized or
fraudulent instructions. Such procedures may include, among others, requiring
forms of personal identification prior to acting upon telephone instructions,
providing written confirmation of such transactions and/or tape recording
telephone instructions.
CONFIRMATIONS, HISTORICAL STATEMENTS AND CERTIFICATES. After every account
transaction, except the automatic payment of dividends and distributions in
shares and periodic ACH purchases and/or redemptions, a shareholder will receive
a statement showing the details of the transaction, the number of shares held,
and a record of transactions since the beginning of the year. For shareholders
who request a historical transcript of their accounts, the Fund charges a fee
based upon the number of years researched, currently $10 per year researched
beyond the two most current years. The shareholder can pay the fee by check.
Otherwise, the charge will be deducted from the shareholder's account. The Fund
reserves the right to make other charges to investors to cover administrative
costs.
Shares purchased are ordinarily in non-certificated form. Certificates
representing shares owned will not be delivered to the shareholder unless
requested in writing from the Transfer Agent. No certificate will be issued for
fractional shares and no certificate will be issued to a shareholder who would
thereafter hold a certificate or certificates representing in the aggregate less
than 30 shares (except in connection with sales or transfers of shares
represented by certificates already outstanding). Certificates are issued only
in like registration to that of the account. Certificates may be returned to the
Transfer Agent at any time. No charge is made for this safekeeping service. If
certificates have been lost or stolen, notify the Transfer Agent immediately.
There may be a charge for cancelling and replacing certificates.
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<PAGE> 53
- --------------------------------------------------------------------------------
APPENDIX A
SECURITIES RATINGS
The ratings by Moody's Investors Service, Inc. ("Moody's") and Standard &
Poor's Ratings Group ("S&P") are a generally accepted measurement of credit
risk. However, they are subject to certain limitations. Ratings are generally
based upon historical events and do not necessarily reflect the future. In
addition, there is a period of time between the issuance of a rating and the
update of a rating, during which time a published rating may be inaccurate.
-----------------------------------------------------------------
A. KEY TO MOODY'S RATINGS
1. Description of Moody's Corporate, Utility and Government Bond Rating
Categories:
Aaa. Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation or protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa. Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba. Bonds which are Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B. Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa. Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca. Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C. Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Conditional Rating: Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals which begin when facilities are completed, or (d) payments to which some
other limiting condition attaches. Conditional rating denotes probable credit
stature upon completion of construction or elimination of basis of condition.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category. Such
modifiers are not considered in applying the Tax-Exempt Portfolio's operating
policy restrictions on corporate investments.
2. Description of Moody's Municipal Note Rating Categories:
The four ratings of Moody's for short-term notes are MIG1, MIG2, MIG3, AND
MIG4. MIG1 denotes "best-quality, enjoying strong protection from established
cash flow"; MIG2 denotes "high-quality" with "ample margins of protection"; MIG3
notes are of "favorable quality . . . but lacking the undeniable strength of the
preceding grades"; MIG4 notes are of "adequate quality, carrying specific risk
but having protection . . . and not distinctly or predominately speculative".
3. Description of Moody's Preferred Stock Rating Categories:
aaa. An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good
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<PAGE> 54
asset protection and the least risk of dividend impairment within the universe
of preferred stocks.
aa. An issue which is rated "aa" is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
a. An issue which is rated "a" is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the "aaa"
and "aa" classifications, earnings and asset protections are, nevertheless,
expected to be maintained at adequate levels.
baa. An issue which is rated "baa" is considered to be a medium grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
ba. An issue which is rated "ba" is considered to have speculative
elements and its future cannot be considered well assured. Earnings and asset
protection may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.
b. An issue which is rated "b" generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.
Moody's major rating categories for preferred stocks continue in descending
order as follows: Caa, Ca, C.
Note: Moody's may apply numerical modifiers identical in significance to
those described for bond rating categories to preferred stocks rated "aa"
through "b". Such modifiers are not considered in applying the Tax-Exempt
Portfolio's operating policy restrictions on corporate investments.
4. Description of Moody's Commercial Paper Rating Categories:
Moody's commercial paper ratings are opinions of the ability of issuers (or
related supporting institutions) to repay punctually promissory obligations not
having an original maturity in excess of 9 months. Moody's employs the following
3 designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers:
Issuers rated Prime-1 ("P-1") have a superior capacity for repayment of
short-term promissory obligations.
Issuers rated Prime-2 ("P-2") have a strong capacity for repayment of
short-term promissory obligations.
Issuers rated Prime-3 ("P-3") have an acceptable capacity for repayment of
short-term promissory obligations.
Issuers rated Not Prime do not fall within any of the Prime rating
categories.
5. Absence of Moody's Rating
Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities that are not rated
as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspense or withdrawal may occur; if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
-----------------------------------------------------------------
B. KEY TO S&P RATINGS
1. Description of S&P Bond Rating Categories:
AAA. Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA. Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debts in higher rated categories.
BBB. Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC, C. Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by the
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large uncertainties or major risk exposures to adverse conditions.
C1. The rating C1 is reserved for income bonds on which no interest is
being paid.
D. Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
Plus (+) or Minus (-). The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the bonds being rated and indicates that payment of
debt service requirements is largely or entirely dependent upon the successful
and timely completion of the project. This rating, however, while addressing
credit quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion.
2. Description of S&P Preferred Stock Rating Categories:
AAA. This is the highest rating that may be assigned by S&P to a preferred
stock issue and indicates an extremely strong capacity to pay the preferred
stock obligations.
AA. A preferred stock issue rated "AA" also qualifies as a high-quality
fixed-income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A. An issue rated "A" is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.
BBB. An issue rated "BBB" is regarded as backed by an adequate capacity to
pay the preferred stock obligations. Although it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.
BB, B, CCC, C, D. Preferred stock rated BB, B, CCC, CC, C and D are
regarded, on balance, as predominately speculative with respect to the issuer's
capacity to pay preferred stock obligations. BB indicates the lowest degree of
speculation and D the highest degree of speculation. While such issues will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposure to adverse conditions.
Plus (+) or Minus (-). The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
3. Description of S&P's Commercial Paper Rating Categories:
An S&P Commercial Paper Rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded into four categories, ranging for "A" for the highest quality
obligations to "D" for the lowest. The "A" rating category consists of the
following:
A. Issues assigned to the highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are further
refined with the designation 1, 2 and 3 to indicate the relative degree of
safety.
A-1. This designation indicates that the degree of safety regarding timely
payment is very strong.
A-2. Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as overwhelming as for
issues designated "A-1".
A-3. Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
4. Absence of S&P Rating:
"NR" indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that S&P does not rate a
particular type of obligation as a matter of policy.
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IDEX II FLEXIBLE INCOME PORTFOLIO
SECURITIES HOLDINGS BY RATING CATEGORY
At March 31, 1995, the percentage of securities holdings of the Flexible
Income Portfolio, by rating category based upon a weighted average by market
value was:
Bonds -- Standard & Poor's Rating
<TABLE>
<S> <C>
AAA................................. 14.17%
AA.................................. 2.47
AA-................................. 0.99
A+.................................. 6.90
A-.................................. 2.29
BBB................................. 8.49
BBB-................................ 23.70
BB+................................. 2.49
BB.................................. 0.79
BB-................................. 2.33
B+.................................. 2.23
B................................... 6.87
B-.................................. 9.05
CCC................................. 2.48
C................................... 1.67
Nonrated............................ 6.44
Non-Convertible Preferred Stocks.... 3.37
Convertible Preferred Stocks........
Short Term Cash and Other Assets in
Excess of Liabilities............. 3.27
------
TOTAL............................... 100.00%
</TABLE>
IDEX II INCOME PLUS PORTFOLIO
SECURITIES HOLDINGS BY RATING CATEGORY
At March 31, 1995, the percentage of securities holdings of the Income Plus
Portfolio, by rating category based upon a weighted average by market value was:
Bonds -- Standard & Poor's Rating
<TABLE>
<S> <C>
AA-................................. 2.76%
A................................... 1.82
BBB+................................ 6.92
BBB................................. 17.28
BBB-................................ 28.53
BB+................................. 1.72
BB.................................. 4.14
BB-................................. 1.50
B+.................................. 11.18
B................................... 14.96
B-.................................. 0.43
Non-Convertible Preferred Stocks.... 0.49
Short Term Cash and Other
Assets in Excess of Liabilities... 8.27
------
TOTAL............................... 100.00%
</TABLE>
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IDEX II AGGRESSIVE GROWTH PORTFOLIO
IDEX II CAPITAL APPRECIATION PORTFOLIO
IDEX II GLOBAL PORTFOLIO
IDEX II GROWTH PORTFOLIO
IDEX II EQUITY-INCOME PORTFOLIO
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
IDEX II BALANCED PORTFOLIO
IDEX II FLEXIBLE INCOME PORTFOLIO
IDEX II INCOME PLUS PORTFOLIO
IDEX II TAX-EXEMPT PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
October 1, 1995
IDEX II SERIES FUND
201 Highland Avenue
Largo, Florida 34640
Shareholder Services (800) 851-9777
IDEX II Aggressive Growth Portfolio, IDEX II Capital Appreciation
Portfolio, IDEX II Global Portfolio, IDEX II Growth Portfolio, IDEX II
Equity-Income Portfolio, IDEX II Tactical Asset Allocation Portfolio, IDEX II
Balanced Portfolio, IDEX II Flexible Income Portfolio, IDEX II Income Plus
Portfolio (formerly known as IDEX II High Yield Portfolio) and IDEX II
Tax-Exempt Portfolio (each a "Portfolio" and collectively, the "Portfolios") are
series of IDEX II Series Fund (the "Fund"), an open-end management investment
company that offers a selection of investment portfolios. All Portfolios other
than the Capital Appreciation Portfolio are diversified, while the Capital
Appreciation Portfolio is nondiversified. IDEX II Aggressive Growth Portfolio
seeks long-term capital appreciation. IDEX II 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 which will
normally have an average market capitalization between $1 billion and $5
billion. IDEX II Global Portfolio seeks long-term growth of capital in a manner
consistent with preservation of capital, primarily through investments in common
stocks of foreign and domestic issuers. IDEX II Growth Portfolio seeks only
growth of capital. IDEX II Equity-Income Portfolio seeks to provide current
income, long-term growth of income and capital appreciation. IDEX II Tactical
Asset Allocation Portfolio seeks preservation of capital and competitive
investment returns. IDEX II Balanced Portfolio seeks long-term capital growth,
consistent with preservation of capital and balanced by current income. IDEX II
Flexible Income Portfolio seeks to obtain maximum total return for its
shareholders, consistent with preservation of capital, by actively managing a
portfolio of income-producing securities. IDEX II Income Plus Portfolio seeks to
provide as high a level of current income as is consistent with the avoidance of
excessive risk. IDEX II Tax-Exempt Portfolio seeks to provide maximum current
interest income exempt from federal income tax in a manner consistent with
preservation of capital.
This Statement of Additional Information is not a Prospectus, and should be
read in conjunction with the Prospectus dated October 1, 1995 which may be
obtained free of charge by writing or calling the Fund at the above address or
telephone number. This Statement of Additional Information contains additional
and more detailed information about each Portfolio's operations and activities
than that set forth in the Prospectus.
ISF00065-10/95
<PAGE> 58
IDEX II SERIES FUND
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<S> <C>
Investment Objectives................................................................................... 1
Investment Restrictions, Policies and Practices......................................................... 1
Investment Restrictions of IDEX II Aggressive Growth Portfolio........................................ 1
Investment Restrictions of IDEX II Capital Appreciation Portfolio and IDEX II Balanced Portfolio...... 2
Investment Restrictions of IDEX II Global Portfolio................................................... 4
Investment Restrictions of IDEX II Growth Portfolio and IDEX II Flexible Income Portfolio............. 5
Investment Restrictions of IDEX II Equity-Income Portfolio............................................ 7
Investment Restrictions of IDEX II Tactical Asset Allocation Portfolio................................ 8
Investment Restrictions of IDEX II Income Plus Portfolio.............................................. 9
Investment Restrictions of IDEX II Tax-Exempt Portfolio............................................... 11
Other Policies and Practices of the Portfolios.......................................................... 12
Futures, Options and Other Derivative Instruments..................................................... 12
Futures Contracts.................................................................................. 12
Options on Futures Contracts....................................................................... 15
Options on Securities.............................................................................. 15
Options on Foreign Currencies...................................................................... 18
Forward Contracts.................................................................................. 19
Swaps and Swap-Related Products.................................................................... 20
Eurodollar Instruments............................................................................. 21
Special Investment Considerations and Risks........................................................ 21
Additional Risks of Options on Foreign Currencies, Forward Contracts and Foreign Instruments....... 22
Other Investment Companies............................................................................ 22
Zero Coupon, Pay-In-Kind and Step Coupon Securities................................................... 22
Income-Producing Securities........................................................................... 23
Lending of Portfolio Securities....................................................................... 24
Illiquid Securities................................................................................... 24
Repurchase and Reverse Repurchase Agreements.......................................................... 25
Pass-through Securities............................................................................... 25
High-Yield/High-Risk Bonds............................................................................ 26
Warrants and Rights................................................................................... 27
U.S. Government Securities............................................................................ 27
Portfolio Turnover.................................................................................... 27
Investment Advisory and Other Services.................................................................. 28
Growth, Global, Flexible Income, Balanced and Capital Appreciation Portfolios......................... 28
Tax-Exempt, Income Plus, Aggressive Growth, Equity-Income and Tactical Asset Allocation Portfolios.... 30
Additional Investment Advisory or Sub-Advisory Services Provided by the Sub-Advisers.................. 32
Distributor............................................................................................. 32
Administrative Services................................................................................. 33
Custodian, Transfer Agent and Other Affiliates.......................................................... 33
Portfolio Transactions and Brokerage.................................................................... 34
Trustees and Officers................................................................................... 36
Purchase of Shares...................................................................................... 39
Distribution Plans...................................................................................... 40
Net Asset Value Determination........................................................................... 41
Dividends and Other Distributions....................................................................... 43
Shareholder Accounts.................................................................................... 43
Retirement Plans........................................................................................ 43
</TABLE>
i
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<TABLE>
<S> <C>
Redemption of Shares.................................................................................... 44
Taxes................................................................................................... 44
Principal Shareholders.................................................................................. 46
Miscellaneous........................................................................................... 46
Organization.......................................................................................... 46
Shares of Beneficial Interest......................................................................... 47
Legal Counsel and Auditors............................................................................ 47
Registration Statement................................................................................ 47
Performance Information................................................................................. 47
Financial Statements.................................................................................... 50
Appendix A-Certain Securities In Which the Portfolios May Invest........................................ 51
</TABLE>
ii
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INVESTMENT OBJECTIVES
The Prospectus discusses the investment objective of each Portfolio, the
types of securities in which each Portfolio will invest and the policies and
practices of each Portfolio. The following discussion of Investment
Restrictions, Policies and Practices supplements that set forth in the
Prospectus.
There can be no assurance that a Portfolio will, in fact, achieve its
objective. A Portfolio's investment objective may be changed by the Board of
Trustees without shareholder approval. A change in the investment objective of a
Portfolio may result in the Portfolio having an investment objective different
from that which the shareholder deemed appropriate at the time of investment. A
Portfolio will not change its objective without 30 days prior notice to its
shareholders nor will it charge shareholders an exchange fee or redemption fee
after such notice and prior to the expiration of such 30 day notice period.
However, should a shareholder decide to redeem Portfolio shares because of a
change in the objective, the shareholder may realize a taxable gain or loss.
INVESTMENT RESTRICTIONS, POLICIES AND PRACTICES
As indicated in the Prospectus, each Portfolio is subject to certain
fundamental policies and restrictions which as such may not be changed without
shareholder approval. Shareholder approval would be the approval by the lesser
of (i) more than 50% of the outstanding voting securities of a Portfolio, or
(ii) 67% or more of the voting securities present at a meeting if the holders of
more than 50% of the outstanding voting securities of a Portfolio are present or
represented by proxy.
INVESTMENT RESTRICTIONS OF IDEX II AGGRESSIVE GROWTH PORTFOLIO
IDEX II Aggressive Growth Portfolio may not, as a matter of fundamental policy:
1. With respect to 75% of the Portfolio's total assets, purchase the
securities of any one issuer (other than government securities as defined in the
1940 Act) if immediately after and as a result of such purchase (a) the value of
the holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets, or (b) the Portfolio owns more than 10%
of the outstanding voting securities of any one class of securities of such
issuer;
2. Purchase any securities that would cause more than 25% of the value of
the Portfolio's total assets to be invested in the securities of issuers
conducting their principal business activities in the same industry; provided
that there shall be no limit on the purchase of U.S. government securities;
3. Purchase or sell real estate or real estate limited partnerships, except
that the Portfolio may purchase and sell securities secured by real estate,
mortgages or interests therein and securities that are issued by companies that
invest or deal in real estate;
4. Invest in commodities, except that the Portfolio may purchase or sell
stock index futures contracts and related options thereon if thereafter no more
than 5% of its total assets are invested in aggregate initial margin and
premiums;
5. Make loans to others, except through purchasing qualified debt
obligations, lending portfolio securities or entering into repurchase
agreements; and
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.
Furthermore, the Portfolio has adopted the following non-fundamental
investment restrictions which may be changed by the Board of Trustees of the
Fund without shareholder approval:
(A) The Portfolio may not invest in warrants, except that the Portfolio may
invest in warrants if, as a result, the investments (valued at the lower of cost
or market) would not exceed 5% of the value of the Portfolio's net assets, of
which not more than 2% of the Portfolio's net assets may be invested in warrants
not listed on a recognized domestic stock exchange. Warrants acquired by the
Portfolio as part of a unit or attached to securities at the time of acquisition
are not subject to this limitation;
(B) The Portfolio may not sell securities short or purchase securities on
margin, except that the Portfolio may obtain any short-term credit necessary for
the clearance of purchases and sales of securities. These restrictions shall not
apply to transactions involving selling securities "short against the box";
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(C) The Portfolio may not pledge, hypothecate, mortgage or otherwise
encumber more than 15% of the value of the Portfolio's total assets except in
connection with borrowings described in H below. These restrictions shall not
apply to transactions involving reverse repurchase agreements or the purchase of
securities subject to firm commitment agreements or on a when-issued basis;
(D) The Portfolio may not purchase securities, including securities of
issuers which are not readily marketable, of any issuer (other than U.S.
government agencies and instrumentalities or instruments guaranteed by an entity
with a record of more than three years' continuous operation, including that of
predecessors) with a record of less than three years' continuous operation
(including that of predecessors) if such purchase would cause the cost of the
Portfolio's investments in all such issuers to exceed 5% of the Portfolio's
total assets taken at market value at the time of such purchase;
(E) The Portfolio may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Portfolio may own
debt or equity securities of companies engaged in those businesses;
(F) The Portfolio may not invest in securities of other investment
companies, except as it may be acquired as part of a merger, consolidation,
reorganization, acquisition of assets or offer of exchange;
(G) The Portfolio may not purchase or retain the securities of any issuer
if any of the officers or directors of the Portfolio or Investment Adviser
individually owns more than 0.5% of the outstanding securities of the issuer and
together they own beneficially more than 0.5% of the securities;
(H) The Portfolio may not borrow money, except that the Portfolio may
borrow from banks for investment purposes as set forth in the Prospectus and may
also engage in reverse repurchase agreements. Immediately after any borrowing,
including reverse repurchase agreements, the Portfolio will maintain asset
coverage of not less than 300% with respect to all borrowings;
(I) The Portfolio may not invest in companies for the purpose of exercising
control or management;
(J) The Portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which the Board of Directors has made a determination as to liquidity, as
permitted under the 1940 Act; and
(K) The Portfolio may not issue senior securities, except that the
Portfolio may borrow from banks for investment purposes so long as the Portfolio
maintains the required coverage.
INVESTMENT RESTRICTIONS OF IDEX II CAPITAL APPRECIATION PORTFOLIO AND IDEX II
BALANCED PORTFOLIO
IDEX II Capital Appreciation Portfolio and IDEX II Balanced Portfolio may not,
as a matter of fundamental policy:
1. With respect to 75% of its total assets in the case of the Balanced
Portfolio and 50% of its total assets in the case of the Capital Appreciation
Portfolio, purchase the securities of any one issuer (except cash items and
"government securities" as defined under the Investment Company Act of 1940, as
amended (the "1940 Act")), if immediately after and as a result of such purchase
the value of the holdings of the Portfolio in the securities of such issuer
exceeds 5% of the value of such Portfolio's total assets or the Portfolio owns
more than 10% of the outstanding voting securities of such issuer. With respect
to the remaining 50% of the value of its total assets, IDEX II Capital
Appreciation Portfolio may invest in the securities of as few as two issuers;
2. Invest more than 25% of the value of its assets in any particular
industry (other than U.S. government securities);
3. Invest directly in real estate or interests in real estate; however, a
Portfolio may own debt or equity securities issued by companies engaged in those
businesses;
4. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this limitation
shall not prevent a Portfolio from purchasing or selling options, futures, swaps
and forward contracts or from investing in securities or other instruments
backed by physical commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or repurchase
agreements); and
6. Act as underwriter of securities issued by others, except to the extent
that a Portfolio may be deemed an underwriter in connection with the disposition
of portfolio securities of that Portfolio.
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Furthermore, the Capital Appreciation Portfolio and the Balanced Portfolio
have adopted the following non-fundamental investment restrictions which may be
changed by the Board of Trustees without shareholder approval:
(A) The Portfolio's investment in warrants, valued at the lower of cost or
market value may not exceed 5% of the value of its net assets. Included within
that amount, but not to exceed 2% of the value of its net assets, may be
warrants that are not listed on the New York or American Stock Exchange.
Warrants acquired by the Portfolio in units or attached to securities shall be
deemed to be without value for the purpose of monitoring this policy;
(B) The Portfolio may not: (i) enter into any futures contracts and related
options for purposes other than bona fide hedging transactions within the
meaning of Commodity Futures Trading Commission ("CFTC") regulations if the
aggregate initial margin and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions will exceed 5% of the fair market value of a
Portfolio's net assets, after taking into account unrealized profits and
unrealized losses on any such contracts it has entered into; and (ii) enter into
any futures contracts if the aggregate amount of such Portfolio's commitments
under outstanding futures contracts positions of that Portfolio would exceed the
market value of its total assets;
(C) The Portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short without the payment of any additional consideration therefore, and
provided that transactions in futures, options, swaps and forward contracts are
not deemed to constitute selling securities short;
(D) The Portfolio may not purchase securities on margin, except that the
Portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments and other deposits in
connection with transactions in futures, options, contracts, swaps, and forward
contracts, shall not be deemed to constitute purchasing securities on margin;
(E) The Portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger. If the
Portfolio invests in a money market fund, the investment adviser will reduce its
advisory fees by the amount of any investment advisory and administrative
services fees paid to the investment manager of the money market fund;
(F) The Portfolio may not mortgage or pledge any securities owned or held
by the Portfolio in amounts that exceed, in the aggregate, 15% of that
Portfolio's net asset value, provided that this limitation does not apply to
reverse repurchase agreements, deposits of assets to margin, guarantee positions
in futures, options, swaps or forward contracts or segregation of assets in
connection with such contracts;
(G) The Portfolio may not purchase securities, including securities of
issuers which are not readily marketable, of any issuer (other than U.S.
government agencies and instrumentalities or instruments guaranteed by an entity
with a record of more than three years' continuous operation, including that of
predecessors) with a record of less than three years' continuous operation
(including that of predecessors) if such purchase would cause the cost of the
Portfolio's investments in all such issuers to exceed 5% of the Portfolio's
total assets taken at market value at the time of such purchase;
(H) The Portfolio may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Portfolio may own
debt or equity securities of companies engaged in those businesses;
(I) The Portfolio may borrow money for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
Portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). If borrowings exceed 25% of the value of the Portfolio's total
assets by reason of a decline in net assets, the Portfolio will reduce its
borrowings within three business days to the extent necessary to comply with the
25% limitation. This policy shall not prohibit reverse repurchase agreements, or
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, and the segregation of assets in connection with such
contracts;
(J) The Portfolio may not purchase any security or enter into a repurchase
agreement, if as a result, more than 15% of its net assets would be invested in
repurchase agreements not entitling the holder to payment of principal and
interest within seven days and in securities that are illiquid by virtue of
legal or contractual restrictions on resale or the absence of a readily
available market. The Trustees, or the Portfolio's Investment Adviser or
Sub-Adviser acting pursuant to authority delegated by the Trustees, may
determine that a readily available market exists for securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933, or any successor
to such rule, and municipal lease obligations. Accordingly, such securities may
not be subject to the foregoing limitation;
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(K) The Portfolio may not invest in companies for the purpose of exercising
control or management;
(L) With respect to the Balanced Portfolio only, at least 25% of the assets
of that Portfolio will normally be invested in fixed-income senior securities,
which include corporate debt securities and preferred stock; and
(M) The Portfolio may not purchase or retain the securities of any issuer
if any of the officers or directors of the Portfolio or Investment Adviser
individually owns more than 0.5% of the outstanding securities of the issuer and
together they own beneficially more than 0.5% of the securities.
INVESTMENT RESTRICTIONS OF IDEX II GLOBAL PORTFOLIO
IDEX II Global Portfolio may not, as a matter of fundamental policy:
1. Own more than 10% of the outstanding voting securities of any one issuer
and, as to seventy-five percent (75%) of the value of its total assets, purchase
the securities of any one issuer (except cash items and "Government securities"
as defined under the Investment Company Act of 1940, as amended (the "1940
Act")), if immediately after and as a result of such purchase, the value of the
holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets;
2. Invest more than 25% of the value of its assets in any particular
industry (other than Government securities);
3. Invest directly in real estate or interests in real estate; however, the
Portfolio may own debt or equity securities issued by companies engaged in those
businesses;
4. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this shall not
prevent the Portfolio from purchasing or selling options, futures, swaps and
forward contracts or from investing in securities or other instruments backed by
physical commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements); and
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.
Furthermore, the Global Portfolio has adopted the following non-fundamental
investment restrictions which may be changed by the Board of Trustees without
shareholder approval:
(A) The Portfolio's investments in warrants, valued at the lower of cost or
market, may not exceed 5% of the value of its net assets. Included within that
amount, but not to exceed 2% of the value of the Portfolio's net assets, may be
warrants that are not listed on the New York or American Stock Exchange.
Warrants acquired by the Portfolio in units or attached to securities shall be
deemed to be without value;
(B) The Portfolio may not: (i) enter into any futures contracts or options
on futures contracts for purposes other than bona fide hedging transactions
within the meaning of Commodity Futures Commission regulations if the aggregate
initial margin deposits and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions would exceed 5% of the fair market value of the
Portfolio's net assets, after taking into account unrealized profits and losses
on such contracts it has entered into; and (ii) enter into any futures contracts
or options on futures contracts if the aggregate amount of the Portfolio's
commitments under outstanding futures contracts positions and options on futures
contracts would exceed the market value of its total assets;
(C) The Portfolio may not sell securities short, unless it owns or has the
right, without the payment of any additional compensation, to obtain securities
equivalent in kind and amount to the securities sold short, and provided that
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(D) The Portfolio may not purchase securities on margin, except that the
Portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments and other deposits in
connection with transactions in options, futures, swaps and forward contracts
shall not be deemed to constitute purchasing securities on margin;
(E) The Portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end
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investment companies. Limitations (i) and (ii) do not apply to money market
funds or to securities received as dividends, through offers of exchange, or as
a result of a consolidation, merger or other reorganization;
(F) The Portfolio may not mortgage or pledge any securities owned or held
by the Portfolio in amounts that exceed, in the aggregate, 15% of the
Portfolio's net assets, provided that this limitation does not apply to reverse
repurchase agreements or in the case of assets deposited to provide margin or
guarantee positions in options, futures contracts, swaps, forward contracts or
other derivative instruments or the segregation of assets in connection with
such transactions;
(G) The Portfolio may not purchase securities of any issuer (other than
U.S. Government agencies and instrumentalities or instruments guaranteed by an
entity with a record of more than three years' continuous operation, including
that of predecessors) with a record of less than three years' continuous
operation (including that of predecessors) if such purchase would cause the cost
of the Portfolio's investments in all such issuers to exceed 5% of the
Portfolio's total assets taken at market value at the time of such purchase;
(H) The Portfolio may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Portfolio may own
debt or equity securities of companies engaged in those businesses;
(I) The Portfolio may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25% of the value
of the Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that exceed 25% of the value of the
Portfolio's total assets by reason of a decline in net assets will be reduced
within three business days to the extent necessary to comply with the 25%
limitation. This policy shall not prohibit reverse repurchase agreements or
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contacts;
(J) The Portfolio may not invest more than 15% of its assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which
the Board of Trustees have made a determination as to liquidity, as permitted
under the 1940 Act; and
(K) The Portfolio may not invest in companies for the purpose of exercising
control or management.
INVESTMENT RESTRICTIONS OF IDEX II GROWTH PORTFOLIO AND IDEX II FLEXIBLE INCOME
PORTFOLIO
IDEX II Growth Portfolio and IDEX II Flexible Income Portfolio may not, as a
matter of fundamental policy:
1. With respect to 75% of the Portfolio's total assets, purchase the
securities of any one issuer (other than cash items and "Government securities"
as defined under the Investment Company Act of 1940, as amended (the "1940
Act")), if immediately after and as a result of such purchase (a) the value of
the holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets, or (b) the Portfolio owns more than 10%
of the outstanding voting securities of such issuer;
2. Invest more than 25% of the value of its assets in any particular
industry (other than Government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the Portfolio from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the Portfolio may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as underwriter of securities issued by others, except to the extent
that it may be deemed an underwriter in connection with the disposition of
portfolio securities of the Portfolio; and
6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements).
Furthermore, the Growth Portfolio and the Flexible Income Portfolio have
adopted the following non-fundamental investment restrictions which may be
changed by the Board of Trustees without shareholder approval:
(A) The Portfolio may not: (i) enter into any futures contracts or options
on futures contracts for purposes other than bona fide hedging transactions
within the meaning of Commodity Futures Commission regulations if the aggregate
initial margin deposits and premiums required to establish positions in futures
contracts and related options that do not fall within
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the definition of bona fide hedging transactions would exceed 5% of the fair
market value of the Portfolio's net assets, after taking into account unrealized
profits and losses on such contracts it has entered into; and (ii) enter into
any futures contracts or options on futures contracts if the aggregate amount of
the Portfolio's commitments under outstanding futures contracts positions and
options on futures contracts would exceed the market value of its total assets;
(B) The Portfolio may not mortgage or pledge any securities owned or held
by the Portfolio in amounts that exceed, in the aggregate, 15% of the
Portfolio's net assets, provided that this limitation does not apply to reverse
repurchase agreements or in the case of assets deposited to provide margin or
guarantee positions in options, futures contracts, swaps, forward contracts or
other derivative instruments or the segregation of assets in connection with
such transactions;
(C) The Portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts, and other derivative instruments are not deemed to constitute
selling securities short;
(D) The Portfolio may not purchase securities on margin, except that the
Portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The Portfolio may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25% of the value
of the Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that exceed 25% of the value of the
Portfolio's total assets by reason of a decline in net assets will be reduced
within three business days to the extent necessary to comply with the 25%
limitation. This policy shall not prohibit reverse repurchase agreements or
deposits of assets to provide margin or guarantee positions in connection with
transactions in options, future contracts, swaps, forward contracts, and other
derivative instruments or the segregation of assets in connection with such
transactions;
(F) The Portfolio may not invest more than 15% of its assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any securities which the Board of
Trustees or the investment sub-adviser, as appropriate, has made a determination
of liquidity, as permitted under the 1940 Act;
(G) The Portfolio may not invest in companies for the purpose of exercising
control or management;
(H) The Portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Restrictions (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers to
exchange, or as a result of reorganization, consolidation, or merger. If the
Portfolio invests in a money market fund, the investment advisers will reduce
their advisory fees by the amount of any investment advisory or administrative
service fees paid to the investment manager of the money market fund;
(I) The Portfolio may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Portfolio may own
debt or equity securities of companies engaged in those businesses;
(J) The Portfolio may not purchase the securities of any issuer (other than
U.S. Government agencies and instrumentalities or instruments guaranteed by an
entity with a record of more than three years' continuous operation, including
that of predecessors) with a record of less than three years' continuous
operation (including that of predecessors) if such purchase would cause the
value of the Portfolio's investments in all such issuers to exceed 5% of the
Portfolio's total assets taken at market value at the time of such purchase; and
(K) The Portfolio may not invest in warrants valued at the lower of cost or
market value, if such value exceeds 5% of the Portfolio's net assets, provided
that no more than 2% of the Portfolio's net assets may be invested in warrants
which are not listed on the New York or American Stock Exchange. Warrants
acquired by the Portfolio in units or attached to securities may be deemed to be
without value.
In making all investments for the IDEX II Flexible Income Portfolio, the
sub-adviser will emphasize economic or financial factors or circumstances of the
issuer, rather than opportunities for short-term arbitrage.
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INVESTMENT RESTRICTIONS OF IDEX II EQUITY-INCOME PORTFOLIO
IDEX II Equity-Income Portfolio may not, as a matter of fundamental policy:
1. With respect to 75% of the Portfolio's total assets, purchase the
securities of any one issuer (other than government securities as defined in the
1940 Act) if immediately after and as a result of such purchase (a) the value of
the holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets, or (b) the Portfolio owns more than 10%
of the outstanding voting securities of such issuer;
2. Invest more than 25% of the Portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services, for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction. In addition, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances;
3. Purchase or sell real estate (but this shall not prevent the Portfolio
from investing in securities or other instruments backed by real estate,
including mortgage-backed securities, or securities of companies engaged in the
real estate business);
4. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Portfolio from investing in securities or other instruments backed by physical
commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper or debt securities); and
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.
Furthermore, the Equity-Income Portfolio has adopted the following
non-fundamental investment restrictions which may be changed by the Board of
Trustees of the Fund without shareholder approval:
(A) The Portfolio's investments in warrants valued at the lower of cost or
market, may not exceed 5% of the value of its net assets. Included within that
amount, but not to exceed 2% of the value of the Portfolio's net assets, may be
warrants that are not listed on the New York or American Stock Exchange.
Warrants acquired by the Portfolio in units or attached to securities shall be
deemed to be without value;
(B) The Portfolio may not mortgage or pledge any securities owned or held
by the Portfolio in amounts that exceed, in the aggregate, 15% of the
Portfolio's net assets, provided that this limitation does not apply in the case
of assets deposited to margin or guarantee positions in options, futures
contracts and options on futures contracts or placed in a segregated account in
connection with such contracts;
(C) The Portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(D) The Portfolio may not purchase securities on margin, except that the
Portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments and other deposits in
connection with transactions in options, futures, swaps and forward contracts
shall not be deemed to constitute purchasing securities on margin;
(E) The Portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(F) The Portfolio may not purchase securities, including securities of
issuers which are not readily marketable, of any issuer (other than U.S.
government agencies and instrumentalities or instruments guaranteed by an entity
with a record of more than three years' continuous operation, including that of
predecessors) with a record of less than three years' continuous operation
(including that of predecessors) if such purchase would cause the cost of the
Portfolio's investments in all such issuers to exceed 5% of the Portfolio's
total assets taken at market value at the time of such purchase;
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(G) The Portfolio may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Portfolio may own
debt or equity securities of companies engaged in those businesses;
(H) The Portfolio may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25% of the value
of the Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that exceed 25% of the value of the
Portfolio's total assets by reason of a decline in net assets will be reduced
within three business days to the extent necessary to comply with the 25%
limitation;
(I) The Portfolio may not invest more than 15% of its assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which
the Board of Trustees has made a determination as to liquidity, as permitted
under the 1940 Act;
(J) The Portfolio may not invest in companies for the purpose of exercising
control or management;
(K) The Portfolio may not issue senior securities, except as permitted by
the 1940 Act;
(L) The Portfolio may not invest in securities of foreign issuers
denominated in foreign currency and not publicly traded in the United States if
at the time of acquisition more than 10% of the Portfolio's total assets would
be invested in such securities; and
(M) The Portfolio may not purchase or retain the securities of any issuer
if any of the officers or directors of the Portfolio or Investment Adviser
individually owns more than 0.5% of the outstanding securities of the issuer and
together they own beneficially more than 0.5% of the securities.
INVESTMENT RESTRICTIONS OF IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
IDEX II Tactical Asset Allocation Portfolio may not, as a matter of fundamental
policy:
1. With respect to 75% of the Portfolio's total assets, purchase the
securities of any one issuer (other than government securities as defined in the
1940 Act) if immediately after and as a result of such purchase (a) the value of
the holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets, or (b) the Portfolio owns more than 10%
of the outstanding voting securities of such issuer;
2. Invest more than 25% of the Portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services, for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction. In addition, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, or of certificates of deposit and bankers acceptances;
3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this limitation shall not
prevent the Portfolio from investing in securities or other instruments backed
by physical commodities);
4. Purchase or sell real estate (but this shall not prevent the Portfolio
from investing in securities or other instruments backed by real estate,
including mortgage-backed securities, or securities of companies engaged in the
real estate business);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper or debt securities); and
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.
Furthermore, the Tactical Asset Allocation Portfolio has adopted the
following non-fundamental investment restrictions which may be changed by the
Board of Trustees of the Fund without shareholder approval:
(A) The Portfolio's investment in warrants valued at the lower of cost or
market, may not exceed 5% of the value of its net assets. Included within that
amount, but not to exceed 2% of the value of the Portfolio's net assets, may be
warrants that are not listed on the New York or American Stock Exchange.
Warrants acquired by the Portfolio in units or attached to securities shall be
deemed to be without value;
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(B) The Portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(C) The Portfolio may not purchase securities on margin, except that the
Portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments and other deposits in
connection with transactions in options, futures, swaps and forward contracts
shall not be deemed to constitute purchasing securities on margin;
(D) The Portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(E) The Portfolio may not mortgage or pledge any securities owned or held
by the Portfolio in amounts that exceed, in the aggregate, 15% of the
Portfolio's net assets, provided that this limitation does not apply to reverse
repurchase agreements, deposits of assets to margin, guarantee positions in
futures, options, swaps or forward contracts or segregation of assets in
connection with such contracts;
(F) The Portfolio may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Portfolio may own
debt or equity securities of companies engaged in those businesses;
(G) The Portfolio may not invest in companies for the purpose of exercising
control or management;
(H) The Portfolio may not issue senior securities, except as permitted by
the 1940 Act;
(I) The Portfolio may borrow money only for temporary or emergency
purposes (not for leveraging or investment) in excess of 25% of the value of the
Portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 25% of the value of the Portfolio's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation;
(J) The Portfolio may not purchase securities, including securities of
issuers which are not readily marketable, of any issuer (other than U.S.
government agencies and instrumentalities or instruments guaranteed by an entity
with a record of more than three years' continuous operation, including that of
predecessors) with a record of less than three years' continuous operation
(including that of predecessors) if such purchase would cause the cost of the
Portfolio's investments in all such issuers to exceed 5% of the Portfolio's
total assets taken at market value at the time of such purchase;
(K) The Portfolio may not purchase or retain the securities of any issuer
if any of the officers or directors of the Portfolio or Investment Adviser
individually owns more than 0.5% of the outstanding securities of the issuer and
together they own beneficially more than 0.5% of the securities; and
(L) The Portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which the Board of Directors has made a determination as to liquidity, as
permitted under the 1940 Act.
INVESTMENT RESTRICTIONS OF IDEX II INCOME PLUS PORTFOLIO
IDEX II Income Plus Portfolio may not, as a matter of fundamental policy:
1. Borrow money, except from a bank for temporary or emergency purposes
(not for leveraging or investment) in an amount not to exceed 1/3 of the current
value of the Portfolio's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the borrowing is
made. If at any time the Portfolio's borrowings exceed this limitation due to a
decline in net assets, such borrowings will be reduced within 3 business days to
the extent necessary to comply with the limitation. The Portfolio will borrow
only to facilitate redemptions requested by shareholders which might otherwise
require untimely disposition of portfolio securities and will not purchase
securities while borrowings are outstanding;
2. Pledge assets, except that the Portfolio may pledge not more than 1/3 of
its total assets (taken at current value) to secure borrowings made in
accordance with paragraph 1 above. Initial margin deposits under interest rate
futures contracts, which are made to guarantee the Portfolio's performance under
such contracts, shall not be deemed a pledging of Portfolio assets for the
purpose of this investment restriction. As a matter of non-fundamental operating
policy, in order to permit the
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sale of shares of the Portfolio under certain state laws, the Portfolio will not
pledge its assets in excess of an amount equal to 10% of its net assets unless
such state restrictions are changed;
3. Invest more than 25% of its assets, measured at the time of investment,
in a single industry (which term shall not include governments or their
political subdivisions), outside the industries of the Portfolio's public
utilities Portfolio concentration, except that the Portfolio may, for temporary
defensive purposes, invest more than 25% of its total assets in the obligations
of banks;
4. Purchase the securities (other than Government securities) of any issuer
if, as a result, more than 5% of the Portfolio's total assets would be invested
in the securities of such issuer, provided that up to 25% of the Portfolio's
total net assets may be invested without regard to this 5% limitation and in the
case of certificates of deposit, time deposits and banker's acceptances, up to
25% of total Portfolio assets may be invested without regard to such 5%
limitation, but shall instead be subject to a 10% limitation;
5. Invest in mineral leases;
6. Invest in bank time deposits with maturities of over 7 calendar days, or
invest more than 10% of the Portfolio's total assets in bank time deposits with
maturities of from 2 business days through 7 calendar days;
7. Issue senior securities, except to the extent that senior securities may
be deemed to arise from bank borrowings and purchases of Government securities
on a "when-issued" or "delayed delivery" basis, as described in the Prospectus;
8. Underwrite any issue of securities, except to the extent the Portfolio
may be deemed to be an underwriter in connection with the sale of its portfolio
securities, although the Portfolio may purchase securities directly from the
issuers thereof for investment in accordance with the Portfolio's investment
objective and policies;
9. Purchase or sell commodities or commodity contracts, except that the
Portfolio may purchase and sell interest rate futures contracts for hedging
purposes as set forth in the Prospectus;
10. Purchase securities on margin or sell "short", but the Portfolio may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities. (Initial and maintenance margin deposits and
payment with respect to interest rate futures contracts are not considered the
purchase of securities on margin);
11. Purchase or retain the securities of any issuer, if, to the Portfolio's
knowledge, those officers and directors of the manager and sub-adviser who
individually own beneficially more than 0.5% of the outstanding securities of
such issuer together own beneficially more than 5% of such outstanding
securities;
12. Invest in securities of other investment companies, except in the event
of merger or reorganization with another investment company;
13. Make loans, except to the extent the purchase of notes, bonds, bankers'
acceptances or other evidence of indebtedness or the entry into repurchase
agreements or deposits (including time deposits and certificates of deposit)
with banks may be considered loans;
14. Invest in companies for the purpose of exercising management or
control;
15. Invest in oil, gas or other mineral exploration or development
programs;
16. Purchase or hold any real estate or mortgage loans thereon, except that
the Portfolio may invest in securities secured by real estate or interests
therein or issued by persons (such as real estate investment trusts) which deal
in real estate or interests therein; and
17. Purchase the securities (other than Government securities) of any
issuer if, as a result, the Portfolio would hold more than 10% of any class of
securities (including any class of voting securities) of such issuer; for this
purpose, all debt obligations of an issuer, and all shares of stock of an issuer
other than common stock, are treated as a single class of securities.
The Income Plus Portfolio has also adopted certain non-fundamental
investment restrictions which may be changed by the Board of Trustees without
shareholder approval. The Income Plus Portfolio may not:
(A) Write or purchase put, call, straddle or spread options, or
combinations thereof;
(B) Invest more than 10% of its assets in illiquid securities;
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(C) Invest more than 5% of its net assets in securities (other than
Government securities) of issuers which, together with their predecessors, have
been in business for less than 3 years;
(D) Invest in real estate limited partnerships;
(E) Purchase or sell interest rate futures contracts (a) involving
aggregate delivery or purchase obligations in excess of 30% of the Portfolio's
net assets, or aggregate margin deposits made by the Portfolio in excess of 5%
of the Portfolio's net assets, (b) which are not for hedging purposes only, or
(c) which are executed under custodial, reserve and other arrangements
inconsistent with regulations and policies adopted or positions taken (i) by the
Securities and Exchange Commission for exemption from enforcement proceedings
under Section 17(f) or 18(f) of the 1940 Act, (ii) by the CFTC for exemption of
investment companies registered under the 1940 Act from registration as
"commodity pool operators" and from certain provisions of Subpart B of Part 4 of
the CFTC's regulations, or (iii) by state securities commissioners or
administrators in the states in which the Portfolio's shares have been qualified
for public offering; and
(F) The Fund may not invest in warrants valued at the lower of cost or
market value, if such value exceeds 5% of the Fund's net assets, provided that
no more than 2% of the Fund's net assets may be invested in warrants which are
not listed on the New York or American Stock Exchange. Warrants acquired by the
Fund in units or attached to securities may be deemed to be without value.
INVESTMENT RESTRICTIONS OF IDEX II TAX-EXEMPT PORTFOLIO
IDEX II Tax-Exempt Portfolio may not, as a matter of fundamental policy:
1. Underwrite any issue of securities, except to the extent the Portfolio
may be deemed to be an underwriter in connection with the sale of its portfolio
securities, although the Portfolio may purchase Municipal Obligations directly
from the issuers thereof for investment in accordance with the Portfolio's
investment objective and policies;
2. Purchase the securities (other than Government securities) of any
issuer if, as a result, more than 5% of the Portfolio's total assets would be
invested in the securities of such issuer, provided that up to 25% of the
Portfolio's total net assets may be invested without regard to this 5%
limitation;
3. Invest in any direct interest in an oil, gas or other mineral
exploration or development program;
4. Purchase securities on margin or sell "short", but the Portfolio may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities;
5. Purchase or hold any real estate or mortgage loans thereon, except that
the Portfolio may invest in securities secured by real estate or interests
therein or issued by persons (such as real estate investment trusts) which deal
in real estate or interests therein;
6. Purchase or retain the securities of any issuer, if, to the Portfolio's
knowledge, those officers and directors of the manager or sub-adviser, who
individually own beneficially more than 0.5% of the outstanding securities of
such issuer together own beneficially more than 5% of such outstanding
securities;
7. Invest in securities of other investment companies, except in the event
of merger or reorganization with another investment company;
8. Make loans, except to the extent the purchase of notes, bonds, or other
evidences of indebtedness or the entry into repurchase agreements or deposits
with banks may be considered loans;
9. Invest in companies for the purpose of exercising management or
control;
10. Write, purchase or sell put, call, straddle or spread options, except
for hedging purposes only, in accordance with such non-fundamental policies that
the Board may from time to time adopt; and
11. Purchase or sell commodities or commodity contracts.
The Tax-Exempt Portfolio has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The Portfolio may not invest more than 10% of its assets in illiquid
securities;
(B) The Portfolio may not invest in oil, gas or mineral leases;
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(C) The Portfolio may not invest in real estate limited partnerships;
(D) The Portfolio may not invest more than 5% of its net assets in
securities of issuers which, together with their predecessors, have been in
business for less than 3 years;
(E) The Portfolio may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 1/3 of the current
value of the Portfolio's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed at the time the borrowing is
made). For purposes of this limitation, reverse repurchases would not constitute
borrowings; and
(F) For hedging purposes only, the Tax-Exempt Portfolio may adopt policies
permitting:
(1) the purchase and sale of interest rate futures contracts, the
purchase of put and call options thereon, and the writing of covered
call or secured put options thereon, not involving delivery or
purchase obligations in excess of 30% of the Portfolio's net assets,
and
(2) the purchase of put and call options related to portfolio securities
and securities to be purchased for the Tax-Exempt Portfolio, the
writing of secured put and covered call options, and the entering
into of closing purchase transactions with respect to such options,
where such transactions will not involve futures contract margin
deposits and premiums on option purchases which, in the aggregate,
exceed 5% of the Portfolio's net assets, in the judgment of the
sub-adviser are economically appropriate to the reduction of risks
inherent in the ongoing management of the Portfolio, and are
executed under custodial, reserve and other arrangements consistent
with regulations and policies adopted or positions taken (i) by the
Securities and Exchange Commission for exemption from enforcement
proceedings under Section 17(f) or 18(f) of the Investment Company
Act of 1940, as amended (the "1940 Act"), (ii) by the Commodity
Futures Trading Commission (the "CFTC") for exemption of investment
companies registered under the 1940 Act from registration as
"commodity pool operators" and from certain provisions of Subpart B
of Part 4 of the CFTC's regulations, and (iii) by state securities
commissioners or administrators in the states in which the
Portfolio's shares have been qualified for public offering.
The Tax-Exempt Portfolio does not intend in the foreseeable future to adopt
the foregoing investment policies to permit trading in interest rate futures
contracts, options thereon, and options on portfolio securities.
Except with respect to borrowing money, if a percentage limitation set
forth above is complied with at the time of the investment, a subsequent change
in the percentage resulting from any change in value of the net assets of any of
the Portfolios will not result in a violation of such restriction. Additional
limitations on borrowing that are imposed by state law and regulations may
apply.
In addition to the above, as a fundamental policy, each of the Portfolios
other than the Tax-Exempt Portfolio and the Income Plus Portfolio, may,
notwithstanding any other investment policy or limitation (whether or not
fundamental), invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental investment
objectives, policies and limitations as such Portfolio.
OTHER POLICIES AND PRACTICES OF THE PORTFOLIOS
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS.
A. Futures Contracts. Each of the Portfolios other than the Tax-Exempt
Portfolio and the Income Plus Portfolio may enter into contracts for the
purchase or sale for future delivery of fixed-income securities, foreign
currencies or contracts based on financial indices including indices of
U.S. government securities, foreign government securities, equity or
fixed-income securities ("futures contracts"). The Income Plus Portfolio
may enter into contracts for the purchase or sale of fixed-income
securities ("interest rate futures contracts") as described in the
Prospectus. U.S. futures contracts are traded on exchanges which have
been designated "contract markets" by the Commodity Futures Trading
Commission ("CFTC") and must be executed through a futures commission
merchant ("FCM"), or brokerage firm, which is a member of the relevant
contract market. Through their clearing corporations, the exchanges
guarantee performance of the contracts as between the clearing members of
the exchange.
When a Portfolio buys or sells a futures contract it incurs a contractual
obligation to receive or deliver the underlying instrument (or a cash
payment based on the difference between the underlying instrument's
closing price and the price at which the contract was entered into) at a
specified price on a specified date. Transactions in futures
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contracts may be made to attempt to hedge against potential changes in
interest or currency exchange rates or the price of a security or a
securities index which might correlate with or otherwise adversely affect
either the value of the Portfolio's securities or the prices of
securities which the Portfolio is considering buying at a later date.
The buyer or seller of a futures contract is not required to deliver or
pay for the underlying instrument unless the contract is held until the
delivery date. However, both the buyer and seller are required to deposit
"initial margin" for the benefit of the FCM when the contract is entered
into. Initial margin deposits are equal to a percentage of the contract's
value, as set by the exchange on which the contract is traded, and may be
maintained in cash or certain high-grade liquid assets by the Portfolio's
custodian for the benefit of the FCM. Initial margin payments are similar
to good faith deposits or performance bonds. Unlike margin extended by a
securities broker, initial margin payments do not constitute purchasing
securities on margin for purposes of a Portfolio's investment
limitations. If the value of either party's position declines, that party
will be required to make additional "variation margin" payments with the
FCM to settle the change in value on a daily basis. The party that has a
gain may be entitled to receive all or a portion of this amount. In the
event of the bankruptcy of the FCM that holds margin on behalf of a
Portfolio, that Portfolio may be entitled to return of the margin owed to
such Portfolio only in proportion to the amount received by the FCM's
other customers. The portfolio manager will attempt to minimize the risk
by careful monitoring of the creditworthiness of the FCMs with which a
Portfolio does business and by segregating margin payments with the
custodian.
Although a Portfolio would segregate cash and liquid assets in an amount
sufficient to cover its open futures obligations, the segregated assets
would be available to that Portfolio immediately upon closing out the
futures position, while settlement of securities transactions could take
several days. However, because a Portfolio's cash that may otherwise be
invested would be held uninvested or invested in high-grade liquid assets
so long as the futures position remains open, such Portfolio's return
could be diminished due to the opportunity losses of foregoing other
potential investments.
The acquisition or sale of a futures contract may occur, for example,
when a Portfolio holds or is considering purchasing equity or debt
securities and seeks to protect itself from fluctuations in prices or
interest rates without buying or selling those securities. For example,
if stock or debt prices were expected to decrease, a Portfolio might sell
equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the Portfolio by a
corresponding increase in the value of the futures contract position held
by that Portfolio and thereby preventing the Portfolio's net asset value
from declining as much as it otherwise would have. Similarly, if interest
rates were expected to rise, a Portfolio might sell bond index futures
contracts, thereby hoping to offset a potential decline in the value of
debt securities in the portfolio by a corresponding increase in the value
of the futures contract position held by the Portfolio. A Portfolio also
could seek to protect against potential price declines by selling
portfolio securities and investing in money market instruments. However,
since the futures market is more liquid than the cash market, the use of
futures contracts as an investment technique allows a Portfolio to
maintain a defensive position without having to sell portfolio
securities.
Similarly, when prices of equity securities are expected to increase, or
interest rates are expected to fall, futures contracts may be bought to
attempt to hedge against the possibility of having to buy equity
securities at higher prices. This technique is sometimes known as an
anticipatory hedge. Since the fluctuations in the value of futures
contracts should be similar to those of equity securities, a Portfolio
could take advantage of the potential rise in the value of equity or debt
securities without buying them until the market has stabilized. At that
time, the futures contracts could be liquidated and such Portfolio could
buy equity or debt securities on the cash market. To the extent a
Portfolio enters into futures contracts for this purpose, the segregated
assets maintained to cover such Portfolio's obligations with respect to
futures contracts will consist of high-grade liquid assets from its
portfolio in an amount equal to the difference between the contract price
and the aggregate value of the initial and variation margin payments made
by that Portfolio with respect to the futures contracts.
The ordinary spreads between prices in the cash and futures markets, due
to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject to
initial margin and variation margin requirements. Rather than meeting
additional variation margin requirements, investors may close out futures
contracts through offsetting transactions which could distort the normal
price relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering into
offsetting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the
futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin
deposit requirements in the futures market are less onerous than margin
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requirements in the securities market. Therefore, increased participation
by speculators in the futures market may cause temporary price
distortions. Due to the possibility of the foregoing distortions, a
correct forecast of general price trends by the portfolio manager still
may not result in a successful use of futures contracts.
Futures contracts entail risks. Although each of the Portfolios that
invests in such contracts believes that their use will benefit the
Portfolio, if the portfolio manager's investment judgment proves
incorrect, the Portfolio's overall performance could be worse than if the
Portfolio had not entered into futures contracts. For example, if a
Portfolio has hedged against the effects of a possible decrease in prices
of securities held in its portfolio and prices increase instead, that
Portfolio may lose part or all of the benefit of the increased value of
the securities because of offsetting losses in the Portfolio's futures
positions. In addition, if a Portfolio has insufficient cash, it may have
to sell securities from its portfolio to meet daily variation margin
requirements. Those sales may, but will not necessarily, be at increased
prices which reflect the rising market and may occur at a time when the
sales are disadvantageous to the Portfolio.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures contracts
available to a Portfolio will not match exactly such Portfolio's current
or potential investments. A Portfolio may buy and sell futures contracts
based on underlying instruments with different characteristics from the
securities in which it typically invests -- for example, by hedging
investments in portfolio securities with a futures contract based on a
broad index of securities -- which involves a risk that the futures
position will not correlate precisely with such performance of the
Portfolio's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments correlate with a
Portfolio's investments. Futures prices are affected by factors such as
current and anticipated short-term interest rates, changes in volatility
of the underlying instruments, and the time remaining until expiration of
the contract. Those factors may affect securities prices differently from
futures prices. Imperfect correlations between a Portfolio's investments
and its futures positions may also result from differing levels of demand
in the futures markets and the securities markets, from structural
differences in how futures and securities are traded, and from imposition
of daily price fluctuation limits for futures contracts. A Portfolio may
buy or sell futures contracts with a greater or lesser value than the
securities it wishes to hedge or is considering purchasing in order to
attempt to compensate for differences in historical volatility between
the futures contract and the securities, although this may not be
successful in all cases. If price changes in a Portfolio's futures
positions are poorly correlated with its other investments, its futures
positions may fail to produce desired gains or may result in losses that
are not offset by the gains in that Portfolio's other investments.
Because futures contracts are generally settled within a day from the
date they are closed out, compared with a settlement period of seven days
for some types of securities, the futures markets can provide superior
liquidity to the securities markets. Nevertheless, there is no assurance
a liquid secondary market will exist for any particular futures contract
at any particular time. In addition, futures exchanges may establish
daily price fluctuation limits for futures contracts and may halt trading
if a contract's price moves upward or downward more than the limit in a
given day. On volatile trading days when the price fluctuation limit is
reached, it may be impossible for a Portfolio to enter into new positions
or close out existing positions. If the secondary market for a futures
contract is not liquid because of price fluctuation limits or otherwise,
the Portfolio may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As
a result, such Portfolio's access to other assets held to cover its
futures positions also could be impaired.
Although futures contracts by their terms call for the delivery or
acquisition of the underlying commodities or a cash payment based on the
value of the underlying commodities, in most cases the contractual
obligation is offset before the delivery date of the contract by buying,
in the case of a contractual obligation to sell, or selling, in the case
of a contractual obligation to buy, an identical futures contract on a
commodities exchange. Such a transaction cancels the obligation to make
or take delivery of the commodities.
The Aggressive Growth, Capital Appreciation, Global, Growth,
Equity-Income, Tactical Asset Allocation, Balanced and Flexible Income
Portfolios each intend to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator" with
the CFTC and the National Futures Association, which regulate trading in
the futures markets. The Portfolios will use futures contracts and
related options primarily for bona fide hedging purposes within the
meaning of CFTC regulations; except that, in addition, the Portfolios may
hold positions in
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futures contracts and related options that do not fall within the
definition of bona fide hedging transactions, provided that the aggregate
initial margin and premiums required to establish such positions will not
exceed 5% of the fair market value of a Portfolio's net assets, after
taking into account unrealized profits and unrealized losses on any such
contracts it has entered into.
The Aggressive Growth Portfolio may not enter into a futures contract or
related option (except for closing transactions) if, immediately
thereafter, the sum of the amount of its initial margin and premiums on
open futures contracts and options thereon would exceed 5% of the
Aggressive Growth Portfolio's total assets (taken at current value);
however, in the case of an option that is in-the-money at the time of the
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
B. Options on Futures Contracts. Each of the Portfolios other than the
Tax-Exempt and Income Plus Portfolios may buy and write put and call
options on futures contracts. An option on a future gives a Portfolio the
right (but not the obligation) to buy or sell a futures contract at a
specified price on or before a specified date. Transactions in options on
futures contracts may be made to attempt to hedge against potential
changes in interest rates or currency exchange rates or the price of a
security or a securities index which might correlate with or otherwise
adversely affect either the value of the Portfolio's securities or the
prices of securities which the Portfolio is considering buying at a later
date. Transactions in options on future contracts will not be made for
speculation.
The purchase of a call option on a futures contract is similar in some
respects to the purchase of a call option on an individual security.
Depending on the pricing of the option compared to either the price of
the futures contract upon which it is based or the price of the
underlying instrument, ownership of the option may or may not be less
risky than ownership of the futures contract or the underlying
instrument. As with the purchase of futures contracts, when a Portfolio
is not fully invested it may buy a call option on a futures contract to
hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which
is deliverable under, or of the index comprising, the futures contract.
If the futures price at the expiration of the option is below the
exercise price, a Portfolio will retain the full amount of the option
premium which provides a partial hedge against any decline that may have
occurred in such Portfolio's holdings. The writing of a put option on a
futures contract constitutes a partial hedge against increasing prices of
the security or foreign currency which is deliverable under, or of the
index comprising, the futures contract. If the futures price at
expiration of the option is higher than the exercise price, a Portfolio
will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which that
Portfolio is considering buying. If a call or put option a Portfolio has
written is exercised, such Portfolio will incur a loss which will be
reduced by the amount of the premium it received. Depending on the degree
of correlation between the change in the value of its portfolio
securities and changes in the value of the futures positions, that
Portfolio's losses from existing options on futures may to some extent be
reduced or increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio
securities. For example, a Portfolio may buy a put option on a futures
contract to hedge its portfolio securities against the risk of falling
prices or rising interest rates.
The amount of risk a Portfolio assumes when it buys an option on a
futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above,
the purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the
value of the options bought.
C. Options on Securities. In an effort to increase current income and to
reduce fluctuations in net asset value, each of the Portfolios other than
the Tax-Exempt Portfolio and the Income Plus Portfolio may write covered
put and call options and buy put and call options on securities that are
traded on United States and foreign securities exchanges and
over-the-counter. A Portfolio also may write call options that are not
covered for cross-hedging purposes. A Portfolio may write and buy options
on the same types of securities that the Portfolio may purchase directly.
There are no specific limitations on the Portfolios' writing and buying
of options on securities.
A put option gives the holder the right, upon payment of a premium, to
deliver a specified amount of a security to the writer of the option on
or before a fixed date at a predetermined price. A call option gives the
holder the right, upon payment of a premium, to call upon the writer to
deliver a specified amount of a security on or before a fixed date at a
predetermined price.
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A put option written by a Portfolio is "covered" if the Portfolio (i)
segregates cash not available for investment or high-grade liquid assets
with a value equal to the exercise price with its custodian or (ii) holds
a put on the same security and in the same principal amount as the put
written and the exercise price of the put held is equal to or greater
than the exercise price of the put written. The premium paid by the buyer
of an option will reflect, among other things, the relationship of the
exercise price to the market price and the volatility of the underlying
security, the remaining term of the option, supply and demand and
interest rates.
A call option written by a Portfolio is "covered" if the Portfolio owns
the underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash
consideration (or has segregated additional cash with its custodian) upon
conversion or exchange of other securities held in its portfolio. A call
option written by a Portfolio is also deemed to be covered if that
Portfolio holds a call on the same security and in the same principal
amount as the call written and the exercise price of the call held (i) is
equal to or less than the exercise price of the call written or (ii) is
greater than the exercise price of the call written if the difference is
segregated with its custodian.
A Portfolio may also write call options that are not covered for
cross-hedging purposes. A Portfolio collateralizes its obligation under a
written call option for cross-hedging purposes by segregating cash or
high-grade liquid assets in an amount not less than the market value of
the underlying security, marked-to-market daily. A Portfolio would write
a call option for cross-hedging purposes, instead of writing a covered
call option, when the premium to be received from the cross-hedge
transaction would exceed that which would be received from writing a
covered call option and the portfolio manager believes that writing the
option would achieve the desired hedge.
If a put or call option written by a Portfolio were exercised, the
Portfolio would be obligated to buy or sell the underlying security at
the exercise price. Writing a put option involves the risk of a decrease
in the market value of the underlying security, in which case the option
could be exercised and the underlying security would then be sold by the
option holder to the Portfolio at a higher price than its current market
value. Writing a call option involves the risk of an increase in the
market value of the underlying security, in which case the option could
be exercised and the underlying security would then be sold by the
Portfolio to the option holder at a lower price than its current market
value. Those risks could be reduced by entering into an offsetting
transaction. A Portfolio retains the premium received from writing a put
or call option whether or not the option is exercised.
The writer of an option may have no control when the underlying security
must be sold, in the case of a call option, or bought, in the case of a
put option, since with regard to certain options, the writer may be
assigned an exercise notice at any time prior to the termination of the
obligation. Whether or not an option expires unexercised, the writer
retains the amount of the premium. This amount, of course, may, in the
case of a covered call option, be offset by a decline in the market value
of the underlying security during the option period. If a call option is
exercised, the writer experiences a profit or loss from the sale of the
underlying security. If a put option is exercised, the writer must
fulfill the obligation to buy the underlying security at the exercise
price, which will usually exceed the then market value of the underlying
security.
The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by buying
an option of the same series as the option previously written. The effect
of the purchase is that the writer's position will be canceled by the
clearing corporation. However, a writer may not effect a closing purchase
transaction after being notified of the exercise of an option. Likewise,
an investor who is the holder of an option may liquidate its position by
effecting a "closing sale transaction." This is accomplished by selling
an option of the same series as the option previously bought. There is no
guarantee that either a closing purchase or a closing sale transaction
can be effected.
In the case of a written call option, effecting a closing transaction
will permit a Portfolio to write another call option on the underlying
security with either a different exercise price or expiration date or
both. In the case of a written put option, such transaction will permit
the Portfolio to write another put option to the extent that the exercise
price thereof is secured by deposited high-grade liquid assets. Effecting
a closing transaction also will permit the cash or proceeds from the
concurrent sale of any securities subject to the option to be used for
other Portfolio investments. If a Portfolio desires to sell a particular
security on which the Portfolio has written a call option, such Portfolio
will effect a closing transaction prior to or concurrent with the sale of
the security.
A Portfolio will realize a profit from a closing transaction if the price
of a purchase transaction is less than the premium received from writing
the option or the price received from a sale transaction is more than the
premium paid
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to buy the option. The Portfolio will realize a loss from a closing
transaction if the price of the purchase transaction is more than the
premium received from writing the option or the price received from a
sale transaction is less than the premium paid to buy the option. Because
increases in the market price of a call option will generally reflect
increases in the market price of the underlying security, any loss
resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the
Portfolio.
An option position may be closed out only where a secondary market for an
option of the same series exists. If a secondary market does not exist, a
Portfolio may not be able to effect closing transactions in particular
options and that Portfolio would have to exercise the options in order to
realize any profit. If a Portfolio is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the
underlying security upon exercise. Reasons for the absence of a liquid
secondary market may include the following: (i) there may be insufficient
trading interest in certain options, (ii) restrictions may be imposed by
a national securities exchange on which the option is traded ("Exchange")
on opening or closing transactions or both, (iii) trading halts,
suspensions or other restrictions may be imposed with respect to
particular classes or series of options or underlying securities, (iv)
unusual or unforeseen circumstances may interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current
trading volume, or (vi) one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue
the trading of options (or a particular class or series of options), in
which event the secondary market on that Exchange (or in that class or
series of options) would cease to exist, although outstanding options on
that Exchange that had been issued by the OCC as a result of trades on
that Exchange would continue to be exercisable in accordance with their
terms.
Each of the Portfolios other than the Tax-Exempt Portfolio and the Income
Plus Portfolio may write options in connection with buy-and-write
transactions. In other words, the Portfolio may buy a security and then
write a call option against that security. The exercise price of such
call will depend upon the expected price movement of the underlying
security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above ("out-of-the-money")
the current value of the underlying security at the time the option is
written. Buy-and-write transactions using in-the-money call options may
be used when it is expected that the price of the underlying security
will remain flat or decline moderately during the option period.
Buy-and-write transactions using at-the-money call options may be used
when it is expected that the price of the underlying security will remain
fixed or advance moderately during the option period. Buy-and-write
transactions using out-of-the-money call options may be used when it is
expected that the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to the
exercise price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, the Portfolio's maximum gain will be the premium received
by it for writing the option, adjusted upwards or downwards by the
difference between that Portfolio's purchase price of the security and
the exercise price. If the options are not exercised and the price of the
underlying security declines, the amount of such decline will be offset
by the amount of premium received.
The writing of covered put options is similar in terms of risk and return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the
put option will expire worthless and a Portfolio's gain will be limited
to the premium received. If the market price of the underlying security
declines or otherwise is below the exercise price, a Portfolio may elect
to close the position or take delivery of the security at the exercise
price and that Portfolio's return will be the premium received from the
put options minus the amount by which the market price of the security is
below the exercise price.
A Portfolio may buy put options to hedge against a decline in the value
of its Portfolio. By using put options in this way, a Portfolio will
reduce any profit it might otherwise have realized in the underlying
security by the amount of the premium paid for the put option and by
transaction costs.
A Portfolio may buy call options to hedge against an increase in the
price of securities that it may buy in the future. The premium paid for
the call option plus any transaction costs will reduce the benefit, if
any, realized by such Portfolio upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may
expire worthless to that Portfolio.
In purchasing an option, a Portfolio would be in a position to realize a
gain if, during the option period, the price of the underlying security
increased (in the case of a call) or decreased (in the case of a put) by
an amount in excess of the premium paid and would realize a loss if the
price of the underlying security did not increase (in the case of a call)
or decrease (in the case of a put) during the period by more than the
amount of the premium. If a put or call option
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purchased by a Portfolio were permitted to expire without being sold or
exercised, the Portfolio would lose the amount of the premium.
Although they entitle the holder to buy equity securities, warrants on
and options to purchase equity securities do not entitle the holder to
dividends or voting rights with respect to the underlying securities, nor
do they represent any rights in the assets of the issuer of those
securities.
In addition to options on securities, a Portfolio may also purchase and
sell call and put options on securities indexes. A stock index reflects
in a single number the market value of many different stocks. Relative
values are assigned to the stocks included in an index and the index
fluctuates with changes in the market values of the stocks. The options
give the holder the right to receive a cash settlement during the term of
the option based on the difference between the exercise price and the
value of the index. By writing a put or call option on a securities
index, the Portfolio is obligated, in return for the premium received, to
make delivery of this amount. The Portfolio may offset its position in
stock index options prior to expiration by entering into a closing
transaction on an exchange or it may let the option expire unexercised.
Use of options on securities indexes entails the risk that trading in the
options may be interrupted if trading in certain securities included in
the index is interrupted. The Portfolio will not purchase these options
unless the sub-adviser is satisfied with the development, depth and
liquidity of the market and believes the options can be closed out.
Price movements in the Portfolio's securities may not correlate precisely
with movements in the level of an index and, therefore, the use of
options on indexes cannot serve as a complete hedge and will depend, in
part, on the ability of its portfolio manager to predict correctly
movements in the direction of the stock market generally or of a
particular industry. Because options on securities indexes require
settlement in cash, the portfolio manager may be forced to liquidate
portfolio securities to meet settlement obligations.
The amount of risk a Portfolio assumes when it buys an option on a
futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above,
the purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the
value of the options bought.
D. Options on Foreign Currencies. Each of the Portfolios other than the
Tax-Exempt Portfolio and the Income Plus Portfolio may buy and write
options on foreign currencies in a manner similar to that in which
futures contracts or forward contracts on foreign currencies will be
utilized. For example, a decline in the U.S. dollar value of a foreign
currency in which portfolio securities are denominated will reduce the
U.S. dollar value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such diminutions
in the value of portfolio securities, a Portfolio may buy put options on
the foreign currency. If the value of the currency declines, such
Portfolio will have the right to sell such currency for a fixed amount in
U.S. dollars and will offset, in whole or in part, the adverse effect on
its portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby
increasing the cost of such securities, a Portfolio may buy call options
thereon. The purchase of such options could offset, at least partially,
the effects of the adverse movements in exchange rates. As in the case of
other types of options, however, the benefit to a Portfolio from
purchases of foreign currency options will be reduced by the amount of
the premium and related transaction costs. In addition, if currency
exchange rates do not move in the direction or to the extent desired, a
Portfolio could sustain losses on transactions in foreign currency
options that would require such Portfolio to forego a portion or all of
the benefits of advantageous changes in those rates. In addition, in the
case of other types of options, the benefit to the Portfolio from
purchases of foreign currency options will be reduced by the amount of
the premium and related transaction costs.
A Portfolio may also write options on foreign currencies. For example, in
attempting to hedge against a potential decline in the U.S. dollar value
of foreign currency denominated securities due to adverse fluctuations in
exchange rates, a Portfolio could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline
occurs, the option will most likely not be exercised and the diminution
in value of portfolio securities will be offset by the amount of the
premium received.
Similarly, instead of purchasing a call option to attempt to hedge
against a potential increase in the U.S. dollar cost of securities to be
acquired, a Portfolio could write a put option on the relevant currency
which, if rates move in the manner projected, will expire unexercised and
allow that Portfolio to hedge the increased cost up to the amount of
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premium. As in the case of other types of options, however, the writing
of a foreign currency option will constitute only a partial hedge up to
the amount of the premium. If exchange rates do not move in the expected
direction, the option may be exercised and a Portfolio would be required
to buy or sell the underlying currency at a loss which may not be offset
by the amount of the premium. Through the writing of options on foreign
currencies, a Portfolio also may lose all or a portion of the benefits
which might otherwise have been obtained from favorable movements in
exchange rates.
A Portfolio may write covered call options on foreign currencies. A call
option written on a foreign currency by a Portfolio is "covered" if that
Portfolio owns the underlying foreign currency covered by the call or has
an absolute and immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash consideration that
is segregated by its custodian) upon conversion or exchange of other
foreign currency held in its portfolio. A call option is also covered if
a Portfolio has a call on the same foreign currency and in the same
principal amount as the call written if the exercise price of the call
held (i) is equal to or less than the exercise price of the call written
or (ii) is greater than the exercise price of the call written, if the
difference is maintained by such Portfolio in cash or high-grade liquid
assets that are segregated with the Fund's custodian.
Each of the Portfolios other than the Tax-Exempt Portfolio and the Income
Plus Portfolio may write call options on foreign currencies for
cross-hedging purposes that would not be deemed to be covered. A call
option on a foreign currency is for cross-hedging purposes if it is not
covered but is designed to provide a hedge against a decline due to an
adverse change in the exchange rate in the U.S. dollar value of a
security which the Portfolio owns or has the right to acquire and which
is denominated in the currency underlying the option. In such
circumstances, a Portfolio collateralizes the option by segregating cash
or high-grade liquid assets in an amount not less than the value of the
underlying foreign currency in U.S. dollars marked-to-market daily.
E. Forward Contracts. A forward contract is an agreement between two
parties in which one party is obligated to deliver a stated amount of a
stated asset at a specified time in the future and the other party is
obligated to pay a specified invoice amount for the assets at the time of
delivery. Each of the Portfolios other than the Tax-Exempt Portfolio and
Income Plus Portfolio may enter into forward contracts to purchase and
sell government securities, foreign currencies or other financial
instruments. Forward contracts generally are traded in an interbank
market conducted directly between traders (usually large commercial
banks) and their customers. Unlike futures contracts, which are
standardized contracts, forward contracts can be specifically drawn to
meet the needs of the parties that enter into them. The parties to a
forward contract may agree to offset or terminate the contract before its
maturity, or may hold the contract to maturity and complete the
contemplated exchange.
The following discussion summarizes the Aggressive Growth, Capital
Appreciation, Global, Growth, Equity-Income, Tactical Asset Allocation,
Balanced and Flexible Income Portfolios' principal uses of forward
foreign currency exchange contracts ("forward currency contracts"). A
Portfolio may enter into forward currency contracts with stated contract
values of up to the value of that Portfolio's assets. A forward currency
contract is an obligation to buy or sell an amount of a specified
currency for an agreed price (which may be in U.S. dollars or another
foreign currency). A Portfolio will exchange foreign currencies for U.S.
dollars and for other foreign currencies in the normal course of business
and may buy and sell currencies through forward currency contracts in
order to fix a price for securities it has agreed to buy or sell
("transaction hedge"). A Portfolio also may hedge some or all of its
investments denominated in foreign currency against a decline in the
value of that currency relative to the U.S. dollar by entering into
forward currency contracts to sell an amount of that currency (or a proxy
currency whose performance is expected to replicate or exceed the
performance of that currency relative to the U.S. dollar) approximating
the value of some or all of its portfolio securities denominated in that
currency ("position hedge") or by participating in options or futures
contracts with respect to the currency. A Portfolio also may enter into a
forward currency contract with respect to a currency where such Portfolio
is considering the purchase or sale of investments denominated in that
currency but has not yet selected the specific investments ("anticipatory
hedge"). In any of these circumstances a Portfolio may, alternatively,
enter into a forward currency contract to purchase or sell one foreign
currency for a second currency that is expected to perform more favorably
relative to the U.S. dollar if the portfolio manager believes there is a
reasonable degree of correlation between movements in the two currencies
("cross-hedge").
These types of hedging seek to minimize the effect of currency
appreciation as well as depreciation, but do not eliminate fluctuations
in the underlying U.S. dollar equivalent value of the proceeds of or
rates of return on a Portfolio's foreign currency denominated portfolio
securities. The matching of the increase in value of a forward contract
and the decline in the U.S. dollar equivalent value of the foreign
currency denominated asset that is the
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subject of the hedge generally will not be precise. Shifting a
Portfolio's currency exposure from one foreign currency to another
removes that Portfolio's opportunity to profit from increases in the
value of the original currency and involves a risk of increased losses to
such Portfolio if its portfolio manager's position projection of future
exchange rates is inaccurate. Proxy hedges and cross-hedges may result in
losses if the currency used to hedge does not perform similarly to the
currency in which hedged securities are denominated. Unforeseen changes
in currency prices may result in poorer overall performance for a
Portfolio than if it had not entered into such contracts.
A Portfolio will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency
underlying the forward contract or the currency being hedged. To the
extent that a Portfolio is not able to cover its forward currency
positions with underlying portfolio securities, its custodian will
segregate cash or high-grade liquid assets having a value equal to the
aggregate amount of such Portfolio's commitments under forward contracts
entered into with respect to position hedges, cross-hedges and
anticipatory hedges. If the value of the securities used to cover a
position or the value of segregated assets declines, the Portfolio will
find alternative cover or segregate additional cash or high-grade liquid
assets on a daily basis so that the value of the covered and segregated
assets will be equal to the amount of a Portfolio's commitments with
respect to such contracts. As an alternative to segregating assets, a
Portfolio may buy call options permitting such Portfolio to buy the
amount of foreign currency being hedged by a forward sale contract or a
Portfolio may buy put options permitting it to sell the amount of foreign
currency subject to a forward buy contract.
While forward contracts are not currently regulated by the CFTC, the CFTC
may in the future assert authority to regulate forward contracts. In such
event, a Portfolio's ability to utilize forward contracts may be
restricted. In addition, a Portfolio may not always be able to enter into
forward contracts at attractive prices and may be limited in its ability
to use these contracts to hedge its assets.
F. Swaps and Swap-Related Products. In order to attempt to protect the
value of its investments from interest rate or currency exchange rate
fluctuations, each of the Portfolios other than the Tax-Exempt Portfolio
and the Income Plus Portfolio may enter into interest rate and currency
exchange rate swaps, and may buy or sell interest rate and currency
exchange rate caps and floors. The portfolio manager expects to enter
into these transactions primarily to attempt to preserve a return or
spread on a particular investment or portion of its portfolio. A
Portfolio also may enter into these transactions to attempt to protect
against any increase in the price of securities the Portfolio may
consider buying at a later date.
Each Portfolio does not intend to use these transactions as a speculative
investment. Interest rate swaps involve the exchange by a Portfolio with
another party of their respective commitments to pay or receive interest,
e.g., an exchange of floating rate payments for fixed rate payments. The
exchange commitments can involve payments to be made in the same currency
or in different currencies. The purchase of an interest rate cap entitles
the purchaser, to the extent that a specified index exceeds a
predetermined interest rate, to receive payments of interest on a
contractually based principal amount from the party selling the interest
rate cap. The purchase of an interest rate floor entitles the purchaser,
to the extent that a specified index falls below a predetermined interest
rate, to receive payments of interest on a contractually based principal
amount from the party selling the interest rate floor.
Each of the Portfolios other than the Tax-Exempt and Income Plus
Portfolios may enter into interest rate swaps, caps and floors on either
an asset-based or liability-based basis, depending upon whether it is
hedging its assets or its liabilities, and will usually enter into
interest rate swaps on a net basis (i.e., the two payment streams are
netted out, with a Portfolio receiving or paying, as the case may be,
only the net amount of the two payments). The net amount of the excess,
if any, of a Portfolio's obligations over its entitlements with respect
to each interest rate swap will be calculated on a daily basis and an
amount of cash or high-grade liquid assets having an aggregate net asset
at least equal to the accrued excess will be segregated by its custodian.
If a Portfolio enters into an interest rate swap on other than a net
basis, it will maintain a segregated account in the full amount accrued
on a daily basis of its obligations with respect to the swap. A Portfolio
will not enter into any interest rate swap, cap or floor transaction
unless the unsecured senior debt or the claims-paying ability of the
other party thereto is rated in one of the three highest rating
categories of at least one nationally recognized statistical rating
organization at the time of entering into such transaction. The portfolio
manager will monitor the creditworthiness of all counterparties on an
ongoing basis. If there is a default by the other party to such a
transaction, the Portfolio will have contractual remedies pursuant to the
agreements related to the transaction.
The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals
and as agents utilizing standardized swap documentation. The sub-advisers
have deter-
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mined that, as a result, the swap market has become relatively liquid.
Caps and floors are more recent innovations for which standardized
documentation has not yet been developed and, accordingly, they are less
liquid than swaps. To the extent a Portfolio sells (i.e., writes) caps
and floors, it will segregate cash or high-grade liquid assets having an
aggregate net asset value at least equal to the full amount, accrued on a
daily basis, of its obligations with respect to any caps or floors.
There is no limit on the amount of interest rate swap transactions that
may be entered into by the Aggressive Growth, Capital Appreciation,
Global, Growth, Equity-Income, Tactical Asset Allocation, Balanced and
Flexible Income Portfolios, although none of the Portfolios presently
intends to engage in such transactions in excess of 5% of its total
assets. These transactions may in some instances involve the delivery of
securities or other underlying assets by a Portfolio or its counterparty
to collateralize obligations under the swap. Under the documentation
currently used in those markets, the risk of loss with respect to
interest rate swaps is limited to the net amount of the interest payments
that a Portfolio is contractually obligated to make. If the other party
to an interest rate swap that is not collateralized defaults, a Portfolio
would risk the loss of the net amount of the payments that it
contractually is entitled to receive. A Portfolio may buy and sell (i.e.,
write) caps and floors without limitation, subject to the segregation
requirement described above.
In addition to the instruments, strategies and risks described in this
Statement of Additional Information and in the Prospectus, there may be
additional opportunities in connection with options, futures contracts,
forward currency contracts and other hedging techniques, that become
available as the portfolio managers develop new techniques, as regulatory
authorities broaden the range of permitted transactions and as new
instruments are developed. The portfolio managers may use these
opportunities to the extent they are consistent with the Portfolio's
investment objective and are permitted by the Portfolio's investment
limitations and applicable regulatory requirements.
G. Eurodollar Instruments. The Portfolios may each make investments in
Eurodollar instruments. Eurodollar instruments are U.S.
dollar-denominated futures contracts or options thereon which are linked
to the London Interbank Offered Rate (the "LIBOR"), although foreign
currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate for
the lending of funds and sellers to obtain a fixed rate for borrowings. A
Portfolio might use Eurodollar futures contracts and options thereon to
hedge against changes in LIBOR, to which many interest rate swaps and
fixed income instruments are linked.
H. Special Investment Considerations and Risks. The successful use of the
investment practices described above with respect to futures contracts,
options on futures contracts, forward contracts, options on securities
and on foreign currencies, and swaps and swap-related products draws upon
skills and experience which are different from those needed to select the
other instruments in which a Portfolio invests. Should interest or
exchange rates or the prices of securities or financial indices move in
an unexpected manner, a Portfolio may not achieve the desired benefits of
the foregoing instruments or may realize losses and thus be in a worse
position than if such strategies had not been used. Unlike many
exchange-traded futures contracts and options on futures contracts, there
are no daily price fluctuation limits with respect to options on
currencies, forward contracts and other negotiated or over-the-counter
instruments, and adverse market movements could therefore continue to an
unlimited extent over a period of time. In addition, the correlation
between movements in the price of the securities and currencies hedged or
used for cover will not be perfect and could produce unanticipated
losses.
A Portfolio's ability to dispose of its positions in the foregoing
instruments will depend on the availability of liquid markets in the
instruments. Markets in a number of the instruments are relatively new
and still developing, and it is impossible to predict the amount of
trading interest that may exist in those instruments in the future.
Particular risks exist with respect to the use of each of the foregoing
instruments and could result in such adverse consequences to a Portfolio
as the possible loss of the entire premium paid for an option bought by a
Portfolio, the inability of the Portfolio, as the writer of a covered
call option, to benefit from the appreciation of the underlying
securities above the exercise price of the option and the possible need
to defer closing out positions in certain instruments to avoid adverse
tax consequences. As a result, no assurance can be given that a Portfolio
will be able to use those instruments effectively for their intended
purposes.
In connection with certain of its hedging transactions, a Portfolio must
segregate assets with the Fund's custodian bank to ensure that such
Portfolio will be able to meet its obligations pursuant to these
instruments. Segregated assets generally may be not be disposed of for so
long as a Portfolio maintains the positions giving rise to the
segregation requirement. Segregation of a large percentage of a
Portfolio's assets could impede implementation of that Portfolio's
investment policies or its ability to meet redemption requests or other
current obligations.
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I. Additional Risks of Options on Foreign Currencies, Forward Contracts
and Foreign Instruments. Unlike transactions entered into by a Portfolio
in futures contracts, options on foreign currencies and forward contracts
are not traded on contract markets regulated by the CFTC or (with the
exception of certain foreign currency options) by the SEC. To the
contrary, such instruments are traded through financial institutions
acting as market-makers, although foreign currency options are also
traded on certain national securities exchanges, such as the Philadelphia
Stock Exchange and the Chicago Board Options Exchange, subject to SEC
regulation. Options on currencies may be traded over-the-counter. In an
over-the-counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there are no
daily price fluctuation limits, and adverse market movements could
therefore continue to an unlimited extent over a period of time. Although
the buyer of an option cannot lose more than the amount of the premium
plus related transaction costs, this entire amount could be lost.
Moreover, an option writer and a buyer or seller of futures or forward
contracts could lose amounts substantially in excess of any premium
received or initial margin or collateral posted due to the potential
additional margin and collateral requirements associated with such
positions.
Options on foreign currencies traded on national securities exchanges are
within the jurisdiction of the SEC, as are other securities traded on
such exchanges. As a result, many of the protections provided to traders
on organized exchanges will be available with respect to such
transactions. In particular, all foreign currency option positions
entered into on a national securities exchange are cleared and guaranteed
by the OCC, thereby reducing the risk of counterparty default. Further, a
liquid secondary market in options traded on a national securities
exchange may be more readily available than in the over-the-counter
market, potentially permitting a Portfolio to liquidate open positions at
a profit prior to exercise or expiration, or to limit losses in the event
of adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid
secondary market described above, as well as the risks regarding adverse
market movements, margining of options written, the nature of the foreign
currency market, possible intervention by governmental authorities and
the effects of other political and economic events. In addition,
exchange-traded options on foreign currencies involve certain risks not
presented by the over-the-counter market. For example, exercise and
settlement of such options must be made exclusively through the OCC,
which has established banking relationships in applicable foreign
countries for this purpose. As a result, the OCC may, if it determines
that foreign government restrictions or taxes would prevent the orderly
settlement of foreign currency option exercises, or would result in undue
burdens on the OCC or its clearing member, impose special procedures on
exercise and settlement, such as technical changes in the mechanics of
delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.
In addition, options on U.S. government securities, futures contracts,
options on futures contracts, forward contracts and options on foreign
currencies may be traded on foreign exchanges and over-the-counter in
foreign countries. Such transactions are subject to the risk of
governmental actions affecting trading in or the prices of foreign
currencies or securities. The value of such positions also could be
adversely affected by (i) other complex foreign political and economic
factors, (ii) lesser availability than in the United States of data on
which to make trading decisions, (iii) delays in a Portfolio's ability to
act upon economic events occurring in foreign markets during nonbusiness
hours in the United States, (iv) the imposition of different exercise and
settlement terms and procedures and margin requirements than in the
United States, and (v) low trading volume.
OTHER INVESTMENT COMPANIES.
The Tactical Asset Allocation Portfolio may invest up to 10% of its total
assets, calculated at the time of purchase, in the securities of money market
funds, which are investment companies. The Portfolio may not invest (i) more
than 5% of its total assets in the securities of any one investment company or
(ii) in more than 3% of the total outstanding voting securities of any other
investment company. The Portfolio will indirectly bear its proportionate share
of any investment advisory fees and expenses paid by the funds in which it
invests, in addition to the investment advisory fee and expenses paid by the
Portfolio.
ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES.
Although it is the policy of the Flexible Income, Income Plus and Tactical
Asset Allocation Portfolios to invest primarily in income-producing securities,
each of the Portfolios other than the Aggressive Growth Portfolio may invest up
to 10% of their assets in zero coupon, pay-in-kind and step-coupon securities.
Zero-coupon bonds are issued and traded at a discount from their face value.
They do not entitle the holder to any periodic payment of interest prior to
maturity. Step coupon bonds trade at a discount from their face value and pay
coupon interest. The coupon rate is low for an initial period and then increases
to
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a higher coupon rate thereafter. The discount from the face amount or par value
depends on the time remaining until cash payments begin, prevailing interest
rates, liquidity of the security and the perceived credit quality of the issuer.
Pay-in-kind bonds give the issuer an option to pay cash at a coupon payment date
or give the holder of the security a similar bond with the same coupon rate and
a face value equal to the amount of the coupon payment that would have been
made. The Flexible Income Portfolio may also invest in "strips", which are debt
securities that are stripped of their interest after the securities are issued,
but otherwise are comparable to zero coupon bonds.
Current federal income tax law requires holders of zero-coupon securities
and step-coupon securities to report the portion of the original issue discount
on such securities that accrues that year as interest income, even though the
holders receive no cash payments of interest during the year. In order to
qualify as a "regulated investment company" under the Internal Revenue Code of
1986 ("Code"), a Portfolio must distribute its investment company taxable
income, including the original issue discount accrued on zero-coupon or
step-coupon bonds. Because it will not receive cash payments on a current basis
in respect of accrued original-issue discount on zero-coupon bonds or
step-coupon bonds during the period before interest payments begin, in some
years a Portfolio may have to distribute cash obtained from other sources in
order to satisfy the distribution requirements under the Code. A Portfolio might
obtain such cash from selling other portfolio holdings. These actions may reduce
the assets to which Portfolio expenses could be allocated and may reduce the
rate of return for such Portfolio. In some circumstances, such sales might be
necessary in order to satisfy cash distribution requirements even though
investment considerations might otherwise make it undesirable for a Portfolio to
sell the securities at the time.
Generally, the market prices of zero-coupon bonds and strip securities are
more volatile than the prices of securities that pay interest periodically and
in cash and are likely to respond to changes in interest rates to a greater
degree than other types of debt securities having similar maturities and credit
quality.
INCOME-PRODUCING SECURITIES.
As a fundamental policy, the Flexible Income Portfolio may not purchase a
non-income-producing security if, after such purchase, less than 80% of the
Flexible Income Portfolio's total assets would be invested in income-producing
securities. Income-producing securities include securities that make periodic
income payments, as well as those that make interest payments on a deferred
basis, or pay interest at maturity (as in the case with treasury bills or
zero-coupon bonds).
The Flexible Income Portfolio will purchase defaulted securities only when
its portfolio manager believes, based upon his analysis of the financial
condition, results of operations and economic outlook of an issuer, that there
is potential for resumption of income payments and that the securities offer an
unusual opportunity for capital appreciation. Notwithstanding the portfolio
manager's belief as to the resumption of income payments, however, the purchase
of any security on which payment of interest or dividends is suspended involves
a high degree of risk. Such risk includes, among other things, the following:
A. Financial and Market Risks. Investments in securities that are in
default involve a high degree of financial and market risks that can
result in substantial or at times even total losses. Issuers of defaulted
securities may have substantial capital needs and may become involved in
bankruptcy or reorganization proceedings. Among the problems involved in
investments in such issuers is the fact that it may be difficult to
obtain information about the condition of such issuers. The market prices
of such securities also are subject to abrupt and erratic movements and
above average price volatility, and the spread between the bid and asked
prices of such securities may be greater than normally expected.
B. Disposition of Portfolio Securities. Although the Flexible Income
Portfolio generally intends to purchase securities for which its
portfolio manager expects an active market to be maintained, defaulted
securities may be less actively traded than other securities and it may
be difficult to dispose of substantial holdings of such securities at
prevailing market prices. The Flexible Income Portfolio will limit its
holdings of any such securities to amounts that its portfolio manager
believes could be readily sold, and its holdings of such securities
would, in any event, be limited so as not to limit the Flexible Income
Portfolio's ability to readily dispose of its securities to meet
redemptions.
C. Other. Defaulted securities require active monitoring and may, at
times, require participation in bankruptcy or receivership proceedings on
behalf of the Flexible Income Portfolio.
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Other types of income producing securities that the Portfolios may purchase
include, but are not limited to, the following types of securities:
Variable and floating rate obligations. These types of securities are
relatively long-term instruments that often carry demand features
permitting the holder to demand payment of principal at any time or at
specified intervals prior to maturity.
Standby commitments. These instruments, which are similar to a put, give
the Portfolios the option to obligate a broker, dealer or bank to
repurchase a security held by the Portfolios at a specified price.
Tender option bonds. Tender option bonds are relatively long-term bonds
that are coupled with the agreement of a third party (such as a broker,
dealer or bank) to grant the holders of such securities the option to
tender the securities to the institution at periodic intervals.
Inverse floaters. Inverse floaters are instruments whose interest bears an
inverse relationship to the interest rate on another security. The
Portfolios will not invest more than 5% of their respective assets in
inverse floaters.
The Portfolios will purchase instruments with demand features, standby
commitments and tender option bonds primarily for the purpose of increasing the
liquidity of their portfolios.
LENDING OF PORTFOLIO SECURITIES.
Subject to any applicable investment restriction relating to lending, each
of the Portfolios other than the Tax-Exempt Portfolio and the may lend
securities from its portfolio. Under applicable regulatory requirements (which
are subject to change), the following conditions apply to securities loans: a)
the loan must be continuously secured by liquid assets maintained on a current
basis in an amount at least equal to the market value of the securities loaned;
b) a Portfolio must receive any dividends or interest paid by the issuer on such
securities; c) a Portfolio must have the right to call the loan and obtain the
securities loaned at any time upon notice of not more than five business days,
including the right to call the loan to permit voting of the securities; and d)
a Portfolio must receive either interest from the investment of collateral or a
fixed fee from the borrower. Securities loaned by a Portfolio remain subject to
fluctuations in market value. A Portfolio may pay reasonable finders, custodian
and administrative fees in connection with a loan. Securities lending, as with
other extensions of credit, involves the risk that the borrower may default.
Although securities loans will be fully collateralized at all times, a Portfolio
may experience delays in, or be prevented from, recovering the collateral.
During a period that a Portfolio seeks to enforce its rights against the
borrower, the collateral and the securities loaned remain subject to
fluctuations in market value. A Portfolio may also incur expenses in enforcing
its rights. If a Portfolio has sold the loaned security, it may not be able to
settle the sale of the security and may incur potential liability to the buyer
of the security on loan for its costs to cover the purchase. The Portfolios will
not lend securities to any advisers or sub-advisers to the Fund or their
affiliates. By lending its securities, a Portfolio can increase its income by
continuing to receive interest or dividends on the loaned securities as well as
by either investing the cash collateral in short-term securities or by earning
income in the form of interest paid by the borrower when U.S. government
securities are used as collateral.
ILLIQUID SECURITIES.
Each of the Aggressive Growth, Capital Appreciation, Global, Growth,
Equity-Income, Tactical Asset Allocation, Balanced and Flexible Income
Portfolios may invest up to 15%, and each of the Tax-Exempt and Income Plus
Portfolios may invest up to 10%, of its net assets in illiquid securities (i.e.,
securities that are not readily marketable). The Board of Trustees has
authorized the sub-advisers to make liquidity determinations with respect to
Rule 144A securities and municipal lease obligations in accordance with the
guidelines established by the Board of Trustees. Under the guidelines, the
portfolio manager will consider the following factors in determining whether a
Rule 144A security or a municipal lease obligation is liquid: 1) the frequency
of trades and quoted prices for the security; 2) the number of dealers willing
to purchase or sell the security and the number of other potential purchasers;
3) the willingness of dealers to undertake to make a market in the security; and
4) the nature of the marketplace trades, including the time needed to dispose of
the security, the method of soliciting offers and the mechanics of the transfer.
With respect to municipal lease obligations, the portfolio managers of the
Tax-Exempt and Flexible Income Portfolios will also consider factors unique to
municipal lease obligations including the general creditworthiness of the
municipality, the importance of the property covered by the lease obligation and
the likelihood that the marketability of the obligation will be maintained
throughout the time the obligation is held by the Portfolio. The sale of
illiquid securities often requires more time and results in higher brokerage
charges or dealer discounts and other selling expenses than does the sale of
securities eligible for trading on national securities exchanges or in the
over-the-counter
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markets. A Portfolio may be restricted in its ability to sell such securities at
a time when the sub-advisor deems it advisable to do so. In addition, in order
to meet redemption requests, a Portfolio may have to sell other assets, rather
than such illiquid securities, at a time which is not advantageous.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS.
Although each of the Portfolios may enter into repurchase and reverse
repurchase agreements, the Growth, Global, Flexible Income, Tax-Exempt,
Equity-Income and Income Plus Portfolios do not intend to invest more than 5% of
their assets, and the Balanced, Capital Appreciation, Aggressive Growth and
Tactical Asset Allocation Portfolios do not intend to invest more than 15% of
their assets, in either repurchase or reverse repurchase agreements. In a
repurchase agreement, a Portfolio purchases a security and simultaneously
commits to resell that security to the seller at an agreed upon price on an
agreed upon date within a number of days (usually not more than seven) from the
date of purchase. The resale price reflects the purchase price plus an agreed
upon incremental amount which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the seller
to pay the agreed upon price, which obligation is in effect secured by the value
(at least equal to the amount of the agreed upon resale price and marked-to-
market daily) of the underlying security or "collateral". A Portfolio may engage
in a repurchase agreement with respect to any security in which it is authorized
to invest. While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delays and costs to a Portfolio
in connection with bankruptcy proceedings), it is the policy of each Portfolio
to limit repurchase agreements to those parties whose creditworthiness has been
reviewed and found satisfactory by the investment sub-adviser for that Portfolio
and approved by the Board of Trustees of the Fund. In addition, the Portfolios
currently intend to invest primarily in repurchase agreements collateralized by
U.S. government securities whose value equals at least 100% of the repurchase
price, marked-to-market daily.
In a reverse repurchase agreement, a Portfolio sells a portfolio instrument
to another party, such as a bank or broker-dealer, in return for cash and agrees
to repurchase the instrument at a particular price and time. While a reverse
repurchase agreement is outstanding, a Portfolio will segregate cash and
appropriate liquid assets with the Fund's custodian to cover its obligation
under the agreement. The Portfolios will enter into reverse repurchase
agreements only with parties the investment sub-adviser for each Portfolio deems
creditworthy and that have been reviewed by the Board of Trustees of the Fund.
PASS-THROUGH SECURITIES.
Each of the Portfolios may, in varying degrees, invest in various types of
pass-through securities, such as mortgage-backed securities, asset-backed
securities and participation interests. A pass-through security is a share or
certificate of interest in a pool of debt obligations that have been repackaged
by an intermediary, such as a bank or broker-dealer. The purchaser receives an
undivided interest in the underlying pool of securities. The issuers of the
underlying securities make interest and principal payments to the intermediary
which are passed through to purchasers, such as the Portfolios. The most common
type of pass-through securities are mortgage-backed securities. Government
National Mortgage Association ("GNMA") Certificates are mortgage-backed
securities that evidence an undivided interest in a pool of mortgage loans. GNMA
Certificates differ from traditional bonds in that principal is paid back
monthly by the borrowers over the term of the loan rather than returned in a
lump sum at maturity. A Portfolio will generally purchase "modified
pass-through" GNMA Certificates, which entitle the holder to receive a share of
all interest and principal payments paid and owned on the mortgage pool, net of
fees paid to the "issuer" and GNMA, regardless of whether or not the mortgagor
actually makes the payment. GNMA Certificates are backed as to the timely
payment of principal and interest by the full faith and credit of the U.S.
government.
The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC guarantees timely payments of
interest on PCs and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay interest
semi-annually and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment of principal
and interest, but is not backed by the full faith and credit of the U.S.
government.
The Federal National Mortgage Association ("FNMA") issues guaranteed
mortgage pass-through certificates ("FNMA Certificates"). FNMA Certificates
resemble GNMA Certificates in that each FNMA Certificate represents a pro rata
share of all
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interest and principal payments made and owned on the underlying pool. This type
of security is guaranteed by FNMA as to timely payment of principal and
interest, but it is not backed by the full faith and credit of the U.S.
government.
Each of the mortgage-backed securities described above is characterized by
monthly payments to the holder, reflecting the monthly payments made by the
borrowers who received the underlying mortgage loans. The payments to the
security holders (such as a Portfolio), like the payments on the underlying
loans, represent both principal and interest. Although the underlying mortgage
loans are for specified periods of time, such as 20 or 30 years, the borrowers
can, and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the principal that is
part of the regular monthly payments. A borrower is more likely to prepay a
mortgage that bears a relatively high rate of interest. This means that in times
of declining interest rates, some of a Portfolio's higher yielding
mortgage-backed securities might be converted to cash and that Portfolio will be
forced to accept lower interest rates when that cash is used to purchase
additional securities in the mortgage-backed securities sector or in other
investment sectors. Mortgage and asset-backed securities may have periodic
income payments or may pay interest at maturity (as is the case with Treasury
bills or zero-coupon bonds).
Asset-backed securities represent interests in pools of consumer loans and
are backed by paper or accounts receivables originated by banks, credit card
companies or other providers of credit. Generally, the originating bank or
credit provider is neither the obliger or guarantor of the security and interest
and principal payments ultimately depend upon payment of the underlying loans by
individuals. Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales agreements
that may be created when a municipality enters into an installment purchase
contract or lease with a vendor. Such securities may be secured by the assets
purchased or leased by the municipality; however, if the municipality stops
making payments, there generally will be no recourse against the vendor. The
market for tax-exempt asset-backed securities is still relatively new. These
obligations are likely to involve unscheduled prepayments of principal.
HIGH-YIELD/HIGH-RISK BONDS.
High-yield/high-risk, below investment grade securities (commonly known as
"junk bonds") involve significant credit and liquidity concerns and fluctuating
yields and are not suitable for short-term investing. Higher yields are
ordinarily available on fixed-income securities which are unrated or are rated
in the lower rating categories of recognized rating services such as Moody's and
Standard & Poor's. None of the Portfolios other than the Flexible Income
Portfolio and the Income Plus Portfolio may invest more than 5% of its net
assets in junk bonds. Lower rated bonds also involve the risk that the issuer
will not make interest or principal payments when due. In the event of an
unanticipated default, a Portfolio owning such bonds would experience a
reduction in its income, and could expect a decline in the market value of the
securities so affected. More careful analysis of the financial condition of each
issuer of lower rated securities is therefore necessary. During an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress which would adversely affect their
ability to service their principal and interest payments obligations, to meet
projected business goals and to obtain additional financing.
The market prices of lower grade securities are generally less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic or political changes or individual developments specific to the
issuer. Periods of economic or political uncertainty and change can be expected
to result in volatility of prices of these securities. Since the last major
economic recession, there has been a substantial increase in the use of
high-yield debt securities to fund highly leveraged corporate acquisitions and
restructurings, so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of future performance
during such periods. Lower rated securities also may have less liquid markets
than higher rated securities, and their liquidity as well as their value may be
more severely affected by adverse economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a greater
negative impact on the market for lower rated bonds.
Unrated securities are not necessarily of lower quality than rated
securities, but the markets for lower rated and nonrated securities are more
limited than those in which higher rated securities are traded. In addition, an
economic downturn or increase in interest rates is likely to have a greater
negative effect on the market for lower rated and nonrated securities, the value
of high yield debt securities held by a Portfolio, the new asset value of a
Portfolio holding such securities and the ability of the bonds' issuers to repay
principal and interest, meet projected business goals and obtain additional
financing than on higher rated securities.
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WARRANTS AND RIGHTS.
Each of the Portfolios other than the Tax-Exempt Portfolio may invest in
warrants and rights. A warrant is a type of security that entitles the holder to
buy a proportionate amount of common stock at a specified price, usually higher
than the market price at the time of issuance, for a period of years or to
perpetuity. In contrast, rights, which also represent the right to buy common
shares, normally have a subscription price lower than the current market value
of the common stock and a life of two to four weeks. The Portfolios intend to
invest in warrants valued at the lower of cost or market value not exceeding 5%
of the value of their net assets, and that are freely transferrable and traded
on the major securities exchanges.
U.S. GOVERNMENT SECURITIES.
Examples of the types of U.S. government securities that the Portfolios may
hold include, in addition to those described in the Prospectus and direct
obligations of the U.S. Treasury, the obligations of the Federal Housing
Administration, Farmers Home Administration, Small Business Administration,
General Services Administration, Central Bank for Cooperatives, Federal Farm
Credit Banks, Federal Home Loan Bank, Federal Intermediate Credit Banks, Federal
Land Banks and Maritime Administration. U.S. government securities may be
supported by the full faith and credit of the U.S. government (such as
securities of the Small Business Administration); by the right of the issuer to
borrow from the Treasury (such as securities of the Federal Home Loan Bank); by
the discretionary authority of the U.S. government to purchase the agency's
obligations (such as securities of the Federal National Mortgage Association);
or only by the credit of the issuing agency.
PORTFOLIO TURNOVER.
As stated in the Prospectus, each of the Growth, Global, Flexible Income,
Balanced, Capital Appreciation, Aggressive Growth, Equity-Income and Tactical
Asset Allocation Portfolios generally intends to purchase and sell securities as
deemed appropriate by its portfolio manager to further the Portfolio's stated
investment objective, and the rate of portfolio turnover is not expected to be a
limiting factor when changes are deemed to be appropriate. The Growth
Portfolio's portfolio turnover rate for the fiscal years ended September 30,
1994, 1993 and 1992 were 63.73%, 97.40% and 56.21%, respectively. The Global
Portfolio's portfolio turnover rate for the fiscal years ended September 30,
1994 and 1993 were 148.01% and 116.98%, respectively. The Flexible Income
Portfolio's portfolio turnover rate for the fiscal year ended September 30, 1994
was 105.40%. For the eleven month period ended September 30, 1993, the portfolio
turnover rate of IDEX Total Income Trust, predecessor to the Flexible Income
Portfolio, was 138.86%. For the fiscal year ended October 31, 1992, IDEX Total
Income Trust's portfolio turnover rate was 140.23%. The estimated annual
turnover rates for the each of the Balanced and Capital Appreciation Portfolios
for the fiscal year ended September 30, 1995 are anticipated to be up to 200%.
The estimated annual turnover rate for the Aggressive Growth Portfolio for the
fiscal year ended September 30, 1995 is anticipated to be less than 150%. The
estimated annual turnover rate for the Equity-Income Portfolio for the fiscal
year ended September 30, 1995 is anticipated to be under 100%. The estimated
annual turnover rate for the Tactical Asset Allocation Portfolio for the fiscal
year ended September 30, 1996 is also anticipated to be under 100%.
These percentages are calculated by dividing the lesser of purchases or
sales of portfolio securities during the fiscal year by the monthly average of
the value of such securities (excluding from the computation all securities,
including options, with maturities at the time of acquisition of one year or
less). For example, a portfolio turnover rate of 100% would mean that all of the
Portfolio's securities (except those excluded from the calculation) were
replaced once in a period of one year. A high rate of portfolio turnover
generally involves correspondingly greater brokerage commission expenses.
Turnover rates may vary greatly from year to year as well as within a particular
year and may also be affected by cash requirements for redemptions of the
Portfolio's shares and by requirements, the satisfaction of which enable the
Portfolio to receive favorable tax treatment. Because the rate of portfolio
turnover is not a limiting factor; however, particular holdings may be sold at
any time, if investment judgement or portfolio operations make a sale advisable.
As a result, the annual portfolio turnover rate in future years may exceed the
percentage shown above.
Portfolio transactions for the Tax-Exempt Portfolio and the Income Plus
Portfolio ordinarily undertaken to achieve each Portfolio's investment objective
in light of anticipated movements in the level of interest rates. The investment
policies of the Tax-Exempt Portfolio and the Income Plus Portfolio may lead to
frequent changes in investments, particularly in periods of rapidly fluctuating
interest rates. The portfolio turnover rate of each Portfolio normally is
anticipated to be less than 100%, although this rate will not be a limiting
factor when either Portfolio deems it desirable to sell or purchase securities.
For the fiscal years ended September 30, 1994 and 1993 and the ten-month period
ended September 30, 1992, the portfolio turnover rates of the Tax-Exempt
Portfolio were 59.84%, 91.03% and 106.38%, respectively. For the fiscal years
ended
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September 30, 1994 and 1993 and the ten-month period ended September 30, 1992,
the portfolio turnover rates of the Income Plus Portfolio were 48.12%, 54.51%
and 90.40%, respectively.
INVESTMENT ADVISORY AND OTHER SERVICES
GROWTH, GLOBAL, FLEXIBLE INCOME, BALANCED AND CAPITAL APPRECIATION PORTFOLIOS
The Fund has entered into a Management and Investment Advisory Agreement
(collectively, the "Advisory Agreements") applicable to the Growth, Global,
Flexible Income, Balanced and Capital Appreciation Portfolios with Idex
Management, Inc. ("IMI"), 201 Highland Avenue, Largo, Florida 34640. IMI
supervises each Portfolio's investments and conducts its investment program.
Each Advisory Agreement provides that IMI will perform the following services or
cause them to be performed by others: (i) furnish to the Portfolio investment
advice and recommendations, (ii) supervise the purchase and sale of securities
as directed by appropriate Fund officers, and (iii) be responsible for the
administration of the Portfolio. For its services to each of those Portfolios,
IMI receives an annual fee, computed daily and paid monthly, equal to 1.00% of
the first $750 million of that Portfolio's average daily net assets, 0.9% of the
next $250 million of that Portfolio's average daily net assets, and 0.8% of the
average daily net assets of that Portfolio in excess of $1 billion. The Growth
Portfolio incurred investment advisory fees of $4,949,754, $4,960,323 and
$2,455,962 for the fiscal years ended September 30, 1994, 1993 and 1992,
respectively. For the fiscal year ended September 30, 1994, the Global Portfolio
incurred investment advisory fees of $558,189. For the fiscal year ended
September 30, 1993, the Global Portfolio incurred investment advisory fees of
$64,951 (net of fees waived by IMI of $52,462 pursuant to the Global Portfolio's
expense limitation of 2.5%). For the fiscal year ended September 30, 1994, the
Flexible Income Portfolio incurred investment advisory fees of $136,806 (net of
fee waivers by IMI of $98,496 pursuant to the Flexible Income Portfolio's
expense limitation of 1.5%). For the eleven month period ended September 30,
1993 and the fiscal year ended October 31, 1992, IDEX Total Income Trust,
predecessor to the Flexible Income Portfolio, incurred investment advisory fees
of $186,653 and $163,429, respectively (net of fees waived by IMI of $53,337 and
$38,279, respectively, pursuant to IDEX Total Income Trust's voluntary expense
limitation of 1.5%).
No investment advisory fees were paid for the fiscal year ended September
30, 1994 for the IDEX II Balanced and Capital Appreciation Portfolios, as those
Portfolios did not commence operations until December 2, 1994.
The duties and responsibilities of the investment adviser are specified in
the Advisory Agreements. The Agreements were approved by the Board of Trustees
of the Fund (including a majority of trustees who are not parties to the
Agreement or interested persons, as defined by the 1940 Act, of any such party.)
The Agreements are not assignable and may be terminated without penalty upon 60
days written notice at the option of either the Fund or IMI or by a vote of
shareholders of each Portfolio. Each provides that it can be continued from year
to year so long as such continuance is specifically approved annually (a) by the
Board of Trustees of the Fund or by a majority of the outstanding shares of the
Portfolio and (b) by a majority vote of the Trustees who are not parties to the
Agreement or interested persons of any such party cast in person at a meeting.
The Agreements also provide that IMI shall not be liable to the Fund or to
any shareholder for any error of judgment or mistake of law or for any loss
suffered by the Fund or by any shareholder in connection with matters to which
the Agreements relate, except for a breach of fiduciary duty or a loss resulting
from willful misfeasance, bad faith, gross negligence, or reckless disregard on
the part of IMI in the performance of its duties thereunder.
The Growth Portfolio's Advisory Agreement became effective April 22, 1991.
The Global Portfolio's Advisory Agreement became effective April 22, 1992. The
Flexible Income Portfolio's Advisory Agreement was entered into as of August 5,
1993. The Balanced and Capital Appreciation Portfolio's Advisory Agreements were
entered into as of September 30, 1994.
IMI supervises all of the administrative functions of these Portfolios,
provides office space, and pays its allocable portion of the salaries, fees and
expenses of all Fund officers and of those trustees who are affiliated with IMI.
The costs and expenses, including legal and accounting fees, filing fees and
printing costs in connection with the formation of the Fund and the preparation
and filing of the Fund's initial registration statements under the Securities
Act of 1933 and 1940 Act are paid by IMI.
The Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios each pay its allocable share of the fees and expenses of the Fund's
non-interested trustees, custodian and transfer agent fees, brokerage
commissions and all other expenses in connection with the execution of its
portfolio transactions, administrative, clerical, recordkeeping, bookkeeping,
legal, auditing and accounting expenses, interest and taxes, expenses of
preparing tax returns, expenses of shareholders' meetings and preparing,
printing and mailing proxy statements (unless otherwise agreed to by the Fund
and
28
<PAGE> 88
IMI), expenses of preparing and typesetting periodic reports to shareholders
(except for those reports the Portfolio permits to be used as sales literature),
and the costs, including filing fees, of renewing or maintaining registration of
Portfolio shares under federal and state law. Whenever, in any fiscal year, the
total cost to a Portfolio of normal operating expenses chargeable to its income
account, including the investment advisory fee but excluding brokerage
commissions, interest, taxes and 12b-1 fees, exceeds on an annual basis the
lesser of the most restrictive expense limitation imposed by any state in which
its shares are offered or, with respect to the Growth, Global and Flexible
Income Portfolios, 1.5% of each Portfolio's average daily net assets, and with
respect to the Balanced Portfolio and the Capital Appreciation Portfolios, 2.5%
of each Portfolio's average daily net assets for the first fiscal year, and 1.5%
thereafter, IMI will reimburse that Portfolio, or waive fees in an amount equal
to that excess.
IMI has entered into an Investment Counsel Agreement applicable to each of
the Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios, respectively, with Janus Capital Corporation ("Janus Capital").
These Agreements are referred to collectively as the Investment Counsel
Agreements. The Investment Counsel Agreement for the Growth Portfolio became
effective April 22, 1991, the Global Portfolio's Investment Counsel Agreement
became effective April 22, 1992, the Flexible Income Portfolio's Investment
Counsel Agreement became effective August 5, 1993, and the Balanced and Capital
Appreciation Portfolios' respective Investment Counsel Agreements were entered
into as of September 30, 1994. Further discussions of the basic fee arrangements
and allocation of responsibilities are set forth in the Prospectus. The Growth
Portfolio incurred investment sub-advisory fees of $2,474,877, $2,480,162 and
$1,227,981 for the fiscal years ended September 30, 1994, 1993 and 1992,
respectively. For the fiscal years ended September 30, 1994 and 1993, the Global
Portfolio incurred investment sub-advisory fees of $279,095 and $32,476,
respectively. For the fiscal year ended September 30, 1994, the Flexible Income
Portfolio incurred investment sub-advisory fees of $68,403. For the eleven month
period ended September 30, 1993 and the fiscal year ended October 31, 1992, IDEX
Total Income Trust, predecessor to the Flexible Income Portfolio, incurred
investment sub-advisory fees of $93,327 and $81,715, respectively.
No investment sub-advisory fees were paid for the fiscal year ended
September 30, 1994 for the IDEX II Balanced and Capital Appreciation Portfolios,
as those Portfolios did not commence operations until December 2, 1994.
The Investment Counsel Agreements provide for additional compensation to be
paid by IMI to Janus Capital as follows: If on December 31 of 1995, and December
31 of each year thereafter ("Target Date") the aggregate actual net assets on
that date of the Fund and any other registered investment company sponsored by
IMI, containing the name IDEX or with respect to which IMI acts as investment
adviser or administrator, and to which Janus Capital provides investment advice
(the "Advised Funds") are less than the applicable Target Net Assets specified
in Table 1 below, then IMI shall pay to Janus Capital a percentage, as specified
in Table 2 below, of the Net Fee otherwise payable to InterSecurities, Inc., or
any other affiliate of IMI serving as administrator to the Fund for the calendar
year following such date (the "Administrator").
TABLE 1
--------
<TABLE>
<CAPTION>
ADVISED FUNDS TARGET
TARGET DATE NET ASSETS
-------------------------------------- --------------------
<S> <C>
December 31, 1995 $950 million
(and December 31 of each
year thereafter)
</TABLE>
The Net Fee of the Administrator shall be the fee received by the
Administrator from IMI less any reimbursement from the Administrator in
connection with any applicable expense limitation. The percentage of the Net Fee
so payable to Janus Capital shall be determined by the percentage that on the
applicable Target Date the aggregate actual net assets of the
29
<PAGE> 89
Advised Funds are less than the applicable Target Net Assets of the Advised
Funds ("Shortfall of Target") in accordance with Table 2 below:
TABLE 2
--------
<TABLE>
<CAPTION>
PERCENTAGE OF
SHORTFALL OF TARGET NET FEE
-------------------------------- --------------
<S> <C>
5% - 10% 10%
Over 10% - 20% 20%
Over 20% - 30% 30%
Over 30% 40%
</TABLE>
No additional fees shall be payable to Janus Capital for any year if, for
the five-year period ending December 31 of the preceding year, the respective
total returns of a majority of the Advised Funds that have the objective of
investing primarily in equity securities with such a five-year record (and with
respect to which Janus Capital shall have provided investment advice for all of
such five years and for the then current year), which in 1994 were IDEX Fund,
IDEX II Growth, Global, Balanced and Capital Appreciation Portfolios and IDEX
Fund 3, are not in the top one-third of their respective fund categories as
determined by Lipper Analytical Services, Inc. or its successor (or if no
successor exists, by a mutually agreed upon statistical service). No additional
fees were payable by IMI to Janus Capital for 1994 because Advised Funds Target
Net Assets exceeded $950 million on December 31, 1994.
IMI and Janus Capital also serve as investment adviser and sub-adviser,
respectively, to certain other funds in the IDEX Group: IDEX Fund and IDEX Fund
3. Janus Capital also serves as sub-adviser to certain portfolios of WRL Series
Fund, Inc., a registered investment company. Janus Capital and its predecessor
Janus Management Corporation have served as investment adviser to Janus Fund
since 1969 and currently serves as investment adviser to each portfolio of the
Janus Investment Fund and Janus Aspen Series. Janus Capital also has served
since 1969 as investment adviser to individual, corporate, charitable and
retirement accounts where aggregate assets under management were over $2.7
billion on December 31, 1994.
Janus Capital and AUSA Holding Company ("AUSA") each own 50% of the
outstanding stock of IMI. AUSA also owns 100% of the outstanding shares of the
Fund's distributor and transfer agent. AUSA is wholly-owned by AEGON USA, Inc.,
a financial services holding company located at 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499. AEGON USA, Inc. is a wholly-owned indirect subsidiary of
AEGON nv, a Netherlands corporation and publicly traded international insurance
group. Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of
Janus Capital, most of which it acquired in 1984. Thomas H. Bailey, President
and Chairman of the Boards of Janus Capital and IMI, owns approximately 12% of
Janus Capital's voting stock and, by agreement with KCSI, selects a majority of
Janus Capital's Board. KCSI, whose address is 114 West 11th Street, Kansas City,
Missouri 64105-1804, is a publicly traded holding company whose primary
subsidiaries, are engaged in transportation and financial services.
TAX-EXEMPT, INCOME PLUS, AGGRESSIVE GROWTH, EQUITY-INCOME AND TACTICAL ASSET
ALLOCATION PORTFOLIOS
The Fund has entered into a Management and Investment Advisory Agreement
(collectively, the "Advisory Agreements") applicable to each of the Tax-Exempt,
Income Plus, Aggressive Growth, Equity-Income and Tactical Asset Allocation
Portfolios with InterSecurities, Inc. ("ISI"), whose address is 201 Highland
Avenue, Largo, Florida 34640. ISI supervises each of these Portfolios'
investments and conducts its investment program. Each of these Portfolios'
Advisory Agreement provides that ISI will perform the following services or
cause them to be performed by others: (i) furnish to the Portfolio investment
advice and recommendations, (ii) supervise the purchase and sale of securities
as directed by appropriate Fund officers, and (iii) be responsible for the
administration of the Portfolio. ISI carries out and supervises all of the
administrative functions of the Portfolios, provides office space and pays its
allocable portion of the salaries, fees and expenses of all Fund officers and of
those trustees who are affiliated with ISI. For its services to the Tax-Exempt
and Income Plus Portfolios, ISI receives an annual fee of .60% of that
Portfolio's average daily net assets computed and paid on a monthly basis. For
its services to the Aggressive Growth, Equity-Income and Tactical Asset
Allocation Portfolios, ISI receives an annual fee, computed daily and paid
monthly, equal to 1.00% of the first $750 million of that Portfolio's average
daily net assets, 0.9% of the next $250 million of that Portfolio's average
daily net assets, and 0.8% of the average daily net assets of the Portfolio in
excess of $1 billion. For the fiscal years ended September 30, 1994 and 1993 and
the ten-month period ended September 30, 1992, the Tax-Exempt Portfolio incurred
investment advisory fees of $65,782, $48,680 and $101,936, respectively (net of
fee waivers by ISI of $115,553 for the year ended 1994, $125,292 for the year
ended 1993, and fee waivers by ISI and
30
<PAGE> 90
AEGON USA Securities, Inc. (formerly known as MidAmerica Management Corporation)
of $49,709 for the year ended 1992 pursuant to the Tax-Exempt Portfolio's
expense limitation). The Income Plus Portfolio incurred investment advisory fees
of $421,791, $378,875 and $254,167 for the fiscal years ended September 30, 1994
and 1993 and the ten month period ended September 30, 1992, respectively.
No investment advisory fees were paid for the fiscal year ended September
30, 1994 by the IDEX II Aggressive Growth, Equity-Income and Tactical Asset
Allocation Portfolios, as those Portfolios had not commenced operations as of
that date.
The duties and responsibilities of the investment adviser are specified in
the Advisory Agreements. The Agreements were approved by the Board of Trustees
of the Fund (including a majority of trustees who are not parties to the
Agreement or interested persons, as defined by the 1940 Act, of any such party).
The Agreements are not assignable and may be terminated without penalty upon 60
days written notice at the option of either the Fund or ISI or by a vote of
shareholders of each Portfolio. Each provides that it can be continued from year
to year so long as such continuance is specifically approved annually (a) by the
Board of Trustees of the Fund or by a majority of the outstanding shares of the
Portfolio and (b) by a majority vote of the Trustees who are not parties to the
Agreement or interested persons of any such party cast in person at a meeting.
The Agreements also provide that ISI shall not be liable to the Fund or to
any shareholder for any error of judgment or mistake of law or for any loss
suffered by the Fund or by any shareholder in connection with matters to which
the Agreements relate, except for a breach of fiduciary duty or a loss resulting
from willful misfeasance, bad faith, gross negligence, or reckless disregard on
the part of ISI in the performance of its duties thereunder.
The Advisory Agreement for each of the Tax-Exempt and Income Plus
Portfolios became effective April 22, 1992. The Advisory Agreement for each of
the Aggressive Growth and Equity Income Portfolios was entered into as of
September 30, 1994. The Advisory Agreement for the Tactical Asset Allocation
Portfolio was entered into as of June 1, 1995.
Each of the Tax-Exempt, Income Plus, Aggressive Growth, Equity-Income and
Tactical Asset Allocation Portfolios pays custodian and transfer agent fees,
brokerage commissions and all other expenses in connection with the execution of
portfolio transactions, administrative, clerical, recordkeeping, bookkeeping,
legal, auditing and accounting expenses, interest and taxes, expenses of
preparing tax returns, expenses of shareholders' meetings and preparing,
printing and mailing proxy statements (unless otherwise agreed to by the Fund
and ISI), expenses of preparing and typesetting periodic reports to its
shareholders (except for those reports the Fund permits to be used as sales
literature), its allocable share of the fees and expenses of the Fund's
non-interested Trustees, and the costs, including filing fees, of registering
and renewing or maintaining registration of its shares under federal and state
law. ISI will reimburse a Portfolio, or waive fees, or both, whenever, in any
fiscal year, the total cost to a Portfolio of normal operating expenses
chargeable to its income account, including the investment advisory fee but
excluding brokerage commissions, interest, taxes and 12b-1 fees, exceeds the
strictest applicable expense limitation imposed by state law. Further, pursuant
to an expense limitation voluntarily adopted by ISI, ISI plans to reimburse a
Portfolio, or waive fees, or both, whenever, in any fiscal year, in the case of
the Tax-Exempt and Income Plus Portfolios, the total costs to a Portfolio of
such normal operating expenses exceeds 0.65% and 1.25% of the average daily net
assets of the Tax-Exempt Portfolio and Income Plus Portfolio, respectively, and
in the case of the Aggressive Growth, Equity Income and Tactical Asset
Allocation Portfolios, the total cost to a Portfolio of such normal operating
expenses exceeds 2.5% of the average daily net assets of the Aggressive Growth
Portfolio, the Equity Income Portfolio or the Tactical Asset Allocation
Portfolio for the first fiscal year, and 1.5% thereafter, if such limitations
are less than the strictest applicable expense limitation imposed by state law.
AEGON USA Investment Management, Inc. ("AEGON Management"), 4333 Edgewood
Road, N.E., Cedar Rapids, Iowa 52499, serves as the investment sub-adviser to
the Tax-Exempt Portfolio and the Income Plus Portfolio pursuant to an Investment
Counsel Agreement relating to each Portfolio. Each Investment Counsel Agreement
was entered into between ISI and AEGON Securities which assigned each Agreement
to AEGON Management, the parent of AEGON Securities, on September 30, 1992.
AEGON Management is a wholly-owned indirect subsidiary of AEGON USA and thus is
an affiliate of ISI and IMI.
The Tax-Exempt Portfolio incurred investment sub-advisory fees of $32,891,
$24,340 and $50,968 for the fiscal years ended September 30, 1994 and 1993 and
the ten-month period ended September 30, 1992, respectively. For the fiscal
years ended September 30, 1994 and 1993 and the ten-month period ended September
30, 1992, the Income Plus Portfolio incurred investment sub-advisory fees of
$210,896, $189,438 and $127,084, respectively.
Fred Alger Management, Inc. ("Alger Management"), 75 Maiden Lane, New York,
NY 10038, serves as the investment sub-adviser to the Aggressive Growth
Portfolio pursuant to an Investment Counsel Agreement dated as of September 30,
31
<PAGE> 91
1994 relating to that Portfolio. Luther King Capital Management Corporation
("Luther King"), 301 Commerce Street, Suite 1600, Fort Worth, TX 76102, serves
as the investment sub-adviser to the Equity-Income Portfolio pursuant to an
Investment Counsel Agreement dated as of September 30, 1994 relating to that
Portfolio. Dean Investment Associates ("Dean Investment"), a Division of C.H.
Dean and Associates, Inc., 2480 Kettering Tower, Dayton, Ohio 45423-2480 serves
as the investment sub-adviser to the Tactical Asset Allocation Portfolio
pursuant to an Investment Counsel Agreement dated as of June 1, 1995 relating to
that Portfolio. Discussions of the fee arrangements and allocation of
responsibilities are set forth in the Prospectus.
No investment sub-advisory fees were paid for the fiscal year ended
September 30, 1994 by the IDEX II Aggressive Growth, Equity-Income and Tactical
Asset Allocation Portfolios, as those Portfolios had not commenced operations as
of that date.
Janus Capital, AEGON Management, Alger Management, Luther King and Dean
Investment also serve as sub-advisers to certain portfolios of WRL Series Fund,
Inc., a registered investment company. Janus Capital, AEGON Management, Alger
Management, Luther King and Dean Investment may be referred to herein
collectively as the "sub-advisers" and individually as a "sub-adviser."
ADDITIONAL INVESTMENT ADVISORY OR SUB-ADVISORY SERVICES PROVIDED BY THE
SUB-ADVISERS
Janus Capital provides investment advisory services to IMI for the Growth,
Global, Flexible Income, Balanced and Capital Appreciation Portfolios. AEGON
Management provides investment advisory services to ISI for the Tax-Exempt and
Income Plus Portfolios. Alger Management provides investment advisory services
to ISI for the Aggressive Growth Portfolio. Luther King provides investment
advisory services to ISI for the Equity-Income Portfolio. Dean Investment
provides investment advisory services to ISI for the Tactical Asset Allocation
Portfolio. Each of the sub-advisers also serves as investment adviser or
sub-adviser to other funds and/or private accounts which may have investment
objectives identical or similar to that of the Portfolios. Securities frequently
meet the investment objectives of one or all of these Portfolios, the other
funds and the private accounts. In such cases, a sub-adviser's decision to
recommend a purchase to one fund or account rather than another is based on a
number of factors. The determining factors in most cases are the amounts
available for investment by each fund or account, the amount of securities of
the issuer then outstanding, the value of those securities and the market for
them. Another factor considered in the investment recommendations is other
investments which each fund or account presently has in a particular industry.
It is possible that at times identical securities will be held by more than
one fund or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that more than one of the funds or
private accounts served by a sub-adviser seeks to acquire or sell the same
security at about the same time, either the price obtained by the Portfolios or
the amount of securities that may be purchased or sold by a Portfolio at one
time may be adversely affected. On the other hand, if the same securities are
bought or sold at the same time by more than one fund or account, the resulting
participation in volume transactions could produce better executions for the
Portfolios. In the event more than one fund or account purchases or sells the
same security on a given date, the purchase and sale transactions are allocated
among the Portfolio(s), the other funds and the private accounts in a manner
believed by the sub-advisers to be equitable to each.
DISTRIBUTOR
The Fund has entered into an Underwriting Agreement with ISI to act as the
principal underwriter of Fund shares. The Underwriting Agreement will continue
from year to year so long as its continuance is approved at least annually in
the same manner as the Investment Advisory Agreements discussed above. A
discussion of ISI's responsibilities and charges as principal underwriter of
Fund shares is set forth in the Prospectus.
For the fiscal years ended September 30, 1994, 1993 and 1992, ISI received
$2,389,332, $4,372,620 and $10,333,550, respectively, and retained $346,753,
$602,394 and $1,519,572, respectively, in underwriting commissions on the sale
of Growth Portfolio shares. For the fiscal years ended September 30, 1994 and
1993, ISI received $1,202,555 and $131,986, respectively, and retained $102,320
and $13,201, respectively, in underwriting commissions on the sale of Global
Portfolio shares. For the fiscal year ended September 30, 1994, ISI received
$66,672 and retained $12,453 in underwriting commissions on the sale of Flexible
Income Portfolio shares. On the sale of shares of IDEX Total Income Trust,
predecessor to the Flexible Income Portfolio, ISI received $213,601 and
$363,523, respectively, and retained $28,977 and
32
<PAGE> 92
$49,836, respectively, in underwriting commissions for the eleven month period
ended September 30, 1993 and the fiscal year ended October 31, 1992.
For the fiscal years ended September 30, 1994 and 1993, ISI received
$73,000 and $80,394, respectively, and retained $14,193 and $6,931,
respectively, in underwriting commissions on the sale of Tax-Exempt Portfolio
shares. For the ten month period ended September 30, 1992, ISI and AEGON
Securities, principal underwriter of AEGON USA Managed Portfolios, Inc.,
received $108,920 and retained $13,544 in underwriting commissions on the sale
of Tax-Exempt Portfolio shares. For the fiscal years ended September 30, 1994
and 1993, ISI received $285,345 and $376,367, respectively, and retained $52,998
and $32,200, respectively, in underwriting commissions on the sale of Income
Plus Portfolio shares. For the ten-month period ended September 30, 1992, ISI
and AEGON Securities received $300,840 and retained $34,181 in underwriting
commissions on the sale of Income Plus Portfolio shares.
No underwriting commissions were received or retained on the sale of
Balanced, Capital Appreciation, Aggressive Growth, Equity-Income or Tactical
Asset Allocation Portfolio shares for the fiscal year ended September 30, 1994,
as those Portfolios had not commenced operations at that time.
ADMINISTRATIVE SERVICES
ISI also serves as administrator to each Portfolio. This is in addition to
ISI's responsibilities as principal underwriter and distributor of Portfolio
shares. IMI has entered into an Administrative Services Agreement
("Administrative Agreement") with ISI applicable to each of the Growth, Global,
Flexible Income, Balanced and Capital Appreciation Portfolios. Under each
Administrative Agreement, ISI carries out and supervises all of the
administrative functions of the Portfolio and incurs IMI's expenses related to
such functions. The basic fee arrangement and allocation of responsibilities is
set forth in the Prospectus. The amount payable to ISI under the Administrative
Agreement will be reduced to the extent that additional compensation is paid by
IMI to Janus Capital, as described above under "Investment Advisory and Other
Services -- Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios".
The administrative duties of ISI with respect to each Portfolio include:
providing the Portfolio with office space, telephones, office equipment and
supplies; paying the compensation of the Fund's officers for services rendered
as such; supervising and assisting in preparation of annual and semi-annual
reports to shareholders, notices of dividends, capital gain distributions and
tax information; supervising compliance by the Fund with the recordkeeping
requirements under the 1940 Act and regulations thereunder and with the state
regulatory requirements; maintaining books and records of the Portfolio (other
than those maintained by the Fund's custodian and transfer agent); preparing and
filing tax returns and reports; monitoring and supervising relationships with
the Fund's custodian and transfer agent; monitoring the qualifications of tax
deferred retirement plans providing for investment in shares of the Portfolio;
authorizing expenditures and approving bills for payment on behalf of the
Portfolio; and providing executive, clerical and secretarial help needed to
carry out its duties.
CUSTODIAN, TRANSFER AGENT AND OTHER AFFILIATES
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas
City, Missouri 64105, is Custodian for the Fund. The Custodian is in no way
responsible for any of the investment policies or decisions of a Portfolio, but
holds its assets in safekeeping and collects and remits the income thereon
subject to the instructions of the Fund. For the fiscal years ended September
30, 1994, 1993 and 1992, the Growth Portfolio incurred custodian fees and
expenses of $69,012, $76,802 and $62,493, respectively, net of earnings credits
of $78,696, $36,334 and $6,596, respectively. For the fiscal years ended
September 30, 1994 and 1993, the Global Portfolio incurred custodian fees and
expenses of $254,474 and $27,632, respectively, net of earnings credits of
$42,370 and $5,809, respectively. For the fiscal year ended September 30, 1994,
the Flexible Income Portfolio incurred custodian fees and expenses of $17,912,
net of earnings credits of $10,676. For the eleven month period ended September
30, 1993 and the fiscal year ended October 31, 1992, IDEX Total Income Trust,
predecessor to the Flexible Income Portfolio, incurred custodian fees and
expenses of $28,632 and $36,224, respectively, net of earnings credits of $5,171
for 1993. For the fiscal years ended September 30, 1994 and 1993 and the ten
month period ended September 30, 1992, the Tax-Exempt Portfolio incurred
custodian fees and expenses of $6,192, $7,822 and $8,330, respectively, net of
earnings of $11,082 for 1994 and $9,263 for 1993. For the fiscal years ended
September 30, 1994 and 1993 and the ten month period ended September 30, 1992,
the Income Plus Portfolio incurred custodian fees and expenses of $17,039,
$12,391 and $16,032, respectively, net of earnings credits of $8,914 for 1994
and $7,005 for 1993.
33
<PAGE> 93
Idex Investor Services, Inc., P. O. Box 9015, Clearwater, Florida
34618-9015, is the Fund's transfer agent, withholding agent and dividend
disbursing agent. Idex Investor Services, Inc. is a wholly-owned subsidiary of
AUSA Holding Company and thus is an affiliate of IMI, ISI and AEGON Management.
Each Portfolio pays the transfer agent a monthly per-account charge of $1.185
for each of its shareholder accounts in existence during the prior month, plus
$2.48 for each new account opened in the prior month. For the fiscal years ended
September 30, 1994, 1993 and 1992, the Growth Portfolio incurred transfer agency
fees and expenses of $1,523,083, $1,160,335 and $512,327, respectively, net of
brokerage credits of $12,039 for 1994 and $26,696 for 1993. For the fiscal years
ended September 30, 1994 and 1993, the Global Portfolio incurred transfer agency
fees and expenses of $34,294 and $27,632, respectively, net of brokerage credits
of $222 and $1,319, respectively. For the fiscal year ended September 30, 1994,
the Flexible Income Portfolio incurred transfer agency fees and expenses of
$60,995. For the eleven month period ended September 30, 1993 and the fiscal
year ended October 31, 1992, IDEX Total Income Trust, predecessor to the
Flexible Income Portfolio, incurred transfer agency fees and expenses of $57,258
and $48,487, respectively. For the fiscal years ended 1994, 1993 and the ten
month period ended September 30, 1992, the Tax-Exempt Portfolio incurred
transfer agency fees and expenses of $40,702, $31,420 and $18,071, respectively.
For the fiscal years ended 1994, 1993 and the ten month period ended September
30, 1992, the Income Plus Portfolio incurred transfer agency fees and expenses
of $152,834, $93,313 and $30,603, respectively.
No custodian or transfer agency fees and expenses were incurred by the IDEX
II Balanced, Capital Appreciation, Aggressive Growth, Equity-Income and Tactical
Asset Allocation Portfolios for the fiscal year ended September 30, 1994, as
those Portfolios had not commenced operations as of that date.
DST, provider of data processing and recordkeeping services for the Fund's
transfer agent, is a wholly-owned subsidiary of KCSI and thus, is an affiliate
of IMI and Janus Capital. Each Portfolio may use another affiliate of DST as
introducing broker for certain portfolio transactions as a means to reduce
expenses through a credit against transfer agency fees with regard to
commissions earned by such affiliate. (See "Portfolio Transactions and
Brokerage.")
PORTFOLIO TRANSACTIONS AND BROKERAGE
Decisions as to the assignment of portfolio business for each of the
Portfolios and negotiation of its commission rates are made by its sub-adviser,
whose policy is to obtain the "best execution" (prompt and reliable execution at
the most favorable security price) of all portfolio transactions. The Advisory
Agreement and Investment Counsel Agreement of each Portfolio specifically
provide that in placing portfolio transactions for each of the Portfolios, the
sub-adviser may agree to pay brokerage commissions for effecting a securities
transaction in an amount higher than another broker or dealer would have charged
for effecting that transaction as authorized, under certain circumstances, by
the Securities Exchange Act of 1934.
In selecting brokers and dealers and in negotiating commissions, a
sub-adviser considers a number of factors, including but not limited to: the
sub-adviser's knowledge of currently available negotiated commission rates or
prices of securities and other current transaction costs; the nature of the
security being traded; the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the desired
timing of the trade; the activity existing and expected in the market for the
particular security; the quality of the execution, clearance and settlement
services; financial stability; the existence of actual or apparent operational
problems of any broker or dealer; and research products and services provided.
In recognition of the value of the foregoing factors, the sub-adviser may place
portfolio transactions with a broker with whom it has negotiated a commission
that is in excess of the commission another broker would have charged for
effecting that transaction if the sub-adviser determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research provided by such broker viewed in terms of either that particular
transaction or of the overall responsibilities of the sub-adviser. Research
provided may include: furnishing advice, either directly or through publications
or writings, as to the value of securities, the advisability of purchasing or
selling specific securities and the availability of securities or purchasers or
sellers of securities; furnishing seminars, information, analyses and reports
concerning issuers, industries, securities, trading markets and methods,
legislative developments, changes in accounting practices, economic factors and
trends and portfolio strategy; access to research analysts, corporate management
personnel, industry experts, economists and government officials; comparative
performance evaluation and technical measurement services and quotation
services, and products and other services (such as third party publications,
reports and analyses, and computer and electronic access, equipment, software,
information and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist the sub-adviser
in carrying out its responsibilities. Most brokers and dealers used by the
sub-advisers provide research and other services described above.
The sub-adviser may use research products and services in servicing other
accounts in addition to the Portfolio. If the sub-adviser determines that any
research product or service has a mixed use, such that it also serves functions
that do not
34
<PAGE> 94
assist in the investment decision-making process, the sub-adviser may allocate
the costs of such service or product accordingly. The portion of the product or
service that the sub-adviser determines will assist it in the investment
decision-making process may be paid for in brokerage commission dollars. Such
allocation may be a conflict of interest for the sub-adviser.
When a Portfolio purchases or sells a security in the over-the-counter
market, the transaction takes place directly with a principal market-maker,
without the use of a broker, except in those circumstances where better prices
and executions will be achieved through the use of a broker.
The sub-adviser may also consider the sale or recommendation of a
Portfolio's shares by a broker or dealer to its customers as a factor in the
selection of brokers or dealers to execute portfolio transactions. In placing
portfolio business with broker or dealers, the sub-adviser will seek the best
execution of each transaction and all such brokerage placement must be
consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc.
The sub-adviser may place transactions for the purchase or sale of
portfolio securities with affiliates of IMI, ISI or the sub-adviser, including
DST Securities, Inc., ISI or Fred Alger & Company, Incorporated. It is
anticipated that Fred Alger & Company, Incorporated, an affiliate of Alger
Management, will serve as the Aggressive Growth Portfolio's broker in effecting
substantially all of the Aggressive Growth Portfolio's transactions on
securities exchanges and will retain commissions in accordance with certain
regulations of the Securities and Exchange Commission. The sub-adviser may place
transactions if it reasonably believes that the quality of the transaction and
the associated commission are fair and reasonable and if, overall, the
associated transaction costs, net of any credits described above under
"Custodian, Transfer Agent and Other Affiliates," are lower than those that
would otherwise be incurred. Under rules adopted by the Securities and Exchange
Commission, the Fund's Board of Trustees will conduct periodic compliance
reviews of such brokerage allocations and review certain procedures adopted by
the Board of Trustees to ensure compliance with these rules as often as
necessary to determine their continued appropriateness. For the fiscal year
ended September 30, 1994 the Growth and Global Portfolios paid the following
commissions to affiliated brokers:
<TABLE>
<CAPTION>
COMMISSIONS PAID: DST SECURITIES, INC.
-------------------------------------------------------------- --------------------
<S> <C>
Fiscal 1994 $ 16,348
Fiscal 1994 Percentages:
Commissions with affiliates to total commissions 2.44%
Value of brokerage transactions with affiliates
to total brokerage transactions 1.00%
</TABLE>
As of September 30, 1994, the Growth Portfolio and the Global Portfolio
owned $16,674,534 and $204,288, respectively, of the common stock of Merrill
Lynch & Co.("Merrill Lynch"). Merrill Lynch is one of the ten brokers or dealers
that received the greatest dollar amount of brokerage commissions from the
Growth and Global Portfolios during the fiscal year ended September 30, 1994.
During the fiscal years ended September 30, 1994 and 1993, brokerage
commissions in the amount of $16,052 and $35,594, respectively, were paid to
affiliated brokers by the Growth Portfolio. The Growth Portfolio received
transfer agency fee credits of $12,309 and $26,696 for the fiscal years ended
September 30, 1994 and 1993, respectively, as a result of such affiliated
brokerage. For the fiscal years ended September 30, 1994 and 1993, brokerage
commissions in the amount of $296 and $1,758, respectively, were paid to
affiliated brokers by the Global Portfolio. As a result of such affiliated
brokerage, the Global Portfolio received transfer agency fee credits of $222 and
$1,319 for the fiscal years ended September 30, 1994 and 1993, respectively. No
brokerage commissions were paid by the Flexible Income Portfolio to
broker-dealers affiliated with IMI or Janus Capital during the fiscal year ended
September 30, 1994 or to IDEX Total Income Trust, predecessor to the Flexible
Income Portfolio, during the eleven month period ended September 30, 1993.
For the fiscal years ended September 30, 1994, 1993 and 1992, the total
amount of brokerage commissions including affiliated brokerage commissions paid
by the Growth Portfolio were $607,482, $676,415 and $467,406, respectively. For
the fiscal years ended September 30, 1994 and 1993, the total amount of
brokerage commissions including affiliated brokerage commissions paid by the
Global Portfolio were $1,241,194 and $1,401,043, respectively. The total amount
of brokerage commissions including affiliated brokerage commissions paid by the
Flexible Income Portfolio for the fiscal year ended September 30, 1994 was
$2,936. The total amount of brokerage commissions paid by IDEX Total Income
Trust, predecessor to the Flexible Income Portfolio, for the eleven month period
ended September 30, 1993 and the fiscal year ended October 31, 1992 were $5,018
and $3,915, respectively. During the fiscal years ended September 30, 1994 and
35
<PAGE> 95
1993 and the ten month period ended September 30, 1992, the Tax-Exempt and
Income Plus Portfolios paid no brokerage commissions on the purchase or sale of
portfolio securities.
No brokerage commissions were paid on the purchase or sale of Balanced,
Capital Appreciation, Aggressive Growth, Equity-Income and Tactical Asset
Allocation shares for the fiscal year ended September 30, 1994, as those
Portfolios had not commenced operations at that time.
TRUSTEES AND OFFICERS
The following information includes the name, address,(1) date of birth,
relationship with the Fund and principal occupations of the trustees and
officers of the Fund during at least the last five years:
- ----------------
Peter R. Brown
1475 Belcher Road South
Largo, FL 34640
05/10/28
Trustee of IDEX II Series Fund, IDEX Fund and IDEX Fund 3; Director of WRL
Series Fund, Inc. (investment company); Chairman of the Board of Peter Brown
Construction Co., Largo, Florida (construction, contractors and engineers); Rear
Admiral (Retired), U.S. Navy Reserve, Civil Engineer Corps.
- --------------------
James L. Churchill
12 Lavington Road
Long Cove
Hilton Head, SC 29928
05/07/30
Trustee of IDEX II Series Fund, IDEX Fund and IDEX Fund 3; currently retired;
formerly, President (1981-1990) and Executive Vice President (1979-1981) of the
Avionics Group of Rockwell International Corporation, Cedar Rapids, Iowa
(supplier of aviation electronics).
- -----------------
Becky A. Ferrell(2)
12/10/60
Assistant Vice President, Counsel and Secretary of IDEX II Series Fund, IDEX
Fund and IDEX Fund 3 (March 1994-present); Assistant Vice President and
Secretary, WRL Series Fund, Inc. (March 1994-present) (investment company);
Assistant Vice President, Counsel and Assistant Secretary of InterSecurities,
Inc. (March 1994-present) (broker-dealer); Attorney (August 1993-present),
Western Reserve Life Assurance Co. of Ohio (life insurance); Attorney, Hearne,
Graziano, Nader & Buhr, P.A. (September 1992-August 1993) (law firm); Legal
Writing Instructor, Florida State University College of Law (August 1991-June
1992) (law school); Teaching Assistant, English, University of South Florida
(August 1990-July 1991) (university); Associate Attorney, Johnson, Blakely,
Pope, Bokor, Ruppel & Burns, P.A. (August 1989-July 1990) (law firm); Attorney,
Schifino, Fleischer & Neal, P.A. (August 1986-August 1989) (law firm); Attorney,
Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O'Neill, P.A. (August
1984-August 1986) (law firm).
- --------------------
Richard B. Franz, II(2)
07/12/50
Treasurer of IDEX II Series Fund, IDEX Fund and IDEX Fund 3 (May 1988 to
present); Treasurer of WRL Series Fund, Inc. (May 1988 to present) (investment
company); Treasurer of InterSecurities, Inc. (May 1988 to present); Treasurer of
ISI Insurance Agency, Inc. (September 1992 to present); Treasurer of Idex
Management, Inc. (May 1988 to present); Treasurer of Idex Investor Services,
Inc. (May 1988 to present); Senior Vice President and Treasurer of Pioneer
Western Corporation and Treasurer of its subsidiaries (May 1988 to February
1991); Senior Vice President, Treasurer and Chief Financial Officer of Western
Reserve Life Assurance Co. of Ohio (November 1987 to present).
- ---------------
(1)The principal business address of each person listed, unless otherwise
indicated, is P.O. Box 5068, Clearwater, FL 34618-5068.
(2)Interested Person (as defined in the Investment Company Act of 1940) of the
Fund.
36
<PAGE> 96
- -------------------
William H. Geiger(2)
06/01/47
Vice President (November 1990 to present), Secretary (June 1990 to March 1994)
and Assistant Secretary (March 1994 to present) of IDEX II Series Fund, IDEX
Fund and IDEX Fund 3; Secretary (June 1990 to March 1994) and Assistant
Secretary (March 1994 to present) of WRL Series Fund, Inc. (investment company);
Senior Vice President, Secretary and General Counsel (July 1990 to present) of
Western Reserve Life Assurance Co. of Ohio (life insurance); Secretary of Idex
Management, Inc. (November 1990 to present); Secretary (May 1990 to present) and
Director (April 1991 to present) of InterSecurities, Inc.; Secretary of ISI
Insurance Agency, Inc. (September 1992 to present); Secretary of Idex Investor
Services, Inc. (May 1990 to present); Vice President, Secretary and General
Counsel of Pioneer Western Corporation and Secretary of its subsidiaries (May
1990 to February 1991) (financial services); Secretary and General Counsel of
Orange State Life and Health Insurance Company and its affiliates (March 1980 to
April 1990) (life and health insurance).
- ------------------
Charles C. Harris
35 Winston Drive
Clearwater, FL 34616
07/15/30
Trustee of IDEX II Series Fund, IDEX Fund and IDEX Fund 3; Director of WRL
Series Fund, Inc. (investment company); currently retired (1988-present); Senior
Vice President, Treasurer (1966-1988), Western Reserve Life Assurance Co. of
Ohio (life insurance); Vice President, Treasurer (1968-1988), Director
(1968-1987), Pioneer Western Corporation (financial services); Vice President of
WRL Series Fund, Inc. (1986-December 1990) (investment company).
- ----------------
G. John Hurley(2)
09/12/48
President and Chief Executive Officer (September 1990 to present), Trustee (June
1990 to present) and Executive Vice President (June 1988 to September 1990) of
IDEX II Series Fund, IDEX Fund and IDEX Fund 3; Executive Vice President (June
1993 to present) and Director (March 1994 to present) of WRL Series Fund, Inc.
(investment company); President, Chief Executive Officer and Director of
InterSecurities, Inc. (May 1988 to present) (broker-dealer); President of ISI
Insurance Agency, Inc. (September 1992 to present); Executive Vice President of
Western Reserve Life Assurance Co. of Ohio (April 1993 to present) (life
insurance); President, Chief Executive Officer and Director of PW Securities,
Inc. (1983 to November 1990) (broker-dealer); President, Chief Executive Officer
and Director (September 1990 to present) and Executive Vice President and
Director (May 1988 to September 1990) of Idex Management, Inc.; President and
Director of Idex Investor Services, Inc. (May 1988 to present); Assistant Vice
President of AEGON USA Managed Portfolios, Inc. (September 1991 to September
1992) (financial services); Vice President of Pioneer Western Corporation (May
1988 to February 1991) (financial services). Mr. Hurley was employed by Pioneer
Western Corporation in various executive positions from 1972 until February,
1991.
- -----------------
John R. Kenney(2)
02/08/38
Trustee (1987 to present), Chairman (December 1989 to present) and President and
Chief Executive Officer (1987 to September 1990) of IDEX II Series Fund, IDEX
Fund and IDEX Fund 3; Chairman of the Board of WRL Series Fund, Inc. (1986 to
present) (investment company); President and Director (1985 to September 1990)
and Director (December 1990 to present) of Idex Management, Inc.; Chairman (1988
to present) and Director (1985 to present) of InterSecurities, Inc.
(broker-dealer); Director of ISI Insurance Agency, Inc. (October 1992 to
present); President and Chief Executive Officer, (1978 to 1987), Chairman and
Chief Executive Officer (1987 to 1992) and Chairman, President and Chief
Executive Officer (1992 to present) of Western Reserve Life Assurance Co. of
Ohio (life insurance); Senior Vice President of AEGON USA, Inc. (May 1992 to
present) (financial services holding company); Chairman and Chief Executive
Officer (1988 to February 1991), President and Chief Executive Officer (1988 to
1989), Executive Vice President (1972 to 1988) and Director (1976 to February
1991) of Pioneer Western Corporation (financial services). Mr. Kenney is also
the brother-in-law of Jack Zimmerman, a Trustee of the Fund.
- ---------------
(2)Interested Person (as defined in the Investment Company Act of 1940) of the
Fund.
37
<PAGE> 97
- -----------------
Leslie E. Martin(2)
09/19/55
Vice President and National Marketing Manager (January 1993 to present) of IDEX
II Series Fund, IDEX Fund and IDEX Fund 3; Vice President of Marketing (January
1993 to present) of InterSecurities, Inc. (broker-dealer); and Vice President of
Marketing of Social Responsibility Investment Group (April 1991 to January 1992)
(investment company); and Vice President of Regional Marketing of Calvert Group
(June 1988 to January 1991) (investment company).
- ---------------------
Thomas R. Moriarty(2)
05/03/51
Senior Vice President (March 1995 to present), Vice President and Principal
Accounting Officer (November 1990 to March 1995) and Principal Accounting
Officer (1988 to September 1990) of IDEX II Series Fund, IDEX Fund and IDEX Fund
3; Senior Vice President (June 1991 to present) and Vice President (1988 to June
1991) of InterSecurities, Inc. (broker-dealer); Senior Vice President of ISI
Insurance Agency, Inc. (September 1992 to present); President (November 1990 to
present) and Vice President (1988 to November 1990) of PW Securities, Inc.
(broker-dealer); Senior Vice President (June 1991 to present) and Vice President
(1988 to June 1991) of Idex Investor Services, Inc.; Vice President (November
1990 to present); Assistant Vice President (1988 to September 1990) of Idex
Management, Inc., Vice President of Western Reserve Life Assurance Co. of Ohio
(June 1993 to present) (life insurance); Assistant Vice President of AEGON USA
Managed Portfolios, Inc. (September 1991 to September 1992) (financial
services); President (November 1990 to December 1992) and Vice President (1988
to November 1990) of PW Securities, Inc. (broker-dealer). Mr. Moriarty was
employed by Pioneer Western Corporation in various executive positions from 1984
to February, 1991.
- -------------------------
Christopher G. Roetzer(2)
01/11/63
Principal Accounting Officer (March 1995 to present), Assistant Vice President
(November 1990 to present) of IDEX II Series Fund, IDEX Fund and IDEX Fund 3;
Assistant Vice President and Controller (May 1988 to present) of
InterSecurities, Inc. (broker-dealer); Assistant Vice President of ISI Insurance
Agency, Inc. (September 1992 to present); Assistant Vice President and
Controller of Idex Investor Services, Inc. (May 1988 to present); Assistant Vice
President of Idex Management, Inc. (November 1990 to present); Assistant Vice
President and Assistant Controller (April 1988 to May 1988) and Accounting
Manager (June 1986 to April 1988) of Western Reserve Life Assurance Co. of Ohio
(life insurance); and Auditor (September 1984 to June 1986) of Peat, Marwick,
Mitchell & Co. (CPA firm).
- ----------------------
William W. Short, Jr.
12420 73rd Court North
Largo, FL 34623
02/25/36
Trustee of IDEX II Series Fund, IDEX Fund and IDEX Fund 3; President and sole
shareholder of Shorts, Inc. (men's retail apparel); Chairman of Southern Apparel
Corporation and S.A.C. Distributors (nationwide wholesale apparel distributors),
Largo, Florida; Director of Barnett Banks of Pinellas County; Trustee of Morton
Plant Hospital Foundation; former Chairman of Advisory Board of First Florida
Bank, Pinellas County, Florida.
- -----------------
Truman H. Sims
55 Rogers Street, #304
Clearwater, FL 34616
06/30/20
Trustee of IDEX II Series Fund, IDEX Fund and IDEX Fund 3; currently retired;
formerly, President, Truman Sims, Inc. (automobile equipment, accessories and
services), Clearwater, Florida; Director and former Chairman of Trust Committee
of Advisory Board of First Florida Bank, Pinellas County, Florida; National
Trustee of Not-for-Profit Hospitals, Washington DC; Director of Florida West
Coast Public Broadcasting, Inc.; Organizer and former mayor of the City of
Belleair Beach, Florida; Lt. Colonel (Retired) U.S. Air Force Reserves.
- ---------------
(2)Interested Person (as defined in the Investment Company Act of 1940) of the
Fund.
38
<PAGE> 98
- ---------------------
Jack E. Zimmerman
507 Saint Michel Circle
Kettering, OH 45429-1972
02/03/28
Trustee of IDEX II Series Fund, IDEX Fund and IDEX Fund 3; Director (1987 to
present), Western Reserve Life Assurance Co. of Ohio (life insurance); currently
retired; formerly, Director, Regional Marketing, Martin Marietta Corporation,
Dayton, Ohio (September 1986 to January 1993) (aerospace industry); Director of
Strategic Planning of Martin Marietta Baltimore Aerospace (January 1986 to
September 1986). Mr. Zimmerman is also the brother-in-law of John Kenney,
Trustee and Chairman of the Fund.
The Fund pays no salaries or compensation to any of its officers, all of
whom are officers or employees of either ISI or its affiliates. Disinterested
trustees (i.e., trustees who are not affiliated with IMI, Janus Capital, ISI,
AEGON Management, Alger Management, or Luther King or Dean Investment) receive:
(a) a total annual retainer fee of $13,000 from IDEX II Series Fund, IDEX Fund
and IDEX Fund 3; of which the Fund pays a pro rata share allocable to each
Portfolio based on the relative assets of the Portfolio; plus (b) $1,250 and
incidental expenses per meeting attended. Any fees and expenses paid to trustees
who are affiliates of IMI or ISI are paid by IMI and/or ISI. The Fund did not
offer its Trustees or officers any pension or retirement benefits during or
prior to the fiscal year ended September 30, 1994. The following table provides
compensation amounts paid to Disinterested Trustees of the Fund for the fiscal
year ended September 30, 1994.
COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION PAID TO TRUSTEES FROM
COMPENSATION FROM IDEX II SERIES FUND AND IDEX FUND,
NAME OF PERSON, POSITION IDEX II SERIES FUND IDEX FUND 3 AND WRL SERIES FUND, INC.
- ------------------------------- -------------------- -----------------------------------------
<S> <C> <C>
Peter R. Brown, Trustee $ 12,313 $24,333
James L. Churchill, Trustee $ 12,022 $21,000
Charles C. Harris, Trustee $ 12,022 $23,833
William W. Short, Jr., Trustee $ 12,313 $21,500
Truman H. Sims, Trustee $ 12,313 $21,500
Jack E. Zimmerman, Trustee $ 12,022 $21,000
</TABLE>
The Board of Trustees has adopted a policy whereby any Disinterested
Trustee of the Fund in office on September 1, 1990 who has served at least three
years as a trustee may, subject to certain limitations, elect upon his
resignation to serve as a trustee emeritus for a period of two years. A trustee
emeritus has no authority, power or responsibility with respect to any Fund
matter. While serving as such, a trustee emeritus is entitled to receive from
the Fund an annual fee equal to one-half the fee then payable per annum to
Disinterested Trustees of the Fund, plus reimbursement of expenses incurred for
attendance at Board meetings.
The Fund has an executive committee whose members currently are John R.
Kenney, G. John Hurley and Peter R. Brown. The executive committee may perform
all of the functions which may be performed by the Board of Trustees, except as
set forth in the Declaration of Trust and By-Laws of the Fund or as prohibited
by applicable law.
During the fiscal year ended September 30, 1994, the Fund paid $96,022 in
trustees fees and expenses and no trustee emeritus fees or expenses. The
trustees and officers held in the aggregate less than 1% of the outstanding
shares of each of the Capital Appreciation, Global, Growth, Equity-Income,
Tactical Asset Allocation, Balanced, Flexible Income, Income Plus and Tax-Exempt
Portfolios as of June 26, 1995. As of June 26, 1995, the trustees and officers
held in the aggregate approximately 2.50% of the outstanding shares of the
Aggressive Growth Portfolio.
PURCHASE OF SHARES
As stated in the Prospectus, each Portfolio offers investors a choice of
three classes of shares. Class A, Class B or Class C shares of a Portfolio can
be purchased through ISI or through broker-dealers or other financial
institutions that have sales agreements with ISI. Shares of each Portfolio are
sold at the net asset value per share as determined at the close of
39
<PAGE> 99
the regular session of business on the New York Stock Exchange next occurring
after a purchase order is received and accepted by the Fund plus the applicable
sales charge in the case of Class A shares. The Prospectus contains detailed
information about the purchase of Portfolio shares.
DISTRIBUTION PLANS
As stated in the Prospectus under "Investment Advisory and Other Services",
each Portfolio has adopted a separate Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (individually, a "Plan" and collectively, the "Plans"),
applicable to Class A, Class B and Class C shares of the Portfolio.
Under the Plans for Class A shares (the "Class A Plans"), a Portfolio may
pay ISI an annual distribution fee of up to 0.35%, and an annual service fee of
up to 0.25%, of the average daily net assets of the Portfolio's Class A shares;
however, to the extent that the Portfolio pays service fees, the amount which
the Portfolio may pay as a distribution fee is reduced accordingly so that the
total fees payable under the Class A Plan may not exceed on an annualized basis
0.35% of the average daily net assets of the Portfolio's Class A shares.
Under the Plans for Class B shares (the "Class B Plans"), a Portfolio may
pay ISI an annual distribution fee of up to 0.75% and an annual service fee of
up to 0.25%, of the average daily net assets of the Portfolio's Class B shares.
Under the Plans for Class C shares (the "Class C Plans"), a Portfolio may
pay ISI an annual distribution fee of up to 0.75% and an annual service fee of
up to 0.25% of the average daily net assets of the Portfolio's Class C shares;
however, the total fee payable pursuant to the Class C Plan may not on an
annualized basis exceed 0.90% of the average daily net assets of the Portfolio's
Class C shares.
ISI may use the fees payable under the Class A, Class B and Class C Plans
as it deems appropriate to pay for activities or expenses primarily intended to
result in the sale of the Class A, Class B or Class C shares, respectively, or
in personal service to and/or maintenance of Class A, Class B or Class C
shareholder accounts, respectively. For each class, these activities and
expenses may include, but are not limited to: compensation to employees of ISI;
compensation to and expenses of ISI and other selected dealers who engage in or
otherwise support the distribution of shares or who service shareholder
accounts; the costs of printing and distributing prospectuses, statements of
additional information and reports for other than existing shareholders; and the
cost of preparing, printing and distributing sales literature and advertising
materials.
Under the Plans, as required by Rule 12b-1, the Board of Trustees will
review at least quarterly a written report provided by ISI of the amounts
expended by ISI in distributing and servicing Class A, Class B or Class C shares
of the Portfolio and the purpose for which such expenditures were made. For so
long as the Plans are in effect, selection and nomination of the Trustees who
are not interested persons of the Fund shall be committed to the discretion of
the Trustees who are not interested persons of the Fund.
A Plan may be terminated as to a class of shares of a Portfolio at any time
by vote of a majority of the non-interested Trustees or by vote of a majority of
the outstanding voting securities of the applicable class. A Plan may be amended
by vote of the Trustees, including a majority of the non-interested Trustees who
are not interested persons of the Fund and have no direct or indirect financial
interest in the operation of the Plan or any agreement relating thereto
("non-interested Trustees"), cast in person at a meeting called for that
purpose. Any amendment of a Plan that would materially increase the costs to a
particular class of shares of a Portfolio requires approval by the shareholders
of that class. A Plan will remain in effect for successive one year periods, so
long as such continuance is approved annually by vote of the Fund's Trustees,
including a majority of the non-interested Trustees, cast in person at a meeting
called for the purpose of voting on such continuance.
During the fiscal year ended September 30, 1994, the Fund incurred fees
under the Plan applicable to the Class A shares of the Growth, Global, Flexible
Income, Tax-Exempt and Income Plus Portfolios in the amounts of $1,723,569,
$188,909, $89,746, $105,127 and $240,924, respectively, of which $778,548,
$85,332, $40,539, $47,487 and $108,827, respectively, was paid to non-affiliated
broker/dealers.
During the fiscal year ended September 30, 1994, the Fund incurred fees
under the Plan applicable to the Class C shares of the Growth, Global, Flexible
Income, Tax-Exempt and Income Plus Portfolios in the amounts of $18,876,
$16,297, $3,811, $756 and $11,891, respectively, of which $11,880, $10,257,
$2,398, $475 and $7,484, respectively, was paid to non-affiliated
broker/dealers.
40
<PAGE> 100
No distribution fees were applicable to Class A or Class C shares of the
Balanced, Capital Appreciation, Aggressive
Growth, Equity-Income or Tactical Asset Allocation Portfolios for the fiscal
year ended September 30, 1994, as those Portfolios had not commenced operations
at that time.
On October 1, 1995, the Fund began offering Class B Shares of each IDEX II
Portfolio. Accordingly, no distribution fees were applicable to Class B shares
for the period shown.
Distribution fees for the fiscal year ended September 30, 1994, were used
by the Distributor as follows:
<TABLE>
<CAPTION>
Growth Global Flexible Income Tax-Exempt Income Plus
------------------- ----------------- --------------- ---------------- -----------------
A C A C A C A C A C
Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares
---------- ------- -------- ------- ------- ------ -------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advertising $ 367,965 $ 9,174 $ 86,891 $ 4,168 $26,487 $ 939 $ 30,412 -- $ 78,841 $ 3,053
Printing/mailing
Prospectuses to other
than current
shareholders 48,105 1,175 16,686 1,872 2,410 474 2,328 281 7,187 1,354
Compensation to
underwriters -- -- -- -- -- -- -- -- -- --
Compensation to dealers 778,548 8,527 85,332 10,257 40,539 2,398 47,487 475 108,827 7,484
Compensation to sales
personnel 361,719 -- -- -- 18,163 -- 19,684 -- 46,099 --
Interest or other finance
charges -- -- -- -- -- -- -- -- --
Travel 78,475 -- -- -- 2,147 -- 3,771 -- -- --
Office Expenses 52,629 -- -- -- -- -- 706 -- -- --
Administrative Processing
Costs 36,128 -- -- -- -- -- 739 -- -- --
---------- ------- -------- ------- ------- ------ -------- ------ -------- -------
Total $1,723,569 $18,876 $188,909 $16,297 $89,746 $3,811 $105,127 $756 $240,954 $11,891
========== ======= ======== ======= ======= ====== ======== ===== ======== =======
</TABLE>
NET ASSET VALUE DETERMINATION
As stated in the Prospectus, net asset value is determined separately for
each class of shares of a Portfolio once daily as of the close of the regular
session of business on the New York Stock Exchange (the "Exchange"), currently
4:00 p.m. Eastern Time, Monday through Friday, except on (i) days on which
changes in the value of portfolio securities will not materially affect the net
asset value of a particular class of shares of the Portfolio; (ii) days during
which no shares of the Portfolio are tendered for redemption and no orders to
purchase shares of that Portfolio are received; or (iii) customary national
holidays on which the Exchange is closed. The per share net asset value of each
class of shares of a Portfolio is determined by dividing the total value of the
Portfolio's securities and other assets allocable to that class, less the
Portfolio's liabilities allocable to that class, by the total number of shares
outstanding of that class. The public offering price of a Class A, Class B or
Class C share of a Portfolio is the net asset value per share plus, in the case
of Class A shares, the applicable sales charge. Investment securities are valued
at the closing price for securities traded on a principal securities exchange
(U.S. or foreign) or on the NASDAQ National Market. Investment securities traded
on the over-the-counter market and listed securities for which no sales are
reported for the trading period immediately preceding the time of determination
are valued at the last bid price. Foreign currency denominated assets and
liabilities are converted into U.S. dollars at the closing exchange rate each
day. Other securities for which quotations are not readily available are valued
at fair values determined in such manner as the Portfolio's sub-adviser, under
the supervision of the Board of Trustees, decide in good faith.
The offering price per share of the Growth Portfolio as of March 31, 1995
was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 17.25 $ 17.10
Add maximum selling commission (5.50% of offering price for
Class A shares) 1.00 --
------- -------
Offering price per share $ 18.25 $ 17.10
====== ======
</TABLE>
41
<PAGE> 101
The offering price per share of the Global Portfolio as of March 31, 1995
was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 14.89 $ 14.67
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.87 --
------- -------
Offering price per share $ 15.76 $ 14.67
====== ======
</TABLE>
The offering price per share of the Flexible Income Portfolio as of March
31, 1995 was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 8.74 $ 8.74
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.44 --
------- -------
Offering price per share $ 9.18 $ 8.74
====== ======
</TABLE>
The offering price per share of the Tax-Exempt Portfolio as of March 31,
1995 was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 11.27 $ 11.27
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.56 --
------- -------
Offering price per share $ 11.83 $ 11.27
====== ======
</TABLE>
The offering price per share of the Income Plus Portfolio as of March 31,
1995 was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 9.88 $ 9.88
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.49 --
------- -------
Offering price per share $ 10.37 $ 9.88
====== ======
</TABLE>
The offering price per share of the Balanced Portfolio as of March 31, 1995
was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 10.41 $ 10.41
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.61 --
------- -------
Offering price per share $ 11.02 $ 10.41
====== ======
</TABLE>
The offering price per share of the Capital Appreciation Portfolio as of
March 31, 1995 was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 11.01 $ 11.00
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.64 --
------- -------
Offering price per share $ 11.65 $ 11.00
====== ======
</TABLE>
42
<PAGE> 102
The offering price per share of the Aggressive Growth Portfolio as of March
31, 1995 was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 12.11 $ 12.09
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.70 --
------- -------
Offering price per share $ 12.81 $ 12.09
====== ======
</TABLE>
The offering price per share of the Equity-Income Portfolio as of March 31,
1995 was calculated as follows:
<TABLE>
<CAPTION>
Class A Class C
------- -------
<S> <C> <C>
Net asset value per share (net assets / shares outstanding) $ 10.77 $ 10.76
Add maximum selling commission (5.50% of offering price for
Class A shares) 0.63 --
------- -------
Offering price per share $ 11.40 $ 10.76
====== ======
</TABLE>
No such calculations are presented for Class B shares of the Portfolios, as
Class B shares were not offered by any Portfolio until October 1, 1995.
No such calculations are presented for Class A, Class B or Class C shares
of IDEX II Tactical Asset Allocation Portfolio because no shares of that
Portfolio were outstanding during the period presented.
DIVIDENDS AND OTHER DISTRIBUTIONS
As indicated in the Prospectus, an investor may choose among several
options with respect to dividends and capital gain distributions payable to the
investor. Dividends or other distributions will be paid in full and fractional
shares at the net asset value determined as of the ex-dividend date, unless the
shareholder has elected another distribution option as described in the
Prospectus. Transaction confirmations and checks for payments designated to be
made in cash generally will be mailed within ten days of the record date. The
per share dividends on Class B and Class C shares of a Portfolio are anticipated
to be lower than the per share dividends on Class A shares of that Portfolio as
a result of higher service and distribution fees applicable to the Class B and
Class C shares.
SHAREHOLDER ACCOUNTS
Detailed information about general procedures for Shareholder Accounts and
specific types of accounts is set forth in the Prospectus.
RETIREMENT PLANS
As stated in the Prospectus, the Fund offers several types of retirement
plans that an investor may establish to invest in shares of a Portfolio with tax
deductible dollars. Prototype retirement plans for both corporations and self
employed individuals and for Individual Retirement Accounts, Code Section 401(k)
Plans and Simplified Employee Pension Plans are available by calling or writing
ISI. These plans require the completion of separate applications which are also
available from ISI. Investors Fiduciary Trust Company, Kansas City, Missouri,
acts as the custodian or trustee under these plans for which it charges an
annual fee of $12.00 on each such account with a maximum of $24 per tax
identification number. Shares of a Portfolio are also available for investment
by Code Section 403(b)(7) retirement plans for employees of charities, schools,
and other qualifying employers. The Tax Exempt Portfolio is not well-suited as
an investment vehicle for tax-deferred retirement plans which cannot benefit
from tax-exempt income and whose distributed earnings are taxable to individual
recipients as ordinary income.
To receive additional information or forms on these plans, please call
Customer Service at (800) 851-9777 or write the Transfer Agent at P. O. Box
9015, Clearwater, Florida 34618-9015. No contribution to a retirement plan can
be made until the appropriate forms to establish the plan have been completed.
It is advisable for an investor considering the funding of any retirement plan
to consult with an attorney, retirement plan consultant or financial or tax
advisor with respect to the requirements of such plans and the tax aspects
thereof.
43
<PAGE> 103
REDEMPTION OF SHARES
Shareholders may redeem their shares at any time at a price equal to the
net asset value per share next determined following receipt of a valid
redemption order by the transfer agent, in proper form as prescribed in the
Prospectus. Payment will ordinarily be made within three business days of the
receipt of a valid redemption order. The value of shares on redemption may be
more or less than the shareholder's cost, depending upon the market value of the
Portfolio's net assets at the time of redemption. CLASS B SHARES ARE ALSO
SUBJECT TO A DECLINING CONTINGENT DEFERRED SALES CHARGE UPON CERTAIN
REDEMPTIONS. The Prospectus describes the requirements and procedures for the
redemption of shares.
Shares will normally be redeemed for cash, although each Portfolio retains
the right to redeem its shares in kind under unusual circumstances, in order to
protect the interests of the remaining shareholders, by the delivery of
securities selected from its assets at its discretion. The Fund has, however,
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the
Fund is obligated to redeem shares solely in cash up to the lesser of $250,000
or 1% of the net asset value of a Portfolio during any 90-day period for any one
shareholder. Should redemptions by any shareholder exceed such limitation, the
Fund will have the option of redeeming the excess in cash or in kind. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage costs in
converting the assets to cash. The method of valuing securities used to make
redemptions in kind will be the same as the method of valuing portfolio
securities described under "Net Asset Value Determination", and such valuation
will be made as of the same time the redemption price is determined.
Redemption of shares may be suspended, or the date of payment may be
postponed, whenever (1) trading on the Exchange is restricted, as determined by
the Securities and Exchange Commission, or the Exchange is closed except for
holidays and weekends, (2) the Securities and Exchange Commission permits such
suspension and so orders, or (3) an emergency exists as determined by the
Securities and Exchange Commission so that disposal of securities and
determination of net asset value is not reasonably practicable.
The contingent deferred sales charge ("CDSC") is waived on redemptions of
Class B shares in the circumstances described below:
(a) Redemption Upon Total Disability or Death
The Fund will waive the CDSC on redemptions following the death or total
disability (as evidenced by a determination of the federal Social Security
Administration) of a Class B shareholder, but in the case of total disability
only as to shares owned at the time of the initial determination of disability.
The Transfer Agent or ISI will require satisfactory proof of death or disability
before it determines to waive the CDSC.
(b) Redemption Pursuant to a Fund's Systematic Withdrawal Plan
A shareholder may elect to participate in a systematic withdrawal plan
("Plan") with respect to the shareholder's investment in the Fund. Under the
Plan, a dollar amount of a participating shareholder's investment in the Fund
will be redeemed systematically by the Fund on a periodic basis, and the
proceeds paid in accordance with the shareholder's instructions. The amount to
be redeemed and frequency of the systematic withdrawals will be specified by the
shareholder upon his or her election to participate in the Plan. The CDSC will
be waived on redemptions made under the Plan subject to the limitations
described below.
The amount of the shareholder's investment in a Fund at the time the
election to participate in the Plan is made with respect to the Fund is
hereinafter referred to as the "Initial Account Balance." The amount to be
systematically redeemed from the Fund without the imposition of a CDSC may not
exceed a maximum of 12% annually of the shareholder's Initial Account Balance.
The Fund reserves the right to change the terms and conditions of the Plan and
the ability to offer the Plan.
The CDSC is also waived on redemption of Class B shares as it relates to
the reinvestment of redemption proceeds in Class B shares of another IDEX
Portfolio within 90 days after redemption.
TAXES
Each Portfolio has qualified, and intends to continue to qualify, for
treatment as a regulated investment company ("RIC") under the Internal Revenue
Code of 1986, as amended (the "Code"). In order to qualify for that treatment,
each Portfolio must distribute to its shareholders for each taxable year at
least 90% of its investment company taxable income (consisting generally of
taxable net investment income and net short-term capital gain) and must meet
several additional requirements. With respect to each Portfolio, these
requirements include the following: (1) the Portfolio must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans and gains from
44
<PAGE> 104
the sale or other disposition of securities, or other income (including gains
from futures contracts) derived with respect to its business of investing in
securities; (2) the Portfolio must derive less than 30% of its gross income each
taxable year from the sale or other disposition of securities or futures
contracts that were held for less than three months ("Short-Short Limitation");
(3) at the close of each quarter of the Portfolio's taxable year, at least 50%
of the value of its total assets must be represented by cash and cash items,
U.S. government securities, securities of other RICs and other securities, with
these other securities limited, in respect of any one issuer, to an amount that
does not exceed 5% of the value of the Portfolio's total assets and that does
not represent more than 10% of the outstanding voting securities of the issuer;
and (4) at the close of each quarter of the Portfolio's taxable year, not more
than 25% of the value of its total assets may be invested in securities (other
than U.S. government securities or the securities of other RICs) of any one
issuer.
A Portfolio will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts. Each
Portfolio intends to distribute annually a sufficient amount of any taxable
income and capital gains so as to avoid liability for this excise tax.
If the Tax-Exempt Portfolio invests in any instruments that generate
taxable income, under the circumstances described in the Prospectus,
distributions of the interest earned thereon will be taxable to that Portfolio's
shareholders as ordinary income to the extent of its earnings and profits.
Moreover, if that Portfolio realizes capital gains as a result of market
transactions, any distributions of that gain also will be taxable to its
shareholder.
Proposals may be introduced before Congress for the purpose of restricting
or eliminating the federal income tax exemption for interest on municipal
securities. If such a proposal were enacted, the availability of municipal
securities for investment by the Tax-Exempt Portfolio and the value of its
portfolio securities would be affected. In that event, the Tax-Exempt Portfolio
will re-evaluate its investment objective and policies.
Dividends and interest received by a Portfolio may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and foreign countries generally do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Global Portfolio's total assets at the close of its taxable year consists of
securities of foreign corporations, it will be eligible to, and may, file an
election with the Internal Revenue Service that will enable its shareholders, in
effect, to receive the benefit of the foreign tax credit with respect to any
foreign and U.S. possessions income taxes paid by it. Pursuant to the election,
a Portfolio will treat those taxes as dividends paid to its shareholders and
each shareholder will be required to (1) include in gross income, and treat as
paid by him, his proportionate share of those taxes, (2) treat his share of
those taxes and of any dividend paid by the Portfolio that represents income
from foreign or U.S. possessions sources as his own income from those sources,
and (3) either deduct the taxes deemed paid by him in computing his taxable
income or, alternatively, use the foregoing information in calculating the
foreign tax credit against his federal income tax. The Global Portfolio will
report to its shareholders shortly after each taxable year their respective
shares of the income from sources within, and taxes paid to, foreign countries
and U.S. possessions if it makes this election.
Each Portfolio except the Tax-Exempt Portfolio may invest in the stock of
"passive foreign investment companies" ("PFICs"). A PFIC is a foreign
corporation that, in general, meets either of the following tests: (1) at least
75% of its gross income is passive or (2) an average of at least 50% of its
assets produce, or are held for the production of, passive income. Under certain
circumstances, a Portfolio will be subject to federal income tax on a portion of
any "excess distribution" received on the stock of a PFIC or of any gain on
disposition of that stock (collectively "PFIC income"), plus interest thereon,
even if the Portfolio distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the Portfolio's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders. If a Portfolio
invests in a PFIC and elects to treat the PFIC as a "qualified electing fund,"
then in lieu of the foregoing tax and interest obligation, the Portfolio will be
required to include in income each year its pro rata share of the qualified
electing fund's annual ordinary earnings and net capital gain (the excess of net
long-term capital gain over net short-term capital loss), even if they are not
distributed to the Portfolio; those amounts would be subject to the distribution
requirements described above. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
The use of hedging strategies, such as writing (selling) and purchasing
options and futures contracts and entering into forward contracts, involves
complex rules that will determine for income tax purposes the character and
timing of recognition of the income received in connection therewith by a
Portfolio. Income from foreign currencies (except certain gains therefrom that
may be excluded by future regulations), and income from transactions in options,
futures and forward contracts derived
45
<PAGE> 105
by a Portfolio with respect to its business of investing in securities or
foreign currencies, will qualify as permissible income under the Income
Requirement. However, income from the disposition of foreign currencies that are
not directly related to the Portfolio's principal business of investing in
securities (or options and futures with respect thereto) also will be subject to
the Short-Short Limitation if the securities are held for less than three
months.
If a Portfolio satisfies certain requirements, any increase in value on a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Portfolio satisfies
the Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. Each
Portfolio intends that, when it engages in hedging transactions, they will
qualify for this treatment, but at the present time it is not clear whether this
treatment will be available for all of the Portfolio's hedging transactions. To
the extent this treatment is not available, a Portfolio may be forced to defer
the closing out of certain options and futures contracts beyond the time when it
otherwise would be advantageous to do so, in order for the Portfolio to continue
to qualify as a RIC.
The treatment of income dividends and capital gain distributions by a
Portfolio to shareholders under the various state income tax laws may not
parallel that under the federal law. Qualification as a regulated investment
company does not involve supervision of a Portfolio's management or of its
investment policies and practices by any governmental authority.
Shareholders are urged to consult their own tax advisors with specific
reference to their own tax situations, including their state and local tax
liabilities.
PRINCIPAL SHAREHOLDERS
As of June 26, 1995, no shareholder owned beneficially or of record 5% or
more of the outstanding shares of beneficial interest of each of the Growth,
Global, Flexible Income, Tax-Exempt, Balanced, Capital Appreciation, Aggressive
Growth or Equity-Income Portfolios, with the following exceptions: Rose Marie
Kruger was record owner of approximately 5.35% of the Aggressive Growth
Portfolio; Joyce G. Thorn was record owner of approximately 5.40% of the
Equity-Income Portfolio; and Ronald L. and Kathleen E. Vincent were record
owners of approximately 10% of the Equity-Income Portfolio. As of June 26, 1995,
ISI owned beneficially or of record approximately 5.75% and 11.75% of the
Aggressive Growth and Equity-Income Portfolios, respectively. As of June 26,
1995, certain affiliates of ISI and AEGON Management were the record owners of
shares of beneficial interest of the Income Plus Portfolio as follows: AUSA Life
Insurance Company owned approximately 6.65% and Bankers United Life Assurance
Company owned approximately 2.0%.
MISCELLANEOUS
ORGANIZATION
The Portfolios are series of IDEX II Series Fund, a Massachusetts business
trust that was formed by a Declaration of Trust dated January 7, 1986. The Trust
currently is governed by a Restatement of Declaration of Trust ("Declaration of
Trust") dated as of August 30, 1991.
On August 7, 1992, in a tax-free reorganization, the IDEX II Tax-Exempt
Portfolio acquired all of the assets and assumed all of the liabilities of the
AEGON USA Tax-Exempt Portfolio in exchange for shares of the IDEX II Tax-Exempt
Portfolio which were then distributed to the AEGON USA Tax-Exempt Portfolio
shareholders, and the IDEX II Income Plus Portfolio (then known as IDEX II High
Yield Portfolio) acquired all of the assets and assumed all of the liabilities
of the AEGON USA High Yield Portfolio in exchange for shares of the IDEX II
Income Plus Portfolio which were then distributed to the AEGON USA High Yield
Portfolio shareholders. All historical financial and performance information set
forth in the Statement of Additional Information relates to the AEGON USA
Tax-Exempt Portfolio and the AEGON USA High Yield Portfolio prior to the date
they were reorganized into the IDEX II Tax-Exempt Portfolio and the IDEX II
Income Plus Portfolio, respectively. On August 21, 1992, in a tax-free
reorganization, IDEX II Growth Portfolio acquired all of the assets and assumed
all of the liabilities of AEGON USA Growth Portfolio and AEGON USA Capital
Appreciation Portfolio in exchange for shares of IDEX II Growth Portfolio which
were then distributed on a pro rata basis to the respective AEGON USA Growth
Portfolio and AEGON USA Capital Appreciation Portfolio shareholders.
On October 1, 1993, in a tax-free reorganization, the Flexible Income
Portfolio acquired all of the assets and assumed all of the liabilities of IDEX
Total in exchange for shares of the Flexible Income Portfolio which were then
distributed to IDEX Total
46
<PAGE> 106
shareholders. All historical financial and performance information set forth in
the Statement of Additional Information relates to IDEX Total prior to the date
it was reorganized into the Flexible Income Portfolio.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Fund to issue an unlimited number of
shares of beneficial interest. Shares of the Fund are fully paid and
nonassessable when issued. Shares of the Fund have no preemptive, cumulative
voting, conversion or subscription rights. Shares of the Fund are fully
transferable but the Fund is not bound to recognize any transfer until it is
recorded on its books.
The shares of beneficial interest of each Portfolio are divided into three
classes, Class A, Class B and Class C. Each class represents interests in the
same assets of the Portfolio and differ as follows: each class of shares has
exclusive voting rights on matters pertaining to its plan of distribution or any
other matter appropriately limited to that class; Class A shares are subject to
an initial sales charge; Class B shares are subject to a contingent deferred
sales charge, or back-end load, at a declining rate; Class B and Class C shares
are subject to higher ongoing distribution and service fees; each class may bear
differing amounts of certain class-specific expenses; and each class has a
separate exchange privilege. The Fund does not anticipate that there will be any
conflicts between the interests of holders of the different classes of shares of
the same Portfolio by virtue of these classes. On an ongoing basis, the Board of
Trustees will consider whether any such conflict exists and, if so, take
appropriate action. On any matter submitted to a vote of shareholders of a
series or class, each full issued and outstanding share of that series or class
has one vote.
The Declaration of Trust provides that each of the trustees will continue
in office until the termination of the Trust or his earlier death, resignation,
bankruptcy or removal. A meeting will be called for the election of trustees
upon the written request of holders of 10% or more of the outstanding shares of
the Trust. Vacancies may be filled by majority of the remaining trustees,
subject to certain limitations imposed by the 1940 Act. Therefore, it is not
anticipated that annual or regular meetings of shareholders normally will be
held, unless otherwise required by the Declaration of Trust or the 1940 Act.
Subject to the foregoing, shareholders have the power to vote for the election
and removal of trustees, to terminate or reorganize the Fund, to amend the
Declaration of Trust, on whether to bring certain derivative actions and on any
other matters on which a shareholder vote is required by the 1940 Act, the
Declaration of Trust, the Fund's bylaws or the trustees.
LEGAL COUNSEL AND AUDITORS
Sutherland, Asbill & Brennan, 1275 Pennsylvania Avenue, N.W., Washington,
D.C. 20004, serves as counsel to the Fund and certain of its affiliates. Price
Waterhouse LLP, 1055 Broadway, Kansas City, Missouri 64105, serves as
independent accountants for the Fund.
REGISTRATION STATEMENT
This Statement of Additional Information and the Prospectus for the
Portfolios do not contain all the information set forth in the registration
statement and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C. under the Securities Act of
1933 and the 1940 Act, to which reference is hereby made.
PERFORMANCE INFORMATION
The Prospectus contains a brief description of how performance is
calculated.
Quotations of average annual total return for a particular class of shares
of a Portfolio will be expressed in terms of the average annual compounded rate
of return of a hypothetical investment in the Portfolio over periods of 1, 5,
and 10 years. These are the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula:
T = ((ERV / P) 1/N ) - 1
(where P = a hypothetical initial investment of $1,000; T = the average annual
total return; N = the number of years; and ERV = the ending redeemable value of
a hypothetical $1,000 investment made at the beginning of the period). All
average annual total return figures reflect the deduction of a proportionate
share of each Portfolio's expenses on an annual basis, and assume that the
maximum sales load (Class A shares only) is deducted from the initial $1,000
investment and all dividends and distributions are paid in additional shares.
47
<PAGE> 107
For the one-year period ended March 31, 1995, the five-year period ended
March 31, 1995 and the period from inception (May 8, 1986) through March 31,
1995, the average annual total return for the Growth Portfolio's Class A shares
was -5.23%, 9.34% and 12.77%, respectively, assuming deduction of the maximum
sales charge of 5.5% and taking into account 12b-1 fees at the maximum level of
0.35%. Assuming no deduction of the maximum sales charge of 5.5%, the average
annual total returns for the Growth Portfolio's Class A shares were 0.31%,
10.59% and 13.52%, respectively, for those same periods. The cumulative total
returns for the Class A shares of the Growth Portfolio for the one-year period
ended March 31, 1995, the five-year period ended March 31, 1995 and the period
from inception (May 8, 1986) through March 31, 1995 were 0.31%, 65.42% and
209.08%, respectively.
For the one-year period ended March 31, 1995 and the period from inception
(October 1, 1993) through March 31, 1995, the average annual total return for
the Growth Portfolio's Class C shares was -0.27% and -3.35%, respectively, which
takes into account 12b-1 fees at the maximum level of 0.90%. The cumulative
total return for the Class C shares of the Growth Portfolio for the one-year
period ended March 31, 1995 and the period from inception (October 1, 1993)
through March 31, 1995 was -0.27% and -4.98%, respectively.
For the one-year period ended March 31, 1995 and the period from inception
(October 1, 1992) through March 31, 1995, the average annual total return for
the Global Portfolio's Class A shares was -4.41% and 16.34%, respectively,
assuming deduction of the maximum sales charge of 5.5% and taking into account
12b-1 fees at the maximum level of 0.35%. Assuming no deduction of the maximum
sales charge of 5.5%, the average annual total return for the Global Portfolio's
Class A shares was 1.16% and 19.01%, respectively, for those periods. The
cumulative total return for the Class A shares of the Global Portfolio for the
one-year period ended March 31, 1995 and for the period from inception (October
1, 1992) through March 31, 1995 was 1.16% and 54.48%, respectively.
For the one-year period ended March 31, 1995 and the period from inception
(October 1, 1993) through March 31, 1995, the average annual total return for
the Global Portfolio's Class C shares was -0.09% and 8.85%, respectively, which
takes into account 12b-1 fees at the maximum level of 0.90%. The cumulative
total return for the Class C shares of the Global Portfolio for the one-year
period ended March 31, 1995 and the period from inception (October 1, 1993)
through March 31, 1995 was -0.09% and 13.55%, respectively.
For the one-year period ended March 31, 1995, the five-year period ended
March 31, 1995 and the period from inception (June 29, 1987) through March 31,
1995, the average annual total return for the Flexible Income Portfolio's Class
A shares was -3.61%, 9.17%, and 6.81%, respectively, assuming deduction of the
applicable maximum sales charge of 4.75% and taking into account 12b-1 fees at
the maximum level of 0.35% through the period ended March 31, 1995. Assuming no
deduction of the maximum sales charge of 4.75%, the average annual total return
for the Flexible Income Portfolio's Class A shares was 1.17%, 10.24% and 7.56%,
respectively, for those periods. For the one-year period ended March 31, 1995,
the five-year period ended March 31, 1995 and the period from inception (June
29, 1987) through March 31, 1995, the cumulative total return for the Flexible
Income Portfolio's Class A shares, was 1.17%, 62.78% and 76.00%, respectively.
For the one-year period ended March 31, 1995 and the period from inception
(October 1, 1993) through March 31, 1995, the average annual total return for
the Flexible Income Portfolio's Class C shares was 0.72% and -0.15%,
respectively, which takes into account 12b-1 fees at the maximum level of 0.90%.
The cumulative total return for the Class C shares of the Flexible Income
Portfolio for the one-year period ended March 31, 1995 and the period from
inception (October 1, 1993) through March 31, 1995 was 0.72% and -0.22%.
For the one-year period ended March 31, 1995, the five-year period ended
March 31, 1995 and the period from inception (April 1, 1985) through March 31,
1995, the average annual total return for the Tax-Exempt Portfolio's Class A
shares was 1.08%, 5.92% and 7.74%, respectively, assuming deduction of the
maximum sales charge of 4.75% and taking into account 12b-1 fees at the maximum
level of 0.35% through the period ended March 31, 1995. Assuming no deduction of
the maximum sales charge of 4.75%, the average annual total return for the
Tax-Exempt Portfolio's Class A shares was 6.14%, 6.97% and 8.20%, respectively,
for those periods. The cumulative total return for the Class A shares of the
Tax-Exempt Portfolio for the one-year period ended March 31, 1995, the five-year
period ended March 31, 1995 and the period from inception (April 1, 1985)
through March 31, 1995 was 6.14%, 40.04% and 120.04%, respectively.
For the one-year period ended March 31, 1995 and the period from inception
(October 1, 1993) through March 31, 1995, the average annual total return for
the Tax-Exempt Portfolio's Class C shares was 5.78% and 2.27%, respectively,
which takes into account 12b-1 fees at the maximum level of 0.60%. The
cumulative total return for the Class C shares of the
48
<PAGE> 108
Tax-Exempt Portfolio for the one-year period ended March 31, 1995 and the period
from inception (October 1, 1993) through March 31, 1995 was 5.78% and 3.42%.
For the one-year period ended March 31, 1995, the five-year period ended
March 31, 1995 and the period from inception (June 14, 1985) through March 31,
1995, the average annual total return for the Income Plus Portfolio's Class A
shares was 0.06%, 9.49% and 10.04%, respectively, assuming deduction of the
maximum sales charge of 4.75% and taking into account 12b-1 fees at the maximum
level of 0.35% through the period ended March 31, 1995. Assuming no deduction of
the maximum sales charge of 4.75%, the average annual total return for the
Income Plus Portfolio's Class A shares was 5.02%, 10.56% and 10.54%,
respectively, for those periods. The cumulative total return for the Class A
shares of the Income Plus Portfolio for the one-year period ended March 31,
1995, the five-year period ended March 31, 1995 and the period from inception
(June 14, 1985) through March 31, 1995 was 5.02%, 65.19% and 166.99%,
respectively.
For the one-year period ended March 31, 1995 and the period from inception
(October 1, 1993) through March 31, 1995, the average annual total return for
the Income Plus Portfolio's Class C shares was 3.97% and 1.01%, which takes into
account 12b-1 fees at the maximum level of 0.90%. The cumulative total return
for the Class C shares of the Income Plus Portfolio for the one-year period
ended March 31, 1995 and the period from inception (October 1, 1993) through
March 31, 1995 was 3.97% and 1.51%.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Balanced Portfolio's Class A shares was -1.42%,
assuming deduction of the maximum sales charge of 5.5% and taking into account
12b-1 fees at the maximum level of 0.35%. Assuming no deduction of the maximum
sales charge of 5.5%, the cumulative total return for the Balanced Portfolio's
Class A shares was 4.30% for that period.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Balanced Portfolio's Class C shares was 4.15%,
which takes into account 12b-1 fees at the maximum level of 0.90%.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Capital Appreciation Portfolio's Class A shares
was 4.06%, assuming deduction of the maximum sales charge of 5.5% and taking
into account 12b-1 fees at the maximum level of 0.35%. Assuming no deduction of
the maximum sales charge of 5.5%, the cumulative total return for the Capital
Appreciation Portfolio's Class A shares was 10.10% for that period.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Capital Appreciation Portfolio's Class C shares
was 10.00%, which takes into account 12b-1 fees at the maximum level of 0.90%.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Aggressive Growth Portfolio's Class A shares was
14.46%, assuming deduction of the maximum sales charge of 5.5% and taking into
account 12b-1 fees at the maximum level of 0.35%. Assuming no deduction of the
maximum sales charge of 5.5%, the cumulative total return for the Aggressive
Growth Portfolio's Class A shares was 21.10% for that period.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Aggressive Growth Portfolio's Class C shares was
20.90%, which takes into account 12b-1 fees at the maximum level of 0.90%.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Equity-Income Portfolio's Class A shares was
2.17%, assuming deduction of the maximum sales charge of 5.5% and taking into
account 12b-1 fees at the maximum level of 0.35%. Assuming no deduction of the
maximum sales charge of 5.5%, the cumulative total return for the Equity-Income
Portfolio's Class A shares was 8.10% for that period.
For the period from December 2, 1994 (inception) to March 31, 1995, the
cumulative total return for the Equity-Income Portfolio's Class C shares was
7.94%, which takes into account 12b-1 fees at the maximum level of 0.90%.
The current yield for a particular class of shares of the Flexible Income
Portfolio, the Tax-Exempt Portfolio, the Income Plus Portfolio, Balanced
Portfolio or the Equity-Income Portfolio is computed in accordance with a
standardized method prescribed by rules of the Securities and Exchange
Commission. The yield is computed by dividing the Portfolio's investment income
per share earned during a particular 30-day base period (including dividends, if
any and interest earned, minus expenses accrued during the period) by the
maximum offering price per share on the last day of the base period and then
annualizing the result. The current yield for the Class A and Class C shares of
the Flexible Income Portfolio for the 30-day period ended March 31, 1995 was
7.69% and 7.53%, respectively. The current yield for the Class A and Class C
shares of the Tax-Exempt Portfolio for the 30-day period ended March 31, 1995
was 4.34% and 4.33%, respectively. The current yield for the Class A and Class C
shares of the Income Plus Portfolio for the 30-day period ended March 31, 1995
was 7.66% and 7.51%, respectively. The current yield for the Class A and Class C
shares of the Balanced Portfolio for the 30-day period
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ended March 31, 1995 was 0.11% and 0.00%, respectively. The current yield for
the Class A and Class C shares of the Equity-Income Portfolio for the 30-day
period ended March 31, 1995 was 0.89% and 0.42%, respectively.
The tax equivalent yield of the Tax-Exempt Portfolio is computed by
dividing that portion of the yield (as computed above) which is tax-exempt by
one minus an assumed tax rate of 28% and adding the product to that portion, if
any, of the Portfolio's yield that is not tax-exempt. The tax equivalent yield
of the Tax-Exempt Portfolio's Class A and Class C shares based on a 30-day
period ended March 31, 1995 was 6.03% and 6.01%, respectively.
As stated in the Prospectus, from time to time in advertisements or sales
material, a Portfolio may present and discuss its performance rankings and/or
ratings or other information as published by recognized mutual fund statistical
services or by publications of general interest such as The Wall Street Journal,
The Boston Globe, The New York Times, The Los Angeles Times, Christian Science
Monitor, USA Today, The Tampa Tribune, The St. Petersburg Times, Financial
Times, The Hartford Current, International Herald Tribune, Investor's Business
Daily, The Boston Herald, The Washington Post, Kiplinger's Washington Letter,
Kiplinger's Tax Report, Kiplinger's Personal Finance Magazine, Barron's,
Business Week, Financial Services Week, National Underwriter, Time, Newsweek,
Pensions & Investments, U.S. News and World Report, Morningstar Mutual Fund
Values, The Economist, Bank Letter, Boston Business Journal, Research
Recommendations, FACS of the Week, Money, Modern Maturity, Forbes, Fortune,
Financial Planner, American Banker, U.S. Banker, ABA Banking Journal,
Institutional Investor (U.S./Europe), Registered Representative, Independent
Agent, American Demographics, Trusts & Estates, Credit Union Management,
Personal Investor, New England Business, Business Month, Gentlemen's Quarterly,
Employee Research Report, Employee Benefit Plan Review, ICI Mutual Fund News,
Succeed, Johnson Charts, Weisenberger Investment Companies Service and Mutual
Fund Quarterly. A Portfolio may also advertise non-standardized performance
information which is for periods in addition to those required to be presented,
or which provides actual year-by-year return, or any combination thereof, or
both. For Class A and Class B shares, non-standardized performance may also be
that which does not reflect deduction of the maximum sales charge applicable to
Class A shares or the contingent deferred sales charge applicable to Class B
shares. In addition, a Portfolio may, as appropriate, compare its performance to
that of other types of investments such as certificates of deposit, savings
accounts and U.S. Treasuries, or to certain interest rate and inflation indices,
such as the Consumer Price Index. A Portfolio may also advertise various methods
of investing including, among others, dollar cost averaging, and may use
compounding illustrations to show the results of such investment methods. The
Fund or the Distributor may also from time to time in advertisements or sales
material present tables or other information comparing tax-exempt yields to the
equivalent taxable yields, whether with specific reference to the Tax-Exempt
Portfolio or otherwise.
FINANCIAL STATEMENTS
Audited Financial Statements for IDEX II Growth Portfolio, IDEX II Global
Portfolio, IDEX II Flexible Income Portfolio (successor of IDEX Total Income
Trust), IDEX II Tax-Exempt Portfolio and IDEX II Income Plus Portfolio (formerly
known as IDEX II High Yield Portfolio) for the year ended September 30, 1994 are
incorporated by reference from the Fund's Annual Report dated September 30,
1994. Unaudited Financial Statements for IDEX II Growth Portfolio, IDEX II
Global Portfolio, IDEX II Flexible Income Portfolio (successor of IDEX Total
Income Trust), IDEX II Tax-Exempt Portfolio, IDEX II Income Plus Portfolio
(formerly known as IDEX II High Yield Portfolio) IDEX II Balanced Portfolio,
IDEX II Capital Appreciation Portfolio, IDEX II Aggressive Growth Portfolio and
IDEX II Equity-Income Portfolio for the period ended March 31, 1995 are
incorporated by reference from the Fund's Semi-Annual Report dated March 31,
1995. No financial information exists for IDEX II Tactical Asset Allocation
Portfolio for the fiscal year ended September 30, 1994 or the period ended March
31, 1995 as that Portfolio did not commence operations until October 1, 1995.
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APPENDIX A
CERTAIN SECURITIES IN WHICH THE PORTFOLIOS MAY INVEST
I. MUNICIPAL OBLIGATIONS IN WHICH THE TAX-EXEMPT PORTFOLIO MAY INVEST
A. MUNICIPAL BONDS
General Information. Municipal Bonds are debt obligations issued to obtain
funds for various public purposes, including the construction of a wide range of
public facilities such as airports, highways, bridges, schools, hospitals,
housing, mass transportation, streets and water and sewer works, and that pay
interest that is exempt from federal income tax in the opinion of issuer's
counsel. Other public purposes for which Municipal Bonds may be issued include
the refunding of outstanding obligations, obtaining funds for general expenses
and obtaining funds to lend to other public institutions and facilities.
The two principal classifications of Municipal Bonds are "general
obligation" bonds and "revenue" or "special tax" bonds. General obligation bonds
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue or special tax bonds are
payable only from the revenues derived from a particular facility or class of
facilities or project or, in some cases, from the proceeds of a special excise
tax or other specific revenue source, but are not supported by the issuer's
power to levy general taxes. Most industrial development bonds are in this
category.
There are, of course, variations in the security of Municipal bonds, both
within a particular classification and between classifications, depending on
numerous factors. The yields of Municipal Bonds depend, among other things, upon
general money market conditions, general conditions of the Municipal Bond
market, size of a particular offering, the maturity of the obligations and
rating of the issue.
Industrial Development Bonds and Private Activity Bonds. Industrial
development bonds ("IDBs") and private activity bonds ("PABs") are issued by or
on behalf of public authorities to finance various privately operated
facilities, such as airports or pollution control facilities. PABs generally are
such bonds issued after August 15, 1986. These obligations are included within
the term "municipal bonds" if the interest paid thereon is exempt from federal
income tax in the opinion of the bond counsel. IDBs and PABs are in most cases
revenue bonds and thus are not payable from the unrestricted revenues of the
issuer. The credit quality of IDBs and PABs is usually directly related to the
credit standing of the user of the facilities being financed.
Purchases on "When-Issued" or "Delayed Delivery" Basis. Sometimes the
Tax-Exempt Portfolio may buy Municipal Bonds on a "when-issued" or "delayed
delivery" basis. This means that when it agrees to buy, the terms of the Bonds
and the price it will pay are fixed, but it does not purchase and take delivery
of the Bonds until a later date (the "settlement date"), which is usually within
one month. The Tax-Exempt Portfolio pays no money and receives no interest
before the settlement date. The commitment to purchase securities on a
when-issued or delayed delivery basis involves the risk that the market value of
such securities may fall below cost prior to the settlement date. While the
Tax-Exempt Portfolio may sell the Municipal Bonds before the settlement date, it
will ordinarily do so only for investment management reasons. Ordinarily, the
Tax-Exempt Portfolio purchases Municipal Bonds that it has agreed to buy on a
when-issued or delayed delivery basis. Gains or losses on sales prior to the
settlement date are not tax-exempt.
A Municipal Bond purchased on a when-issued or delayed delivery basis is
recorded as an asset on the commitment date. The Tax-Exempt Portfolio will
direct the Fund's custodian to segregate cash, U.S. Government securities or
other appropriate high-grade debt obligations owned by the Portfolio that are at
least equal in value to the amount the Tax-Exempt Portfolio will have to pay on
the settlement date. If necessary, additional assets will be placed in the
account daily so that the value of the account will at least equal the
Portfolio's purchase commitment.
B. MUNICIPAL NOTES
The Tax-Exempt Portfolio may invest in the following types of Municipal
Notes, subject to the quality requirements described in the Prospectus:
Project Notes. Project notes ("PNs") are issued on behalf of local
authorities at auctions conducted by the United States Department of Housing and
Urban Development to raise funds for federally sponsored urban renewal,
neighborhood development and housing programs. PNs are backed by the full faith
and credit of the Federal government through agreements with the local authority
which provide that, if required, the Federal government will lend the issuer an
amount
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equal to the principal of and interest on the PNs. Ordinarily, PNs are repaid by
rolling over the notes or from the proceeds of new bonds or other securities
which are issued to provide permanent financing.
Bond Anticipation Notes. Bond anticipation notes ("BANs") are usually
general obligations of state and local governmental issuers which are sold to
obtain interim financing for projects that will eventually be funded through the
sale of long-term debt obligations or bonds. The ability of an issuer to meet
its obligations on its BANs is primarily dependent on the issuer's access to the
long-term municipal bond market and the likelihood that the proceeds of such
bond sales will be used to pay the principal and interest on the BANs.
Tax Anticipation Notes. Tax anticipation notes ("TANs") are issued by
state and local governments to finance their current operations. Repayment is
generally to be derived from specific future tax revenues. TANs are usually
general obligations of the issuer. A weakness in an issuer's capacity to raise
taxes due to, among other things, a decline in its tax base or a rise in
delinquencies, could adversely affect the issuer's ability to meet its
obligations on outstanding TANs.
Revenue Anticipation Notes. Revenue anticipation notes ("RANs") are issued
by governments or governmental bodies with the expectation that future revenues
from a designated source will be used to repay the notes. In general, they also
constitute general obligations of the issuer. A decline in the receipt of
projected revenues, such as anticipated revenues from another level of
government, could adversely affect an issuer's ability to meet its obligations
on outstanding RANs. In addition, the possibility that the revenues would, when
received, be used to meet other obligations could affect the ability of the
issuer to pay the principal and interest on RANs.
Construction Loan Notes. Construction loan notes are issued to provide
construction financing for specific projects. Frequently, these notes are
redeemed with funds obtained from the Federal Housing Administration.
Bank Notes. Bank notes are notes issued by local governmental bodies and
agencies as those described above to commercial banks as evidence of borrowings.
Banks on occasion sell such notes to purchasers such as the Tax-Exempt
Portfolio. The purposes for which the notes are issued vary, but bank notes are
frequently issued to meet short-term working-capital or capital-project needs.
These notes typically are redeemed with revenue from taxes or from long-term
financing proceeds, and may have risks similar to the risks associated with TANs
and RANs.
C. MUNICIPAL COMMERCIAL PAPER
Municipal Commercial Paper (also called "short-term discount notes")
represents short-term obligations of state and local governments and their
agencies issued typically to meet seasonal working capital or interim
construction financing requirements. Municipal Commercial Paper is often issued
at a discount, with shorter maturities than Municipal Notes. Such obligations
are repayable from general revenues of the issuer or refinanced with long-term
debt. In most cases, Municipal Commercial Paper is backed by letters of credit,
lending or note repurchase agreements, or other credit facility agreements
offered by banks or other institutions.
While the various types of Municipal Notes and Municipal Commercial Paper
described above as a group represent the major portion of the tax-exempt note
market, other types of notes are occasionally available in the marketplace and
the Tax-Exempt Portfolio may invest in such other types of notes to the extent
permitted under its investment objective and policies. Such short-term
obligations may be issued for different purposes and with different security
than those mentioned above.
D. FLOATING RATE AND VARIABLE RATE OBLIGATIONS
The Tax-Exempt Portfolio may purchase floating rate and variable rate
obligations, including participation interests therein (see section E below).
Investments in floating or variable rate securities normally will include IDBs
which provide that the rate of interest is set as a specific percentage of a
designated base rate, such as the rate on Treasury Bonds or Bills or the prime
rate at a major commercial bank, and that the Portfolio can demand payment of
the obligation on short notice at par value plus accrued interest. Variable rate
securities provide for a specified periodic adjustment in the interest rate,
while floating rate securities have flexible rates that change whenever there is
a change in the designated base interest rate. Frequently, such securities are
secured by letters of credit or other credit support arrangements provided by
banks. The quality of the underlying creditor (i.e., the corporation utilizing
the IDBs financing) or the bank, as the case may be, must be equivalent to the
Municipal Obligation ratings required for purchases for the Tax-Exempt
Portfolio.
E. PARTICIPATION INTERESTS
The Tax-Exempt Portfolio may invest in participation interests purchased
from banks in variable rate tax-exempt securities (such as IDBs) owned by the
banks. A participation interest gives the purchaser an undivided interest in the
tax-exempt security in the proportion that the Portfolio's participation
interest bears to the total principal amount of the tax-
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exempt security, and permits demand repurchase as described in section D above.
Participations are frequently backed by an irrevocable letter of credit or
guarantee of the bank offering the participation which the sub-adviser, under
the supervision of the Board of Trustees, has determined meets the prescribed
quality standards for the Tax-Exempt Portfolio. The Portfolio has the right to
sell the instrument back to the bank and draw on the letter of credit on 7 days'
notice for all or any part of the Portfolio's participation interest in the
tax-exempt security, plus accrued interest. The Portfolio intends to exercise
its demand rights under the letter of credit only (1) upon a default under the
terms of the tax-exempt security, (2) as needed to provide liquidity in order to
meet redemptions, or (3) upon a drop in the rating or the sub-adviser's
evaluation of the underlying security. Banks charge a service and letter of
credit fee and a fee for issuing repurchase commitments in an amount equal to
the excess of the interest paid on the tax-exempt securities over the yield
negotiated between the Portfolio and the bank at which the instruments were
purchased by the Tax-Exempt Portfolio. The sub-adviser will monitor the pricing,
quality and liquidity of the variable rate demand instruments held by the
Tax-Exempt Portfolio, including the IDBs supported by bank letters of credit or
guarantee, on the basis of published financial information, reports or rating
agencies and other bank analytical services. Participation interests will be
purchased only if, in the opinion of counsel, interest income on such interest
will be tax-exempt when distributed as dividends to shareholders.
Obligations of issuers of Municipal Bonds, Municipal Notes and Municipal
Commercial Paper are subject to the provisions of bankruptcy, insolvency and
other laws affecting the rights and remedies of creditors, such as the Federal
Bankruptcy Act, and laws, if any, which may be enacted by Congress or state
legislatures extending the time for payment of principal or interest, or
imposing other constraints upon enforcement of such obligations or upon
municipalities' power to levy taxes. There is also the possibility that
litigation or other conditions may materially affect the power or ability of an
issuer to pay, when due, the principal of and interest on its Municipal
Obligations.
II. OBLIGATIONS IN WHICH EACH PORTFOLIO MAY INVEST (UNLESS OTHERWISE NOTED)
A. U.S. GOVERNMENT OBLIGATIONS
As described in the Prospectus, the Portfolios may invest in some or all of
the following types of direct obligations of the Federal Government, issued by
the Department of the Treasury, and backed by the full faith and credit of the
Federal Government.
Treasury Bills. Treasury bills are issued with maturities of up to one
year. They are issued in bearer form, are sold on a discount basis and are
payable at par value at maturity.
Treasury Notes. Treasury Notes are longer-term interest bearing
obligations with original maturities of one to seven years.
Treasury Bonds. Treasury bonds are longer-term interest bearing
obligations with original maturities from 5 to 30 years.
B. OBLIGATIONS OF FEDERAL AGENCIES, INSTRUMENTALITIES AND AUTHORITIES
Certain federal agencies have been established as instrumentalities of the
United States Government to supervise and finance certain types of activities.
These agencies include, but are not limited to, the Banks for Cooperatives,
Federal Land Banks, Federal Intermediate Credit Banks, Federal Home Loan Banks
("FHLB"), Federal National Mortgage Association ("FNMA"), Government National
Mortgage Association ("GNMA"), Export-Import Bank of the United States, and
Tennessee Valley Authority ("TVA"). Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA Certificates or certain TVA Bonds)
or are guaranteed by the Treasury (e.g., certain other TVA Bonds) or supported
by the issuing agencies' right to borrow from the Treasury (e.g., FHLB and FNMA
Bonds). There can be no assurance that the United States Government itself will
pay interest and principal on securities as to which it is not legally obligated
to do so.
C. CERTIFICATES OF DEPOSIT (ALL PORTFOLIOS) AND TIME DEPOSITS (INCOME PLUS
PORTFOLIO ONLY)
A time deposit is a non-negotiable interest-bearing deposit with a bank
which generally cannot be withdrawn prior to a specified maturity date without
substantial interest penalties. A certificate of deposit ("CD") is a negotiable
instrument issued by a bank against a time deposit. CDs normally can be traded
in the secondary market prior to maturity, and are thus more liquid than other
forms of time deposits. The Portfolios will only invest in U.S. dollar
denominated time deposits and CDs representing deposits in U.S. Banks with
assets of $1 billion or more, whose deposits are insured by the Federal Deposit
Insurance Corporation.
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D. COMMERCIAL PAPER
Commercial paper refers to short-term unsecured promissory notes issued by
commercial and industrial corporations to finance their current operations.
Commercial paper may be issued at a discount and redeemed at par, or issued at
par with interest added at maturity. The interest or discount rate depends on
general interest rates, the credit standing of the issuer, and the maturity of
the note, and generally moves in tandem with rates on large CDs and Treasury
bills. An established secondary market exists for commercial paper, particularly
that of stronger issuers which are rated by Moody's Investors Service, Inc. and
Standard and Poor's Ratings Group. Investments in commercial paper are subject
to the risks that general interest rates will rise, that the credit standing and
outside rating of the issuer will fall,or that the secondary market in the
issuer's notes will become too limited to permit their liquidation at a
reasonable price.
E. BANKER'S ACCEPTANCE
A banker's acceptance is a negotiable short-term draft, generally arising
from a bank customer's commercial transaction with another party, with payment
due for the transaction on the maturity date of the customer's draft. The draft
becomes a banker's acceptance when the bank, upon fulfillment of the obligations
of the third party, accepts the draft for later payment at maturity, thus adding
the bank's guarantee of payment to its customer's own obligation. In effect, a
banker's acceptance is a post-dated certified check payable to its bearer at
maturity. Such acceptances are highly liquid, but are subject to the risk that
both the customer and the accepting bank will be unable to pay at maturity. The
Portfolios may invest in U.S. dollar denominated banker's acceptances issued by
U.S. banks, their foreign branches, and by U.S. branches of foreign banks.
F. REPURCHASE AGREEMENTS FOR U.S. GOVERNMENT SECURITIES (EXCEPT
EQUITY-INCOME PORTFOLIO)
The Portfolios may enter into repurchase agreements with banks and dealers
for securities of or guaranteed by the U.S. Government, under which the
Portfolio purchases securities and agrees to resell the securities at an agreed
upon time and at an agreed upon price. The difference between the amount the
Portfolio pays for the securities and the amount it receives upon resale is
accrued as interest and reflected in the Portfolio's net investment income. When
the Portfolio enters into repurchase agreements, it relies on the seller to
repurchase the securities. Failure to do so may result in a loss for the
Portfolio if the market value of the securities is less than the repurchase
price. Under the Investment Company Act of 1940, repurchase agreements may be
considered collateralized loans by the Portfolio.
At the time a Portfolio enters into a repurchase agreement, the value of
the underlying security including accrued interest will be equal to or exceed
the value of the repurchase agreement and, for repurchase agreements that mature
in more than one day, the seller will agree that the value of the underlying
security including accrued interest will continue to be at least equal to the
value of the repurchase agreement.
Although repurchase agreements carry certain risks not associated with
direct investment in securities, the Portfolios intend to enter into repurchase
agreements only with banks and dealers in transactions which the sub-adviser
believes present minimal credit risks in accordance with guidelines adopted by
the Trustees. To the extent that proceeds from any sales of collateral upon a
default in the counterparty's obligation to repurchase were less than the
repurchase price, the Portfolio would suffer a loss. If the counterpart's
petitions for bankruptcy or otherwise becomes subject to bankruptcy or
liquidation proceedings, there might be restrictions on the Portfolio's ability
to sell the collateral and the Portfolio could suffer a loss.
III. OTHER SECURITIES IN WHICH THE PORTFOLIOS MAY INVEST
A. CORPORATE DEBT SECURITIES
The Portfolio may invest in corporate bonds, notes and debentures of long
and short maturities and of various grades, including unrated securities.
Corporate debt securities exist in great variety, differing from one another in
quality, maturity, and call or other provisions. Lower grade bonds, whether
rated or unrated, usually offer higher interest income, but also carry increased
risk of default. Corporate bonds may be secured or unsecured, senior to or
subordinated to other debt of the issuer, and, occasionally, may be guaranteed
by another entity. In addition, they may carry other features, such as those
described under "Convertible Securities" and "Variable or Floating Rate
Securities", or have special features such as the right of the holder to shorten
or lengthen the maturity of a given debt instrument, rights to purchase
additional securities, rights to elect from among two or more currencies in
which to receive interest or principal payments, or provisions permitting the
holder to participate in earnings of the issuer or to participate in the value
of some specified commodity, financial index, or other measure of value.
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B. INTERNATIONAL AGENCY OBLIGATIONS
The Portfolio may invest in bonds, notes or Eurobonds of international
agencies. Examples are securities issued by the Asian Development Bank, the
European Economic Community, and the European Investment Bank. The Portfolio may
also purchase obligations of the International Bank for Reconstruction and
Development which, while technically not a U.S. Government agency or
instrumentality, has the right to borrow from the participating countries,
including the United States.
C. BANK OBLIGATIONS OR SAVINGS AND LOAN OBLIGATIONS
The Portfolios may purchase certificates of deposit, bankers' acceptances
and other debt obligations of commercial banks and certificates of deposit and
other debt obligations of savings and loan associations ("S&L's"). Certificates
of deposit are receipts from a bank or an S&L for funds deposited for a
specified period of time at a specified rate of return. Bankers' acceptance are
time drafts drawn on commercial banks by borrowers, usually in connection with
international commercial transactions. These instruments may be issued by
institutions of any size, may be of any maturity, and may be insured or
uninsured. The quality of bank or savings and loan obligations may be affected
by such factors as (a) location -- the strength of the local economy will often
affect financial institutions in the region, (b) asset mix -- institutions with
substantial loans in a troubled industry may be weakened by those loans, and (c)
amount of equity capital -- under-capitalized financial institutions are more
vulnerable when loan losses are suffered. The portfolio manager will evaluate
these and other factors affecting the quality of bank and savings and loan
obligations purchased by the Portfolio, but the Portfolio is not restricted to
obligations or institutions which satisfy specified quality criteria.
D. VARIABLE OR FLOATING RATE SECURITIES
The Portfolio may purchase variable rate securities that provide for
automatic establishment of a new interest rate at fixed intervals (e.g., daily,
monthly, semi-annually, etc.). Floating rate securities provide for automatic
adjustment of the interest rate whenever some specified interest rate index
changes. The interest rate on variable and floating rate securities is
ordinarily determined by reference to, or is a percentage of, a bank's prime
rate, the 90-day U.S. Treasury bill rate, the rate of return on commercial paper
or bank certificates of deposit, an index of short-term interest rates, or some
other objective measure.
E. PREFERRED STOCKS (ALL PORTFOLIOS EXCEPT THE TAX-EXEMPT PORTFOLIO)
Preferred stocks are securities which represent an ownership interest in a
corporation and which give the owner a prior claim over common stock on the
corporation's earnings and assets. Preferred stock generally pays quarterly
dividends. Preferred stocks may differ in many of their provisions. Among the
features that differentiate preferred stocks from one another are the dividend
rights, which may be cumulative or non-cumulative and participating or
non-participating, redemption provisions, and voting rights. Such features will
establish the income return and may affect the prospects for capital
appreciation or risks of capital loss.
F. CONVERTIBLE SECURITIES
The Portfolios may invest in debt securities convertible into or
exchangeable for equity securities, or debt securities that carry with them the
right to acquire equity securities, as evidenced by warrants attached to such
securities or acquired as part of units of the securities. Such securities
normally pay less current income than securities without conversion features,
but add the potential opportunity for appreciation from enhanced value for the
equity securities into which they are convertible, and the concomitant risk of
loss from declines in those values.
G. COMMON STOCKS
Each Portfolio (other than the Tax-Exempt Portfolio) invests in common
stocks. The Flexible Income Portfolio will consider investment in
income-producing common stocks if the yields of common stocks generally become
competitive with the yields of other income securities. Common stocks are junior
to the debt obligations and preferred stocks of an issuer. Hence, dividend
payments on common stocks should be regarded as less secure than income payments
on corporate debt securities.
55
<PAGE> 115
IDEX II SERIES FUND
OTHER INFORMATION
PART C
Item 24 Financial Statements and Exhibits
List all financial statements and exhibits filed as part of the
Registration Statement.
(a) Financial Statements:
(1) Audited financial statements of IDEX II Growth
Portfolio, IDEX II Global Portfolio, IDEX II
Flexible Income Portfolio, IDEX II Tax-Exempt
Portfolio and IDEX II Income Plus Portfolio for the
fiscal year ended September 30, 1994 included in
the IDEX II Series Fund's 1994 Annual Report to
Shareholders are incorporated by reference into the
Statement of Additional Information. The audited
financial statements are filed as an exhibit to the
registration statement in EDGARized format as
Exhibit 99. The unaudited financial statements of
IDEX II Aggressive Growth Portfolio, IDEX II
Capital Appreciation Portfolio, IDEX II Global
Portfolio, IDEX II Growth Portfolio, IDEX II
Equity-Income Portfolio, IDEX II Balanced
Portfolio, IDEX II Flexible Income Portfolio, IDEX
II Income Plus Portfolio and IDEX II Tax-Exempt
Portfolio for the period ended March 31, 1995
included in the IDEX II Series Fund's 1995 Semi-
Annual Report to Shareholders are incorporated by
reference into the Statement of Additional
Information. No financial information exists for
the IDEX II Tactical Asset Allocation Portfolio for
the periods stated, as that Portfolio will not
commence operations until October 1, 1995.
(2) Financial Highlights of IDEX II Aggressive Growth
Portfolio, IDEX II Capital Appreciation Portfolio,
IDEX II Global Portfolio, IDEX II Growth Portfolio,
IDEX II Equity-Income Portfolio, IDEX II Balanced
Portfolio, IDEX II Flexible Income Portfolio, IDEX
II Income Plus Portfolio and IDEX II Tax-Exempt
Portfolio are included on pages 5-7 of the
Prospectus.
(b) Exhibits:
Exhibit 1 Restatement of Declaration of Trust(1)
Exhibit 2 Bylaws, as amended(2)
Exhibit 3 Not Applicable
Exhibit 4 Specimen Share Certificate:
(a) Class A Shares
(1) IDEX II Aggressive Growth Portfolio(4)
(2) IDEX II Capital Appreciation Portfolio(4)
(3) IDEX II Global Portfolio(2)
(4) IDEX II Growth Portfolio(2)
(5) IDEX II Equity-Income Portfolio(4)
(6) IDEX II Tactical Asset Allocation Portfolio
(7) IDEX II Balanced Portfolio(3)
____________________
(1) Filed previously with Post-Effective Amendment No. 17 to Registration
Statement filed on January 1, 1995.
(2) Filed previously with Post-Effective Amendment No. 15 to Registration
Statement filed on December 3, 1993.
(3) Filed previously with Post-Effective Amendment No. 16 to Registration
Statement filed on October 3, 1994.
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<PAGE> 116
(8) IDEX II Flexible Income Portfolio(4)
(9) IDEX II Income Plus Portfolio(2)
(10) IDEX II Tax Exempt Portfolio(2)
(b) Class B Shares
(1) IDEX II Aggressive Growth Portfolio
(2) IDEX II Capital Appreciation Portfolio
(3) IDEX II Global Portfolio
(4) IDEX II Growth Portfolio
(5) IDEX II Equity-Income Portfolio
(6) IDEX II Tactical Asset Allocation Portfolio
(7) IDEX II Balanced Portfolio
(8) IDEX II Flexible Income Portfolio
(9) IDEX II Income Plus Portfolio
(10) IDEX II Tax Exempt Portfolio
(c) Class C Shares
(1) IDEX II Aggressive Growth Portfolio(4)
(2) IDEX II Capital Appreciation Portfolio(4)
(3) IDEX II Global Portfolio(2)
(4) IDEX II Growth Portfolio(2)
(5) IDEX II Equity-Income Portfolio(4)
(6) IDEX II Tactical Asset Allocation Portfolio
(7) IDEX II Balanced Portfolio(4)
(8) IDEX II Flexible Income Portfolio(3)
(9) IDEX II Income Plus Portfolio(2)
(10) IDEX II Tax Exempt Portfolio(2)
Exhibit 5 (a) Management and Investment Advisory
Agreement
(1) IDEX II Aggressive Growth Portfolio(1)
(2) IDEX II Capital Appreciation
Portfolio(1)
(3) IDEX II Global Portfolio(5)
(4) IDEX II Growth Portfolio(6)
(5) IDEX II Equity-Income Portfolio(1)
(6) IDEX II Tactical Asset Allocation
Portfolio
(7) IDEX II Balanced Portfolio(1)
(8) IDEX II Flexible Income Portfolio(3)
(9) IDEX II Income Plus Portfolio(7)
(10) IDEX II Tax-Exempt Portfolio(7)
(b) Investment Counsel Agreement
(1) IDEX II Aggressive Growth Portfolio(1)
(2) IDEX II Capital Appreciation
Portfolio(1)
(3) IDEX II Global Portfolio(6)
(4) IDEX II Growth Portfolio(5)
(5) IDEX II Equity-Income Portfolio(1)
(6) IDEX II Tactical Asset Allocation
Portfolio
(7) IDEX II Balanced Portfolio(1)
_________________________
(4) Filed previously with Post-Effective Amendment No. 13 to Registration
Statement filed on July 26, 1993.
(5) Filed previously with Post-Effective Amendment No. 9 to Registration
Statement filed on July 29, 1992.
(6) Filed previously with Post-Effective Amendment No. 6 to Registration
Statement filed on November 18, 1991.
(7) Filed previously with Registration Statement filed on Form N-14 filed
on April 20, 1992.
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<PAGE> 117
(8) IDEX II Flexible Income Portfolio(3)
(9) IDEX II Income Plus Portfolio(7)
(10) IDEX II Tax-Exempt Portfolio(7)
(c) Administrative Services Agreement
(1) IDEX II Capital Appreciation Portfolio(1)
(2) IDEX II Global Portfolio(6)
(3) IDEX II Growth Portfolio(5)
(4) IDEX II Balanced Portfolio(1)
(5) IDEX II Flexible Income Portfolio(3)
Exhibit 6 (a) Underwriting Agreement
(b) Dealer Sales Agreement
(c) Service Agreement
Exhibit 7 Not Applicable
Exhibit 8 Custody Agreement(8)
Exhibit 9 Transfer Agency Agreement with Idex Investor
Services, Inc.
Exhibit 10 Opinion of Counsel
Exhibit 11 (a) Consent of Price Waterhouse
(b) Consent of Sutherland Asbill & Brennan
Exhibit 12 Not Applicable
Exhibit 13 Investment Letter from Sole Shareholder(8)
Exhibit 14 (a) Model Individual Retirement Plan(1)
(b) Prototype Money Purchase Pension and
Profit Sharing Plan(9)
(c) Model Section 403(b)(7) Plan(1)
(d) Model 401(k) Plan(5)
Exhibit 15 (a) Plan of Distribution under Rule 12b-1 -
Class A Shares
(1) IDEX II Aggressive Growth Portfolio(1)
(2) IDEX II Capital Appreciation Portfolio(1)
(3) IDEX II Global Portfolio(10)
(4) IDEX II Growth Portfolio(10)
(5) IDEX II Equity-Income Portfolio(1)
(6) IDEX II Tactical Asset Allocation
Portfolio
(7) IDEX II Balanced Portfolio(1)
(8) IDEX II Flexible Income Portfolio(3)
(9) IDEX II Income Plus Portfolio(11)
(10) IDEX II Tax-Exempt Portfolio(11)
__________________________
(8) Filed previously with Pre-Effective Amendment No. 1 to Registration
Statement filed on March 7, 1986.
(9) Filed previously with Post-Effective Amendment No. 5 to Registration
Statement filed on February 1, 1991.
(10) Filed previously with Post-Effective Amendment No. 14 to Registration
Statement filed on August 2, 1993.
(11) Filed previously with Post-Effective Amendment No. 7 to Registration
Statement filed on January 17, 1992.
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<PAGE> 118
(b) Plan of Distribution under Rule 12b-1 -
Class B Shares
(1) IDEX II Aggressive Growth Portfolio
(2) IDEX II Capital Appreciation Portfolio
(3) IDEX II Global Portfolio
(4) IDEX II Growth Portfolio
(5) IDEX II Equity-Income Portfolio
(6) IDEX II Tactical Asset Allocation
Portfolio
(7) IDEX II Balanced Portfolio
(8) IDEX II Flexible Income Portfolio
(9) IDEX II Income Plus Portfolio
(10) IDEX II Tax Exempt Portfolio
(c) Plan of Distribution under Rule 12b-1 -
Class C Shares
(1) IDEX II Aggressive Growth Portfolio(1)
(2) IDEX II Capital Appreciation Portfolio(1)
(3) IDEX II Global Portfolio(11)
(4) IDEX II Growth Portfolio(11)
(5) IDEX II Equity-Income Portfolio(1)
(6) IDEX II Tactical Asset Allocation
Portfolio
(7) IDEX II Balanced Portfolio(1)
(8) IDEX II Flexible Income Portfolio(3)
(9) IDEX II Income Plus Portfolio(11)
(10) IDEX II Tax-Exempt Portfolio(11)
Exhibit 16 (a) Computation of Performance Quotation
Class A Shares
(1) IDEX II Aggressive Growth Portfolio
(2) IDEX II Capital Appreciation
Portfolio
(3) IDEX II Global Portfolio(2)
(4) IDEX II Growth Portfolio(10)
(5) IDEX II Equity-Income Portfolio
(6) IDEX II Balanced Portfolio
(7) IDEX II Flexible Income Portfolio(3)
(8) IDEX II Income Plus Portfolio(6)
(9) IDEX II Tax-Exempt Portfolio(6)
(b) Computation of Performance Quotation
Class C Shares
(1) IDEX II Aggressive Growth Portfolio
(2) IDEX II Capital Appreciation
Portfolio
(3) IDEX II Global Portfolio(1)
(4) IDEX II Growth Portfolio(1)
(5) IDEX II Equity-Income Portfolio
(6) IDEX II Balanced Portfolio
(7) IDEX II Flexible Income Portfolio(1)
(8) IDEX II Income Plus Portfolio(1)
(9) IDEX II Tax-Exempt Portfolio(1)
Exhibit 18 Multiple Class Plan
Exhibit 19 Powers of Attorney
Exhibit 27 Financial Data Schedules (Exhibits 27.1
through 27.28) For SEC use only.
Exhibit 99 Audited Financial Statements
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<PAGE> 119
Item 25 Persons Controlled by or under Common Control with Registrant
To the knowledge of the Registrant, IDEX II Aggressive Growth
Portfolio, IDEX II Capital Appreciation Portfolio, IDEX II Global Portfolio,
IDEX II Growth Portfolio, IDEX II Equity-Income Portfolio, IDEX II Tactical
Asset Allocation Portfolio, IDEX II Balanced Portfolio, IDEX II Flexible Income
Portfolio, IDEX II Income Plus Portfolio and IDEX II Tax-Exempt Portfolio are
not controlled by or under common control with any other person. The
Registrant has no subsidiaries.
Item 26 Number of Holders of Securities
The number of record holders of shares of beneficial interest of the
Registrant as of June 1, 1995, was as follows:
<TABLE>
<CAPTION>
Title of Class A Shares Number of Record Holders
----------------------- ------------------------
<S> <C>
Shares of Beneficial Interest
IDEX II Aggressive Growth Portfolio 1,286
IDEX II Capital Appreciation Portfolio 767
IDEX II Global Portfolio 11,556
IDEX II Growth Portfolio 62,601
IDEX II Equity-Income Portfolio 354
IDEX II Tactical Asset Allocation Portfolio 0
IDEX II Balanced Portfolio 218
IDEX II Flexible Income Portfolio 1,580
IDEX II Income Plus Portfolio 3,911
IDEX II Tax-Exempt Portfolio 1,142
</TABLE>
<TABLE>
<CAPTION>
Title of Class C Shares Number of Record Holders
----------------------- ------------------------
<S> <C>
Shares of Beneficial Interest
IDEX II Aggressive Growth Portfolio 59
IDEX II Capital Appreciation Portfolio 112
IDEX II Global Portfolio 1,239
IDEX II Growth Portfolio 1,399
IDEX II Equity-Income Portfolio 121
IDEX II Tactical Asset Allocation Portfolio 0
IDEX II Balanced Portfolio 97
IDEX II Flexible Income Portfolio 120
IDEX II Income Plus Portfolio 249
IDEX II Tax-Exempt Portfolio 76
</TABLE>
Item 27 Indemnification
Provisions relating to indemnification of the Registrant's Trustees
and employees are included in Registrant's Restatement of Declaration of Trust
and Bylaws which are incorporated herein by reference.
Item 28 Business and Other Connections of Investment Advisers
(a). IDEX II Growth Portfolio, IDEX II Global Portfolio, IDEX II Flexible
Income Portfolio, IDEX II Balanced Portfolio and IDEX II Capital Appreciation
Portfolio
The only business of Idex Management, Inc. is to serve as the
investment adviser of IDEX Fund; IDEX II Growth Portfolio, IDEX II Global
Portfolio, IDEX II Flexible Income Portfolio, IDEX II Balanced Portfolio and
IDEX II Capital Appreciation Portfolio of IDEX II Series Fund; and IDEX Fund 3.
Janus Capital Corporation ("Janus Capital") serves as sub-adviser to
certain portfolios and mutual funds in the IDEX Group of Funds and as
investment adviser to each portfolio of the Janus Investment Fund and Janus
Aspen Series and as adviser or sub-adviser to several other mutual funds and
private and retirement accounts. Janus Capital also serves as sub-adviser to
certain portfolios of the WRL Series Fund, Inc. Thomas H. Bailey, Chairman
C-5
<PAGE> 120
and President of Janus Capital and Chairman of the Board of Directors of Idex
Management, Inc., has no business, profession, vocation or employment of a
substantial nature other than his positions with Idex Management, Inc., the
Janus Investment Fund, Janus Aspen Series and Janus Capital. Jack R. Thompson,
Executive Vice President and Director of Janus Capital and Director of Idex
Management, Inc. has no substantial business, profession, vocation or
employment other than his positions with Janus Capital, Janus Investment Fund,
Janus Aspen Series and Idex Management, Inc. James P. Craig, James P. Goff,
Thomas F. Marsico, Ronald V. Speaker and Helen Y. Hayes are Vice Presidents of
Janus Capital, and have no substantial business, profession, vocation or
employment other than their positions with Janus Capital, Janus Investment Fund
and Janus Aspen Series. David C. Tucker is Vice President, Secretary and
General Counsel of Janus Capital, and Vice President and General Counsel of the
Janus Investment Fund and Janus Aspen Series; he has no substantial business,
profession, vocation or employment other than his positions with Janus Capital,
Janus Investment Fund and Janus Aspen Series. Steven R. Goodbarn is Treasurer
and Chief Financial Officer of Janus Capital and Treasurer and Chief Financial
Officer of the Janus Investment Fund and Janus Aspen Series; he has no
substantial business, profession, vocation or employment other than his
positions with Janus Capital, Janus Investment Fund and Janus Aspen Series.
Mr. Michael N. Stolper, a director of Janus Capital, is President of Stolper &
Company, Inc., 525 "B" Street, Suite 630, San Diego, CA 92101, an investment
performance consultant. Mr. Michael E. Herman, a director of Janus Capital, is
Chairman of the Finance Committee (1980 to present) and former President (1985
to 1990) of Ewing Marion Kauffman Foundation, 9300 Ward Parkway, Kansas City,
MO 64114. Mr. Thomas A. McDonnell, a director of Janus Capital, is
President, Chief Executive Officer and a director of DST Systems, Inc., 1004
Baltimore Avenue, Kansas City, MO 64104, a provider of data processing and
recordkeeping services for various mutual funds (including the IDEX Funds), and
Executive Vice President and a director of Kansas City Southern Industries,
Inc., 114 W. 11th Street, Kansas City, MO, 64105, a publicly traded holding
company whose primary subsidiaries are engaged in transportation and financial
services. The only business, professions, vocations or employments of a
substantial nature of Messrs. Kenney, Hurley, Moriarty, Geiger, Franz and Ms.
Ferrell, the remaining officers and directors of Idex Management, Inc., are
described under "Trustees and Officers" in the Statement of Additional
Information included in this Registration Statement.
(b). IDEX II Tax-Exempt Portfolio, IDEX II Income Plus Portfolio, IDEX II
Aggressive Growth Portfolio, IDEX II Equity-Income Portfolio and IDEX
II Tactical Asset Allocation Portfolio.
InterSecurities, Inc. ("ISI") serves as investment adviser to IDEX II
Tax-Exempt Portfolio, IDEX II Income Plus Portfolio, IDEX II Aggressive Growth
Portfolio, IDEX II Equity-Income Portfolio and IDEX II Tactical Asset
Allocation Portfolio, and serves as principal underwriter to the Fund, IDEX
Fund and IDEX Fund 3. ISI is also a registered broker-dealer engaged in the
retail brokerage of securities. The only business, professions, vocations or
employments of a substantial nature of Messrs. Kenney, Hurley, Moriarty, Geiger
and Franz, officers and directors of ISI, are described under "Trustees and
Officers" in the Statement of Additional Information included in this
Registration Statement. In addition, the following describes the principal
occupations of other officers and directors of ISI: J. Will Paull, a Director
of ISI, is Chairman, President and Chief Executive Officer of Associated
Mariner Financial Group, 17199 N. Laurel Park Drive, Ste. 100, Livonia, MI
48152-3908, a Financial Holding Company whose primary subsidiaries are engaged
in insurance and financial services; Donald L. Cudney is a Senior Vice
President of ISI; Gerald P. Kirk is a Vice President of ISI; Gordon E. Hippner
is a Vice President of ISI; Cynthia L. Remley, Vice President and Assistant
Secretary of ISI, is also Vice President of Western Reserve Life and Assistant
Secretary of Idex Investor Services, Inc.; Leslie E. Martin, a Vice President
of ISI, is also Vice President of the Fund, IDEX Fund and IDEX Fund 3; Stanley
R. Orr, Vice President of ISI, is also Vice President of Western Reserve Life;
Terry L. Garvin, Vice President of ISI, is also a Vice President of Western
Reserve Life.
AEGON USA Investment Management, Inc. ("AEGON Management"), is an Iowa
Corporation which was incorporated on April 12, 1989. AEGON Management became
a registered investment adviser on March 16, 1992 and has assumed all of the
investment advisory functions of its wholly-owned subsidiary, AEGON USA
Securities, Inc. ("AEGON Securities"). AEGON Management, Inc. is a
wholly-owned subsidiary of AUSA Holding Company which is a wholly-owned
subsidiary of AEGON USA, Inc.
AEGON Management serves as sub-adviser to IDEX II Tax-Exempt Portfolio
and IDEX II Income Plus Portfolio. Patrick E. Falconio, President, Director
and Chairman of the Board of AEGON Management, is also Executive Vice President
and Chief Investment Officer of AEGON USA, Inc.; Senior Vice President and
Director of AUSA Holding Company and Senior Vice President, Director and Chief
Investment Officer of AUSA Life Insurance Co., Inc. Mr. Falconio is also
currently an officer and/or a director of other AEGON affiliates. Larry G.
Brown, a Director of AEGON Management, is also a Senior Vice President and
Secretary of AEGON USA, Inc. and the President and a Director of AUSA Holding
Company. Mr. Brown is also currently an officer and/or a director of other
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<PAGE> 121
AEGON affiliates. Donald E. Flynn, Executive Vice President of AEGON
Management is also a Vice President of AEGON USA, Inc. and AUSA Life Insurance
Co., Inc. Mr. Flynn is also currently an officer and/or director of other
AEGON affiliates. Donald W. Chamberlain, an Executive Vice President of AEGON
Management, is also a Vice President of AEGON USA, Inc.; Ronald M. Nagler, an
Executive Vice President of AEGON Management, is a Vice President and Deputy
Chief Investment Officer of AEGON USA, Inc.; Ralph M. O'Brien, a Senior Vice
President of AEGON Management, is also a Vice President of AUSA Life Insurance
Company. Mr. O'Brien is also currently an officer and/or a director of other
AEGON affiliates. Clifford A. Sheets and Michael Van Meter are Senior Vice
Presidents of AEGON Management; Alan F. Fletcher, Vice President and Treasurer
of AEGON Management is also currently an officer and/or a director of other
AEGON affiliates. David R. Halfpap is a Vice President of AEGON Management and
a Vice President and Assistant Secretary of AUSA Life Insurance Company. Mr.
Halfpap is also currently an officer and/or a director of other AEGON
affiliates. Robert L. Hansen is Vice President of AEGON Management and Vice
President of AUSA Life Insurance Company; Jon D. Kettering is Vice President
of AEGON Management and Vice President of AUSA Life Insurance Company; Patrick
S. Baird, a Director of AEGON Management and AUSA Holding Company, is also Vice
President and Chief Financial Officer of AUSA Holding Company and AUSA Life
Insurance Co., Inc. Mr. Baird is also currently an officer and/or a director
of other AEGON affiliates. Gregory W. Theobald, Vice President and Secretary
of AEGON Management, is also Vice President and Asst. Secretary of AUSA Life
Insurance Co., Inc. Mr. Theobald is also currently an officer and/or a
director of other AEGON affiliates. Drew E. Washburn, Kenneth M. Certain,
Rachel Dennis, Michael N. Meese, Mark W. Mullin, Frederick A. Sabetta, Lester
P. Duke and Lewis O. Funkhouser are Vice Presidents of AEGON Management. James
E. Fine, Steven P. Opp and Thomas E. Myers are Assistant Vice Presidents of
AEGON Management.
Fred Alger Management, Inc. ("Alger Management") is a wholly-owned
subsidiary of Fred Alger & Company, Incorporated ("Alger, Inc.") which in turn
is a wholly-owned subsidiary of Alger Associates, Inc., a financial services
holding company. Alger Management is generally engaged in rendering investment
advisory services to mutual funds, institutions and, to a lesser extent,
individuals.
Fred M. Alger III serves as Chairman of the Board of Alger Associates,
Inc. ("Associates"), Alger Management, Alger, Inc., Alger Properties, Inc.
("Properties"), Alger Shareholder Services, Inc. ("Services"), Alger Life
Insurance Agency, Inc. ("Agency") and Analysts Resources, Inc. David D. Alger
also serves as President and Director of Associates, Alger Management, Alger
Inc., Properties, Services and Agency; and Executive Vice President and
Director of Analysts Resources, Inc. Gregory S. Duch also serves as Executive
Vice President, Treasurer and Director of Alger Management and Properties; and
Executive Vice President and Treasurer of Associates, Alger Inc., Analysts
Resources, Inc., Services and Agency. Nanci K. Staple also serves as
Secretary of Associates, Alger Management, Alger Inc., Properties, Analysts
Resources, Inc., Services and Agency. The principal business address of each
of the companies listed above, other than Alger, Inc., is 75 Maiden Lane, New
York, NY 10038. The principal business address of Alger, Inc. is 30
Montgomery Street, Jersey City, NJ 07302.
Luther King Capital Management Corporation ("Luther King") is a
registered investment adviser providing investment management services. Luther
King also provides investment management services to individual and
institutional investors on a private basis. J. Luther King, Jr., President of
Luther King, Emmett M. Murphy, Paul W. Greenwell, Robert M. Holt, Jr., Scot C.
Hollmann, David L. Dowler, David D. May, J. Patrick Clegg, Donald R. Andrews,
Joan M. Maynard, Robert B. Crates, Robert H. Alpert, Scott M. Kleberg and
Barbara S. Garcia, officers of Luther King, have no substantial business,
profession, vocation or employment other than their positions with Luther King.
Dean Investment Associates ("Dean Investment"), a division of C.H.
Dean and Associates, Inc., is a registered investment adviser providing
investment management services. Dean Investment became a registered investment
adviser on March 11, 1974. C.H. Dean and Associates, Inc. was incorporated as
an Ohio corporation on March 28, 1975.
Chauncey H. Dean is the Chairman and Chief Executive Officer; Dennis
D. Dean, President and Chief Operations Officer; Frank H. Scott is Senior Vice
President; John C. Riazzi is Vice President and Director of Consulting
Services; Robert D. Dean is Vice President and Director of Research; Richard M.
Luthman is Senior Vice President; Darrell N. Fulton is Vice President of
Information Systems. The business address of each of the officers of Dean
Investment is 2480 Kettering Tower, Dayton, OH 45423-2480.
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<PAGE> 122
Item 29 Principal Underwriter
InterSecurities, Inc.
(a) The Registrant has entered into an Underwriting Agreement with
InterSecurities, Inc. ("ISI"), whose address is P.O. Box 9053, Clearwater, FL
34618-9053, to act as the principal underwriter of Fund shares. ISI also
serves as the principal underwriter to IDEX Fund and IDEX Fund 3, each a
registered investment company within the Fund complex.
(b) Directors and Officers of Principal Underwriter
<TABLE>
<CAPTION>
Name Positions and Offices with Underwriter Positions and Offices with Registrant
- ---- -------------------------------------- --------------------------------------
<S> <C> <C>
John R. Kenney Chairman and Director Chairman and Trustee
G. John Hurley President, Chief Executive Officer President, Chief Executive
and Director Officer and Trustee
J. Will Paull Director N/A
Thomas R. Moriarty Senior Vice President Senior Vice President
William H. Geiger Director and Secretary Vice President and Assistant
Secretary
Becky A. Ferrell Assistant Vice President, Counsel Assistant Vice President, Counsel
and Assistant Secretary and
Secretary
Richard B. Franz II Treasurer Treasurer
Christopher G. Roetzer Assistant Vice President Assistant Vice President and
Principal Accounting Officer
Donald L. Cudney Senior Vice President N/A
Cynthia L. Remley Vice President, Counsel and N/A
Assistant Secretary
Terry L. Garvin Vice President N/A
Gordon E. Hippner Vice President N/A
Gerard P. Kirk Vice President N/A
Leslie E. Martin, III Vice President Vice President
Stanley R. Orr Vice President N/A
Pamela C. Dils Assistant Vice President and N/A
Assistant Secretary
Kristy L. Dowd Assistant Vice President N/A
James C. Brzycki Assistant Vice President N/A
</TABLE>
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<PAGE> 123
<TABLE>
<S> <C> <C>
Diane Rogers Assistant Vice President N/A
Sammie Jo McClintick Assistant Vice President N/A
Douglas Forster Assistant Vice President N/A
</TABLE>
Item 30 Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's transfer
agent, Idex Investor Services, Inc., P. O. Box 9015, Clearwater, FL
34618-9015.
(b) All other accounting records of the Registrant are maintained at
the offices of the Registrant at 201 Highland Avenue, Largo, FL, 34640 or 33
N. Garden Avenue, Suites 1000 & 1100, Clearwater, FL 34615, and are in the
physical possession of the officers of the Fund, or at the offices of the
Custodian, Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, MO 64105.
Item 31 Management Services
The Registrant has no management-related service contract which is not
discussed in Part I of this form. See the section of the Prospectus entitled
"Investment Advisory and Other Services" for a discussion of the management and
advisory services furnished by Idex Management, Inc., Janus Capital
Corporation, InterSecurities, Inc., AEGON USA Management, Inc., Fred Alger
Management, Inc., Luther King Capital Management Corporation and Dean
Investment Associates pursuant to the Management and Investment Advisory
Agreements, the Investment Counsel Agreements, the Administrative Services
Agreements and the Underwriting Agreement.
Item 32 Undertakings
(a) Not applicable
(b) Registrant hereby undertakes to file a Post-Effective Amendment
including the financial statements of IDEX II Tactical Asset
Allocation Portfolio, which need not be certified, within four to
six months after the effective date of this Post-Effective
Amendment to the Registration Statement.
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of its latest annual report to
shareholders, upon request and without charge.
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<PAGE> 124
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Largo and
State of Florida, on the 27th day of June, 1995.
IDEX II Series Fund
By: /s/ G. John Hurley
-----------------------
G. John Hurley
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 and
Investment Company Act of 1940, this Post-Effective Amendment to its
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<S> <C> <C>
/s/ John R. Kenney Chairman and Trustee June 27, 1995
- ----------------------------
John R. Kenney
/s/ G. John Hurley President and Trustee June 27, 1995
- ----------------------------- (Principal Executive
G. John Hurley Officer)
/s/ Richard B. Franz II Treasurer and June 27, 1995
- --------------------------- Principal Financial
Richard B. Franz II Officer
/s/ Christopher G. Roetzer Assistant Vice President and June 27, 1995
- -------------------------- Principal Accounting
Christopher G. Roetzer Officer
/s/ Peter R. Brown * Trustee June 27, 1995
- ----------------------------
Peter R. Brown *
/s/ James L. Churchill * Trustee June 27, 1995
- ---------------------------
James L. Churchill *
</TABLE>
<PAGE> 125
<TABLE>
<S> <C> <C>
/s/ Charles C. Harris * Trustee June 27, 1995
- ---------------------------
Charles C. Harris
/s/ William W. Short, Jr. * Trustee June 27, 1995
- ----------------------------
William W. Short, Jr. *
/s/ Truman H. Sims * Trustee June 27, 1995
- ---------------------------
Truman H. SIms *
/s/ Jack E. Zimmerman * Trustee June 27, 1995
- ------------------------
Jack E. Zimmerman *
/s/ G. John Hurley
- -----------------------------
*Signed by G. John Hurley
Attorney in Fact
</TABLE>
<PAGE> 126
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
Exhibit 4 Specimen Share Certificate:
(a) Class A Shares
(6)IDEX II Tactical Asset Allocation Portfolio
(b) Class B Shares
(1)IDEX II Aggressive Growth Portfolio
(2)IDEX II Capital Appreciation Portfolio
(3)IDEX II Global Portfolio
(4)IDEX II Growth Portfolio
(5)IDEX II Equity-Income Portfolio
(6)IDEX II Tactical Asset Allocation Portfolio
(7)IDEX II Balanced Portfolio
(8)IDEX II Flexible Income Portfolio
(9)IDEX II Income Plus Portfolio
(10)IDEX II Tax-Exempt Portfolio
(c) Class C Shares
(6)IDEX II Tactical Asset Allocation Portfolio
Exhibit 5 (a)Management and Investment Advisory Agreement
(6)IDEX II Tactical Asset Allocation Portfolio
(b)Investment Counsel Agreement
(6)IDEX II Tactical Asset Allocation Portfolio
Exhibit 6 (a)Underwriting Agreement
(b)Dealer Sales Agreement
(c)Service Agreement
Exhibit 9 Transfer Agency Agreement
Exhibit 10 Opinion of Counsel
Exhibit 11 (a)Consent of Price Waterhouse
(b)Consent of Sutherland Asbill & Brennan
Exhibit 15 (a)Plan of Distribution under Rule 12b-1
Class A Shares
(6)IDEX II Tactical Asset Allocation Portfolio
(b)Plan of Distribution under Rule 12b-1
Class B Shares
(1)IDEX II Aggressive Growth Portfolio
(2)IDEX II Capital Appreciation Portfolio
(3)IDEX II Global Portfolio
</TABLE>
<PAGE> 127
<TABLE>
<S> <C>
(4)IDEX II Growth Portfolio
(5)IDEX II Equity-Income Portfolio
(6)IDEX II Tactical Asset Allocation Portfolio
(7)IDEX II Balanced Portfolio
(8)IDEX II Flexible Income Portfolio
(9)IDEX II Income Plus Portfolio
(10)IDEX II Tax-Exempt Portfolio
(c)Plan of Distribution under Rule 12b-1
Class C Shares
(6)IDEX II Tactical Asset Allocation Portfolio
Exhibit 16 (a)Computation of Performance Quotation
Class A Shares
(1)IDEX II Aggressive Growth Portfolio
(2)IDEX II Capital Appreciation Portfolio
(5)IDEX II Equity-Income Portfolio
(6)IDEX II Balanced Portfolio
(b)Computation of Performance Quotation
Class C Shares
(1)IDEX II Aggressive Growth Portfolio
(2)IDEX II Capital Appreciation Portfolio
(5)IDEX II Equity-Income Portfolio
(6)IDEX II Balanced Portfolio
Exhibit 18 Multiple Class Plan
Exhibit 19 Powers of Attorney
Exhibit 27 Financial Data Schedule (Exhibits 27.1 through 27.28)
For SEC use only.
Exhibit 99 Audited Financial Statements
</TABLE>
<PAGE> 1
EXHIBIT 4(a)(6)
<TABLE>
<CAPTION>
CLASS A SHARES OF
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class A Shares (without par value) of IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO, a series of
shares (the "Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and
designated under the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time
(the "Trust Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of
Massachusetts, are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust
Agreement, the beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent
the beneficial interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities
belonging to the Series and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the
Trust will furnish the holder of this certificate upon written request and without charge a statement of such rights and
preferences. THE SHARES EVIDENCED HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined
by the Trustees in accordance with the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually
but as Trustees under the Trust Agreement, and represents shares of beneficial interest in the Series and does not bind any of the
Trustees, shareholders, officers, employees or agents of the Trust personally but only the assets and property of the Series.
Subject to the provisions of the Trust Agreement, the Class A Shares represented by this certificate are transferable upon the books
of the Trust by the registered holder hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(1)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II AGGRESSIVE GROWTH PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II AGGRESSIVE GROWTH PORTFOLIO, a series of shares (the
"Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under
the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II AGGRESSIVE GROWTH PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(2)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II CAPITAL APPRECIATION PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II CAPITAL APPRECIATION PORTFOLIO, a series of shares (the
"Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under
the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II CAPITAL APPRECIATION PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(3)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II GLOBAL PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II GLOBAL PORTFOLIO, a series of shares (the "Series") of
IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under the Declaration
of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust Agreement"). The terms
of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, are hereby incorporated
by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the beneficial interest in the
Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial interest in an undivided
proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series and classes thereof.
Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the holder of this
certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED HEREBY ARE
SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with the Trust
Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust Agreement, and
represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers, employees or
agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust Agreement,
the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder hereof in
person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II GLOBAL PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(4)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II GROWTH PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II GROWTH PORTFOLIO, a series of shares (the "Series") of
IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under the Declaration
of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust Agreement"). The terms
of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, are hereby incorporated
by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the beneficial interest in the
Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial interest in an undivided
proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series and classes thereof.
Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the holder of this
certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED HEREBY ARE
SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with the Trust
Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust Agreement, and
represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers, employees or
agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust Agreement,
the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder hereof in
person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II GROWTH PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(5)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II EQUITY - INCOME PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II EQUITY - INCOME PORTFOLIO, a series of shares (the
"Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under
the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II EQUITY - INCOME PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(6)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO, a series of shares
(the "Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated
under the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(7)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II BALANCED PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II BALANCED PORTFOLIO, a series of shares (the "Series") of
IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under the Declaration
of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust Agreement"). The terms
of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, are hereby incorporated
by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the beneficial interest in the
Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial interest in an undivided
proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series and classes thereof.
Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the holder of this
certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED HEREBY ARE
SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with the Trust
Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust Agreement, and
represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers, employees or
agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust Agreement,
the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder hereof in
person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II BALANCED PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(8)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II FLEXIBLE INCOME PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II FLEXIBLE INCOME PORTFOLIO, a series of shares (the
"Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under
the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II FLEXIBLE INCOME PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(9)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II INCOME PLUS PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II INCOME PLUS PORTFOLIO, a series of shares (the "Series")
of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under the
Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II INCOME PLUS PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(b)(10)
<TABLE>
<CAPTION>
CLASS B SHARES OF
IDEX II TAX EXEMPT PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class B Shares (without par value) of IDEX II TAX EXEMPT PORTFOLIO, a series of shares (the "Series")
of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated under the
Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class B Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX II TAX EXEMPT PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
EXHIBIT 4(c)(6)
<TABLE>
<CAPTION>
CLASS C SHARES OF
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF SHARES OF
IDEX II SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C>
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
*SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
----------------------------
fully paid and non-assessable Class C Shares (without par value) of IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO, a series of shares
(the "Series") of IDEX II Series Fund, a Massachusetts business trust (the "Trust"), which shares are established and designated
under the Declaration of Trust dated January 7, 1986, and restated as of August 30, 1991, as amended from time to time (the "Trust
Agreement"). The terms of the Trust Agreement, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts,
are hereby incorporated by reference as fully as if set down herein in their entirety. As provided in the Trust Agreement, the
beneficial interest in the Series has been divided into classes of Shares, and the Shares evidenced hereby represent the beneficial
interest in an undivided proportionate part of the assets belonging to the Series subject to the liabilities belonging to the Series
and classes thereof. Such Shares have the rights and preferences set forth in the Trust Agreement and the Trust will furnish the
holder of this certificate upon written request and without charge a statement of such rights and preferences. THE SHARES EVIDENCED
HEREBY ARE SUBJECT TO REDEMPTION BY THE TRUST pursuant to the procedures that may be determined by the Trustees in accordance with
the Trust Agreement. This certificate is issued by the Trustees of the Trust not individually but as Trustees under the Trust
Agreement, and represents shares of beneficial interest in the Series and does not bind any of the Trustees, shareholders, officers,
employees or agents of the Trust personally but only the assets and property of the Series. Subject to the provisions of the Trust
Agreement, the Class C Shares represented by this certificate are transferable upon the books of the Trust by the registered holder
hereof in person or by its duly authorized attorney upon surrender of this certificate.
Witness the facsimile signature of the President and Treasurer of the Trust and the signature of its duly authorized agent.
VOID IF NOT COUNTERSIGNED
COUNTERSIGNED by Idex Investor Services, Inc.
P.O. Box 9015, Clearwater, FL 34618-9015
Dated TRANSFER AGENT
/s/ Richard B. Franz /s/ G. John Hurley
TREASURER PRESIDENT BY
----------------------------------------------
Authorized Signature
IM NO.
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
NUMBER A SERIES OF IDEX II SERIES FUND SHARES
IM NO.
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH ID. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION IS
INCORRECT OR MISSING, PLEASE PRINT THE CORRECT
INFORMATION BELOW, AND RETURN TO:
IDEX INVESTOR SERVICES, INC.
P.O. BOX 9015
CLEARWATER, FL 34618-9015
------------------------------------------------
------------------------------------------------
------------------------------------------------
TAX IDENT OR SOC SEC NO
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they
were written out in full, according to the applicable laws or regulations:
<S> <C>
TEN COM - as tenants in common UNIF GIFTS/TRANSFERS MIN ACT - __________________Custodian__________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts/Transfers to Minors
and not as tenants in common Act__________________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received,_________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
______________________________________
____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________Shares
of the Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________Attorney
to transfer the said stock on the books of the within-named issuer with full power of substitution in the premises
Dated, __________________________
______________________________________________________
Owner
______________________________________________________
Signature of Co-Owner, if any
IMPORTANT (BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.)
Signature(s) guaranteed by:
____________________________________________________________________________________________________________________________________
Name of Institution
____________________________________________________________________________________________________________________________________
Authorized Signature
(Guarantee stamp must be included)
</TABLE>
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
WHO MEETS THE STANDARDS AND PROCEDURES OF THE TRANSFER AGENT.
<PAGE> 1
Exhibit 5 (a)(6)
IDEX II SERIES FUND
ON BEHALF OF IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of June 1, 1995, is between IDEX II
SERIES FUND, a Massachusetts business trust (referred to herein as the "Fund")
and INTERSECURITIES, INC., a Delaware corporation (referred to herein as
"InterSecurities"), to provide certain management and investment advisory
services to a certain series of shares of beneficial interest in the Trust,
namely, IDEX II Series Fund Tactical Asset Allocation Portfolio (the
"Portfolio").
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and consists of
more than one series of shares, including the Portfolio. In managing the
Portfolio, as well as in the conduct of certain of its affairs, the Fund wishes
to have the benefit of the investment advisory services of InterSecurities and
its assistance in performing certain management, administrative and promotional
functions. InterSecurities desires to furnish such services for the Portfolio
and to perform the functions assigned to it under this Agreement for the
considerations provided. Accordingly, the parties have agreed as follows:
1. APPOINTMENT. The Fund hereby appoints InterSecurities as the
Portfolio's investment adviser and administrator for the period and on the
terms set forth in this Agreement. InterSecurities accepts such appointment
and agrees to render or cause to be rendered the services set forth for the
compensation herein specified. In all matters relating to the performance of
this Agreement, InterSecurities will act in conformity with the Fund's
Declaration of Trust, Bylaws and registration statement applicable to the
Portfolio and with the instructions and direction of the Board of Trustees of
the Fund, and will conform to and comply with the 1940 Act and all other
applicable federal or state laws and regulations.
2. INVESTMENT ADVISORY SERVICES. In its capacity as investment
adviser to the Portfolio, InterSecurities shall have the following
responsibilities:
(a) to furnish continuous advice and recommendations to the Fund as to
the acquisition, holding or disposition of any or all of the
securities or other assets which the Portfolio may own or
contemplate acquiring from time to time, consistent with the
Fund's Declaration of Trust and the Portfolio's investment
objectives and policies adopted and declared by the Board of
Trustees and stated in the Portfolio's current Prospectus;
(b) to cause the officers of InterSecurities to attend meetings and
furnish oral or written reports, as the Fund may reasonably
require, in order to keep the Trustees and appropriate officers of
the Fund fully informed as to the conditions of the investment
securities of the Portfolio, the investment recommendations of
InterSecurities, and the investment considerations which have
given rise to those recommendations; and
(c) to supervise the purchase and sale of securities as directed by
the appropriate officers of the Fund, including the selection of
brokers and dealers to execute such transactions, consistent with
paragraph 10 hereof.
It is understood and agreed that InterSecurities intends to enter into
an Investment Counsel Agreement with Dean Investment Associates ("Dean"), an
Ohio corporation, under which Dean would furnish investment information and
advice to assist InterSecurities in carrying out its responsibilities under
this Section 2. The compensation to be paid to Dean for such services and the
other terms and conditions under which the services shall be rendered by Dean
shall be set forth in the Investment Counsel Agreement; provided, however, that
such Agreement shall be approved by the Board of
<PAGE> 2
Trustees and by the holders of the outstanding voting securities of the
Portfolio in accordance with the requirements of Section 15 of the 1940 Act,
and shall otherwise be subject to, and contain such provisions as shall be
required by, the 1940 Act.
3. MANAGEMENT AND ADMINISTRATIVE SERVICES. InterSecurities shall
furnish and perform all administrative services, including recordkeeping,
shareholder relations, regulatory reporting and compliance, supervising and
coordinating the services of the Portfolio's custodian and transfer agent and
such other functions of the Portfolio, (other than the investment advisory
services provided for in Section 2), as the parties may agree. InterSecurities
shall also assist in the preparation of reports to shareholders of the
Portfolio and prepare sales literature promoting sale of the Portfolio shares
as requested by the Fund.
4. INTERSECURITIES EXPENSES. In addition to the expenses which
InterSecurities may incur in the performance of its services pursuant to
Sections 2 and 3 above, InterSecurities shall incur and pay the following
expenses allocable to the Portfolio's operations:
(a) Reasonable compensation, fees and related expenses of officers of
the Fund and of those Trustees of the Fund who are interested
persons (as that term is defined in Section 2(a)(19) of the 1940
Act) of InterSecurities; and
(e) Rental of offices for the Portfolio.
5. OBLIGATIONS OF FUND. The Fund shall have the following
obligations under this Agreement:
(a) to keep InterSecurities continuously and fully informed as to the
composition of the investment securities of the Portfolio and the
nature of all of its assets and liabilities from time to time;
(b) to furnish InterSecurities with a certified copy of any financial
statement or report prepared for the Portfolio by certified or
independent public accountants, and with copies of any financial
statements or reports made to its shareholders or to any
governmental body or securities exchange;
(c) to furnish InterSecurities with any further materials or
information which InterSecurities may reasonably request to enable
it to perform its functions under this Agreement; and
(d) to compensate InterSecurities for its services in accordance with
the provisions of Section 6 hereof.
6. COMPENSATION. The Portfolio shall pay to InterSecurities for its
services an annual fee, computed daily and paid monthly, payable on the last
day of each month during which or part of which this Agreement is in effect,
equal to 1.00% of first $750 million of the Portfolio's average daily net
assets, 0.9% of the next $250 million of the Portfolio's average daily net
assets, and 0.85% of the average daily net assets of the Portfolio in excess of
$1 billion. For the month during which this Agreement becomes effective and
the month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar
days of such month during which this Agreement is effective.
7. EXPENSES PAID BY PORTFOLIO. Subject to the provisions of Section
8, below, and except as provided in this paragraph, nothing in this Agreement
shall be construed to impose upon InterSecurities the obligation to incur, pay,
or reimburse the Portfolio for any expenses not specifically assumed by
InterSecurities under Sections 2, 3 and 4 above. The Fund shall pay all of its
other
- 2 -
<PAGE> 3
expenses (or pay such expenses of the Fund attributable to the Portfolio)
including, but not limited to, custodian and transfer agent fees; advisory
fees; brokerage commissions and all other expenses in connection with the
execution of portfolio transactions; administrative, clerical, recordkeeping,
bookkeeping, legal, auditing and accounting expenses; interest and taxes;
expenses of preparing tax returns; expenses of shareholders' meetings and of
preparing, printing and mailing proxy statements (unless otherwise agreed to by
the Fund and InterSecurities); expenses of preparing and typesetting periodic
reports to its shareholders (except for those reports the Portfolio permits to
be used as sales literature); its allocable share of the fees and expenses of
the Fund's non-interested Trustees; and the costs, including filing fees, of
registering and renewing or maintaining registration of the Portfolio's shares
under federal and state law. Nothing in this Section 7 shall prohibit the Fund
from entering into other agreements or adopting plans which provide for the
allocation of expenses of the Fund or the Portfolio to other entities, or the
assumption of other expenses by the Fund or the Portfolio.
8. LIMITATION ON EXPENSES OF PORTFOLIO. Whenever, for any fiscal
year, the total cost to the Portfolio for normal operating expenses chargeable
to its income account, including, but not limited to, the fees of the
Portfolio's investment adviser, the compensation of its custodian, transfer
agent, registrar, auditors and legal counsel, printing expenses, expenses
incurred in complying with all laws applicable to the sale of shares of the
Portfolio and any compensation, fees, or reimbursements which the Portfolio
pays to Trustees of the Fund who are not interested persons (as that phrase is
defined in Section 2(a)(29) of the 1940 Act) of InterSecurities, but excluding
all interest and all federal, state and local taxes (such as stamp, excise,
income, franchise and similar taxes), exceeds any expense limitation imposed by
applicable state law, InterSecurities shall reimburse the Portfolio for the
amount of said excess in the manner and to the extent required by state law;
provided, however, that InterSecurities shall reimburse the Portfolio for the
amount of such expenses, exclusive of expenses incurred pursuant to the Fund's
Plan of Distribution under Rule 12b-1 of the 1940 Act, which exceed 2.5% of the
Fund's average daily net assets for the first full fiscal year of the
Portfolio, and 1.5% thereafter.
9. TREATMENT OF INVESTMENT ADVICE. With respect to the Portfolio,
the Fund shall treat the investment advice and recommendations of
InterSecurities as being advisory only, and shall retain full control over its
own investment policies. However, the Trustees of the Fund may delegate to the
appropriate officers of the Fund, or to a committee of Trustees, the power to
authorize purchases, sales or other actions affecting the securities of the
Portfolio in the interim between meetings of the Trustees, provided such action
is consistent with the established investment policy of the Fund and is
reported to the Trustees at their next meeting.
10. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. InterSecurities is authorized and directed to place
the Portfolio's securities transactions, or to delegate to Dean the authority
and direction to place the Portfolio's securities transactions, only with
brokers and dealers who render satisfactory service in the execution of orders
at the most favorable prices and at reasonable commission rates; provided,
however, that InterSecurities or Dean, may pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if InterSecurities or Dean determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer viewed in terms of
either that particular transaction or the overall responsibilities of
InterSecurities or Dean. InterSecurities and Dean are also authorized to
consider sales of Portfolio shares by a broker-dealer or the recommendation of
a broker-dealer to its customers that they purchase Portfolio shares as a
factor in selecting broker-dealers to execute the Portfolio's securities
transactions, provided that in placing portfolio business with such
broker-dealers,
- 3 -
<PAGE> 4
InterSecurities and Dean shall seek the best execution of each transaction and
all such brokerage placement shall be consistent with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
Notwithstanding the foregoing, the Fund shall retain the right to direct the
placement of all securities transactions of the Portfolio, and the Trustees may
establish policies or guidelines to be followed by InterSecurities and Dean in
placing securities transactions for the Portfolio pursuant to the foregoing
provisions. InterSecurities shall report on the placement of portfolio
transactions each quarter to the Trustees of the Fund.
11. LIABILITY OF INTERSECURITIES. InterSecurities may rely on
information reasonable believed by it to be accurate and reliable. Except as
may otherwise be provided by the 1940 Act, neither InterSecurities nor its
officers, directors, employees or agents shall be subject to any liability to
the Fund or the Portfolio or any shareholder of the Portfolio for any error or
judgment, mistake of law or any loss arising out of any investment or other act
or omission in the course of, connected with or arising out of any service to
be rendered hereunder, except by reason of willful misfeasance, bad faith or
gross negligence in its performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement.
12. TERMINATION. This Agreement may be terminated at any time,
without penalty, by the Trustees of the Fund or by the shareholders of the
Portfolio acting by vote of at least a majority of its outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 1940 Act),
provided in either case that 60 days' written notice of termination be given to
InterSecurities at its principal place of business. This Agreement may be
terminated by InterSecurities at any time by giving 60 days' written notice of
termination to the Fund, addressed to its principal place of business.
13. ASSIGNMENT. This Agreement shall terminate automatically in the
event of any assignment (as the term is defined in Section 2(a)(4) of the 1940
Act) of this Agreement.
14. TERM. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, for an initial term ending April 22,
1997, and shall continue in effect from year to year thereafter only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Fund who are not parties hereto or interested
persons (as that term is defined in Section 2(a)(19) of the 1940 Act) of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Fund
or the affirmative vote of a majority of the outstanding voting securities of
the Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
15. AMENDMENTS. The terms of this Agreement may be amended only with
the approval by the affirmative vote of a majority of the outstanding voting
securities of the Portfolio (as that phrase is defined in Section 2(a)(42) of
the 1940 Act) and the approval by the vote of a majority of Trustees of the
Fund who are not parties hereto or interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of any such party, cast in person
at a meeting called for the purpose of voting on the approval of such
amendment, unless otherwise permitted in accordance with the 1940 Act.
16. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
- 4 -
<PAGE> 5
17. LIMITATION OF LIABILITY. A copy of the Fund's Declaration of
Trust is on file with the Secretary of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the
Trustees as Trustees of the Fund and not individually, and that the obligations
under this Agreement are not binding upon any of the Trustees, officers,
shareholders, agents or employees of the Fund individually, but binding only
upon the assets and property of the Portfolio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of June
1, 1995.
ATTEST: INTERSECURITIES, INC.
/s/ William H. Geiger By: /s/ G. John Hurley
- ---------------------------- ----------------------------
William H. Geiger, Secretary G. John Hurley
President
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- ----------------------------
Becky A. Ferrell, Secretary G. John Hurley
President
- 5 -
<PAGE> 1
Exhibit 5 (b) (6)
IDEX II SERIES FUND
ON BEHALF OF IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
INVESTMENT COUNSEL AGREEMENT
This Agreement is entered into as of June 1, 1995, between
INTERSECURITIES, INC., a Delaware corporation (referred to herein as "ISI"),
and DEAN INVESTMENT ASSOCIATES, a Division of C.H. Dean & Associates, Inc., an
Ohio corporation (referred to herein as "Dean").
WHEREAS, ISI entered into a Management and Investment Advisory Agreement
(referred to herein as the "Advisory Agreement"), dated June 1, 1995, with IDEX
II Series Fund, a Massachusetts business trust (referred to herein as the
"Fund") on behalf of the IDEX II Series Fund Tactical Asset Allocation
Portfolio (the "Portfolio"), under which ISI has agreed, among other things, to
act as investment adviser to the Fund.
WHEREAS, the Advisory Agreement provides that ISI may engage Dean to
furnish investment information and advice to assist ISI in carrying out its
responsibilities under the Advisory Agreement as investment adviser to the
Portfolio.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
Dean to ISI and the terms and conditions under which such services will be
rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF DEAN. Dean shall act as investment counsel to ISI.
In this capacity, Dean shall have the following responsibilities:
(a) to furnish continuous investment information, advice and
recommendations to ISI as to the acquisition, holding or
disposition of any or all of the securities or other assets which
the Portfolio may own or contemplate acquiring from time to time;
(b) to cause its officers to attend meetings of ISI or the Fund and
furnish oral or written reports, as ISI may reasonably require, in
order to keep ISI and its officers and the Trustees of the Fund
and appropriate officers of the Fund fully informed as to the
condition of the investment portfolio of the Portfolio, the
investment recommendations of Dean, and the investment
considerations which have given rise to those recommendations;
(c) to furnish such statistical and analytical information and reports
as may reasonably be required by ISI from time to time; and
(d) to supervise the purchase and sale of securities as directed by
the appropriate officers of the Fund or of ISI.
2. OBLIGATIONS OF ISI. ISI shall have the following obligations
under this Agreement:
(a) to keep Dean continuously and fully informed as to the composition
of the Portfolio's investment portfolio and the nature of the
Portfolio's assets and liabilities from time to time;
(b) to furnish Dean with a certified copy of any financial statement
or report prepared for the Portfolio by certified or independent
public accountants, and with copies
<PAGE> 2
of any financial statements or reports made by the Fund to its
shareholders or to any governmental body or securities exchange;
(c) to furnish Dean with copies of the Fund's Declaration of Trust,
By-laws, and current registration statement and any amendments
thereto applicable to the Portfolio, together with any further
materials or information which Dean may reasonably request to
enable it to perform its functions under this Agreement; and
(d) to compensate Dean for its services under this Agreement by the
payment of fees equal to (i) 40% of the fees received by ISI
pursuant to Section 6 of the Advisory Agreement for services
rendered by ISI to the Portfolio during the term of this
Agreement, less (ii) 40% of any amount reimbursed to the Portfolio
by ISI pursuant to the provisions of Section 8 of the Advisory
Agreement. In the event that this Agreement shall be effective
for only part of a period to which any such fee received by ISI is
attributable, then an appropriate proration of the fee that would
have been payable hereunder if this Agreement had remained in
effect until the end of such period shall be made, based on the
number of calendar days in such period and the number of calendar
days during the period in which this Agreement was in effect. The
fees payable to Dean hereunder shall be payable upon receipt by
ISI from the Portfolio of fees payable to ISI under Section 5 of
the Advisory Agreement.
3. TREATMENT OF INVESTMENT ADVICE. ISI shall treat the investment
information, advice and recommendations of Dean as being advisory only, and
shall determine the extent to which such advice and recommendations shall be
passed on to the Portfolio or incorporated in investment advice by ISI to the
Portfolio. ISI may direct Dean to furnish its investment information, advice
and recommendations directly to officers or Trustees of the Fund.
4. PURCHASES BY AFFILIATES. Neither Dean nor any of its officers or
Directors shall take a long or short position in the securities issued by the
Fund. This prohibition, however, shall not prevent the purchase from the Fund
of shares issued by the Fund by the officers and Directors of Dean (or deferred
benefit plans established for their benefit) at the current price available to
the public, or at such price with reductions in sales charge as may be
permitted in the Fund's current prospectus in accordance with Section 22(d) of
the Investment Company Act of 1940.
5. LIABILITY OF DEAN. Dean may rely on information reasonably
believed by it to be accurate and reliable. Except as may otherwise be
provided by the Investment Company Act of 1940, neither Dean nor its officers,
directors, employees or agents shall be subject to any liability to the Fund or
any shareholders of the Fund for any error of judgment, mistake of law or any
loss arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties under this Agreement.
6. COMPLIANCE WITH LAWS. Dean represents that it is, and will
continue to be throughout the term of this Agreement, an investment adviser
registered under all applicable federal and state laws. In all matters
relating to the performance of this Agreement, Dean will act in conformity with
the Fund's Declaration of Trust, Bylaws, and current registration statement
applicable to the Portfolio and with the instructions and direction of ISI and
the Fund's Trustees, and will conform to and comply with the Investment Company
Act of 1940, as amended (the "1940 Act") and all other applicable federal or
state laws and regulations.
- 2 -
<PAGE> 3
7. TERMINATION. This Agreement shall terminate automatically upon
the termination of the Advisory Agreement. This Agreement may be terminated at
any time, without penalty, by ISI or by the Fund by giving 60 days' written
notice of such termination to Dean at its principal place of business, provided
that such termination is approved by the Board of Trustees of the Fund or by
vote of a majority of the outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the 1940 Act) of the Fund. This Agreement may
be terminated at any time by Dean by giving 60 days' written notice of such
termination to the Fund and ISI at their respective principal places of
business.
8. ASSIGNMENT. This Agreement shall terminate automatically in the
event of any assignment (as that term is defined in Section 2(a)(4) and the
rules thereunder of the 1940 Act) of this Agreement.
9. TERM. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, for an initial term ending April 22,
1997, and shall continue in effect from year to year thereafter only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Fund who are not parties hereto or interested
persons (as the term is defined in Section 2(a)(19) of the 1940 Act) of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Fund
or the affirmative vote of a majority of the outstanding voting securities of
the Fund (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
10. AMENDMENTS. This Agreement may be amended only with the approval
by the affirmative vote of a majority of the outstanding voting securities of
the Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act)
and the approval by the vote of a majority of the Trustees of the Fund who are
not parties hereto or interested persons (as that term is defined in Section
2(a)(19) of the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of such amendment, unless otherwise
permitted in accordance with the 1940 Act.
11. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: DEAN INVESTMENT ASSOCIATES
/s/ John C. Riazzi BY: /s/ Chauncey H. Dean
- ---------------------------- ----------------------
Secretary Title:
ATTEST: INTERSECURITIES, INC.
/s/ William H. Geiger BY: /s/ John R. Kenney
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William H. Geiger, Secretary John R. Kenney
Chairman of the Board
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Exhibit 6 (a)
IDEX II SERIES FUND
UNDERWRITING AGREEMENT
This Agreement is entered into as of September 30, 1994, by and
between IDEX II Series Fund, a Massachusetts business trust (the "Fund"), and
InterSecurities, Inc. (formerly known as Idex Distributors, Inc.), a Delaware
corporation (the "Distributor").
Whereas, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company;
Whereas, the Distributor has served as principal underwriter for the
Fund since its inception;
Whereas, the Fund was formerly known as "Idex II" and the Fund
consisted of, and offered for public sale, only one series of shares of
beneficial interest corresponding to one portfolio;
Whereas, the Fund's Declaration of Trust was amended under a
Restatement of Declaration of Trust dated August 30, 1991 to provide for more
than one distinct series of shares of beneficial interest and for classes of
shares;
Whereas, the Fund currently offers for public sale more than one
series of its shares, for each of which series the Distributor serves as the
principal underwriter under an Underwriting Agreement dated April 22, 1993;
1. APPOINTMENT AND AUTHORITY OF AGENT. The Fund appoints the
Distributor as its principal underwriter, to sell shares of the Fund's
beneficial interest during the term of this Agreement. While this Agreement is
in force, the Distributor agrees to use its best efforts to find purchasers for
shares of the Fund. The Distributor shall sell, as agent on behalf of the
Fund, the shares needed, but not more than the shares needed (except for
clerical errors and errors of transmission), to fill unconditional orders
placed with the Distributor, and the price which the Fund shall receive for
shares so purchased shall be the net asset value used in determining the public
offering price on which such orders were based. (The term "net asset value" as
used in this Agreement shall have the meaning assigned to it in the Fund's
Bylaws, as amended from time to time).
The Distributor shall notify the Custodian of the Fund, at the end of
each business day, or as soon thereafter as the orders placed with it in such
period have been compiled, of the number of shares and the prices thereof which
the Distributor shall have sold on behalf of the Fund. The Distributor shall
use its best efforts to cause the sums due for shares ordered from the Fund to
be collected or to be advanced to the Fund on behalf of the purchasers on or
before the seventh business day (excluding Saturdays) after the shares have
been so ordered.
The agency of the Distributor shall be exclusive, except that it shall
not apply to (1) shares issued in connection with the merger or consolidation
of any other investment company or entity with the Fund or the non-taxable
acquisition, by purchase or otherwise, of all (or substantially all) of the
assets or the outstanding shares of any company by the Fund, or (2) shares
which may be offered by the Fund to its shareholders for reinvestment of
dividends and capital gains distributions, whether declared in cash or in
shares or cash at the option of the shareholder.
The Fund may suspend the sale of its shares at any time by notice to the
Distributor for such period of time as the Fund deems desirable. Such a
suspension of sale shall not effect a termination of this Agreement.
2. TERMS OF SALE OF SHARES. The Fund's shares shall be sold by the
Distributor as agent on behalf of the Fund to dealers having sales agreements
with the Distributor and to investors upon the terms and conditions (including
minimum purchase requirements) set forth in the current prospectus relating to
the Fund's shares and (to the extent not inconsistent with said prospectus)
upon the following terms and conditions:
a. PUBLIC OFFERING PRICE. The public offering price, which
means the price per share at which the Distributor or a dealer purchasing
shares from the Fund may sell shares to the public, shall be based upon the per
share net asset value determined as of the time specified in the then current
prospectus relating to the Fund's shares. The public offering price shall not
exceed the per share net asset value on the basis of which the applicable
public offering price is determined plus a sales charge as described in the
then current prospectus
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relating to the Fund's shares, which shall not exceed 8.5% of the public
offering price. The public offering price shall be adjusted to the nearer
cent. The Distributor shall fix, in its agreements with dealers, the portion
of the sales charge which may be reallowed to the dealers on the purchase of
shares from the Fund.
b. DETERMINATION OF NET ASSET VALUE. The Fund shall determine
the net asset value of the shares of the Fund (or cause such net asset value to
be determined) as of the close of the New York Stock Exchange on each business
day on which said Exchange is open, in accordance with the method set forth in
the Bylaws. Upon due notice to the Distributor, the Fund may also employ other
methods or times in calculation of net asset value, to the extent authorized by
its Bylaws and consistent with applicable federal laws and rules of the
National Association of Securities Dealers, Inc. The Fund shall also have the
right to suspend the sale of its shares and the calculation of net asset value
if, because of some extraordinary condition, the New York Stock Exchange shall
be closed, or if, in the judgment of a majority of the members of the Board of
Trustees of the Fund, or its Executive Committee, conditions existing during
the hours when said Exchange is open render such action advisable.
c. CONFIRMATIONS. The Distributor shall issue and deliver on
behalf of the Fund or cause to be issued and delivered all confirmations of
transactions effected hereunder for the account of the Fund.
3. NECESSARY ACTION. The Fund agrees that it will, from time to time,
but subject to any necessary approval of its shareholders, take all appropriate
action fixing the number of its authorized shares, and such other steps as may
be necessary to register the same under the Securities Act of 1933, to the end
that there will be available for sale such number of shares as the Distributor
may reasonably be expected to sell. The Fund plans to discontinue sales of its
shares except to existing shareholders when it reaches $500,000,000 in net
assets.
4. INDEMNITY OF FUND BY DISTRIBUTOR. The Distributor will indemnify and
hold harmles the Fund and each of its officers and trustees and each person, if
any, who controls the Fund within the meaning of Section 15 of the Securities
Act of 1933, against any loss, liability, damage, claim, or expense (including
the reasonable cost of investigating or defending any alleged loss, liability,
damage, claim or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of or in connection with any person acquiring any
shares of the Fund, which may be based upon the Securities Act of 1933 or any
other statute or on the common law, on account of any wrongful act of the
Distributor or any of its employees or on the ground that the registration
statement or prospectus, as from time to time amended and supplemented,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, insofar as any such statement or omission was made in
reliance upon, and in conformity with, information furnished to the Fund in
connection therewith by or on behalf of the Distributor, provided, however,
that in no case shall (1) the indemnity of the Distributor in favor of any
person indemnified be deemed to protect the Fund or any such person against any
liability to which the Fund or any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its (or his) duties or by reason of its (or his) reckless
disregard of its (or his) obligations and duties under this Agreement, or (2)
the Distributor be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or such person, as the case may be, shall have
notified the Distributor in writing within a reasonable time after the summons
or first legal process giving notice of the claim shall have been served upon
the Fund or upon such person (or after the Fund or such person shall have
received notice of such service on any designated agent), but failure to notify
the Distributor of any such claim shall not relieve it from any liability which
it may have to the Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any such notice to the Distributor, it shall be
entitled to participate, at its own expense, in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any such
liability, but, if the Distributor elects to assume the defense, such defense
shall be conducted by counsel chosen by it and satisfactory to the Fund, and to
those of its officers, trustees, or controlling persons who are defendants in
the suit. In the event that the Distributor elects to assume the defense of
any such suit and retain such counsel, the Fund and those of its officers,
trustees or controlling persons who are defendants in the suit shall bear the
fees and expenses of any additional counsel retained by them, but, in case the
Distributor does not elect to assume the defense of any such suit, it shall
reimburse them for the reasonable fees and expenses of any counsel so retained
by them. The Fund agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the shares.
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5. INDEMNITY OF DISTRIBUTOR BY FUND. The Fund will indemnify and hold
harmless the Distributor and each of its officers and directors and each
person, if any, who controls the Distributor within the meaning of Section 15
of the Securities Act of 1933 against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damage or expense and reasonable counsel fees
incurred in connection therewith), arising by reason of or in connection with
any person acquiring any of its shares which may be based upon the Securities
Act of 1933 or on any other statute or on the common law, on the ground that
the registration statement or prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statement therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished to the Fund in
connection therewith by or on behalf of the Distributor; provided, however,
that in no case shall (1) the indemnity of the Fund in favor of the Distributor
and any such controlling person be deemed to protect the Distributor or any
such controlling person against any liability to which the Distributor (or any
such controlling person) would otherwise be subject by reason of its willful
misfeasance, bad faith, gross negligence in the performance of its (or his)
duties or by reason of its (or his) reckless disregard of its (or his)
obligations and duties under this Agreement, or (2) the Fund be liable under
its indemnity agreement contained in this paragraph with respect to any claim
made against the Distributor (or any such controlling person) unless the
Distributor or such controlling person, as the case may be, shall have notified
the Fund in writing within a reasonable time after the summons or first legal
process giving notice of the claim shall have been served upon the Distributor
or upon such controlling person (or after such Distributor or controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Fund of any such claim shall not relieve it from any
liability which it may have to the person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Fund will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if the Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor and to the controlling persons who are defendants in the suit. In
the event the Fund elects to assume the defense of any such suit and retain
such counsel, the Distributor or persons who are defendants in the suit shall
bear the fees and expenses of any additional counsel retained by them, but, in
case the Fund does not elect to assume the defense of any such suit, it will
reimburse them for the reasonable fees and expenses of any counsel so retained
by them. The Distributor agrees to notify the Fund promptly of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of any of the shares.
6. COMPLIANCE WITH SECURITIES LAWS. The Distributor, in selling the
shares of the Fund, will in all respects duly conform with all federal and
state laws relating to the sale of such securities.
7. AUTHORIZED REPRESENTATIONS. Neither the Distributor, any dealer nor
any other person is authorized by the Fund to give any information or to make
any representations, other than those contained in the registration statement
or prospectus filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (as said registration statement and
prospectus may be amended or supplemented from time to time), covering the
shares of the Fund, or in such other sales literature as the Fund may expressly
authorize the Distributor to use. No dealer (except the Distributor acting as
agent of the Fund for the account of the Fund) is authorized to act as agent
for the Fund in connection with the offering or sale of shares of the Fund to
the public or otherwise.
8. COSTS TO BE INCURRED BY DISTRIBUTOR. In addition to the expenses
which the Distributor may incur in the performance of its own functions under
this Agreement, and the expenses which it may expressly undertake to pay under
other agreements with the Fund or otherwise, the Distributor will pay:
(a) the expenses of printing and distributing prospectuses to
persons other than shareholders and state and federal agencies; and
(b) preparing, printing and distributing all other sales
literature used by the Distributor or by dealers, (including copies of the
Fund's reports to shareholders or federal or state regulatory agencies, other
than those sent to shareholders or federal or state regulatory agencies, which
the Fund may permit to be used as sales literature) in connection with the
offering of Fund shares for sale to the public; and
(c) any expenses of advertising in connection with such offering.
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The Fund will pay all of its own expenses, except as expressly provided
herein or in any other agreements which the Fund may have with the Distributor
or any other person.
9. VOLUNTARY REPURCHASE OF SHARES BY THE FUND. The Fund reserves the
right, by resolution of its Board of Trustees, to authorize and require the
Distributor to repurchase, upon prices, terms and conditions to be set forth in
such resolution, as agent of the Fund and for its account, such shares of the
Fund as may be offered for voluntary repurchase by the Fund from time to time.
10. LONG OR SHORT POSITIONS. The Distributor agrees that it will not
take any long or short positions in the shares of the Fund except to the extent
contemplated by paragraphs 1 and 9 above, and that, so far as it can control
the situation, it will prevent any officer or director of (or person
financially interested in) the Distributor from taking any long or short
position in the shares of the Fund, except as permitted by the Declaration of
Trust of the Fund and by those portions of its Bylaws which are not subject to
amendment except by the shareholders of the Fund.
11. AMENDMENTS. This Agreement may be supplemented or amended by mutual
consent of the parties, provided that no amendment hereto shall be effective
unless approved by a majority of the trustees of the Fund who are not
interested persons (as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended) of the Distributor, cast in person
at a meeting called for the purpose of voting on such approval. If, at any
time during the existence of this Agreement, the Fund shall in good faith deem
it necessary or advisable in the best interest of the Fund that any amendment
of this Agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any proper advantage under federal or state tax laws,
and shall notify the Distributor of the form of amendment which it deems
necessary or advisable and the reasons therefor, and, if the Distributor
declines to assent to such amendment, the Fund may terminate this Agreement
immediately, upon written notice. If, at any time during the existence of this
Agreement, upon request by the Distributor, the Fund fails (after a reasonable
time) to make any changes in its governing instruments, or in its methods of
doing business, which are in good faith deemed by the Distributor to be
necessary in order to comply with federal law or the lawful requirements of the
Securities and Exchange Commission or of the National Association of Securities
Dealers, Inc. relating to the sale of the shares of the Fund, the Distributor
may terminate this Agreement immediately, upon written notice.
12. COMPENSATION. As compensation for the services performed and the
expenses assumed by the Distributor under this Agreement, including, but not
limited to, remuneration to the Distributor's employees and to other
broker/dealers on the basis of sales of shares, the Fund shall pay the
Distributor a distribution service fee of .25% of the average daily net assets
of the Fund. Such payments have been authorized by the Fund in its
Distribution Plan adopted pursuant to Rule 12b-1 under the Investment Company
Act of 1940 ("Distribution Plan") and will be limited in accordance with the
terms of the Distribution Plan. Additional payments to the Distributor from
the Fund's investment manager, IDEX Management, Inc. or the Fund's investment
sub-adviser, Janus Capital Corporation, may be authorized in accordance with
applicable law.
13. REPORTS. The Distributor shall prepare written reports for the
Board of Trustees of the Fund on a quarterly basis showing information
concerning services provided and expenses incurred which are related to this
Agreement and such other information as from time to time shall be reasonably
requested by the Fund's Board of Trustees.
14. TERM. This Agreement shall continue in effect unless sooner
terminated in accordance with its terms for one year from the date hereof and
shall continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by the Board of Trustees
of the Fund or by the affirmative vote of a majority of the outstanding voting
securities of the Fund (as that phrase is defined in Section 2(a)(42) of the
Investment Company Act of 1940, as amended); provided that no renewal hereof
shall be effective unless the terms of such renewal have been approved by the
vote of a majority of the Trustees of the Fund who are not interested parties
(as that term is defined in Section 2(a)(19) of the Investment Company Act of
1940, as amended) of the Distributor, cast in person at a meeting called for
the purpose of voting on the approval of the terms of such renewal. Either
party shall have the right to terminate this Agreement upon 60 days' written
notice given to the other party.
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15. ASSIGNMENT. In the event of the assignment (as defined in Section
2(a)(4) of the Investment Company Act of 1940, as amended) of this Agreement by
the Distributor, this Agreement shall automatically terminate.
16. LIMITATION OF LIABILITY. A copy of the Fund's Declaration of Trust
is on file with the Secretary of The Commonwealth of Massachusetts, and notice
is hereby given that this Agreement is executed on behalf of the Trustees as
Trustees of the Fund and not individually, and that the obligations under this
Agreement are not binding upon any of the Trustees, officers, shareholders,
agents or employees of the Fund individually, but binding only upon the assets
and property of the Fund.
17. PRIOR AGREEMENTS. This agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first appearing above.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
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Becky A. Ferrell G. John Hurley
Secretary President and Chief Executive Officer
ATTEST: INTERSECURITIES, INC.
/s/ William H. Geiger By: /s/ John R. Kenney
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William H. Geiger John R. Kenney
Secretary Chairman of the Board
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AMENDMENT TO SCHEDULE I
OF THE UNDERWRITING AGREEMENT
BETWEEN
IDEX II SERIES FUND AND INTERSECURITIES, INC.
The following series and classes of shares are offered for public sale by IDEX
II Series Fund:
<TABLE>
<S> <C>
IDEX II Growth Portfolio IDEX II Balanced Portfolio
Class A Class A
Class B Class B
Class C Class C
IDEX II Global Portfolio IDEX II Capital Appreciation Portfolio
Class A Class A
Class B Class B
Class C Class C
IDEX II Flexible Income Portfolio IDEX II Aggressive Growth Portfolio
Class A Class A
Class B Class B
Class C Class C
IDEX II Tax-Exempt Portfolio IDEX II Equity-Income Portfolio
Class A Class A
Class B Class B
Class C Class C
IDEX II Income Plus Portfolio IDEX II Tactical Asset Allocation Portfolio
Class A Class A
Class B Class B
Class C Class C
</TABLE>
Effective as of June 1, 1995
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrel /s/ G. John Hurley
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Becky A. Ferrell, Secretary By: G. John Hurley, President and
Chief Executive Officer
ATTEST: INTERSECURITIES, INC.
/s/ William H. Geiger /s/ Thomas R. Moriarty
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William H. Geiger, Secretary By: Thomas R. Moriarty,
Senior Vice President
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Exhibit 6 (b)
IDEX FUND InterSecurities, Inc.
IDEX II SERIES FUND 201 Highland Avenue
CASH EQUIVALENT FUND Largo, FL 34640
Telephone: (813) 585-6565
Dated:
------------------
Ladies and Gentlemen: PART I
IDEX FUND
DEALER'S SALES AGREEMENT
We have entered into an underwriting agreement with IDEX Fund (the
"Fund") whereby we will act as Principal Underwriter as defined in the
Investment Company Act of 1940, with the right to purchase shares of beneficial
interest of the Fund for sale of such shares to investors either directly or
indirectly through other broker-dealers. As Principal Underwriter, we offer to
sell to you shares of the Fund subject to the following conditions:
1. In all sales of shares to the public you shall act as dealer for your
own account.
2. On purchases of shares, you shall receive a discount amounting
to a percentage of the applicable public offering price as set
forth in the then current prospectus for the Fund. Such
payment shall be subject to all of the terms and conditions
relating thereto as set forth in the then current prospectus
for the Fund.
We shall pay to you an Administrative Services Fee, computed
on an annual basis and paid quarterly, in the amount of ten
basis points (1/10 of 1%) of the average daily aggregate value
(at net asset value) of shares of the Fund and IDEX Fund 3
held by your clients, provided that the average daily net
asset value of such shares held by your clients are at least
equal to $500,000 throughout each quarter. Payment of this
Administrative Services Fee or the terms thereof, may be
modified or terminated at any time.
3. You represent that you are, and at the time of purchasing any
shares of the Fund will be, a member in good standing of the
National Association of Securities Dealers, Inc.
4. Orders received from you will be accepted by us only at the
public offering price applicable to each order as established
by the then current Prospectus of the Fund. The procedure
relating to handling orders shall be subject to instructions
which we shall forward to you from time to time. All orders
are subject to acceptance or rejection by us in our sole
discretion.
5. You agree to purchase shares only from us or from your
customers. If you purchase shares from us, you agree that all
such purchases shall be made only to cover orders already
received by you from your customers, or for your own bona fide
investment.
If you purchase shares from your customers, you agree to pay
such customers not less than the redemption price in effect on
the date of purchase, as defined in the Prospectus of the
Fund. We in turn agree that we will not purchase any shares
from the Fund except for the purpose of covering purchase
order which we have already received.
6. You shall sell shares only (a) to customers at the public
offering price then in effect and (b) to the Fund or to any
dealer who is a member of the National Association of
Securities Dealers, Inc. at the redemption price in effect on
the date of sale.
7. Only unconditional orders for shares of a definite specified
price will be accepted.
8. If any shares sold to you under the terms of this agreement
are repurchased by the Fund or are tendered for redemption
within seven business days after the date of confirmation, it
is agreed that you shall forfeit your right to any discount
received by you on such shares. a)
9. Remittance of the net amount due for shares purchased from us
shall be made payable to Idex Investor Services, Inc., Agent
for the Underwriter, promptly, but in no event later than the
maximum amount of time legally permissible after our
confirmation of sale to you (currently, three business days).
Such payment should be sent, together with stock transfer
stamps required on account of the sale by you, to Idex
Investor Services, Inc., P.O. Box 9015, Clearwater, FL
34618-9015, with your transfer instructions on the appropriate
copy of our confirmation of sale to you. If such payment is
not received by Idex Investor Services, Inc., we reserve the
right, without notice, forthwith to cancel the sale.
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10. Promptly upon receipt of payment, shares sold to you shall be
deposited by us or our agent, Idex Investor Services, Inc. No
certificates will be issued unless specifically requested.
11. No person is authorized to make any representations concerning
shares of the Fund except those contained in the current
Prospectus for the Fund and in supplements thereto. In
purchasing shares from us you shall rely solely on the
representations contained in the Prospectus for the Fund and
supplements thereto.
12. Additional copies of the current Prospectus and supplements
thereto and other literature will be supplied by us in
reasonable quantities upon request.
13. Certain of your registered representatives may, from time to
time, request access to certain account information with
respect to the shares of the Fund (the "Account Information")
via downloading of such Account Information to an electronic
mailbox which will be accessed by the registered
representative through his or her personal computer. The
Account Information will be accessed by the registered
representative via software purchased from an outside vendor
to whom the Fund provides access to the Account Information.
In exchange for the cooperation of the Fund and of
InterSecurities, Inc. in providing access to the Account
Information for the convenience of the registered
representatives, you agree that it is your sole responsibility
to oversee and supervise your registered representatives in
the utilization of such Account Information, including
verification of the accuracy of all written material produced
by a registered representative from the Account Information.
Further, you are solely responsible for ensuring that all
NASD, SEC and other regulations are fully complied with by the
registered representatives in connection with the utilization
of and preparation of any written or oral material from, the
Account Information. You shall fully indemnify and hold
harmless the undersigned and the Fund from any and all claims
made against them by any party with respect to your registered
representatives' use of such Account Information.
14. We reserve the right in our discretion, without notice, to
suspend sales or withdraw the offering of shares entirely or
to modify or cancel this agreement.
15. We both hereby agree to abide by the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. ("NASD
Rules"). Specifically, and without limiting the foregoing, we
both hereby agree that sales of the shares shall be effected
in accordance with Section 2 and Section 26 of the NASD Rules,
as interpreted by the NASD.
16. All communications to us should be sent to the above address.
Any notice to you shall be duly given if mailed or telegraphed
to you at your address specified below. This agreement shall
be construed in accordance with the laws of Florida.
17. Your registered representatives may, from time to time, assist
your customers in determining and documenting such customers'
eligibility for reductions in, or waivers of, front end sales
charges to which shares may be subject. You agree that it is
your responsibility to oversee and supervise the activities of
your registered representatives in connection with the sale
and redemption of shares of the Fund, including verification
of the eligibility of customers for reductions in, or waivers
of, sales charges to the extent that your registered
representatives assist customers in determining and
documenting such eligibility. You shall fully indemnify and
hold harmless the undersigned and the Fund from any and all
losses sustained by them as a result of any inaccurate, or
incomplete, representations made by your registered
representatives or your customers in connection with
eligibility for reductions in, or waivers of, sales charges,
if and to the extent that you or your registered
representatives knew, or should have known, of such
inaccuracies or omissions.
PART II
IDEX II SERIES FUND
DEALER'S SALES AGREEMENT
We have entered into an underwriting agreement with IDEX II Series
Fund (the "IDEX II Fund") whereby we will act as Principal Underwriter as
defined in the Investment Company Act of 1940, with the right to purchase
shares of beneficial interest of the IDEX II Fund for sale of such shares to
investors either directly or indirectly through other broker-dealers. As
Principal Underwriter, we offer to sell to you the various series and classes
of shares of the IDEX II Fund (the "Fund") representing the various Portfolios
of the IDEX II Fund (each Portfolio and class thereof referred to individually
as a "Portfolio" or "Class", as applicable, and collectively, the "Portfolios"
or "Classes", as applicable), subject to the following conditions:
18. In all sales of shares to the public you shall act as dealer
for your own account.
19. On purchases of Class A Portfolio shares, you shall receive a
discount amounting to a percentage of the applicable public
offering price, as set forth in the then current prospectus
for the Portfolio. On purchases of Class B Portfolio shares,
you shall receive a commission amounting to a percentage of
the net asset value, as set forth in the
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<PAGE> 3
then current prospectus for the Portfolio. Such payment shall
be subject to all of the terms and conditions relating thereto
as set forth in the then current prospectus for the Class A
and Class B shares of the Portfolio. In addition to the
discount or commission payable to you pursuant to this Section
2: (a) for your distribution, marketing and/or administrative
services in the promotion and sale of Portfolio shares, we
shall, providing this Agreement is in force, pay to you a fee
as to each Class of shares of a Portfolio sold by you,
computed on an annual basis and paid quarterly, to the extent
and in the amount such fee, if any, is set forth in the then
current prospectus for the applicable Class of the Portfolio
based on a percentage of the average daily aggregate value (at
net asset value) of shares of the applicable Class of the
Portfolio held by your clients; and (b) for your personal
service and/or maintenance of shareholder accounts with
respect to your customers who own shares of a Portfolio, we
shall, providing this Agreement is in force, pay to you a fee
as to each Class of shares of a Portfolio computed on an
annual basis and paid quarterly, to the extent and in the
amount such fee, if any, is set forth in the then current
prospectus for the applicable Class of the Portfolio based on
a percentage of the average daily aggregate value (at net
asset value) of shares of the applicable Class of the
Portfolio held by your clients. Payment of these fees or the
terms thereof, may be modified or terminated by us at any
time.
20. You represent that you are, and at the time of purchasing any
shares of a Portfolio will be, a member in good standing of
the National Association of Securities Dealers, Inc.
21. Orders received from you will be accepted by us only at the
public offering price applicable to each order as established
by the then current Prospectus applicable to the particular
shares of the IDEX II Fund. The procedure relating to
handling orders shall be subject to instructions which we
shall forward to you from time to time. All orders are
subject to acceptance or rejection by us in our sole
discretion.
22. You agree to purchase shares only from us or from your
customers. If you purchase shares from us, you agree that all
such purchases shall be made only to cover orders already
received by you from your customers, or for your own bona fide
investment.
If you purchase shares from your customers, you agree to pay
such customers not less than the redemption price in effect on
the date of purchase, as defined in the then current
Prospectus applicable to the particular shares of the IDEX II
Fund. We in turn agree that we will not purchase any shares
from the IDEX II Fund except for the purpose of covering
purchase orders which we have already received.
23. You shall sell shares only (a) to customers at the public
offering price then in effect and (b) to the IDEX II Fund or
to any dealer who is a member of the National Association of
Securities Dealers, Inc. at the redemption price in effect
with respect to the particular shares on the date of sale.
24. Only unconditional orders for shares of a definite specified
price will be accepted.
25. If any shares sold to you under the terms of this agreement
are repurchased by the Fund or are tendered for redemption
within seven business days after the date of confirmation, it
is agreed that you shall forfeit your right to any discount
received by you on such shares.
26. Remittance of the net amount due for shares purchased from us
shall be made payable to Idex Investor Services, Inc., Agent
for the Underwriter, promptly, but in no event later than the
maximum amount of time legally permissible after our
confirmation of sale to you (currently, three business days).
Such payment should be sent, together with stock transfer
stamps required on account of the sale by you, to Idex
Investor Services, Inc., P. O. Box 9015, Clearwater, FL
34618-9015, with your transfer instructions on the appropriate
copy of our confirmation of sale to you. If such payment is
not received by Idex Investor Services, Inc., we reserve the
right, without notice, forthwith to cancel the sale.
27. Promptly upon receipt of payment, shares sold to you shall be
deposited by us or our agent, Idex Investor Services, Inc. No
certificates will be issued unless specifically requested.
28. No person is authorized to make any representations concerning
shares of a Portfolio except those contained in the then
current Prospectus applicable to the particular shares of the
IDEX II Fund and in supplements thereto. In purchasing shares
from us you shall rely solely on the representations contained
in the Prospectus applicable to the particular shares of the
Fund and supplements thereto.
29. Additional copies of the current Prospectus and supplements
thereto and other literature will be supplied by us in
reasonable quantities upon request.
30. Certain of your registered representatives may, from time to
time, request access to certain account information with
respect to the shares of the Fund (the "Account Information")
via downloading of such Account Information to an electronic
mailbox which will be accessed by the registered
representative through his or her personal computer. The
Account Information will be accessed by the registered
representative via software purchased from an outside vendor
- 5 -
<PAGE> 4
to whom the Fund provides access to the Account Information.
In exchange for the cooperation of the Fund and of
InterSecurities, Inc. in providing access to the Account
Information for the convenience of the registered
representatives, you agree that it is your sole responsibility
to oversee and supervise your registered representatives in
the utilization of such Account Information, including
verification of the accuracy of all written material produced
by a registered representative from the Account Information.
Further, you are solely responsible for ensuring that all
NASD, SEC and other regulations are fully complied with by the
registered representatives in connection with the utilization
of and preparation of any written or oral material from, the
Account Information. You shall fully indemnify and hold
harmless the undersigned and the Fund from any and all claims
made against them by any party with respect to your registered
representatives' use of such Account Information.
31. We reserve the right in our discretion, without notice, to
suspend sales or withdraw the offering of shares entirely or
to modify or cancel this agreement.
32. We both hereby agree to abide by the NASD Rules.
Specifically, and without limiting the foregoing, we both
hereby agree that sales of the shares of each Portfolio, and
each Class thereof, shall be effected in accordance with
Section 2 and Section 26 of the NASD Rules, as interpreted by
the NASD.
33. All communications to us should be sent to the above address.
Any notice to you shall be duly given if mailed or telegraphed
to you at your address specified below. This agreement shall
be construed in accordance with the laws of Florida.
34. You agree to abide by the Sales Compliance Policies Relating
to the Multiple Class Distribution System, attached to this
Agreement as Appendix A, with respect to each Portfolio of the
IDEX II Fund and to include such Sales Compliance Policies in
your internal guidelines for sales compliance.
35. Your registered representatives may, from time to time, assist
your customers in determining and documenting such customers'
eligibility for reductions in, or waivers of, front end sales
charges or contingent deferred sales charges to which one or
more Classes of shares may be subject. You agree that it is
your responsibility to oversee and supervise the activities of
your registered representatives in connection with the sale
and redemption of shares of the Portfolios, including
verification of the eligibility of customers for reductions
in, or waivers of, sales charges to the extent that your
registered representatives assist customers in determining and
documenting such eligibility. You shall fully indemnify and
hold harmless the undersigned and the Fund from any and all
losses sustained by them as a result of any inaccurate, or
incomplete, representations made by your registered
representatives or your customers in connection with
eligibility for reductions in, or waivers of, sales charges,
if and to the extent that you or your registered
representatives knew, or should have known, of such
inaccuracies or omissions.
PART III
CASH EQUIVALENT FUND
SALES AGREEMENT
We have entered into a Services Agreement (the "KFS Agreement") with
Kemper Financial Services, Inc. ("KFS"), the administrator, distributor and
principal underwriter for CASH EQUIVALENT FUND ("CEF"), pursuant to which we
have agreed to sell shares of CEF and perform certain shareholder services and
provide certain facilities and equipment in connection with such services. The
KFS Agreement permits us to enter into agreements with other broker-dealers
pursuant to which such broker-dealers shall sell shares of CEF and we will
perform certain shareholder servicing functions with respect to CEF shares
owned by the clients of such broker-dealers. Accordingly, we agree as follows:
36. Sale of CEF Shares. You shall sell shares of CEF to the
public in accordance with the terms and conditions set forth
in this Agreement:
(a) You shall offer and sell CEF shares only in states
where they may legally be sold.
(b) In all sales of CEF shares to the public, you shall
act as dealer for your own account, and you shall not
have authority to act as agent for CEF, for KFS, for
InterSecurities, Inc., or for any representative or
agent of such parties.
(c) All orders shall be subject to acceptance or
rejection by KFS in its sole discretion, and will be
accepted by KFS only at the public offering price
applicable to each order as established by CEF's then
current prospectus. You may offer and sell CEF
shares to your customers only at the public offering
price, which is the net asset value per share as
described in CEF's prospectus. KFS will not accept
any conditional orders for shares. You shall place
orders for CEF shares in the manner set forth in
CEF's prospectus.
- 4 -
<PAGE> 5
(d) You shall purchase shares only from KFS or your
client, and you shall not purchase shares from your
clients at a price lower than that quoted by or for
CEF. You may sell shares for the account of your
customer to CEF, or to KFS as agent for CEF, at the
price currently quoted by or for CEF.
(e) You will purchase shares from KFS only to cover
purchase orders already received from your clients or
for your own bona fide investment.
(f) You will not withhold placing with KFS orders
received from your clients so as to profit yourself
as a result of such withholding.
(g) All sales will be made subject to receipt by KFS of
shares from CEF.
37. Unauthorized Representations. No person is authorized to make
any representations concerning shares of CEF except those
contained in the current prospectus of CEF and in supplemental
printed information subsequently issued by CEF or by KFS.
38. NASD Membership. You represent that you are, and at the time
of purchasing any shares of CEF will be, a member in good
standing of the National Association of Securities Dealers,
Inc.
39. Agreements of InterSecurities, Inc.
(a) We agree to supply you with such reasonable number of
copies of CEF's prospectus and sales literature as
you may request.
(b) We shall perform the following services with respect
to your clients who own CEF shares: answer routine
client inquiries regarding CEF, assist clients in
changing dividend options, account designations and
addresses, and similar coordination of shareholder
matters with KFS and CEF, provided, however, that we
may terminate such service at any time upon written
notice to you. In the event that we cease to perform
such services, those services will be performed
directly by KFS.
(c) We shall pay you a fee after the end of each calendar
quarter in the amount of .10 of 1% of the average
aggregate daily net asset value of CEF shares owned
by your clients. In computing your fee, one-fourth
of the applicable fee rate shall be applied to the
average aggregate daily net asset value of such CEF
shares owned by your clients for the quarter in
question.
Each quarter's fee shall be determined independently
of every other quarter's fee. For the quarter in
which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis
of the number of days that the Agreement is in effect
during that quarter.
40. Reports. You shall prepare such reports as we may request in
order to comply with our reporting obligations to KFS.
41. Downloading of Account Information. Certain of your
registered representatives may, from time to time, request
access to certain account information with respect to the CEF
shares (the "Account Information") via downloading of such
Account Information to an electronic mailbox which will be
accessed by the registered representative through his or her
personal computer. The Account Information will be accessed
by the registered representative via software purchased from
an outside vendor to whom access to the Account Information is
provided. In exchange for the cooperation of the IDEX Group
of Funds and of InterSecurities, Inc. in providing access to
the Account Information for the convenience of the registered
representatives, you agree that it is your sole responsibility
to oversee and supervise your registered representatives in
the utilization of such Account Information, including
verification of the accuracy of all written material produced
by a registered representative from the Account Information.
Further, you are solely responsible for ensuring that all
NASD, SEC and other regulations are fully complied with by the
registered representatives in connection with the utilization
of and preparation of any written or oral material from, the
Account Information. You shall fully indemnify and hold
harmless the undersigned and the IDEX Group of Funds from any
and all claims made against them by any party with respect to
your registered representatives' use of such Account
Information.
42. Terms and Termination. This Agreement shall become effective
on the date hereof and continue in effect until terminated.
This Agreement shall automatically terminate in the event of
its assignment and upon any termination of the KFS Agreement.
It may be terminated at any time by us or you on thirty (30)
days written notice.
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<PAGE> 6
43. Notices and Communications. All notices and communications to
us should by sent to the above address. Any notice to you
shall be duly given if mailed, hand delivered or telegraphed
to the address specified below.
Very truly yours,
InterSecurities, Inc.
By:
---------------------------------------
Registered Principal
The undersigned hereby accepts and agrees to the terms of
this Agreement.
Firm Name:
--------------------------------
By:
---------------------------------------
Authorized Securities Principal
Name:
-------------------------------------
Title:
-------------------------------------
Address:
----------------------------------
----------------------------------
Telephone:
--------------------------------
Federal Tax I.D.:
-------------------------
(RETAIN A COPY AND RETURN THE ORIGINAL)
- 6 -
<PAGE> 7
APPENDIX A
TO
IDEX II SERIES FUND
DEALER'S SALES AGREEMENT
SALES COMPLIANCE POLICIES RELATING TO THE
MULTIPLE CLASS DISTRIBUTION SYSTEM
Effective October 1, 1995, each portfolio of IDEX II Series Fund (each
a "Portfolio" and collectively, the "Portfolios"), plans to offer three classes
of shares as follows:
Class A shares are ordinarily purchased with a front-end sales load
and are currently subject to an annual 12b-1 fee of up to .35% of the
average daily net assets of that Portfolio's Class A shares.
Class B shares are purchased with no front-end sales charge and are
currently subject to an annual 12b-1 fee of 1.00% of the average daily
net assets of that Portfolio's Class B shares. Class B shares are
also subject to a contingent deferred sales charge at a declining
rate, payable upon redemption of the shares during the first six years
after purchase. Class B shares automatically convert to Class A
shares eight years after purchase.
Class C shares are purchased with no front-end sales charge and are
currently subject to an annual 12b-1 fee of up to .90% (.60% for the
Tax-Exempt Portfolio) of the average daily net assets of that
Portfolio's Class C shares.
To assist investors in selecting the method of investing that best
meets their needs and to ensure proper supervision of mutual fund purchase
recommendations, we request that your internal guidelines include the following
policies:
(1) Any purchases of Portfolio shares for less than $500,000 may
be of shares either 1)subject to a front-end sales charge and
an ongoing 12b-1 fee of up to .35% of the average daily net
assets of those shares (Class A Shares); 2) subject to an
ongoing 12b-1 fee of 1.00% of the average daily net assets of
those shares, a contingent deferred sales charge on the lesser
of the original purchase price or redemption proceeds at a
declining rate for the six years following purchase as
follows: 5% during the first year, 4% during the second year,
3% during the third year, 2% during the fourth year, 1% during
the fifth and sixth years, and 0% after the sixth year, and
automatic conversion to Class A shares eight years after
purchase (Class B Shares); or 3) subject to no front-end sales
charge and a 12b-1 fee of up to .90% (.60% for the Tax-Exempt
Portfolio) of the average daily net assets of those shares
(Class C Shares).
(2) Any purchases of Portfolio shares for $500,000 or more but
less than $1,000,000 may be of shares either 1) subject to a
front-end sales charge and an ongoing 12b-1 fee of up to .35%
of the average daily net assets of those shares (Class A
shares); or 2) subject to no front-end sales charge and a
higher 12b-1 fee (Class C shares). Purchases of $500,000 or
more for Class B shares will be declined.
(3) Sales personnel should determine which class of shares best
meets the investor's needs based on the relevant facts and
circumstances, including, but not limited to:
(a) the specific dollar amount of the purchase;
(b) the length of time the investor expects to hold
his or her shares;
(c) any other relevant circumstances, such as the
availability of sales charge waivers or reductions
on Class A and Class B shares;
(d) the availability of breakpoints for reduced sales
loads on Class A shares; and
(e) sales of shares of each Portfolio, and each Class
thereof, shall be effected in accordance with
Section 2 and Section 26 of the NASD Rules, as
interpreted by the NASD.
(4) Any purchase of Portfolio shares for $1,000,000 or more
normally should be for Class A shares because such a purchase
will not be subject to a front-end sales charge and will have
lower ongoing 12b-1 fees than those imposed on Class B or
Class C shares.
(5) Investors who are eligible for a complete waiver of the
front-end sales charge on Class A shares normally should
purchase Class A shares because the ongoing 12b-1 fees of such
shares are lower than those of Class B or Class C shares.
- 7 -
<PAGE> 8
Investors should consider both ongoing annual expenses and front-end
and contingent deferred sales charges, if any, in estimating the costs of
investing in the respective classes of Portfolio shares over time. For
example, investors that qualify for a substantial reduction in a front-end
sales charge ordinarily should determine that a purchase of Class A shares,
subject to lower ongoing expenses, is preferable to a purchase of Class B
shares which are subject to higher ongoing 12b-1 fees and a contingent deferred
sales charge or of Class C shares which would be subject to payment of a higher
ongoing 12b-1 fee.
Alternatively, an investor whose purchase of Portfolio shares would
not qualify for a reduction of the front- end sales charge, may wish to avoid
the sales charge and thus initially invest all of his or her dollars in Class B
or Class C shares. Such an investor should consider how long he or she plans
to hold such shares when deciding which class of shares to purchase. Certain
investors may elect to purchase Class B shares if they determine it to be most
advantageous to have all their funds invested initially and intend to hold
their shares for an extended period of time. Investors in Class B shares
should take into account whether they intend to remain invested until the end
of the conversion period and thereby take advantage of the reduction in ongoing
fees resulting from the conversion into Class A shares. Other investors may
elect to purchase Class C shares if they determine that it is advantageous to
have all their assets invested initially and they are uncertain as to the
length of time they intend to hold their assets in the Fund. See especially
the sections "Summary of Expenses," "Alternative Purchase Arrangements," "How
to Purchase Shares" and "Investment Advisory and Other Services" in the
prospectus for the respective Portfolio.
The above policies go into effect October 1, 1995, and are reflected
in a revised prospectus for the Portfolios. These policies are in addition to,
and not intended to override, any other of your internal policies.
- 8 -
<PAGE> 1
Exhibit 6 (c)
SERVICE AGREEMENT
This AGREEMENT is entered into between __________________ ("Servicer")
and InterSecurities, Inc. ("Distributor") (collectively, "Parties"), effective
as of ______________, 19__.
WHEREAS, Distributor is a broker-dealer registered with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934
("1934 Act") and a member of the National Association of Securities Dealers,
Inc. ("NASD");
WHEREAS, Distributor is the principal underwriter for certain open-end
investment companies registered with the SEC under the Investment Company Act
of 1940, as amended ("1940 Act"), and which are set forth in Schedule A
attached hereto ("Funds"), pursuant to an Underwriting Agreement between each
Fund and Distributor;
WHEREAS, each Fund offers for sale shares of the Fund, which may
include shares issued in separate series or classes ("Shares");
WHEREAS, certain of the Funds have adopted a plan of distribution
pursuant to Rule 12b-1 under the 1940 Act ("Plan") with respect to Shares and
approved the form of this Agreement pursuant to Rule 12b-1;
WHEREAS, Servicer desires to make it possible for its customers and
clients ("Investors") to purchase Shares and to act as the Investors' agent in
performing certain administrative support services in connection with purchases
and redemptions of Shares from time to time upon the order and for the account
of the Investors and to provide related services to the Investors in connection
with investments in the Funds ("Services"); and
WHEREAS, Distributor desires to retain Servicer to furnish the
Services;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and covenants herein contained, which consideration is full and
complete, Distributor and Servicer mutually agree as follows:
1. APPOINTMENT. Distributor hereby appoints Servicer to render
or cause to be rendered the Services set forth in Paragraph 2 of this Agreement
with respect to Investors. Servicer accepts such appointment and, while this
Agreement is in force, shall render the Services and the obligations set forth
herein for the compensation herein provided. Servicer's appointment hereunder
is non-exclusive, and the Parties recognize and agree that, from time to time,
Distributor may enter into service agreements with other entities. Servicer
shall prepare such quarterly reports in connection with such Services as
Distributor may reasonably request.
2. SERVICES TO BE PROVIDED. The Services to be provided by
Servicer pursuant to Paragraph 1 of this Agreement may include, but are not
limited to, the following Services:
(a) maintaining account records and providing subaccounting for
Investors that become shareholders of one or more of the Funds
("Shareholders");
(b) transmitting Shareholder orders to purchase, redeem, and exchange
Shares;
(c) transfer and receipt funds for the purchase and redemption of
shares, and confirming and reconciling all such transactions;
(d) review of activity in Shareholders' Fund accounts;
(e) assisting Investors or Shareholders to complete application forms
and designate and update dividend options, account designations
and mailing addresses;
(f) maintaining and distributing current copies of the Funds'
prospectuses and semi-annual and annual reports;
(g) transmitting proxy statements on behalf of the Funds and
receiving, tabulating and transmitting to the Funds proxies
executed by Shareholders with respect to meetings of Shareholders;
<PAGE> 2
(h) advertising and otherwise informing Investors of the availability
of Shares;
(i) providing assistance and review in designing materials relating to
the Funds to distribute to Investors and developing methods of
making such materials accessible to Investors and potential
Investors;
(j) responding to inquiries from Shareholders and Investors regarding
various matters relating to the Funds;
(k) providing, or assisting the Funds in obtaining, information from
Shareholders required by the Funds in connection with the
establishment of Fund accounts and the purchase of Shares;
(l) taking reasonable steps to ensure that taxpayer identification
numbers provided by Shareholders are correct and providing
Distributor with timely written notice of any failure to obtain
such correct taxpayer identification numbers; and
(m) providing such other services as may be agreed upon from time to
time and as may be permitted by applicable statutes, rules and
regulations.
The Services set forth above are illustrative. Servicer is not
required to perform each Service and may at any time perform either more or
fewer Services than described above as Servicer shall deem appropriate under
the circumstances.
3. EXPENSES. During the term of this Agreement, Servicer shall pay
all expenses incurred by it in connection with Services provided pursuant to
this Agreement, except out-of-pocket expenses incurred by Servicer in
connection with the transmittal of proxy materials to Shareholders and the
tabulation and submission to a Fund of proxies executed by Shareholders, for
which Servicer may obtain reimbursement from that Fund or its agent.
4. COMPENSATION. For the Services provided and the expenses assumed
by Servicer pursuant to this Agreement, Distributor shall pay Servicer the
compensation as set forth in Schedule B, attached hereto. Payment of this
compensation or the terms thereof may be modified or terminated at any time by
Distributor sending a new Schedule B to Servicer.
5. PURCHASES AND REDEMPTIONS OF SHARES.
(a) Orders received from Servicer for the purchase of Shares shall be
accepted by Distributor through Idex Investor Services, Inc.
("Transfer Agent"), only at the public offering price applicable
to each order as set forth in the then current prospectus and
statement of additional information (collectively, "Prospectus")
of the applicable Fund. The procedure relating to the handling of
orders shall be in accordance with oral or written instructions
that Distributor, Transfer Agent or the Fund shall forward to
Servicer from time to time. Payments for Shares ordered from
Distributor must be received together with Servicer's order and
shall be made as specified in the applicable Fund's Prospectus.
If payment for any purchase order is not received in accordance
with the terms of the applicable Fund's Prospectus, Distributor
reserves the right, without notice, to cancel the sale and to hold
Servicer responsible for any loss sustained as a result thereof.
All orders are subject to acceptance or rejection, in their sole
discretion, by Distributor, the Fund, or by the Transfer Agent
acting on behalf of Distributor and the Fund, and orders shall be
effective only upon confirmation by Distributor, the Fund, or the
Transfer Agent. Servicer shall place orders for Shares in
accordance with the minimum initial and subsequent purchase
requirements as set forth in the Prospectus of the Fund.
Distributor reserves the right in its discretion and without
notice to Servicer to reject any purchase request, suspend sales,
or withdraw the offering of Shares.
- 2 -
<PAGE> 3
(b) Servicer shall in no event place orders for Shares unless it has
already received purchase orders from Investors for such Shares at
the applicable public offering price as set forth in the
Prospectus of the applicable Fund and subject to the terms
thereof. Servicer shall not offer or sell any Shares except under
circumstances that will result in compliance with all applicable
federal and state securities laws, and that in connection with
sales and offers to sell Shares, Servicer shall furnish to each
person to whom any such sale or offer is made, at or prior to the
time of the offering or sale, a copy of the then current
prospectus of the applicable Fund and, if requested, the then
current statement of additional information of the Fund.
Distributor shall supply Servicer with reasonable quantities of
prospectuses, statements of additional information, supplemental
sales literature, periodic reports and proxy solicitation
materials of the Funds upon request.
CHECK SECTION 5(C)(1) OR 5(C)(2), WHICHEVER IS APPLICABLE:
___(c)(1) Servicer shall make Shares available to Investors on a fully
disclosed basis, wherein Distributor shall confirm purchases and
redemptions directly to Investors as recordholders of the Shares
and the Transfer Agent will maintain records for each such
Investor. Servicer shall assist Distributor in obtaining all
information Distributor or the Funds may reasonably request in
connection with the Investors purchase and redemption of Shares.
Servicer hereby represents and warrants that it will have full
right, power and authority to effect transactions in Shares of the
Funds on behalf of Investors for whom it effects such
transactions.
or
___(c)(2) Servicer shall make Shares available to Investors on an "omnibus"
basis, wherein Servicer shall be the recordholder of the Shares
and will be responsible for subaccounting and the confirmation of
purchases and redemptions by the Investors. Each Fund, at the
request of regulatory authorities having jurisdiction over it, may
request, and in such event, Servicer shall furnish to that Fund, a
list of all Shareholders' accounts maintained by Servicer, showing
each account name, address and shareholding. Servicer shall
provide Distributor or the Fund with such other information as
they may reasonably request, including the location by state of
Shares sold. All information provided by Servicer to Distributor
shall be accurate and complete. Servicer hereby represents and
warrants that it will have full right, power and authority to
effect transactions in Shares of the Funds on behalf of Investors
for whom it effects such transactions.
(d) Servicer shall offer and sell Shares only in states and
jurisdictions in which the Shares are registered and qualified for
sale under, or are exempt from the requirements of, the respective
securities laws of such states and jurisdictions. Distributor
shall keep Servicer fully informed with respect to the states and
jurisdictions so qualified and exempt; however, Distributor
assumes no responsibility or obligation as to Servicer's right to
make available Shares in any state or jurisdiction.
(e) Orders received from Servicer for the redemption of Shares shall
be executed through the Transfer Agent only at the public offering
price applicable to each order as set forth in the Prospectus of
the applicable Fund and subject to the terms thereof.
(f) Exchanges (i.e., the investment of the proceeds from the
liquidation of the Shares of one Fund in the Shares of another
Fund) shall be made by Servicer subject to and in accordance with
the Prospectus of the applicable Fund.
6. INDEMNIFICATION. Servicer agrees to indemnify and hold harmless
Distributor, the Fund and the Transfer Agent, and their respective
subsidiaries, affiliates, officers, trustees, directors, agents and employees
against any and all direct and indirect claims, damages, liabilities, losses,
expenses or costs (including any legal or other expenses incurred in connection
with investigating or defending any such claim, damage, liability or loss) to
which any of them become subject arising from, related to, or otherwise
connected with: (1) any breach by Servicer of any provision of this Agreement;
(2) any action or omission of Distributor or the Funds in reliance upon any
oral, written or electronically transmitted communication given by or on behalf
of Servicer which Distributor or the Fund believes to be genuine; and (3) any
act or failure to act by Servicer. This Paragraph 6 shall survive the
termination of this Agreement.
- 3 -
<PAGE> 4
7. INFORMATION PERTAINING TO THE SHARES. Servicer and its officers,
employees and agents shall not (a) make any representation, or furnish to any
person any information, relating to the Funds or the Shares that is
inconsistent in any respect with the information contained in the respective
Prospectuses of the Funds (as then amended or supplemented) or any printed
material provided to Servicer by Distributor or the Funds, or (b) cause any
written materials to be used in connection with sale of Shares or any
advertisement to be published in any newspaper, broadcast by television, radio
or other means, or posted in any public place without the prior written consent
of Distributor.
8. STATUS OF SERVICER.
(a) The signing of this Agreement and the purchase of Shares pursuant
hereto is a representation by Servicer that it is duly organized
and validly existing in good standing under the laws of the
jurisdiction in which it is organized and that it is either (i)
a "bank" as that term is defined by Section 3(a)(6) of the 1934
Act, or (ii) a member in good standing with the NASD and a
broker-dealer registered under the 1934 Act affiliated with a
bank.
(b) If Servicer is a "bank," Servicer represents and warrants that it
shall act in accordance with all applicable federal and state
laws, including the rules and regulations of all applicable
federal and state bank regulatory agencies and authorities.
Servicer shall give written notice to Distributor promptly in the
event that Servicer shall cease to be a bank as defined in Section
3(a)(6) of the 1934 Act.
(c) If Servicer is a registered broker-dealer, Servicer represents and
warrants that it shall act in accordance with all applicable
federal and state laws and the Rules of Fair Practice of the NASD,
including Section 26 of Article III of such Rules. Servicer shall
notify Distributor immediately (1) in the event Servicer ceases
to be a member in good standing of the NASD or Servicer is found
to have violated any applicable federal or state law, rule or
regulation arising out of its activities as a broker-dealer or in
connection with this Agreement, or (2) upon the occurrence of
any other event which may otherwise materially affect its ability
to act in accordance with this Agreement.
(d) Servicer shall, for all purposes herein, be deemed to be an
independent contractor. Nothing in this Agreement shall be deemed
or construed to make Servicer an employee, agent, representative
or partner of Distributor or any Fund, and Servicer is not
authorized to act for a Fund or Distributor or to make any
representations on behalf of Distributor or any Fund.
9. SOLICITATION OR PROXIES. Servicer shall not solicit or cause to
be solicited, directly or indirectly, at any time, any proxies from the
Shareholders of any Fund in opposition to proxies solicited by management of
the Fund, unless a court of competent jurisdiction shall have determined that
the conduct of a majority of the Board of Trustees of the Fund constitutes
willful misfeasance, bad faith, gross negligence or reckless disregard of their
duties. This Paragraph 9 shall survive the termination of this Agreement.
10. ACTIVITIES OF SERVICER. The Parties recognize that Servicer may
be subject to the provisions of the Glass-Steagall Act of 1933, as amended,
and other federal and state laws and regulations governing the permissible
activities of banks and their affiliates. Servicer shall be solely responsible
for the determination that its activities and obligations pursuant to this
Agreement are permissible under such laws and regulations.
11. DURATION OF AGREEMENT. For each series or class of Shares with
respect to which a Fund has adopted a Plan, this Agreement shall continue in
effect for one year from the date of its execution and thereafter for
successive periods of one year, provided that the form of this Agreement is
approved at least annually by the Board of Trustees of that Fund, including a
majority of the members of the Board of Trustees of the Fund who are not
interested persons (as defined in the 1940 Act) of the Fund and have no direct
or indirect financial interest in the operation of the Fund's Plan or in any
agreements related to the Plan (the "Disinterested Trustees") case in person at
a meeting called for voting on such continuance.
- 4 -
<PAGE> 5
12. TERMINATION.
(a) Notwithstanding paragraph 11 hereof, this Agreement may be
terminated with respect to a particular Fund as follows:
(i) at any time, without the payment of any penalty, by the vote
of the Board of Trustees of the Fund, by the vote of a majority of
the Disinterested Trustees of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund, or
separate series or class thereof, as defined in the 1940 Act on
not more than sixty (60) days' written notice to the Parties to
this Agreement;
(ii) automatically in the event of the termination of the
Underwriting Agreement or the Administrative Services Agreement
between the Fund and Distributor;
(iii) automatically in the event of the assignment (as defined in
the 1940 Act) of this Agreement;
(iv) by either Party to the Agreement without cause by giving the
other Party at least sixty (60) days' written notice of its
intention to terminate;
(v) if Servicer is a bank, in the event of Servicer's ceasing to
be a bank as defined in Section 3(a)(6) of the 1934 Act; and
(vi) if Servicer is a registered broker-dealer, (1) in the
event Servicer ceases to be a member in good standing of the NASD
or Servicer is found to have violated any applicable federal or
state law, rule or regulation arising out of its activities as a
broker-dealer or in connection with this Agreement, or (2) upon
the occurrence of any other event which may otherwise materially
affect its ability to act in accordance with this Agreement.
(b) The termination of this Agreement with respect to any one Fund
will not cause the Agreement's termination with respect to any
other Fund.
13. NOTICES. Any notice under this Agreement shall be in writing and
shall be addressed and delivered, or mailed, postage prepaid to the other
Party's principal place of business, attention: Legal Department, or to such
other place as shall have been previously specified by written notice given to
the other Party.
14. AMENDMENTS TO AGREEMENT. This Agreement may be amended by
Distributor from time to time by the following procedure. Distributor shall
provide notice of the amendment to Servicer in the manner set forth in
Paragraph 13. If Servicer does not object to the amendment within thirty (30)
days after its receipt, the amendment shall become part of this Agreement.
Servicer's objection must be in writing and be received by Distributor within
such thirty (30) days of Servicer's receipt of the amendment. Any order to
purchase Shares placed by Servicer after notice of any amendment to this
Agreement has been sent to Servicer shall constitute Servicer's agreement to
such amendment.
- 5 -
<PAGE> 6
15. MISCELLANEOUS. This Agreement constitutes the entire agreement
between the Parties and no conditions or warranties shall be implied unless
expressly set forth herein. This Agreement and all of the rights and
obligations of the Parties hereunder shall be governed by and construed under
the laws of the State of Florida. To the extend that the applicable laws of
the State of Florida conflict with the applicable provisions of the federal
securities laws, the latter shall prevail. The captions in this Agreement are
included for convenience of reference only and in no way define or limit any of
the provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their officers designated below.
_____________________________
Servicer
(Please Print or Type)
_____________________________
Address
_____________________________
City State Zip Code
By: ________________________
Name:
Title:
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 34640
By: _________________________
Name:
Title:
- 6 -
<PAGE> 7
AMENDMENT TO
SCHEDULE A FOR SERVICE AGREEMENT
Distributor is the principal underwriter for each of the following registered
investment companies:
<TABLE>
<S> <C>
IDEX Fund
IDEX II Series Fund
IDEX II Growth Portfolio IDEX II Balanced Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Global Portfolio IDEX II Capital Appreciation Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Flexible Income Portfolio IDEX II Aggressive Growth Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Tax-Exempt Portfolio IDEX II Equity-Income Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Income Plus Portfolio IDEX II Tactical Asset Allocation Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
</TABLE>
Dated June 1, 1995
InterSecurities, Inc.
Principal Underwriter for
IDEX Fund and IDEX II Series Fund
By: /s/ G. John Hurley
-------------------------
G. John Hurley, President
<PAGE> 8
AMENDMENT TO
SCHEDULE B FOR SERVICE AGREEMENT
A. With respect to each purchase of Shares of a Fund by or on behalf of
an Investor pursuant to an order placed by Servicer, Distributor shall
pay Servicer an amount equal to the dealer allowance, if any,
specified in the then current prospectus of that Fund that would be
applicable to that purchase of Shares if Servicer were acting as a
dealer in that transaction. The amounts due Servicer shall be paid
quarterly; however, if any Shares purchased by or through Servicer are
redeemed or repurchased within seven (7) days after Servicer's order
to purchase those Shares, Servicer shall refund to Distributor any fee
paid to Servicer as a result of that order.
B. For the personal services and/or maintenance of shareholder accounts
described in Paragraph 2 of the Service Agreement, Distributor shall
pay to Servicer a fee, computed on an annual basis and paid quarterly,
in an amount equal to the applicable percentage of the average
aggregate net asset value of the Shares of the Fund, as set forth
below, held by or on behalf of Investors. For the month and year in
which this Schedule B becomes effective or the Agreement terminates,
there shall be an appropriate proration of the fee payable hereunder
made on the basis of the number of days that the Schedule or
Agreement, as applicable, is in effect.
<TABLE>
<S> <C>
IDEX Fund N/A
IDEX II Series Fund:
IDEX II Growth Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Global Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.60%
IDEX II Flexible Income Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Tax-Exempt Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Income Plus Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Balanced Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Capital Appreciation Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Aggressive Growth Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Equity-Income Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
IDEX II Tactical Asset Allocation Portfolio
Class A Shares 0.25%
Class B Shares 1.00%
Class C Shares 0.90%
</TABLE>
Dated June 1, 1995 InterSecurities, Inc.
Principal Underwriter for
IDEX Fund and IDEX II Series Fund
By:/s/ G. John Hurley
--------------------------
G. John Hurley, President
<PAGE> 1
Exhibit 9
IDEX II AND IDEX INVESTOR SERVICES, INC.
TRANSFER AGENCY AGREEMENT
THIS TRANSFER AGENCY AGREEMENT is made and entered into as of this
_1st__ day of _February__, 1988 between IDEX II, a Massachusetts business trust
and registered investment company with its principal place of business at 600
Cleveland Street, Suite 800, Clearwater, Florida 34615, (the "Fund") and IDEX
Investor Services, Inc., a registered transfer agent with offices at 600
Cleveland Street, Suite 1000, Clearwater, Florida, 34615 (the "Transfer
Agent").
In consideration of the mutual covenant herein contained, the parties
hereto agree as follows;
1. APPOINTMENT.
(a) The Fund hereby employs and appoints Transfer Agent as its
transfer agent and dividend disbursing agent effective February 1, 1988, for
all shares of beneficial interest of the Fund, now or hereafter issued, and for
any further class or classes of shares that the Fund subsequently may issue.
(b) Transfer Agent hereby accepts such employment and appointment and
agrees that it will act as the Fund's transfer agent and dividend disbursing
agent, and that in connection therewith, it will perform all of the usual and
ordinary services of a transfer agent and dividend disbursing agent, including,
without limitation, the following services and functions: issuing,
transferring and cancelling certificates of shares of beneficial interest,
maintaining all shareholder accounts, preparing shareholder meeting lists,
mailing proxies, receiving and tabulating proxies, mailing shareholder reports
and prospectuses, withholding taxes on non-resident alien and foreign
corporation accounts, for pension and deferred income, back-up withholding or
other instances agreed upon by the parties, preparing and mailing checks for
disbursement of income dividends and capital gains distributions, preparing and
filing Form 1099 for all shareholders, preparing and mailing confirmation forms
to shareholders and dealers for all transactions in shareholders accounts for
which confirmations are required, recording reinvestments of dividends and
distributions in Fund shares, recording redemptions of Fund shares and
preparing and mailing checks for payments upon redemptions and for
disbursements to systematic withdrawal plan holders.
(c) It is understood that the Transfer Agent is an affiliate of the
Fund's investment adviser, IDEX Management, Inc. (the "Adviser") and the Fund's
Principal Underwriter, Pioneer Western Distributors, Inc. ("Distributor"), and
that directors, officers, employees and agents of the Transfer Agent may be
interested in the Adviser, the Distributor or the Fund, or all of them, as
trustees, directors, officers, employees, agents, shareholders, or otherwise,
of the Adviser, the Distributor, the Fund or all of them.
(d) The Fund understands and agrees that the Transfer Agent may, in
its discretion, subcontract for certain of the services to be provided
hereunder.
2. REPRESENTATIONS AND WARRANTIES OF TRANSFER AGENT. Transfer Agent
represents and warrants to Fund that:
(a) It is a corporation duly organized and existing in good standing
under the laws of the State of Florida.
(b) It is registered as a transfer agent to the extent required under
the Securities Act of 1934.
3. REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund represents
and warrants to Transfer Agent that:
(a) It is a business trust duly organized and existing in good
standing under the laws of the Commonwealth of Massachusetts.
(b)It is an open-end diversified management investment company
registered under the Investment Company Act of 1940, as amended.
<PAGE> 2
(c) A registration statement under the Securities Act of 1933 has
been filed and is effective with respect of all shares of the Fund to be
offered for sale.
(d) The Fund has the power under applicable laws and under its
Declaration of Trust and Bylaws to enter into and perform this Agreement.
4. DOCUMENTS TO BE SUPPLIED.
(a) On or before the effective date of this Agreement, Fund shall
deliver to the Transfer Agent the following documents:
(1) A certified copy of the Fund's Declaration of Trust and all
amendments thereto;
(2) A certified copy of the Bylaws of the Fund as then in
effect;
(3) Certified copies of the resolutions of the Trustees of the
Fund authorizing the execution of this Agreement and designating certain
authorized persons to give instructions to Transfer Agent and to sign
certificates of shares of beneficial interest of the Fund;
(4) A specimen certificate for shares of the Fund in the form
approved by the Trustees, accompanied by a certificate of the Secretary of the
Fund as to such approval;
(5) Specimens of the signatures of the officers of the Fund
authorized to sign certificates of shares of beneficial interest and of
individuals authorized to sign written instructions and requests;
(6) Copies of account application forms and other documents
relating to shareholder accounts;
(7) Copies of the registration statement and amendments thereto,
filed with the Securities and Exchange Commission;
(8) Copies of all agreements then in effective between the Fund
and any agent with respect to the issuance, sale or cancellation of shares;
(9) A legal memorandum with respect to the status of shares of
beneficial interest of the Fund under state securities laws; and
(10) An opinion of counsel for the Fund with respect to the
validity of the shares of beneficial interest of the Fund.
(b) From time to time during the term of this agreement, the Fund
shall also furnish the Transfer Agent with the following documents:
(1) A certified copy of any amendment to the Declaration of
Trust and Bylaws of the Fund;
(2) Certified copies of each additional resolution of the
Trustees of the Fund designating authorized persons to give instructions to the
Transfer Agent;
(3) Certificates as to any change in officers, trustees or
authorized persons of the Fund;
(4) Each registration statement filed with the Securities and
Exchange Commission, and each amendment and/or with respect thereto, with
respect to the sale of shares of the Fund;
(5) Specimens of any new certificates for Fund shares
accompanied by appropriate resolutions of the Trustees of the Fund approving
such forms;
(6) Such other documents, certificates or opinions as the
transfer agent may reasonably request.
2
<PAGE> 3
5. COMPENSATION AND EXPENSES.
(a) In consideration for its services hereunder as transfer agent and
dividend disbursing agent, the Fund shall pay to Transfer Agent fees in
accordance with the Fee Schedule attached hereto as Exhibit A.
(b) The compensation agreed to in this Agreement may be changed from
time to time by the parties by attaching to this Agreement a revised Fee
Schedule, dated and signed by an authorized officer of each party, and a
certified resolution of the Trustees of the Fund authorizing such revised Fee
Schedule.
(c) In addition to the Transfer Agent fee paid pursuant to subparagraph
(a), above, Fund agrees to reimburse Transfer Agent for all reasonable
out-of-pocket expenses or advances in connection with the performance of
services under this Agreement, including, without limitation, postage,
envelopes, printing, check forms, forms for reports and statements, stationery,
microfilming, telephone and telegraph charges, including charges for a
telephone drop line, and similar items. Transfer Agent will provide to Fund,
not less frequently than monthly, a detailed accounting of all out-of-pocket
expenditures made by Transfer Agent on behalf of the Fund.
(d) Transfer Agent shall bill the Fund as soon as practicable after
the end of each calendar month for the fee due for that month, and said
billings shall be detailed in accordance with the Fee Schedule of the Fund.
The Fund shall promptly pay to the Transfer Agent the amount of such billing.
6. SALE OF SHARES.
(a) Whenever the Fund shall sell or cause to be sold any shares of
beneficial interest, the Fund shall provide or cause to be provided to the
Transfer Agent information concerning such sales, including: (i) the number of
shares sold, the trade date and price; (ii) the amount of money to be delivered
to the Custodian of the Fund for the sale of such shares; (iii) in the case of
a new account, a new account application or sufficient information to establish
an account.
(b) The Transfer Agent will, upon receipt by it of a check or other
payment identified by it as an investment in shares of the Fund and drawn or
endorsed to the Transfer Agent as agent for, or identified as being for the
account of, the Fund, promptly deposit such check or other payment to the
appropriate account and shall cause the investment to be duly recorded on the
shareholder records of the Fund. The Transfer Agent will notify the Fund, or
its designee, and the Custodian of all purchases and related account
adjustments. Out of the money received in payment for shares, Transfer Agent
shall pay to the Custodian the net asset value per share and shall pay to the
Fund's Principal Underwriter its commission.
(c) Upon receipt of the information required under subparagraph (a)
and notification from the Custodian that such money has been received by it,
the Transfer Agent shall issue to the purchaser or his authorized agent such
shares as he is entitled to receive, based upon the appropriate net asset value
of the Fund's shares, determined in accordance with applicable federal law or
regulation, as described in the Fund's current prospectus. In issuing shares
to a purchaser or his authorized agent, the Transfer Agent shall be entitled to
rely upon the latest written directions, if any, previously received by the
Transfer Agent from the purchaser or his authorized agent concerning the
delivery of such shares.
(d) In connection with wire orders or telephone orders for shares,
Transfer Agent will follow such procedures which may established by the Fund
from time to time. All wire or telephone purchases will be subject to such
additional requirements as may be described in the Fund's current prospectus.
The Fund and the Transfer Agent reserve the right to modify or terminate the
procedures for wire orders or telephone orders at any time.
7. TRANSFERS AND EXCHANGES. The Transfer Agent is authorized to
review and process transfers of shares of the Fund and exchanges between the
Fund and other mutual funds as permitted in the current prospectus for the
Fund. If shares to be transferred are represented by outstanding certificates,
the
3
<PAGE> 4
Transfer Agent shall, upon surrender to it of the certificates in proper form
for transfer, and upon cancellation thereof, countersign and issue new
certificates for a like number of shares and deliver the same. If the shares
to be transferred are not represented by outstanding certificates, the Transfer
Agent shall, upon an order thereof by or on behalf of the registered holder
thereof in proper form, credit the same to the transferee on its books. If the
shares are to be exchanged for shares of another mutual fund, the Transfer
Agent will process such exchange in the same manner as a redemption and sale of
shares, except that it may, in its discretion, waive requirements for
information and documentation.
8. REDEMPTION.
(a) Transfer Agent shall redeem shares of the Fund upon receipt by
Transfer Agent of: (i) a written request for redemption, signed by each
registered owner exactly as the shares are registered; (ii) any certificates
which have been issued for such shares, properly endorsed; (iii) signature
guarantees to the extent required by the Transfer Agent as described in the
current prospectus for the Fund; (iv) any additional documents required by the
Transfer Agent for redemption by corporations, executors, administrators,
guardians and others acting in a representative capacity. The Transfer Agent
will, consistent with procedures which may be established by the Fund from time
to time for redemption by wire or telephone, upon receipt of such a wire order
or telephone redemption request, redeem shares and transmit the proceeds of
such redemption to the redeeming shareholder as directed. All wire or
telephone redemptions will be subject to such additional requirements as may be
described in the Fund's current prospectus. The Fund and the Transfer Agent
reserve the right to modify or terminate the procedures for wire orders or
telephone redemptions at any time.
(b) If the Transfer Agent has received a completed application and
authorization of redemption by draft signed by the registered owner in
accordance with procedures established by the Fund, Transfer Agent will, as
agent for the shareholder, upon receipt of a redemption draft cause the Fund to
redeem a sufficient number of shares in the shareholder's account to cover the
amount of the draft. All draft redemptions will be subject to such additional
requirements as may be described in the Fund's current prospectus and the rules
and regulations of the Transfer Agent.
(c) Upon receipt of all necessary information and documentation
relating to a redemption, the Transfer Agent will issue to the Custodian an
advice setting forth the number of shares of the Fund received by the Transfer
Agent for redemption and that such shares are valid and in good form for
redemption. The Transfer Agent shall, upon notification that the Custodian has
transferred funds for the redemption of shares to a redemption account at the
Custodian or at another bank, pay such monies to the shareholder, his
authorized agent or legal representative.
9. CONFIRMATIONS. Upon each transaction in a shareholder's account,
Transfer Agent shall mail confirmations of such transactions to shareholders
and dealers in a timely fashion.
10. DUTIES AS DIVIDEND DISBURSING AGENT.
(a) Transfer Agent will maintain one or more deposit accounts as
dividend disbursing agent for the Fund, into which the funds for payment of
dividends and distributions provided for hereunder will be deposited and
against which checks will be drawn.
(b) The Fund will promptly notify the Transfer Agent of the
declaration of any dividend or distribution. The Fund shall furnish to the
Transfer Agent a certificate of an authorized person specifying the date of the
declaration of such dividend or distribution, the payment date thereof, the
record date as of which shareholders entitled to payment shall be determined,
the amount payable per share to shareholders of record as of that date, and the
total amount payable to the Transfer Agent on the payment date.
4
<PAGE> 5
(c) On or before the payable date of any dividend or distribution, the
Transfer Agent shall notify the Fund's Custodian of the the estimated amount of
cash required to pay said dividend or distribution, and the Fund agrees that,
on or before the mailing date of such dividend or distribution, the Fund shall
instruct the Custodian to place in a dividend disbursing account at such bank
as may be directed by the Transfer Agent, the funds equal to the cash amount to
be paid out to shareholders. Transfer Agent shall, in accordance with
shareholder instructions, calculate, prepare and mail checks to or (where
appropriate) credit such dividends or distributions to the account of, Fund
shareholders, and maintain and safeguard all underlying records.
(d) Transfer Agent shall replace lost checks upon receipt of properly
executed affidavits and maintain stop payment orders against such replaced
checks.
(e) Transfer Agent shall not be liable for any improper payments made
in accordance with resolutions of the Trustees of the Fund.
(f) Transfer Agent shall prepare and mail to each Fund shareholder such
information which respect to each dividend or distribution as is required by
applicable by federal and state income tax laws and regulations and by the
Investment Company Act of 1940.
11. CERTIFICATES.
(a) The Fund shall supply Transfer Agent with an adequate supply of
blank share certificates to meet the Transfer Agent's requirements therefor.
Such share certificates will be signed manually or by facsimile signatures of
the officers of the Fund authorized by law and by the Bylaws of the Fund to
sign such share certificates. The Fund agrees that, notwithstanding the death,
resignation or removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent may continue to countersign certificates
which bear such signatures until otherwise directed in writing by the Fund.
(b) The Transfer Agent shall maintain a record of each certificate
issued and the number of shares represented thereby and the holder of record of
such shares, and shall maintain a stop transfer record on lost and/or replaced
certificates.
(c) The Transfer Agent agrees to prepare, issue and mail certificates
for shares as requested by shareholders of the Fund in accordance with the
instructions of the Fund and to confirm such issuance to the shareholder and
the Fund or its designee.
(d) The Fund hereby authorizes the Transfer Agent to issue
replacement share certificates in lieu of certificates which have been lost,
stolen or destroyed, without any further action of the Trustees or any officer
of the Fund, upon receipt by the Transfer Agent of properly executed affidavits
or lost certificate bonds in form satisfactory to the Transfer Agent, and the
Fund and the Transfer Agent shall be obligees under any such bond.
(e) The Transfer Agent may establish such rules and regulations
governing the transfer or registration of share certificates as it deems
advisable and consistent with such rules and regulations generally adopted by
transfer agents.
12. RECORDS AND REPORTS.
(a) Transfer Agent shall maintain and safeguard records for each
shareholder's account showing at least the following information: (i) name,
addresses, taxpayer identification numbers and account numbers; (ii) number of
shares held; (iii) historical account information, including dividends paid and
date and price of all transactions on a shareholder's account; (iv)
certificate numbers and denominations for any shareholders holding share
certificates; (v) dealer identification and commission information; (vi)
any stop order or restraining order placed against the shareholder's account;
(vii) information concerning withholdings in the case of a foreign
shareholder; (viii) any capital gain or dividend reinvestment order,
Check-o-Matic Plan, Systematic Withdrawal Plan, Letter of Intention or
retirement plan information.
5
<PAGE> 6
(b) Transfer Agent shall maintain records of (i) issued shares and
(ii) number of shareholders and their aggregate shareholding, classified
according to their residence in each state of the United States or foreign
country.
(c) Any records required to be maintained by Rule 31a-1 under the
Investment Company Act of 1940 shall be preserved for the period prescribed in
Rule 31a-2 under such Act. Such records may be inspected by the Fund at all
reasonable times. The Transfer Agent may, at its option at any time, and shall
forthwith upon the Fund's demand, turn over to the Fund and cease to retain in
Transfer Agent's files records and documents created and maintained by the
Transfer Agent in performance of its services hereunder or for its protection.
At the end of the prescribed retention period, such records and documents shall
either be turned over to the Fund or destroyed, in accordance with the Fund's
authorization.
(d) Transfer Agent will furnish to the Fund and to properly
authorized auditors, examiners and other persons designated by the Fund, access
to records and reports maintained by Transfer Agent in connection with its
duties hereunder.
(e) Except as otherwise agreed between the parties or as otherwise
required by law, Transfer Agent will keep confidential all records of and
information in its possession relating to the Fund or its shareholders or
shareholder accounts and will not disclose the same to any person except at the
request of or with the consent of the Fund.
13. SHAREHOLDER SERVICING.
(a) Transfer Agent will respond promptly to correspondence and
telephone inquiries from shareholders and shall investigate all shareholder
inquires.
(b) In connection with any meeting of shareholders, upon receiving
appropriate instructions and written materials prepared by the Fund, the
Transfer Agent will prepare shareholder lists and proxy cards, mail and certify
as to the mailing of proxy materials, process and tabulate returned proxy
cards, furnish one or more reports of proxies voted prior to the meeting, and
certify to the Secretary of the Fund the shares voted at the meeting.
(c) Transfer Agent shall address and mail all communications to
shareholders or their nominees, including proxy material and periodic reports
to shareholders.
14. INSTRUCTIONS.
(a) The Transfer Agent shall be protected in acting upon any paper or
document believed by it to be genuine and to be signed by an authorized person
of the Fund and shall not be held to have any notice of any change of authority
of any person until receipt of written notice thereof from the Fund. It shall
also be protected in processing share certificates which it reasonably believes
to bear the proper manual or facsimile signatures of the officers of the Fund
and the proper counter-signature of the Transfer Agent.
(b) Transfer Agent may apply at any time to any officer of the Fund
for written instructions, and, at the expense of the Fund, may seek advice from
legal counsel for the Fund, with respect to any matter arising in connection
with this Agreement, and it shall not be liable for any action taken to not
taken or suffered by it in good faith in accordance with such written
instructions or with the opinion of such counsel. In addition, the Transfer
Agent, its officers, agents or employees, shall accept instructions or requests
given to them by any person representing or acting on behalf of the Fund only
if said representative is known by the Transfer Agent, its officers, agents or
employees, to be an authorized person of the Fund. The Transfer Agent shall
have no duty or obligation to inquire into, nor shall the Transfer Agent be
responsible for, the legality of any act done by it upon the request or
direction of authorized persons of the Fund.
6
<PAGE> 7
(c) Notwithstanding any provision of this Agreement, the Transfer
Agent shall have no duty or obligation to inquire into, and shall not be liable
for: (i) the legality of the issue or sale of any shares of the Fund or the
sufficiency of the amount to be received therefor; (ii) the legality of the
redemption of any shares of the Fund or priority of the amount to be paid
therefore; (iii) the legality of the declaration of any dividend of the Fund,
or the legality of the issue of any shares of the Fund in payment of any stock
dividend; or (iv) the legality of any recapitalization or readjustment of the
shares of the Fund.
15. INDEMNIFICATION AND STANDARD OF CARE.
(a) Transfer Agent shall at all times use reasonable care and act in
good faith in performing its duties hereunder.
(b) Except to the extent that Transfer Agent is covered by and
receives payment from any insurance coverage, Transfer Agent shall incur no
liability to the Fund in connection with its performance of services hereunder,
unless such liability such arise from any error, omission or negligent act
within the scope of its duties hereunder, including but not limited to failure
to discover any dishonest act, or acts done with intent to cause damage to the
Fund. Without limiting the generality of the foregoing, Transfer Agent shall
not be liable or responsible for delays or errors occurring by reason of
circumstances beyond its control, including acts of civil, military, banking or
other regulatory authority, national emergencies, labor difficulties, fire,
flood or other catastrophes, acts of God, insurrection, war, riots, failure of
transportation, communication or power supply, or malfunctions of, or
unavoidable difficulties with, Transfer Agent's records or equipment.
(c) The Fund hereby agrees to indemnify and hold harmless the
Transfer Agent from and against any and all claims, demands, expenses and
liabilities (whether with or without basis in fact or law) of any and every
nature which the Transfer Agent may sustain or incur or which may be asserted
against Transfer Agent by any person by reason of, or as a result of: (i) any
action taken or omitted to be taken by the Transfer Agent in good faith in
reliance upon any certificate, instrument, order or share certificate believed
by it to be genuine and to be signed, countersigned or executed by any duly
authorized person of the Fund, upon the oral or written instructions of any
authorized person of the Fund or upon the opinion of legal counsel for the Fund
or its own counsel; or (ii) any action taken or omitted to be taken by the
Transfer Agent in connection with its appointment in good faith in reliance
upon any law, act, regulation or interpretation of the same even though the
same may thereafter may have been altered, changed, amended or repealed.
However, this indemnification shall not apply to actions or omissions of the
Transfer Agent or its directors, officers, employees or agents in cases of its
own gross negligence, willful misconduct, bad faith, or reckless disregard of
its or their duties hereunder.
16. TERM AND TERMINATION.
(a) This Agreement shall become effective on February 1, 1988 and
shall continue in effect until terminated in accordance with the provisions
hereof.
(b) Either party may terminate this Agreement by giving 60 days
written notice to the other party. In the event such notice is given by the
Fund, it shall be accompanied by a certified resolution of the Trustees of the
Fund, stating the election to terminate this Agreement and designating a
successor transfer agent.
(c) In addition to any other rights or remedies it may have under
this Agreement or by law, the Fund shall have the right to terminate this
Agreement immediately upon the occurrence at any time of any of the following
events:
(1) any interruption or cessation of operations by Transfer
Agent or its assigns or subcontractors which materially interferes with the
business and operation of the Fund;
(2) the bankruptcy of Transfer Agent or the appointment of a
receiver; or
7
<PAGE> 8
(3) failure by Transfer Agent or its assigns or subcontractors
to perform its duties in accordance with this Agreement, which failure
materially adversely affects the business and operations of the Fund and which
failure continues for 30 days after receipt of written notice from the Fund to
Transfer Agent.
(d) If this Agreement is terminated by the Fund pursuant to
subsection (b) above, the Fund will have and is hereby granted the right, at
its option, to use or cause its agents, employees or independent contractors to
use for as long as the Fund deems necessary for its operations, and without
payment of any compensation or reimbursement to Transfer Agent, Transfer
Agent's system, including all of the programs, manuals and other materials and
information necessary to operate the system.
(e) In the event of termination, Transfer Agent agrees to cooperate
with the Fund in effecting all necessary transfers of the Fund's records to the
Fund or to the successor Transfer Agent.
17. APPLICABLE LAW. This Agreement is executed and delivered in the
State of Florida and shall be governed by the laws of the State of Florida.
18. AMENDMENT. No provisions of this Agreement may be amended or
modified in any manner except by written instrument executed by both parties
hereto.
19. ASSIGNMENT. This Agreement shall not be assigned by either party
except with the written consent of the other party.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
21. NOTICES. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Fund or the Transfer Agent,
shall be deemed to be sufficiently given if addressed to that party and mailed
or delivered to it at its office set forth below or at such other place as such
party may from time to time designate in writing:
To the Fund: IDEX II
600 Cleveland Street, Suite 800
Clearwater, FL 34615
ATT: Peter D. Jones, Executive Vice President
To the Transfer Agent: IDEX Investor Services, Inc.
600 Cleveland Street, Suite 1000
Clearwater, FL 34615
ATT: G. John Hurley
8
<PAGE> 9
22. LIMITATION OF LIABILITY. A copy of the Declaration of Trust of
the Fund is on file with the Secretary of the Commonwealth of Massachusetts and
notice is hereby given that this Agreement has been executed on behalf of the
Fund by the undersigned officer of the Fund in his capacity as an officer of
the Fund. The obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any trustee,
officer or shareholder of the Fund individually.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed by their respective duly authorized officers, as of the day and year
first above written.
IDEX II, a Massachusetts business trust
By: /s/ Peter D. Jones
------------------------------------------
Peter D. Jones, Executive Vice President
IDEX INVESTOR SERVICES, INC.,
a Florida corporation
By: /s/ G. John Hurley
------------------------------------------
G. John Hurley
9
<PAGE> 10
TRANSFER AGENCY AGREEMENT
FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, Fund shall pay to IDEX Investor Services,
Inc. the following fees:
$8.25 per account per year (pro rated)
$2.00 set-up fee for each new account established
$ .10 per closed account per month.
<PAGE> 11
TRANSFER AGENCY AGREEMENT
FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, Fund shall pay to IDEX Investor Services,
Inc. the following fees:
$8.63 per account per year (pro rated)
$2.09 set-up fee for each new account established
$1.25 per closed account per year
<PAGE> 12
TRANSFER AGENCY AGREEMENT
FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, Fund shall pay to IDEX Investor Services,
Inc. the following fees:
$9.01 per account per year (pro rated)
$2.19 set-up fee for each new account established
$1.31 per closed account per year
<PAGE> 13
TRANSFER AGENCY AGREEMENT
FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, the Fund shall pay to IDEX Investor
Services, Inc. the following fees:
$9.51 per account per year (pro rated)
$2.31 set-up fee for each new account established
$1.38 per closed account per year
<PAGE> 14
IDEX FUND
TRANSFER AGENCY AGREEMENT
AMENDED FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, Fund shall pay to IDEX Investor Services,
Inc. the following fees *:
$9.65 per account per year (pro rated)
$2.35 set-up fee for each new account established
$1.40 per closed account per year
* less the amount of credits, if any, received by or applied to transfer
agent from DST Systems, Inc. for brokerage of portfolio transactions of
the Fund placed by or through a broker/dealer affiliated with DST
Systems, Inc.
Effective this 1st day of April, 1992.
IDEX FUND IDEX INVESTOR SERVICES, INC.
By: /s/ G. John Hurley By: /s/ Thomas R. Moriarty
------------------- ----------------------
G. John Hurley Thomas R. Moriarty
President and Chief Senior Vice President
Executive Officer
<PAGE> 15
IDEX II SERIES FUND
TRANSFER AGENCY AGREEMENT
AMENDED FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, the Fund shall pay to IDEX Investor
Services, Inc. the following fees*:
$9.86 per account per year (pro rated)
$2.40 set up fee for each new account established
$1.43 per closed account per year
* less the amount of credits, if any, received by or applied
to transfer agent from DST Systems, Inc. for brokerage of
portfolio transactions of the Fund placed by or through a
broker/dealer affiliated with DST Systems, Inc.
Effective this 1st day of April, 1993.
IDEX II SERIES FUND INC IDEX INVESTOR SERVICES,
By:/s/ G. John Hurley By:/s/ Thomas R. Moriarty
------------------- ----------------------
G. John Hurley Thomas R. Moriarty
President and Chief Senior Vice President
Executive Officer
<PAGE> 16
IDEX II SERIES FUND
TRANSFER AGENCY AGREEMENT
AMENDED FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, the Fund shall pay to Idex Investor
Services, Inc. the following fees*:
$ 12.00 per open account per year (pro rated)**
$ 2.43 set up fee for each new account established
$ 1.45 per closed account per year
* Less the amount of credits, if any, received by or applied to the
transfer agent from DST Systems, Inc. for brokerage of portfolio
transactions of the Fund placed by or through a broker/dealer
affiliated with DST Systems, Inc.
Effective this day, April 1, 1994
IDEX II SERIES FUND IDEX INVESTOR SERVICES, INC.
By: /s/ G. John Hurley By: /s/ Thomas R. Moriarty
------------------- ----------------------
G. John Hurley Thomas R. Moriarty
President and Chief Senior Vice President
Executive Officer
<PAGE> 17
CERTIFICATE OF
IDEX II SERIES FUND
I, Becky A. Ferrell, Assistant Vice President and Secretary of IDEX II
Series Fund (the "Fund"), hereby certify that the following resolutions were
duly adopted by the Board of Trustees of the Fund on March 14, 1994, which
resolutions have not been amended, rescinded or annulled and remain in full
force and effect:
WHEREAS, Section 5 of the Transfer Agency Agreement, as amended, for
each of the Funds provides for annual fee adjustments based on the
average of the Consumer Price Index ("CPI") and Producer Price Index
("PPI"); and
WHEREAS, the Board of Trustees has determined that it is in the best
interest of the Fund and its shareholders to obtain the anticipated
benefits of the Transfer Agent's acquisition of Imaging equipment to
enhance customer service for the Funds;
NOW THEREFORE BE IT
RESOLVED, that the revised fee schedule for the Transfer Agency
Agreement between each Fund and Idex Investor Services, Inc. ("IIS")
reflecting a 1.45% increase in the fees payable pursuant to the
Transfer Agency Agreement, which represents the average of the CPI and
PPI for 1993, a copy of which is attached to these minutes as Exhibit
B, be, and it hereby is, approved; and
FURTHER RESOLVED, that the appropriate officers of and counsel to the
Funds be, and they hereby are, directed to prepare and execute an
amendment to the Transfer Agency Agreement between each Fund and IIS,
that would expressly include an additional annual $2.00 per open
account fee to cover expenses paid by IIS for the Imaging technology
system, including projected annual operating costs and training
resources; and
FURTHER RESOLVED, that in March of 1995, the Trustees intend to
re-evaluate the $2.00 per open account additional annual fee in light
of the expenses actually incurred by IIS in connection with the
acquisition and implementation of Imaging technology, and if
appropriate, to consider an adjustment in the amount of such fee.
DATED: April 1, 1994 By: /s/ Becky A. Ferrell
---------------------
Becky A. Ferrell
Assistant Vice President and Secretary
IDEX II Series Fund
<PAGE> 18
IDEX II SERIES FUND
TRANSFER AGENCY AGREEMENT
AMENDED FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, the Fund shall pay to Idex Investor
Services, Inc. the following fees*:
$ 14.00 per open account per year (pro rated)**
$ 2.43 set up fee for each new account established
$ 1.45 per closed account per year
* Less the amount of credits, if any, received by or applied to the
transfer agent from DST Systems, Inc. for brokerage of portfolio
transactions of the Fund placed by or through a broker/dealer
affiliated with DST Systems, Inc.
** This fee includes the annual base rate per open account of $10.00,
plus an additional annual $2.00 per open account fee, contingent upon
review in March, 1995, which is to cover expenses paid by the transfer
agent for the Imaging technology system, including projected annual
operating costs and training resources. The open account fee also
includes a temporary $2.00 increase (on an annual basis) for the
period October 1, 1994 through March 31, 1995.
Effective this day, October 1, 1994
IDEX II SERIES FUND IDEX INVESTOR SERVICES, INC.
By: /s/ G. John Hurley By: /s/ Thomas R. Moriarty
------------------- ----------------------
G. John Hurley Thomas R. Moriarty
President and Chief Senior Vice President
Executive Officer
<PAGE> 19
CERTIFICATE OF
IDEX II SERIES FUND
I, Becky A. Ferrell, Assistant Vice President and Secretary of IDEX II
Series Fund (the "Fund"), hereby certify that the following resolution was
duly adopted by the Board of Trustees of the Fund on September 19, 1994, which
resolution has not been amended, rescinded or annulled and remain in full force
and effect:
RESOLVED, that the fee schedule for the Transfer Agency Agreement
between each Fund and Idex Investor Services, Inc. ("IIS") be revised
to reflect an annual increase of $2.00 per open account fee for the
period October 1, 1994 through March 31, 1995, payable pursuant to the
Transfer Agency Agreement, which would offset the net decrease in
accounts that IIS is currently undergoing, be, and it hereby is,
approved.
DATED: October 1, 1994 By: /s/ Becky A. Ferrell
--------------------------------
Becky A. Ferrell
Assistant Vice President and Secretary
IDEX II Series Fund
<PAGE> 20
IDEX II SERIES FUND
TRANSFER AGENCY AGREEMENT
AMENDED FEE SCHEDULE
EXHIBIT A
For its services as Transfer Agent, the Fund shall pay to Idex Investor
Services, Inc. the following fees*:
$ 14.22 per open account per year (pro rated)**
$ 2.48 set up fee for each new account established
$ 1.48 per closed account per year
* Less the amount of credits, if any, received by or applied to the
transfer agent from DST Systems, Inc. for brokerage of portfolio
transactions of the Fund placed by or through a broker/dealer
affiliated with DST Systems, Inc.
** This fee includes an increase in the annual base rate per open account
from $10.00 to $10.22, plus an additional annual $2.00 per open
account fee, continued through March, 1996, which is to cover ongoing
expenses paid by the transfer agent for the Imaging technology system.
The open account fee also includes the continuation of a temporary
$2.00 increase (on an annual basis) for the period April 1, 1995
through September 30, 1995.
Effective this day, April 1, 1995
IDEX II SERIES FUND IDEX INVESTOR SERVICES, INC.
By: /s/ G. John Hurley By: /s/ Thomas R. Moriarty
------------------- ----------------------
G. John Hurley Thomas R. Moriarty
President and Chief Senior Vice President
Executive Officer
<PAGE> 21
CERTIFICATE OF
IDEX II SERIES FUND
I, Becky A. Ferrell, Assistant Vice President and Secretary of IDEX II
Series Fund (the "Fund"), hereby certify that the following resolutions were
duly adopted by the Board of Trustees of the Fund on March 6, 1995, which
resolutions have not been amended, rescinded or annulled and remain in full
force and effect:
RESOLVED, that the revised fee schedule for the Transfer Agency
Agreement between each Fund and Idex Investor Services, Inc. ("IIS")
reflecting a 2.2% increase in the fees payable pursuant to the
Transfer Agency Agreement, which represents the average of the CPI and
PPI for 1994, be, and it hereby is, approved; and
RESOLVED, that the continuation of the annual $2.00 per open account
fee for the period April 1, 1995 to March 31, 1996 to cover expenses
paid by IIS for the Imaging technology system, including projected
annual operating costs and training resources, be and it hereby is,
approved; and
FURTHER RESOLVED, that the continuation of the annual increase of
$2.00 per open account fee for the period April 1, 1995 through
September 30, 1995, be, and it hereby is, approved.
DATED: April 1, 1995 By: /s/ Becky A. Ferrell
--------------------------------------
Becky A. Ferrell
Assistant Vice President and Secretary
IDEX II Series Fund
<PAGE> 1
Exhibit 10
November 14, 1994
IDEX II Series Fund
201 Highland Avenue
Largo, FL 34640
RE: IDEX II Series Fund
Offering of Shares of Beneficial Interest
Gentlemen:
In my capacity as Assistant Vice President, Secretary and Counsel, I have acted
as counsel for IDEX II Series Fund (the "Fund") and have reviewed the
Registration Statement under the Securities Act of 1933 on Form N-1A, and
amendments thereto, with respect to the offer and sale of shares of beneficial
interest, no par value, of the above-referenced Fund, including the "Rule 24f-2
Notice" for the fiscal year ended September 30, 1994, registering such shares
pursuant to such Registration Statement, as amended, in accordance with Rule
24f-2 under the Investment Company Act of 1940.
I have examined the Fund's Declaration of Trust and Bylaws, as amended; the
proceedings of its Board of Trustees relating to the authorization, issuance,
and proposed sales of the shares; and such other records and documents as I
deemed relevant. Based upon such examination, it is my opinion that upon the
issuance and sale of the shares of beneficial interest of the Fund in the
manner contemplated by the aforesaid Registration Statement, as amended, such
shares were validly issued, fully paid and nonassessable outstanding shares of
beneficial interest of the Fund.
Very truly yours,
/s/ Becky A. Ferrell
- -------------------------
Becky A. Ferrell
Assistant Vice President,
Secretary and Counsel
BAF/ldd
<PAGE> 1
Exhibit 11 (a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 18 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated November 11, 1994, relating to the financial
statements and financial highlights appearing in the September 30, 1994 Annual
Report to Shareholders of the IDEX II Series Fund, which is also incorporated
by reference into the Registration Statement. We also consent to the
references to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Legal Counsel and Auditors" in the Statement of
Additional Information.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Kansas City, Missouri
June 26, 1995
<PAGE> 2
1055 Broadway Telephone 816 474 6590
10th Floor Facsimile 816 421 7024
Kansas City, MO 64105
PRICE WATERHOUSE LLP [LOGO]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
IDEX II Series Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Growth
Portfolio, the Global Portfolio, the Tax-Exempt Portfolio, the Income Plus
Portfolio (formerly the High Yield Portfolio) and the Flexible Income Portfolio
(formerly IDEX Total Income Trust) (constituting IDEX II Series Fund, hereafter
referred to as the "Fund") at September 30, 1994, the results of each of their
operations, the changes in each of their net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above. The financial statements of the Tax-Exempt
Portfolio and the Income Plus Portfolio for the two years ended November 30,
1991 were audited by other independent accountants whose report dated December
20, 1991 expressed an unqualified opinion on those statements.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Kansas City, Missouri
November 11, 1994
<PAGE> 1
Sutherland, Asbill & Brennan EXHIBIT 11(b)
CONSENT OF SUTHERLAND, ASBILL & BRENNAN
We consent to the reference to our firm under the heading
"Legal Counsel and Auditors" in the statement of additional information
included in Post-Effective Amendment No. 18 to the Registration Statement on
Form N-1A for IDEX II Series Fund (File No. 33-2659). In giving this consent,
we do not admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933.
/s/ Sutherland, Asbill & Brennan
-------------------------------------
SUTHERLAND, ASBILL & BRENNAN
Washington, D.C.
June 23, 1995
<PAGE> 1
Exhibit 15 (a)(6)
CLASS A SHARES
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class A shares of
IDEX II Tactical Asset Allocation Portfolio (the "Portfolio"), a series of
shares of the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class A shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class A shares, a distribution
fee at the rate of up to 0.35% on an annualized basis of the average daily net
assets of the Portfolio's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class A shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). To the extent that the Portfolio pays a service fee pursuant
to paragraph 1(B) of this Plan, the amount available to be paid pursuant to
paragraph 1(A) of this Plan shall be reduced pro tanto, so that the total fees
payable under this Plan by the Portfolio with respect to its Class A shares
shall not exceed the rate of 0.35% on an annual basis of the average daily net
assets of the Portfolio's Class A shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class A shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class A shares of the Portfolio
or the servicing and/or maintenance of Class A shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect with respect to the Class A shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related thereto
<PAGE> 2
("Independent Trustees"), cast in person at a meeting or (meetings) called for
the purpose of voting on such approval; and until the Trustees who approve the
Plan's taking effect have reached the conclusion required by Rule 12b-1(e)
under the 1940 Act.
4. If approved as set forth in paragraph 3, this Plan shall continue
thereafter in full force and effect with respect to the Class A shares of the
Portfolio for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph 3.
5. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 5, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 5, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class A shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
6. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class A shares of the Portfolio.
7. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class A shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
8. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class A shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class A shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class A shares, any
distribution expenses incurred by ISI on behalf of the Class A shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
9. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
10. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
11. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 5 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(1)
CLASS B SHARES
IDEX II AGGRESSIVE GROWTH PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Aggressive Growth Portfolio (the "Portfolio"), a series of shares of
the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(2)
CLASS B SHARES
IDEX II CAPITAL APPRECIATION PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Capital Appreciation Portfolio (the "Portfolio"), a series of shares of
the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(3)
CLASS B SHARES
IDEX II GLOBAL PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Global Portfolio (the "Portfolio"), a series of shares of the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(4)
CLASS B SHARES
IDEX II GROWTH PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Growth Portfolio (the "Portfolio"), a series of shares of the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(5)
CLASS B SHARES
IDEX II EQUITY-INCOME PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Equity-Income Portfolio (the "Portfolio"), a series of shares of the
Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(6)
CLASS B SHARES
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Tactical Asset Allocation Portfolio (the "Portfolio"), a series of
shares of the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(7)
CLASS B SHARES
IDEX II BALANCED PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Balanced Portfolio (the "Portfolio"), a series of shares of the Fund;
and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
2
<PAGE> 1
Exhibit 15 (b)(8)
CLASS B SHARES
IDEX II FLEXIBLE INCOME PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Flexible Income Portfolio (the "Portfolio"), a series of shares of the
Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(9)
CLASS B SHARES
IDEX II INCOME PLUS PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Income Plus Portfolio (the "Portfolio"), a series of shares of the
Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (b)(10)
CLASS B SHARES
IDEX II TAX-EXEMPT PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class B shares of
IDEX II Tax-Exempt Portfolio (the "Portfolio"), a series of shares of the Fund;
and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class B shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class B shares, a service fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Portfolio's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class B shares shall not exceed the maximum rate of 1.00% on an
annual basis of the average daily net assets of the Portfolio's Class B shares.
(D). The Portfolio may pay a distribution or service fee to ISI at
a lesser rate than the fees specified in paragraphs 1(A) and 1(B),
respectively, of this Plan, in either case as agreed upon by the Fund and ISI
and as approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Portfolio, ISI may
spend such amounts as it deems appropriate on any activities or expenses
primarily intended to result in the sale of the Class B shares of the Portfolio
or the servicing and/or maintenance of Class B shareholder accounts, including,
but not limited to: compensation to employees of ISI; compensation to and
expenses, including overhead and telephone expenses, of ISI and other selected
dealers who engage in or support the distribution of shares or who service
shareholder accounts; the costs of printing and distributing prospectuses,
statements of additional information and reports for other than existing
shareholders; and the costs of preparing, printing and distributing sales
literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved
by a vote of a majority of the outstanding voting securities of the Class B
shares of the Portfolio.
4. This Plan shall not take effect with respect to the Class B shares
of the Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no
<PAGE> 2
direct or indirect financial interest in the operation of this Plan or any
agreements related thereto ("Independent Trustees"), cast in person at a
meeting or (meetings) called for the purpose of voting on such approval; and
until the Trustees who approve the Plan's taking effect have reached the
conclusion required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall
continue thereafter in full force and effect with respect to the Class B shares
of the Portfolio for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by
vote of a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of
fees provided for in paragraph 1 hereof unless such amendment is approved by a
vote of a majority of the outstanding voting securities of the Class B shares
of the Portfolio, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
9. The amount of the fees payable by the Portfolio to ISI under
paragraph 1 hereof and the Underwriting Agreement is not related directly to
expenses incurred by ISI on behalf of the Portfolio in serving as Distributor
of the Class B shares, and paragraph 2 hereof and the Underwriting Agreement do
not obligate the Fund to reimburse ISI for such expenses. The fee set forth in
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares, any
distribution expenses incurred by ISI on behalf of the Class B shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of
Trustees who are not interested persons of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
2
<PAGE> 3
12. The Fund shall preserve copies of this Plan (including any
amendments thereto) and any related agreements and all reports made pursuant to
paragraph 6 hereof for a period of not less than six years from the date of
this Plan, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on
the day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
3
<PAGE> 1
Exhibit 15 (c)(6)
CLASS C SHARES
IDEX II TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF
IDEX II SERIES FUND
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX II Series Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company, and offers for public sale shares of beneficial
interest; and
WHEREAS, the Fund desires to adopt a Plan of Distribution ("Plan")
pursuant to Rule 12b-1 under the 1940 Act applicable to the Class C shares of
IDEX II Tactical Asset Allocation Portfolio (the "Portfolio"), a series of
shares of the Fund; and
WHEREAS, the Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with InterSecurities, Inc. ("ISI"), pursuant to
which ISI serves as Distributor of the various series and classes of shares of
the Fund during the continuous offering of its shares;
NOW THEREFORE, the Fund hereby adopts this Plan with respect to the
Class C shares of the Portfolio in accordance with Rule 12b-1 under the 1940
Act.
1. (A). The Portfolio is authorized to pay to ISI, as compensation for
ISI's services as Distributor of the Portfolio's Class C shares, a distribution
fee at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Portfolio's Class C shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Fund and ISI
shall agree.
(B). The Portfolio is authorized to pay ISI, as compensation for ISI's
services as Distributor of the Portfolio's Class C shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets of
the Portfolio's Class C shares. Such fee shall be calculated and accrued daily
and paid monthly or at such other intervals as the Fund and ISI shall agree.
(C). The total fees payable under this Plan by the Portfolio with
respect to its Class C shares shall not exceed the maximum rate of 0.90% on an
annual basis of the average daily net assets of the Portfolio's Class C shares.
To the extent the sum of any service fee paid under Paragraph 1(B) plus the
distribution fee paid under paragraph 1(A) would otherwise exceed such maximum
rate of 0.90%, the distribution fee paid under paragraph 1(A) shall be reduced
pro tanto so that such maximum rate is not exceeded.
(D). The Portfolio may pay a distribution or service fee to ISI at a
lesser rate than the fees specified in paragraphs 1(A) and 1(B), respectively,
of this Plan, in either case as agreed upon by the Fund and ISI and as approved
in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class C shares of the Portfolio, ISI may spend such
amounts as it deems appropriate on any activities or expenses primarily
intended to result in the sale of the Class C shares of the Portfolio or the
servicing and/or maintenance of Class C shareholder accounts, including, but
not limited to: compensation to employees of ISI; compensation to and expenses,
including overhead and telephone expenses, of ISI and other selected dealers
who engage in or support the distribution of shares or who service shareholder
accounts; the costs of printing and distributing prospectuses, statements of
additional information and reports for other than existing shareholders; and
the costs of preparing, printing and distributing sales literature and
advertising materials.
<PAGE> 2
3. This Plan shall not take effect unless it first has been approved by a
vote of a majority of the outstanding voting securities of the Class C shares
of the Portfolio.
4. This Plan shall not take effect with respect to the Class C shares of the
Portfolio unless it first has been approved, together with any related
agreements, by votes of a majority of both (a) the Board and (b) those Trustees
of the Fund who are not "interested persons" of the Fund and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related thereto ("Independent Trustees"), cast in person at a meeting or
(meetings) called for the purpose of voting on such approval; and until the
Trustees who approve the Plan's taking effect have reached the conclusion
required by Rule 12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class C shares of the
Portfolio for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class C shares of the Portfolio, within the
meaning of the definition of "service fee" for purposes of Section 26(d) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
Overhead and other expenses of ISI related to its "distribution activities" or
"service activities," including telephone and other communications expenses,
may be included in the information regarding amounts expended for such
activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of
a majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class C shares of the Portfolio.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Portfolio, and no material amendment to the Plan shall be made unless approved
in the manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Portfolio to ISI under paragraph 1
hereof and the Underwriting Agreement is not related directly to expenses
incurred by ISI on behalf of the Portfolio in serving as Distributor of the
Class C shares, and paragraph 2 hereof and the Underwriting Agreement do not
obligate the Fund to reimburse ISI for such expenses. The fee set forth in
- 2 -
<PAGE> 3
paragraph 1 hereof will be paid by the Portfolio to ISI unless and until either
the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class C shares. If either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class C shares, any
distribution expenses incurred by ISI on behalf of the Class C shares of the
Portfolio in excess of the payments of the fees specified in paragraph 1 hereof
and the Underwriting Agreement which ISI has received or accrued through the
termination date are the sole responsibility and liability of ISI, and are not
obligations of the Fund.
10. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Fund shall be committed to the discretion
of the Trustees who are not interested persons of the Fund.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Fund shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph
6 hereof for a period of not less than six years from the date of this Plan,
the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan of Distribution on the
day and year set forth below in Largo, Florida.
Dated as of June 1, 1995.
ATTEST: IDEX II SERIES FUND
/s/ Becky A. Ferrell By: /s/ G. John Hurley
- --------------------------- -------------------------------------
Becky A. Ferrell, Secretary G. John Hurley
President and Chief Executive Officer
- 3 -
<PAGE> 1
Exhibit 16 (a)(1)
IDEX II AGGRESSIVE GROWTH PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS A SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 21.10%
ERV = $1,211.00
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (a)(2)
IDEX II CAPITAL APPRECIATION PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS A SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 10.10%
ERV = $1,101.00
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (a)(5)
IDEX II EQUITY INCOME PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS A SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 8.10%
ERV = $1,081.00
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (a)(6)
IDEX II BALANCED PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS A SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 4.30%
ERV = $1,043.00
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (b)(1)
IDEX II AGGRESSIVE GROWTH PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS C SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 20.90%
ERV = $1,209.00
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (b)(2)
IDEX II CAPITAL APPRECIATION PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS C SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 10.00%
ERV = $1,100.00
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (b)(5)
IDEX II EQUITY-INCOME PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS C SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 7.94%
ERV = $1,079.40
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 16 (b)(6)
IDEX II BALANCED PORTFOLIO
COMPUTATION OF CUMULATIVE TOTAL RETURN - CLASS C SHARES
(Assuming no deduction of the maximum sales charge of 5.50%)
The formula used to calculate Cumulative Total Return is:
T = (ERV / P) - 1
Where: T = Cumulative Total Return
ERV = Ending redeemable value of the initial investment
for the periods shown
P = $1,000.00 initial investment
N = Number of years
For the period from inception (December 2, 1994) through March 31, 1995:
T = 4.15%
ERV = $1,041.50
P = $1,000.00
N = .58
<PAGE> 1
Exhibit 18
IDEX II SERIES FUND
PLAN FOR MULTIPLE CLASSES OF SHARES
WHEREAS, IDEX II Series Fund (the "Fund") is a Massachusetts business
trust engaged in business as an open-end management investment company and
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Fund has established a multiple class distribution system
pursuant to an Exemptive Order issued by the Securities and Exchange Commission
on September 30, 1993 (the "Exemptive Order");
WHEREAS, pursuant to the terms of the Fund's Declaration of Trust and
the Exemptive Order, as well as the 1940 Act and the rules and regulations
thereunder, the Board of Trustees of the Fund has authority to approve and
authorize the issuance of, and has previously approved and authorized the
issuance of, an unlimited number of shares of beneficial interest as Class A,
Class B and Class C shares of each Portfolio of the Fund listed herein on
Schedule A, as may be amended; and
WHEREAS, the terms of such Class A, Class B and Class C Shares as
previously approved and authorized for issuance by the Board are the same as
the terms of Class A, Class B and Class C Shares set forth in this Plan for
Multiple Classes of Shares ("the Plan").
NOW, THEREFORE, this Plan is a plan as contemplated by Rule 18f- 3(d)
under the 1940 Act with respect to each class of shares of the Fund set forth
on Schedule A. The Plan shall remain in effect until such time as the Board of
Trustees terminates the Plan or makes a material amendment to the Plan. Any
material amendment to the Plan must be approved by the Trustees, including a
majority of the Trustees who are disinterested persons of the Fund, as in the
best interests of each class of shares and the Fund as a whole.
SECTION I: CLASS DISTRIBUTION FEES AND SHAREHOLDER SERVICES
(A) Class A shares are offered at net asset value and shall be
subject to a front-end sales charge as set forth below:
IDEX II Aggressive Growth Portfolio, IDEX II Capital Appreciation Portfolio,
IDEX II Global Portfolio, IDEX II Growth Portfolio,
IDEX II Equity-Income Portfolio,
IDEX II Tactical Asset Allocation Portfolio, IDEX II Balanced Portfolio
<TABLE>
<CAPTION>
Amount of Purchase Sales Charge as % of Offering
------------------ -----------------------------
<S> <C>
Less than $50,000 . . . . . . . . . . . . . . . . . 5.50%
$50,000 but less than $100,000 . . . . . . . . . . 4.75%
$100,000 but less than $250,000 . . . . . . . . . . 4.25%
$250,000 but less than $500,000 . . . . . . . . . . 3.00%
$500,000 but less than $1,000,000 . . . . . . . . . 2.00%
$1,000,000 or more . . . . . . . . . . . . . . . . 0.00%
IDEX II Flexible Income Portfolio, IDEX II Income Plus Portfolio,
IDEX II Tax-Exempt Portfolio
<S> <C>
Less than $50,000 . . . . . . . . . . . . . . . . . 4.75%
$50,000 but less than $100,000 . . . . . . . . . . 4.00%
$100,000 but less than $250,000 . . . . . . . . . . 3.25%
$250,000 but less than $500,000 . . . . . . . . . . 2.25%
$500,000 but less than $1,000,000 . . . . . . . . . 1.25%
$1,000,000 or more . . . . . . . . . . . . . . . . 0.00%
</TABLE>
(B) Class A shares may pay an annual distribution fee of up to
0.35%, and an annual service fee of up to 0.25%, of the average daily net
assets of each Portfolio's Class A shares. However, to the extent that a
Portfolio pays service fees, the amount which the Portfolio may pay as a
distribution fee is reduced accordingly, so that the total distribution and
service fees payable may not exceed on an annualized basis 0.35% of the average
daily net assets of that Portfolio's Class A shares. Such fees shall be
calculated and accrued daily and paid monthly on an annualized basis of the
average daily net assets of each Portfolio's Class A shares.
1
<PAGE> 2
(C) Class B shares are offered at net asset value and shall be
subject to a contingent deferred sales charge if redeemed within 6 years of
purchase, payable upon redemption, which shall be imposed as follows as a
percentage of the lesser of the then current net asset value per share of the
shares being redeemed or the net asset value per share of the shares being
redeemed at the time of purchase:
<TABLE>
<CAPTION>
Redemption During Year Applicable Contingent Deferred Sales Charge Percentage
---------------------- ------------------------------------------------------
<S> <C>
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5%
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4%
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3%
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2%
5 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1%
6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1%
7 and later . . . . . . . . . . . . . . . . . . . . . . 0%
</TABLE>
In determining whether a contingent deferred sales charge is payable,
the Fund will comply with the provisions of Rule 6c-10 under the 1940 Act as
currently adopted. Under Rule 6c-10, no contingent deferred sales charge is
imposed with respect to 1) the portion of redemption proceeds attributable to
the increase in the value of an account above the net cost of the investment
due to increases in the net asset value per Class B shares; 2) Class B shares
which have been acquired through reinvestment of income dividends or capital
gain distributions; or 3) Class B shares held for more than six years after
purchase.
(D) Class B shares are subject to an annual service fee at a rate
of up to 0.25% and an annual distribution fee at a rate of up to 0.75% of the
average daily net assets of each Portfolio's Class B shares. Such fees shall
be calculated and accrued daily and paid monthly on an annualized basis of the
average daily net assets of each Portfolio's Class B shares.
(E) Class C shares are offered at net asset value without a sales
charge, and shall be subject to annual service and distribution fees of up to
0.90% of the average daily net assets of each Portfolio's Class C shares. Such
fees shall be calculated and accrued daily and paid monthly on an annualized
basis of the average daily net assets of each Portfolio's Class C shares.
(F) Notwithstanding the foregoing, the aggregate amounts of any
front-end sales charge, any asset-based distribution plan fee and any
contingent deferred sales charge imposed by the Fund shall comply with the
requirements of Section 26(d) of the National Association of Securities
Dealers, Inc. Variations in front-end or back-end loads for Class A or Class B
Shares, respectively, may be available in accordance with Rule 22d-1 or Rule
6c-10 of the 1940 Act, as applicable.
SECTION II: CONVERSION FEATURES
(A) Class A and Class C shares of the Portfolio do not have
conversion features.
(B) Class B shares will convert automatically to Class A shares of
the same Portfolio eight (8) years after the end of the calendar month in which
the shareholder's order to purchase such Class B shares was accepted, on the
basis of the relative net asset values per share, without the imposition of any
sales load, fee or other charge.
(C) Class B shares in a shareholder's account that is purchased
through the reinvestment of dividends and other distributions paid with respect
to Class B shares (and which have not converted to Class A shares) are
considered to be held in a separate sub-account. Each time any Class B shares
in the shareholder's Portfolio account (other than those in the sub-account)
convert to Class A shares, an equal pro rata portion of the Class B shares in
the sub-account will also convert to Class A shares. The portion converting is
determined by the ratio that the shareholder's Class B shares converting to
Class A shares bears to the shareholder's total Class B shares not acquired
through dividends and distributions.
SECTION III: EXCHANGE PRIVILEGES
(A) Class A shares of a Portfolio may be exchanged only for shares
of other IDEX Funds or Portfolios on which an initial sales charge is imposed.
Class B and Class C shares may be exchanged only for Class B and Class C
shares, respectively, of other IDEX II Portfolios. Class A or Class C shares
of a Portfolio may also be exchanged for shares of any of the three portfolios
of the Cash Equivalent Fund or the California Tax-Exempt Money Market Fund,
money market mutual funds managed by Kemper Financial Services, Inc. Class B
shares of a Portfolio may also be exchanged only for the Cash Equivalent Fund
Money Market Portfolio.
(B) Class B shares are exchangeable on the basis of relative net
asset value per share without payment of any contingent deferred sales charge
that might otherwise be due on the redemption of such Class B shares. For
purposes of computing the contingent deferred sales charge that may be payable
upon a disposition of the Class B shares acquired in the exchange, the holding
period for the previously owned Class B shares is "tacked" to the holding
period of the Class B shares acquired through the exchange.
(C) Any IDEX exchange will be based on the respective net asset
value of the shares involved and may be made in amounts of $1,000 or more. If
an exchange transaction is less than $1,000, a $5 service charge may be
deducted from the shareholder's account through a redemption of Portfolio
shares. There is no sales commission involved in an exchange of Class A, Class
B or Class C shares.
2
<PAGE> 3
SECTION IV: ALLOCATION OF CLASS EXPENSES
Class A, Class B and Class C shares of each Portfolio shall have the
same rights, preferences, voting powers, restrictions and limitations as to
dividends, qualifications, and terms and conditions of redemption, except as
follows:
(1) Expenses related to the distribution of a class of
shares or to services provided to the shareholders of
a class of shares, shall be borne solely by such
class;
(2) The bearing of the expenses set forth in Section IV
(i) solely by shares of each class shall be
appropriately reflected (in the manner determined by
the Board of Trustees) in the net asset value,
dividend, distribution and liquidation rights of the
shares of such class;
(3) Expenses that may be borne by a particular class may
also include: transfer agency fees attributable to a
particular class; preparing, printing, mailing and
distributing materials such as shareholder reports,
prospectuses and proxy statements to current
shareholders of a specific class; state and federal
registration fees incurred by a specific class;
litigation and other legal expenses relating to a
particular class; administrative personnel and
services required to support the shareholders of a
specific class; and fees and other payments made to
entities performing services for a particular class,
including maintenance, dividend disbursing or
subaccounting services or administration of a
dividend reinvestment or systematic investment or
withdrawal plan.
SECTION V: ALLOCATION OF FUND INCOME AND EXPENSES
(A) Income, realized and unrealized capital gains and losses, and
expenses that are not allocable to a specific class pursuant to Section IV
above, shall be allocated to each class of a Portfolio in accordance with Rule
18f-3(c) under the 1940 Act.
(B) Dividends and other distributions paid by each Portfolio of
the Fund with respect to its Class A, Class B and Class C shares are calculated
in the same manner and declared and paid at the same time. The per share
dividends from net investment income on Class B and Class C shares are
anticipated to be lower than the per share dividends from net investment income
on Class A shares as a result of the higher service and distribution fees
applicable to Class B and Class C shares.
(C) All dividends and capital gain distributions, if any, with
respect to a particular class, will be paid automatically in additional shares
of that class at the net asset value per share determined as of the next
business day following the record date, unless otherwise elected by the
shareholder.
SECTION VI: REDEMPTIONS
The value of Portfolio shares on certain redemptions may be more or
less than the shareholder's cost or basis, depending upon the Portfolio's net
asset value at the time of redemption. Class B shares may be subject to a
contingent deferred sales charge, as defined in Rule 6c-10 of the 1940 Act as
set forth in Section I above. Shares will normally be redeemed for cash.
3
<PAGE> 4
SECTION VII: RECORDKEEPING
The Fund shall preserve copies of this Plan and any related agreements
for a period of not less than six years from the date of this Plan or
agreement, the first two years in an easily accessible place.
SECTION VIII: AMENDMENTS
This Plan may not be amended to change any material provision unless
such amendment is approved by the vote of the majority of the Board of
Trustees, including a majority of the Trustees who are not interested persons
of the Fund, based on their finding that the amendment is in the best interest
of each class individually and the Fund as a whole.
In Witness Whereof, the Fund has executed this Plan for Multiple
Classes of Shares on the day and year set forth below.
Dated as of June 30, 1995
/s/ G. John Hurley
--------------------------------------
By: G. John Hurley
President and Chief Executive Officer
ATTEST:
/s/ Becky A. Ferrell
--------------------------------------
By: Becky A. Ferrell, Secretary
4
<PAGE> 1
Exhibit 19
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each of them,
severally, his true and lawful attorneys and agents in his name, place and
stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ John R. Kenney
- ---------------------
John R. Kenney
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ James L. Churchill
- -------------------------
James L. Churchill
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ William W. Short, Jr.
- ------------------------------
William W. Short, Jr.
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ Jack E. Zimmerman
- -------------------------
Jack E. Zimmerman
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ Peter R. Brown
- ----------------------
Peter R. Brown
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ Charles C. Harris
- --------------------------
Charles C. Harris
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL and G. JOHN HURLEY and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead and on his behalf (a) to sign and cause to be filed registration
statements of IDEX II Series Fund under the Securities Act of 1933 and the
Investment Company Act of 1940, and all amendments, consents and exhibits
thereto; (b) to withdraw such statements or any amendments or exhibits and make
requests for acceleration in connection therewith; (c) to take all other action
of whatever kind or nature in connection with such registration statements
which said attorneys may deem advisable; and (d) to make, file, execute, amend
and withdraw documents of every kind, and to take other action of whatever kind
they may elect, for the purpose of complying with the laws of any state
relating to the sale of securities of IDEX II Series Fund, hereby ratifying and
confirming all actions of any of said attorneys thereunder. Said attorneys may
act jointly or severally, and the action of one shall bind the undersigned as
fully as if two or more had acted together.
DATED this day, June 20, 1995
/s/ Truman H. Sims
- ---------------------
Truman H. Sims
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
makes, constitutes and appoints BECKY A. FERRELL, his true and lawful attorney
and agent in his name, place and stead and on his behalf (a) to sign and cause
to be filed registration statements of IDEX II Series Fund under the Securities
Act of 1933 and the Investment Company Act of 1940, and all amendments,
consents and exhibits thereto; (b) to withdraw such statements or any
amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in
connection with such registration statements which said attorneys may deem
advisable; and (d) to make, file, execute, amend and withdraw documents of
every kind, and to take other action of whatever kind they may elect, for the
purpose of complying with the laws of any state relating to the sale of
securities of IDEX II Series Fund, hereby ratifying and confirming all actions
of said attorney thereunder.
DATED this day, June 20, 1995
/s/ G. John Hurley
- ---------------------
G. John Hurley
<PAGE> 9
Schedule A
IDEX II Series Fund
<TABLE>
<S> <C>
IDEX II Growth Portfolio IDEX II Portfolio Aggressive Growth Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Global Portfolio IDEX II Equity-Income Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Flexible Income Portfolio IDEX II Tactical Asset Allocation Portfolio
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
IDEX II Tax-Exempt Portfolio
Class A Shares
Class B Shares
Class C Shares
IDEX II Income Plus Portfolio
Class A Shares
Class B Shares
Class C Shares
IDEX II Balanced Portfolio
Class A Shares
Class B Shares
Class C Shares
IDEX II Capital Appreciation Portfolio
Class A Shares
Class B Shares
Class C Shares
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GROWTH FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> IDEX II GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 348,105
<INVESTMENTS-AT-VALUE> 398,121
<RECEIVABLES> 13,979
<ASSETS-OTHER> 2,685
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 414,785
<PAYABLE-FOR-SECURITIES> 12,847
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,967
<TOTAL-LIABILITIES> 14,814
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 341,157
<SHARES-COMMON-STOCK> 22,957
<SHARES-COMMON-PRIOR> 25,691
<ACCUMULATED-NII-CURRENT> (367)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,422
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 48,759
<NET-ASSETS> 399,971
<DIVIDEND-INCOME> 1,639
<INTEREST-INCOME> 1,572
<OTHER-INCOME> 0
<EXPENSES-NET> 3,743
<NET-INVESTMENT-INCOME> (532)
<REALIZED-GAINS-CURRENT> 15,848
<APPREC-INCREASE-CURRENT> (2,673)
<NET-CHANGE-FROM-OPS> 12,643
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,733
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 892
<NUMBER-OF-SHARES-REDEEMED> 3,727
<SHARES-REINVESTED> 101
<NET-CHANGE-IN-ASSETS> (34,659)
<ACCUMULATED-NII-PRIOR> 165
<ACCUMULATED-GAINS-PRIOR> (3,693)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,743
<AVERAGE-NET-ASSETS> 408,560
<PER-SHARE-NAV-BEGIN> 16.78
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 0.57
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.25
<EXPENSE-RATIO> 1.82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GROWTH FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> IDEX II GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 348,105
<INVESTMENTS-AT-VALUE> 398,121
<RECEIVABLES> 13,979
<ASSETS-OTHER> 2,685
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 414,785
<PAYABLE-FOR-SECURITIES> 12,847
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,967
<TOTAL-LIABILITIES> 14,814
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 341,157
<SHARES-COMMON-STOCK> 228
<SHARES-COMMON-PRIOR> 205
<ACCUMULATED-NII-CURRENT> (367)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,422
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 48,759
<NET-ASSETS> 399,971
<DIVIDEND-INCOME> 1,639
<INTEREST-INCOME> 1,572
<OTHER-INCOME> 0
<EXPENSES-NET> 3,743
<NET-INVESTMENT-INCOME> (532)
<REALIZED-GAINS-CURRENT> 15,848
<APPREC-INCREASE-CURRENT> (2,673)
<NET-CHANGE-FROM-OPS> 12,643
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,733
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 45
<NUMBER-OF-SHARES-REDEEMED> 23
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> (34,659)
<ACCUMULATED-NII-PRIOR> 165
<ACCUMULATED-GAINS-PRIOR> (3,693)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,743
<AVERAGE-NET-ASSETS> 3,633
<PER-SHARE-NAV-BEGIN> 16.68
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> 0.57
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.10
<EXPENSE-RATIO> 2.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II AGGRESSIVE GROWTH FOR THE PERIOD ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> IDEX II AGGRESSIVE GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 4,406
<INVESTMENTS-AT-VALUE> 4,584
<RECEIVABLES> 21
<ASSETS-OTHER> 184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,789
<PAYABLE-FOR-SECURITIES> 190
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7
<TOTAL-LIABILITIES> 197
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,263
<SHARES-COMMON-STOCK> 351
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (7)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 158
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 178
<NET-ASSETS> 4,592
<DIVIDEND-INCOME> 3
<INTEREST-INCOME> 5
<OTHER-INCOME> 0
<EXPENSES-NET> 15
<NET-INVESTMENT-INCOME> (7)
<REALIZED-GAINS-CURRENT> 158
<APPREC-INCREASE-CURRENT> 178
<NET-CHANGE-FROM-OPS> 329
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 387
<NUMBER-OF-SHARES-REDEEMED> 29
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,592
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16
<AVERAGE-NET-ASSETS> 1,572
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 2.13
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.11
<EXPENSE-RATIO> 2.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II AGGRESSIVE GROWTH FOR THE PERIOD ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> IDEX II AGGRESSIVE GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 4,406
<INVESTMENTS-AT-VALUE> 4,584
<RECEIVABLES> 21
<ASSETS-OTHER> 184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,789
<PAYABLE-FOR-SECURITIES> 190
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7
<TOTAL-LIABILITIES> 197
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,263
<SHARES-COMMON-STOCK> 28
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (7)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 158
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 178
<NET-ASSETS> 4,592
<DIVIDEND-INCOME> 3
<INTEREST-INCOME> 5
<OTHER-INCOME> 0
<EXPENSES-NET> 15
<NET-INVESTMENT-INCOME> (7)
<REALIZED-GAINS-CURRENT> 158
<APPREC-INCREASE-CURRENT> 178
<NET-CHANGE-FROM-OPS> 329
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 122
<NUMBER-OF-SHARES-REDEEMED> 12
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,592
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16
<AVERAGE-NET-ASSETS> 55
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 2.13
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.09
<EXPENSE-RATIO> 3.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II CAPITAL APPRECIATION FOR THE PERIOD ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> IDEX II CAPITAL APPRECIATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 6,178
<INVESTMENTS-AT-VALUE> 6,278
<RECEIVABLES> 65
<ASSETS-OTHER> 376
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,719
<PAYABLE-FOR-SECURITIES> 1,090
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25
<TOTAL-LIABILITIES> 1,115
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,478
<SHARES-COMMON-STOCK> 387
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (10)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 92
<NET-ASSETS> 5,604
<DIVIDEND-INCOME> 3
<INTEREST-INCOME> 13
<OTHER-INCOME> 0
<EXPENSES-NET> 26
<NET-INVESTMENT-INCOME> (10)
<REALIZED-GAINS-CURRENT> 44
<APPREC-INCREASE-CURRENT> 92
<NET-CHANGE-FROM-OPS> 126
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 416
<NUMBER-OF-SHARES-REDEEMED> 29
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,604
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 27
<AVERAGE-NET-ASSETS> 2,363
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 1.03
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.01
<EXPENSE-RATIO> 2.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II CAPITAL APPRECIATION FOR THE PERIOD ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> IDEX II CAPITAL APPRECIATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 6,178
<INVESTMENTS-AT-VALUE> 6,278
<RECEIVABLES> 65
<ASSETS-OTHER> 376
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,719
<PAYABLE-FOR-SECURITIES> 1,090
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25
<TOTAL-LIABILITIES> 1,115
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,478
<SHARES-COMMON-STOCK> 122
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (10)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 92
<NET-ASSETS> 5,604
<DIVIDEND-INCOME> 3
<INTEREST-INCOME> 13
<OTHER-INCOME> 0
<EXPENSES-NET> 26
<NET-INVESTMENT-INCOME> (10)
<REALIZED-GAINS-CURRENT> 44
<APPREC-INCREASE-CURRENT> 92
<NET-CHANGE-FROM-OPS> 126
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 134
<NUMBER-OF-SHARES-REDEEMED> 12
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,604
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 27
<AVERAGE-NET-ASSETS> 384
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 1.03
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.00
<EXPENSE-RATIO> 3.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GLOBAL FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> IDEX II GLOBAL
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 78,492
<INVESTMENTS-AT-VALUE> 83,593
<RECEIVABLES> 4,136
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 87,729
<PAYABLE-FOR-SECURITIES> 3,029
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,708
<TOTAL-LIABILITIES> 4,737
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 82,654
<SHARES-COMMON-STOCK> 5,347
<SHARES-COMMON-PRIOR> 5,102
<ACCUMULATED-NII-CURRENT> (221)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,986)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,545
<NET-ASSETS> 82,992
<DIVIDEND-INCOME> 244
<INTEREST-INCOME> 348
<OTHER-INCOME> 0
<EXPENSES-NET> 792
<NET-INVESTMENT-INCOME> (200)
<REALIZED-GAINS-CURRENT> (3,491)
<APPREC-INCREASE-CURRENT> 915
<NET-CHANGE-FROM-OPS> (2,776)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3,199
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 872
<NUMBER-OF-SHARES-REDEEMED> 825
<SHARES-REINVESTED> 198
<NET-CHANGE-IN-ASSETS> (1,820)
<ACCUMULATED-NII-PRIOR> (21)
<ACCUMULATED-GAINS-PRIOR> 2,704
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 432
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 792
<AVERAGE-NET-ASSETS> 83,028
<PER-SHARE-NAV-BEGIN> 15.93
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> (0.44)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.56
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.89
<EXPENSE-RATIO> 1.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GLOBAL FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> IDEX II GLOBAL
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 78,492
<INVESTMENTS-AT-VALUE> 83,593
<RECEIVABLES> 4,136
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 87,729
<PAYABLE-FOR-SECURITIES> 3,029
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,708
<TOTAL-LIABILITIES> 4,737
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 82,654
<SHARES-COMMON-STOCK> 231
<SHARES-COMMON-PRIOR> 227
<ACCUMULATED-NII-CURRENT> (221)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,986)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,545
<NET-ASSETS> 82,992
<DIVIDEND-INCOME> 244
<INTEREST-INCOME> 348
<OTHER-INCOME> 0
<EXPENSES-NET> 792
<NET-INVESTMENT-INCOME> (200)
<REALIZED-GAINS-CURRENT> (3,491)
<APPREC-INCREASE-CURRENT> 915
<NET-CHANGE-FROM-OPS> (2,776)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3,199
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 47
<NUMBER-OF-SHARES-REDEEMED> 52
<SHARES-REINVESTED> 9
<NET-CHANGE-IN-ASSETS> (1,820)
<ACCUMULATED-NII-PRIOR> (21)
<ACCUMULATED-GAINS-PRIOR> 2,704
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 432
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 792
<AVERAGE-NET-ASSETS> 3,641
<PER-SHARE-NAV-BEGIN> 15.74
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> (0.44)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.56
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.67
<EXPENSE-RATIO> 2.41
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II BALANCED FOR THE PERIOD ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> IDEX II BALANCED
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 3,818
<INVESTMENTS-AT-VALUE> 3,879
<RECEIVABLES> 85
<ASSETS-OTHER> 270
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,234
<PAYABLE-FOR-SECURITIES> 94
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8
<TOTAL-LIABILITIES> 102
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,068
<SHARES-COMMON-STOCK> 190
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (2)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 60
<NET-ASSETS> 4,132
<DIVIDEND-INCOME> 2
<INTEREST-INCOME> 13
<OTHER-INCOME> 0
<EXPENSES-NET> 13
<NET-INVESTMENT-INCOME> 2
<REALIZED-GAINS-CURRENT> 6
<APPREC-INCREASE-CURRENT> 60
<NET-CHANGE-FROM-OPS> 68
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 191
<NUMBER-OF-SHARES-REDEEMED> 2
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 4,132
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14
<AVERAGE-NET-ASSETS> 1,086
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.40
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.41
<EXPENSE-RATIO> 2.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II BALANCED FOR THE PERIOD ENDED MARCH 31, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> IDEX II BALANCED
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 3,818
<INVESTMENTS-AT-VALUE> 3,879
<RECEIVABLES> 85
<ASSETS-OTHER> 270
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,234
<PAYABLE-FOR-SECURITIES> 94
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8
<TOTAL-LIABILITIES> 102
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,068
<SHARES-COMMON-STOCK> 207
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (2)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 60
<NET-ASSETS> 4,132
<DIVIDEND-INCOME> 2
<INTEREST-INCOME> 13
<OTHER-INCOME> 0
<EXPENSES-NET> 13
<NET-INVESTMENT-INCOME> 2
<REALIZED-GAINS-CURRENT> 6
<APPREC-INCREASE-CURRENT> 60
<NET-CHANGE-FROM-OPS> 68
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 207
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,132
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14
<AVERAGE-NET-ASSETS> 353
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0.40
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.41
<EXPENSE-RATIO> 3.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II EQUITY-INCOME FOR THE PERIOD ENDED MARCH 31, 1995,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> IDEX II EQUITY-INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 2,945
<INVESTMENTS-AT-VALUE> 3,028
<RECEIVABLES> 19
<ASSETS-OTHER> 80
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,127
<PAYABLE-FOR-SECURITIES> 375
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8
<TOTAL-LIABILITIES> 383
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,636
<SHARES-COMMON-STOCK> 243
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (3)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 28
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 83
<NET-ASSETS> 2,744
<DIVIDEND-INCOME> 7
<INTEREST-INCOME> 14
<OTHER-INCOME> 0
<EXPENSES-NET> 13
<NET-INVESTMENT-INCOME> 8
<REALIZED-GAINS-CURRENT> 28
<APPREC-INCREASE-CURRENT> 83
<NET-CHANGE-FROM-OPS> 119
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 246
<NUMBER-OF-SHARES-REDEEMED> 4
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 2,744
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14
<AVERAGE-NET-ASSETS> 1,423
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0.76
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.77
<EXPENSE-RATIO> 2.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II EQUITY-INCOME FOR THE PERIOD ENDED MARCH 31, 1995,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> IDEX II EQUITY-INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> DEC-02-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 2,945
<INVESTMENTS-AT-VALUE> 3,028
<RECEIVABLES> 19
<ASSETS-OTHER> 80
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,127
<PAYABLE-FOR-SECURITIES> 375
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8
<TOTAL-LIABILITIES> 383
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,636
<SHARES-COMMON-STOCK> 12
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (3)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 28
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 83
<NET-ASSETS> 2,744
<DIVIDEND-INCOME> 7
<INTEREST-INCOME> 14
<OTHER-INCOME> 0
<EXPENSES-NET> 13
<NET-INVESTMENT-INCOME> 8
<REALIZED-GAINS-CURRENT> 28
<APPREC-INCREASE-CURRENT> 83
<NET-CHANGE-FROM-OPS> 119
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,744
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14
<AVERAGE-NET-ASSETS> 44
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.76
<PER-SHARE-DIVIDEND> 0.03
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.76
<EXPENSE-RATIO> 3.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II INCOME PLUS FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 7
<NAME> IDEX II INCOME PLUS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 64,539
<INVESTMENTS-AT-VALUE> 62,830
<RECEIVABLES> 2,994
<ASSETS-OTHER> 577
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66,401
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 73
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,306
<SHARES-COMMON-STOCK> 6,531
<SHARES-COMMON-PRIOR> 6,560
<ACCUMULATED-NII-CURRENT> 139
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (407)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,710)
<NET-ASSETS> 66,328
<DIVIDEND-INCOME> 21
<INTEREST-INCOME> 2,996
<OTHER-INCOME> 0
<EXPENSES-NET> 407
<NET-INVESTMENT-INCOME> 2,610
<REALIZED-GAINS-CURRENT> (560)
<APPREC-INCREASE-CURRENT> 2,053
<NET-CHANGE-FROM-OPS> 4,103
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,560
<DISTRIBUTIONS-OF-GAINS> 676
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 263
<NUMBER-OF-SHARES-REDEEMED> 532
<SHARES-REINVESTED> 240
<NET-CHANGE-IN-ASSETS> 221
<ACCUMULATED-NII-PRIOR> 158
<ACCUMULATED-GAINS-PRIOR> 829
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 194
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 407
<AVERAGE-NET-ASSETS> 63,081
<PER-SHARE-NAV-BEGIN> 9.75
<PER-SHARE-NII> 0.39
<PER-SHARE-GAIN-APPREC> 0.23
<PER-SHARE-DIVIDEND> 0.39
<PER-SHARE-DISTRIBUTIONS> 0.10
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.88
<EXPENSE-RATIO> 1.24
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II INCOME PLUS FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 7
<NAME> IDEX II INCOME PLUS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 64,539
<INVESTMENTS-AT-VALUE> 62,830
<RECEIVABLES> 2,994
<ASSETS-OTHER> 577
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66,401
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 73
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,306
<SHARES-COMMON-STOCK> 184
<SHARES-COMMON-PRIOR> 217
<ACCUMULATED-NII-CURRENT> 139
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (407)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,710)
<NET-ASSETS> 66,328
<DIVIDEND-INCOME> 21
<INTEREST-INCOME> 2,996
<OTHER-INCOME> 0
<EXPENSES-NET> 407
<NET-INVESTMENT-INCOME> 2,610
<REALIZED-GAINS-CURRENT> (560)
<APPREC-INCREASE-CURRENT> 2,053
<NET-CHANGE-FROM-OPS> 4,103
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 69
<DISTRIBUTIONS-OF-GAINS> 676
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 28
<NUMBER-OF-SHARES-REDEEMED> 69
<SHARES-REINVESTED> 8
<NET-CHANGE-IN-ASSETS> 221
<ACCUMULATED-NII-PRIOR> 158
<ACCUMULATED-GAINS-PRIOR> 829
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 194
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 407
<AVERAGE-NET-ASSETS> 1,912
<PER-SHARE-NAV-BEGIN> 9.74
<PER-SHARE-NII> 0.36
<PER-SHARE-GAIN-APPREC> 0.23
<PER-SHARE-DIVIDEND> 0.35
<PER-SHARE-DISTRIBUTIONS> 0.10
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.88
<EXPENSE-RATIO> 1.79
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II FLEXIBLE INCOME FOR THE SIX MONTHS ENDED MARCH 31, 1995,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 8
<NAME> IDEX II FLEXIBLE INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 19,663
<INVESTMENTS-AT-VALUE> 19,767
<RECEIVABLES> 1,404
<ASSETS-OTHER> 261
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,432
<PAYABLE-FOR-SECURITIES> 895
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 96
<TOTAL-LIABILITIES> 991
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,080
<SHARES-COMMON-STOCK> 2,264
<SHARES-COMMON-PRIOR> 2,438
<ACCUMULATED-NII-CURRENT> 81
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,824)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 104
<NET-ASSETS> 20,441
<DIVIDEND-INCOME> 52
<INTEREST-INCOME> 905
<OTHER-INCOME> 0
<EXPENSES-NET> 195
<NET-INVESTMENT-INCOME> 762
<REALIZED-GAINS-CURRENT> (1,115)
<APPREC-INCREASE-CURRENT> 842
<NET-CHANGE-FROM-OPS> 489
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 708
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 70
<NUMBER-OF-SHARES-REDEEMED> 306
<SHARES-REINVESTED> 62
<NET-CHANGE-IN-ASSETS> (1,777)
<ACCUMULATED-NII-PRIOR> 49
<ACCUMULATED-GAINS-PRIOR> (2,709)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 94
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 224
<AVERAGE-NET-ASSETS> 20,242
<PER-SHARE-NAV-BEGIN> 8.83
<PER-SHARE-NII> 0.32
<PER-SHARE-GAIN-APPREC> (0.11)
<PER-SHARE-DIVIDEND> (0.30)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.74
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II FLEXIBLE INCOME FOR THE SIX MONTHS ENDED MARCH 31, 1995,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 8
<NAME> IDEX II FLEXIBLE INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 19,663
<INVESTMENTS-AT-VALUE> 19,767
<RECEIVABLES> 1,404
<ASSETS-OTHER> 261
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,432
<PAYABLE-FOR-SECURITIES> 895
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 96
<TOTAL-LIABILITIES> 991
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,080
<SHARES-COMMON-STOCK> 74
<SHARES-COMMON-PRIOR> 78
<ACCUMULATED-NII-CURRENT> 81
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,824)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 104
<NET-ASSETS> 20,441
<DIVIDEND-INCOME> 52
<INTEREST-INCOME> 905
<OTHER-INCOME> 0
<EXPENSES-NET> 195
<NET-INVESTMENT-INCOME> 762
<REALIZED-GAINS-CURRENT> (1,115)
<APPREC-INCREASE-CURRENT> 842
<NET-CHANGE-FROM-OPS> 489
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 22
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14
<NUMBER-OF-SHARES-REDEEMED> 20
<SHARES-REINVESTED> 2
<NET-CHANGE-IN-ASSETS> (1,777)
<ACCUMULATED-NII-PRIOR> 49
<ACCUMULATED-GAINS-PRIOR> (2,709)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 94
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 224
<AVERAGE-NET-ASSETS> 686
<PER-SHARE-NAV-BEGIN> 8.83
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> (0.11)
<PER-SHARE-DIVIDEND> (0.26)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.74
<EXPENSE-RATIO> 2.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II TAX-EXEMPT FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 9
<NAME> IDEX II TAX-EXEMPT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 27,442
<INVESTMENTS-AT-VALUE> 27,737
<RECEIVABLES> 1,533
<ASSETS-OTHER> 639
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,909
<PAYABLE-FOR-SECURITIES> 1,070
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34
<TOTAL-LIABILITIES> 1104
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28,675
<SHARES-COMMON-STOCK> 2,529
<SHARES-COMMON-PRIOR> 2,621
<ACCUMULATED-NII-CURRENT> 124
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (289)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 295
<NET-ASSETS> 28,805
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 848
<OTHER-INCOME> 0
<EXPENSES-NET> 141
<NET-INVESTMENT-INCOME> 707
<REALIZED-GAINS-CURRENT> (206)
<APPREC-INCREASE-CURRENT> 680
<NET-CHANGE-FROM-OPS> 1,181
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 689
<DISTRIBUTIONS-OF-GAINS> 91
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 105
<NUMBER-OF-SHARES-REDEEMED> 245
<SHARES-REINVESTED> 48
<NET-CHANGE-IN-ASSETS> (568)
<ACCUMULATED-NII-PRIOR> 111
<ACCUMULATED-GAINS-PRIOR> 8
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 84
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 169
<AVERAGE-NET-ASSETS> 27,923
<PER-SHARE-NAV-BEGIN> 11.10
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> 0.20
<PER-SHARE-DIVIDEND> 0.27
<PER-SHARE-DISTRIBUTIONS> 0.04
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.27
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II TAX-EXEMPT FOR THE SIX MONTHS ENDED MARCH 31, 1995, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 9
<NAME> IDEX II TAX-EXEMPT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 27,442
<INVESTMENTS-AT-VALUE> 27,737
<RECEIVABLES> 1,533
<ASSETS-OTHER> 639
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,909
<PAYABLE-FOR-SECURITIES> 1,070
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34
<TOTAL-LIABILITIES> 1104
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28,675
<SHARES-COMMON-STOCK> 28
<SHARES-COMMON-PRIOR> 25
<ACCUMULATED-NII-CURRENT> 124
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (289)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 295
<NET-ASSETS> 28,805
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 848
<OTHER-INCOME> 0
<EXPENSES-NET> 141
<NET-INVESTMENT-INCOME> 707
<REALIZED-GAINS-CURRENT> (206)
<APPREC-INCREASE-CURRENT> 680
<NET-CHANGE-FROM-OPS> 1,181
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5
<DISTRIBUTIONS-OF-GAINS> 91
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20
<NUMBER-OF-SHARES-REDEEMED> 17
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (568)
<ACCUMULATED-NII-PRIOR> 111
<ACCUMULATED-GAINS-PRIOR> 8
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 84
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 169
<AVERAGE-NET-ASSETS> 229
<PER-SHARE-NAV-BEGIN> 11.10
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 0.20
<PER-SHARE-DIVIDEND> 0.26
<PER-SHARE-DISTRIBUTIONS> 0.04
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.27
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GROWTH FOR THE YEAR ENDED SEPTEMBER 30, 1994, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> IDEX II GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 384,524
<INVESTMENTS-AT-VALUE> 435,956
<RECEIVABLES> 4,414
<ASSETS-OTHER> 4,013
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 444,383
<PAYABLE-FOR-SECURITIES> 8,275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,478
<TOTAL-LIABILITIES> 9,753
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 386,726
<SHARES-COMMON-STOCK> 25,691
<SHARES-COMMON-PRIOR> 29,710
<ACCUMULATED-NII-CURRENT> 165
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,693)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 51,432
<NET-ASSETS> 434,630
<DIVIDEND-INCOME> 5,803
<INTEREST-INCOME> 3,113
<OTHER-INCOME> 0
<EXPENSES-NET> 8,746
<NET-INVESTMENT-INCOME> 170
<REALIZED-GAINS-CURRENT> 771
<APPREC-INCREASE-CURRENT> (34,217)
<NET-CHANGE-FROM-OPS> (33,276)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 9,602
<DISTRIBUTIONS-OTHER> 3,945
<NUMBER-OF-SHARES-SOLD> 3,314
<NUMBER-OF-SHARES-REDEEMED> 8,071
<SHARES-REINVESTED> 738
<NET-CHANGE-IN-ASSETS> (113,934)
<ACCUMULATED-NII-PRIOR> 392
<ACCUMULATED-GAINS-PRIOR> 8,686
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,950
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,746
<AVERAGE-NET-ASSETS> 492,555
<PER-SHARE-NAV-BEGIN> 18.46
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> (1.22)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.33)
<RETURNS-OF-CAPITAL> (0.14)
<PER-SHARE-NAV-END> 16.78
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GROWTH FOR THE YEAR ENDED SEPTEMBER 30, 1994, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> IDEX II GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 384,524
<INVESTMENTS-AT-VALUE> 435,956
<RECEIVABLES> 4,414
<ASSETS-OTHER> 4,013
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 444,383
<PAYABLE-FOR-SECURITIES> 8,275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,478
<TOTAL-LIABILITIES> 9,753
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 386,726
<SHARES-COMMON-STOCK> 205
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 165
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,693)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 51,432
<NET-ASSETS> 434,630
<DIVIDEND-INCOME> 5,803
<INTEREST-INCOME> 3,113
<OTHER-INCOME> 0
<EXPENSES-NET> 8,746
<NET-INVESTMENT-INCOME> 170
<REALIZED-GAINS-CURRENT> 771
<APPREC-INCREASE-CURRENT> (34,217)
<NET-CHANGE-FROM-OPS> (33,276)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 9,602
<DISTRIBUTIONS-OTHER> 3,945
<NUMBER-OF-SHARES-SOLD> 244
<NUMBER-OF-SHARES-REDEEMED> 40
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> (113,934)
<ACCUMULATED-NII-PRIOR> 392
<ACCUMULATED-GAINS-PRIOR> 8,686
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,950
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,746
<AVERAGE-NET-ASSETS> 2,107
<PER-SHARE-NAV-BEGIN> 18.46
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> (1.22)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.33)
<RETURNS-OF-CAPITAL> (0.14)
<PER-SHARE-NAV-END> 16.68
<EXPENSE-RATIO> 3.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GLOBAL FOR THE YEAR ENDED SEPTEMBER 30, 1994, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> IDEX II GLOBAL
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 75,370
<INVESTMENTS-AT-VALUE> 79,779
<RECEIVABLES> 4,214
<ASSETS-OTHER> 5,669
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89,662
<PAYABLE-FOR-SECURITIES> 3,726
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,124
<TOTAL-LIABILITIES> 4,850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,499
<SHARES-COMMON-STOCK> 5,102
<SHARES-COMMON-PRIOR> 1,306
<ACCUMULATED-NII-CURRENT> (21)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,704
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,630
<NET-ASSETS> 84,812
<DIVIDEND-INCOME> 242
<INTEREST-INCOME> 644
<OTHER-INCOME> 0
<EXPENSES-NET> 1,232
<NET-INVESTMENT-INCOME> (346)
<REALIZED-GAINS-CURRENT> 3,253
<APPREC-INCREASE-CURRENT> 2,160
<NET-CHANGE-FROM-OPS> 5,067
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,456
<NUMBER-OF-SHARES-REDEEMED> 660
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 67,382
<ACCUMULATED-NII-PRIOR> (57)
<ACCUMULATED-GAINS-PRIOR> (177)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 558
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,232
<AVERAGE-NET-ASSETS> 54,183
<PER-SHARE-NAV-BEGIN> 13.35
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 2.62
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.93
<EXPENSE-RATIO> 2.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II GLOBAL FOR THE YEAR ENDED SEPTEMBER 30, 1994, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> IDEX II GLOBAL
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 75,370
<INVESTMENTS-AT-VALUE> 79,779
<RECEIVABLES> 4,214
<ASSETS-OTHER> 5,669
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89,662
<PAYABLE-FOR-SECURITIES> 3,726
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,124
<TOTAL-LIABILITIES> 4,850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,499
<SHARES-COMMON-STOCK> 227
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (21)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,704
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,630
<NET-ASSETS> 84,812
<DIVIDEND-INCOME> 242
<INTEREST-INCOME> 644
<OTHER-INCOME> 0
<EXPENSES-NET> 1,232
<NET-INVESTMENT-INCOME> (346)
<REALIZED-GAINS-CURRENT> 3,253
<APPREC-INCREASE-CURRENT> 2,160
<NET-CHANGE-FROM-OPS> 5,067
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 263
<NUMBER-OF-SHARES-REDEEMED> 36
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 67,382
<ACCUMULATED-NII-PRIOR> (57)
<ACCUMULATED-GAINS-PRIOR> (177)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 558
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,232
<AVERAGE-NET-ASSETS> 1,821
<PER-SHARE-NAV-BEGIN> 13.35
<PER-SHARE-NII> (0.23)
<PER-SHARE-GAIN-APPREC> 2.62
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.74
<EXPENSE-RATIO> 4.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II FLEXIBLE INCOME FOR THE YEAR ENDED SEPTEMBER 30, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> IDEX II FLEXIBLE INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 21,683
<INVESTMENTS-AT-VALUE> 20,935
<RECEIVABLES> 1,787
<ASSETS-OTHER> 84
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,806
<PAYABLE-FOR-SECURITIES> 506
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82
<TOTAL-LIABILITIES> 588
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,616
<SHARES-COMMON-STOCK> 2,438
<SHARES-COMMON-PRIOR> 3,048
<ACCUMULATED-NII-CURRENT> 49
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,709)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (738)
<NET-ASSETS> 22,218
<DIVIDEND-INCOME> 150
<INTEREST-INCOME> 2,050
<OTHER-INCOME> 0
<EXPENSES-NET> 485
<NET-INVESTMENT-INCOME> 1,715
<REALIZED-GAINS-CURRENT> 32
<APPREC-INCREASE-CURRENT> (2,171)
<NET-CHANGE-FROM-OPS> (424)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,644
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 414
<NUMBER-OF-SHARES-REDEEMED> 1,158
<SHARES-REINVESTED> 134
<NET-CHANGE-IN-ASSETS> (7,014)
<ACCUMULATED-NII-PRIOR> 53
<ACCUMULATED-GAINS-PRIOR> (2,846)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 235
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 584
<AVERAGE-NET-ASSETS> 25,701
<PER-SHARE-NAV-BEGIN> 9.59
<PER-SHARE-NII> 0.65
<PER-SHARE-GAIN-APPREC> (0.81)
<PER-SHARE-DIVIDEND> (0.60)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.83
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II FLEXIBLE INCOME FOR THE YEAR ENDED SEPTEMBER 30, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> IDEX II FLEXIBLE INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 21,683
<INVESTMENTS-AT-VALUE> 20,935
<RECEIVABLES> 1,787
<ASSETS-OTHER> 84
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,806
<PAYABLE-FOR-SECURITIES> 506
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82
<TOTAL-LIABILITIES> 588
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,616
<SHARES-COMMON-STOCK> 78
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 49
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,709)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (738)
<NET-ASSETS> 22,218
<DIVIDEND-INCOME> 150
<INTEREST-INCOME> 2,050
<OTHER-INCOME> 0
<EXPENSES-NET> 485
<NET-INVESTMENT-INCOME> 1,715
<REALIZED-GAINS-CURRENT> 32
<APPREC-INCREASE-CURRENT> (2,171)
<NET-CHANGE-FROM-OPS> (424)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 27
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 99
<NUMBER-OF-SHARES-REDEEMED> 23
<SHARES-REINVESTED> 2
<NET-CHANGE-IN-ASSETS> (7,014)
<ACCUMULATED-NII-PRIOR> 53
<ACCUMULATED-GAINS-PRIOR> (2,846)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 235
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 584
<AVERAGE-NET-ASSETS> 425
<PER-SHARE-NAV-BEGIN> 9.59
<PER-SHARE-NII> 0.60
<PER-SHARE-GAIN-APPREC> (0.81)
<PER-SHARE-DIVIDEND> (0.55)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.83
<EXPENSE-RATIO> 2.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II INCOME PLUS FOR THE YEAR ENDED SEPTEMBER 30, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> IDEX II INCOME PLUS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 66,658
<INVESTMENTS-AT-VALUE> 62,895
<RECEIVABLES> 2,876
<ASSETS-OTHER> 2,438
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 68,209
<PAYABLE-FOR-SECURITIES> 1,896
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 206
<TOTAL-LIABILITIES> 2,102
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,883
<SHARES-COMMON-STOCK> 6,560
<SHARES-COMMON-PRIOR> 6,596
<ACCUMULATED-NII-CURRENT> 158
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 829
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,763)
<NET-ASSETS> 66,107
<DIVIDEND-INCOME> 63
<INTEREST-INCOME> 6,040
<OTHER-INCOME> 0
<EXPENSES-NET> 963
<NET-INVESTMENT-INCOME> 5,140
<REALIZED-GAINS-CURRENT> 829
<APPREC-INCREASE-CURRENT> (8,190)
<NET-CHANGE-FROM-OPS> (2,221)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,970
<DISTRIBUTIONS-OF-GAINS> 960
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,027
<NUMBER-OF-SHARES-REDEEMED> 1,463
<SHARES-REINVESTED> 400
<NET-CHANGE-IN-ASSETS> (6,294)
<ACCUMULATED-NII-PRIOR> 70
<ACCUMULATED-GAINS-PRIOR> 960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 422
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 963
<AVERAGE-NET-ASSETS> 68,954
<PER-SHARE-NAV-BEGIN> 10.98
<PER-SHARE-NII> 0.76
<PER-SHARE-GAIN-APPREC> (1.10)
<PER-SHARE-DIVIDEND> 0.75
<PER-SHARE-DISTRIBUTIONS> 0.14
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.75
<EXPENSE-RATIO> 1.33
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II INCOME PLUS FOR THE YEAR ENDED SEPTEMBER 30, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> IDEX II INCOME PLUS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 66,658
<INVESTMENTS-AT-VALUE> 62,895
<RECEIVABLES> 2,876
<ASSETS-OTHER> 2,438
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 68,209
<PAYABLE-FOR-SECURITIES> 1,896
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 206
<TOTAL-LIABILITIES> 2,102
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,883
<SHARES-COMMON-STOCK> 217
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 158
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 829
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,763)
<NET-ASSETS> 66,107
<DIVIDEND-INCOME> 63
<INTEREST-INCOME> 6,040
<OTHER-INCOME> 0
<EXPENSES-NET> 963
<NET-INVESTMENT-INCOME> 5,140
<REALIZED-GAINS-CURRENT> 829
<APPREC-INCREASE-CURRENT> (8,190)
<NET-CHANGE-FROM-OPS> (2,221)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 82
<DISTRIBUTIONS-OF-GAINS> 960
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 244
<NUMBER-OF-SHARES-REDEEMED> 35
<SHARES-REINVESTED> 8
<NET-CHANGE-IN-ASSETS> (6,294)
<ACCUMULATED-NII-PRIOR> 70
<ACCUMULATED-GAINS-PRIOR> 960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 422
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 963
<AVERAGE-NET-ASSETS> 1,327
<PER-SHARE-NAV-BEGIN> 10.98
<PER-SHARE-NII> 0.66
<PER-SHARE-GAIN-APPREC> (1.10)
<PER-SHARE-DIVIDEND> 0.66
<PER-SHARE-DISTRIBUTIONS> 0.14
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.74
<EXPENSE-RATIO> 3.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II TAX-EXEMPT FOR THE YEAR ENDED SEPTEMBER 30, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> IDEX II TAX-EXEMPT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 29,202
<INVESTMENTS-AT-VALUE> 28,817
<RECEIVABLES> 1,571
<ASSETS-OTHER> 212
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,600
<PAYABLE-FOR-SECURITIES> 1,079
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 148
<TOTAL-LIABILITIES> 1,227
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,639
<SHARES-COMMON-STOCK> 2,621
<SHARES-COMMON-PRIOR> 2,545
<ACCUMULATED-NII-CURRENT> 111
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (385)
<NET-ASSETS> 29,373
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,762
<OTHER-INCOME> 0
<EXPENSES-NET> 302
<NET-INVESTMENT-INCOME> 1,460
<REALIZED-GAINS-CURRENT> 108
<APPREC-INCREASE-CURRENT> (1,685)
<NET-CHANGE-FROM-OPS> (117)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,405
<DISTRIBUTIONS-OF-GAINS> 996
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 221
<NUMBER-OF-SHARES-REDEEMED> 291
<SHARES-REINVESTED> 146
<NET-CHANGE-IN-ASSETS> (1,344)
<ACCUMULATED-NII-PRIOR> 61
<ACCUMULATED-GAINS-PRIOR> 896
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 181
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 418
<AVERAGE-NET-ASSETS> 30,092
<PER-SHARE-NAV-BEGIN> 12.07
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> (0.60)
<PER-SHARE-DIVIDEND> 0.54
<PER-SHARE-DISTRIBUTIONS> 0.39
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.10
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF IDEX II TAX-EXEMPT FOR THE YEAR ENDED SEPTEMBER 30, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> IDEX II TAX-EXEMPT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-01-1993
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 29,202
<INVESTMENTS-AT-VALUE> 28,817
<RECEIVABLES> 1,571
<ASSETS-OTHER> 212
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,600
<PAYABLE-FOR-SECURITIES> 1,079
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 148
<TOTAL-LIABILITIES> 1,227
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,639
<SHARES-COMMON-STOCK> 25
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 111
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (385)
<NET-ASSETS> 29,373
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,762
<OTHER-INCOME> 0
<EXPENSES-NET> 302
<NET-INVESTMENT-INCOME> 1,460
<REALIZED-GAINS-CURRENT> 108
<APPREC-INCREASE-CURRENT> (1,685)
<NET-CHANGE-FROM-OPS> (117)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5
<DISTRIBUTIONS-OF-GAINS> 996
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26
<NUMBER-OF-SHARES-REDEEMED> 1
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,344)
<ACCUMULATED-NII-PRIOR> 61
<ACCUMULATED-GAINS-PRIOR> 896
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 181
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 418
<AVERAGE-NET-ASSETS> 127
<PER-SHARE-NAV-BEGIN> 12.07
<PER-SHARE-NII> 0.53
<PER-SHARE-GAIN-APPREC> (0.60)
<PER-SHARE-DIVIDEND> 0.51
<PER-SHARE-DISTRIBUTIONS> 0.39
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.10
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE> 1
EXHIBIT 99
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
IDEX II GROWTH PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCK (89.4%)
AUTOMOTIVE (5.1%)
287,725 Chrysler Corp. $ 12,911,659
137,330 General Motors Corp. 6,437,344
70,025 General Motors Corp. Class E 2,660,950
------------
22,009,953
------------
BANKING (6.1%)
86,025 Bancorp of Hawaii, Inc. 2,613,009
79,225 BankAmerica Corp. 3,495,803
399,810 Citicorp 16,991,925
49,025 First Bank System, Inc. 1,789,413
2,725 First Hawaiian, Inc. 76,300
30,200 SunTrust Banks, Inc. 1,472,250
------------
26,438,700
------------
BIOTECHNOLOGY (1.9%)
131,875 Amgen, Inc.* 7,022,344
24,725 Biogen, Inc.* 1,347,512
------------
8,369,856
------------
COMMUNICATIONS (12.1%)
312,625 Airtouch Communications* 8,948,891
159,925 AT&T Corp. 8,635,950
120,125 Capital Cities/ABC, Inc. 9,850,250
165,290 General Instrument Corp.* 4,710,765
Infinity Broadcasting Corp., Class
53,420 A* 1,629,310
3,275 LIN Broadcasting Corp.* 455,634
55,125 Pacific Telesis Group 1,695,094
250,110 Telefonos de Mexico# 15,631,875
384,000 Vodafone Group PLC+ 1,195,845
------------
52,753,614
------------
COMPUTER/TECHNOLOGY (8.3%)
13,700 America Online, Inc.* 936,737
57,125 Autodesk, Inc. 3,570,313
130,325 Compaq Computer Corp.* 4,251,853
International Business Machines
22,200 Corp. 1,542,900
73,775 Micron Technology Inc. 2,545,238
36,275 Microsoft Corp.* 2,035,934
88,475 Motorola, Inc. 4,667,056
150,300 Oracle Systems Corp.* 6,462,900
12,725 Sybase, Inc.* 583,759
135,825 Texas Instruments, Inc. 9,287,034
------------
35,883,724
------------
CONSUMER GOODS (8.3%)
173,950 Aldila, Inc.* 2,217,862
28,390 Callaway Golf Company 975,906
415,100 Coca-Cola Company 20,184,238
23,000 Coleman, Inc.* 805,000
244,580 General Electric Company 11,770,413
------------
35,953,419
------------
ENTERTAINMENT (2.7%)
90,375 Caesars World, Inc.* 3,920,016
85,600 Carnival Corp. -- Class A 3,755,700
192,235 Mirage Resorts, Inc.* 4,133,053
------------
11,808,769
------------
ELECTRONICS (2.7%)
385,800 Philips Electronics nv# 11,718,675
------------
FINANCIAL SERVICES (18.3%)
173,754 Countrywide Credit Industries, Inc. 2,454,272
288,575 Federal Home Loan Mortgage Corp. 15,402,691
Federal National Mortgage
203,655 Association 16,037,831
386,000 First Data Corp. 19,396,500
2,221,725 Grupo Financiero Inbursa SA Class C+ 9,474,474
481,575 Merrill Lynch and Company, Inc. 16,674,534
------------
79,440,302
------------
<CAPTION>
- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE
- -----------------------------------------------------------------
<C> <S> <C>
MEDICAL/HEALTHCARE (5.4%)
137,160 Columbia/HCA Healthcare Corp. $ 5,966,460
227,425 United Healthcare Corp. 12,053,525
114,272 U.S. Healthcare, Inc. 5,320,813
------------
23,340,798
------------
PACKAGING (0.6%)
75,075 Liqui-Box Corp. 2,622,933
------------
RAILROADS (4.0%)
222,400 Conrail, Inc. 11,008,800
92,975 CSX Corp. 6,368,788
------------
17,377,588
------------
RESTAURANTS (0.3%)
42,550 Brinker International, Inc.* 1,021,200
13,290 Lone Star Steakhouse & Saloon, Inc.* 337,234
------------
1,358,434
------------
RETAIL (9.8%)
372,716 Home Depot, Inc. 15,654,072
701,720 Lowe's Companies, Inc. 27,103,935
------------
42,758,007
------------
WASTE MANAGEMENT (2.0%)
259,915 Browning-Ferris Industries, Inc. 8,252,301
19,850 WMX Technologies, Inc. 573,169
------------
8,825,470
------------
OTHER (1.8%)
92,000 Caterpillar, Inc. 4,979,500
13,150 Hercules, Inc. 1,352,806
74,200 Southwest Airlines Company 1,669,500
------------
8,001,806
------------
TOTAL COMMON STOCK (COST $336,514,759) 388,662,048
------------
PRINCIPAL
-------
LONG-TERM U.S. GOVERNMENT SECURITIES (3.3%)
$15,000,000 United States Treasury Bonds
5.500%, 9-30-97, (cost $15,147,927) 14,432,850
------------
SHORT-TERM U.S. GOVERNMENT SECURITIES (6.9%)
United States Treasury Bills,
20,000,000 4.390%,
11-10-94 19,902,444
United States Treasury Bills,
10,000,000 4.440%,
11-3-94 9,959,300
------------
TOTAL SHORT-TERM U.S. GOVERNMENT SECURITIES
(COST $29,861,744) 29,861,744
------------
COMMERCIAL PAPER (0.7%)
3,000,000 Ford Motor Credit Corp., 4.400%,
10-3-94, (cost $2,999,267) 2,999,267
------------
TOTAL SHORT-TERM SECURITIES (COST $32,861,011) 32,861,011
------------
TOTAL INVESTMENTS (100.3%) (COST $384,523,697) 435,955,909
OTHER LIABILITIES IN EXCESS OF ASSETS (-0.3%) (1,326,162)
------------
NET ASSETS (100.0%) $434,629,747
============
</TABLE>
See Notes to Schedules of Investments at page 9.
1
<PAGE> 2
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
IDEX II GLOBAL PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCK (87.5%)
AUTOMOTIVE (3.3%)
113,000 Nissan Motor Company, Ltd.+ $ 922,938
32,250 Kia Motors GDS# 741,750
30,100 Kia Motors Corp.# 707,350
20,000 Toyota Motor Corp.+ 409,894
------------
2,781,932
------------
BANKING (13.2%)
13,572 Banco de Galicia -- Buenos Aires# 429,230
12,825 Banco Frances Rio Plata# 384,750
675 Banco LatinoAmericano de Exportaciones
SA-Class E# 21,600
760 Banco Popular Espanol+ 90,124
2,300 Banco Santander SA+ 87,904
3,150 Banco Weise# 76,387
399,800 Bank Dagang Nasional+ 679,806
59,975 Citicorp 2,548,938
14,850 Corporacion Bancaria de Espana Ord.# 297,000
1,300 Deutsche Pfandbrief & Hypothekenbank AG+ 628,100
61,320 Grupo Financiero GBM Atlantico SA# 308,812
549,551 Grupo Financiero Bancomer SA+* 671,664
465,000 Grupo Financiero Inbursa SA Class C+ 1,982,977
37,750 Grupo Financiero Serfin SA# 858,813
51,200 HSBC Holdings PLC+ 571,488
48,000 Mitsui Trust & Banking+ 533,064
36,000 Mitsubishi Trust & Banking+ 541,545
33,000 Sumitomo Trust & Banking+ 489,753
------------
11,201,955
------------
BIOTECHNOLOGY (1.8%)
27,700 Biogen, Inc.* 1,509,650
------------
COMMUNICATIONS (14.5%)
17,675 Carlton Communications PLC+ 233,550
48,452 Kinnevik+ 1,406,815
51,509 News Corp., Ltd.+ 326,660
232 Nippon Telegraph & Telephone+ 2,061,181
7,800 Paging Network, Inc.* 225,225
28,150 Scandinavian Broadcasting System#* 738,937
5,875 Spir Communication+* 752,978
128,000 Tele Danmark A/S# 3,488,000
21,718 Telecom Argentina Stet-Fran Tel SA+ 145,586
575,255 Telecom Italia Spa+* 1,619,711
13,450 Telecom Asia# 549,309
5 Telecomunicacoes Braseleiras# 314
3,450 Telefonica de Espana# 139,725
6,200 Telefonos de Mexico# 387,500
6,975 Vodafone Group PLC# 218,841
------------
12,294,332
------------
CONGLOMERATES (7.2%)
4,659 Mannesman AG+ 1,158,521
145,000 Mitsubishi Heavy Industries+ 1,127,208
11,495 VEBA AG+ 3,809,945
------------
6,095,674
------------
CONSUMER GOODS (1.7%)
4,300 Dial Corp. 89,763
20,000 Industrie Natuzzi Spa#* 622,500
117,500 PT Hanjaya Mandala Sampoerna+ 499,483
111,340 Smart Corp.+ 186,761
------------
1,398,507
------------
CONTAINERS (0.4%)
8,075 Crown Cork & Seal* 310,888
------------
<CAPTION>
- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE
- -----------------------------------------------------------------
<C> <S> <C>
DRUGS (5.5%)
176,367 Astra AB A-Free+ $ 4,226,178
1,730 Grupo Casa Autrey# 56,441
104,149 Kalbe Farma+ 406,832
------------
4,689,451
------------
ELECTRONICS (8.7%)
46,000 Canon, Inc.+ 808,077
51,000 Hitachi Ltd.+ 492,236
52,000 Matsushita Electric Industrial Company,
Ltd.+ 829,480
115,755 Phillips Electronics nv+ 3,533,539
3,775 Sony Corp.# 220,366
18,600 Sony Corp.+ 1,081,636
33,000 Victor Company+ 433,115
------------
7,398,449
------------
ENERGY (0.6%)
19,575 YPF Sociedad Anonima# 494,269
------------
ENGINEERING/CONSTRUCTION (0.6%)
17,925 Celsius Industries+ 399,615
3,504 Cementos Paz del Rio# 89,352
45 Hochitief AG+ 28,409
------------
517,376
------------
ENTERTAINMENT (1.8%)
3,200 Autotote Corp. Class A* 60,000
7,525 Promus Companies, Inc.* 253,028
117,600 Tabcorp Holdings, Ltd.+ 202,766
158,700 The Rank Organisation PLC+ 1,007,208
------------
1,523,002
------------
FINANCIAL SERVICES (3.9%)
12,425 Baumax Holding AG+ 444,360
47,800 Citic Pacific Ltd.+ 147,844
49,350 Grupo Carso+ 561,737
31,175 Grupo Financiero Banamex+ 216,219
327,925 Guangdong Inv+ 218,554
10,700 Household International Corp. 382,525
25,150 Mercury Finance Company 364,675
5,900 Merrill Lynch and Company, Inc. 204,288
9,895 Servicios Financieros Quadrum#* 160,794
32,796 Trygg-Hansa SPP Holdings+ 404,975
5,000 Uni Danmark+ 191,983
------------
3,297,954
------------
FOOD/BEVERAGE (0.8%)
3,174 Cultor OY 1 Ordinary+ 90,693
6,311 Cultor OY 2+ 179,032
11,285 Dr. Pepper/Seven-Up Companies, Inc.* 262,376
39,500 PT Charoen Pokphand Indo+ 173,357
------------
705,458
------------
MEDICAL/HEALTHCARE (5.0%)
9,700 Arjo AB+ 168,338
6,250 Pfizer, Inc. 432,031
152,454 Pharmacia Aktiebolag+ 2,716,978
21,100 R.P. Scherer Corp. 878,288
------------
4,195,635
------------
METALS/MINING (1.5%)
30,505 Arbed SA#* 928,877
12,625 Ashanti Goldfields Company# 255,656
883 Dutch State Mining+ 74,873
------------
1,259,406
------------
</TABLE>
See Notes to Schedules of Investments at page 9.
2
<PAGE> 3
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
IDEX II GLOBAL PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE
- -----------------------------------------------------------------
<C> <S> <C>
PACKAGING (0.7%)
3,690 Mayr-Melnhof Karton Aktiengesellschaft+ $ 208,102
21,650 Stone Container Corp.* 422,175
------------
630,277
------------
PUBLISHING (4.9%)
16,550 Arnoldo Mondadori Editore+ 160,978
18,847 Elsevier nv+ 1,802,898
130 VNU Verenidg+ 14,065
31,036 Wolters Kluwer cva+ 2,203,476
------------
4,181,417
------------
RESTAURANTS (0.8%)
9,200 Brinker International, Inc.* 220,800
2,875 Fresh Choice, Inc.* 57,500
15,350 McDonald's Corp. 402,938
------------
681,238
------------
RETAIL (5.6%)
1,000 Amway Japan, Ltd.+ 31,196
337 AVA Allgemeine Handelsgesellschaft
der Verbraucher AG+ 134,383
1,610 Castorama Dubois Invest. SA+ 227,924
10,600 Centros Comerciales Pryca SA+ 160,731
24,000 Centros Comerciales Continente SA+ 515,086
225 Escom AG+ 50,876
7,000 Filene's Basement Corp.* 58,625
20,550 Hennes and Mauritz AB -- Series B+ 984,855
125 Hornbach Baumarket+ 72,473
108 Hornbach Holdings AG+ 108,188
1,992 Karstadt AG+ 768,671
69,590 Wal-Mart Stores, Inc. 1,626,666
------------
4,739,674
------------
SECURITY SYSTEMS (1.7%)
52,643 Securitas AB+ 1,405,519
------------
TRANSPORTATION (0.6%)
4,250 KLM-Konin Luchvaart MI-nv+ 118,497
3,475 Deutsche Lufthansa AG+ 405,189
------------
523,686
------------
UTILITY (1.2%)
7,425 Consolidated Electric Power Asia Ltd.# 167,675
378,100 Consolidated Electric Power Asia Ltd.+ 853,847
------------
1,021,522
------------
OTHER (1.5%)
5,925 Ecco SA+ 706,822
1,700 Investor AB+ 39,034
32,104 Korea Equity Fund# 353,144
12,425 RFS Hotel Investors, Inc. 199,965
------------
TOTAL COMMON STOCK (COST $71,869,234) 1,298,965
------------
74,156,236
------------
PREFERRED STOCK (5.5%)
COMMUNICATIONS (4.7%)
21,135 Nokia AB OY+ 2,454,729
5,559 Nokia Corp. Ordinaries+ 646,793
7,500 Nokia+ 871,089
------------
3,972,611
------------
<CAPTION>
- -----------------------------------------------------------------
SHARES DESCRIPTION VALUE
- -----------------------------------------------------------------
<C> <S> <C>
UTILITY (0.8%)
25,475 Companhia de Energetica de Ninas Gerais# $ 700,563
------------
TOTAL PREFERRED STOCK (COST $2,551,316) 4,673,174
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- --------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (1.1%)
$ 950,000 Ford Motor Credit Company, 4.400%,
10-3-94, (cost $949,768) 949,768
------------
TOTAL INVESTMENTS (94.1%) (COST $75,370,318) 79,779,178
------------
UNREALIZED GAIN (LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (-1.0%)
A 103,244 Australian Dollar 10-5-94 Buy 7
A 288,133 Australian Dollar 10-6-94 Buy (276)
D 1,066,553 German Deutschemark 10-4-94 Sell 213
D 256,368 German Deutschemark 10-5-94 Sell 31
D 15,254,650 German Deutschemark 12-8-94 Sell 29,458
D 5,439,425 German Deutschemark
12-15-94 Sell (121,912)
D 5,439,425 German Deutschemark
12-15-94 Buy 31,346
D 3,813,600 German Deutschemark
12-20-94 Sell 22,289
D 6,800,000 German Deutschemark 3-16-95 Sell (258,190)
D 6,800,000 German Deutschemark 3-16-95 Buy 55,293
D 5,533,608 German Deutschemark 3-21-95 Sell (140,687)
D 5,533,608 German Deutschemark 3-21-95 Buy 30,955
D 638,879 German Deutschemark 3-22-95 Sell (14,059)
D 638,879 German Deutschemark 3-22-95 Buy 2,231
D 13,292,155 German Deutschemark 3-28-95 Sell (205,881)
D 13,292,155 German Deutschemark 3-28-95 Buy 118,633
G 6,264,160 Dutch Guilder 3-16-95 Sell (212,549)
G 6,264,160 Dutch Guilder 3-16-95 Buy 39,359
J 622,408,475 Japanese Yen 12-20-94 Sell (161,017)
K 3,001,194 Swedish Krona 10-3-94 Buy (19,039)
K 3,155,500 Swedish Krona 10-4-94 Buy (529)
L 1,639,365,526 Italian Lira 10-31-94 Buy 965
M 506,986 Finish Marka 10-5-94 Buy 210
P 9,403,371 Spanish Peso 10-3-94 Sell (170)
------------
TOTAL FORWARD FOREIGN CURRENCY CONTRACTS (803,319)
------------
OTHER ASSETS IN EXCESS OF LIABILITIES (6.9%) 5,836,159
------------
NET ASSETS (100.0%) $ 84,812,018
============
</TABLE>
See Notes to Schedules of Investments at page 9.
3
<PAGE> 4
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
IDEX II TAX-EXEMPT PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION*** PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (98.1%)
ALABAMA (1.9%)
Birmingham, Unlimited
General Obligation Bonds, 7.400%,
4-1-16, NR/Aaa $ 500,000 $ 553,080
----------
ALASKA (5.3%)
Alaska State Housing Finance Corp.
Single Family Housing, Series 1993,
5.900%, 12-1-33, AAA/Aaa 1,000,000 890,760
Alaska Student Loan Corp.
Student Loan Revenue Bonds, Series
1988A, AMBAC Insured,
AMT Bonds, 8.400%, 7-1-03, AAA/Aaa 600,000 659,424
----------
1,550,184
----------
ARIZONA (3.6%)
Maricopa County IDA
IDR-Citizens Utilities Company
Project, Series 1991, 6.650%,
4-1-26, AAA/NR 1,000,000 1,068,090
----------
CALIFORNIA (3.7%)
Los Angeles, Convention and
Exhibition Center, Certificates of
Participation, 9.000%, 12-1-20,
AAA/Aaa 50,000 63,851
San Francisco City and County,
General Obligation Bonds, Series
1991A, 6.700%, 12-15-08, AA-/A1 1,000,000 1,031,540
----------
1,095,391
----------
FLORIDA (2.5%)
Florida State Pollution Control
Board, Revenue Bonds, Series 1987Y,
7.625%, 7-1-10, AA/Aa 500,000 553,010
Tampa, Capital Improvements Program
Revenue Bonds, Series 1988A,
8.250%, 10-1-18, AA/NR 165,000 176,707
----------
729,717
----------
ILLINOIS (15.1%)
Chicago O'Hare International Airport,
Revenue Bonds, Series 1988A, AMT
Bonds, 8.200%, 1-1-18, A+/A1 750,000 816,780
Cook & Will Counties, Illinois TWP
High School District #206, General
Obligation Bonds, 7.100%, 12-1-97,
AAA/Aaa 500,000 512,360
Hoffman Estates, Tax Increment
Revenue Bonds, Series 1990, 7.625%,
11-15-09, AAA/Aaa 1,000,000 1,055,200
Illinois State Government, General
Obligation Bonds, Series 1986,
7.125%, 4-1-09, AA-/Aa 1,000,000 1,055,670
Palatine, General Obligation Bonds,
Series 1985, 9.900%, 1-1-16, NR/A 25,000 30,449
West Chicago, IDR-Leggett and Platt,
Inc. Project, Revenue Bonds, Series
1994, 6.900%, 9-1-24, NR/A3 1,000,000 975,240
----------
4,445,699
----------
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION*** PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
IOWA (10.2%)
Des Moines, General Obligation Bonds,
Series 1994, 6.000%, 6-1-13, AA+/AA $1,000,000 $ 965,100
Iowa State Certificate of
Participation, Revenue Bonds,
Series 1992A, 6.500%, 7-1-06,
AAA/Aaa 1,000,000 1,049,190
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue Bonds, Series
1993B, 5.800%, 12-1-08, NR/Aaa 1,000,000 980,980
----------
2,995,270
----------
KENTUCKY (5.4%)
Kentucky Housing Corp., Single Family
Mortgage Revenue Bonds, AMT Series
Bonds, 1991D-1, 6.800%, 1-1-24,
AAA/Aa1 1,000,000 993,560
Kentucky State Turnpike Authority,
Revenue Bonds, 6.000%, 7-1-09,
AAA/Aaa 590,000 579,185
----------
1,572,745
----------
MAINE (1.5%)
Jay Solid Waste Disposal,
International Paper Project Revenue
Bonds, Series 1993B, 6.000%,
12-1-17, A-/A3 500,000 441,975
----------
MICHIGAN (4.2%)
Kent County, Refuse Disposal System,
Limited Tax General Obligation
Bonds, Series 1987, 8.400%,
11-1-10, AAA/A1 300,000 332,259
Michigan State Trunk Line, Revenue
Bonds, Series 1994, 5.625%,
11-15-14, AAA/Aaa 1,000,000 899,340
----------
1,231,599
----------
NEBRASKA (3.4%)
Nebraska Higher Education Loan
Program, Revenue Bonds, Series
1992A-6, AMT Bonds, 6.950%, 6-1-08,
NR/A 1,000,000 1,003,350
----------
NEVADA (1.1%)
Nevada Housing Division, Single
Family Program, Series 1990B, AMT
Bonds, 7.900%, 4-1-22, AA/Aa 315,000 322,667
----------
NORTH CAROLINA (3.6%)
North Carolina Eastern, Revenue
Bonds, 7.500%, 1-1-00, A-/A 1,000,000 1,058,630
----------
PENNSYLVANIA (0.0%)
Pennsylvania Housing Finance Agency,
Multi-Family Mortgage Revenue
Bonds, Series 1985A, 9.375%,
8-1-28, AA/Aa 5,000 5,247
----------
</TABLE>
See Notes to Schedules of Investments at page 9.
4
<PAGE> 5
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
IDEX II TAX-EXEMPT PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION*** PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
SOUTH CAROLINA (3.5%)
South Carolina State Public Service
Authority Electric Revenue Bonds,
Series 1987, 6.900%, 7-1-21, A+/A1 $1,000,000 $ 1,024,680
----------
TEXAS (18.2%)
Austin Utility Systems, Revenue
Bonds, Series 1988B, 7.750%,
11-15-08, A/A 1,000,000 1,103,780
Brazos River Authority, Pollution
Control Revenue Bonds, Houston
Light and Power Company Project,
Series 1988A, 8.250%, 5-1-19, A-/A3 150,000 163,801
Grand Prairie Lincoln Property Multi-
Family Housing Revenue Bonds,
Series 1994, 3.500% (rate adjusts
weekly), AAA/Aaa 400,000 400,000
Houston Public Improvement, General
Obligation Bonds, Series 1987
6.000%, 3-1-01, AA-/NR 1,000,000 1,032,100
Houston Water Conveyance System
Revenue Bonds, Series 1993C,
7.000%, 12-15-01, AAA/Aaa 1,000,000 1,090,010
Tarrant County, Housing Finance
Corp., Single Family Mortgage
Revenue Bonds, GNMA, Series 1989A,
8.000%, 7-1-21, AAA/NR 845,000 867,367
Texas Housing Agency, Multi-Family
Housing Revenue Bonds, Series 1984,
3.497% (rate adjusts weekly),
3-1-06, AA/NR 700,000 700,000
----------
5,357,058
----------
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION*** PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
UTAH (7.5%)
Utah Associated Municipal,
Cooperative Revenue Bonds, Hunter
Project, Series 1994, 5.000%,
7-1-10, AAA/Aaa $1,000,000 $ 845,480
Utah State School District Finance,
Cooperative Revenue Bonds,
Mandatory Redemption, Series 1988,
8.375%, 2-15-04, AAA/NR 595,000 638,929
8.375%, 2-15-03, AAA/NR 660,000 712,873
----------
2,197,282
----------
WASHINGTON (7.4%)
Washington State General Obligation
Bonds, Series 1991B, 6.700%,
6-1-16, AA/Aa 1,000,000 1,077,140
Grant County Public Utility District,
Columbia River Priest Rapids
Revenue Bonds, Series 1990, 7.700%,
1-1-18, A+/A1 1,000,000 1,086,860
----------
2,164,000
----------
TOTAL INVESTMENTS (98.1%) (COST $29,202,075) 28,816,664
OTHER ASSETS IN EXCESS OF LIABILITIES (1.9%) 556,614
----------
NET ASSETS (100.0%) $29,373,278
==========
</TABLE>
See Notes to Schedules of Investments at page 9.
5
<PAGE> 6
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
IDEX II INCOME PLUS PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (91.1%)
BASIC ENERGY (8.8%)
Enron Corp.
6.750%, 7-1-05 $2,500,000 $ 2,180,675
Louisiana Land Exploration Company
7.625%, 4-15-13 2,000,000 1,743,060
Maxus Energy Corp.
11.250%, 5-1-13 905,000 886,900
McDermott, Inc.
9.375%, 3-15-02 1,000,000 1,027,560
------------
5,838,195
------------
BASIC MATERIALS (6.6%)
Armco, Inc.
11.375%, 10-15-99 1,000,000 1,033,750
Canadian Pacific Forest Products,
Ltd.
9.250%, 6-15-02 1,000,000 902,500
Cyprus Amax Minerals Company
6.625%, 10-15-05 2,000,000 1,686,060
Weirton Steel Corp.
10.875%, 10-15-99 700,000 708,750
------------
4,331,060
------------
CONSUMER CYCLICAL (13.0%)
American Restaurant Group, Inc.
12.000%, 9-15-98 1,000,000 950,000
Cablevision Industries Corp.
9.250%, 4-1-08 1,000,000 880,000
Food 4 Less Supermarkets, Inc.
10.450%, 4-15-00 1,000,000 967,500
Fruit of the Loom, Inc.
7.000%, 3-15-11 2,000,000 1,678,100
Movie Star, Inc.
12.875%, 10-01-01 315,000 288,225
Super Rite Foods, Inc.
10.625%, 4-1-02 1,000,000 990,000
Time Warner Entertainment Company
8.375%, 3-15-23 1,000,000 874,600
Western Publishing Group, Inc.
7.650%, 9-15-02 2,500,000 2,007,200
------------
8,635,625
------------
CONSUMER STAPLES (14.1%)
American Stores Company
9.125%, 4-1-02 1,000,000 1,036,750
BAT Capital Corp.
6.500%, 11-24-03 2,000,000 1,775,720
BFI Acquisition Corp.
12.000%, 12-1-01 1,000,000 1,040,000
Eckerd Corp.
11.125%, 5-1-01 1,002,000 1,004,505
Grand Union Company
11.375%, 2-15-99 1,000,000 913,750
Great Atlantic & Pacific Tea, Inc.
7.700%, 1-15-04 2,000,000 1,780,280
James River Corp.
6.700%, 11-15-03 2,000,000 1,754,500
------------
9,305,505
------------
ELECTRIC UTILITIES (5.0%)
First PV Funding Corp.
10.300%, 1-15-14 1,225,000 1,152,786
Texas Utilities Electric Company
10.350%, 1-1-18 750,000 821,595
6.750%, 4-1-03 1,500,000 1,351,095
------------
3,325,476
------------
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
FINANCIAL (5.5%)
Chevy Chase Savings Bank, Inc.
9.250%, 12-1-05 $1,250,000 $ 1,100,000
Citicorp
9.500%, 2-1-02 1,000,000 1,059,270
Continental Bank N.A.
11.250%, 7-1-01 1,100,000 1,195,260
Reliance Financial Services Corp.
9.273%, 11-1-00 300,000 294,000
------------
3,648,530
------------
HEALTHCARE (5.7%)
American Medical International, Inc.
11.000%, 10-15-00 1,000,000 1,065,000
FHP International Corp.
7.000%, 9-15-03 2,000,000 1,743,620
Mediq/PRN Life Support Svs., Inc.
11.125%, 7-1-99 1,000,000 960,000
------------
3,768,620
------------
INDUSTRIAL MANUFACTURING (14.7%)
Actava Group, Inc.
9.875%, 3-15-97 1,359,000 1,338,615
Black & Decker Corp.
7.500%, 4-1-03 2,000,000 1,820,540
Mark IV Industries, Inc.
8.750%, 4-1-03 2,430,000 2,259,900
News America Holdings, Inc.
8.625%, 2-1-03 1,500,000 1,458,420
Penn Central Corp.
10.625%, 4-15-00 1,000,000 1,074,750
Westinghouse Electric Corp.
6.875%, 9-1-03 2,000,000 1,760,000
------------
9,712,225
------------
TECHNOLOGY (5.5%)
AAR Corp.
7.250%, 10-15-03 2,000,000 1,721,740
MFS Communications, Inc.
0% until 1-15-99, then
9.375%, 1-15-04 1,800,000 1,062,000
Unisys Corp.
9.750%, 9-15-16 1,000,000 880,000
------------
3,663,740
------------
TRANSPORTATION (7.9%)
Federal Express Corp.
9.625%, 10-15-19 1,000,000 1,021,140
Overseas Shipholding Group, Inc.
8.000%, 12-1-03 2,000,000 1,814,020
Piedmont Aviation, Inc.
10.100%, 5-13-07 1,048,000 758,490
United Airlines, Inc.
9.125%, 1-15-12 1,500,000 1,300,905
USAir, Inc.
10.800%, 1-1-05 400,000 312,000
------------
5,206,555
------------
</TABLE>
See Notes to Schedules of Investments at page 9.
6
<PAGE> 7
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
IDEX II INCOME PLUS PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
UTILITIES (2.9%)
Texas Eastern Corp.
10.500%, 12-15-97 $ 757,000 $ 759,612
Williams Company
10.250%, 7-15-20 1,000,000 1,131,030
-----------
1,890,642
-----------
WASTE MANAGEMENT (1.4%)
Allied Waste Industries, Inc.
10.750%, 2-1-04 1,000,000 910,000
-----------
TOTAL CORPORATE BONDS (COST $63,949,625) 60,236,173
-----------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION SHARES VALUE
- -----------------------------------------------------------------
<S> <C> <C>
NON-CONVERTIBLE PREFERRED STOCKS (1.1%)
BANKING (0.5%)
Riggs National Corp. Series B,
10.750% 12,651 $ 338,414
INDUSTRIAL (0.6%)
Americo Series A,
8.500% 20,000 425,000
TOTAL NON-CONVERTIBLE PREFERRED STOCK
(COST $812,675) 763,414
-----------
PRINCIPAL
-------
COMMERCIAL PAPER (2.9%)
Credit Card Security
4.850%, 10-17-94, (cost
$1,895,904) $1,900,000 1,895,904
-----------
TOTAL INVESTMENTS (95.1%) (COST $66,658,204) 62,895,491
OTHER ASSETS IN EXCESS OF LIABILITIES (4.9%) 3,211,316
-----------
NET ASSETS (100.0%) $66,106,807
============
</TABLE>
See Notes to Schedules of Investments at page 9.
7
<PAGE> 8
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
IDEX II FLEXIBLE INCOME PORTFOLIO (A)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
NON-CONVERTIBLE CORPORATE BONDS (81.3%)
AEROSPACE (4.7%)
McDonnell Douglas Corp.
9.250%, 4-1-02 $1,000,000 $ 1,042,500
------------
COMMUNICATIONS (7.8%)
General Media, Inc.
10.625%, 12-31-00 500,000 468,750
News America Holdings, Inc.
9.250%, 2-1-13 750,000 731,250
10.125%, 10-15-12 500,000 525,000
------------
1,725,000
------------
ENERGY (6.7%)
Texaco Capital, Inc.
7.500%, 3-1-43 500,000 433,125
Texas Eastern Transmission Corp.
10.000%, 10-1-11 1,000,000 1,060,000
------------
1,493,125
------------
ENTERTAINMENT (3.9%)
Time Warner Entertainment Company
8.375%, 3-15-23 1,000,000 877,500
------------
FINANCIAL SERVICES (23.9%)
Chase Manhattan Corp.
8.000%, 5-15-04 500,000 481,875
Delphi Financial Group, Inc.
8.000%, 10-1-03 1,000,000 890,000
ICH Corp.
11.250%, 12-1-96 950,000 953,562
Indah Kiat Pulp and Paper Corp.
11.875%, 6-15-02 450,000 454,500
Leucadia National Corp.
10.375%, 6-15-02 475,000 502,313
Life Partners Group, Inc.
12.750%, 7-15-02 250,000 279,375
New York Life Insurance Company
7.500%, 12-15-23 600,000 508,500
Orion Capital Corp.
9.125%, 9-1-02 1,220,000 1,241,350
------------
5,311,475
------------
FOOD/BEVERAGE (7.8%)
Dr. Pepper/Seven-Up Companies, Inc.
0% until 11-1-97, then 11.500%,
11-1-02 1,000,000 797,500
McDonalds Corp.
7.375%, 7-15-33 500,000 433,750
Super Rite Foods, Inc.
10.625%, 4-1-02 500,000 497,500
------------
1,728,750
------------
INDUSTRIAL MANUFACTURING (10.6%)
Harvard Industries, Inc.
12.000%, 7-15-04 250,000 253,750
International Controls Corp.
14.500%, 1-1-06 630,000 625,275
Kenetech Corp.
12.750%, 12-15-02 500,000 537,500
Pilgrims Pride Corp.
10.875%, 8-1-03 500,000 485,000
Westinghouse Electric Corp.
8.625%, 8-1-12 500,000 465,625
------------
2,367,150
------------
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
MEDICAL/HEALTHCARE (1.3%)
Mediq/PRN Life Support Svcs., Inc.
11.125%, 7-1-99 $ 300,000 $ 281,250
------------
PAPER (2.2%)
Williamhouse Regency, Inc.
11.500%, 6-15-05 500,000 485,625
------------
RETAIL (4.2%)
Pier 1 Imports, Inc.
11.500%, 7-15-03 900,000 928,125
------------
TECHNOLOGY (3.4%)
Unisys Corp.
9.750%, 9-15-96 750,000 760,312
------------
TRANSPORTATION (3.0%)
American President Companies, Ltd.
8.000%, 1-15-24 500,000 426,875
Borg Warner Corp.
8.000%, 4-1-96 250,000 247,500
------------
674,375
------------
OTHER (1.8%)
Southeastern Public Services Company
11.875%, 2-1-98 385,000 388,369
------------
TOTAL NON-CONVERTIBLE CORPORATE BONDS
(COST $18,731,018) 18,063,556
------------
CONVERTIBLE CORPORATE BONDS (1.1%)
ENTERTAINMENT
Time Warner, Inc.
8.750%, 1-10-15, (cost $252,484) 250,000 248,438
------------
TOTAL CORPORATE BONDS (COST
$18,983,502) 18,311,994
------------
LONG-TERM U.S. GOVERNMENT SECURITIES (2.1%)
United States Treasury Bonds**
6.250%, 2-15-23 (cost $478,729) 500,000 459,260
------------
</TABLE>
See Notes to Schedules of Investments at page 9.
8
<PAGE> 9
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
IDEX II FLEXIBLE INCOME PORTFOLIO (A)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
DESCRIPTION PRINCIPAL VALUE
- -----------------------------------------------------------------
<S> <C> <C>
FOREIGN GOVERNMENT SECURITIES (4.5%)
United Mexican States #
9.500%, 7-16-01 $ 791,820 $ 800,728
Republic of Argentina
8.375%, 12-20-03 250,000 205,313
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(COST $1,005,882) 1,006,041
------------
<CAPTION>
SHARES
----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (1.9%)
CONGLOMERATE
ConAgra Capital, Inc. (cost
$455,000) 18,200 427,700
------------
NON-CONVERTIBLE PREFERRED STOCKS (3.3%)
BANKING
Chevy Chase Savings Bank, Inc. (cost
$760,000) 25,000 725,000
------------
TOTAL PREFERRED STOCK (COST
$1,215,000) 1,152,700
------------
WARRANTS (0.0%)
General Media, Inc. Warrants (cost
$5) 500 5,000
------------
TOTAL INVESTMENTS (94.2%) (COST
$21,683,118) 20,934,995
OTHER ASSETS IN EXCESS OF LIABILITIES (5.8%) 1,283,161
------------
NET ASSETS (100.0%) $22,218,156
============
</TABLE>
- -----------------------------------------------------------------
NOTES TO SCHEDULES OF INVESTMENTS
- -----------------------------------------------------------------
+ Foreign securities. Principal amount of forward foreign currency contracts
denominated in indicated currency: A-Australian Dollar; D-German
Deutschemark; G-Dutch Guilder; J-Japanese Yen; K-Swedish Krona; L-Italian
Lira; M-Finish Marka; P-Spanish Peso.
# American Depository Receipts or Global Depository Receipts.
* Presently non-income producing.
** U.S. Treasury Bonds owned by the Portfolio in the principal amount of
$400,000 are held by the Fund's custodian as initial margin for open futures
contracts. At September 30, 1994, the Fund held 15 December 1994 contracts
with a market value of $1,497,031, an unrealized gain of $10,469 and a
variation margin receivable of $3,594 (see Note 6).
***Ratings indicated are by Standard and Poor's/Moody's, respectively, NR: not
rated by this service.
(a) See Note 1 to financial statements for information regarding the
reorganization of this Portfolio.
See Note 2 to financial statements for security valuation and other significant
accounting policies.
See Note 7 to financial statements for cost and unrealized appreciation and
depreciation of investments for Federal income tax purposes.
9
<PAGE> 10
SEPTEMBER 30, 1994 IDEX II SERIES FUND
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
All numbers (except per share amounts) in thousands
<TABLE>
<CAPTION>
GROWTH GLOBAL TAX-EXEMPT INCOME PLUS FLEXIBLE INCOME
-------- ------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment securities, at market value (see cost
below) $435,956 $79,779 $ 28,817 $62,895 $20,935
Cash 4,013 5,669 212 2,438 84
Receivables:
Investment securities sold 3,757 3,572 1,003 1,093 1,254
Shares of beneficial interest sold 188 504 -- 57 4
Interest 2 -- 568 1,726 528
Dividends 458 90 -- -- --
Other 9 48 -- -- 1
-------- ------- ------- ------- -------
Total assets 444,383 89,662 30,600 68,209 22,806
-------- ------- ------- ------- -------
LIABILITIES:
Accounts payable:
Investment securities purchased 8,275 3,726 1,079 1,896 506
Shares of beneficial interest redeemed 1,068 56 108 85 19
Variation margin (Note 6) -- -- -- -- 4
Accrued liabilities (Note 4):
Management and advisory fees 2 167 7 33 25
Distribution fees 130 26 9 20 7
Transfer agent fees and expenses 138 35 6 40 7
Forward foreign currency contracts -- 803 -- -- --
Other 140 37 18 28 20
-------- ------- ------- ------- -------
Total liabilities 9,753 4,850 1,227 2,102 588
-------- ------- ------- ------- -------
NET ASSETS $434,630 $84,812 $ 29,373 $66,107 $22,218
======== ======= ======= ======= =======
NET ASSETS:
Shares of beneficial interest, unlimited shares
authorized (Notes 2,3) $386,726 $78,499 $ 29,639 $68,883 $25,616
Undistributed net investment income (loss) (Note 2) 165 (21) 111 158 49
Undistributed net realized gain (loss) from
investments and foreign currency transactions
(Note 2) (3,693) 2,704 8 829 (2,709)
Net unrealized appreciation (depreciation) of
investments and on translation of assets and
liabilities in foreign currencies (Note 2) 51,432 3,630 (385) (3,763) (738)
-------- ------- ------- ------- -------
Total net assets $434,630 $84,812 $ 29,373 $66,107 $22,218
======== ======= ======= ======= =======
Investment securities, at cost $384,524 $75,370 $ 29,202 $66,658 $21,683
======== ======= ======= ======= =======
NET ASSETS:
Class A shares $431,207 $81,241 $ 29,096 $63,995 $21,527
Class C shares 3,423 3,571 277 2,112 691
-------- ------- ------- ------- -------
Total net assets $434,630 $84,812 $ 29,373 $66,107 $22,218
======== ======= ======= ======= =======
NET ASSET VALUE PER SHARE (NET ASSETS DIVIDED BY
SHARES OUTSTANDING) (NOTE 3):
Class A shares $ 16.78 $ 15.93 $ 11.10 $ 9.75 $ 8.83
Class C shares $ 16.68 $ 15.74 $ 11.10 $ 9.74 $ 8.83
OFFERING PRICE PER SHARE:
Class A shares* $ 17.76 $ 16.86 $ 11.65 $ 10.24 $ 9.27
Class C shares $ 16.68 $ 15.74 $ 11.10 $ 9.74 $ 8.83
</TABLE>
* Includes selling commission of 5.50%, 5.50%, 4.75%, 4.75% and 4.75% of
offering price, respectively. On sales equal to or greater than $25,000 the
selling commission is reduced as set forth in the Prospectus.
The notes to financial statements are an integral part of these statements.
10
<PAGE> 11
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
All numbers in thousands
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
-------------------------------------------------------------------
GROWTH GLOBAL
------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 3,113 $ 644
Dividends (net of foreign withholding taxes of $27 and
$22 for Growth and Global, respectively) 5,803 242
------------- -------------
8,916 886
------------- -------------
EXPENSES (NOTE 4):
Management and advisory fees 4,950 558
Distribution fees:
Class A 1,724 189
Class C 19 16
Transfer agent fees and expenses 1,523 34
Custody fees and expenses 69 254
Trustees fees and expenses 49 20
Audit fees and expenses 25 11
Other 387 150
------------- -------------
8,746 1,232
Less amounts waived by the investment adviser -- --
------------- -------------
Net expenses 8,746 1,232
------------- -------------
Net investment income (loss) 170 (346)
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY (NOTE 2):
Net realized gain on investments 317 3,589
Net realized gain (loss) from foreign currency
transactions 454 (336)
------------- -------------
Net realized gain 771 3,253
------------- -------------
Net unrealized appreciation (depreciation) during the
period on:
Investments (34,249) 2,951
Translation of assets and liabilities in foreign
currency 32 (791)
------------- -------------
Net unrealized appreciation (depreciation) during
the period (34,217) 2,160
------------- -------------
Net gain (loss) on investments and foreign
currency (33,446) 5,413
------------- -------------
Net increase (decrease) in net assets resulting
from operations $ (33,276) $ 5,067
=========== ===========
</TABLE>
The notes to financial statements are an integral part of these statements.
11
<PAGE> 12
IDEX II SERIES FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 30, 1994
----------------------------------------------------------------------------------------------------------
FLEXIBLE
TAX-EXEMPT INCOME PLUS INCOME(A)
------------- ------------- ----------------
<S> <C> <C>
$ 1,762 $ 6,040 $ 2,050
-- 63 150
------------- ------------- ----------------
1,762 6,103 2,200
------------- ------------- ----------------
181 422 235
105 241 90
1 12 4
41 153 61
6 17 18
5 18 4
11 11 11
68 89 161
------------- ------------- ----------------
418 963 584
(116) -- (99)
------------- ------------- ----------------
302 963 485
------------- ------------- ----------------
1,460 5,140 1,715
------------- ------------- ----------------
108 829 32
-- -- --
------------- ------------- ----------------
108 829 32
------------- ------------- ----------------
(1,685) (8,190) (2,172)
-- -- 1
------------- ------------- ----------------
(1,685) (8,190) (2,171)
------------- ------------- ----------------
(1,577) (7,361) (2,139)
------------- ------------- ----------------
$ (117) $(2,221) $ (424)
=========== =========== ==============
</TABLE>
The notes to financial statements are an integral part of these statements.
12
<PAGE> 13
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
All numbers in thousands
<TABLE>
<CAPTION>
GROWTH GLOBAL
------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
------------- ------------- ------------- -------------
1994 1993 1994 1993
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $ 170 $ 1,454 $ (346) $ (57)
Net realized gain (loss) on investments and foreign
currency transactions 771 10,612 3,253 (177)
Net unrealized appreciation (depreciation) during
period (34,217) 55,197 2,160 1,470
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from
operations (33,276) 67,263 5,067 1,236
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Class A -- (2,000) -- --
Class C -- -- -- --
------------- ------------- ------------- -------------
-- (2,000) -- --
From net realized gains on investments and foreign
currency transactions (9,602) (10,098) -- --
In excess of net realized gains (3,945) -- -- --
------------- ------------- ------------- -------------
(13,547) (12,098) -- --
------------- ------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS (NOTE 3):
Net increase (decrease) from share transactions (67,111) 90,038 62,315 16,194
------------- ------------- ------------- -------------
Net increase (decrease) in net assets (113,934) 145,203 67,382 17,430
NET ASSETS:
Beginning of period 548,564 403,361 17,430 --
------------- ------------- ------------- -------------
End of period $ 434,630 $ 548,564 $84,812 $17,430
=========== =========== =========== ===========
Undistributed net investment income (loss) included in
net assets at end of period $ 165 $ 392 $ (21) $ (57)
=========== =========== =========== ===========
SHARES OF BENEFICIAL INTEREST (NOTE 3):
Class A
Outstanding at beginning of period 29,710 24,507 1,306 --
Outstanding at end of period 25,691 29,710 5,102 1,306
Class C
Outstanding at beginning of period -- -- -- --
Outstanding at end of period 205 -- 227 --
</TABLE>
(a) See Note 1.
The notes to financial statements are an integral part of these statements.
13
<PAGE> 14
IDEX II SERIES FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IDEX TOTAL
FLEXIBLE INCOME TRUST(A)
TAX-EXEMPT INCOME PLUS(A) INCOME(A) ---------------
------------------------------- ------------------------------- ------------- ELEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
------------- ------------- ------------- ------------- ------------- --------------
1994 1993 1994 1993 1994 1993
------------- ------------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 1,460 $ 1,400 $ 5,140 $ 4,883 $ 1,715 $ 2,071
108 912 829 1,063 32 991
(1,685) 197 (8,190) 1,875 (2,171) 952
------------- ------------- ------------- ------------- ------------- ---------------
(117) 2,509 (2,221) 7,821 (424) 4,014
------------- ------------- ------------- ------------- ------------- ---------------
(1,405) (1,339) (4,970) (4,812) (1,644) (1,966)
(5) -- (82) -- (27) --
------------- ------------- ------------- ------------- ------------- ---------------
(1,410) (1,339) (5,052) (4,812) (1,671) (1,966)
(996) (47) (960) (247) -- --
-- -- -- -- -- --
------------- ------------- ------------- ------------- ------------- ---------------
(2,406) (1,386) (6,012) (5,059) (1,671) (1,966)
------------- ------------- ------------- ------------- ------------- ---------------
1,179 1,231 1,939 14,992 (4,919) 508
------------- ------------- ------------- ------------- ------------- ---------------
(1,344) 2,354 (6,294) 17,754 (7,014) 2,556
30,717 28,363 72,401 54,647 29,232 26,676
------------- ------------- ------------- ------------- ------------- ---------------
$29,373 $30,717 $66,107 $72,401 $22,218 $29,232
=========== =========== =========== =========== =========== ============
$ 111 $ 61 $ 158 $ 70 $ 49 $ 53
=========== =========== =========== =========== =========== ============
2,545 2,442 6,596 5,181 3,048 2,982
2,621 2,545 6,560 6,596 2,438 3,048
-- -- -- -- -- --
25 -- 217 -- 78 --
</TABLE>
The notes to financial statements are an integral part of these statements.
14
<PAGE> 15
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected per share data for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
NET ASSET NET REALIZED TOTAL INCOME
YEAR OR VALUE NET AND UNREALIZED (LOSS) FROM
PERIOD BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
ENDED OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
IDEX II GROWTH PORTFOLIO***
Class A 9/30/94 $ 18.46 $0.01 ($1.22) ($1.21)
9/30/93 16.46 0.04 2.42 2.46
9/30/92 16.22 0.08 0.88 0.96
9/30/91 13.77 0.14 5.32 5.46
9/30/90 17.52 0.12 (2.21) (2.09)
Class C 9/30/94(a) 18.46 (0.09) (1.22) (1.31)
- ---------------------------------------------------------------------------------------------------------------------------
IDEX II GLOBAL PORTFOLIO
Class A 9/30/94 $ 13.35 ($0.04) $2.62 $2.58
9/30/93 10.00 (0.04) 3.39 3.35
Class C 9/30/94(a) 13.35 (0.23) 2.62 2.39
- ---------------------------------------------------------------------------------------------------------------------------
IDEX II TAX-EXEMPT PORTFOLIO
Class A 9/30/94 $ 12.07 $0.56 ($0.60) ($0.04)
9/30/93 11.62 0.56 0.45 1.01
9/30/92 11.46 0.54 0.28 0.82
11/30/91 11.27 0.75 0.26 1.01
11/30/90 11.39 0.78 (0.12) 0.66
Class C 9/30/94(a) 12.07 0.53 (0.60) (0.07)
- ---------------------------------------------------------------------------------------------------------------------------
IDEX II INCOME PLUS PORTFOLIO
Class A 9/30/94 $ 10.98 $0.76 ($1.10) ($0.34)
9/30/93 10.55 0.83 0.46 1.29
9/30/92 10.04 0.76 0.64 1.40
11/30/91 9.20 0.98 0.87 1.85
11/30/90 9.99 1.04 (0.79) 0.25
Class C 9/30/94(a) 10.98 0.66 (1.10) (0.44)
- ---------------------------------------------------------------------------------------------------------------------------
IDEX II FLEXIBLE INCOME PORTFOLIO***
Class A 9/30/94 $ 9.59 $0.65 ($0.81) ($0.16)
9/30/93 8.95 0.70 0.60 1.30
10/31/92 8.73 0.80 0.22 1.02
10/31/91 7.74 0.82 1.10 1.92
10/31/90 9.55 0.90 (1.80) (0.90)
Class C 9/30/94(a) 9.59 0.60 (0.81) (0.21)
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
DIVIDENDS DISTRIBUTIONS
FROM NET FROM NET
INVESTMENT REALIZED
INCOME CAPITAL GAINS
<S> <C> <C>
- ------------------------------------------------------------------------
IDEX II GROWTH PORTFOLIO***
Class A $ -- ($ 0.33)
(0.07) (0.39)
(0.07) (0.65)
(0.17) (2.84)
(0.09) (1.57)
Class C -- (0.33)
- ------------------------------------------------------------------------
IDEX II GLOBAL PORTFOLIO
Class A $ -- $ --
-- --
Class C -- --
- ------------------------------------------------------------------------
IDEX II TAX-EXEMPT PORTFOLIO
Class A ($0.54) ($ 0.39)
(0.54) (0.02)
(0.54) (0.12)
(0.75) (0.07)
(0.78) --
Class C (0.51) (0.39)
- ------------------------------------------------------------------------
IDEX II INCOME PLUS PORTFOLIO
Class A ($0.75) ($ 0.14)
(0.81) (0.05)
(0.76) (0.13)
(0.98) (0.03)
(1.04) --
Class C (0.66) (0.14)
- ------------------------------------------------------------------------
IDEX II FLEXIBLE INCOME PORTFOLIO***
Class A ($0.60) $ --
(0.66) --
(0.80) --
(0.80) (0.13)
(0.91) --
Class C (0.55) --
- ------------------------------------------------------------------------
</TABLE>
(a) From commencement of operations, October 1, 1993.
(b) Total return has been calculated without deduction of a sales load, if any,
on an initial purchase. Short periods (where applicable) are not
annualized.
* 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 and 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). Short periods (where applicable) are annualized.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Global Class A -- 3.65% -- -- --
Tax-Exempt Class A 1.30% 1.43% 1.20% 1.24% 0.92%
Class C 20.88% -- -- -- --
Income Plus Class A -- -- -- 1.21% 1.44%
Flexible Income Class A 2.13% 1.56% 1.66% 1.75% 1.60%
Class C 8.59% -- -- -- --
</TABLE>
** 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.
*** As of October 1, 1992, Growth Class A and Flexible Income Class A
discontinued the practice of equalization accounting.
The notes to financial statements are an integral part of these statements.
15
<PAGE> 16
IDEX II SERIES FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISTRIBUTIONS NET ASSET NET ASSETS RATIO OF
IN EXCESS OF VALUE END SHARES EXPENSES TO
NET REALIZED TOTAL END TOTAL OF PERIOD OUTSTANDING AVERAGE
CAPITAL GAINS DISTRIBUTIONS OF PERIOD RETURN (B) (000'S) (000'S) NET ASSETS*
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
($ 0.14) ($ 0.47) $ 16.78 (6.72%) $431,207 25,691 1.76%
-- (0.46) 18.46 15.13 548,564 29,710 1.61
-- (0.72) 16.46 6.10 403,361 24,507 1.61
-- (3.01) 16.22 48.00 126,436 7,796 1.48
-- (1.66) 13.77 (12.50) 74,594 5,415 1.35
(0.14) (0.47) 16.68 (7.72) 3,423 205 3.48
- ----------------------------------------------------------------------------------------------------------------
$ -- $ 0.00 $ 15.93 19.33% $ 81,241 5,102 2.14%
-- 0.00 13.35 33.52 17,430 1,306 2.84
-- 0.00 15.74 17.90 3,571 227 4.04
- ----------------------------------------------------------------------------------------------------------------
$ -- ($ 0.93) $ 11.10 (0.41%) $ 29,096 2,621 1.00%
-- (0.56) 12.07 8.97 30,717 2,545 1.00
-- (0.66) 11.62 7.20 28,363 2,442 1.00
-- (0.82) 11.46 9.20 28,242 2,464 0.95
-- (0.78) 11.27 6.00 22,708 2,016 0.68
-- (0.90) 11.10 (0.73) 277 25 1.25
- ----------------------------------------------------------------------------------------------------------------
$ -- ($ 0.89) $ 9.75 (3.28%) $ 63,995 6,560 1.33%
-- (0.86) 10.98 12.80 72,401 6,596 1.33
-- (0.89) 10.55 14.40 54,647 5,181 1.17
-- (1.01) 10.04 21.00 47,334 4,716 1.15
-- (1.04) 9.20 2.50 33,182 3,607 0.69
-- (0.80) 9.74 (4.55) 2,112 217 3.52
- ----------------------------------------------------------------------------------------------------------------
$ -- ($ 0.60) $ 8.83 (1.54%) $ 21,527 2,438 1.85%
-- (0.66) 9.59 13.66 29,232 3,048 1.50
-- (0.80) 8.95 12.17 26,676 2,982 1.50
-- (0.93) 8.73 26.38 18,696 2,142 1.50
-- (0.91) 7.74 (10.22) 18,760 2,424 1.50
-- (0.55) 8.83 (2.15) 691 78 2.40
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIO OF NET
INVESTMENT
INCOME (LOSS) PORTFOLIO
TO AVERAGE TURNOVER
NET ASSETS RATE**
<S> <C>
- -------------------------------
0.04% 63.73%
0.29 97.40
0.69 56.21
0.88 102.16
0.75 127.79
(1.68) 63.73
- -------------------------------
(0.55%) 148.01%
(0.87) 116.98
(2.46) 148.01
- -------------------------------
4.83% 59.84%
4.83 91.03
5.49 106.89
6.67 117.92
6.92 81.17
4.58 59.84
- -------------------------------
7.35% 48.12%
7.73 54.51
8.79 91.01
10.20 52.79
11.12 18.54
5.16 48.12
- -------------------------------
6.57% 105.40%
7.76 138.86
8.55 140.23
9.84 130.73
10.51 72.40
6.03 105.40
- -------------------------------
</TABLE>
16
<PAGE> 17
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
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 a diversified, open-end management investment company. IDEX II Series
is comprised of five portfolios (each a "Portfolio" and collectively the
"Portfolios"): IDEX II Growth Portfolio ("Growth"), IDEX II Global Portfolio
("Global"), IDEX II Tax-Exempt Portfolio ("Tax-Exempt"), IDEX II Income Plus
Portfolio ("Income Plus") and IDEX II Flexible Income Portfolio ("Flexible
Income"). Global commenced operations on October 1, 1992.
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.
On October 1, 1993, Flexible Income acquired the net assets totaling
$29,232,430 of IDEX Total Income Trust ("Total Income") pursuant to an Agreement
and Plan of Reorganization and Liquidation ("the Plan") dated June 15, 1993. In
accordance with the Plan, shares of Flexible Income were distributed in a
tax-free exchange on a one-for-one basis to the shareholders of Total Income on
October 1, 1993.
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-Adviser(s),
under the supervision of the Board of Trustees, decides 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. Effective October 1, 1993, the Portfolios
adopted "Statement of Position 93-4: Foreign Currency Accounting and
Financial Statement Presentation for Investment Companies". 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
taxable and exempt-interest income and net capital gains to shareholders
and otherwise qualify as regulated investment companies under the
Internal Revenue Code. In addition, the Portfolios intend to pay
distributions as required to avoid excise taxes. Accordingly, no
provisions have been made for Federal taxes.
17
<PAGE> 18
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
E. Distributions to shareholders: Dividends and distributions are recorded
by the Portfolios on the ex-dividend date. On October 1, 1993, the
Portfolios adopted "Statement of Position 93-2: Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies". 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
were reclassified among components of net assets.
The following table presents necessary reclassifications for the cumulative
effect of such differences as of October 1, 1993 and necessary current year
adjustments as of September 30, 1994:
<TABLE>
<CAPTION>
GROWTH GLOBAL FLEXIBLE INCOME
--------- --------- ---------------
<S> <C> <C> <C>
SHARES OF BENEFICIAL INTEREST
October 1, 1993 $ -- $ (9,808) $ (56,735)
September 30, 1994 -- -- --
UNDISTRIBUTED NET INVESTMENT INCOME
October 1, 1993 (144,699) 28,706 (47,826)
September 30, 1994 (251,842) 353,311 --
UNDISTRIBUTED NET REALIZED GAIN
October 1, 1993 144,699 (18,898) 104,561
September 30, 1994 251,842 (353,311) --
</TABLE>
NOTE 3.Shares of Beneficial Interest Transactions:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------ --------- ------- --------
<S> <C> <C> <C> <C> <C>
ALL NUMBERS IN THOUSANDS
IDEX II
GROWTH
PORTFOLIO
Class A Sold 3,314 $ 58,595 10,022 $176,557
Issued on reinvestment of distributions 738 13,125 676 10,917
Redeemed (8,071) (142,515) (5,495) (97,436)
------ --------- ------- --------
Net increase (decrease) (4,019) $ (70,795) 5,203 $ 90,038
====== ========= ======= ========
Class C Sold 244 $ 4,338
Issued on reinvestment of distributions 1 21
Redeemed (40) (675) N/A
------ ---------
Net increase 205 $ 3,684
====== =========
IDEX II GLOBAL PORTFOLIO
Class A Sold 4,456 $ 69,000 1,591 $ 19,752
Issued on reinvestment of distributions -- -- -- --
Redeemed (660) (10,201) (285) (3,558)
------ --------- ------- --------
Net increase 3,796 $ 58,799 1,306 $ 16,194
====== ========= ======= ========
Class C Sold 263 $ 4,062
Issued on reinvestment of distributions -- --
Redeemed (36) (546) N/A
------ ---------
Net increase 227 $ 3,516
====== =========
</TABLE>
18
<PAGE> 19
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------ --------- ------- --------
<S> <C> <C> <C> <C> <C>
IDEX II TAX-EXEMPT PORTFOLIO
Class A Sold 221 $ 2,531 398 $ 4,697
Issued on reinvestment of distributions 146 1,686 83 975
Redeemed (291) (3,322) (378) (4,441)
------ --------- ------- --------
Net increase 76 $ 895 103 $ 1,231
====== ========= ======= ========
Class C Sold 26 $ 292
Issued on reinvestment of distributions -- 4
Redeemed (1) (12) N/A
------ ---------
Net increase 25 $ 284
====== =========
IDEX II INCOME PLUS PORTFOLIO
Class A Sold 1,027 $ 10,809 2,266 $ 24,109
Issued on reinvestment of distributions 400 4,164 342 3,620
Redeemed (1,463) (15,337) (1,193) (12,737)
------ --------- ------- --------
Net increase (decrease) (36) $ (364) 1,415 $ 14,992
====== ========= ======= ========
Class C Sold 244 $ 2,587
Issued on reinvestment of distributions 8 75
Redeemed (35) (359) N/A
------ ---------
Net increase 217 $ 2,303
====== =========
IDEX II FLEXIBLE INCOME PORTFOLIO
Class A Sold 414 $ 4,010 1,436 $ 13,199
Issued on reinvestment of distributions 134 1,241 162 1,496
Redeemed (1,158) (10,790) (1,532) (14,187)
------ --------- ------- --------
Net increase (decrease) (610) $ (5,539) 66 $ 508
====== ========= ======= ========
Class C Sold 99 $ 813
Issued on reinvestment of distributions 2 22
Redeemed (23) (215) N/A
------ ---------
Net increase 78 $ 620
====== =========
</TABLE>
NOTE 4. Investment Advisory and Other Payments To/From Affiliates:
Idex Management, Inc. ("IMI") is the investment adviser for Growth, Global
and Flexible Income; InterSecurities, Inc. ("ISI") is the investment adviser for
Tax-Exempt and Income Plus, and is the Portfolios' underwriter. Idex Investor
Services, Inc. ("IIS") is the Portfolios' transfer agent. Investors Fiduciary
Trust Company ("IFTC") is the Portfolios' custodian. 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; JCC is a majority-owned subsidiary and IFTC is an
indirect subsidiary of Kansas City Southern Industries, Inc.
Under the 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 $0.82167 plus $2.40 for each new account opened. Transfer agent fees and
expenses of Growth and Global reflect reductions of $12,039 and $222,
respectively, for commission credits received through affiliated brokers during
the year.
19
<PAGE> 20
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
For the year ended September 30, 1994:
<TABLE>
<CAPTION>
FLEXIBLE
GROWTH GLOBAL TAX-EXEMPT INCOME PLUS INCOME
---------- ---------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Annual management fee rate* 1.00% 1.00% 0.60% 0.60% 0.90%
Annual expense limit (excluding 12b-1 fees) 1.50% 2.50%** 0.65% 1.25% 1.50%
Class A annual 12b-1 distribution fee rate 0.35% 0.35% 0.35% 0.35% 0.35%
Class C annual 12b-1 distribution fee rate 0.90% 0.90% 0.60% 0.90% 0.90%
Class A:***
Underwriting commissions received by ISI
(not a Portfolio expense) $2,389,332 $1,202,555 $ 73,000 $ 285,345 $ 66,672
Underwriting commissions retained by ISI 346,753 102,320 14,193 52,998 12,453
Custody earnings credits**** 78,696 42,370 11,082 8,914 10,676
</TABLE>
* The rates for Growth, Global and Flexible Income apply to the first
$750 million, $750 million and $100 million in average net assets,
respectively.
** The rate for Global is 2.50% on the first $30 million and 2.00% on the
next $70 million of average net assets.
*** Class A (only) imposes a front-end sales charge.
**** Custody fees in the Statements of Operations are net of custody
earnings credits.
NOTE 5. Investment Transactions:
The cost of securities purchased and proceeds from securities sold
(excluding non-U.S. Government short-term securities) for the year ended
September 30, 1994 were as follows:
<TABLE>
<CAPTION>
FLEXIBLE
GROWTH GLOBAL TAX-EXEMPT INCOME PLUS INCOME
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Non-U.S. Government purchases $289,130,875 $124,158,439 $18,092,012 $32,740,998 $24,049,645
Non-U.S. Government sales 387,773,251 67,288,726 16,582,345 31,733,925 28,129,429
U.S. Government purchases 121,751,628 25,679,029 -- -- 2,260,999
U.S. Government sales 118,089,367 25,769,354 -- -- 2,964,699
</TABLE>
The losses on the sale of U.S. Government securities in Growth and Flexible
Income totaled $2,256,411 and $106,993, respectively, for the year ended
September 30, 1994.
NOTE 6. Futures, Forward Currency Contracts And Other Derivative Transactions:
When a Portfolio enters into a stock index or U.S. Treasury securities
futures contract, the Portfolio is required to pledge to the broker an amount of
U.S. Government securities, equal to a portion of the contract's value, as
"initial margin" on the contract. Subsequently, the Portfolio receives or makes
delivery of cash equal to a specific dollar amount times the difference between
the stock index value (or for Treasury securities futures, the per-contract
value) at the close of the valuation day and the contract's opening strike
price. These payments, called "variation margin", are recorded by the Portfolio
as unrealized gains or losses. To the extent variation margin is unsettled and
is due to or owed by the Portfolio on open futures contracts, a receivable or
payable will exist and will be indicated in the Statement of Assets and
Liabilities and the Schedule of Investments. When a futures contract expires or
is closed, the Portfolio may realize a gain or loss. Realized net gains on
futures contracts aggregated $101,867 for the year ended September 30, 1994 for
Flexible Income.
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
20
<PAGE> 21
IDEX II SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1994
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 7. Information for Federal Income Tax Purposes:
<TABLE>
<CAPTION>
FLEXIBLE
GROWTH GLOBAL TAX-EXEMPT INCOME PLUS INCOME
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Realized net capital gains for the year
ended September 30, 1994 $ 1,086,495 $ 3,703,142 $ 108,211 $ 828,879 $ 31,423
Cost of securities at September 30, 1994 384,612,318 75,484,409 29,202,075 66,658,297 21,683,118
At September 30, 1994:
Unrealized appreciation of investments 58,469,225 6,651,544 207,644 905,178 185,172
Unrealized depreciation of investments (7,125,633) (2,356,774) (593,055) (4,667,984) (943,765)
------------ ----------- ----------- ----------- -----------
Net unrealized appreciation (depreciation) 51,343,592 4,294,770 (385,411) (3,762,806) (758,593)
</TABLE>
Realized net capital gains available to distribute will be paid to
shareholders in December, 1994. The realized net capital gains of Flexible
Income were entirely offset by the utilization of capital loss carryforwards.
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.
21
<PAGE> 22
IDEX II SERIES FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
IDEX II Series Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Growth Portfolio, the Global
Portfolio, the Tax-Exempt Portfolio, the Income Plus Portfolio (formerly the
High Yield Portfolio) and the Flexible Income Portfolio (formerly IDEX Total
Income Trust) (constituting IDEX II Series Fund, hereafter referred to as the
"Fund") at September 30, 1994, the results of each of their operations, the
changes in each of their net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 1994 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
The financial statements of the Tax-Exempt Portfolio and the Income Plus
Portfolio for the two years ended November 30, 1991 were audited by other
independent accountants whose report dated December 20, 1991 expressed an
unqualified opinion on those statements.
PRICE WATERHOUSE LLP
Kansas City, Missouri
November 11, 1994
22
<PAGE> 23
IDEX II SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION
SEPTEMBER 30, 1994
(UNAUDITED)
The following dividend information for the period ended September 30, 1994
is being provided according to notice requirements under Internal Revenue Code
section 852:
<TABLE>
<CAPTION>
FOR CORPORATIONS ONLY
FOR INDIVIDUALS/OTHERS -----------------------------------------------------------
-------------------------------------------------------- PER-SHARE AMOUNTS REPORTABLE AS:
EXEMPT- --------------------------------------
RECORD ORDINARY INTEREST LONG-TERM RECORD NON- LONG-TERM
DATE TOTAL INCOME DIVIDENDS CAPITAL GAIN DATE TOTAL QUALIFYING QUALIFYING CAPITAL GAIN
-------- ------- -------- --------- ------------ -------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH
PORTFOLIO
Class
A
Shares 12-20-93 0.46700 0.14100 N/A 0.32600 12-20-93 0.46700 N/A 0.14100 0.32600
--------------------------------------- -----------------------------------------
--------------------------------------- -----------------------------------------
Class
C
Shares 12-20-93 0.46700 0.14100 N/A 0.32600 12-20-93 0.46700 N/A 0.14100 0.32600
--------------------------------------- -----------------------------------------
--------------------------------------- -----------------------------------------
GLOBAL
PORTFOLIO
Class
A
and
C
Shares No dividends were paid during the year ended September 30, 1994 for the Global Portfolio.
TAX-EXEMPT
PORTFOLIO
Class
A
Shares 10-14-93 0.04724 -- 0.04724 --
11-12-93 0.04738 -- 0.04738 --
12-20-93 0.45600 0.16200 0.06600 0.22800
1-14-94 0.02587 -- 0.02587 --
2-14-94 0.04186 -- 0.04186 --
3-14-94 0.04291 -- 0.04291 -- Portfolio does not contain dividend producing securities.
4-14-94 0.03883 -- 0.03883 --
5-13-94 0.04669 -- 0.04669 --
6-14-94 0.04352 -- 0.04352 --
7-14-94 0.04577 -- 0.04577 --
8-12-94 0.04568 -- 0.04568 --
9-14-94 0.04519 -- 0.04519 --
---------------------------------------
0.92694 0.16200 0.53694 0.22800
---------------------------------------
---------------------------------------
Class
C
Shares 10-14-93 0.04625 -- 0.04625 --
11-12-93 0.04480 -- 0.04480 --
12-20-93 0.45200 0.16200 0.06200 0.22800
1-14-94 0.02397 -- 0.02397 --
2-14-94 0.03970 -- 0.03970 --
3-14-94 0.04077 -- 0.04077 -- Portfolio does not contain dividend producing securities.
4-14-94 0.03651 -- 0.03651 --
5-13-94 0.04439 -- 0.04439 --
6-14-94 0.04123 -- 0.04123 --
7-14-94 0.04345 -- 0.04345 --
8-12-94 0.04339 -- 0.04339 --
9-14-94 0.04289 -- 0.04289 --
---------------------------------------
0.89935 0.16200 0.50935 0.22800
---------------------------------------
---------------------------------------
INCOME
PLUS
PORTFOLIO
Class
A
Shares 10-14-93 0.06005 0.06005 N/A -- 10-14-93 0.06005 $ -- 0.06005 --
11-12-93 0.05741 0.05741 N/A -- 11-12-93 0.05741 0.00056 0.05685 --
12-20-93 0.23200 0.17400 N/A 0.05800 12-20-93 0.23200 -- 0.17400 0.05800
1-14-94 0.03530 0.03530 N/A -- 1-14-94 0.03530 -- 0.03530 --
2-14-94 0.06298 0.06298 N/A -- 2-14-94 0.06298 0.00253 0.06045 --
3-14-94 0.06310 0.06310 N/A -- 3-14-94 0.06310 -- 0.06310 --
4-14-94 0.05967 0.05967 N/A -- 4-14-94 0.05967 -- 0.05967 --
5-13-94 0.06509 0.06509 N/A -- 5-13-94 0.06509 0.00238 0.06271 --
6-14-94 0.06383 0.06383 N/A -- 6-14-94 0.06383 -- 0.06383 --
7-14-94 0.06447 0.06447 N/A -- 7-14-94 0.06447 -- 0.06447 --
8-12-94 0.06670 0.06670 N/A -- 8-12-94 0.06670 0.00241 0.06429 --
9-14-94 0.06441 0.06441 N/A -- 9-14-94 0.06441 -- 0.06441 --
--------------------------------------- -----------------------------------------
0.89501 0.83701 N/A 0.05800 0.89501 0.00788 0.82913 0.05800
--------------------------------------- -----------------------------------------
--------------------------------------- -----------------------------------------
</TABLE>
23
<PAGE> 24
IDEX II SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION (CONTINUED)
SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
FOR CORPORATIONS ONLY
-----------------------------------------------------------
FOR INDIVIDUALS/OTHERS PER-SHARE AMOUNTS REPORTABLE AS:
-------------------------------------------- --------------------------------------
RECORD ORDINARY LONG-TERM RECORD NON- LONG-TERM
DATE TOTAL INCOME CAPITAL GAIN DATE TOTAL QUALIFYING QUALIFYING CAPITAL GAIN
-------- ------- -------- ------------ -------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME PLUS
PORTFOLIO
Class C Shares 10-14-93 0.05806 0.05806 -- 10-14-93 0.05806 $ -- 0.05806 --
11-12-93 0.05223 0.05223 -- 11-12-93 0.05223 0.00051 0.05172 --
12-20-93 0.22400 0.16600 0.05800 12-20-93 0.22400 -- 0.16600 0.05800
1-14-94 0.03142 0.03142 -- 1-14-94 0.03142 -- 0.03142 --
2-14-94 0.05858 0.05858 -- 2-14-94 0.05858 0.00235 0.05623 --
3-14-94 0.05872 0.05872 -- 3-14-94 0.05872 -- 0.05872 --
4-14-94 0.05494 0.05494 -- 4-14-94 0.05494 -- 0.05494 --
5-13-94 0.05851 0.05851 -- 5-13-94 0.05851 0.00214 0.05637 --
6-14-94 0.05393 0.05393 -- 6-14-94 0.05393 -- 0.05393 --
7-14-94 0.05115 0.05115 -- 7-14-94 0.05115 -- 0.05115 --
8-12-94 0.05100 0.05100 -- 8-12-94 0.05100 0.00185 0.04915 --
9-14-94 0.04771 0.04771 -- 9-14-94 0.04771 -- 0.04771 --
----------------------------- -----------------------------------------
0.80025 0.74225 0.05800 0.80025 0.00685 0.73540 0.05800
----------------------------- -----------------------------------------
----------------------------- -----------------------------------------
FLEXIBLE INCOME
PORTFOLIO
Class A Shares 10-14-93 0.05011 0.05011 -- 10-14-93 0.05011 $ -- 0.05011 --
11-12-93 0.05005 0.05005 -- 11-12-93 0.05005 -- 0.05005 --
12-20-93 0.04400 0.04400 -- 12-20-93 0.04400 0.00378 0.04022 --
1-14-94 0.02726 0.02726 -- 1-14-94 0.02726 0.00028 0.02698 --
2-14-94 0.05000 0.05000 -- 2-14-94 0.05000 0.00620 0.04380 --
3-14-94 0.04828 0.04828 -- 3-14-94 0.04828 -- 0.04828 --
4-14-94 0.05696 0.05696 -- 4-14-94 0.05696 0.01431 0.04265 --
5-13-94 0.05426 0.05426 -- 5-13-94 0.05426 0.00598 0.04828 --
6-14-94 0.05409 0.05409 -- 6-14-94 0.05409 -- 0.05409 --
7-14-94 0.05522 0.05522 -- 7-14-94 0.05522 0.00428 0.05094 --
8-12-94 0.05322 0.05322 -- 8-12-94 0.05322 0.00631 0.04691 --
9-14-94 0.05711 0.05711 -- 9-14-94 0.05711 0.00097 0.05614 --
----------------------------- -----------------------------------------
0.60056 0.60056 -- 0.60056 0.04211 0.55845 --
----------------------------- -----------------------------------------
----------------------------- -----------------------------------------
Class C Shares 10-14-93 0.04837 0.04837 -- 10-14-93 0.04837 $ -- 0.04837 --
11-12-93 0.04557 0.04557 -- 11-12-93 0.04557 -- 0.04557 --
12-20-93 0.03700 0.03700 -- 12-20-93 0.03700 0.00318 0.03382 --
1-14-94 0.02397 0.02397 -- 1-14-94 0.02397 0.00024 0.02373 --
2-14-94 0.04608 0.04608 -- 2-14-94 0.04608 0.00555 0.04053 --
3-14-94 0.04434 0.04434 -- 3-14-94 0.04434 -- 0.04434 --
4-14-94 0.05270 0.05270 -- 4-14-94 0.05270 0.01323 0.03947 --
5-13-94 0.05013 0.05013 -- 5-13-94 0.05013 0.00552 0.04461 --
6-14-94 0.05003 0.05003 -- 6-14-94 0.05003 -- 0.05003 --
7-14-94 0.05114 0.05114 -- 7-14-94 0.05114 0.00396 0.04718 --
8-12-94 0.04918 0.04918 -- 8-12-94 0.04918 0.00584 0.04334 --
9-14-94 0.05308 0.05308 -- 9-14-94 0.05308 0.00090 0.05218 --
----------------------------- -----------------------------------------
0.55159 0.55159 -- 0.55159 0.03842 0.51317 --
----------------------------- -----------------------------------------
----------------------------- -----------------------------------------
</TABLE>
Corporate Deductions: Under Federal tax law, the amounts reportable as
qualifying dividends are eligible for the dividends received deduction in the
year received as provided by section 243 of the Internal Revenue Code. The tax
status of dividends paid will be reported to recipients of form 1099-DIV after
the close of the applicable calendar year. Shareholders are advised to consult
their tax adviser concerning the tax treatment of dividends and distributions
paid by the Portfolios.
24
