SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Registration No. 33-2659
Pre-Effective Amendment No.
Post-Effective Amendment No. 27
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
1940 Act File No. 811-4556
Amendment No. 29
(Check appropriate box or boxes.)
IDEX SERIES FUND
(Exact Name of Registrant as Specified in Charter)
201 Highland Avenue, Largo, Florida 33770-2957
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (813) 585-6565
John Hurley, P.O. Box 5068, Clearwater, Florida 33758-5068
(Name and Address of Agent for Service)
Approximate date of proposed public offering: It is proposed that this filing
will become effective:
|X| 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.
|_| On (date) 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.
IDEX Aggressive Growth Portfolio Class A Shares; IDEX Aggressive Growth
Portfolio Class B Shares; IDEX Aggressive Growth Portfolio Class C Shares; IDEX
International Equity Portfolio Class A Shares; IDEX International Equity
Portfolio Class B Shares; IDEX International Equity Portfolio Class C Shares;
IDEX Capital Appreciation Portfolio Class A Shares; IDEX Capital Appreciation
Portfolio Class B Shares; IDEX Capital Appreciation Portfolio Class C Shares;
IDEX Global Portfolio Class A Shares; IDEX Global Portfolio Class B Shares; IDEX
Global Portfolio Class C Shares; IDEX Growth Portfolio Class A Shares; IDEX
Growth Portfolio Class B Shares; IDEX Growth Portfolio Class C Shares; IDEX
Growth Portfolio Class T Shares; IDEX C.A.S.E. Portfolio Class A Shares; IDEX
C.A.S.E. Portfolio Class B Shares; IDEX C.A.S.E. Portfolio Class C Shares; IDEX
Value Equity Portfolio Class A Shares; IDEX Value Equity Portfolio Class B
Shares; IDEX Value Equity Portfolio Class C Shares; IDEX Strategic Total Return
Portfolio Class A Shares; IDEX Strategic Total Return Portfolio Class B Shares;
IDEX Strategic Total Return Portfolio Class C Shares; IDEX Tactical Asset
Allocation Portfolio Class A Shares; IDEX Tactical Asset Allocation Portfolio
Class B Shares; IDEX Tactical Asset Allocation Portfolio Class C Shares; IDEX
Balanced Portfolio Class A Shares; IDEX Balanced Portfolio Class B Shares; IDEX
Balanced Portfolio Class C Shares; IDEX Flexible Income Portfolio Class A
Shares; IDEX Flexible Income Portfolio Class B Shares; IDEX Flexible Income
Portfolio Class C Shares; IDEX Income Plus Portfolio Class A Shares; IDEX Income
Plus Portfolio Class B Shares; IDEX Income Plus Portfolio Class C Shares; IDEX
Tax-Exempt Portfolio Class A Shares; IDEX Tax-Exempt Portfolio Class B Shares;
IDEX Tax-Exempt Portfolio Class C Shares.
as filed December 30, 1997
<PAGE>
IDEX SERIES FUND
Cross Reference Sheet
Between Prospectus and Statement of
Additional Information and Form N-1A Item
Form N-1A Item Caption
Part A Prospectus
1. Cover Page Cover Page
2. Synopsis The IDEX Series - Fund Introduction to the
Portfolios; Summary of Expenses
3. Condensed Financial Financial Highlights^
Information
4. General Description of The IDEX Series - Fund Introduction to the
Registrant Portfolios; Securities in Which the
Portfolios Invest; How the Portfolios
Invest; Additional Risk Factors;
Miscellaneous Information
5. Management of Fund Investment Advisory and Other Services;
Miscellaneous Information
5A. Management's Discussion Not Applicable
of Fund Performance
6. Capital Stock and Other Shareholder Information and Instructions -
Securities How to Buy Shares; Distributions and
Taxes; Miscellaneous Information
7. Purchase of Securities Alternative Purchase Arrangements;
Being Offered Shareholder Information and Instructions -
Opening an Account; Shareholder
Information and Instructions - How to Buy
Shares; Shareholder Information and
Instructions; How to Exchange Shares;
Shareholder Information and Instructions
- Other Information; Investment Advisory
and Other Services
8. Redemption or Repurchase Shareholder Information and Instructions -
How to Redeem (Sell) Shares
9. Pending Legal Proceedings Not Applicable
Part B Statement of Additional
Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Miscellaneous Information
History
<PAGE>
13. Investment Objectives and Investment Objectives; Investment
Policies Restrictions; Policies and Practices; Other
Policies and Practices of the Portfolio
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Shareholders
Principal 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 Miscellaneous Information
Securities
19. Purchase, Redemption and Purchase of Shares; Distribution Plans; Net
Pricing of Securities Being Asset Value Determination; Dividends and
Offered Other Distributions; Shareholder Accounts;
Retirement Plans; Redemption of Shares
20. Tax Status Taxes
21. Underwriter Distributor
22. Calculation of Performance Performance Information
Data
23. Financial Statements Financial Statements^
<PAGE>
IDEX SERIES FUND
201 Highland Avenue, Largo, FL 33770-2597
Customer Service: (888) 233-4339 (toll free)
Prospectus dated March 1, 1998
This Prospectus is a legal document provided to you, the investor, which sets
forth concise information about the IDEX Series Fund that should be considered
carefully before you invest in a Portfolio of the Fund. Additional and more
detailed information about each Portfolio is contained in the Statement of
Additional Information (the "SAI"), which is incorporated by reference in this
Prospectus. You may obtain a copy of the current SAI, dated March 1, 1998, at no
charge by calling or writing IDEX. You should retain this Prospectus for future
reference.
The investment objective of each Portfolio is set forth on the following pages
of this Prospectus. There can be, of course, no assurance that a Portfolio will
achieve its investment objective. For further information about the Portfolios,
please read The IDEX Series Fund Introduction to the Portfolios; Securities in
Which the Portfolios Invest; How the Portfolios Invest; and Additional Risk
Factors.
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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") 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.
This Prospectus does not constitute an offer to sell securities in any state to
any person to whom it is unlawful to make an offer in such state.
<PAGE>
TABLE OF CONTENTS
The IDEX Series Fund...........................................................
Introduction to the Portfolios.................................................
Summary of Expenses ......................................................
Financial Highlights .....................................................
Aggressive Growth Portfolio.............................................
International Equity Portfolio..........................................
Capital Appreciation Portfolio..........................................
Global Portfolio........................................................
Growth Portfolio........................................................
C.A.S.E. Portfolio......................................................
Value Equity Portfolio..................................................
Strategic Total Return Portfolio .......................................
Tactical Asset Allocation Portfolio.....................................
Balanced Portfolio......................................................
Flexible Income Portfolio...............................................
Income Plus Portfolio...................................................
Tax-Exempt Portfolio....................................................
Performance/Total Return.......................................................
Shareholder Information and Instructions ......................................
Securities in Which the Portfolios Invest .....................................
How the Portfolios Invest .....................................................
Additional Risk Factors .......................................................
Investment Advisory and Other Services ........................................
Distributor and Distribution and Service Plans ................................
Miscellaneous Information .....................................................
Distributions and Taxes .......................................................
Brief Explanation of Rating Categories...............................Appendix A
Glossary of Investment Terms.........................................Appendix B
i
<PAGE>
IDEX SERIES FUND
INTRODUCTION TO THE PORTFOLIOS
The IDEX Series Fund consists of thirteen Portfolios. Each Portfolio is a
separate series of IDEX Series Fund (formerly IDEX II Series Fund) (the "Fund"),
an open-end management investment company offering a selection of separate
investment portfolios. The Fund is registered under the Investment Company Act
of 1940 (the "1940 Act"). All Portfolios of the Fund are diversified except for
the Capital Appreciation Portfolio. The Capital Appreciation Portfolio is
non-diversified. See How the Portfolios Invest - Diversification. Each Portfolio
has its own distinct investment objective and policies, which are summarized in
the following sections. The Portfolios are generally listed in order from those
with higher to lower risk/reward characteristics. Portfolios with higher
risk/reward characteristics may experience greater volatility in net asset value
changes and total return. The summaries should be read in conjunction with the
sections called: Securities in Which the Portfolios Invest; How the Portfolios
Invest; and Additional Risk Factors, which provide more information about the
Portfolios' investments, practices and risks. Either Idex Management, Inc. or
InterSecurities, Inc. serves as investment adviser to each of the Portfolios.
All investments involve risks. For information on specific Portfolio investment
risks, see Additional Risk Factors. For detailed information about how to
purchase, redeem or exchange shares, see Shareholder Information and
Instructions.
Each Portfolio may change its investment objective without shareholder approval.
Unless otherwise noted, a Portfolio may also change its investment policies
without shareholder approval.
There can be no assurance that a Portfolio will achieve its investment
objective.
Summary of Expenses
Before investing in a Portfolio of IDEX Series Fund, please read this section
carefully to understand the cost of investing. When you buy shares of any of the
Portfolios, you will incur certain expenses. The section titled Shareholder
Transaction Expenses shows the expenses involved in owning shares of each class
of the Portfolios. The section titled Examples shows the expenses you might pay
when making a hypothetical $1,000 investment. Class T shares of the Growth
Portfolio are not available for sale to new investors.
Financial Highlights
Each Financial Highlights table shows the earnings, capital gains or losses, and
expenses of a share of each class in a Portfolio. On October 1, 1996, the Fund
changed its fiscal year end from September 30 to October 31. The information
contained in the tables for each fiscal year through October 31, 1997 has been
audited by ____________________, independent accountants, whose report is
incorporated by reference into the SAI. All periods have been audited unless
otherwise noted. The SAI is incorporated by reference in this Prospectus. You
may obtain it without charge by calling or writing the Fund. Further information
about performance of the Fund Portfolios is contained in the Fund's Annual
Report to shareholders, which you may also obtain without charge by calling or
writing to the Fund.
1
<PAGE>
Aggressive Growth Portfolio
Objective: Long-term capital appreciation.
Investment Focus: The Aggressive Growth Portfolio is a diversified, actively
managed portfolio primarily composed of equity securities traded on domestic
stock exchanges or in the over-the-counter market. These securities include
common or preferred stocks, or securities convertible into or exchangeable for
equity securities, including warrants and rights.
Investor Profile: For the investor who aggressively seeks capital growth, and
who can tolerate volatility in the value of an investment.
Primary Investment Practices: The Portfolio may engage in leveraging and options
and futures transactions, which are considered speculative and which may cause
the Portfolio's net asset value to be more volatile than the net asset value of
a fund which does not engage in these activities.
Except during temporary defensive periods, the Portfolio invests at least 85% of
its net assets in equity securities. The sub-adviser may pick stocks of
developing companies; older companies that appear to be entering a new stage of
growth due to management changes or development of new technologies, products or
markets; or companies providing products or services with a high unit volume
growth rate.
In order to afford the flexibility to take advantage of new opportunities for
investments in accordance with its investment objective, the 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. Under those circumstances,
investment income may constitute a proportionately larger amount of the return
realized by the Portfolio.
Sub-Adviser: Fred Alger Management, Inc.
2
<PAGE>
AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
<CAPTION>
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
3
<PAGE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $15.75 $(0.01) $(0.04) $(0.05) -- -- -- $15.70
9/30/96 (14) $17.68 $(0.15) $(0.76) $(0.91) -- $(1.02) $(1.02) $15.75
9/30/95 $10.00 $(0.14) $7.82 $7.68 -- -- -- $17.68
CLASS B
10/31/97
10/31/96 (2) $15.63 $(0.01) $(0.04) $(0.05) -- -- -- $15.58
9/30/96 (14) $17.64 $(0.23) $(0.76) $(0.99) -- $(1.02) $(1.02) $15.63
CLASS C
10/31/97
10/31/96 (2) $15.65 $(0.01) $(0.04) $(0.05) -- -- -- $15.60
9/30/96 (14) $17.64 $(0.21) $(0.76) $(0.97) -- $(1.02) $(1.02) $15.65
9/30/95 $10.00 $(0.18) $7.82 $7.64 -- -- -- $17.64
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) (0.32)% $21,938 1.85% 1.85% 2.62% (1.06)% 9.40% $0.0662
9/30/96 (4.91)% $22,078 1.85% 1.85% 2.60% (1.15)% 127.49% $0.0715
9/30/95 76.80% $16,747 2.85% 2.85% 3.35% (2.39)% 88.28% --
CLASS B
10/31/97
10/31/96 (2) (0.32)% $1,992 2.50% 2.50% 3.27% (1.71)% 9.40% $0.0662
9/30/96 (5.33)% $1,800 2.50% 2.50% 3.25% (1.80)% 127.49% $0.0715
CLASS C
10/31/97
10/31/96 (2) (0.32)% $2,129 2.40% 2.40% 3.17% (1.62)% 9.40% $.0662
9/30/96 (5.22)% $2,250 2.40% 2.40% 3.15% (1.70)% 127.49% $.0715
9/30/95 76.40% $1,736 3.40% 3.40% 3.91% (2.94)% 88.28% --
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
</TABLE>
4
<PAGE>
International Equity Portfolio
Objective: Long-term growth of capital.
Investment Focus: The International Equity Portfolio invests primarily in the
common stock and other equity securities of foreign issuers traded on overseas
exchanges and in foreign over-the-counter markets.
Investor Profile: For the investor who seeks long-term growth of capital through
investments in foreign securities. The investor should also be able to tolerate
the significant risk factors associated with foreign investing.
Primary Investment Practices: The Portfolio invests primarily in common stock
and other equity securities, including preferred stocks, convertible securities,
warrants or rights. The Portfolio may also invest in fixed-income instruments
when its sub-advisers deem appropriate.
Daily cash inflows attributable to shares purchased by investors will be divided
equally each day between its sub-advisers, and each portion will thereafter be
managed separately by each sub-adviser.
Under normal circumstances, the Portfolio will seek to be invested in a minimum
of 50 stocks of issuers from approximately 15-25 countries, based on (i) the
country in which an issuer is organized; (ii) the country from which an issuer
derives at least 50% of its revenues or profits from goods produced or sold,
investments made or services performed; (iii) the country in which an issuer has
at least 50% of its assets situated or (iv) the country in which the issuer has
the principal trading market for its securities. The Portfolio will not be
invested in issuers of fewer than twelve countries other than the U.S. at any
time. (For this purpose, ADRs, European Depositary Receipts ("EDRs"), and Global
Depositary Receipts ("GDRs") will be considered to be issued by the issuer of
the securities underlying the receipt.) Typically, the Portfolio will be
invested broadly, not only in the larger stock markets of the United Kingdom,
Continental Europe, Japan and the Far East, but also, to a lesser extent, in the
smaller stock markets of Asia, Europe and Latin America.
At any time, overseas economies may not be moving in the same direction and will
be subject to substantially different fiscal and monetary policies. These
provide situations the Portfolio will aim to exploit. The Portfolio will aim to
add value through active asset allocation among international equity markets.
In selecting investments on behalf of the Portfolio, its sub-adviser GE
Investment Management Incorporated ("GEIM") seeks companies that are expected to
grow faster than relevant markets and whose securities are available at a price
that does not fully reflect the potential growth of those companies. GEIM
typically focuses on companies that possess one or more of a variety of
characteristics, including strong earnings growth relative to price-to-earnings
and price-to-cash earnings ratios, low price-to-book value, strong cash flow,
presence in an industry experiencing strong growth, and high quality management.
In selecting investments on behalf of the Portfolio, its sub-adviser, Scottish
Equitable Investment Management Limited ("Scottish Equitable"), seeks initially
to identify countries where economic growth conditions are favorable (through
analysis of gross domestic product growth rates, inflation, interest rates and
other economic factors), and where stock market valuations generally do not
fully reflect growth potential. Scottish Equitable then seeks to identify within
each of the individual markets, companies whose earnings are undervalued (that
is, where future earnings potential is not reflected in the present share
price). Scottish Equitable will utilize measures of value appropriate to local
market conditions, which may include low price earnings ratios, low price to
book value, low price to cash flow ratios, as well as considering such factors
as industry position and management quality.
Under normal circumstances, the Portfolio will seek to invest as described
above, but may for cash management purposes and to meet operating expenses,
invest a portion of its total assets in cash and/or money market instruments as
described under How the Portfolios Invest below, pending investment in
accordance with its investment objective and policies. During periods when a
sub-adviser believes there are unstable market, economic, political or currency
conditions abroad, the Portfolio may assume a temporary defensive posture and
(i) restrict the securities markets in which its assets will be invested and/or
invest all or a significant portion of its assets in securities of the types
described above issued by companies incorporated in and/or having their
principal activities in the United States, or (ii) without limitation, hold cash
and/or invest in such money market instruments. To the extent that it holds cash
or invests in money market instruments, the Portfolio may not achieve its
investment objective of long-term growth of capital.
Sub-Advisers: Scottish Equitable Investment Management Limited and GE Investment
Management Incorporated
5
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal period ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
6
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
CLASS B
10/31/97
CLASS C
10/31/97
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
CLASS B
10/31/97
CLASS C
10/31/97
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
</TABLE>
7
<PAGE>
Capital Appreciation Portfolio
Objective: Long-term growth of capital.
Investment Focus: The Capital Appreciation Portfolio is a nondiversified
Portfolio that pursues its objective by normally investing at least 50% of its
equity assets in securities issued by medium-sized companies. Medium-sized
companies are those whose market capitalizations fall within the range of
companies in the MidCap Index. Companies whose capitalization falls outside this
range after the Portfolio's initial purchase continue to be considered
medium-sized companies for purposes of this policy. As of December 31, 1997, the
MidCap Index included companies with capitalizations between approximately
$____________ and $____________. The range of the MidCap Index is expected to
change on a regular basis. Subject to the above policy, the Portfolio may also
invest in smaller or larger issuers.
Investor Profile: For the investor who wants capital growth, and who can
tolerate the greater risks associated with common stock investments.
Primary Investment Practices: The Portfolio invests in industries and stocks of
companies the sub-adviser believes are experiencing favorable demand for their
products and services, and which operate in a favorable competitive environment
and regulatory climate. The sub-adviser searches especially for stocks with
earnings growth potential that may not be recognized by the market. Some fund
holdings may create incidental income.
Medium-sized companies may suffer more significant losses as well as realize
more substantial growth than larger issuers. Investments in such companies tend
to be more volatile than investments in larger companies, and are somewhat
speculative.
Sub-Adviser: Janus Capital Corporation
8
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
9
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $15.75 $(0.02) $(0.24) $(0.26) -- -- -- $15.49
9/30/96 (15) $13.54 $(0.02) $3.12 $3.10 $(0.07) $(0.82) $(0.89) $15.75
9/30/95 $10.00 $(0.03) $3.57 $3.54 -- -- -- $13.54
CLASS B
10/31/97
10/31/96 (2) $15.69 $(0.03) $(0.24) $(0.27) -- -- -- $15.42
9/30/96 $13.49 $(0.10) $3.12 $3.02 -- $(0.82) $(0.82) $15.69
CLASS C
10/31/97
10/31/96 (2) $15.70 $(0.03) $(0.24) $(0.27) -- -- -- $15.43
9/30/96 (15) $13.49 $(0.08) $3.12 $3.04 $(0.01) $(0.82) $(0.83) $15.70
9/30/95 $10.00 $(0.08) $3.57 $3.49 -- -- -- $13.49
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) (1.59)% $19,350 1.85% 1.85% 2.48% (1.41)% 10.11% $0.0340
9/30/96 24.35% $18,713 1.85% 1.85% 2.72% (0.35)% 160.72% $0.0369
9/30/95 35.40% $6,241 2.90% 2.85% 4.17% 0.75% 262.97% --
CLASS B
10/31/97
10/31/96 (2) (1.66)% $2,132 2.50% 2.50% 3.13% (2.06)% 10.11% $0.0340
9/30/96 23.63% $2,022 2.50% 2.50% 3.37% (1.00)% 160.72% $0.0369
CLASS C
10/31/97
10/31/96 (2) (1.66)% $2,243 2.40% 2.40% 3.03% (1.96)% 10.11% $0.0340
9/30/96 23.81% $2,369 2.40% 2.40% 3.27% (0.90)% 160.72% $0.0369
9/30/95 34.90% $2,565 3.45% 3.40% 4.72% 0.20% 262.97% --
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
</TABLE>
10
<PAGE>
Global Portfolio
Objective: Long-term growth of capital in a manner consistent with preservation
of capital primarily through investing in common stocks of foreign and domestic
issuers.
Investment Focus: The Global Portfolio invests primarily in common stocks of
foreign and domestic issuers. It also invests in securities issued by foreign or
domestic governments, government agencies, and other government entities.
Investor Profile: For the investor who wants capital growth without being
limited to investments in U.S. securities. The investor should also be able to
tolerate the significant risk factors associated with foreign investing.
Primary Investment Practices: The Portfolio's assets are normally invested in
securities of issuers from at least five different countries, including the
United States. Under unusual marketing circumstances, the Portfolio may,
however, invest its assets in as few as three countries, or for temporary
emergency defensive purposes, in a single country.
The Portfolio seeks to invest substantially all of its assets in common stocks
of companies that the sub-adviser believes are experiencing favorable demand for
their products and services, and which operate in a favorable competitive
environment and regulatory climate. These stocks are selected solely for their
capital growth potential; investment income is not a consideration.
In evaluating foreign investments, the manager looks for: 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.
Sub-Adviser: Janus Capital Corporation
12
<PAGE>
<TABLE>
<CAPTION>
GLOBAL PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A _____ _____ _____ _____
B _____ _____ _____ _____
C _____ _____ _____ _____
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
12
<PAGE>
<TABLE>
<CAPTION>
GLOBAL PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $21.40 $(0.02) $0.01 $(0.01) -- -- -- $21.39
9/30/96 $17.73 $(0.09) $4.38 $4.29 -- $(0.62) $(0.62) $21.40
9/30/95 $15.93 $(0.06) $2.42 $2.36 -- $(0.56) $(0.56) $17.73
9/30/94 $13.35 $(0.04) $2.62 $2.58 -- -- -- $15.93
9/30/93 $10.00 $(0.04) $3.39 $3.35 -- -- -- $13.35
CLASS B
10/31/97
10/31/96 (2) $21.14 $(0.02) $0.01 $(0.01) -- -- -- $21.13
9/30/96 $17.57 $(0.19) $4.38 $4.19 -- $(0.62) $(0.62) $21.14
CLASS C
10/31/97
10/31/96 (2) $21.04 $(0.02) $0.01 $(0.01) -- -- -- $21.03
9/30/96 $17.46 $(0.18) $4.38 $4.20 -- $(0.62) $(0.62) $21.04
9/30/95 $15.74 $(0.14) $2.42 $2.28 -- $(0.56) $(0.56) $17.46
9/30/94 $13.35 $(0.23) $2.62 $2.39 -- -- -- $15.74
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) (0.05)% $135,837 2.08% 2.07% -- (1.15)% 2.59% $0.0520
9/30/96 25.04% $131,347 2.09% 2.06% -- (0.67)% 97.94% $0.0489
9/30/95 15.47% $89,397 2.10% 1.97% -- (0.43)% 161.48% --
9/30/94 19.33% $81,241 2.14% -- -- (0.55)% 148.01% --
9/30/93 33.52% $17,430 2.84% -- 3.65% (0.87)% 116.98% --
CLASS B
10/31/97
10/31/96 (2) (0.05)% $5,966 2.73% 2.72% -- (1.80)% 2.59% $0.0520
9/30/96 24.70% $5,000 2.74% 2.71% -- (1.32)% 97.94% $0.0489
CLASS C
10/31/97
10/31/96 (2) (0.05)% $8,624 2.63% 2.62% -- (1.70)% 2.59% $0.0520
9/30/96 24.91% $8,081 2.64% 2.61% -- (1.22)% 97.94% $0.0489
9/30/95 15.14% $3,567 2.65% 2.52% -- (0.98)% 161.48% --
9/30/94 17.90% $3,571 4.04% -- -- (2.46)% 148.01% --
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
</TABLE>
13
<PAGE>
Growth Portfolio
Objective: Growth of capital.
Investment Focus: The Growth Portfolio invests primarily in common stocks listed
on a national securities exchange or on NASDAQ, which the Portfolio's
sub-adviser believes have a good potential for capital growth. Investment
analysis focuses on stocks with earnings growth potential that may not be
recognized by the market. These securities are selected solely for their growth
potential; investment income is not a consideration.
Investor Profile: For the investor who wants capital growth in a broadly
diversified stock portfolio, and who can tolerate significant fluctuations in
value.
Primary Investment Practices: The Portfolio seeks to invest substantially all of
its assets in common stocks when its sub-adviser believes that the relevant
market environment favors such investing. 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.
Sub-Adviser: Janus Capital Corporation
15
<PAGE>
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C T
===================================================================================================================================
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None 8.50%
Redemption Fees (a) None None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption None 5.00% None None
proceeds, whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90% --
Other Expenses (c) _____ _____ _____ _____
----- ----- ----- -----
Total Operating Expenses (c) _____ _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
T ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
T ______ ______ ______ ______
- -------------------------------
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A or Class T shares in amounts greater than
$1,000,000, a contingent deferred sales charge of 1% applies for 24 months after
purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
15
<PAGE>
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $22.21 -- $(0.24) $(0.24) -- -- -- $21.97
9/30/96 $22.84 $(0.11) $4.66 $4.55 -- $(5.18) $(5.18) $22.21
9/30/95 $16.78 $(0.05) $6.18 $6.13 -- $(0.07) $(0.07) $22.84
9/30/94 (4) (14) $18.46 $0.01 $(1.22) $(1.21) -- $(0.47) $(0.47) $16.78
9/30/93 (3) $16.46 $0.04 $2.42 $2.46 $(0.07) $(0.39) $(0.46) $18.46
9/30/92 $16.22 $0.08 $0.88 $0.96 $(0.07) $(0.65) $(0.72) $16.46
9/30/91 (4) $13.77 $0.14 $5.32 $5.46 $(0.17) $(2.84) $(3.01) $16.22
9/30/90 $17.52 $0.12 $(2.21) $(2.09) $(0.09) $(1.57) $(1.66) $13.77
9/30/89 $11.48 $0.09 $6.18 $6.27 $(0.23) -- $(0.23) $17.52
9/30/88 $14.08 $0.25 $(1.59) $(1.34) $(0.16) $(1.10) $(1.26) $11.48
CLASS B
10/31/97
10/31/96 (2) $21.85 $(0.01) $(0.24) $(0.25) -- -- -- $21.60
9/30/96 $22.64 $(0.27) $4.66 $4.39 -- $(5.18) $(5.18) $21.85
CLASS C
10/31/97
10/31/96 (2) $21.91 $(0.02) $(0.24) $(0.26) -- -- -- $21.65
9/30/96 $22.64 $(0.21) $4.66 $4.45 -- $(5.18) $(5.18) $21.91
9/30/95 $16.68 $(0.15) $6.18 $6.03 -- $(0.07) $(0.07) $22.64
9/30/94 (14) $18.46 $(0.09) $(1.22) $(1.31) -- $(0.47) $(0.47) $16.68
CLASS T (8)
10/31/97
10/31/96 (2) $22.41 -- $(0.24) $(0.24) -- -- -- $22.17
9/30/96 (13) $22.23 -- $0.18 $0.18 -- -- -- $22.41
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) (1.09)% $565,032 1.68% 1.68% -- (0.13)% 9.40% $0.0360
9/30/96 22.41% $567,564 1.83% 1.82% -- (0.22)% 57.80% $0.0385
9/30/95 36.70% $485,935 1.86% 1.84% -- (0.26)% 123.26% --
9/30/94 (4) (6.72)% $431,207 1.76% -- -- 0.04% 63.73% --
9/30/93 15.13 % $548,564 1.61% -- -- 0.29% 97.40% --
9/30/92 6.10% $403,361 1.61% -- -- 0.69% 56.21% --
9/30/91 (4) 48.00% $126,436 1.48% -- -- 0.88% 102.16% --
9/30/90 (12.50)% $74,594 1.35% -- -- 0.75% 127.79% --
9/30/89 55.70% $89,494 1.41% -- -- 0.67% 98.88% --
9/30/88 (8.00)% $65,463 1.47% -- -- 2.45% 133.28% --
CLASS B
10/31/97
10/31/96 (2) (1.14)% $5,242 2.32% 2.32% -- (0.78)% 9.40% $0.0360
9/30/96 21.87% $4,536 2.46% 2.45% -- (0.86)% 57.80% $0.0385
CLASS C
10/31/97
10/31/96 (2) (1.19)% $11,016 2.23% 2.23% -- (0.68)% 9.40% $0.0360
9/30/96 22.15% $11,167 2.34% 2.33% -- (0.77)% 57.80% $0.0385
9/30/95 36.32% $5,593 2.41% 2.38% -- (0.81)% 123.26% --
9/30/94 (7.72)% $3,423 3.48% -- -- (1.68)% 63.73% --
CLASS T (8)
10/31/97
10/31/96 (2) (1.03)% $573,884 1.33% 1.33% -- (0.20)% 9.40% $0.0360
9/30/96 (13) 0.81% $585,505 1.18% 1.17% -- 0.36% 57.80% $0.0385
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
16
<PAGE>
C.A.S.E. Portfolio
Objective: Annual growth of capital through investment in companies whose
management, financial resources and fundamentals appear attractive on a scale
measured against each company's present value.
Investment Focus: The C.A.S.E. Portfolio's assets are normally invested in
companies whose securities are traded on a national exchange or in the domestic
over-the-counter markets. Companies are selected based on their perceived
qualitative and quantitative fundamental strengths, on a market relative basis
against other companies in the same industry, sector and against the broad
market.
Investor Profile: For investors who seek growth in excess of the S&P 500 on a
quarterly basis, in good markets as well as bad markets, but want a diversified
portfolio that seeks to have investments in companies that have below market
risk characteristics. The investor should be comfortable with the price
fluctuations of a stock portfolio.
Primary Investment Practices: Employing the sub-adviser's proprietary forms of
market comparative and stock specific research, companies are selected after
evaluating the present nature of the economic cycle and after the sub-adviser
identifies what it believes to be attractive sectors, industries and company
specific circumstances. The Portfolio normally invests in common, preferred and
convertible stocks of firms that the sub-adviser believes exhibit below market
risk characteristics supported by below market multiples on a leading, lagging
and ten-year basis, and are perceived to have above average fundamentals
including return on equity, price to earnings ratio and other balance sheet
components to obtain long-term capital growth. The sub-adviser applies its
proprietary forms of research to such companies which it believes exhibit
superior products, above average growth rates along with sound management and
financials. Each company selected in the Portfolio is monitored against more
than two dozen disciplines, on a market and comparative basis, including
insider's activity, market style leadership, earnings surprise, analyst's change
in earnings projection, return on equity, five-year earnings per share growth,
price earnings ratio, price-to-book, price to cash flow, institutional activity
and holdings, stock price changes, price to 200 day moving average, price to
historical rising inflation, price to declining U.S. dollar and earnings
projected change. The sub-adviser believes that above average performance is as
much a condition of eliminating bad situations as it is discovering good ones.
Securities are sold when companies appear overvalued or lose the fundamentals
necessary for future confidence as determined by the sub-adviser of the
Portfolio. Under certain circumstances, the Portfolio may elect to invest 20% or
more of its investable assets in money market instruments, repurchase agreements
and cash equivalents.
Sub-Adviser: C.A.S.E. Management, Inc.
18
<PAGE>
<TABLE>
<CAPTION>
C.A.S.E. PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
18
<PAGE>
<TABLE>
<CAPTION>
C.A.S.E. PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $10.46 $(0.07) $0.17 $0.10 -- -- -- $10.56
9/30/96 $10.00 $0.61 $(0.15) $0.46 -- -- -- $10.46
CLASS B
10/31/97
10/31/96 (2) $10.41 $(0.07) $0.17 $0.10 -- -- -- $10.51
9/30/96 $10.00 $0.56 $(0.15) $0.41 -- -- -- $10.41
CLASS C
10/31/97
10/31/96 (2) $10.42 $(0.07) $0.17 $0.10 -- -- -- $10.52
9/30/96 $10.00 $0.57 $(0.15) $0.42 -- -- -- $10.42
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 0.96% $1,675 1.85% 1.84% 6.79% 0.27% 20.69% $0.0603
9/30/96 4.60% $1,455 2.85% 2.85% 5.89% 10.00% 654.49% $0.0396
CLASS B
10/31/97
10/31/96 (2) 0.96% $1,159 2.50% 2.49% 7.44% 0.38% 20.69% $0.0603
9/30/96 4.10% $1,100 3.50% 3.50% 6.54% 9.35% 654.49% $0.0396
CLASS C
10/31/97
10/31/96 (2) 0.96% $687 2.40% 2.39% 7.34% 0.28% 20.69% $0.0603
9/30/96 4.20% $613 3.40% 3.40% 6.44% 9.45% 654.49% $0.0396
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
19
<PAGE>
Value Equity Portfolio
Objective: Maximum consistent total return with minimum risk to principal.
Investment Focus: The Value Equity Portfolio invests primarily in common stocks
with above-average statistical value which the sub-adviser believes are in
fundamentally attractive industries and are undervalued at the time of purchase.
Investor Profile: For the investor who seeks both capital preservation and
long-term capital appreciation.
Primary Investment Practices: The Portfolio seeks to achieve its investment
objective by investing its assets in common stocks with above-average
statistical value which the sub-adviser believes are in fundamentally attractive
industries and are undervalued at the time of purchase. The sub-adviser will
seek to identify stocks of above-average statistical value by using statistical
measures to screen for below-average price-to-earnings and price-to-book ratios,
above-average dividend yields and strong financial stability.
The sub-adviser will begin the process of evaluating potential common stock and
equity-related securities investments by screening a universe of 1,100
companies, primarily of medium to large capitalization. For these purposes, the
sub-adviser considers medium capitalization stocks to be stocks issued by
companies with market capitalization of between $500 million and $3 billion, and
large capitalization stocks to be those stocks issued by companies with market
capitalization in excess of $3 billion. Investments in companies with market
capitalization under $500 million will be limited to 10% of the Portfolio's
total assets.
The process used by the sub-adviser to identify promising under-valued companies
within this universe of companies may be different from those of other
value-oriented investment managers in the following ways: the use of earnings
averaged over both strong and weak periods to value cyclical companies, a focus
on quality of earnings, investment in relative value, and concentration in
industries/sectors having strong long-term fundamentals.
As a part of this multi-disciplined approach to capturing value, the sub-adviser
first seeks to identify market sectors early in their cycle of fundamental
improvement, investor recognition and market exploitation. Industry fundamentals
used in this decision making process are business trend analysis (to analyze
industry and company fundamentals for the impact of changing worldwide product
demand/supply), direction of inflation and interest rates, and
expansion/contraction of business cycles. The sub-adviser utilizes in-house
capabilities, in addition to independent resources, for economic, industry and
securities research.
Following this initial phase, approximately 200 companies that the sub-adviser
believes have above-average statistical value and are in a sector identified as
having positive fundamentals on a long-term basis, will be actively followed.
The Portfolio's investments will generally be selected from among these 200
actively followed companies. Company visits and interviews with management
augment fundamental research in seeking to identify the potential value in these
investments. The Portfolio will focus on those industries with positive
fundamentals and likewise will seek to minimize risk by avoiding industries with
deteriorating long-term fundamentals. No more than 10% of the Portfolio's assets
may be invested in fixed-income securities considered to be non-investment
grade, commonly known as "junk bonds."
Sub-Adviser: NWQ Investment Management Company, Inc,
21
<PAGE>
<TABLE>
<CAPTION>
VALUE EQUITY PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal period ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
21
<PAGE>
<TABLE>
<CAPTION>
VALUE EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97 (2)
CLASS B
10/31/97 (2)
CLASS C
10/31/97 (2)
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97 (2)
CLASS B
10/31/97 (2)
CLASS C
10/31/97 (2)
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
22
<PAGE>
Strategic Total Return Portfolio
Objective: Current income, long-term growth of income and capital appreciation.
Investment Focus: The Strategic Total Return Portfolio seeks to invest primarily
in a blend of equity and fixed-income securities, including common stocks,
income-producing securities convertible into common stock and fixed-income
securities. The Portfolio will primarily invest in equity and debt securities of
companies with established operating histories and strong fundamental
characteristics.
Investor Profile: For the investor who seeks capital appreciation and income
growth through a strategic blend of stocks and bonds. The investor should desire
a fundamentally-oriented investment approach which emphasizes risk management.
Primary Investment Practices: The Portfolio seeks to invest its assets primarily
in income producing common or preferred stock, debt obligations, some of which
will typically be convertible into common stock, and other fixed-income
securities. The sub-adviser typically seeks companies which exhibit strong
fundamental characteristics and considers fundamental factors such as balance
sheet quality, cash flow generation, earnings and dividend growth record and
outlook, and profitability levels. The sub-advisor presently intends to consider
these and other fundamental characteristics in determining attractive investment
opportunities in equity and fixed-income investment securities. However, the
sub-adviser may select securities based on other factors. For example, some
securities may be purchased at an apparent discount to their appropriate value,
anticipating that they will increase to that value over time. The Portfolio
seeks to achieve an income yield in excess of the average dividend income yield
of the stocks in the S&P 500 primarily by utilizing both equity and fixed-income
securities. It is anticipated that approximately 25% of the Portfolio's assets
will be invested in fixed-income securities, some of which may be convertible
into common stocks. No more than 10% of the Portfolio's assets may be invested
in fixed-income securities considered to be non-investment grade. The Portfolio
does not, at present, intend to invest more than 20% of its assets in equities
which do not pay a dividend.
The sub-adviser expects that the majority of the Portfolio's equity securities
will be listed on a national securities exchange or traded on NASDAQ or in the
U.S. over-the-counter market.
Sub-Adviser: Luther King Capital Management Corporation
24
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC TOTAL RETURN PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------ -------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------ -------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
24
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $13.27 $0.01 $0.15 $0.16 -- -- -- $13.43
9/30/96 $11.74 $0.20 $1.65 $1.85 $(0.17) $(0.15) $(0.32) $13.27
9/30/95 $10.00 $0.09 $1.75 $1.84 $(0.10) -- $(0.10) $11.74
CLASS B
10/31/97
10/31/96 (2) $13.27 -- $0.15 $0.15 -- -- -- $13.42
9/30/96 $11.73 $0.13 $1.65 $1.78 $(0.09) $(0.15) $(0.24) $13.27
CLASS C
10/31/97
10/31/96 (2) $13.27 -- $0.15 $0.15 -- -- -- $13.42
9/30/96 $11.73 $0.15 $1.65 $1.80 $(0.11) $(0.15) $(0.26) $13.27
9/30/95 $10.00 $0.03 $1.75 $1.78 $(0.05) -- $(0.05) $11.73
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 1.20% $11,744 1.85% 1.82% 2.76% 1.47% 5.50% $0.0591
9/30/96 16.00% $11,314 1.85% 1.79% 2.79% 1.67% 40.58% $0.0622
9/30/95 18.43% $5,167 2.99% 2.85% 4.57% 0.85% 34.67% --
CLASS B
10/31/97
10/31/96 (2) 1.13% $1,684 2.50% 2.47% 3.40% 0.82% 5.50% $0.0591
9/30/96 15.38% $1,537 2.50% 2.44% 3.44% 1.02% 40.58% $0.0622
CLASS C
10/31/97
10/31/96 (2) 1.13% $1,792 2.40% 2.37% 3.30% 0.92% 5.50% $0.0591
9/30/96 15.49% $1,728 2.40% 2.34% 3.34% 1.12% 40.58% $0.0622
9/30/95 17.95% $281 3.54% 3.40% 5.12% 0.30% 34.67% --
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
25
<PAGE>
Tactical Asset Allocation Portfolio
Objective: Preservation of capital and competitive investment returns.
Investment Focus: The Tactical Asset Allocation Portfolio invests primarily in
stocks, U.S. Treasury bonds, notes and bills and money market funds. Models are
used in determining when the Portfolio's assets are "tactically" allocated among
these groups of investments.
Investor Profile: For the investor who wants a combination of capital growth and
income, and who is comfortable with the risks associated with an actively traded
portfolio which shifts assets between equity and debt.
Primary Investment Practices: The Portfolio does not, at present, intend to
invest more than 20% of its assets in equities which do not pay a dividend. The
Portfolio focuses on high quality, liquid, large capitalization stocks. These
stocks are selected via a "bottom-up" screening method (i.e., company by
company, not industry by industry, or by any other large category) which seeks
to identify undervalued companies. The screening method compares financial
characteristics such as the price-to-cash flow ratio, price-to-sales ratio,
price-to-earnings ratio (P/E ratio), dividend yield, and return on equity to a
stock's historical norms. The Portfolio seeks to achieve an income yield in
excess of the dividend income yield of the S&P 500. Undervalued companies --
those which are selling at less than true value -- are by definition out of
favor with most investors. However, the portfolio manager believes that
investors' expectations and the company's operating performance ultimately
determine which statistically "undervalued" stocks make good investments. In
order to preserve a margin of safety for the Portfolio's investors, the
sub-adviser thoroughly reviews the risks surrounding stocks under consideration
for investment. The goal is to choose stocks whose price has been driven down
due to an "overreaction" by the market to their perceived risks. Stocks are
given a careful fundamental and technical evaluation to determine their likely
prospects for positive investment performance.
"Asset allocation" is an investment technique which shifts assets from one class
of investment to another in anticipation of changes in market direction. The
Portfolio seeks to enhance its returns in positive markets by increasing its
equity exposure, then to protect itself in negative markets by shifting assets
into fixed income investments and reducing equity exposure.
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) time periods. These time series models, developed by
the sub-adviser, help compare anticipated risks and rewards of holding stocks
versus holding treasury notes and money market funds. The models therefore
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, sentiment and monetary
variables is used in the forecasting models.
The Portfolio seeks to invest its assets primarily in income producing common or
preferred stock when the sub-adviser believes that the market environment favors
profitable investing in such securities. The remainder of the Portfolio will
ordinarily be invested in debt obligations of U.S. issuers, some of which will
typically be convertible into common stock.
If the forecasting models predict a decline in the stock market, the Portfolio
may invest as much as 10% of its total assets in money market funds, within
limits imposed by the 1940 Act, which restricts the Portfolio's investments in
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 advisory fee and expenses paid by the
Portfolio.
Sub-Adviser: Dean Investment Associates
27
<PAGE>
<TABLE>
<CAPTION>
TACTICAL ASSET ALLOCATION PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
27
<PAGE>
<TABLE>
<CAPTION>
TACTICAL ASSET ALLOCATION PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $11.03 $0.02 $0.14 $0.16 -- -- -- $11.19
9/30/96 $10.00 $0.08 $1.03 $1.11 $(0.08) -- $(0.08) $11.03
CLASS B
10/31/97
10/31/96 (2) $11.02 $0.02 $0.14 $0.16 -- -- -- $11.18
9/30/96 $10.00 -- $1.03 $1.03 $(0.01) -- $(0.01) $11.02
CLASS C
10/31/97
10/31/96 (2) $11.03 $0.01 $0.14 $0.15 -- -- -- $11.18
9/30/96 $10.00 $0.02 $1.03 $1.05 $(0.02) -- $(0.02) $11.03
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 1.45% $8,396 1.85% 1.85% 2.65% 1.26% 2.38% $0.0800
9/30/96 11.07% $7,401 2.85% 2.85% 3.20% 0.72% 56.22% $0.0828
CLASS B
10/31/97
10/31/96 (2) 1.45% $5,013 2.50% 2.50% 3.30% 0.61% 2.38% $0.0800
9/30/96 10.39% $4,848 3.50% 3.50% 3.85% 0.07% 56.22% $0.0828
CLASS C
10/31/97
10/31/96 (2) 1.36% $4,758 2.40% 2.40% 3.20% 0.71% 2.38% $0.0800
9/30/96 10.50% $4,641 3.40% 3.40% 3.75% 0.17% 56.22% $0.0828
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
28
<PAGE>
Balanced Portfolio
Objective: Long-term capital growth, consistent with preservation of capital and
balanced by current income.
Investment Focus: The Balanced Portfolio normally invests 40-60% of its assets
in securities selected primarily for their growth potential and 40-60% of its
assets in securities selected primarily for their income potential. At least 25%
of its assets normally will be invested in fixed income senior securities, which
include debt securities and preferred stocks.
Investor Profile: For the investor who wants capital growth and income from the
same investment, but who also wants an investment which has the prospect of
sustaining its interim principal value through maintaining a balance between
equity and debt. The Portfolio is not designed for investors who desire a
consistent level of income.
Primary Investment Practices: The growth component of the Portfolio is expected
to consist primarily of common stocks, selected in industries and companies that
the sub-adviser believes are experiencing favorable demand for their products
and services, and which operate in a favorable competitive environment and
regulatory climate. The sub-adviser's analysis of these stocks aims to find
companies with earnings growth potential that may not be recognized by the
market.
The income component of the 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.
The Portfolio may select equity securities for the income component on the basis
of growth potential, dividend paying properties, or some combination of both.
The Portfolio may shift assets between the growth and income portions of its
portfolio based on its manager's analysis of the relevant market, financial and
economic conditions. If the sub-adviser believes that growth securities will
provide better returns than the yields available or expected on income-producing
securities, then the Portfolio will place a greater emphasis on growth
securities.
Sub-Adviser: Janus Capital Corporation
30
<PAGE>
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 5.50% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
30
<PAGE>
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 13.47 $0.01 $0.10 $0.11 -- -- -- $13.58
9/30/96 11.47 $0.24 $2.25 $2.49 $(0.21) $(0.28) $(0.49) $13.47
9/30/95 10.00 $0.05 $1.47 $1.52 $(0.05) -- $(0.05) $11.47
CLASS B
10/31/97
10/31/96 (2) 13.46 -- $0.10 $0.10 -- -- -- $13.56
9/30/96 11.47 $0.15 $2.25 $2.40 $(0.13) $(0.28) $(0.41) $13.46
CLASS C
10/31/97
10/31/96 (2) 13.46 $0.01 $0.10 $0.11 -- -- -- $13.57
9/30/96 11.47 $0.16 $2.25 $2.41 $(0.14) $(0.28) $(0.42) $13.46
9/30/95 10.00 $0.01 $1.47 $1.48 $(0.01) -- $(0.01) $11.47
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 0.81% $8,402 1.85% 1.85% 3.44% 1.84% 9.08% $0.0408
9/30/96 22.12% $8,056 1.85% 1.85% 3.11% 1.87% 175.78% $0.0443
9/30/95 15.27% $3,670 2.92% 2.85% 4.48% 0.56% 82.48% --
CLASS B
10/31/97
10/31/96 (2) 0.74% $878 2.50% 2.50% 4.09% 1.18% 9.08% $0.0408
9/30/96 21.38% $687 2.50% 2.50% 3.76% 1.22% 175.78% $0.0443
CLASS C
10/31/97
10/31/96 (2) 0.81% $967 2.40% 2.40% 3.99% 1.28% 9.08% $0.0408
9/30/96 21.49% $943 2.40% 2.40% 3.66% 1.32% 175.78% $0.0443
9/30/95 14.77% $3,365 3.47% 3.40% 5.03% 0.01% 82.48% --
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
31
<PAGE>
Flexible Income Portfolio
Objective: Maximum total return for shareholders, consistent with preservation
of capital, by actively managing a portfolio of income-producing securities.
Investment Focus: As a fundamental policy, the Flexible Income Portfolio will
normally invest at least 80% of its total assets in income-producing securities.
It may invest in all types of income-producing securities, including domestic or
foreign securities issued by companies or by governments or governmental
agencies and lower rated securities.
Investor Profile: For the investor who wants current income enhanced by possible
capital growth, and is willing to tolerate the fluctuation in principal value
associated with changes in the interest rate environment and the risks
associated with substantial holdings of high-yield/ high-risk bonds.
Primary Investment Practices: The Portfolio emphasizes total return, primarily
through investing in corporate debt securities which offer higher yield but more
risk than higher grade securities. It may purchase debt securities of any
maturity. The average maturity of the Portfolio may vary substantially,
depending on the sub-adviser'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. The Portfolio
may also invest in unrated debt securities of foreign and domestic issuers.
The Portfolio may, at times, have substantial holdings of high-yield/high-risk
bonds or unrated bonds of foreign and domestic issuers.
The 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.
If rated securities held by the Portfolio are downgraded by a ratings agency,
the sub-adviser will consider the advisability of keeping these securities.
The sub-adviser uses, but does not place sole reliance on, credit ratings in
evaluating bonds and determining credit quality of the issuer.
Sub-Adviser: Janus Capital Corporation
33
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE INCOME PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 4.75% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 0.90% 0.90% 0.90%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
33
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $9.19 $0.05 $0.14 $0.19 $(0.05) -- $(0.05) $9.33
9/30/96 $9.17 $0.60 -- $0.60 $(0.58) -- $(0.58) $9.19
9/30/95 $8.83 $0.61 $0.37 $0.98 $(0.64) -- $(0.64) $9.17
9/30/94 (4) (5) $9.59 $0.65 $(0.81) $(0.16) $(0.60) -- $(0.60) $8.83
9/30/93 $8.95 $0.70 $0.60 $1.30 $(0.66) -- $(0.66) $9.59
10/31/92 (3) $8.73 $0.80 $0.22 $1.02 $(0.80) -- $(0.80) $8.95
10/31/91 $7.74 $0.82 $1.10 $1.92 $(0.80) $(0.13) $(0.93) $8.73
10/31/90 $9.55 $0.90 $(1.80) $(0.90) $(0.91) -- $(0.91) $7.74
10/31/89 $10.15 $0.95 $(0.46) $0.49 $(0.93) $(0.16) $(1.09) $9.55
10/31/88 $9.60 $0.91 $0.55 $1.46 $(0.91) -- $(0.91) $10.15
CLASS B
10/31/97
10/31/96 (2) $9.18 $0.05 $0.14 $0.19 $(0.05) -- $(0.05) $9.32
9/30/96 $9.17 $0.53 -- $0.53 $(0.52) -- $(0.52) $9.18
CLASS C
10/31/97
10/31/96 (2) $9.18 $0.05 $0.14 $0.19 $(0.05) -- $(0.05) $9.32
9/30/96 $9.17 $0.54 -- $0.54 $(0.53) -- $(0.53) $9.18
9/30/95 $8.83 $0.56 $0.37 $0.93 $(0.59) -- $(0.59) $9.17
9/30/94 $9.59 $0.60 $(0.81) $(0.21) $(0.55) -- $(0.55) $8.83
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 2.08% $17,001 1.85% 1.85% 2.98% 6.15% 16.16% --
9/30/96 6.73% $17,065 1.85% 1.85% 2.07% 6.46% 135.38% --
9/30/95 11.57% $19,786 1.87% 1.85% 1.94% 7.03% 149.58% --
9/30/94 (4) (5) (1.54)% $21,527 1.85% -- 2.13% 6.57% 105.40% --
9/30/93 13.66% $29,232 1.50% -- 1.56% 7.76% 138.86% --
10/31/92 (3) 12.17% $26,676 1.50% -- 1.66% 8.55% 140.23% --
10/31/91 26.38% $18,696 1.50% -- 1.75% 9.84% 130.73% --
10/31/90 (10.22)% $18,760 1.50% -- 1.60% 10.51% 72.40% --
10/31/89 5.17% $27,645 1.29% -- 1.56% 9.63% 71.44% --
10/31/88 15.62% $20,469 1.00% -- 1.96% 9.22% 54.42% --
CLASS B
10/31/97
10/31/96 (2) 2.04% $522 2.50% 2.50% 3.63% 5.50% 16.16% --
9/30/96 5.94% $494 2.50% 2.50% 2.72% 5.81% 135.38% --
CLASS C
10/31/97
10/31/96 (2) 2.04% $846 2.40% 2.40% 3.53% 5.60% 16.16% --
9/30/96 6.03% $883 2.40% 2.40% 2.62% 5.91% 135.38% --
9/30/95 10.95% $558 2.42% 2.40% 2.49% 6.48% 149.58% --
9/30/94 (2.15)% $691 2.40% -- 8.59% 6.03% 105.40% --
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
34
<PAGE>
Income Plus Portfolio
Objective: As high a level of current income as is consistent with the avoidance
of excessive risk.
Investment Focus: The Income Plus Portfolio invests 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 Portfolio may invest in convertible
securities if the total return is expected to provide higher current income than
nonconvertible securities. The 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.
Investor Profile: For the investor who wants high current income and is willing
to tolerate the fluctuation in principal value associated with changes in the
interest rate environment.
Primary Investment Practices: The Portfolio seeks yields as high as possible
while managing risk through certain investment policies described below.
The 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). If rated securities held by the Portfolio are
downgraded by a ratings agency, the sub-adviser will consider the advisability
of keeping these securities. The Portfolio may invest in unrated securities
which, in the manager's judgment, are of equivalent quality. The Portfolio may
not invest in rated corporate securities if, after such investment, more than
50% of its total holdings of securities (other than commercial paper) would then
be rated below investment grade (below the four highest rating categories); and
will not invest in rated securities that, at the time of investment, are rated
below B by Moody's or B by S&P.
The 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. It may invest in unrated
commercial paper of comparable quality, as determined by the sub-adviser.
Under certain conditions, the 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
restrictions described in the SAI); and (d) obligations of the U.S. government,
its agencies or instrumentalities. Before investing in any foreign short-term
bank obligations, the sub-adviser will consider factors including the political
and economic condition in a country, the prospect for changes in the value of
its currency, the possibility of expropriation or nationalization, and interest
payment limitations, based on existing or prior actions of the foreign
government. Such risks cannot be entirely eliminated from foreign investing.
The sub-adviser uses, but does not place sole reliance on, credit ratings in
evaluating bonds and determining credit quality of the issuer.
Sub-Adviser: AEGON USA Investment Management, Inc.
36
<PAGE>
<TABLE>
<CAPTION>
INCOME PLUS PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 4.75% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 0.60% 0.60% 0.60%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.90%
Other Expenses (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
36
<PAGE>
<TABLE>
<CAPTION>
INCOME PLUS PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $10.41 $0.04 $0.22 $0.26 $(0.06) -- $(0.06) $10.61
9/30/96 $10.36 $0.72 $0.04 $0.76 $(0.71) -- $(0.71) $10.41
9/30/95 $9.75 $0.75 $0.71 $1.46 $(0.75) $(0.10) $(0.85) $10.36
9/30/94 $10.98 $0.76 $(1.10) $(0.34) $(0.75) $(0.14) $(0.89) $9.75
9/30/93 $10.55 $0.83 $0.46 $1.29 $(0.81) $(0.05) $(0.86) $10.98
9/30/92 (6) $10.04 $0.76 $0.64 $1.40 $(0.76) $(0.13) $(0.89) $10.55
11/30/91 $9.20 $0.98 $0.87 $1.85 $(0.98) $(0.03) $(1.01) $10.04
11/30/90 $9.99 $1.04 $(0.79) $0.25 $(1.04) -- $(1.04) $9.20
11/30/89 $9.89 $1.04 $0.10 $1.14 $(1.04) -- $(1.04) $9.99
11/30/88 $9.85 $1.04 $0.06 $1.10 $(1.04) $(0.02) $(1.06) $9.89
CLASS B
10/31/97
10/31/96 (2) $10.40 $0.05 $0.22 $0.27 $(0.06) -- $(0.06) $10.61
9/30/96 $10.35 $0.65 $0.04 $0.69 $(0.64) -- $(0.64) $10.40
CLASS C
10/31/97
10/31/96 (2) $10.40 $0.05 $0.22 $0.27 $(0.06) -- $(0.06) $10.61
9/30/96 $10.35 $0.66 $0.04 $0.70 $(0.65) -- $(0.65) $10.40
9/30/95 $9.74 $0.69 $0.71 $1.40 $(0.69) $(0.10) $(0.79) $10.35
9/30/94 $10.98 $0.66 $(1.10) $(0.44) $(0.66) $(0.14) $(0.80) $9.74
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 2.53% $66,285 1.33% 1.32% -- 5.60% 1.58% --
9/30/96 7.64% $65,252 1.33% 1.31% -- 6.89% 65.96% --
9/30/95 15.85% $68,746 1.29% 1.26% -- 7.53% 25.07% --
9/30/94 (3.28)% $63,995 1.33% -- -- 7.35% 48.12% --
9/30/93 12.80% $72,401 1.33% -- -- 7.73% 54.51% --
9/30/92 (6) 14.40% $54,647 1.17% -- -- 8.79% 91.01% --
11/30/91 21.00% $47,334 1.15% -- 1.21% 10.20% 52.79% --
11/30/90 2.50% $33,182 0.69% -- 1.44% 11.12% 18.54% --
11/30/89 12.10% $23,416 0.70% -- 1.09% 10.59% 57.50% --
11/30/88 11.50% $17,078 0.68% -- 1.11% 10.55% 34.29% --
CLASS B
10/31/97
10/31/96 (2) 2.59% $804 1.98% 1.97% -- 4.95% 1.58% --
9/30/96 6.95% $774 1.98% 1.96% -- 6.24% 65.96% --
CLASS C
10/31/97
10/31/96 (2) 2.59% $2,781 1.88% 1.87% -- 5.05% 1.58% --
9/30/96 7.05% $2,684 1.88% 1.86% -- 6.34% 65.96% --
9/30/95 15.08% $1,980 1.84% 1.81% -- 6.98% 25.07% --
9/30/94 (4.55)% $2,112 3.52% -- -- 5.16% 48.12% --
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
37
<PAGE>
Tax-Exempt Portfolio
Objective: Maximum current interest income exempt from federal income tax,
consistent with preservation of capital.
Investment Focus: Ordinarily, at least 80% of the Tax-Exempt Portfolio's net
assets will be invested in municipal obligations. These are obligations issued
by states, territories or possessions of the United States, the District of
Columbia and their political subdivisions, agencies, instrumentalities and
authorities if the interest on such securities is, in the opinion of bond
counsel, exempt from federal income tax. Income from municipal obligations may
be subject to state and local tax and may constitute an item of preference for
determining the federal alternative minimum tax. The weighted average maturity
of securities in the Portfolio is generally expected to be between 20 and 35
years.
Investor Profile: For the investor who wants high current federal tax-free
income, and is willing to tolerate the fluctuation in principal value associated
with changes in the interest rate environment. Yields on municipal obligations
are typically lower than on similar taxable securities. The Portfolio is not
well suited as an investment vehicle for tax-exempt retirement programs which
receive no benefit from the tax-exempt nature of the majority of the Portfolio's
income. Also, the benefits of tax-exempt income are greater for persons with
higher taxable incomes.
Primary Investment Practices: The Portfolio seeks yields as high as possible
while managing risk through certain investment policies described below.
The Portfolio normally invests at least 75% of its net assets in (a) municipal
obligations which are rated at the time of purchase within the four highest
ratings of 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 (with maturities between 6 months and 3 years) of issuers which,
at the time of purchase, have outstanding at least one issue of municipal bonds
rated in the four highest ratings of Moody's or S&P. In addition, the Portfolio
may invest in unrated municipal obligations which the portfolio manager
considers equal in quality to the four highest ratings of Moody's or S&P.
Unrated municipal securities may be less liquid than rated securities.
Therefore, their purchase by the Portfolio may entail somewhat greater risk than
that involved in rated municipal obligations.
Bonds rated in the fourth category by Moody's or S&P have some speculative
characteristics. The Portfolio's operating policies place no specific limit on
the proportion of the Portfolio which may be made up of bonds in these
categories, so long as the sub-adviser believes that the Portfolio's objective
of preserving capital is being met.
If rated securities held by the Portfolio are downgraded by a ratings agency,
the sub-adviser will consider the advisability of keeping these securities.
The Portfolio may also invest in floating and variable rate municipal
obligations or participation interests in such obligations. The interest on
these obligations or participations must be free from federal income tax, and
the credit quality must be equal to long-term bonds rated in the four highest
Moody's or S&P categories, or to short-term bonds rated in the two highest
Moody's or S&P categories.
Under certain conditions, the Portfolio may invest as much as 20% of its assets
in taxable securities. For example, the Portfolio may make such investments due
to market conditions, while temporarily holding funds in readiness for
tax-exempt investments, or to provide highly liquid securities to meet
anticipated share sales. Such investments may also be made when the sub-adviser
determines that a defensive position is required in anticipation of a decline in
the market value of portfolio securities. These temporary investments may
consist of the following fixed-income, short-term securities: (a) U.S.
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.
A period of rising commercial interest rates may adversely affect the value of
the Portfolio and its net asset value per share. This may require rapid
portfolio turnover, with temporary investments in lower-yielding and taxable
instruments, to adjust the Portfolio to higher prevailing rates.
Conversely, portfolio values will tend to increase in periods of falling
commercial rates.
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. Such legislation would affect the availability of
municipal obligations for investment and the value of the Portfolio's assets.
The Portfolio's income which is exempt from federal taxes is not generally
exempt from state and local income taxes.
Sub-Adviser: AEGON USA Investment Management, Inc.
39
<PAGE>
<TABLE>
<CAPTION>
TAX-EXEMPT PORTFOLIO
SUMMARY OF EXPENSES CLASS OF SHARES
A B C
===================================================================================================================================
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as percentage of offering price) 4.75% None None
Redemption Fees (a) None None None
Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, None 5.00% None
whichever is lower) (b)
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 0.60% 0.60% 0.60%
12b-1 Distribution and Service Fees 0.35% 1.00% 0.60%
Other Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
----- ----- -----
Total Operating Expenses (net of expense reimbursements and/or fee waivers) (c) _____ _____ _____
EXAMPLES
The tables below show the expenses you would pay on a $1,000 investment over a
variety of time frames, assuming a 5% annual return. The first example assumes
redemption at the end of each period.
<S> <C> <C> <C> <C>
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
The next example assumes no redemption and, therefore, no deferred sales charge.
Share Class 1 Year 3 Years 5 Years 10 Years
- ----------- ------ ------- ------- --------
A ______ ______ ______ ______
B ______ ______ ______ ______
C ______ ______ ______ ______
</TABLE>
(a) A $10 service fee is charged for each redemption transaction paid by Federal
funds bank wire, and a $20 service fee is charged for each check redemption sent
via overnight delivery.
(b) On certain purchases of Class A shares in amounts greater than $1,000,000, a
contingent deferred sales charge of 1% applies for 24 months after purchase.
(c) See Ratio of Expenses to Average Net Assets in the Financial Highlights
section, and Note 10 to the Notes to Financial Highlights for further discussion
of expenses. The percentages shown are for the fiscal year ended October 31,
1997.
The purpose of the Examples shown in the Summary of Expenses are to help you
understand the direct and indirect expenses an investor in each Portfolio may
bear. The Examples for Class B shares reflect conversion to Class A shares eight
years after purchase, and assume that the shareholder was the owner of shares on
the first day of the first year. For more information, see Investment Advisory
and Other Services and Shareholder Information and Instructions.
Long-term shareholders may pay more in 12b-1 fees than the economic equivalent
of the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. ("NASD").
EXPENSES SHOWN IN THE EXAMPLES DO NOT REPRESENT ACTUAL PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5% RETURN IS
HYPOTHETICAL, AND IS NOT A REPRESENTATION OR PREDICTION OF PAST OR FUTURE
RETURNS, WHICH MAY BE MORE OR LESS THAN 5%.
39
<PAGE>
<TABLE>
<CAPTION>
TAX-EXEMPT PORTFOLIO
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
NET REALIZED
NET ASSET AND TOTAL INCOME DIVIDENDS DISTRIBUTIONS
VALUE NET UNREALIZED (LOSS) FROM FROM NET FROM NET NET ASSET
YEAR OR PERIOD BEGINNING OF INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE AT END
ENDED (1) PERIOD INCOME (LOSS) INVESTMENTS INCOME INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) $11.36 $0.05 $0.04 $0.09 $(0.05) -- $(0.05) $11.40
9/30/96 $11.34 $0.55 $0.10 $0.65 $(0.56) $(0.07) $(0.63) $11.36
9/30/95 $11.10 $0.55 $0.29 $0.84 $(0.56) $(0.04) $(0.60) $11.34
9/30/94 $12.07 $0.56 $(0.60) $(0.04) $(0.54) $(0.39) $(0.93) $11.10
9/30/93 $11.62 $0.56 $0.45 $1.01 $(0.54) $(0.02) $(0.56) $12.07
9/30/92 (7) $11.46 $0.54 $0.28 $0.82 $(0.54) $(0.12) $(0.66) $11.62
11/30/91 $11.27 $0.75 $0.26 $1.01 $(0.75) $(0.07) $(0.82) $11.46
11/30/90 $11.39 $0.78 $(0.12) $0.66 $(0.78) -- $(0.78) $11.27
11/30/89 $10.97 $0.78 $0.42 $1.20 $(0.78) -- $(0.78) $11.39
11/30/88 $10.44 $0.79 $0.53 $1.32 $(0.79) -- $(0.79) $10.97
CLASS B
10/31/97
10/31/96 (2) $11.36 $0.04 $0.04 $0.08 $(0.04) -- $(0.04) $11.40
9/30/96 $11.34 $0.48 $0.10 $0.58 $(0.49) $(0.07) $(0.56) $11.36
CLASS C
10/31/97
10/31/96 (2) $11.36 $0.04 $0.04 $0.08 $(0.04) -- $(0.04) $11.40
9/30/96 $11.34 $0.52 $0.10 $0.62 $(0.53) $(0.07) $(0.60) $11.36
9/30/95 $11.10 $0.52 $0.29 $0.81 $(0.53) $(0.04) $(0.57) $11.34
9/30/94 $12.07 $0.53 $(0.60) $(0.07) $(0.51) $(0.39) $(0.90) $11.10
NET ASSETS RATIO OF EXPENSES TO AVERAGE RATIO OF NET
AT END OF NET ASSETS (10) INCOME (LOSS) PORTFOLIO AVERAGE
YEAR OR PERIOD TOTAL PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER COMMISSION
ENDED (1) RETURN (9) (000'S) CREDITS CREDITS GROSS NET ASSETS (16) RATE(11) RATE (12)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
10/31/97
10/31/96 (2) 0.76% $24,439 1.00% 1.00% 1.89% 4.60% 3.79% --
9/30/96 5.89% $24,708 1.00% 1.00% 1.46% 4.88% 71.05% --
9/30/95 7.75% $27,401 1.02% 1.00% 1.35% 4.83% 126.48% --
9/30/94 (0.41)% $29,096 1.00% -- 1.30% 4.83% 59.84% --
9/30/93 8.97% $30,717 1.00% -- 1.43% 4.83% 91.03% --
9/30/92 7.20% $28,363 1.00% -- 1.20% 5.49% 106.89% --
11/30/91 9.20% $28,242 0.95% -- 1.24% 6.67% 117.92% --
11/30/90 6.00% $22,708 0.68% -- 0.92% 6.92% 81.17% --
11/30/89 11.20% $15,916 0.70% -- 1.11% 6.98% 67.45% --
11/30/88 12.90% $11,805 0.70% -- 1.13% 7.28% 35.44% --
CLASS B
10/31/97
10/31/96 (2) 0.71% $198 1.65% 1.65% 2.54% 3.94% 3.79% --
9/30/96 5.21% $189 1.65% 1.65% 2.11% 4.23% 71.05% --
CLASS C
10/31/97
10/31/96 (2) 0.74% $939 1.25% 1.25% 2.14% 4.34% 3.79% --
9/30/96 5.63% $907 1.25% 1.25% 1.71% 4.63% 71.05% --
9/30/95 7.48% $454 1.27% 1.25% 1.60% 4.58% 126.48% --
9/30/94 (0.73)% $277 1.25% -- 20.88% 4.58% 59.84% --
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 41
40
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
(1) Commencement of operations for Growth Portfolio Class A, Global Portfolio
Class A, IDEX Total Income Trust (predecessor to Flexible Income Portfolio Class
A), AEGON USA Tax-Exempt Portfolio (predecessor to Tax-Exempt Portfolio Class A)
and AEGON USA High Yield Portfolio (predecessor to Income Plus Portfolio 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 Portfolios was October 1,
1993. Commencement of operations for Class A and Class C shares of Balanced,
Capital Appreciation, Aggressive Growth and Strategic Total Return Portfolios
was December 2, 1994. Commencement of operations for Class B shares of each of
the above Portfolios was October 1, 1995. Commencement of operations for Class
A, Class B and Class C shares of the Tactical Asset Allocation Portfolio was
October 1, 1995. Commencement of operations for Class A, Class B and Class C
shares of the C.A.S.E. Portfolio was February 1, 1996. Commencement of
operations for Class A, Class B and Class C shares of the International Equity
and Value Equity Portfolios was February 1, 1997.
(2) On October 1, 1996, the Fund changed its fiscal year end from September 30
to October 31.
(3) As of October 1, 1992, Growth Portfolio Class A and Flexible Income
Portfolio Class A discontinued the practice of equalization accounting.
(4) Prior to May 1, 1991, no 12b-1 fees were incurred by Growth Portfolio 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. Effective October 1, 1993 Growth
Portfolio 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 Portfolio 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.
(5) 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 Portfolio acquired all of the assets and assumed
all of the liabilities of IDEX Total in exchange for Class A shares of Flexible
Income Portfolio. All historical financial information relates to IDEX Total
prior to the date it was reorganized into Flexible Income Portfolio.
(6) On August 7, 1992, AEGON High Yield Portfolio was reorganized into IDEX II
Income Plus Portfolio (formerly known as IDEX II High Yield Portfolio), which
had no prior operating history as of that date. Pursuant to the Agreement and
Plan of Reorganization and Liquidation, the Income Plus Portfolio acquired all
of the assets and assumed all the liabilities of AEGON High Yield Portfolio in
exchange for shares of Income Plus Portfolio. All historical financial
information prior to August 7, 1992 relates to AEGON High Yield Portfolio.
(7) On August 7, 1992, AEGON Tax-Exempt Portfolio was reorganized into IDEX II
Tax-Exempt Portfolio, which had no prior operating history as of that date.
Pursuant to the Agreement and Plan of Reorganization and Liquidation, the
Tax-Exempt Portfolio acquired all of the assets and assumed all of the
liabilities of AEGON Tax-Exempt Portfolio in exchange for shares of Tax-Exempt
Portfolio. All historical financial information prior to August 7, 1992 relates
to AEGON Tax-Exempt Portfolio.
(8) On September 20, 1996, IDEX Fund and IDEX Fund 3 were reorganized into
Growth Portfolio Class T shares which had no prior operating history. Pursuant
to the Agreement and Plan of Reorganization and Liquidation, the Growth
Portfolio acquired all of the assets and assumed all of the liabilities of each
of IDEX Fund and IDEX Fund 3 in exchange for Class T shares of Growth Portfolio.
(9) Total return has been calculated without deduction of a sales load, if any,
on an initial purchase for Class A or Class T shares and assumes all dividends
and distributions are paid in additional shares. Short periods (where
applicable) are not annualized.
(10) Ratio of expenses to average net assets show: Expenses Excluding Credits
(total expenses less amounts waived/reimbursed by the investment adviser);
Expenses Including Credits (total expenses less amounts waived/reimbursed by the
investment adviser and reduced by affiliated brokerage and custody earnings
credits); and Gross Expenses (total expenses, not taking into account
waived/reimbursed amounts by the investment adviser or affiliated brokerage and
custody earnings credits). Short periods (where applicable) are annualized.
(11) This rate is calculated by dividing the lesser of the Portfolio's
respective long-term purchases or sales by the average value of its long-term
investments during the period. Growth's acquisition of investment securities of
IDEX Fund and IDEX Fund 3 has been eliminated from the September 30, 1996
portfolio turnover calculation. Short periods (where applicable) are not
annualized.
43
<PAGE>
(12) This rate is calculated by dividing total commissions paid on purchases and
sales of securities during the period by total shares purchased or sold in those
same transactions and is reported for the periods ended September 30, 1996 and
forward to the extent that commissionable trades constitute more than 10% of the
average net assets for the period.
(13) The information shown for Class T shares is for the period from inception
(September 20, 1996) through the fiscal year ended September 30, 1996.
(14) Distributions from net realized capital gains include distributions in
excess of current net realized capital gains.
(15) Distributions from net investment income include distributions in excess of
current net investment income.
(16) Short periods (where applicable) are annualized.
44
<PAGE>
PERFORMANCE/TOTAL RETURN
Mutual fund performance is most often stated as "total return." Total return,
expressed as a percentage, shows the change in value of fund shares, plus its
income and capital gain distributions, net of expenses or sales charges, from
the beginning of a period to the end of a period. Total return may be annual --
the return achieved in a year -- or cumulative, over a period of several years.
Performance is calculated separately for each class of shares.
You may also see a Portfolio's performance described in terms of "average annual
total return." This rate shows the hypothetical annual 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 SAI contains a more detailed description of the method used to calculate
average annual total return for each Portfolio.
YIELD
The current 30-day yield for a class of shares of the Flexible Income,
Tax-Exempt or Income Plus Portfolios is based on the investment income earned
during a particular 30-day period (including dividends, if any, and interest),
less expenses (excluding reductions for affiliated brokerage and custody
earnings credits) accrued during that period, divided by average shares
outstanding during the period, and divided by the maximum offering price per
share on the last day of the period. The resulting figure is multiplied by 12
for an annual yield.
PERFORMANCE SHOWN IN ADVERTISING
The Portfolios may advertise their returns in both standard and non-standard
ways. In accordance with rules of the SEC and NASD, any non-standard performance
included in advertising or sales literature must be accompanied by standard
performance. The Portfolios may also advertise their returns for periods in
addition to those required by the NASD and SEC. In advertising their returns in
non-standard ways, the Portfolios may not deduct applicable sales charges. In
such cases, the returns of the Portfolios will be higher than if the applicable
sales charges had been deducted.
Each class of shares of the Tax-Exempt Portfolio may advertise its "taxable
equivalent yield." This figure shows the percentage yield an investor in a given
tax bracket -- typically the highest -- would have to earn on a taxable
investment in order to equal the tax-exempt income of the Portfolio.
COMMERCIAL PERFORMANCE RANKINGS AND COMPARISONS TO STANDARD INVESTING INDEXES
The Portfolios may sometimes advertise their "Lipper Rankings" or "Morningstar
Ratings," or other ratings or rankings published by business magazines or
newspapers such as Forbes, Money, the Wall Street Journal, Business Week,
Barron's, Changing Times, CDA/Wiesenberger Investment Technologies, Fortune or
Institutional Investor. These rankings or ratings may include criteria relating
to Portfolio characteristics, as well as to performance.
When the Portfolios advertise such rankings or ratings relating to the Portfolio
performance, information will be included about the ranking category, 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 also compare its performance to other selected funds or to
recognized market indexes, such as the Standard & Poor's 500 Stock Index (the
"S&P 500"), 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, the Lehman Brothers
General Municipal Bond Index or the Morgan Stanley Capital International World
Index.
The International Equity and Global Portfolios' performance may 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.
45
<PAGE>
In addition, a Portfolio may make appropriate comparisons of its performance to
the performance of other types of investments, including certificates of
deposit, savings accounts and U.S. Treasury securities, or of certain interest
rate and inflation indexes, such as the Consumer Price Index.
All performance figures are based on historical results and are not intended to
predict future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when sold, may be worth
more or less than their original cost.
SHAREHOLDER INFORMATION AND INSTRUCTIONS
This section discusses buying, selling, and exchanging shares of a Portfolio;
sales charges and possible waivers and discounts; and general shareholder
account information.
If you need help or additional forms, call IDEX Customer Service at (888)
233-4339 (toll free) Monday-Thursday, 8 a.m.-7 p.m. and Friday, 8 a.m.- 6 p.m.
Eastern Time, or contact your representative.
HOW TO BUY SHARES
Buying shares in IDEX is a three-step process:
1. Select the class of shares you want to buy.
2. Open an account.
3. Pay for the shares.
If you're buying through an IDEX representative, he or she can help you. If
you're investing on your own, here's what to do:
1. Select the class of shares you want to buy
All the Portfolios are available in Class A, B and C shares. (The Growth
Portfolio has Class T shares, but they can be bought only by shareholders who
owned shares of IDEX Fund or IDEX Fund 3 on or before September 20, 1996.)
Which class makes the most sense for you depends on your particular
circumstances and investment goals. It will help with your decision to ask
yourself these questions:
o How much do I intend to invest? For example, Class A and T shares have an
up-front shares charge, but if you invest enough you may get a lower
percentage sales charge or no sales charge at all.
o How long do I intend to keep my shares? Class B shares don't have an
up-front sales charge, but they do charge a sales load if you redeem them
during the first six years. This load decreases each year and goes to zero
after six years. Class A, C and T shares are generally not subject to sales
charges when you redeem. However, if you buy $1 million worth or more of
Class A or T shares and thus don't pay an up-front sales charge, you will
pay a deferred sales charge of 1% if you redeem any of those shares within
the first 24 months after buying them, unless they were purchased through a
qualified retirement plan.
o Will I keep my shares long enough so that the higher annual fees paid by
Class B or C shares will add up to more than the up-front sales charge on
Class A or T shares? If you hold Class B shares for eight years they
automatically become Class A shares, which have a lower annual distribution
and service fee than Class B or C shares. Class C shares have lower service
and distribution charges than Class B shares, but they don't convert to
Class A shares free of the sales charge. Class T shares have a higher
up-front sales charge, but are not subject to annual distribution and
service fees.
The different classes of shares represent interests in the same portfolio of
investments and generally have the same rights. But each class bears separate
expenses and has separate voting rights on matters involving that class.
Dividends and other distributions are calculated in a similar fashion and paid
at the same time for each class of shares. Because they have higher expenses,
Class B and C shares are likely to pay lower income dividends than Class A or T
shares.
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BRIEF COMPARISON OF SHARE CLASSES
CLASS A CLASS B CLASS C CLASS T
Up-front sales charge Yes No No Yes
Higher ongoing distribution No Yes Yes No
and service fees
Sales charge on redemption No** Yes* No No***
Quantity sales charge discounts Yes No No Yes
available
* The redemption charge on Class B shares declines year by year and reaches
0% after six years. After eight years, Class B shares convert to A shares
which are subject to lower ongoing fees.
** A 1% deferred sales charge will be applied to any redemption within 24
months of a $1 million purchase on which no up-front sales charge was
imposed, unless the shares were purchased through a qualified retirement
plan.
2. Open an account
Fill out the New Account Application form included with this Prospectus and send
it to IDEX. IRAs and other retirement accounts require a different application.
To open an IRA or other retirement account, call or write IDEX for the required
application.
If you already have an account in an IDEX Portfolio, and you want to open an
account in another Portfolio with the same account features, you don't need to
submit an application. Simply call or write to IDEX.
Note:On your application, you must include your Social Security or Taxpayer
Identification Number. If you don't, your account may be subject to backup
withholding or be closed.
The Fund reserves the right to reject any purchase.
3. Pay for Your Shares
You may buy shares in four ways:
a. By check:
Make check payable to Idex Investor Services, Inc. and send it to:
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, FL 33758-9015
or
201 Highland Avenue
Largo, FL 33770-2597
(for overnight express deliveries only)
b. By Automatic Investment Plan:
With an Automatic Investment Plan, you invest a level dollar amount on a regular
basis and have that amount deducted from your bank account on any day between
the 3rd and 28th of the month. Your money will be transferred electronically. To
establish, change or discontinue an Automatic Investment Plan, call or write to
IDEX.
c. By telephone:
You can establish telephone purchase privileges by writing to IDEX, or by
selecting Telephone Purchase in Section 4 of your New Account Application. Funds
to pay for telephone purchases will be transferred electronically from your bank
account to IDEX.
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<PAGE>
d. Through authorized dealers:
Orders of at least $1,000 may be issued through authorized dealers. If you open
a new account through a dealer, the dealer is responsible for opening your
account and providing your taxpayer ID number. If you already have an IDEX
account, no additional documentation is needed.
The dealer's bank may charge for a wire transfer. IDEX currently does not charge
for this service.
The Fund will not accept initial purchases for less than $500 worth of shares
(including the appropriate sales charge) per Portfolio account; however,
purchases through plans for regular investment, like the Automatic Investment
Plan, don't require a minimum initial investment. Investments made after the
initial purchase must be at least $50 per Portfolio account.
Generally, the Fund must receive your payment within three business days from
when the Fund accepts your dealer's order.
For direct investments, if your check, draft or electronic transfer is returned
because of insufficient or uncollected funds or a stop-payment order, the Fund
may charge a $15 fee (through a redemption of shares).
HOW THE SHARES ARE PRICED
To understand this, you must be familiar with two terms: Net Asset Value (NAV)
and Public Offering Price.
The Net Asset Value (NAV) of a share is determined each business day by adding
up the value of all the assets of the Portfolio, subtracting the liabilities,
then dividing by the number of shares outstanding.
The Public Offering Price of a share is its per-share NAV plus any sales charge.
Since Class B and C shares have no up-front sales charges, their public offering
price is simply the NAV.
When you place an order to buy a number of dollars worth of shares, the number
of shares you actually buy depends on the public offering price as it is
determined after IDEX receives and accepts your order. The NAV is determined
separately for each class. Example: If you buy $1,000 worth of Class B shares,
and the NAV is $10, you will receive 100 Class B shares of a Portfolio.
The NAV per share of each class is determined by the Fund's custodian on each
day that the New York Stock Exchange (the "Exchange") is open, as of the close
of business on the Exchange (currently 4:00 p.m. Eastern time). If your order to
purchase shares is received in proper form, by IDEX by 4:00 p.m. Eastern time,
your transaction will be priced at that day's NAV. If IDEX receives your order
after 4:00 p.m., it will be priced at the next day's NAV.
In determining NAV, portfolio investments are valued at market value.
Investments for which quotations are not readily available are valued at fair
value determined in good faith under the supervision of the Board of Trustees.
Differing expenses incurred by each class result in different NAVs and
dividends. The NAV of Class B and C shares will generally be lower than Class A
shares because Class B and C shares carry higher expenses.
CLASS "A" SHARES
Sales Charges and Fees
When you buy Class A shares, you generally pay an up-front sales charge, as well
as ongoing distribution and service fees up to 0.35% of net assets per year.
Discounts
You can reduce the up-front sales charge percentage in four ways:
1. By investing larger amounts.
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<PAGE>
2. By investing under a "right of accumulation," which credits your
account for shares you already own in various IDEX Portfolios and
helps you earn discounts on new purchases.
3. By filing a "letter of intention" to buy enough shares in a 13-month
period to qualify for a reduced sales charge.
4. By investing as part of a qualified group.
1. Discounts by investing in larger amounts
See the tables headed "Class A Share Quantity Discounts" on the pages that
follow.
NOTE: You generally pay no charge when you redeem Class A shares. But if you buy
$1 million worth or more and thus don't pay an up-front sales charge, you will
pay a deferred sales charge of 1% if you redeem any of those shares within the
first 24 months after buying them, unless they were purchased through a
qualified retirement plan. The privilege to purchase Class A shares in amounts
of $1 million or more is not available if another NAV purchase privilege, such
as a discount as a result of right of accumulation, is available to you.
The charge is based on either the current market value or the original cost of
the shares being redeemed, whichever is less. No sales charge is imposed on
increases in net asset value above the initial purchase price.
2. Discounts by a right of accumulation
If you already own Class A shares of certain Portfolios, or Growth Portfolio
Class T shares, you may get a discount when you buy new shares of Portfolios
described in this Prospectus. The value of shares you already own may be
"accumulated"--that is, counted together with the value of the new shares you
buy--to achieve quantities eligible for discount. For more information, ask your
representative or call IDEX Customer Service.
3. Discounts by a Letter of Intention
You may earn a sales charge discount by making a written commitment to invest,
within a 13-month period, an amount which qualifies for discount. This written
commitment, called a Letter of Intention ("LOI"), is not a binding legal
obligation.
When you buy under the terms of an LOI, you buy at a discounted offering price
during the period of the LOI. During this period, your purchases are subject to
these rules:
a. The first 5% of what you agree to invest will be put in escrow until
the LOI is complete, or 13 months elapse.
b. Future changes in quantity discounts (breakpoints) will apply to
purchases under the LOI.
c. Sales charge (and share) adjustments will be made if you buy more or
less than you committed to buy during the LOI period.
d. Shares bought up to 90 days before an LOI may be counted toward your
commitment. The LOI, however, will start on the day of the first
purchase included under it.
e. Right of accumulation can apply to an LOI. That is, the current value
of all prior Class A purchases that had a sales charge can be counted
towards fulfilling the LOI, but sales charges on the prior purchases
will not be adjusted.
f. Dividends and capital gains must be reinvested in additional shares.
No cash distributions are allowed on accounts with an LOI.
You may elect to invest under an LOI on your New Account Application. For more
information about an LOI, consult your registered representative or call IDEX
Customer Service.
4. Discounts for a qualified group
Members of a qualified group may buy Class A shares at a reduced sales charge
within a specified period. In reducing the charge, IDEX takes into account how
much the group intends to buy. A "qualified group" is one which:
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<PAGE>
a. has been in existence for more than six months,
b. has a purpose other than to acquire shares of the Portfolio or similar
investments, and
c. satisfies uniform criteria that allows IDEX and other dealers offering
Portfolio shares to realize economies of scale.
Pension or other employee benefit plans may be eligible for qualified group
purchases. The Fund reserves the right to change or terminate this privilege at
any time. For information about qualifying groups, call IDEX Customer Service.
Waiver of Sales Charges for Certain Individuals
Class A shares may be sold without sales charges to:
o Current or former trustees, directors, officers, full-time employees or
sales representatives of the Fund, IMI, ISI, Alger Management, Scottish
Equitable, GEIM, Janus Capital, C.A.S.E., NWQ, Luther King, Dean
Investment, AEGON Management, or any of their affiliates.
o Directors, officers, full-time employees and sales representatives of
dealers having a sales agreement with ISI.
o Any trust, pension, profit-sharing or other benefit plan for any of the
foregoing persons.
o Any family members of the foregoing persons.
o "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.
Persons eligible to buy Class A shares at NAV may not impose a sales charge when
they re-sell those shares.
Dealer Reallowances
IDEX sells shares of its Portfolios both directly and through authorized
dealers. When you buy shares, your Portfolio receives the entire NAV. ISI keeps
the sales charge, then "reallows" a portion to the dealers through which shares
were purchased. This is how dealers are compensated.
From time to time, ISI will create special promotions in which dealers earn
larger reallowances in return for selling significant amounts of shares or for
certain training services. Sometimes, these dealers may earn virtually the
entire sales charge; at those times, they may be deemed underwriters as
described in the Securities Act of 1933.
Promotions may also involve non-cash incentives such as prizes or merchandise.
Non-cash compensation may also be in the form of attendance at seminars
conducted by ISI, including lodging and travel expenses, in accordance with the
rules of the NASD.
Reallowances may also be given to financial institutions to compensate them for
their services in connection with Class A share sales and servicing of
shareholder accounts.
ISI may also pay dealers or financial institutions from its own funds for
administrative services for larger accounts.
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<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARE QUANTITY DISCOUNTS
AGGRESSIVE GROWTH PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO
GLOBAL PORTFOLIO
GROWTH PORTFOLIO
C.A.S.E. PORTFOLIO
VALUE EQUITY PORTFOLIO
STRATEGIC TOTAL RETURN PORTFOLIO
TACTICAL ASSET ALLOCATION PORTFOLIO
BALANCED PORTFOLIO
SALES CHARGE REALLOWANCE SALES CHARGE
AS % OF TO DEALERS AS A % AS % OF
AMOUNT OF PURCHASE OFFERING PRICE OF OFFERING PRICE AMOUNT INVESTED
<S> <C> <C> <C>
Under $50,000 5.50% 4.75% 5.82%
$50,000 to under $100,000 4.75% 4.00% 4.99%
$100,000 to under $250,000 3.50% 2.75% 3.63%
$250,000 to under $500,000 2.75% 2.25% 2.83%
$500,000 to under $1,000,000 2.00% 1.75% 2.04%
$1,000,000 and over 0.00% 1.00%* 0.00%
</TABLE>
* This is not a charge incurred by shareholders. ISI, at its own expense, from
time to time, may make the following payments: 1% of the NAV of shares sold in
amounts of $1,000,000 but less than $2,500,000; .75% of the NAV of shares sold
in amounts of $2,500,000 but less than $4,000,000; .50% of the NAV of shares
sold in amounts of $4,000,000 but less than $5,000,000; and .25% of the NAV of
shares sold in amounts of $5,000,000 or more. The privilege of buying Class A
shares at NAV in amounts of $1,000,000 or more is not available if another NAV
purchase privilege is also available at the same time.
<TABLE>
<CAPTION>
CLASS A SHARE QUANTITY DISCOUNTS
FLEXIBLE INCOME PORTFOLIO
INCOME PLUS PORTFOLIO
TAX-EXEMPT PORTFOLIO
SALES CHARGE REALLOWANCE SALES CHARGE
AS % OF TO DEALERS AS A % AS % OF
AMOUNT OF PURCHASE OFFERING PRICE OF OFFERING PRICE AMOUNT INVESTED
<S> <C> <C> <C>
Under $50,000 4.75% 4.00% 4.99%
$50,000 to under $100,000 4.00% 3.25% 4.17%
$100,000 to under $250,000 3.50% 2.75% 3.63%
$250,000 to under $500,000 2.25% 1.75% 2.30%
$500,000 to under $1,000,000 1.25% 1.00% 1.27%
$1,000,000 and over 0.00% 0.50%* 0.00%
</TABLE>
* This is not a charge incurred by shareholders. ISI, at its own expense, from
time to time, may make the following payments: 1% of the NAV of shares sold in
amounts of $1,000,000 but less than $2,500,000; .75% of the NAV of shares sold
in amounts of $2,500,000 but less than $4,000,000; .50% of the NAV of shares
sold in amounts of $4,000,000 but less than $5,000,000; and .25% of the NAV of
shares sold in amounts of $5,000,000 or more. The privilege of buying Class A
shares at NAV in amounts of $1,000,000 or more is not available if another NAV
purchase privilege is also available at the same time.
CLASS "B" SHARES
Charges and Fees
When you buy Class B shares, you pay no up-front sales charge. You pay
distribution and service fees up to 1.00% per year as long as you own Class B
shares. When you redeem your shares, you may incur a sales charge, which
decreases year by year. Class B shares convert to Class A shares automatically
after eight years.
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CLASS B SHARES
CONTINGENT DEFERRED SALES CHARGE
AS A PERCENTAGE OF DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CHARGE
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth and Sixth 1%
Seventh and Later 0%
Here's how the amount subject to sales charge is determined:
o Dividends and capital gains, either in cash or reinvested shares, are not
subject to the sales charge.
o There is no sales charge on any increase in value of your shares.
o If your shares are worth less than when you bought them, the charge will be
assessed on their current, lower value.
o When you put in an order to redeem Class B shares, IDEX always sells the
longest held shares first, then the next- longest held, etc., until your
redemption request is fulfilled.
For the purpose of calculating the contingent deferred sales charge, your
holding period for Class B shares always begins on the first day of the first
month after you pay for them.
CLASS B SHARE DEALER REALLOWANCES
Aggressive Growth Portfolio, International Equity Portfolio,
Capital Appreciation Portfolio, Global Portfolio, Growth Portfolio, C.A.S.E.
Portfolio, Value Equity Portfolio, Strategic Total Return Portfolio, Tactical
Asset Allocation Portfolio, Balanced Portfolio
AMOUNT OF CLASS B SHARES PURCHASED DEALER REALLOWANCE %
Up to $250,000 4.00%
$250,000 to $500,000 2.50%
Flexible Income Portfolio, Income Plus Portfolio, Tax-Exempt Portfolio
AMOUNT OF CLASS B SHARES PURCHASED DEALER REALLOWANCE %
Up to $250,000 3.00%
$250,000 to $500,000 2.00%
Class B shares are not sold in amounts over $500,000. Besides the reallowances
at the time of sale, dealers begin to earn an annual service fee of up to 0.25%
of average daily net assets on Class B shares in the 13th month after their
sale.
Waivers of Sales Charges
The sales charge on Class B shares may be waived in these circumstances:
o Following the death of the shareholder.
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<PAGE>
o Following the total disability of the shareholder, as determined by the
Social Security Administration (applies only to shares held at the time the
disability is determined).
o On redemptions made under the Fund's systematic withdrawal plan, but each
year this amount may not exceed 12% of the value of the account on the date
the systematic withdrawal plan was established. The Fund's systematic
withdrawal plan is discussed in more detail later in this Prospectus.
o Within 90 days of redeeming Class B shares of one Portfolio, if you
reinvest the proceeds in Class B shares of another Portfolio, the sales
charge on the first redemption will be waived.
o On withdrawals from IRS qualified and nonqualified retirement plans,
individual retirement accounts, tax-sheltered accounts, and deferred
compensation plans, where such withdrawals are permitted under the terms of
the plan or account (e.g., attainment of age 59 1/2, separation from
service, death, disability, loans, hardships, withdrawals of excess
contributions pursuant to applicable IRS rules or withdrawals based on life
expectancy under applicable IRS rules). This waiver does not include
transfer of asset redemptions, broker directed accounts or omnibus
accounts.
See the SAI for complete information about Class B share sales charge waivers.
CLASS "C" SHARES
Charges and Fees
When you buy Class C shares, you pay no up-front sales charge. As long as you
own them, you will be charged distribution and service fees of up to .90% per
year. The Tax-Exempt Portfolio currently limits these fees to no more than .60%
of average daily net assets attributable to Class C shares.
Dealer Reallowances
Currently, ISI pays dealers a distribution fee of no more than .90% per year of
the average daily net assets of Class C shares the dealer sells.
CLASS "T" SHARES
(not available to new investors)
Sales Charges
When you buy Class T shares of the Growth Portfolio, you generally pay an
up-front sales charge. You can reduce the sales charge percentage in the same
four ways that are described above under Class A Shares. Class T shares are not
subject to annual distribution and service fees.
You generally pay no sales charge when you redeem Class T shares. As with Class
A shares, if you pay no up-front sales charge because you are purchasing $1
million or more of Class T shares, you will pay a deferred sales charge of 1% if
you redeem any of those shares within the first 24 months after buying them,
unless they were purchased through a qualified retirement plan. 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. No sales charge is imposed on
increases in net asset value above the initial purchase price.
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CLASS T SHARE QUANTITY DISCOUNTS
GROWTH PORTFOLIO
SALES CHARGE REALLOWANCE SALES CHARGE
AS % OF TO DEALERS AS A % AS % OF
AMOUNT OF PURCHASE OFFERING PRICE OF OFFERING PRICE AMOUNT INVESTED
Under $10,000 8.50% 7.00% 9.29%
$10,000 to under $25,000 7.75% 6.25% 8.40%
$25,000 to under $50,000 6.25% 5.50% 6.67%
$50,000 to under $75,000 5.75% 5.00% 6.10%
$75,000 to under $100,000 5.00% 4.25% 5.26%
$100,000 to under $250,000 4.25% 3.75% 4.44%
$250,000 to under $500,000 3.00% 2.50% 3.09%
$500,000 to under $1,000,000 1.25% 1.00% 1.27%
$1,000,000 and over 0.00% 1.00%* 0.00%
* This is not a charge incurred by shareholders. ISI, at its own expense,
from time to time may make the following payments: 1% of the NAV of shares
sold in amounts of $1,000,000 to under $2,500,000; .75% of the NAV of
shares sold in amounts of $2,500,000 to under $4,000,000; .50% of the NAV
of shares sold in amounts of $4,000,000 to under $5,000,000; and .25% of
the NAV of shares sold in amounts of $5,000,000 and over. The privilege of
buying Class T shares at NAV in amounts of $1,000,000 or more is not
available if another NAV purchase privilege is also available at the same
time.
Waiver of Sales Charges to Certain Individuals
Class T shares of a Portfolio may be sold without sales charges to:
o Current or former trustees, directors, officers, full-time employees or
sales representatives of the Fund, IMI, ISI, Alger Management, Scottish
Equitable, GEIM, Janus Capital, C.A.S.E., NWQ, Luther King, Dean
Investment, AEGON Management, or any of their affiliates.
o Directors, officers, full-time employees and sales representatives of
dealers having a sales agreement with ISI.
o Any trust, pension, profit-sharing or other benefit plan for any of the
foregoing persons.
o Any family members of the foregoing persons.
o "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.
Persons eligible to buy Class T shares at NAV may not impose a sales charge when
they re-sell those shares.
HOW TO REDEEM (SELL) SHARES
In this section, the words "redeem" and "sell" with regard to your shares have
the same meaning. This section describes selling shares for cash. For other
circumstances, see Redemption of Shares in the SAI.
When you may redeem
You may redeem your shares at any time. Your transaction will be processed at
the NAV on the day your redemption request is received in proper form.
Redemption and repurchase of shares may be suspended or payment postponed during
any period when the Exchange is closed or trading on the Exchange is restricted.
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<PAGE>
When to expect your money
IDEX will normally pay you for your shares within three days of receiving a
valid redemption request. However, shares purchased by check or electronically
are not considered part of your available balance for 15 days. Therefore, IDEX
may not send payment of such proceeds for up to 15 days from the purchase date
to allow for sufficient clearing time. You may avoid this delay by purchasing
shares using either a cashiers' check, certified check or electronic funds
transfer.
Payment by check will be sent by first-class mail. If you want overnight
delivery and if the service is available to your address, IDEX will use this
mail service for a $20 service charge. See below for other payment options.
As described under "How to Buy Shares," above, on Class B and certain Class A
shares, you will be charged a contingent deferred sales charge when you redeem
them.
How to Redeem Shares By Mail
Send your redemption request to:
Idex Investor Services, Inc.
Attention: Redemptions
P.O. Box 9015
Clearwater, FL 33758-9015
Your redemption request must be signed by the owner(s) of the account, or by a
person authorized to act for the owner(s). If the shares are held in the name of
a corporation, partnership or trust, you must include written evidence of the
authority of the person making the redemption.
o Include the name of the Portfolio, the class of shares, the number of
shares or dollar amount of shares to be sold, the account number, and the
name(s) on the account.
o If you have the share certificates, they must be returned.
o Your signature(s) may have to be guaranteed.
Signature Guarantees
For your protection, a signature guaranteed written request will be required for
the following transactions:
o redemption requests larger than $100,000.
o redemption requests of any size made for an account where the address has
been changed within the past 10 days.
o redemptions by check made payable to someone other than the name(s) on the
account or sent to an address other than the address of record.
o redemptions by Federal funds bank wire to a bank that is not pre-designated
on your account.
o requests to change the registered owners of an account.
o requests to change systematic withdrawal plan or cash dividend payment
details.
This guarantee must be made by a national or state bank, a member firm of a
national stock exchange, or any other eligible guarantor as defined by the SEC.
Notarization is not an acceptable substitute. IDEX may require signature
guarantees under certain other circumstances.
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<PAGE>
How to Redeem Shares by Telephone and Get Your Money by Check
You may redeem shares by phone in amounts up to $50,000 per day and receive your
money by check unless you have declined this privilege on the New Account
Application. Call (888) 233-4339 (toll free) to request a phone redemption.
The Fund, ISI and IDEX are not liable for complying with telephone instructions
which are believed by the Fund, ISI and IDEX to be genuine. The Fund, ISI and
IDEX will employ reasonable procedures to make sure telephone instructions are
genuine. In situations where the Fund, ISI and IDEX reasonably believe they were
acting on genuine telephone instructions, you bear the risk of loss. These
procedures may include requiring personal identification, providing written
confirmation of transactions, and tape recording conversations. The Fund has the
right to modify the telephone redemption privilege.
Telephone redemption with payment by check is not allowed in the following
situations:
o For shares that have not yet become part of your available balance
(generally those purchased by check or electronically within the past 15
days).
o For retirement accounts (except IRAs, which will be subject to 10%
withholding).
o For shares of which you have the physical certificates.
o For accounts where the address has been changed within the past 10 days.
If the account is held in more than one name, IDEX, provided the
accountholder(s) have not declined the telephone redemption privilege on the New
Account Application, may accept a telephone sale order from any one account
holder. Your registered representative may redeem shares on your behalf by
telephone unless you have declined the telephone redemption privilege on your
New Account Application.
How to Redeem Shares by Telephone and Get Your Money Electronically (Direct
Deposit)
You may redeem up to $50,000 worth of shares by phone and have your money sent
electronically to a pre-authorized bank account. To receive this privilege,
complete the appropriate section of the New Account Application. If you already
have an account, and want to add this privilege, mail a signature-guaranteed
letter and a voided check to IDEX. Electronic transfers usually take three
banking days. No fee is currently charged for this service.
Funds sent via Federal funds bank wire usually arrive on the next banking day.
Each time you have money wired to your bank account, a $10 fee will be charged.
This amount will be deducted from your IDEX account. The receiving bank may also
charge you a fee. Federal funds wire transfers require a minimum redemption of
$1,000. If you don't have the wire transfer privilege, and don't want to
establish it as a standing privilege on your account, you may still redeem
shares and receive funds at a U.S. bank via Federal funds wire by writing a
letter of instruction to IDEX and including a voided check. Such a wire
redemption requires a signature guarantee.
How to Redeem Shares Through a Dealer
You may also redeem through registered securities dealers. It's the
responsibility of such dealers to transmit your sell orders promptly. Payment
for these redemption requests will be made to the dealer within three days after
IDEX receives your order, properly signed, including share certificates and
appropriate signature guarantees where necessary.
How to Redeem Shares Automatically-Monthly, Quarterly or Annually
You may set up a systematic withdrawal plan ("SWP") on your New Account
Application or by calling Customer Service to get the forms. To establish an
SWP, you must:
o Have an account worth at least $10,000 (no minimum for IRA accounts).
o Withdraw at least $50 with each redemption.
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<PAGE>
o Withdraw no more than 12% annually of the value of your account, if you own
Class B shares.
You can get your money by direct deposit to your bank account or by check to
your address of record. Withdrawals paid by direct deposit can be made on any
day you select between the 3rd and 28th of the month. Withdrawals paid by check
are available only on a fixed date each month, which is normally seven to ten
days before the first of the month. The Fund cannot guarantee that you'll
receive your money exactly by the date you select.
Before you set up an SWP, be aware of these conditions:
o If an SWP is established on a new account, the initial disbursement cannot
normally be made within 15 days of your initial purchase to allow for
collection of funds.
o Dividends and capital gains on accounts with an active SWP must be
reinvested.
o If the requested payments under an SWP require sale of more shares than
have been credited, your original investment may be depleted and ultimately
exhausted.
o Payments under an SWP may be taxable.
o If you have an SWP in a Portfolio and are simultaneously buying shares in
it, you'll pay more in sales charges than you have to. This could be a
disadvantage.
o You can change or cancel an SWP at any time by writing or calling IDEX. An
SWP will be terminated when all shares in an account have been redeemed, or
when IDEX receives notice of the accountholder's death.
Reinvestment Privilege
If you sell Class A, B or T shares, you may repurchase shares in any Portfolio
of the same class, in an amount not more than the amount you sold, without
incurring a new sales charge. To do this, you must send a check accompanied by a
written request to IDEX within 90 days after you sell your shares. IDEX reserves
the right to modify or eliminate this privilege at any time. Certain
distributions from qualified plans are not eligible.
When you exercise the reinvestment privilege:
o You may reinvest the proceeds of a Class B share sale in other Class B
shares, and your new shares will be considered the same age as your old
shares. For example, if you sell three-year-old shares and buy new shares,
the new shares will be considered three years old, and therefore subject to
a smaller contingent deferred sales charge;
o The contingent deferred sales charge you paid when you sold your Class B
shares will also be reinvested in new Class B shares;
o You may reinvest the proceeds of a Class B share sale (less the contingent
deferred sales charge) in Class A shares without paying the up-front charge
on the Class A shares.
HOW TO EXCHANGE SHARES
You may exchange shares of one Portfolio for shares in the same class of another
Portfolio of the Fund or for any of the three portfolios of the Cash Equivalent
Fund ("Money Market Funds") without incurring a sales charge at the time of the
exchange. Exchanges may be requested by telephone or in writing. You
automatically have the telephone exchange privilege unless you decline it on
your New Account Application. Exchanges will be effected as of the end of the
day when your exchange request is received, if it is received before the close
of the Exchange, normally 4:00 p.m. Eastern time. These restrictions apply:
o Exchanges must be made in amounts of $500 or more.
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o You may exchange Class A shares for A shares, Class B shares for B shares,
and Class C shares for C shares in any of the Portfolios.
o Class T Shares may be exchanged only for Class A shares of the IDEX
Portfolios other than the Growth Portfolio. Class A shares of all IDEX
Portfolios are subject to 12b-1 distribution and service fees.
o You may not exchange other classes of shares of the IDEX Portfolios for
Class T Shares.
o The Fund reserves the right to limit exchanges or modify or terminate the
exchange privilege at any time.
With Class B shares, the contingent deferred sales charge will be calculated
from the date you bought your original shares. This means your new shares will
be the same age as your old shares, so your sales charge will not increase
because of the exchange.
You may exchange all the shares in one account for shares in another account.
All special features of the old account, such as Automatic Investment Plan,
Letter of Intention, and Systematic Withdrawal Plan, will be transferred to the
new account, unless you instruct otherwise.
You may exchange part of the shares in one account and open a new account for
new shares in another Fund or Portfolio. In partial exchanges, all special
features except Automatic Investment Plan and Systematic Withdrawal Plan will be
transferred to the new account, unless you instruct otherwise.
There is currently not a fee for exchanges. However, if you request three or
more exchanges in a calendar quarter, a $10 service fee per exchange will be
charged on the accounts from which shares are being exchanged. This fee has been
imposed to deter the practice of timing the market and to defray the costs of
maintaining an automated exchange service for accounts wherein transactions are
based upon certain pre-determined market indicators ("Timing Accounts"). An
account will be deemed a Timing Account if three or more requests to exchange
from a Portfolio are made in any calendar quarter. Systematic exchanges,
dividend reinvestment to a different Portfolio and exchanges from Money Market
Funds are excluded from this service fee.
Before making an exchange into a Fund or Portfolio which is new to you, read the
Prospectus carefully. You can order Prospectuses by calling or writing IDEX
Customer Service.
Telephone Exchanges
Call IDEX Customer Service at (888) 233-4339 (toll free) to request a telephone
exchange. New shares you acquire by telephone exchange must be registered in
exactly the same name as the shares sold.
Systematic Exchanges
You may choose to exchange shares of the same class automatically at regular
intervals from one Portfolio to another in the same way you would set up a
Systematic Withdrawal Plan. You can do it either on your New Account
Application, or by calling or writing IDEX. All exchange restrictions described
above also apply to systematic exchanges. In addition, new shares you acquire by
systematic exchange must be registered in exactly the same name as the shares
sold.
Money Market Fund Exchange Privilege
You may exchange Class A, C or T shares for any of the Money Market Funds. You
may exchange Class B shares only for the Class B Cash Equivalent Money Market
Portfolio. You may request a Money Market Fund exchange by calling or writing
IDEX Customer Service.
Systematic exchanges may also be made between the Money Market Funds and the
Portfolios of the Fund.
Sales of shares in connection with Money Market Fund exchanges will be effected
as of the end of the day when your exchange request is received, if received
before the close of the Exchange, normally 4:00 p.m. Eastern time.
Sales charges will be applied to exchanges from Money Market Funds when you
originally invest in the Money Market Funds and then decide to exchange for
shares of a Portfolio of the Fund.
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The Money Market Funds, which are separately managed by Scudder Kemper
Investments, Inc., are open-end, diversified money market mutual funds. The
exchange privilege does not constitute an offering or recommendation of Money
Market Fund shares by the Fund. Before making a Money Market Fund exchange, you
should consider the investment objective of the Money Market Fund and read its
current Prospectus.
Special Rules for Class B Shares in Money Market Fund Exchanges
When you exchange Class B shares of a Portfolio for Class B shares of the Cash
Equivalent Money Market Portfolio, you won't be charged a contingent deferred
sales charge. You'll be charged the sales charge if you later sell the Class B
shares of the Cash Equivalent Money Market Portfolio, but the time you held them
will not count toward figuring the sales charge.
If you exchange Class B shares of the Cash Equivalent Money Market Portfolio
back for Class B shares of a Portfolio of the Fund, no sales charge will be
made. But when you eventually sell the Class B shares of your Portfolio, you
will pay the deferred sales charge, which is determined only for the time you
held Class B shares in the Fund. The time you held Class B shares of the Cash
Equivalent Money Market Portfolio does not count toward figuring your ultimate
sales charge.
OTHER IMPORTANT INFORMATION
Minimum Account Balance
If your account balance falls below $500 due to redemptions, a $10 fee will be
charged twice a year. If your account falls below $250 because of redemptions,
it will be liquidated and a check will be mailed to your address of record.
Class B accounts will have applicable sales charges deducted.
No minimum account fees will be charged on:
o accounts opened within the preceding 24 months;
o accounts with an active monthly Automatic Investment Plan ($50 minimum per
account); or
o accounts owned by individuals whose multiple accounts with the same Social
Security number have a combined balance totaling $5,000 or more.
Before a minimum account fee is assessed or an account is liquidated, you'll be
given 60 days notice and will have the opportunity to increase the account
balance to at least $500 or to start a monthly Automatic Investment Plan.
Repurchase Arrangements
For your convenience, the Fund has authorized ISI to act as its agent in the
repurchase of Fund shares. This procedure may be terminated at any time. If you
sell your shares to ISI through a dealer, your dealer may charge you an
additional fee.
Retirement Plans
All classes of shares may be purchased in qualified retirement plans, including
IRAs, 401(k)s, Simplified Employee Pension Plans (SEP-IRAs), corporate and
self-employed pension and profit sharing plans (Keoghs) and 403(b)(7) programs.
Retirement plan accounts naming IFTC as custodian are ordinarily charged a $15
per year maintenance fee, with a maximum of $30 per year per taxpayer ID number.
If the combined balances of such accounts with the same taxpayer ID number,
under IFTC as custodian, are more than $50,000, there's generally no fee.
The SAI contains more information about retirement plans. Consult with your tax
adviser about tax issues in such plans.
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How Transactions Are Confirmed
After most account transactions, you'll receive a statement showing the details
of the transaction. In addition, you'll receive a quarterly statement which
details all your financial transactions for the period indicated, including
dividend and capital gain distributions as well as your electronic transactions.
Historical Statements. You may order a historical statement covering years
before the current year.
Share Certificates. Account holders ordinarily don't want share certificates.
Shares are normally recorded on the Fund's books and no certificates are issued.
You may, however, get certificates for your shares, with these limitations:
o No certificates will be issued for fractional shares.
o No certificates will be issued for accounts holding less than 30 shares,
except in connection with sales or transfers of shares from other funds
when you already hold certificates.
o Certificates are issued only as your account is registered.
o Certificates are not issued for retirements plan accounts with IFTC as
custodian.
If you want certificates representing your shares, call or write IDEX to request
them. You may return share certificates to IDEX for re-deposit at any time.
Notify IDEX immediately if your certificates are lost or stolen. There may be a
charge for canceling and replacing lost or stolen share certificates. Remember
that if you ask for a certificate for your shares, you won't be able to redeem
or exchange your shares by telephone. You'll have to send your share certificate
to IDEX in order to redeem or exchange those shares.
SECURITIES IN WHICH THE PORTFOLIOS INVEST
A Portfolio's potential risks and rewards are achieved fundamentally from the
investments it makes. Certain limitations may apply to Portfolio investments.
Unless otherwise indicated, all limitations apply at the time of investment.
Limitations on borrowing and investments in illiquid securities apply on a
continuous basis. This section discusses those securities with special
risk/reward considerations. This section should be read together with the
section called Additional Risk Factors.
Foreign Securities
Subject to the following limitations, each Portfolio, other than the Tax-Exempt
Portfolio, may invest directly in foreign securities denominated in a foreign
currency and not publicly traded in the United States.
o The Growth, Balanced, Capital Appreciation, Aggressive Growth, Tactical
Asset Allocation, C.A.S.E., Income Plus and Value Equity Portfolios may
invest up to 25% of their individual net assets, directly or indirectly, in
foreign securities.
o The Global and International Equity Portfolios may invest without limit in
foreign securities.
o The Strategic Total Return Portfolio may invest up to 25% of its net assets
directly or indirectly in foreign securities, provided that no more than
10% of its total assets may be invested directly in such securities
denominated in foreign currency and not publicly traded in the United
States.
o The Flexible Income Portfolio may invest up to 50% of its net assets,
directly or indirectly, in foreign securities, provided that no more than
25% of its total assets may be invested in the securities of the government
or private issuers of any one foreign country.
In addition to direct foreign investment, these Portfolios may also invest in
foreign securities through American Depositary Receipts ("ADRs") or American
Depositary Shares ("ADSs"), which are dollar-denominated receipts issued by
domestic banks or securities firms. ADRs and ADSs are publicly traded on U.S.
exchanges, and may not involve the same risks as securities denominated in
foreign currency.
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Each of these Portfolios may also indirectly invest in foreign securities
through European Depositary Receipts ("EDRs"), which are typically issued by
European banks; in Global Depositary Receipts ("GDRs"), which may be issued by
domestic or foreign banks; and in other types of receipts evidencing ownership
of foreign securities.
Investments in foreign securities involve different risks from investing in
domestic securities. See Additional Risk Factors.
Futures, Options and Other Derivative Instruments
Each of the Portfolios, other than the Tax-Exempt and Income Plus 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. These instruments are commonly called derivatives,
because their price is derived from an underlying index, security or other
measure of value.
These Portfolios use derivatives primarily as a hedge -- for example, to protect
portfolio positions against market or currency swings, to gain market exposure
for accumulating and residual cash balances pending investment in securities, to
adjust a Portfolio's overall maturity duration, or to reduce the risk inherent
in the management of the Portfolio involved.
Futures contracts and related options may be used to attempt to enhance profit,
but each Portfolio limits non-hedging use of such instruments by requiring that
the aggregate initial margin and premiums required to establish non-hedging
positions will not exceed 5% of the fair market value of such Portfolio's net
assets.
The Value Equity, Strategic Total Return and Tactical Asset Allocation
Portfolios do not currently intend to purchase or sell any derivatives during
the fiscal year ending October 31, 1998. However, they may do so in the future.
The Flexible Income Portfolio may also write and purchase options on securities
to attempt to enhance income. Call options, which give the buyer the right to
"call away" a portfolio security at a designated price until a certain date,
must be "covered" -- that is, the Portfolio must own the securities required to
fulfill the contract.
The Income Plus Portfolio may purchase and sell contracts for the future
delivery of fixed-income securities at an established price, commonly called
"interest rate futures contracts." It does so only for the purpose of hedging
against anticipated interest rate changes that would adversely affect the value
of Portfolio securities. The 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 its position is fully collateralized and that
its use of such contracts is minimally leveraged.
The Aggressive Growth Portfolio intends to use derivatives for hedging as well
as to enhance income, subject to these limitations:
o The 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.
o The Portfolio does not intend to write any put options.
o The Portfolio may buy only those options listed on a national securities
exchange.
o The Portfolio will not purchase options if, as a result, the aggregate cost
of all outstanding options exceeds 10% of the Portfolio's total assets.
o No more than 5% of the Portfolio's total assets will be committed to
non-hedging transactions.
o The Portfolio will buy and sell stock index futures contracts and options
on stock index futures only for hedging or other permissible
risk-management purposes, not for speculation. Aggregate initial margins
and premiums on such investments may not be more than 5% of the Portfolio's
total assets.
The Portfolios' futures contracts activities are limited in such a manner as to
qualify for certain exemptions from registration with the Commodity Futures
Trading Commission.
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There can be no assurance that the use of derivatives will help a Portfolio
achieve its investment objective. Derivatives involve special risks. See
Additional Risk Factors.
For more information about derivatives and their risks, see the SAI.
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 are subject to prepayment risk -- the possibility
that early payoffs of underlying mortgages or other loans will cause the
principal and interest on the security to be paid before its stated maturity.
These early payments are more likely during periods when long-term interest
rates decline. In the event of such a prepayment during an interest rate
decline, a Portfolio may be required to invest the unanticipated proceeds at a
lower interest rate. Prepayments during such periods will also limit a
Portfolio's ability to participate in the kind of market gains possible with
comparable government securities not subject to prepayment.
The Value Equity Portfolio does not currently intend to invest in these types of
securities during the fiscal year ended October 31, 1998, although it may do so
in the future.
Convertible Securities
The Portfolios may invest in varying degrees in convertible securities, which
may include corporate notes or preferred stock, but ordinarily are long-term
debt obligations which are convertible at a stated rate and time into common
stock of the issuer.
As with all debt securities, the market value of convertibles tends to decline
as interest rates rise and to increase as interest rates fall. Convertible
securities generally offer lower interest rates or dividend yields than
non-convertible securities of similar quality. However, when the market price of
the common stock underlying a convertible exceeds the conversion price, the
price of the convertible tends to rise like the common stock price. When the
price of the underlying stock declines, the convertible tends to trade
increasingly on a yield basis; therefore, its price may not fall as much as the
price of the common stock.
Convertible securities generally rank senior to common stocks in an issuer's
capital structure. That means convertible obligations are supposed to be paid
off before common stock obligations. Consequently, most convertibles are 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 largely
on the market value of the convertible as a debt security -- i.e., if compared
to other debt securities, the convertible pays a competitive rate and is in
demand, its price will hold up.
Each Portfolio that invests primarily in equity securities may invest in
convertibles as a substitute for common stock. When investing in convertible
debt securities, each Portfolio will evaluate them for potential investment
using the same ratings criteria as such Portfolio would use for investments in
non-convertible debt securities. See Securities in Which the Portfolios Invest -
Debt Securities.
When-Issued, Delayed Delivery and Forward Transactions
Each Portfolio, other than the Tax-Exempt and Tactical Asset Allocation
Portfolios, may buy securities on a when-issued or delayed delivery basis. They
may also enter into contracts to buy securities for a fixed price at a future
date beyond normal settlement time ("forward commitments"). 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
before delivery and the risk that the seller may not complete the transaction.
See Appendix B for more information.
Illiquid Securities
Each of the Portfolios, other than the Tax-Exempt and Income Plus Portfolios,
may invest as much as 15% of their net assets in securities that are considered
illiquid. The Tax-Exempt and Income Plus Portfolios may invest as much as 10% of
their net assets in such securities.
Securities may be considered illiquid if there is no readily available market
for them, or if they carry legal or contractual restrictions on resale. It often
takes more time to sell illiquid securities, and costs more in brokerage or
dealer discounts or other expenses than does the sale of exchange-listed
securities or securities traded over-the-counter. As a result, a Portfolio may
not be able to sell such securities
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readily when the sub-adviser thinks it proper to do so. The sub-adviser may have
to sell an alternative security in order to meet short-term needs for cash such
as shareholder redemption requests at a time that may not be advantageous.
Certain securities, called Rule 144A securities, are not registered for sale to
the public, but may be sold to certain institutional investors. Rule 144A
securities may be considered liquid if a dealer or an institutional market
exists for them. Procedures have been established by the Portfolios'
sub-advisers and Board of Trustees to determine if certain Rule 144A securities
and other securities, including commercial paper, are liquid. Under similar
procedures for the Flexible Income and Tax-Exempt Portfolios, the sub-adviser
and Board of Trustees may determine that certain municipal leases are liquid.
Securities purchased under these rules may later become illiquid. The
Portfolios' investments in such securities could have the effect of increasing
the level of Portfolio illiquidity to the extent that a dealer or institutional
trading market declines. To the extent such securities are determined to be
liquid, they will not be subject to the percentage limitations described above.
The Tactical Asset Allocation Portfolio does not currently intend to invest in
illiquid securities.
Zero Coupon Bonds and Other Securities
Each of the Portfolios, other than the Aggressive Growth and Value Equity
Portfolios, may invest as much as 10% of their assets in zero coupon bonds, step
coupon bonds, pay-in-kind securities or strips.
o Zero coupon bonds do not make regular interest payments. They are sold at a
discount from face value. Principal and accreted discount (representing
interest accrued but not paid) are paid at maturity.
o Step coupon bonds sell at a discount and pay a low coupon rate for an
initial period, then pay a higher coupon rate thereafter.
o Pay-in-kind securities may pay interest in cash or in the form of a similar
bond or other asset.
o Strips are debt securities that are stripped of their interest after the
securities are issued, but are comparable to zero coupon bonds.
The market value of these four kinds of securities generally fluctuates more in
response to interest rate changes than does the market value of interest-paying
securities of comparable quality and term. The Portfolios may realize greater
gains or losses as a result of such fluctuations.
To pay cash distributions from income earned on these kinds of securities, the
Portfolios may sell certain securities and may incur a capital gain or loss on
the sale.
Repurchase and Reverse Repurchase Agreements
Each of the Portfolios may invest in repurchase and reverse repurchase
agreements. In a repurchase agreement, the Portfolio buys a security and
simultaneously agrees to resell it to the seller, generally a bank or
broker-dealer who agrees to repurchase the security, at a specified price and
date or on demand. This technique is a method of earning income on idle cash.
The repurchase agreement is effectively secured by the value of the underlying
security.
If a seller fails to repurchase the security as agreed, the Portfolio may suffer
a loss if the security's value declines before it can be sold on the open
market. If the seller goes bankrupt, a Portfolio may encounter delays and
increased costs in selling the underlying security.
Repurchase agreements maturing in more than seven days are subject to the limits
described above on illiquid securities.
In a reverse repurchase agreement, a Portfolio sells a security to another party
such as a bank or broker-dealer in return for cash and the Portfolio agrees to
buy the security back at a future date and price. These agreements may provide
cash to satisfy unusually heavy redemption requests or for other temporary or
emergency purposes without actually selling portfolio securities. They also may
help earn additional income on securities like treasury bills and notes.
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U.S. Government Securities
Each of the Portfolios may invest in U.S. government securities, which are debt
securities backed either by the credit of the U.S. government as a whole or only
by the credit of the issuing agency or instrumentality. 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.
Debt Securities
None of the Portfolios, other than the Value Equity, Strategic Total Return,
Flexible Income and Income Plus Portfolios, may invest more than 5% of its net
assets in high yield/high risk bonds, commonly referred to as "junk bonds." Junk
bonds are bonds that are rated below investment grade and normally involve
greater risk than investment grade securities. (See Additional Risk Factors.)
The Flexible Income Portfolio may invest without limit, the Income Plus
Portfolio may invest up to 50% of its total assets, and each of the Value Equity
and Strategic Total Return Portfolios may invest up to 10% of its total assets,
in junk bonds, or in the case of the Value Equity and Strategic Total Return
Portfolios, in convertible securities rated lower than investment grade.
The Aggressive Growth and C.A.S.E. Portfolios may invest in debt securities
rated only in the three highest categories by Moody's (Aaa, Aa or A) or S&P
(AAA, AA or A).
The Tactical Asset Allocation Portfolio will limit investments in commercial
paper to obligations rated Prime-1 by Moody's or A-1 by S&P.
The Portfolios may also buy unrated securities that, in the sub-adviser's
opinion, are equal in quality to the Portfolio's rated debt securities.
Unrated debt securities are not necessarily of lower grade than rated
securities, but they may not be as attractive to some buyers. The Portfolios
rely on the credit analysis of their sub-advisers when investing in unrated debt
securities.
See the IDEX Tax-Exempt Portfolio - Primary Investment Practices for a
discussion of the Portfolio's investments in debt securities.
Other Investment Companies
Certain of the Portfolios may invest in securities issued by other investment
companies, within limits described in the SAI and in accordance with the 1940
Act. These limitations do not apply to investments by the International Equity
Portfolio in the GEI Short-Term Investment Fund, as described under How the
Portfolios Invest - Cash Positions and Debt Investing by Stock Portfolios. A
Portfolio may 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 such Portfolio.
The International Equity Portfolio may invest in investment funds which have
been authorized by the governments of certain countries specifically to permit
foreign investment in securities of companies listed and traded on the stock
exchanges in these countries.
Bank Obligations
Subject to its investment policy, during temporary defensive periods or for
investment of incidental cash balances and short-term cash management, a
Portfolio may invest up to 100% of its assets in bank obligations such as CDs or
time deposits. Certain characteristics of the banking industry and the possible
risks of such investments might be:
o banks are subject to extensive governmental regulations which may limit the
amounts and types of loans and other financial commitments, as well as
interest rates and fees which may be charged;
o profitability is largely dependent upon the availability and cost of
capital funds for the purpose of financing lending operations under
prevailing money market conditions; and
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o exposure to credit losses arising from possible financial difficulties of
borrowers might affect a bank's ability to meet its obligations.
HOW THE PORTFOLIOS INVEST
A Portfolio's potential risks and rewards are affected by the investment
techniques practiced by the Portfolio. This section discusses investing
techniques with special risk/reward considerations.
Diversification
Diversification is the practice of spreading a portfolio's assets over a number
of investments, investment types, industries or countries to reduce risk. A
non-diversified portfolio has the ability to take larger positions in fewer
issuers. Because the appreciation or depreciation of a single security may have
a greater impact on the net asset value of a non-diversified portfolio, its
share price can be expected to fluctuate more than a comparable diversified
portfolio.
Each of the Portfolios other than the Capital Appreciation Portfolio is
diversified as a matter of fundamental policy, and is defined as a diversified
investment company under the 1940 Act. With respect to 75% of its total assets,
a diversified investment company may not purchase the securities of any one
issuer (other than government securities), if immediately after and as a result
of such purchase, the value of the holdings of the securities of such issuer
exceeds 5% of the value of the Portfolio's total assets, or the Portfolio owns
more than 10% of the outstanding voting securities of any one class of
securities of such issuer. The Capital Appreciation Portfolio is a
nondiversified investment company.
As a fundamental policy governing concentration, each of the Portfolios will not
invest 25% or more of total assets in any one particular industry, other than
U.S. government securities.
The Capital Appreciation Portfolio reserves the right to become a diversified
investment company (as defined by the 1940 Act). Currently, however, its
policies are as follows:
With respect to 50% of its assets, the Capital Appreciation Portfolio will not
buy the securities of any one issuer (other than cash items and U.S. government
securities) if, as a result, the Portfolio
o owns more than 10% of the outstanding voting securities of that issuer; or
o the value of the Portfolio's holdings of that issuer exceeds 5% of the
value of the Portfolio's total assets.
The Capital Appreciation Portfolio may invest as much as 50% of its assets in
the securities of as few as two issuers. However, it does not expect to do so
unless its sub-adviser sees the potential for substantial capital appreciation
in such an investment. The Portfolio does intend to take advantage of the
flexibility of its nondiversification policy by investing more than 5% of total
assets in the securities of one issuer.
To the extent that the Portfolio makes such single large investments, it
increases its exposure to credit and/or market risks, and to the profit
potential, associated with a single issuer. Both profit potential and risk are
greater in a nondiversified portfolio than in a diversified portfolio.
See The IDEX Series Fund - Introduction to the Portfolios: Investment Practices
and Risks for a discussion of the individual Portfolios' diversification styles.
Portfolio Turnover
Although it is the policy of each Portfolio, other than the Tax-Exempt and
Income Plus Portfolios, to buy and hold securities for their stated investment
objectives, changes in these holdings will be made whenever the respective
portfolio managers believe they are advisable. Such changes may result from:
o liquidity needs;
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o securities having reached a price or yield objective;
o anticipated changes in interest rates or the credit standing of an issuer;
or
o developments not foreseen at the time of the investment decision.
To a limited extent, these Portfolios may engage in a significant number of
short-term transactions if such investing serves their objectives. The rate of
portfolio turnover will not be a limiting factor when such short-term investing
is considered appropriate. The Value Equity Portfolio will not normally engage
in short-term trading, but reserves the right to do so.
The investment policies of the Tax-Exempt and Income Plus Portfolios may lead to
frequent changes in investments, particularly when interest rates fluctuate
rapidly. Securities may be sold in anticipation of a decline in portfolio value
(a rise in interest rates) or bought in anticipation of an increase in portfolio
value (a fall in interest rates).
In addition, a security may be sold and another bought at approximately the same
time to take advantage of a temporary disparity, in the manager's judgment, in
the normal yield relationship between the two securities. These yield
disparities may occur for reasons not directly related to the investment quality
of particular issues or to the general movement of interest rates; instead, this
disparity may come about because of changes in the overall demand for or supply
of various types of securities or because of changes in the objectives of
investors in such securities.
Turnover rate will not limit a manager's ability to buy or sell securities for
the Portfolios. Certain tax rules may restrict a Portfolio's ability to sell
securities when the security has been held for less than three months.
Increased turnover (100% or more) results in higher brokerage costs or mark-up
charges for a Portfolio; these charges are ultimately borne by the shareholders.
Short-term trading may also result in short-term capital gains, which are taxed
as ordinary income to the Portfolio's shareholders.
For historical Portfolio turnover rates, see Financial Highlights. For more
discussion of portfolio turnover, see the SAI.
Cash Positions and Debt Investing by Stock Portfolios
The Portfolios may at times choose to hold some portion of their net assets in
cash, or to invest that cash in a variety of debt securities. This may be done
as a defensive measure at times when desirable risk/reward characteristics are
not available in stocks or to earn income from otherwise uninvested cash. When a
Portfolio increases its cash or debt investment position, its income may
increase while its ability decreases to participate in stock market declines or
advances.
The International Equity Portfolio may also invest in the GEI Short-Term
Investment Fund (the "Investment Fund"), an investment fund created specifically
to serve as a vehicle for the collective investment of cash balances of the
Portfolio and other accounts advised by GEIM or its affiliate, General Electric
Investment Corporation ("GEIC"). The Investment Fund invests exclusively in the
money market instruments described in (i) through (vii) below. The Investment
Fund is advised by GEIM. No advisory fee is charged by GEIM to the Investment
Fund, nor will a Portfolio incur, directly or indirectly, any sales charge,
redemption fee, distribution fee or service fee in connection with its
investments in the Investment Fund. The Portfolio may invest up to 25% of its
total assets in the Investment Fund. The types of money market instruments in
which the International Equity Portfolio may invest directly or indirectly
through its investment in the Investment Fund are as follows: (i) securities
issued or guaranteed by the U.S. government or one of its agencies or
instrumentalities; (ii) debt obligations of banks, savings and loan
institutions, insurance companies and mortgage bankers; (iii) commercial paper
and notes, including those with variable and floating rates of interest; (iv)
debt obligations of foreign branches of U.S. banks, U.S. branches of foreign
banks and foreign branches of foreign banks; (v) debt obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities, including obligations of
supranational entities; (vi) debt securities issued by foreign issuers; and
(vii) repurchase agreements. The Investment Fund is not registered with the SEC
as an investment company.
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Short Sales
Each of the Portfolios may sell securities "short against the box." A short sale
is a sale of a security that the Portfolio does not own. A short sale is
"against the box" if, at all times when the short sale is open, the Portfolio
owns an equal amount of the securities sold short or convertible into those same
securities, or exchangeable without further consideration for, securities of the
same issue as the securities sold short.
Borrowing and Lending
Each Portfolio, other than the Aggressive Growth Portfolio, may borrow money
from banks for temporary or emergency purposes. The amount borrowed shall not
exceed 25% of total assets for the Capital Appreciation, Global, Growth,
C.A.S.E., Strategic Total Return, Tactical Asset Allocation, Balanced and
Flexible Income Portfolios, 33 1/3% of total assets for the International
Equity, Income Plus and Tax-Exempt Portfolios, and 10% of total assets for the
Value Equity Portfolio.
To secure borrowings, a Portfolio may not mortgage or pledge its securities in
amounts that exceed 15% of its net assets for the International Equity, Capital
Appreciation, Global, Growth, C.A.S.E., Strategic Total Return, Tactical Asset
Allocation, Balanced and Flexible Income Portfolios, and 10% of net assets for
the Value Equity, Income Plus and Tax-Exempt Portfolios.
The Tactical Asset Allocation Portfolio does not currently intend to borrow.
The Capital Appreciation, Global, Growth, Balanced and Flexible Income
Portfolios may borrow money from or lend money to other funds that permit such
transactions and that are advised or sub-advised by Janus Capital Corporation
("Janus Capital"), provided that Janus Capital obtains permission to do so from
the SEC. There is no assurance that such permission will be granted.
The Aggressive Growth Portfolio may borrow for investment purposes -- this is
called "leveraging." The Portfolio may borrow only from banks, not from other
investment companies.
The 1940 Act requires that a Portfolio maintain continuous asset coverage of
300% of the amount borrowed -- that is, total assets including borrowings, less
liabilities exclusive of borrowings, must be three times the amount borrowed.
There are risks associated with leveraging, which is a speculative technique.
o If the Portfolio's asset coverage drops below 300% of borrowings, the
Portfolio may be required to sell securities within three days to reduce
its debt and restore the 300% coverage, even though it may be
disadvantageous to do so.
o Leveraging may exaggerate the effect on net asset value of any increase or
decrease in the market value of the Portfolio's securities.
o Money borrowed for leveraging will be subject to interest costs. In certain
cases, interest costs may exceed the return received on the securities
purchased.
o The Portfolio may be required to maintain minimum average balances in
connection with 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.
State law and regulations may impose additional limits on the Portfolio's
borrowing. To the extent that any Portfolio purchases securities when the amount
that it has borrowed, even for temporary or emergency purposes, exceeds 5% of
its total assets, the Portfolio is engaged in leveraging. For more information
about borrowing and lending, see the SAI.
Lending Portfolio Securities
Each of the Portfolios other than the Tax-Exempt and Income Plus Portfolios may
lend securities to broker-dealers and financial institutions to realize
additional income. As a fundamental policy, these Portfolios (except for the
Aggressive Growth Portfolio) will not lend securities or other assets if, as a
result, more than 25% (or 30% in the case of the International Equity Portfolio)
of total assets would be lent to other parties. In practice, at this time, none
of these Portfolios intends to lend securities or make any other loans valued at
more than 5% of total assets.
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As a fundamental policy, the Aggressive Growth Portfolio may not make loans to
others, except through buying 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 loaned to other parties.
If the borrower of a security defaults, the Portfolio may be delayed or
prevented from recovering collateral, or may be otherwise required to cover a
transaction in the security loaned. If portfolio securities are loaned,
collateral values must be continuously maintained at no less than 100% by
pricing both the securities loaned and the collateral 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 actions as may be appropriate in order to
vote its shares. For more information about lending securities, see the SAI.
Joint Trading Accounts
Subject to approval by the Fund's Board of Trustees, the Growth, Global,
Flexible Income, Balanced and Capital Appreciation Portfolios may transfer
uninvested cash balances on a daily basis into certain joint trading accounts.
Assets in the joint trading accounts are invested in money market instruments.
All other participants in the joint trading accounts will be registered mutual
funds or other clients of Janus Capital or its affiliates. These Portfolios will
participate in the joint trading accounts only to the extent that the
investments of the joint trading accounts are consistent with each Portfolio's
investment policies and restrictions. Janus Capital anticipates that the
investments made by a Portfolio through the joint trading accounts will be at
least as advantageous to that Portfolio as if the Portfolio had made such
investment directly.
Master Fund/Feeder Fund Option
The Fund may in the future seek to achieve the investment objective of each
Portfolio, other than the Income Plus and Tax-Exempt Portfolios, by investing
all of a Portfolio's assets in another investment company having the same
objective and substantially the same investment policies and restrictions.
Such an investment would be made only if the Board of Trustees of the Fund
determines it would be in the best interests of the Portfolio and its
shareholders. In making this determination, the Board will consider benefits to
shareholders and the opportunities to reduce costs and increase efficiency,
among other things. Should such a determination be made, shareholders will be
given at least 30 days notice.
Changes in Investment Policies and Rules
Each Portfolio is subject to investment restrictions, certain of which are
fundamental policies of that Portfolio. As such, they may not be changed without
shareholder approval. 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 SAI.
New Investment Instruments
The sub-advisers reserve the right to evaluate new financial instruments as they
are developed and become actively traded. Subject to any applicable investment
restriction, a Portfolio may invest in any such investment products that its
manager believes will further the Portfolio's investment objective.
ADDITIONAL RISK FACTORS
All investments involve risks. Some securities and some investment practices
involve taking special or additional risks. This section describes a number of
those risk factors.
Foreign Securities
Investments in foreign securities involve risks that are different in some
respects from investments in securities of U.S. issuers. These risks include:
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Currency Value. Changes in currency exchange rates 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. Currency exchange rates are
affected by numerous factors, including relative interest rates, balances of
trade, levels of foreign investment and manipulation by central banks. The
foreign currency market is essentially unregulated and can be subject to
speculative trading. From time to time, many countries impose exchange controls
which limit or prohibit trading in certain currencies.
Currency Trading Costs. ADRs do not involve the same direct currency and
liquidity risks as securities denominated in foreign currencies. However, the
value of the currency in which the foreign security represented by the ADR is
denominated may affect the value of the ADR.
To the extent that a Portfolio invests in foreign securities denominated in
foreign currencies, its share price reflects the price movements both of its
securities and of the currencies in which they are denominated. The share price
of a Portfolio that invests in both U.S. and foreign securities may have a low
correlation with movements in the U.S. markets. If most of the securities in a
Portfolio are denominated in foreign currencies or depend on the value of
foreign currencies, the relative strength of the U.S. dollar against those
foreign currencies may be an important factor in that Portfolio's performance. A
Portfolio incurs costs in converting foreign currencies into U.S. dollars, and
vice versa.
Different Accounting and Reporting Practices. Foreign companies are generally
subject to tax laws and to accounting, auditing and financial reporting
standards, practices and requirements different from those that apply in the
U.S.
Less Information Available. There is generally less public information available
about foreign companies.
Less Regulation. Many foreign countries have less stringent securities
regulations than the U.S.
More Difficult Business Negotiations. A Portfolio may find it difficult to
enforce obligations in foreign countries or to negotiate favorable brokerage
commission rates.
Reduced Liquidity/Increased Volatility. Some foreign securities are less liquid,
and their prices more volatile, than securities of comparable U.S. companies.
Settlement Delays. Settling foreign securities transactions may take longer than
settlements in the U.S.
Higher Custody Charges. Custodianship of shares may cost more for foreign
securities than it does for U.S. securities.
Asset Vulnerability. In some foreign countries, there is a risk of direct
seizure or appropriation through taxation of assets of a Portfolio. Certain
countries may also impose limits on the removal of securities or other assets of
a Portfolio. Interest, dividends and capital gains on foreign securities held by
a Portfolio may be subject to foreign withholding taxes.
Political Instability. In some countries, political instability, war or
diplomatic developments could affect investments.
These risks may be greater in developing countries or in 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 only a small number of securities. As a result,
securities of issuers located in developing countries may have limited
marketability and may be subject to abrupt or erratic price fluctuations.
At times, the Portfolios' foreign securities may be listed on exchanges or
traded in markets which are open on days (such as Saturday) when the Portfolios
do not compute a price or accept orders for purchase, sale 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.
Hedging Foreign Currency Transactions. A Portfolio may hedge some or all of its
investments denominated in a foreign currency against a decline in the value of
that currency. For example, a Portfolio may buy or sell securities while using
forward currency contracts to fix a price in U.S. dollars for securities it has
agreed to buy or sell ("transaction hedge"). A Portfolio may enter into
contracts to sell a foreign currency for U.S. dollars (not exceeding the value
of a given Portfolio's assets denominated in that currency) or by participation
in options or futures contracts with respect to a currency ("position hedge").
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A Portfolio could hedge a position by selling a second currency, which is
expected to perform similarly to the currency in which portfolio investments are
denominated or exposed, for U.S. dollars ("proxy hedge"). Or it may 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 a given currency,
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 liquid assets in the amount of such commitments. In
addition, when a Portfolio anticipates buying securities denominated in a
particular currency, it may enter into a forward contract to purchase such
currency in exchange for the U.S. 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 affect a Portfolio's performance if the manager's projection of
future exchange rates is wrong.
Futures, Options and Other Derivative Instruments
Generally, options, futures contracts, forward contracts and swap-related
products ("derivative instruments") involve additional investment risks and
transaction costs, and draw upon skills and experience which are different from
those needed to pick the other securities or instruments in which a Portfolio
invests. Special risks of derivatives' use include:
Inaccurate Market Predictions. If interest rates, securities prices or currency
markets do not move in the directions expected by a portfolio manager who uses
derivatives based on those measures, these instruments may fail in their
intended purpose and result in losses to the Portfolio.
Imperfect Correlation. Derivatives' prices may be imperfectly correlated with
the prices of the securities, interest rates or currencies being hedged. When
this happens, the expected benefits may be diminished.
Illiquidity. A liquid secondary market may not be available for a particular
instrument at a particular time. A Portfolio may therefore be unable to control
losses by closing out a derivative position.
Tax Considerations. A Portfolio may have to delay closing out certain derivative
positions to avoid adverse tax consequences.
The risk of loss from investing in derivative instruments is potentially
unlimited. See the SAI for more information about derivatives.
Fixed Income Investing
Risk in the fixed income component of any Portfolio depends on (1) the term of
the securities; (2) the quality of the securities; and (3) changes in interest
rates.
When prevailing interest rates trend downward, the price of existing debt
securities tends to go up, because the coupon payments (or yield) of those
securities becomes more valuable in comparison to prevailing rates. When
interest rates trend upward, the price of existing securities tends to go down.
This effect usually becomes more pronounced with longer-term issues than with
shorter-term issues.
The effect of these fluctuations, in turn, on a Portfolio's share price and
yield depends on the extent to which a Portfolio is invested in debt securities.
High-Yield/High-Risk Bonds
High-yield/high risk debt securities are also known as "junk bonds." These bonds
involve significant quality and liquidity concerns. Their yields fluctuate. They
are not suitable for short-term investing.
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<PAGE>
Higher yields are ordinarily available on fixed-income securities which are
unrated or are rated in the lower categories by services such as S&P or Moody's.
Unrated securities are not necessarily of lower quality than rated securities,
but the markets for lower rated and unrated securities are less liquid than
higher rated securities.
Lower rated debt securities (including convertibles) carry significant default
risk -- the risk that the issuer will not make interest or principal payments
when due. Because the coupon rates on these securities are high, the issuers
might experience great financial stress in an economic downturn or during
periods of rising interest rates. This stress might adversely affect their
ability to make interest or principal payments or to obtain additional credit. A
bond default within the Portfolio would cause losses to the Portfolio.
The performance of high-yield debt securities in an economic downturn cannot be
precisely predicted.
Appendix A of this Prospectus contains a description of bond rating categories
and includes a weighted average debt rating table for the Flexible Income and
Income Plus Portfolios.
Special Situations
Each Portfolio may invest in "special situations" from time to time. Special
situations arise when, in the opinion of a portfolio manager, a company's
securities may be recognized, then increase considerably in price, due to:
o a new product or process;
o a management change;
o a technological breakthrough;
o an extraordinary corporate event; or
o a temporary imbalance in the supply of, and demand for, the securities of
an issuer.
Investing in a special situation carries an additional risk of loss if the
expected development does not happen or does not attract the expected attention.
The impact of special situation investing to a Portfolio will depend on the size
of the Portfolio's investment in a situation.
INVESTMENT ADVISORY AND OTHER SERVICES
The Fund is run by a Board of Trustees. Subject to the supervision of the Board
of Trustees, the assets of each Portfolio are managed by investment advisers and
sub-advisers, and by portfolio managers. This section describes IDEX Series
Fund's ownership, organization and management.
Trustees
The Board of Trustees is responsible for managing the business and affairs of
IDEX Series Fund. It oversees the operation of the Fund by its officers. It also
reviews the management of the Portfolios' assets by the investment advisers and
sub-advisers. Information about the Trustees and officers of the Fund is
contained in the SAI.
Capital Appreciation, Global, Growth, Balanced and Flexible Income Portfolios
Investment Adviser
These 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 33770-2597, to act as its
investment adviser. IMI has served as investment adviser to IDEX Series Fund
Capital Appreciation, Global, Growth, Balanced and Flexible Income (and its
predecessor, IDEX Total Income Trust) Portfolios, since the inception of each
Portfolio. IMI also served as the investment adviser to IDEX Fund and IDEX Fund
3, which were reorganized into IDEX Growth Portfolio Class T shares on September
20, 1996, since inception of each of those Funds.
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Advisory Fees Paid by These Portfolios
IMI is responsible for furnishing or causing to be furnished to each of these
Portfolios investment advice and recommendations, and for supervising the
purchase and sale of securities as directed by Fund officers. In addition, IMI
is responsible for the administration of each of these Portfolios.
The Portfolios pay IMI an annual fee, computed daily and paid monthly, based on
each Portfolio's average daily net assets, as shown in the Advisory Fee
Schedule.
The investment advisory fees paid by these Portfolios are higher than those paid
by most other funds.
Advisory Fee Reimbursement
IMI will reimburse each of these Portfolios, other than the Global Portfolio, or
waive fees, or both, to the extent that the Portfolio's normal net operating
expenses, including advisory fees but excluding interest, taxes, brokerage
commissions and 12b-1 fees, exceed on an annual basis 1.50% of that Portfolio's
average daily net assets. The Global Portfolio does not have an expense
limitation.
Aggressive Growth, International Equity, C.A.S.E., Value Equity, Strategic Total
Return, Tactical Asset Allocation, Income Plus and Tax-Exempt Portfolios
Investment Adviser
These Portfolios have each entered into an Advisory Agreement with
InterSecurities, Inc. ("ISI"), whose address is 201 Highland Avenue, Largo,
Florida 33770-2597, to act as its investment adviser. ISI has served as
investment adviser to the IDEX Series Fund Aggressive Growth, International
Equity, C.A.S.E., Value Equity, Strategic Total Return, Tactical Asset
Allocation, Income Plus and Tax-Exempt Portfolios since the inception of each
Portfolio. ISI is an affiliate of IMI.
Advisory Fees Paid by These Portfolios
ISI is responsible for furnishing or causing to be furnished to each of these
Portfolios investment advice and recommendations, and for supervising the
purchase and sale of securities as directed by Fund officers. In addition, ISI
is responsible for the administration of each of these Portfolios.
The Portfolios pay ISI an annual fee, computed daily and paid monthly, based on
each Portfolio's net assets, as shown in the Advisory Fee Schedule.
The investment advisory fees paid by these Portfolios are higher than those paid
by most other funds.
Advisory Fee Reimbursement
ISI will reimburse the following Portfolios or waive fees, or both, to the
extent that the Portfolio's normal net operating expenses, including advisory
fees but excluding interest, taxes, brokerage commissions and 12b-1 fees, exceed
on an annual basis the following percentages of each Portfolio's average daily
net assets: Tax-Exempt Portfolio, 1.00%; Income Plus Portfolio, 1.25%;
Aggressive Growth, C.A.S.E., Value Equity, Strategic Total Return and Tactical
Asset Allocation Portfolios, 1.50%. The International Equity Portfolio does not
have an expense limitation.
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<TABLE>
<CAPTION>
ACTUAL ADVISORY FEE RATIOS FOR TOTAL ACTUAL EXPENSE RATIOS FOR THE FISCAL
THE FISCAL YEAR ENDED YEAR ENDED OCTOBER 31, 1997,
OCTOBER 31, 1997 INCLUDING THE INVESTMENT ADVISORY FEE.
PERCENTAGE OF AVERAGE PERCENTAGE OF AVERAGE
DAILY NET ASSETS DAILY NET ASSETS
CLASS A CLASS B CLASS C CLASS T
<S> <C> <C> <C> <C> <C> <C>
Capital Appreciation* Capital Appreciation*
Global Global
Growth Growth
Balanced* Balanced*
Flexible Income* Flexible Income*
*Net of fees waived by IMI *Net of fees waived by IMI
</TABLE>
<TABLE>
<CAPTION>
ADVISORY FEE SCHEDULE
CAPITAL
AVERAGE DAILY NET ASSETS APPRECIATION GLOBAL GROWTH BALANCED FLEXIBLE INCOME
<S> <C> <C> <C> <C> <C>
First $750 million 1.00% 1.00% 1.00% 1.00%
the next $250 million 0.90% 0.90% 0.90% 0.90%
over $1 billion 0.85% 0.85% 0.85% 0.85%
First $100 million 0.90%
the next $150 million 0.80%
over $250 million 0.70%
</TABLE>
<TABLE>
<CAPTION>
ACTUAL ADVISORY FEE RATIOS FOR TOTAL ACTUAL EXPENSE RATIOS FOR THE FISCAL
THE FISCAL YEAR ENDED YEAR ENDED OCTOBER 31, 1997,
OCTOBER 31, 1997 INCLUDING THE INVESTMENT ADVISORY FEE.
PERCENTAGE OF AVERAGE PERCENTAGE OF AVERAGE
DAILY NET ASSETS DAILY NET ASSETS
CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C> <C>
Aggressive Growth* Aggressive Growth*
International Equity* International Equity*
C.A.S.E.* C.A.S.E.*
Value Equity* Value Equity*
Strategic Total Return* Strategic Total Return*
Tactical Asset Allocation* Tactical Asset Allocation*
Income Plus Income Plus
Tax-Exempt* Tax-Exempt*
*Net of fees waived by ISI *Net of fees waived by ISI
</TABLE>
<TABLE>
<CAPTION>
ADVISORY FEE SCHEDULE
TACTICAL
AGGRESSIVE INTERNATIONAL VALUE STRATEGIC ASSET INCOME TAX-
AVERAGE DAILY NET ASSETS GROWTH EQUITY C.A.S.E. EQUITY TOTAL ALLOCATION PLUS EXEMPT
RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $750 million 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 0.60% 0.60%
the next $250 million 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.60% 0.60%
over $1 billion 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.60% 0.60%
</TABLE>
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Business Expenses Borne by the Portfolios
In addition to the investment advisory fee, under their Advisory Agreements, the
Portfolios pay most of their 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. The Portfolios also pay all
brokerage commissions in connection with portfolio transactions; brokerage of
the Portfolios may be placed with affiliates, and the sale of Fund shares by a
broker-dealer may be taken into account in placing brokerage.
Ownership of Idex Management, Inc. and InterSecurities, Inc.
Fifty percent (50%) of the outstanding stock of IMI and 100% of the outstanding
stock of ISI, 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, the sub-adviser of the Capital Appreciation, Global, Growth, Balanced
and Flexible Income 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.
The ownership of IMI by AUSA and Janus Capital is the subject of an agreement
among IMI, AUSA and Janus Capital (the "joint venture agreement") that expires
no later than March 2, 1998. In connection with the expiration of the joint
venture agreement, either AUSA or Janus Capital could become the sole owner of
the outstanding shares of IMI; or outstanding shares of IMI could be sold to a
third party. Under the 1940 Act, a change in control of IMI would generally
trigger an "assignment" and termination of the Advisory Agreements and
Investment Counsel Agreements relating to the Capital Appreciation, Global,
Growth, Balanced and Flexible Income Portfolios. New Advisory Agreements and
Investment Counsel Agreements relating to each of these Portfolios would be
subject to the approval of a majority of outstanding voting securities of such
Portfolio.
Sub-Advisers
Janus Capital, AEGON USA Investment Management, Inc. ("AEGON Management"), Fred
Alger Management, Inc. ("Alger Management"), Luther King Capital Management
Corporation ("Luther King"), Dean Investment Associates ("Dean Investment"),
C.A.S.E. Management, Inc. ("C.A.S.E."), NWQ Investment Management Company, Inc.
("NWQ"), Scottish Equitable and GEIM, whose functions in managing the Portfolios
are described below, are described in this Prospectus collectively as the
"sub-advisers" and individually as a "sub-adviser."
Aggressive Growth Portfolio
Alger Management, 75 Maiden Lane, New York, New York 10038, 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 September 30, 1997, Alger
Management had approximately $9.2 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.
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 all security purchases and
sales 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 Portfolio's transactions on securities
exchanges and will retain commissions in accordance with certain regulations of
the SEC. In placing portfolio business with all broker/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 NASD.
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While Alger Management provides portfolio management services, 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 that Portfolio's expense limitation.
Portfolio Managers:
David D. Alger, Seilai Khoo and Ronald Tartaro are primarily responsible for the
day-to-day management of the Portfolio. Mr. Alger has been employed by Alger
Management as Executive Vice President and Director of Research since 1971 and
as President since 1995 and has served as a portfolio manager of the Aggressive
Growth Portfolio since its inception in December, 1994. Ms. Khoo has been
employed by Alger Management as a senior research analyst since 1989 and as a
Senior Vice President since 1995 and has served as a portfolio manager of the
Aggressive Growth Portfolio since October, 1995. Mr. Tartaro has been employed
by Alger Management as a senior research analyst since 1990 and as a Senior Vice
President since 1995 and has served as a portfolio manager of the Aggressive
Growth Portfolio since October, 1995. Mr. Alger, Ms. Khoo and Mr. Tartaro also
serve as portfolio managers for other mutual funds and investment accounts
managed by Alger Management.
International Equity Portfolio
Scottish Equitable, Edinburgh Park, Edinburgh EH12 9SE, Scotland, a wholly-owned
subsidiary of Scottish Equitable plc and an indirect wholly-owned subsidiary of
AEGON nv, serves as an investment sub-adviser to the International Equity
Portfolio. Scottish Equitable plc is successor to Scottish Equitable Life
Assurance Society, which was founded in Edinburgh in 1831. As of December 31,
1997, Scottish Equitable plc had _____________ in assets under management.
Scottish Equitable currently provides investment advisory and management
services to certain of its affiliates, including Scottish Equitable plc, and to
other external organizations.
GEIM, 3003 Summer Street, Stamford, Connecticut 06905, a wholly-owned subsidiary
of General Electric Company, also serves as an investment sub-adviser to the
International Equity Portfolio. GEIM's principal officers and directors serve in
similar capacities with respect to GEIC, also a wholly-owned subsidiary of
General Electric Company. GEIC serves as investment adviser to various GE
pension and benefit plans and certain employee mutual funds. GEIC and GEIM (and
their predecessors) together have approximately 70 years of investment
management experience, and have managed mutual funds since 1935. Together, as of
December 31 , 1997, GEIM and GEIC managed assets in excess of $_______________,
of which more than $_________________ is invested in mutual funds.
GEIM and Scottish Equitable also serve as the investment sub-advisers to the WRL
Series Fund, Inc. International Equity Portfolio; and GEIM serves as the
investment sub-adviser to the WRL Series Fund, Inc. U.S. Equity Portfolio.
Scottish Equitable and GEIM provide ISI with investment advice and
recommendations for the International Equity Portfolio consistent with that
Portfolio's investment objective, policies and restrictions, and supervise all
security purchases and sales 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, Scottish
Equitable and GEIM may consider research and other services furnished to them
and may place portfolio transactions with broker-dealers that are affiliated
with ISI, Scottish Equitable or GEIM. It is anticipated that PaineWebber, an
affiliate of GEIM, may serve as a broker to the Portfolio's transactions and
retain commissions in accordance with certain regulations of the SEC. In placing
portfolio business with all broker/dealers, Scottish Equitable and GEIM seek the
best execution of each transaction, and all brokerage placement must be
consistent with the Rules of Fair Practice of the NASD.
While Scottish Equitable and GEIM provide portfolio management services, ISI
retains responsibility for the performance of such functions. For their
services, Scottish Equitable and GEIM each will receive 45% of the fees received
by ISI with respect to the amount of Portfolio assets managed by each
sub-adviser under the International Equity Portfolio's Advisory Agreement, less
45% of any amount voluntarily reimbursed to the Portfolio or waived by ISI with
respect to the amount of assets managed by each sub-adviser.
Portfolio Managers:
At Scottish Equitable, investment strategy formulation is the responsibility of
the Investment Strategy Group ("ISG"), which consists of one full-time
Investment Strategist (currently, Alastair Bryne) working with a team of
analysts/fund managers drawn from our equity and fixed income team.
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On a monthly basis, the ISG presents the proposed investment strategy to the
Investment Management Board ("IMB"). The IMB consists of Russell Hogan, Chief
Investment Officer, Tom Crombie, Chief Investment Manager, Colin Black,
Investment Actuary, Mike Craston, Investment Manager-Business Development,
Andrew Hartley, Investment Manager-UK Equities and Malcolm Jones, Investment
Manager-International Equities.
The role of the IMB is to review critically the proposed investment strategy,
testing the assumptions of the analysis and ensuring internal consistency. Once
the IMB is satisfied with the investment strategy proposal, it is adopted and
translated into asset allocations for the Portfolio. The adopted investment
strategy and model asset allocations are communicated to the whole investment
team, which also serves as a final check on the adopted investment strategy. No
one individual is responsible for managing the Portfolio.
Ralph R. Layman leads a team of GEIM Portfolio Managers for the International
Equity Portfolio. Mr. Layman has more than 18 years of investment experience and
has held positions with GEIM since 1991. From 1989 to 1991, Mr. Layman served as
Executive Vice President, Partner and Portfolio Manager of Northern Capital
Management, and prior thereto, served as Vice President and Portfolio Manager of
Templeton Investment Counsel. Mr. Layman is currently an Executive Vice
President of GEIM.
Capital Appreciation, Global, Growth, Balanced and Flexible Income Portfolios
IMI has entered into an Investment Counsel Agreement for each of these
Portfolios with Janus Capital, 100 Fillmore Street, 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
is also sub-adviser to certain Portfolios of the WRL Series Fund, Inc., an
affiliate of the Fund. Janus Capital also served as sub-adviser to IDEX Fund and
IDEX Fund 3 prior to their reorganization into the Growth Portfolio Class T
shares, since the inception of each of those Funds.
Janus Capital provides IMI with investment advice and recommendations for each
Portfolio consistent with that Portfolio's investment objective, policies and
restrictions, and supervises all security purchases and sales 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
broker/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 NASD.
While Janus Capital provides portfolio management services, 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 IDEX Series Fund, as
described in the SAI.
Portfolio Managers:
Scott W. Schoelzel has served as portfolio manager of the Growth Portfolio since
January, 1996. He previously served as co-portfolio manager of the Growth
Portfolio from 1995 until becoming portfolio manager. Mr. Schoelzel also served
as portfolio manager of IDEX Fund and IDEX Fund 3 prior to their reorganization
into the Growth Portfolio Class T shares. 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.
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 October, 1993, 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; he joined Janus Capital as a securities analyst and research
associate in 1986. On January 13, 1997, Mr. Speaker, settled an SEC
administrative action involving two personal trades that he made in January of
1993. Without admitting or denying the allegations, Mr. Speaker agreed to civil
money penalty, disgorgement and interest payments totaling $37,199, and to a
90-day suspension starting on or about January 27, 1997. During that time, the
Flexible Income Portfolio was managed by its co-manager, Sandy Rufenacht.
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Sandy R. Rufenacht has been co-portfolio manager of the Flexible Income
Portfolio since January, 1997. Mr. Rufenacht joined Janus Capital Corporation in
1990 and gained experience as a trader and research analyst before assuming
management responsibilities. He holds a Bachelor of Arts in Business from the
University of Northern Colorado. Mr. Rufenacht is also an Executive Vice
President of Janus Investment Fund and serves as portfolio manager or co-manager
of other mutual funds.
Blaine P. Rollins has assisted in the management of the Balanced Portfolio since
its inception, and has served as portfolio manager since February 1, 1996. Mr.
Rollins joined Janus Capital in 1990 and has gained experience as a trader and
research analyst prior to assuming management responsibility for the Balanced
Portfolio. He holds a Bachelor of Science in Finance from the University of
Colorado and is a Chartered Financial Analyst. He has also managed the Janus
Balanced Fund since January 1996.
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. He has
co-managed Janus Venture Fund since December, 1993.
Value Equity Portfolio
NWQ, 2049 Century Park East, 4th Floor, Los Angeles, CA 90067, serves as the
investment sub-adviser to the Value Equity Portfolio. NWQ was founded in 1982
and is a wholly-owned subsidiary of United Asset Management Corporation. NWQ
provides investment management services to institutions and high net worth
individuals. As of September 30, 1997, NWQ had over $8.1 billion in assets under
management. NWQ has served as the investment sub-adviser to the WRL Series Fund,
Inc. Value Equity Portfolio since its inception.
NWQ provides ISI with investment advice and recommendations for the Value Equity
Portfolio consistent with that Portfolio's investment objective, policies and
restrictions, and supervises all security purchases and sales on behalf of the
Portfolio, including the negotiation of commissions and the allocation of
principal business and portfolio brokerage. In allocating such portfolio
transactions, NWQ may consider research and other services furnished to it and
may place portfolio transactions with broker-dealers that are affiliated with
ISI or NWQ. In placing portfolio business with all broker/dealers, NWQ seeks the
best execution of each transaction, and all brokerage placement must be
consistent with the Rules of Fair Practice of the NASD.
While NWQ provides portfolio management services, ISI retains responsibility for
the performance of such functions. For its services, NWQ receives 40% of the
fees received by ISI under the Value Equity Portfolio's Advisory Agreement, less
40% of any amount reimbursed to that Portfolio or waived by ISI pursuant to that
Portfolio's expense limitation.
Portfolio Managers:
An investment policy committee is responsible for the day-to-day management of
the Value Equity Portfolio's investments. David A. Polak, CFA, Edward C.
Friedel, CFA, James H. Galbreath, CFA, Phyllis G. Thomas, CFA and Jon D. Bosse,
CFA, constitute the committee.
Edward C. Friedel serves as Senior Portfolio Manager for the Value Equity
Portfolio. Mr. Friedel has been a managing director and investment
strategist/portfolio manager of NWQ since 1983. From 1971 to 1983, Mr. Friedel
was a portfolio manager for Beneficial Standard Investment Management.
C.A.S.E. Portfolio
C.A.S.E., located at 2255 Glades Road, Suite 221-A, Boca Raton, FL 33431, serves
as the investment sub-adviser to the C.A.S.E. Portfolio pursuant to an
Investment Counsel Agreement relating to the Portfolio. C.A.S.E. is a registered
investment advisory firm and a wholly-owned subsidiary of C.A.S.E., Inc.
C.A.S.E., Inc. is indirectly controlled by William Edward Lange, President and
Chief Executive Officer of the sub-adviser. C.A.S.E. provides investment
management services to financial institutions, high net worth individuals and
other professional money managers. C.A.S.E. has served as the investment
sub-adviser to the WRL Series Fund, Inc. C.A.S.E. Quality Growth, C.A.S.E.
Growth & Income and C.A.S.E. Growth Portfolios since their inception in 1995.
C.A.S.E. provides ISI with investment advice and recommendations for the
C.A.S.E. Portfolio consistent with that Portfolio's investment objective,
policies and restrictions, and supervises all security purchases and sales
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,
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C.A.S.E. may consider research and other services furnished to it and may place
portfolio transactions with broker-dealers that are affiliated with ISI or
C.A.S.E. In placing portfolio business with all broker/dealers, C.A.S.E. seeks
the best execution of each transaction, and all brokerage placement must be
consistent with the Rules of Fair Practice of the NASD.
While C.A.S.E. provides portfolio management services, ISI retains
responsibility for the performance of such functions. For its services, C.A.S.E.
receives 40% of the fees received by ISI under the C.A.S.E. Portfolio's Advisory
Agreement, less 40% of any amount reimbursed to the Portfolio or waived by ISI
pursuant to that Portfolio's expense limitation.
Portfolio Managers:
The C.A.S.E. Portfolio is managed by a team of investors called the Portfolio
Management Committee. William Edward Lange serves as the head portfolio manager
to the Portfolio Management Committee. Mr. Lange has been President of C.A.S.E.
since 1984.
Strategic Total Return Portfolio
Luther King, 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102, serves as
the investment sub-adviser to the Strategic Total Return 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. Strategic Total Return
Portfolio since its inception in February, 1993.
Luther King provides ISI with investment advice and recommendations for the
Strategic Total Return Portfolio consistent with that Portfolio's investment
objective, policies and restrictions, and supervises all security purchases and
sales 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 broker/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 NASD.
While Luther King provides portfolio management services, ISI retains
responsibility for the performance of such functions. For its services, Luther
King receives 40% of the fees received by ISI under the Strategic Total Return
Portfolio's Advisory Agreement, less 40% of any amount reimbursed to that
Portfolio or waived by ISI pursuant to that Portfolio's expense limitation.
Portfolio Managers:
Luther King, Jr. and Scot C. Hollmann have served as portfolio managers of the
Strategic Total Return 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.
Tactical Asset Allocation Portfolio
ISI has entered into an Investment Counsel Agreement for the Tactical Asset
Allocation Portfolio with Dean Investment, a division of C.H. Dean and
Associates, Inc., 2480 Kettering Tower, Dayton, Ohio 45423-2480. Founded in
1972, Dean Investment manages portfolios for individuals and institutional
clients world-wide and provides a full range of investment advisory services,
with more than $4 billion in assets under management as of November 30, 1997.
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.
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 all security purchases and
sales 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 broker/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 NASD.
While Dean Investment provides portfolio management services, ISI retains
responsibility for the performance of such functions. For its 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 that Portfolio's expense limitation.
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Portfolio Managers:
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, Mr. Riazzi
was responsible for client servicing, portfolio execution and trading
operations. Mr. Riazzi has been a member of the Central Investment Committee of
Dean Investment and a Senior Institutional Portfolio Manager for the past five
years.
Arvind Sachdeva, CFA, is the Senior Equity Strategist of the Tactical Asset
Allocation Portfolio. Mr. Sachdeva joined Dean Investment in 1993. Before that,
he had been the Senior Security Analyst and Equity Portfolio Manager for
Carillon Advisers, Inc. from 1985 to 1993. Carillon Advisers, Inc. is an
investment subsidiary of the Union Central Life Insurance Company.
Income Plus and Tax-Exempt Portfolios
AEGON Management, 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499, serves as
the investment sub-adviser to each of these 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 also serves as sub-adviser to
certain portfolios of the WRL Series Fund, 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
each Portfolio consistent with that Portfolio's investment objective, policies
and restrictions, and supervises all security purchases and sales on behalf of
the 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 broker/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 NASD.
While AEGON Management provides portfolio management services, 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
Income Plus Portfolios' Advisory Agreements, less 50% of any amount reimbursed
to that Portfolio or waived by ISI pursuant to that Portfolio's expense
limitation.
Portfolio Managers:
Rachel A. Dennis has served as portfolio manager of the Tax-Exempt Portfolio
since its inception. Ms. Dennis is 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 also a Senior Vice President of AEGON
Management and has been employed by AEGON Management and its affiliates in
various positions since 1975.
Administrator
IMI has entered into separate Administrative Services Agreements
("Administrative Agreements") pursuant to which ISI serves as administrator to
the Growth, Global, Flexible Income, Balanced and Capital Appreciation
Portfolios.
Under these 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 record keeping.
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 SAI.
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DISTRIBUTOR AND DISTRIBUTION AND SERVICE PLANS
Underwriting Agreements
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 is compensated by each Portfolio for services as distributor and principal
underwriter for Class A, Class B and Class C shares of each Portfolio, and Class
T shares of the Growth Portfolio.
Distribution Plans
ISI may use the fees payable under these plans as it deems appropriate to pay
for activities or expenses primarily intended to result in the sale of the
respective share classes or in personal service to and/or maintenance of
shareholder accounts of the respective share classes. Expense categories may
include, but are not limited to: compensation to employees of ISI; compensation
to and expenses of ISI, dealers or other financial institutions who sell shares
or 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. Payments made under the plans may
exceed distribution expenses actually incurred.
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 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. Class T shares of the Growth Portfolio are
not subject to annual distribution and service fees. However, as compensation
for the expenses borne by ISI and the distribution services provided, ISI
receives the sales charges imposed on Class T shares and reallows a portion of
such charges to brokers or dealers that have sold such Class T shares.
Class A Share Distribution Plan
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.
ISI may also receive annual distribution and service 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 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 0.35%, on an annualized basis, of the average
daily net assets of that Portfolio's Class A shares.
Class B Share Distribution Plan
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.
Class C Share Distribution Plan
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.
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MISCELLANEOUS INFORMATION
Organization of the Portfolios
Each Portfolio is a series of IDEX 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 the Declaration of
Trust is on file with the Secretary of the Commonwealth of Massachusetts. On
September 20, 1996, in a tax free reorganization, IDEX Growth Portfolio acquired
all of the assets and assumed all of the liabilities of each of IDEX Fund and
IDEX Fund 3 in exchange for Class T shares of IDEX Growth Portfolio, which were
then distributed on a pro rata basis to the respective shareholders of IDEX Fund
and IDEX Fund 3. At that time, the Fund changed its name from IDEX II Series
Fund to IDEX Series Fund. Before its organization as a series company, the Fund
was called IDEX II.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for acts or obligations
of the Fund. 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 IDEX believes is remote.
Class A, Class B, Class C and Class T Shares
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:
Class A, Class B, and Class C shares. In addition, the shares of beneficial
interest of IDEX Growth Portfolio only include a fourth class of shares,
designated Class T shares. Each class represents interests in the same assets of
the Portfolio. The classes differ as follows:
o 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.
o Class A shares are subject to an initial sales charge, or front-end load.
Class A shares which are not subject to an initial sales charge because of
the size of the purchase are subject to a deferred sales charge if redeemed
during the first year.
o Class B shares are subject to a contingent deferred sales charge, or
back-end load, at a declining rate.
o Class C shares are subject to higher ongoing distribution and service fees
than Class A shares, and lower ongoing distribution and service fees than
Class B shares.
o Class T shares of the Growth Portfolio are subject to an initial front-end
load, but no annual distribution and service fees. Class T shares are not
available to new investors; only existing Class T shareholders (who were
shareholders of IDEX Fund or IDEX Fund 3 on September 20, 1996) may
purchase additional Class T shares.
Each class may bear differing amounts of certain class-specific expenses. Each
class has a separate exchange privilege. 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, and with respect to the Growth Portfolio, lower
than for Class T shares.
Class B shares convert automatically into Class A shares of the same Portfolio
eight years after the end of the calendar month in which the shareholder's order
to purchase the share was accepted. The conversion is based on net asset value,
without any sales charge, fee or other charge. The purpose of this conversion is
to relieve the holders of the Class B shares from the higher distribution and
service fees imposed on those shares, after ISI has been substantially
compensated for distribution expenses by those fees.
The Fund does not expect that there will be any conflicts between the interests
of holders of the different classes of shares of the same Portfolio because of
the class structure. The Board of Trustees will consider, if necessary, whether
any such conflict exists; if it does, the Board will take appropriate action to
resolve it.
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Personal Securities Trading
The Fund permits "Access Persons" as defined by Rule 17j-1 under the 1940 Act to
engage in personal securities transactions, subject to the terms of the Code of
Ethics and Insider Trading Policy ("the Policy") that has been adopted by the
Board of Trustees of the Fund. Access Persons must use the guidelines
established by this Policy for all personal securities transactions and are
subject to certain prohibitions on personal trading. The Fund's sub-advisers,
pursuant to Rule 17j-1 and other applicable laws, and pursuant to the terms of
the Policy, must adopt and enforce their own Code of Ethics and Insider Trading
Policies appropriate to their particular business needs. Each sub-adviser must
report to the Board of Trustees on a quarterly basis with respect to the
administration and enforcement of such Policy, including any violations thereof
which may potentially affect the Fund.
Shareholder Meetings
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.
The Transfer Agent
Idex Investor Services, Inc., P.O. Box 9015, Clearwater, Florida 33758-9015, an
affiliate of IMI and ISI, is the Fund's transfer agent, withholding agent and
dividend paying agent.
The Custodian
Investors Fiduciary Trust Company ("IFTC"), 801 Pennsylvania, Kansas City,
Missouri 64105-1307, is custodian of the Fund's assets and serves as custodian
for qualified retirement plans and individual retirement plan accounts investing
in the Fund. However, all correspondence about a shareholder's account should be
sent to IDEX.
Shareholder Inquiries
Inquiries by shareholders about a Portfolio or requests for forms for opening or
changing accounts or plans should be made by writing IDEX at P.O. Box 9015,
Clearwater, Florida 33758-9015 or calling IDEX Customer Service at (888)
233-4339 (toll free).
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, the Fund will send only one copy of certain mailings to a shareholder who
has more than one account (each with the same taxpayer ID number). Further, two
or more shareholders may elect to receive a consolidated statement and only one
copy of certain mailings for their accounts so long as they share the same
surname and address. Select this option on the New Account Application or by
written request to IDEX Customer Service.
Additional copies of shareholder reports and prospectuses may be obtained by
calling IDEX Customer Service.
DISTRIBUTIONS AND TAXES
This section discusses how and when the Portfolios make distributions to you and
some of your Federal tax responsibilities related to such distributions. The
discussions are on taxes in general, and should not be construed as tax advice.
Shareholders are urged to consult tax-advisers.
Income and Capital Gains Distributions
The Portfolios may pay distributions from various sources. Ordinary income
distributions are made from fund earnings from interest paid on taxable bonds,
dividends paid on stocks, and other kinds of securities income. Capital gains
distributions are made from gains net of losses realized when securities owned
by a Portfolio for more than one year are sold at an amount greater than their
cost basis.
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Short-term capital gain distributions (related to securities sold which have
been owned one year or less) are ordinary income, not capital gain, to
shareholders. The Tax-Exempt Portfolio pays exempt interest dividends that are
generally exempt from Federal income tax.
Ordinarily, the Portfolios distribute income and capital gains annually, except
that the Strategic Total Return, Tactical Asset Allocation and Balanced
Portfolios distribute income quarterly, and the Flexible Income, Income Plus and
Tax-Exempt Portfolios distribute income monthly. Dividend transactions are
confirmed quarterly. Capital gain distributions realized during each fiscal year
normally will be declared and paid in the following fiscal year. To avoid a 4%
excise tax on undistributed amounts of ordinary income and capital gains, as
described in the SAI, a Portfolio may, to the extent permitted 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, Class C and Class T shares are calculated in the same manner and
declared and paid at the same time. For a complete discussion of Class A, Class
B, Class C and Class T share values and expenses, see Shareholder Information
and Instructions.
If you buy shares in a non-retirement account on or shortly before the record
date for a dividend or other taxable distribution, you will pay full price for
the shares, then receive some portion of what you paid as a taxable
distribution.
How You Receive Your Distributions
The Portfolios will automatically reinvest your dividend and capital gain
distributions in additional portfolio shares of the same class you already own,
unless you specify another payment method. See Shareholder Information and
Instructions for complete information about how to receive your distributions.
Requested cash distributions will be paid by direct deposit (via Automated
Clearing House electronic funds transfer ("ACH")), or by check, whichever you
choose on your New Account Application. Dividend checks are usually mailed,
along with a confirmation, on the payable date. Dividend checks will be made
payable to the shareholder and mailed to the address of record. You may request
a different payee or address on the New Account Application. To change dividend
check payees for an existing account, mail a signature guaranteed written
request to IDEX.
Any checks which cannot be delivered and are returned by the Post Office to IDEX
will be reinvested in full or fractional shares in your account at the net asset
value next computed after the check has been received by IDEX. To reduce costs
to a Portfolio, checks outstanding and uncashed for over 180 days may have
payments stopped and be reinvested back into the shareholder/payee's account at
the discretion of IDEX. Cash distributions that total less than $5.00 will not
be disbursed but will be reinvested into the account.
Shareholders may obtain further information or change their dividend or
distribution options any time before the record date of any dividend or
distribution by calling IDEX Customer Service at (888) 233-4339 (toll free) or
writing to IDEX, P.O. Box 9015, Clearwater, FL 33758-9015.
Tax Information
Each Portfolio is treated as a separate entity for federal tax purposes. Each
Portfolio is a regulated investment company, as defined by Subchapter M of the
Internal Revenue Code of 1986 (the "Code"), as amended.
For each fiscal period, if a Portfolio meets certain requirements of the Code,
the Portfolio does not pay taxes on net income and gains realized from
investment operations to the extent earnings and profits are distributed to
shareholders. Shareholders are responsible for any taxes attributable to
distributions. (See The Tax-Exempt Portfolio -- Special Considerations, below,
for discussion of tax-exempt distributions; see the SAI for a complete
discussion of the tax treatment of a mutual fund as a regulated investment
company.)
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 the first year, and the Portfolio will be treated
as having paid the distribution on that date.
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"Taxable Events" -- When and How You Owe Federal Income Tax
Related to Your Portfolio Investment
Selling or Exchanging Shares. When you sell shares, whether you take cash or
exchange the shares for shares in another Portfolio, it is a "taxable event."
For non-retirement plan accounts, you will owe tax if you realize a taxable gain
on the sale or exchange. On the other hand, if you realize a loss based on your
cost or basis in the shares, you may be able to offset that capital loss against
any capital gain income you have. If there were any capital gains distributions
on the shares, the loss that is allowed will be treated as a long-term capital
loss, to the extent of the capital gains distributions.
If you sell shares in a Portfolio, then buy shares again under the reinvestment
privilege described in Shareholder Information and Instructions, the cost of
shares sold may need to be reduced related to any front-end sales charges you
may have initially paid. See the SAI and consult your tax adviser about these
rules, as well as wash sale provisions of the Internal Revenue Code.
For tax purposes, the cost per share of a Class A or Class T share is generally
the per-share price you paid for your shares (which may include sales charges);
the cost of a Class B or Class C share is the per-share NAV on the date of
purchase. As a general rule, your gain or loss on a sale or exchange will be a
long-term capital gain or loss if the shares have been held for more than one
year and a short-term capital gain or loss if held for one year or less. Under
the Taxpayer Relief Act of 1997, capital gains Federal tax rate of 28% has been
reduced to 20% for individuals in certain circumstances. The 20% rate (10% for
those in the 15% income tax bracket) applies for sales of assets (such as
redemptions of mutual fund shares) from May 7, 1997 through July 28, 1997 for
assets held more than 12 months, and for sales on July 29, 1997 and later, for
assets held more than 18 months. Further, for sales of assets after December 31,
2005, for assets held more than 5 years, the tax rate drops to 18% (8% for those
in the 15% tax bracket). However, as with all issues relating to your personal
income taxes, we strongly encourage you to consult your tax adviser for advice
on how the Taxpayer Relief Act of 1997 will affect you.
For most accounts (other than retirement plan accounts which will receive Form
1099-R), IDEX will provide you with the "cost basis" for the shares you sold in
the tax package mailed in January. This cost basis figure is important. It is
figured on the single category average cost method, and it may assist you in
reporting the gain or loss on your shares sold.
You are not required to use this method; in fact, if you have previously sold
shares in a Portfolio and did not use this method to report gain or loss, it is
not available to you to use for sales of shares in that Portfolio. To determine
which cost basis method is most suitable for you, please consult your tax
adviser.
Note: Please keep all regular account statements to use in conjunction with
average cost information you may receive in order to determine gain or loss on
the sale of Portfolio shares. Additionally, your tax adviser should determine
the accuracy and utility of this information according to your situation.
Income Tax Owed on Income Distributions. Ordinary income distributions from all
Portfolios, whether received in cash or reinvested, are subject to ordinary
income tax rates. See the Tax-Exempt Portfolio - Special Considerations, below.
Income Tax Owed on Capital Gain Distributions. As explained above, the
Portfolios generally distribute net realized capital gains, to the extent
available, to shareholders once a year. These capital gains distributions,
whether paid in cash or reinvested, should be subject to the same tax rates as
if you sell shares and realize a gain (see above). The United States Treasury
Department has been given authority to write regulations regarding the effect of
the Taxpayer Relief Act of 1997 on capital gain distributions. See the SAI and
consult your tax adviser .
The Tax-Exempt Portfolio --
Special Considerations
The Tax-Exempt Portfolio intends to continue to qualify to pay "exempt-interest"
dividends. These are distributions from the Portfolio's investment income
attributable to interest on municipal obligations. Exempt-interest dividends are
generally excluded from the calculation of the gross income of recipients for
federal income tax purposes.
The Tax-Exempt Portfolio's principal business is tax-exempt investing. However,
some of its investments or activities may result in taxable income to its
shareholders, or other tax consequences. Possible tax effects include:
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Alternative Minimum Tax. Some securities held by the Tax-Exempt Portfolio may
pay interest which is a tax preference item for purposes of computing the
federal alternative minimum tax for both individuals and corporations.
Taxable Income Dividends. Some securities held by the Tax-Exempt Portfolio may
pay interest that is taxable as ordinary income.
Capital Gains. Any "long-term" capital gains distributions from the Tax-Exempt
Portfolio are taxable as capital gains. "Short-term" capital gain distributions
are taxable as ordinary income.
Social Security and Railroad Retirement Benefits. Exempt-interest dividends from
the Tax-Exempt Portfolio are included in the calculation of total income for
recipients of Social Security or railroad retirement benefits. As a result,
although the exempt-interest dividends from the Portfolio are still tax-exempt,
they may be figured into the calculation of how much of a recipient's Social
Security or railroad retirement income is taxed.
Capital Loss Allowance. If shares of a Portfolio that earned exempt-interest
dividends are redeemed at a loss after being held for six months or less, part
of the loss will be disallowed for income tax purposes, to the extent of
exempt-interest dividends that were earned on the shares. It is anticipated that
this situation could only occur for shareholders in the Tax-Exempt Portfolio.
Some State Tax Exemptions
In some states, shareholders are not subject to state taxation on distributions
made by a registered investment company that were derived from interest on or
portions of their account value attributed to direct or indirect obligations of
the U.S. government. This exemption may not apply to dividends derived from
interest on obligations issued by agencies or instrumentalities of the U.S.
government, or interest earned on repurchase obligations secured by such
obligations or direct obligations of the U.S. government, depending on the
particular state. Some states may also impose an intangible tax on the value of
shares you own. Consult your tax adviser.
Tax Statements
Tax forms related to dividends , distributions and redemptions of shares paid by
a Portfolio are mailed annually in January for the preceding year. For most
types of accounts, IDEX will report the proceeds of redemptions to shareholders
and the Internal Revenue Service ("IRS") annually. Average cost basis
information on non-retirement plan account redemptions is not currently reported
to the IRS.
Tax Withholding
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 gains 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 income distributions and capital gain distributions also is
required for shareholders who otherwise are subject to backup withholding
according to the IRS.
Note: The foregoing is only a general summary of some of the important federal
tax considerations under current law generally affecting each Portfolio and its
shareholders; see the SAI 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.
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APPENDIX A
BRIEF EXPLANATION OF RATING CATEGORIES
BOND RATING EXPLANATION
STANDARD & POOR'S AAA Highest rating; extremely strong capacity to
CORPORATION pay principal and interest.
AA High quality; very strong capacity to pay
principal and interest.
A Strong capacity to pay principal and
interest; somewhat more susceptible to the
adverse effects of changing circumstances and
economic conditions.
BBB Adequate capacity to pay principal and
interest; normally exhibit adequate
protection parameters, but adverse economic
conditions or changing circumstances
more likely to lead to a weakened capacity
to pay principal and interest than for higher
rated bonds.
BB,B Predominantly speculative with respect to the
CCC, CC, C issuer's capacity to meet required interest
and principal payments. BB - lowest degree of
speculation; C - highest degree of
speculation. Quality and protective
characteristics outweighed by large
uncertainties or major risk exposure to
adverse conditions.
D In default.
MOODY'S INVESTORS Aaa Highest quality, smallest degree of
SERVICE, INC. investment risk.
Aa
High quality; together with Aaa bonds,
they compose the high-grade bond group.
A Upper-medium grade obligations; many
favorable investment attributes.
Baa Medium-grade obligations; neither highly
protected nor poorly secured. Interest and
principal appear adequate for the
present but certain protective elements
may be lacking or may be unreliable over any
great length of time.
Ba More uncertain, with speculative elements.
Protection of interest and principal payments
not well safeguarded during good and bad
times.
B Lack characteristics of desirable investment;
potentiallylow assurance of timely interest
and principal payments or maintenance of
other contract terms over time.
Caa Poor standing, may be in default; elements of
danger with respect to principal or interest
payments.
Ca Speculative in a high degree; could be in
defalut or have other marked shortcomings.
C Lowest-rated; extremely poor aspects of ever
attaining investment standing.
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SECURITIES HOLDINGS BY RATING CATEGORY
During the period ended October 31, 1997, the percentage of security holdings
by rating category based upon a weighted average was:
BONDS - S&P RATING FLEXIBLE INCOME PORTFOLIO INCOME PLUS PORTFOLIO
- ----------------------------------------------------------------------------
AAA
AA
A
BBB
BB
B
CCC
CC
C/NR
Preferred Stock/NR
Cash, Equivalents and
Assets Less Liabilities
Total
- --------------------------------------------------------------------------------
No other Fund held 5% or more of its assets in bonds rated below investment
grade, including unrated bonds deemed to be the equivalent of non-investment
grade securities, for the period ended October 31, 1997. Unrated securities and
securities that have received different ratings from more than one agency will
be treated as noninvestment grade securities unless the portfolio manager,
subject to the supervision of the Board of Trustees, determines that such
securities are the equivalent of investment grade securities.
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APPENDIX B
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of the types of securities in
which the Portfolios may invest. The Portfolios may invest in these securities
to the extent permitted by their investment objectives and policies. The
Portfolios are not limited by this discussion and may invest in ANY type of
security unless precluded by the policies discussed elsewhere in this Prospectus
or in the SAI.
I. EQUITY AND DEBT SECURITIES
Bonds Are Debt Securities issued by a company, municipality or government
agency. The issuer of a bond is required to pay the holder the amount of the
loan (or par value) at a specified maturity and to make scheduled interest
payments.
Certificates of Participation ("Cops") are certificates representing an interest
in a pool of securities. Holders are entitled to a proportionate interest in the
underlying securities. Municipal lease obligations are often sold in the form of
COPs. See "Municipal lease obligations" below.
Commercial Paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Portfolios may purchase commercial paper issued
under Section 4(2) of the Securities Act of 1933. The Portfolios may determine
that such securities are liquid under guidelines established by the Trustees.
Common stock represents a share of ownership in a company and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible Securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary Receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).
Fixed-Income Securities are securities that pay a fixed rate of return. The term
generally includes short- and long-term government, corporate and municipal
obligations that pay a fixed rate of interest or coupons for a specified period
of time and preferred stock, which pays fixed dividends. Coupon and dividend
rates may be fixed for the life of the issue or, in the case of adjustable and
floating rate securities, for a shorter period.
High-Yield/High-Risk Bonds are securities that are rated below investment grade
by the primary rating agencies (BB or lower by Standard & Poor's and Ba or lower
by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "non-investment grade bonds" and "junk bonds."
Industrial Development Bonds are revenue bonds that are issued by a public
authority but which may be backed only by the credit and security of a private
issuer and may involve greater credit risk. See "Municipal securities" below.
Mortgage- and Asset-Backed Securities are shares in an organized pool of
mortgages or other debt. These securities are generally pass-through securities,
which means that principal and interest payments on the underlying securities
(less servicing fees) are passed through to shareholders on a pro rata basis.
These securities involve prepayment risk, which is the risk that the underlying
mortgages or other debt may be refinanced or paid off prior to their maturities
during periods of declining interest rates. In that case, a portfolio manager
may have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Municipal Lease Obligations are revenue bonds backed by leases or installment
purchase contracts for property or equipment. Lease obligations may not be
backed by the issuing municipality's credit and may involve risks not normally
associated with general obligation bonds and other revenue bonds. For example,
their interest may become taxable if the lease is assigned and the holders may
incur losses
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if the issuer does not appropriate funds for the lease payments on an annual
basis, which may result in termination of the lease and possible default.
Municipal Securities are bonds or notes issued by a U.S. state or political
subdivision. A municipal security may be a general obligation backed by the full
faith and credit (i.e., the borrowing and taxing power) of a municipality or a
revenue obligation paid out of the revenues of a designated project, facility or
revenue source.
Passive Foreign Investment Companies (PFICs) are foreign investment funds or
trusts. In addition to bearing their proportionate share of a Portfolio's
expenses, shareholders may indirectly bear similar expenses of PFICs and similar
trusts.
Preferred Stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase Agreements involve the purchase of a security by a Portfolio and a
simultaneous agreement by a bank or dealer to repurchase the security from the
Portfolio at a specified date or upon demand. This technique offers a method of
earning income on idle cash. These securities involve the risk that the seller
will fail to repurchase the security, as agreed. In that case, a Portfolio will
bear the risk of market value fluctuations until the security can be sold and
may encounter delays and incur costs in liquidating the security.
Reverse Repurchase Agreements involve the sale of a security by a Portfolio to
another party (generally a bank or dealer) in return for cash and an agreement
by the Portfolio to buy the security back at a specified price and time. This
technique may be used to provide cash to satisfy unusually high redemption
requests or for other temporary or emergency purposes.
Standby Commitments are obligations purchased by a Portfolio from a dealer that
give the Portfolio the option to sell a security to the dealer at a specified
price.
Tender Option Bonds are generally long-term securities that have been coupled
with an option to tender the securities to a bank, broker-dealer or other
financial institution at periodic intervals and receive the face value of the
bond. This type of security is commonly used as a means of enhancing the
liquidity of municipal securities.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Warrants are securities, typically issued with preferred stock or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
When-Issued, Delayed Delivery and Forward Transactions generally involve the
purchase of a security with payment and delivery due at some time in the future
(i.e., beyond normal settlement). The Portfolios do not earn interest on such
securities until settlement and bear the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero Coupon Bonds are debt securities that do not pay regular interest at
regular intervals, but are issued at a significant discount from face value. The
discount approximates the total amount of interest the security will accrue from
the date of issuance to maturity. Strips are debt securities that are stripped
of their interest (usually by a financial intermediary) after the securities are
issued. The market value of these securities generally fluctuates more in
response to changes in interest rates than interest-paying securities of
comparable maturity.
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II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Futures Contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Portfolios may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. An option on
a futures contract gives the buyer the right, but not the obligation, to buy or
sell a futures contract at a specified price on or before a specified date.
Futures contracts and options on futures are standardized and traded on
designated exchanges.
Indexed/Structured Securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices or other financial indicators. Such
securities may be positively or negatively indexed (i.e. their value may
increase or decrease if the reference index or instrument appreciates).
Indexed/structured securities may have return characteristics similar to direct
investments in the underlying instruments and may be more volatile than the
underlying instruments. A Portfolio bears the market risk of an investment in
the underlying instruments, as well as the credit risk of the issuer.
Inverse Floaters are debt instruments whose interest rate bears an inverse
relationship to the interest rate on another instrument.
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Portfolios may purchase and write put and call options on securities,
securities indices and foreign currencies. 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.
Forward Contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Portfolios may enter into forward currency contracts to hedge against
declines in the value of non-dollar denominated securities or to reduce the
impact of currency appreciation on purchases of nondollar denominated
securities. They may also enter into forward contracts to purchase or sell
securities or other financial indices.
Interest Rate Swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Interest Rate Caps entitle 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.
Interest Rate Floors entitle 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.
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IDEX AGGRESSIVE GROWTH PORTFOLIO
IDEX INTERNATIONAL EQUITY PORTFOLIO
IDEX CAPITAL APPRECIATION PORTFOLIO
IDEX GLOBAL PORTFOLIO
IDEX GROWTH PORTFOLIO
IDEX C.A.S.E. PORTFOLIO
IDEX VALUE EQUITY PORTFOLIO
IDEX STRATEGIC TOTAL RETURN PORTFOLIO
IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
IDEX BALANCED PORTFOLIO
IDEX FLEXIBLE INCOME PORTFOLIO
IDEX INCOME PLUS PORTFOLIO
IDEX TAX-EXEMPT PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
March 1, 1998
IDEX SERIES FUND
(formerly IDEX II Series Fund)
201 Highland Avenue
Largo, Florida 33770-2957
Customer Service (888) 233-4339 (toll free)
IDEX Aggressive Growth, International Equity, Capital Appreciation, Global,
Growth, C.A.S.E., Value Equity, Strategic Total Return (formerly Equity-Income),
Tactical Asset Allocation, Balanced, Flexible Income, Income Plus and Tax-Exempt
Portfolios (each a "Portfolio" and collectively, the "Portfolios") are series of
IDEX Series Fund (the "Fund"), an open-end management investment company that
offers a selection of investment portfolios. Each IDEX Portfolio herein was
formerly known as an IDEX II Portfolio. All Portfolios other than the Capital
Appreciation Portfolio are diversified, while the Capital Appreciation Portfolio
is nondiversified. IDEX Aggressive Growth Portfolio seeks long-term capital
appreciation. IDEX International Equity Portfolio seeks long-term growth of
capital. IDEX Capital Appreciation Portfolio seeks long-term growth of capital
by emphasizing investments in common stocks of companies by normally investing
at least 50% of its equity assets in securities issued by medium-sized companies
as described in the Prospectus. IDEX 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 Growth
Portfolio seeks only growth of capital. IDEX C.A.S.E. Portfolio seeks annual
growth of capital through investments in companies whose management, financial
resources and fundamentals appear attractive on a scale measured against each
company's present value. IDEX Value Equity Portfolio seeks maximum consistent
total return with minimum risk to principal. IDEX Strategic Total Return
Portfolio seeks to provide current income, long-term growth of income and
capital appreciation. IDEX Tactical Asset Allocation Portfolio seeks
preservation of capital and competitive investment returns. IDEX Balanced
Portfolio seeks long-term capital growth, consistent with preservation of
capital and balanced by current income. IDEX 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 Income Plus Portfolio seeks to provide as high a level of current income as
is consistent with the avoidance of excessive risk. IDEX Tax-Exempt Portfolio
seeks to provide maximum current interest income exempt from federal income tax
in a manner consistent with preservation of capital.
On September 20, 1996 in a tax-free reorganization, IDEX Growth Portfolio
(formerly IDEX II Growth Portfolio) acquired all of the assets and assumed all
of the liabilities of IDEX Fund and IDEX Fund 3 in exchange for Class T shares
of IDEX Growth Portfolio, which were then distributed on a pro rata basis to the
respective shareholders of IDEX Fund and IDEX Fund 3. Upon the closing of the
reorganization, IDEX II Series Fund changed its name to IDEX Series Fund.
This Statement of Additional Information is not a Prospectus, and should be
read in conjunction with the Prospectus dated March 1, 1998 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.
<PAGE>
IDEX SERIES FUND
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
INVESTMENT OBJECTIVES..........................................................
INVESTMENT RESTRICTIONS, POLICIES AND PRACTICES................................
Investment Restrictions of IDEX Aggressive Growth Portfolio .................
Investment Restrictions of IDEX International Equity Portfolio...............
Investment Restrictions of IDEX Capital Appreciation Portfolio
and IDEX Balanced Portfolio...............................................
Investment Restrictions of IDEX Global Portfolio.............................
Investment Restrictions of IDEX Growth Portfolio and IDEX Flexible
Income Portfolio..........................................................
Investment Restrictions of IDEX C.A.S.E. Portfolio...........................
Investment Restrictions of IDEX Value Equity Portfolio.......................
Investment Restrictions of IDEX Strategic Total Return Portfolio.............
Investment Restrictions of IDEX Tactical Asset Allocation Portfolio..........
Investment Restrictions of IDEX Income Plus Portfolio........................
Investment Restrictions of IDEX Tax-Exempt Portfolio.........................
OTHER POLICIES AND PRACTICES OF THE PORTFOLIOS.................................
Futures, Options and Other Derivative Instruments............................
Futures Contracts ...........................................................
Options on Futures Contracts.................................................
Options on Securities........................................................
Options on Foreign Currencies................................................
Forward Contracts............................................................
Swaps and Swap-Related Products..............................................
Eurodollar Instruments.......................................................
Special Investment Considerations and Risks..................................
Additional Risks of Options on Foreign Currencies,
Forward Contracts and Foreign Instruments.................................
Other Investment Companies...................................................
Zero Coupon, Pay-In-Kind and Step Coupon Securities..........................
Income-Producing Securities..................................................
Lending of Portfolio Securities..............................................
Joint Trading Accounts.......................................................
Illiquid Securities..........................................................
Repurchase and Reverse Repurchase Agreements.................................
Pass-through Securities......................................................
High-Yield/High-Risk Bonds...................................................
Warrants and Rights..........................................................
U.S. Government Securities...................................................
Portfolio Turnover...........................................................
INVESTMENT ADVISORY AND OTHER SERVICES.........................................
Additional Investment Advisory or Sub-Advisory Services Provided
by the Sub-Advisers.......................................................
DISTRIBUTOR....................................................................
ADMINISTRATIVE SERVICES........................................................
CUSTODIAN, TRANSFER AGENT AND OTHER AFFILIATES ................................
PORTFOLIO TRANSACTIONS AND BROKERAGE...........................................
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TRUSTEES AND OFFICERS .........................................................
PURCHASE OF SHARES ............................................................
DISTRIBUTION PLANS ............................................................
NET ASSET VALUE DETERMINATION..................................................
DIVIDENDS AND OTHER DISTRIBUTIONS .............................................
SHAREHOLDER ACCOUNTS...........................................................
RETIREMENT PLANS...............................................................
REDEMPTION OF SHARES ..........................................................
TAXES..........................................................................
PRINCIPAL SHAREHOLDERS.........................................................
MISCELLANEOUS .................................................................
Organization ................................................................
Shares of Beneficial Interest ...............................................
Legal Counsel and Auditors ..................................................
Registration Statement ......................................................
PERFORMANCE INFORMATION .......................................................
FINANCIAL STATEMENTS ..........................................................
CERTAIN SECURITIES IN WHICH THE PORTFOLIOS MAY INVEST ...............APPENDIX A
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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 Aggressive Growth Portfolio
IDEX 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
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 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;
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;
7. 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; and
8. Issue senior securities, except that the Portfolio may borrow from banks
for investment purposes so long as the Portfolio maintains the required
coverage.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government securities.
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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 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";
(B) 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 number 7 above. 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;
(C) 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;
(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 consolidation, merger or other reorganization;
(E) The Portfolio may not invest in companies for the purpose of exercising
control or management; and
(F) 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 (the "1933 Act"), or any
successor to such Rule, Section 4(2) commercial paper or any other securities as
to which the Board of Trustees has made a determination as to liquidity, as
permitted under the 1940 Act.
Investment Restrictions of IDEX International Equity Portfolio
IDEX International Equity 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. All securities of a foreign government and its agencies will be treated
as a single issuer for purposes of this restriction;
2. Invest 25% or more of the value of the Portfolio's total assets in any
particular industry (other than U.S. government securities). For purposes of
this restriction, the term industry shall include (a) the government of any one
country other than the U.S., but not the U.S. government and (b) all
supranational organizations;
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 securities or
other instruments backed by real estate, including mortgage-backed securities,
or debt or equity securities issued by companies engaged in those businesses;
5. 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 portfolio securities of the Portfolio;
6. Lend any security or make any other loan if, as a result, more than 30%
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);
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7. The Portfolio may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 331/3% of the
value of the Portfolio's total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that exceed 331/3% 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
331/3% 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, futures contracts, swaps, forward contracts, or
other derivative instruments or the segregation of assets in connection with
such transactions; and
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government 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, as a matter of non-fundamental policy (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
Trading 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;
(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 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 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or other securities for which the Board of Trustees has
made a determination of liquidity, as permitted under the 1940 Act;
(F) 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 consolidation, merger or other reorganization. The
Portfolio may also invest in the GEI Short-Term Investment Fund, an investment
fund advised by GE Investment Management Incorporated ("GEIM"), created
specifically to serve as a vehicle for the collective investment of cash
balances of the Portfolio and other accounts advised by GEIM or General Electric
Investment Corporation. Investments in GEI Short-Term Investment Fund are not
considered investments in another investment company for the purposes of this
restriction;
(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; and
(H) The Portfolio may not invest in companies for the purpose of exercising
control or management.
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<PAGE>
With respect to investment restriction No. 2 above, the Portfolio may use
the industry classifications reflected by the S&P 500 Composite Stock Index, if
applicable at the time of determination. For all other Portfolio holdings the
Portfolio may use the Directory of Companies Required to File Annual Reports
with the SEC and Bloomberg, Inc. In addition, the Portfolio may select its own
industry classifications, provided such classifications are reasonable.
Investment Restrictions of IDEX Capital Appreciation Portfolio and IDEX Balanced
Portfolio
IDEX Capital Appreciation Portfolio and IDEX 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 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 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);
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; and
7. 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.
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government securities.
Furthermore, the Portfolios 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 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;
(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 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;
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<PAGE>
(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 futures, options, contracts, 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 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 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;
(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 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 1933 Act, or any successor to such Rule,
Section 4(2) commercial paper and municipal lease obligations. Accordingly, such
securities may not be subject to the foregoing limitation;
(H) The Portfolio may not invest in companies for the purpose of exercising
control or management; and
(I) With respect to the Balanced Portfolio only, at least 25% of the total
assets of that Portfolio will normally be invested in fixed-income senior
securities, which include corporate debt securities and preferred stock.
Investment Restrictions of IDEX Global Portfolio
IDEX 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 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);
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; and
7. 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
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<PAGE>
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.
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government securities.
Furthermore, the Portfolio has 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 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 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;
(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 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;
(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 more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the 1933 Act, or any successor to such Rule, Section
4(2) commercial paper 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
(H) The Portfolio may not invest in companies for the purpose of exercising
control or management.
Investment Restrictions of IDEX Growth Portfolio and IDEX Flexible Income
Portfolio
IDEX Growth Portfolio and IDEX 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 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;
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<PAGE>
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;
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); and
7. 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, futures contracts, swaps, forward contracts, and other
derivative instruments or the segregation of assets in connection with such
transactions.
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government securities.
Furthermore, the Portfolios 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 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 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 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or
7
<PAGE>
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;
(F) The Portfolio may not invest in companies for the purpose of exercising
control or management;
(G) 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 consolidation, merger or other reorganization; and
(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.
In making all investments for the IDEX Flexible Income Portfolio, the
sub-adviser will emphasize economic or financial factors or circumstances of the
issuer, rather than opportunities for short-term arbitrage.
Investment Restrictions of IDEX C.A.S.E. Portfolio
IDEX C.A.S.E. 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 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. Invest 25% or more of the value of the Portfolio's 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 an 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;
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);
7. 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, futures contracts, swaps, forward contracts, or other
derivative instruments or the segregation of assets in connection with such
transactions; and
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government 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:
8
<PAGE>
(A) The Portfolio may not, as a matter of non-fundamental policy (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;
(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 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 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or other securities for which the Board of Trustees has
made a determination of liquidity, as permitted under the 1940 Act;
(F) 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 consolidation, merger or other reorganization;
(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 not invest more than 25% of its net assets at the
time of purchase in the securities of foreign issuers and obligors; and
(I) The Portfolio may not invest in companies for the purpose of exercising
control or management.
Investment Restrictions of IDEX Value Equity Portfolio
IDEX Value Equity 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. Invest 25% or more of the value of the Portfolio's total assets in any
particular industry (other than U.S. 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);
9
<PAGE>
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 an 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;
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);
7. The Portfolio may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 10% of the value
of the Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that exceed 10% 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 10%
limitation. The Portfolio may not purchase additional securities when borrowings
exceed 5% of total assets. This policy shall not prohibit reverse repurchase
agreements or deposits of assets to provide margin or guarantee positions in
connection with transactions in options, futures contracts, swaps, forward
contracts, or other derivative instruments or the segregation of assets in
connection with such transactions; and
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government 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, as a matter of non-fundamental policy (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;
(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 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 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or other securities for which the Board of Trustees has
made a determination of liquidity, as permitted under the 1940 Act;
(F) 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
10
<PAGE>
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 consolidation, merger or other reorganization;
(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 not invest more than 25% of its net assets at the
time of purchase in the securities of foreign issuers and obligors; and
(I) The Portfolio may not invest in companies for the purpose of exercising
control or management.
Investment Restrictions of IDEX Strategic Total Return Portfolio
IDEX Strategic Total Return 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);
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;
7. 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; and
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government 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 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;
11
<PAGE>
(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 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 more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or any other securities as to which the Board of Trustees
has made a determination as to liquidity, as permitted under the 1940 Act;
(G) The Portfolio may not invest in companies for the purpose of exercising
control or management; and
(H) 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.
Investment Restrictions of IDEX Tactical Asset Allocation Portfolio
IDEX 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);
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;
7. 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; and
12
<PAGE>
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government 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 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 and futures contracts are not deemed
to constitute selling securities short;
(B) 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;
(C) 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;
(D) 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;
(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 companies for the purpose of exercising
control or management; and
(G) 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 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or any other securities as to which the Board of Trustees
has made a determination as to liquidity, as permitted under the 1940 Act.
Investment Restrictions of IDEX Income Plus Portfolio
IDEX 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 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;
13
<PAGE>
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 for
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.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government securities.
Furthermore, the Portfolio has adopted the following 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 net assets in illiquid securities;
14
<PAGE>
(C) Invest in real estate limited partnerships;
(D) The Portfolio may not invest more than 25% of its net assets at the
time of purchase in the securities of foreign issuers and obligors; and
(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.
Investment Restrictions of IDEX Tax-Exempt Portfolio
IDEX 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;
11. Purchase or sell commodities or commodity contracts; and
12. 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
15
<PAGE>
including the amount borrowed at the time the borrowing is made). For purposes
of this limitation, reverse repurchases would not constitute borrowings.
As a fundamental policy governing concentration, the Portfolio will not
invest 25% or more of its total assets in any one particular industry, other
than U.S. government securities.
Furthermore, the 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 net assets in
illiquid securities;
(B) The Portfolio may not invest in oil, gas or mineral leases;
(C) The Portfolio may not invest in real estate limited partnerships; and
(D) 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 equity or 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.
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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 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 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 with the custodian 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 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 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.
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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 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
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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, International Equity,
Global, Growth, Value Equity, C.A.S.E., Strategic Total Return,
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 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 in 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
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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.
A put option written by a Portfolio is "covered" if the Portfolio (i)
segregates cash not available for investment or other liquid assets
with a value equal to the exercise price with its custodian or (ii)
continues to own an equivalent number of puts of the same "series"
(that is, puts on the same underlying securities having the same
exercise prices and expiration dates as those written by the
Portfolio), or an equivalent number of puts of the same "class" (that
is, puts on the same underlying securities) with exercise prices
greater than those it has written (or if the exercise prices of the
puts it holds are less than the exercise prices of those it has
written, the difference is segregated with the custodian). 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 (i)
if that Portfolio holds a call at the same exercise price for the same
exercise period and on the same securities as the call written, (ii)
in the case of a call on a stock index, if the Portfolio owns a
portfolio of securities substantially replicating the movement of the
index underlying the call option, or (iii) if at the time the call is
written an amount of cash, U.S. government securities or other liquid
assets equal to the fluctuating market value of the optioned
securities is segregated with the 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
other 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
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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 other 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 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
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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
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.
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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 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 (i) the Portfolio holds a call at the same
exercise price for the same exercise period and on the same currency
as the call written or (ii) at the time the call is written, an amount
of cash, U.S. government securities or other liquid assets equal to
the fluctuating market value of the optioned currency is segregated
with the 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 other 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, International Equity, Global, Growth, Value Equity,
C.A.S.E., Strategic Total Return, 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
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may be in U.S. dollars or another 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 or exposed to foreign currency fluctuations 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
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 other 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 other
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
contact.
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,
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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 other 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 determined 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 other 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, International Equity, Global, Growth, Value Equity,
C.A.S.E., Strategic Total Return, 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
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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.
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
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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.
Certain of the Portfolios may invest in securities issued by other
investment companies, within limits described in the investment restrictions of
each Portfolio and in accordance with the 1940 Act. A Portfolio may 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 such Portfolio.
The International Equity Portfolio may not purchase securities of other
investment companies, other than a security acquired in connection with a
merger, consolidation, acquisition, reorganization or offer of exchange and
except as otherwise permitted under the 1940 Act. Investments by the
International Equity Portfolio in GEI Short-Term Investment Fund, an investment
fund advised by GEIM, created specifically to serve as a vehicle for the
collective investment of cash balances of the Portfolio and other accounts
advised by GEIM or its affiliate, General Electric Investment Corporation, is
not considered an investment in another investment company for purposes of this
restriction.
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, International Equity
and Value Equity 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 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).
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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.
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 Income Plus
Portfolio 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
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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.
Joint Trading Accounts.
As described in the Prospectus, the Growth, Global, Flexible Income,
Balanced and Capital Appreciation Portfolios and other clients of Janus Capital
and its affiliates may place assets in joint trading accounts for the purpose of
making short-term investments in money market instruments. The Board of Trustees
of the Fund must approve the participation of each of these Portfolios in these
joint trading accounts and procedures pursuant to which the joint accounts will
operate. The joint trading accounts are to be operated pursuant to an exemptive
order issued to Janus Capital and certain of its affiliates by the SEC. All
joint account participants, including these Portfolios, will bear the expenses
of the joint trading accounts in proportion to their investments. Financial
difficulties of other participants in the joint accounts could cause delays or
other difficulties for the Portfolios in withdrawing their assets from joint
trading accounts.
Illiquid Securities.
Each of the Aggressive Growth, Capital Appreciation, International Equity,
Global, Growth, Value Equity, C.A.S.E., Strategic Total Return, 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 its securities, including Rule 144A
securities, commercial paper 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 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, C.A.S.E., Global, Flexible Income,
Tax-Exempt, Strategic Total Return and Income Plus Portfolios do not intend to
invest more than 5% of their assets, the Balanced, Capital Appreciation,
Aggressive Growth and Tactical Asset Allocation Portfolios do not intend to
invest more than 15% of their assets, and the International Equity and the Value
Equity Portfolios do not intend to invest more than 25% 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
29
<PAGE>
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 cash, U.S. government securities, or money market instruments
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 with its
custodian 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 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
30
<PAGE>
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 Value Equity, Strategic
Total Return, Flexible Income and Income Plus Portfolios 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. Such Portfolios, furthermore, may incur additional costs
in seeking the recovery of the defaulted securities. 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.
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.
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.
31
<PAGE>
Portfolio Turnover.
October 31 September 30
Portfolio 1997 1996 1996 1995
Aggressive Growth 9.40% 127.49% 88.28%
International Equity N/A N/A N/A
Capital Appreciation 10.11% 160.72% 262.97%
Global 2.59% 97.94% 161.48%
Growth 9.40% 57.80% 123.26%
C.A.S.E. 20.69% 654.49% --
Value Equity N/A N/A N/A
Strategic Total Return 5.50% 40.58% 34.67%
Tactical Asset Allocation 2.38% 56.22% --
Balanced 9.08% 175.78% 82.48%
Flexible Income 16.16% 135.38% 149.58%
Income Plus 1.58% 65.96% 25.07%
Tax-Exempt 3.79% 71.05% 126.48%
As stated in the Prospectus, each of the Portfolios generally intend 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. Portfolio transactions for the Tax-Exempt Portfolio and the Income
Plus Portfolio are 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.
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, 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.
INVESTMENT ADVISORY AND OTHER SERVICES
The Fund has entered into a Management and Investment Advisory Agreement
applicable to each of the Capital Appreciation, Global, Growth, Balanced and
Flexible Income Portfolios with Idex Management, Inc. ("IMI"), and applicable to
each of the Aggressive Growth, International Equity, C.A.S.E., Value Equity,
Strategic Total Return, Tactical Asset Allocation, Income Plus and Tax-Exempt
Portfolios with InterSecurities, Inc. ("ISI"), both located at 201 Highland
Avenue, Largo, Florida 33770-2957. These Management and Investment Advisory
Agreements are collectively referred to herein as the "Advisory Agreements". IMI
and ISI supervise each respective Portfolio's investments and conducts its
investment program. Each Advisory Agreement provides that IMI and 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. For services
to the Capital Appreciation, Global, Growth and Balanced 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, 0.90% 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 services
to the Flexible Income Portfolio,
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<PAGE>
IMI receives an annual fee, computed daily and paid monthly, equal to 0.90% of
the first $100 million of that Portfolio's average daily net assets, 0.80% of
the next $150 million of that Portfolio's average daily net assets, and 0.70% of
the average daily net assets of that Portfolio in excess of $250 million. For
services to the Tax-Exempt and Income Plus Portfolios, ISI receives an annual
fee of 0.60% of each Portfolio's average daily net assets computed and paid on a
monthly basis. For services to each of its other respectively advised
Portfolios, ISI receives an annual fee, computed daily and paid monthly, equal
to 1.00% of the first $750 million of each Portfolio's average daily net assets,
0.90% of the next $250 million of each Portfolio's average daily net assets, and
0.85% of the average daily net assets of each Portfolio in excess of $1 billion.
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, IMI, 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 IMI and 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 IMI or ISI in the performance of its duties thereunder.
The Advisory Agreements became effective as follows: Aggressive Growth -
September 30, 1994; International Equity - February 1, 1997; Capital
Appreciation - September 30, 1994; Global - April 22, 1992; Growth - April 22,
1991; C.A.S.E. -November 15, 1995; Value Equity - October 30, 1996; Strategic
Total Return - September 30, 1994; Tactical Asset Allocation -June 1, 1995;
Balanced - September 30, 1994; Flexible Income - August 5, 1993; Income Plus -
April 22, 1992; and Tax-Exempt - April 22, 1992.
Each Portfolio pays 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,
IMI or ISI), 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. The respective
investment adviser 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, in the
case of the Aggressive Growth, Capital Appreciation, Growth, C.A.S.E., Value
Equity, Strategic Total Return, Tactical Asset Allocation, Balanced and Flexible
Income Portfolios, 1.50% of each Portfolio's average daily net assets; in the
case of the Tax-Exempt and Income Plus Portfolios, 1.00% and 1.25% of the
Portfolio's average daily net assets, respectively. The International Equity and
Global Portfolios do not have an expense limitation.
33
<PAGE>
INVESTMENT ADVISORY FEES
<TABLE>
<CAPTION>
Advisory Fees After Reimbursement Advisory Fee Reimbursements
October 31 September 30 October 31 September 30
Portfolio Advisor 1997 1996 1996 1995 1997 1996 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth ISI $5,163 $56,761 $30,629 $17,394 $169,995 $31,402
International Equity ISI N/A N/A N/A N/A N/A N/A
Capital Appreciation IMI $7,502 $19,350 $(11,865) $12,709 $122,710 $55,475
Global IMI $126,856 $1,130,757 $873,921 -- -- --
Growth IMI $952,996 $5,459,981 $4,292,430 -- -- --
C.A.S.E. ISI $(11,137) $(36,998) -- $13,949 $55,165 --
Value Equity ISI N/A N/A N/A N/A N/A N/A
Strategic Total ISI $1,140 $5,591 $(14,695) $11,492 $92,079 $39,831
Return
Tactical Asset ISI $2,983 $53,542 -- $11,829 $28,453 --
Allocation
Balanced IMI $(4,993) $(21,773) $(17,689) $13,490 $106,223 $49,201
Flexible Income IMI $(3,566) $133,035 $169,696 $17,675 $41,410 $16,128
Income Plus ISI $35,332 $414,023 $402,031 -- -- --
Tax-Exempt ISI $(6,243) $35,970 $78,055 $19,367 $123,530 $91,270
</TABLE>
IMI has entered into an Investment Counsel Agreement applicable to each of
the Capital Appreciation, Global, Growth, Balanced and Flexible Income
Portfolios, respectively, wherein Janus Capital Corporation ("Janus Capital"),
100 Fillmore Street, Denver, CO 80206, serves as the investment sub-adviser to
each of these Portfolios. 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.
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,
1994 with ISI. Luther King Capital Management Corporation ("Luther King"), 301
Commerce Street, Suite 1600, Fort Worth, TX 76102, serves as the investment
sub-adviser to the Strategic Total Return Portfolio pursuant to an Investment
Counsel Agreement dated as of September 30, 1994 with ISI. 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 30, 1995 with ISI. C.A.S.E. Management, Inc.
("C.A.S.E."), 2255 Glades Road, Suite 221-A, Boca Raton, FL 33431, serves as the
investment sub-adviser to the C.A.S.E. Portfolio pursuant to an Investment
Counsel Agreement dated November 15, 1995 with ISI. NWQ Investment Management
Company, Inc. ("NWQ"), 2049 Century Park East, 4th Floor, Los Angeles, CA 90067,
serves as the investment sub-adviser to the Value Equity Portfolio pursuant to
an Investment Counsel Agreement dated October 30, 1996 with ISI. Scottish
Equitable Investment Management Limited ("Scottish Equitable"), Edinburgh Park,
Edinburgh EH12 9SE, Scotland, and GEIM, 3003 Summer Street, Stamford, CT 06905,
serve as the investment sub-advisers to the International Equity Portfolio
pursuant to respective Investment Counsel Agreements dated February 1, 1997 with
ISI.
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.
Further discussions of the basic fee arrangements and allocation of
responsibilities relating to terms of the Investment Counsel Agreements for each
Portfolio are set forth in the Prospectus. Alger Management, Scottish Equitable,
GEIM, Janus Capital, C.A.S.E., NWQ, Luther King, Dean Investment and AEGON
Management also serve as sub-advisers to certain portfolios of the WRL Series
Fund, Inc., a registered investment company. They may be referred to herein
collectively as the "sub-advisers" and individually as a "sub-adviser."
34
<PAGE>
SUB-ADVISORY FEES
(Net of Fees Reimbursed)
October 31 September 30
Portfolio 1997 1996 1996 1995
Aggressive Growth $2,065 $22,704 $12,252
International Equity N/A N/A N/A
Capital Appreciation $3,751 $9,675 --
Global $63,428 $565,378 $436,960
Growth $476,498 $2,729,990 $2,146,215
C.A.S.E. -- -- --
Value Equity N/A N/A N/A
Strategic Total $456 $2,236 --
Return
Tactical Asset $1,193 $21,417 --
Allocation
Balanced -- -- --
Flexible Income -- $66,517 $84,848
Income Plus $17,666 $207,011 $201,015
Tax-Exempt -- $17,985 $39,027
Additional Investment Advisory or Sub-Advisory Services Provided by the
Sub-Advisers
The Investment Counsel Agreements between IMI and Janus Capital provide for
additional compensation to be paid by IMI to Janus Capital as follows: If on
December 31, 1997, 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 ISI, or any other affiliate of IMI serving as administrator
to the Fund for the calendar year following such date (the "Administrator").
TABLE 1
Target Date Advised Funds Target Net Assets
December 31, 1997 $950 million
(and December 31 of each year thereafter)
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 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
Shortfall of Target Percentage of Net Fee
5% - 10% ............................................................10%
Over 10% - 20% ......................................................20%
Over 20% - 30% ......................................................30%
Over 30% ............................................................40%
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<PAGE>
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 1997 were IDEX Growth,
Global, Flexible Income, Balanced and Capital Appreciation Portfolios , 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 1997 because Advised Funds Target Net Assets exceeded
$_________ on December 31, 1997.
IMI and Janus Capital also served as investment adviser and sub-adviser,
respectively, to certain other funds in the IDEX Group, IDEX Fund and IDEX Fund
3, which were reorganized into Class T shares of IDEX Growth Portfolio on
September 20, 1996. Janus Capital has served as investment adviser to Janus Fund
since 1970 and currently serves as investment adviser to each portfolio of the
Janus Investment Fund and Janus Aspen Series as well as sub-adviser to other
mutual funds. Janus Capital also serves as investment adviser to individual,
corporate, charitable and retirement accounts. Janus Capital managed
approximately $_________ in assets as of December 31, 1997.
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.
The ownership of IMI by AUSA and Janus Capital is the subject of an
agreement among IMI, AUSA and Janus Capital (the "joint venture agreement") that
expires no later than March 2, 1998. In connection with the expiration of the
joint venture agreement, either AUSA or Janus Capital could become the sole
owner of the outstanding shares of IMI; or outstanding shares of IMI could be
sold to a third party. Under the 1940 Act, a change in control of IMI would
generally trigger an "assignment" and termination of the Advisory Agreements and
Investment Counsel Agreements relating to the Capital Appreciation, Global,
Growth, Balanced and Flexible Income Portfolios. New Advisory Agreements and
Investment Counsel Agreements relating to each of these Portfolios would be
subject to the approval of a majority of outstanding voting securities of such
Portfolio.
Alger Management provides investment advisory services to ISI for the
Aggressive Growth Portfolio. Scottish Equitable and GEIM provide investment
advisory services to ISI for the International Equity Portfolio. Janus Capital
provides investment advisory services to IMI for the Capital Appreciation,
Global, Growth, Balanced and Flexible Income Portfolios. C.A.S.E. provides
investment advisory services to ISI for the C.A.S.E. Portfolio. NWQ provides
investment advisory services to ISI for the Value Equity Portfolio. Luther King
provides investment advisory services to ISI for the Strategic Total Return
Portfolio. Dean Investment provides investment advisory services to ISI for the
Tactical Asset Allocation Portfolio. AEGON Management provides investment
advisory services to ISI for the Income Plus and Tax-Exempt Portfolios. 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
36
<PAGE>
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.
<TABLE>
<CAPTION>
UNDERWRITING COMMISSIONS
Commissions Received Commissions Retained
October 31 September 30 October 31 September 30
Portfolio 1997 1996 1996 1995 1997 1996 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth $25,967 $479,802 $228,229 $3,677 $65,924 $33,478
International Equity N/A N/A N/A N/A N/A N/A
Capital Appreciation $47,565 $395,205 $73,332 $8,052 $60,768 $10,921
Global $150,015 $938,340 $491,761 $20,964 $139,197 $73,278
Growth $191,780 $2,033,743 $1,155,639 $28,146 $296,565 $167,446
C.A.S.E. $4,356 $36,903 -- $642 $5,443 --
Value Equity N/A N/A N/A N/A N/A N/A
Strategic Total
Return $19,972 $234,546 $90,604 $3,617 $35,552 $14,667
Tactical Asset
Allocation $22,282 $200,817 -- $2,742 $30,970 --
Balanced $13,157 $128,544 $61,824 $2,118 $20,474 $10,074
Flexible Income $2,509 $36,139 $28,794 $444 $5,837 $5,736
Income Plus $7,845 $167,267 $142,265 $1,393 $29,744 $26,821
Tax-Exempt $2,189 $50,307 $22,502 $410 $8,771 $4,491
</TABLE>
ADMINISTRATIVE SERVICES
Each of IMI and ISI, with respect to the Portfolios they advise, is
responsible for the supervision all of the administrative functions, providing
office space, and paying its allocable portion of the salaries, fees and
expenses of all Fund officers and of those trustees who are affiliated with IMI
and ISI. 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
1933 Act and 1940 Act are also paid by the advisor.
IMI has entered into an Administrative Services Agreement ("Administrative
Agreement") with ISI applicable to each of the Capital Appreciation, Global,
Growth, Balanced and Flexible Income 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 "Additional Investment Advisory or Sub-Advisory Services
Provided by the Sub-Advisers."
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
37
<PAGE>
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"), 801 Pennsylvania, Kansas City,
Missouri 64105-1307, 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.
Idex Investor Services, Inc., P. O. Box 9015, Clearwater, Florida
33758-9015, 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 an annual per-account charge of $15.55
for each of its shareholder accounts in existence, $2.71 for each new account
opened and $1.62 for each closed account.
DST, provider of data processing and recordkeeping services for the Fund's
transfer agent, is a partially-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.")
<TABLE>
<CAPTION>
TRANSFER AGENCY FEES
Fees and Expenses Net of Brokerage
Credits Brokerage Credits Received
October 31 September 30 October 31 September 30
Portfolio 1997 1996 1996 1995 1997 1996 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth $15,460 $141,668 $27,772 -- -- --
International Equity N/A N/A N/A N/A N/A N/A
Capital Appreciation $9,740 $61,086 $22,570 -- -- $8
Global $46,880 $379,409 $341,591 -- -- $323
Growth $273,000 1,537,321 $174,068 -- -- --
C.A.S.E. $2,260 $8,930 -- -- -- --
Value Equity
Strategic Total
Return $5,772 $40,189 $10,668 -- -- --
Tactical Asset
Allocation $6,084 $25,499 -- -- -- --
Balanced $3,500 $26,374 $9,905 -- -- --
Flexible Income $8,624 $51,078 $53,822 -- -- --
Income Plus $10,000 $113,654 $118,821 -- -- --
Tax-Exempt $4,250 $40,367 $35,084 -- -- --
</TABLE>
PORTFOLIO TRANSACTION 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.
38
<PAGE>
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 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 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 October 31, 1997 the __________________ Portfolio paid the following
commissions to ______________________________:
39
<PAGE>
Commissions Paid:
10/31/97
Fiscal 1997 $
Fiscal 1997 Percentages: %
Commissions with affiliates to total commissions
Value of brokerage transactions with affiliates to %
value of total brokerage transactions
As of October 31, 1997, the ________ Portfolio owned $_________ and
$________of the common stock of ___________________. ________________is one of
the ten brokers or dealers that received the greatest dollar amount of brokerage
commissions from the __________ Portfolio during the fiscal year ended October
31, 1997.
As of October 31, 1997, the ___________Portfolio owned a total of $_______
and $_______ of the common stocks of __________ and __________, which are two of
the ten brokers or dealers that received the greatest dollar amount of brokerage
commissions from the ____________ Portfolio during fiscal year ended October 31,
1997.
<TABLE>
<CAPTION>
BROKERAGE COMMISSIONS
Brokerage Commissions Paid Aggressive International Capital
(including Affiliated Brokerage) Growth Equity Appreciation Global Growth C.A.S.E. Value Equity
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1997
October 31, 1996 $5,156 N/A $14,114 $9,638 $34,732 $3,469 N/A
September, 1996 $43,591 N/A $109,526 $109,328 $314,230 $50,714 N/A
September, 1995 $19,568 N/A $41,182 $124,068 $930,417 -- N/A
Affiliated Brokerage Paid
October 31, 1997
October 31, 1996 $4,711 N/A -- -- -- -- N/A
September, 1996 $42,819 N/A -- -- -- -- N/A
September, 1995 $18,944 N/A $11 $431 -- -- N/A
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Brokerage Commissions Paid Strategic Tactical Asset Flexible
(including Affiliated Brokerage) Total Return Allocation Balanced Income Income Plus Tax-Exempt
<S> <C> <C> <C> <C> <C> <C>
October 31, 1997
October 31, 1996 $2,089 $2,800 $1,291 --- -- --
September, 1996 $16,340 $34,335 $37,881 $27,515 -- --
September, 1995 $9,661 -- $9,193 $1,853 -- --
Affiliated Brokerage Paid
October 31, 1997
October 31, 1996 -- -- -- -- -- --
September, 1996 -- -- -- -- -- --
September, 1995 -- -- -- -- -- --
</TABLE>
During the fiscal year ended October 31, 1997, Growth, Global, Balanced,
Capital Appreciation, Strategic Total Return, Tactical Asset Allocation and
C.A.S.E. Portfolios had transactions in the amounts of $__________, $__________,
$__________, $__________, $___________, $__________, and $__________,
respectively, which resulted in brokerage commission of $__________,
$__________, $__________, $__________, $__________, $__________ and $__________,
respectively, that were directed to brokers for brokerage and research services
provided.
TRUSTEES AND OFFICERS
- ----------
Peter R. Brown
1475 Belcher Road South
Largo, FL 34640
05/10/28
Trustee of IDEX Series Fund; Director of WRL Series Fund, Inc. (investment
company); Chairman of the Board of Peter Brown Construction Co., Largo, FL
(construction, contractors and engineers); Rear Admiral (Retired), U.S. Navy
Reserve, Civil Engineer Corps.
- ----------
Daniel Calabria
7068 S. Shore Drive S.
South Pasadena, FL 33707
03/05/36
Trustee of IDEX Series Fund; Trustee (1993 - present) and President (1993 -
1995) of The Florida Tax Free Funds (mutual funds); Director (1996-present) of
ASM Fund (mutual fund); currently retired; formerly President and Director
(1995) of Sun Chiropractic Clinics, Inc. (medical services); Executive Vice
President (1993 - 1995) of William R. Hough & Co. (investment adviser, municipal
bond and underwriting firm); President/CEO (1986-1992) of Templeton Funds
Management, Inc. (investment advisers); and Vice President (1986-1992) of all
U.S. Templeton Funds (mutual funds).
- ----------
James L. Churchill
12 Lavington Road
Long Cove
Hilton Head, SC 29928
05/07/30
Trustee of IDEX Series Fund; 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).
41
<PAGE>
- ----------
Thomas E. Pierpan(2)
10/18/43
Vice President, Counsel and Secretary (December 1997 - present), of IDEX Series
Fund; Vice President, Counsel and Secretary (December 1997 - present), Assistant
Secretary (March 1995-December 1997) of WRL Series Fund, Inc. (investment
company); Assistant Vice President, Counsel and Assistant Secretary of
InterSecurities, Inc. (November 1997 present) (broker-dealer); Vice President
(November 1993 - present), Associate General Counsel (February 1995 - present)
and Assistant Secretary (February 1995 - present), Assistant Vice President
(November 1992 - November 1993) Western Reserve Life Assurance Co. of Ohio (life
insurance).
- ----------
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 Series Fund; former Vice
President and Assistant Secretary of 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 (November 1990 to present) of Idex Management,
Inc. (investment adviser); Secretary (May 1990 to present) and Director (April
1991 to present) of InterSecurities, Inc. (broker-dealer); Secretary (September
1992 to present) of ISI Insurance Agency, Inc.; Secretary (May 1990 to present)
of Idex Investor Services, Inc. (transfer agent); Vice President, Secretary and
General Counsel (May 1990 to February 1991) of Pioneer Western Corporation and
Secretary of its subsidiaries (financial services); Secretary and General
Counsel (March 1980 to April 1990) of Orange State Life and Health Insurance
Company and its affiliates (life and health insurance).
- ----------
Ronald L. Hall (2)
12/05/48
Senior Vice President, Sales and Marketing (September 1996 to present) of IDEX
Series Fund; Vice President (November 1995 to Present) of InterSecurities, Inc.;
Regional Marketing Director (March 1995 to November 1995) of Western Reserve
Life Assurance Co. of Ohio; President (March 1991 to March 1995) of Herzfeld
Hall & Associates, Inc./MCC Securities, Inc.; Vice President (November 1987 to
March 1991) of Western Reserve Life Assurance Co. of Ohio.
- ---------
Charles C. Harris
35 Winston Drive
Belleair, FL 34616
07/15/30
Trustee of IDEX Series Fund; Director (March 1994 - present) 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 Series Fund; former President and Chief Executive Officer and Trustee of
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 (May 1988 to present) of
InterSecurities, Inc. (broker-dealer); President (September 1992 to present) of
ISI Insurance Agency, Inc.; Executive Vice President (April 1993 to present) of
Western Reserve Life Assurance Co. of Ohio (life insurance); President, Chief
Executive Officer and Director (1983 to November 1990) of PW Securities, Inc.
(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. (investment adviser); President and Director (May
1988 to present) of Idex Investor Services, Inc. (transfer agent); Assistant
Vice President (September 1991 to September 1992) of AEGON USA Managed
Portfolios, Inc. (financial services); Vice President (May 1988 to February
1991) of Pioneer Western Corporation (financial services). Mr. Hurley was
employed by Pioneer Western Corporation in various executive positions from 1972
until February 1991.
42
<PAGE>
- ----------
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 Series Fund; Chairman
of the Board (1986 to present) of WRL Series Fund, Inc. (investment company);
President and Director (1985 to September 1990) and Director (December 1990 to
present) of Idex Management, Inc. (investment adviser); Chairman (1988 to
present) and Director (1985 to present) of InterSecurities, Inc.
(broker-dealer); Director (October 1992 to present) of ISI Insurance Agency,
Inc.; 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 (May 1992 to present) of AEGON USA, Inc.
(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.
- ---------
Julian A. Lerner
One Spurling Plaza, Suite 208
12850 Spurling Road
Dallas, TX 75230
11/12/24
Trustee of IDEX Series Fund; currently retired; Trustee of American Skandia
Trust; Director of American Skandia Advisory Funds; Trustee of American Skandia
Master Trust; Director of Atlas Assets, Inc. (mutual fund); Trustee of Atlas
Insurance Trust (variable annuity); formerly Investment Consultant (1995-1996)
and Sr. Vice President (1987-1995) of Aim Capital Management (investment
adviser).
- ---------
Thomas R. Moriarty(2)
05/03/51
Senior Vice President (March 1995 to present), Treasurer and Principal Financial
Officer (December 1996 to present), Vice President and Principal Accounting
Officer (November 1990 to March 1995) and Principal Accounting Officer (1988 to
September 1990) of IDEX Series Fund; former Senior Vice President of 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 (September 1992 to present) of ISI Insurance Agency, Inc.; 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. (transfer
agent); Vice President (November 1990 to present) and Assistant Vice President
(1988 to September 1990) of Idex Management, Inc. (investment adviser); Vice
President (June 1993 to present) of Western Reserve Life Assurance Co. of Ohio
(life insurance); Assistant Vice President (September 1991 to September 1992) of
AEGON USA Managed Portfolios, Inc. (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
Vice President, Assistant Treasurer and Principal Accounting Officer (March 1997
to Present); Principal Accounting Officer (March 1995 to March 1997) and
Assistant Vice President (November 1990 to March 1997) of IDEX Series Fund;
former Principal Accounting Officer of IDEX Fund and IDEX Fund 3; Assistant Vice
President and Controller (May 1988 to present) of InterSecurities, Inc.
(broker-dealer); Assistant Vice President (September 1992 to present) of ISI
Insurance Agency, Inc.; Assistant Vice President and Controller (May 1988 to
present) of Idex Investor Services, Inc. (transfer agent); Assistant Vice
President (November 1990 to present) of Idex Management, Inc. (investment
adviser); 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).
43
<PAGE>
- ---------
William W. Short, Jr.
12420 73rd Court
Largo, FL 34623
02/25/36
Trustee of IDEX Series Fund; President and sole shareholder of Shorts, Inc.
(men's retail apparel); Chairman of Southern Apparel Corporation and S.A.C.
Apparel Corporation and S.A.C. Distributors (nationwide wholesale apparel
distributors), Largo, Florida; Member of Advisory Board of Barnett Banks of
Pinellas County; Trustee of Morton Plant Hospital Foundation; former Chairman of
Advisory Board of First Florida Bank, Pinellas County, Florida.
- ---------
Jack E. Zimmerman
507 Saint Michel Circle
Kettering, OH 45429
02/03/28
Trustee of IDEX Series Fund; Director (1987 to present), Western Reserve Life
Assurance Co. of Ohio (life insurance); currently retired; formerly, Director,
Regional Marketing (September 1986 to January 1993) Martin Marietta Corporation,
Dayton (aerospace industry); Director of Strategic Planning (January 1986 to
September 1986) of Martin Marietta Baltimore Aerospace. Mr. Zimmerman is also
the brother-in-law of John Kenney, Trustee and Chairman of the Fund.
- ---------------------------------------------------
(1) The principal business address of each person listed, unless otherwise
indicated, is P.O. Box 9015, Clearwater, FL 33758-9015.
(2) Interested Person (as defined in the Investment Company Act of 1940) 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, IMI or their affiliates.
Disinterested Trustees (i.e., Trustees who are not affiliated with ISI, IMI or
any of the sub-advisers) receive for each regular Board meeting: (a) a total
annual retainer fee of $13,000 from IDEX Series Fund, of which the Fund pays a
pro rata share allocable to each Portfolio based on the relative assets of the
Portfolio; plus (b) $2,250 and incidental expenses per meeting attended. Three
of the Disinterested Trustees have been elected to serve on the Fund's Audit
Committee, which meets twice annually. Each Audit Committee member receives a
total of $250 per Audit Committee meeting attended in addition to the regular
meetings attended. In the case of a Special Board Meeting, each of the
Disinterested Trustees receives a fee of $500 per special meeting attended in
addition to the regular meetings attended. Any fees and expenses paid to
Trustees who are affiliates of IMI or ISI are paid by IMI and/or ISI and not by
the Fund or the Fund Complex. Commencing on January 1, 1996, a non-qualified
deferred compensation plan (the "Plan") became available to Trustees who are not
interested persons of the Fund. Under the Plan, compensation may be deferred
that would otherwise be payable by IDEX Series Fund and/or WRL Series Fund,
Inc., to a Disinterested Trustee or Director on a current basis for services
rendered as Trustee. Deferred compensation amounts will accumulate based on the
value of Class A shares of a Portfolio of the Fund (without imposition of sales
charge), as elected by the Trustee. It is not anticipated that the Plan will
have any impact on the Portfolios of the Fund.
The following table provides compensation amounts paid to Disinterested
Trustees of the Fund for the fiscal year ended October 31, 1997.
44
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
Aggregate Pension Or Retirement Total Compensation Paid to
Compensation From Benefits Accrued As Part of Trustees from Fund
Name of Person, Position IDEX Series Fund* Fund Expenses Complex**
<S> <C> <C> <C>
Peter R. Brown, Trustee
Daniel Calabria, Trustee
James L. Churchill, Trustee
Charles C. Harris, Trustee
Julian A. Lerner, Trustee
William W. Short, Jr., Trustee
Jack E. Zimmerman, Trustee
Total
</TABLE>
* Of this aggregate compensation, the total amounts deferred (including
earnings) and accured for the benefit of the participating Trustees at
October 31, 1997 were as follows: Peter R. Brown, $___________; Daniel
Calabria, $___________; James L. Churchill, $___________; Charles C.
Harris, $___________ and Jack E. Zimmerman, $-----------.
** The Fund Complex consists of IDEX Series Fund (including IDEX Fund and IDEX
Fund 3 prior to their reorganization into IDEX Series Fund on September 20,
1996) and WRL Series Fund, Inc.
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 October 31, 1997, the Fund paid $_______ in
trustees fees and expenses and no trustee emeritus fees or expenses. As of
__________, the trustees and officers held in the aggregate less than 1% of the
outstanding shares of each of the Aggressive Growth, International Equity,
Capital Appreciation, Global, Growth, C.A.S.E., Value Equity, Strategic Total
Return, Tactical Asset Allocation, Balanced, Flexible Income, Income Plus and
Tax-Exempt Portfolios.
PURCHASE OF SHARES
As stated in the Prospectus, each Portfolio offers investors a choice of
three classes of shares, and the Growth Portfolio includes a fourth class, Class
T 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. Class T shares of IDEX Growth Portfolio are not
available to new investors; only existing Class T shareholders (former
shareholders of IDEX Fund and IDEX Fund 3) can purchase Class T shares of the
Growth Portfolio. Shares of each Portfolio are sold at the net asset value per
share as determined
45
<PAGE>
at the close of 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 and Class T 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. Class T
shares of the Growth Portfolio are not subject to annual distribution and
service fees.
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.
DISTRIBUTION FEES
Distribution related expenses incurred by ISI for the fiscal year ended
October 31, 1997 were as follows. These expenses have been partially reimbursed
to ISI by the 12b-1 arrangements with the Fund.
46
<PAGE>
<TABLE>
<CAPTION>
Aggressive Growth International Equity
A B C A B C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
<TABLE>
<CAPTION>
Capital Appreciation Global
A B C A B C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
<TABLE>
<CAPTION>
Growth C.A.S.E.
A B C A B C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
<TABLE>
<CAPTION>
Value Equity Strategic Total Return
A B C A B C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
<TABLE>
<CAPTION>
Tactical Asset Allocation Balanced
A B C A B C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
<TABLE>
<CAPTION>
Flexible Income Income Plus
A B C A B C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
<TABLE>
<CAPTION>
Tax-Exempt
A B C
Shares Shares Shares
<S> <C> <C> <C>
Advertising
Printing/mailing
Prospectuses to other
than current shareholders
Compensation to underwriters
Compensation to dealers
Compensation to sales personnel
Interest or other finance charges
Travel
Office Expenses
Administrative Processing Costs
TOTAL
</TABLE>
Class T shares of the Growth Portfolio are not subject to
annual distribution and service fees.
NET ASSET VALUE DETERMINATION
As stated in the Prospectus, net asset value is determined separately for
each class of shares of a Portfolio on each day 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, receivables and other assets allocable to that class by
the total number of shares outstanding of that class. The public offering price
of a Class A, Class B, Class C or Class T share of a Portfolio is the net asset
value per share plus, in the case of Class A and Class T 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.
48
<PAGE>
<TABLE>
<CAPTION>
OFFERING PRICE PER SHARE CALCULATED AS FOLLOWS:
Net Asset Value Per Share Add Maximum Amount of Sales
As of October 31, 1997 (net assets shares outstanding) Selling Commissions Charge Offering Price Per Share
<S> <C> <C> <C> <C>
Aggressive Growth
Class A 5.50%
Class B --
Class C --
International Equity
Class A 5.50%
Class B --
Class C --
Capital Appreciation
Class A 5.50%
Class B --
Class C --
Global
Class A 5.50%
Class B --
Class C --
Growth
Class A 5.50%
Class B --
Class C --
Class T 8.50%
C.A.S.E.
Class A 5.50%
Class B --
Class C --
Value Equity
Class A 5.50%
Class B --
Class C --
Strategic Total Return
Class A 5.50%
Class B --
Class C --
Tactical Asset Allocation
Class A 5.50%
Class B --
Class C --
Balanced
Class A 5.50%
Class B --
Class C --
Flexible Income
Class A 4.75%
Class B --
Class C --
Income Plus
Class A 4.75%
Class B --
Class C --
Tax-Exempt
Class A 4.75%
Class B --
Class C --
</TABLE>
49
<PAGE>
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 on the payable date. The per share income
dividends on Class B and Class C shares of a Portfolio are anticipated to be
lower than the per share income dividends on Class A shares of that Portfolio,
and Class T shares of the Growth Portfolio, as a result of higher distribution
and service 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 IDEX Customer Service. These plans require the completion of separate
applications which are also available from IDEX Customer Service. Investors
Fiduciary Trust Company ("IFTC"), Kansas City, Missouri, acts as the custodian
or trustee under these plans for which it charges an annual fee of up to $15.00
on each such account with a maximum of $30.00 per tax identification number.
However, if your retirement plan is under custody of IFTC and your combined
retirement account balances per taxpayer ID number are more than $50,000, there
is generally no fee. 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 IDEX Customer Service at (888) 233-4339 (toll free) or
write the Transfer Agent at P. O. Box 9015, Clearwater, Florida 33758-9015. 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.
REDEMPTION OF SHARES
Shareholders may redeem their shares at any time at any 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 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 and certain Class A share
purchases are also subject to a 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. Upon any
distributions in-kind, shareholders may appeal the valuation of such securities
by writing to the Fund.
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
50
<PAGE>
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 Distributor 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 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.
(c) Reinvestment Privilege
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.
(d) Certain Retirement Plan Withdrawals
The Fund will waive the CDSC on withdrawals from IRS qualified and
nonqualified retirement plans, individual retirement accounts, tax-sheltered
accounts, and deferred compensation plans, where such withdrawals are permitted
under the terms of the plan or account (e.g., attainment of age 59 1/2,
separation from service, death, disability, loans, hardships, withdrawals of
excess contributions pursuant to applicable IRS rules or withdrawals based on
life expectancy under applicable IRS rules). This waiver does not include
transfer of asset redemptions, broker directed accounts or omnibus accounts.
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 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 (the "Short-Short Limitation") (however, this requirement has
been repealed for tax years beginning after August 5, 1997); (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
shareholders.
51
<PAGE>
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 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; however, the Short-Short
Limitation has been repealed for tax years beginning after August 5, 1997.
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 an 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
To the knowledge of the Fund, as of ___________, no shareholder owned
beneficially or of record 5% or more of the outstanding shares of beneficial
interest of each of the Aggressive Growth, International Equity, Capital
Appreciation, Global, C.A.S.E., Value Equity, Strategic Total Return, Tactical
Asset Allocation, Balanced, Flexible Income or Tax-Exempt Portfolios, with the
following exceptions: _________ was record owner of approximately ______ of the
___________ Portfolio, and _________ owned beneficially or of record
approximately _______ of
52
<PAGE>
the __________ Portfolio. As of _____________, 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 ________, and Bankers United Life Assurance Company owned
approximately ________. As of ____________, State Street Bank and Trust Company
as Trustee for the ConAgra Retirement Income Savings Plan, Boston,
Massachusetts, owned approximately ______% of the outstanding shares of
beneficial interest of the Growth Portfolio.
MISCELLANEOUS
Organization
The Portfolios are series of IDEX 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 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 Income Trust ("IDEX Total") in exchange for shares of the Flexible Income
Portfolio which were then distributed to IDEX Total 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.
On September 20, 1996 in a tax-free reorganization, IDEX Growth Portfolio
(formerly IDEX II Growth Portfolio) acquired all of the assets and assumed all
of the liabilities of IDEX Fund and IDEX Fund 3 in exchange for Class T shares
of IDEX Growth Portfolio which were then distributed on a pro rata basis to the
respective shareholders of IDEX Fund and IDEX Fund 3. Upon closing of the
reorganization, IDEX II Series Fund changed its name to IDEX Series Fund.
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 shares; the Growth Portfolio includes a
fourth class, Class T shares. 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. Class T shares of the Growth Portfolio are subject
to an initial sales charge, but no annual distribution and service fees. Class T
shares are not available to new investors; only existing Class T shareholders
(who were shareholders of IDEX Fund or IDEX Fund 3 on September 20, 1996) may
purchase additional Class T shares. 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, L.L.P., 1275 Pennsylvania Avenue, N.W.,
Washington, D.C. 20004, serves as counsel to the Fund and certain of its
affiliates. ___________________, 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 1933 Act and the
1940 Act, to which reference is hereby made.
53
<PAGE>
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 and Class T shares) is deducted from the initial
$1,000 investment and all dividends and distributions are paid in additional
shares.
<TABLE>
<CAPTION>
Average Annual Total Return
Aggressive Growth International Equity
AS OF OCTOBER 31, 1997 Class Class
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 12/02/94 10/01/95 12/02/94 02/01/97 02/01/97 02/01/97
SALES CHARGE 5.50% * -- 5.50% * --
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
<TABLE>
<CAPTION>
Capital Appreciation Global
AS OF OCTOBER 31, 1997 Class Class
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 12/02/94 10/01/95 12/02/94 10/01/92 10/01/95 10/01/93
SALES CHARGE 5.50% * -- 5.50% * --
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
<TABLE>
<CAPTION>
Growth C.A.S.E.
AS OF OCTOBER 31, 1997 Class Class
A B C T A B C
<S> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 05/08/86 10/01/95 10/01/93 9/20/96 02/01/96 2/01/96 2/01/96
SALES CHARGE 5.50% * -- 8.50% 5.50% * --
12B-1 FEE 0.35% 1.00% 0.90% 0% 0.35% 1.00% 0.90%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
<TABLE>
<CAPTION>
Value Equity Strategic Total Return
AS OF OCTOBER 31, 1997 Class Class
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 02/01/97 02/01/97 02/01/97 12/02/94 10/01/95 12/02/94
SALES CHARGE 5.50% * -- 5.50% * --
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
<TABLE>
<CAPTION>
Tactical Asset Allocation Balanced
AS OF OCTOBER 31, 1997 Class Class
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 10/01/95 10/01/95 10/01/95 12/02/94 10/01/95 12/02/94
SALES CHARGE 5.50% * -- 5.50% * --
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
<TABLE>
<CAPTION>
Flexible Income Income Plus
AS OF OCTOBER 31, 1997 Class Class
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 06/29/87 10/01/95 10/01/93 06/14/85 10/01/95 10/01/93
SALES CHARGE 4.75% * -- 4.75% * --
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
<TABLE>
<CAPTION>
Tax-Exempt
AS OF OCTOBER 31, 1997 Class
A B C
<S> <C> <C> <C>
INCEPTION DATE 04/01/85 10/01/95 10/01/93
SALES CHARGE 4.75% * --
12B-1 FEE 0.35% 1.00% 0.60%
AVERAGE ANNUAL TOTAL RETURN
INCLUDING SALES CHARGES:
1 year
5 years
10 years
Inception
AVERAGE ANNUAL TOTAL RETURN
WITHOUT DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
CUMULATIVE TOTAL RETURN WITHOUT
DEDUCTION OF SALES CHARGE:
1 year
5 years
10 years
Inception
</TABLE>
- -------------------------
* The deferred sales charge on redemption of 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.
** Performance of Class T Shares of the Growth Portfolio is based on the
historical performance of IDEX Fund from its inception on June 4, 1985
until the reorganization of IDEX Fund and IDEX Fund 3 into Class T
Shares of IDEX Series Fund Growth Portfolio on September 20, 1996; and
the historical performance of Class T Shares of the Growth Portfolio
thereafter.
55
<PAGE>
The current yield for a particular class of shares of each of the Flexible
Income, Tax-Exempt, Income Plus, Balanced or Strategic Total Return Portfolios
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
(excluding reductions for affiliated brokerage and custody earnings credits)
accrued during the period) by the maximum offering price per share on the last
day of the base period and then annualizing the result.
Current Yield
Strategic Total Return 30 Day Period Ended 10/31/97
Class A
Class B
Class C
Balanced
Class A
Class B
Class C
Flexible Income
Class A
Class B
Class C
Income Plus
Class A
Class B
Class C
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, Class B and Class C shares based on a
30-day period ended October 31, 1997 was ______%, ______% and ______%,
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 Wall Street Journal,
Boston Globe, New York Times, Los Angeles Times, Christian Science Monitor, USA
Today, Tampa Tribune, St. Petersburg Times, Financial Times, Hartford Current,
International Herald Tribune, Investor's Business Daily, Boston Herald,
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, 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, Mutual Fund Quarterly, Financial World Magazine,
Consumer Reports, Babson-United Mutual Fund Selector and Mutual Fund
Encyclopedia (Dearborn Financial Publishing.) . A Portfolio may also advertise
non-standardized performance information which is for period 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, Class B and Class T shares,
non-standardized performance may also be that which does not reflect deduction
of the maximum sales charge applicable to Class A and Class T 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
56
<PAGE>
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 Aggressive Growth, International
Equity, Capital Appreciation, Global, Growth, C.A.S.E., Value Equity, Strategic
Total Return, Tactical Asset Allocation, Balanced, Flexible Income, Income Plus
and Tax-Exempt Portfolios for the fiscal year ended October 31, 1997 are
incorporated by reference from the Fund's Annual Report dated October 31, 1997.
<PAGE>
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 option 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 other 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
1
<PAGE>
authority which provide that, if required, the Federal government will lend the
issuer an amount 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.
2
<PAGE>
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-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.
3
<PAGE>
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.
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 ^ STRATEGIC
TOTAL RETURN 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.
4
<PAGE>
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.
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
5
<PAGE>
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.
6
IDEX 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 Aggressive Growth, International
Equity, Capital Appreciation, Global, Growth, C.A.S.E., Value Equity,
Strategic Total Return, Tactical Asset Allocation, Balanced, Flexible
Income, Income Plus and Tax-Exempt Portfolios for the fiscal year
ended October 31, 1997 included in the IDEX Series Fund's 1997 Annual
Report to Shareholders are incorporated by reference into the
Statement of Additional Information.
(2) Financial Highlights of IDEX Aggressive Growth, International Equity,
Capital Appreciation, Global, Growth, C.A.S.E., Value Equity,
Strategic Total Return, Tactical Asset Allocation, Balanced, Flexible
Income, Income Plus and Tax-Exempt Portfolios are included on pages
2-40 of the Prospectus.
(b) Exhibits:
Exhibit 1 Restatement of Declaration of Trust 1
Exhibit 2 Bylaws, as amended 1
Exhibit 3 Not Applicable
Exhibit 4 Specimen Share Certificate:
(a) Class A Shares
(1) IDEX Aggressive Growth Portfolio
(2) IDEX International Equity Portfolio 1
(3) IDEX Capital Appreciation Portfolio
(4) IDEX Global Portfolio
(5) IDEX Growth Portfolio
(6) IDEX C.A.S.E. Portfolio
(7) IDEX Value Equity Portfolio 1
(8) IDEX Strategic Total Return Portfolio
(9) IDEX Tactical Asset Allocation Portfolio
(10) IDEX Balanced Portfolio
(11) IDEX Flexible Income Portfolio
(12) IDEX Income Plus Portfolio
(13) IDEX Tax Exempt Portfolio
- --------
1 Filed previously with Post-Effective Amendment No. 24 to Registration
Statement filed on November 15, 1996 (File No. 33- 2659).
1
<PAGE>
(b) Class B Shares
(1) IDEX Aggressive Growth Portfolio
(2) IDEX International Equity Portfolio 1
(3) IDEX Capital Appreciation Portfolio
(4) IDEX Global Portfolio
(5) IDEX Growth Portfolio
(6) IDEX C.A.S.E. Portfolio
(7) IDEX Value Equity Portfolio 1
(8) IDEX Strategic Total Return Portfolio
(9) IDEX Tactical Asset Allocation Portfolio
(10) IDEX Balanced Portfolio
(11) IDEX Flexible Income Portfolio
(12) IDEX Income Plus Portfolio
(13) IDEX Tax Exempt Portfolio
(c) Class C Shares
(1) IDEX Aggressive Growth Portfolio
(2) IDEX International Equity Portfolio 1
(3) IDEX Capital Appreciation Portfolio
(4) IDEX Global Portfolio
(5) IDEX Growth Portfolio
(6) IDEX C.A.S.E. Portfolio
(7) IDEX Value Equity Portfolio 1
(8) IDEX Strategic Total Return Portfolio
(9) IDEX Tactical Asset Allocation Portfolio
(10) IDEX Balanced Portfolio
(11) IDEX Flexible Income Portfolio
(12) IDEX Income Plus Portfolio
(13) IDEX Tax Exempt Portfolio
(d) Class T Shares
(1) IDEX Growth Portfolio
Exhibit 5 (a) Management and Investment Advisory Agreement
(1) IDEX Aggressive Growth Portfolio 1
(2) IDEX International Equity Portfolio 2
(3) IDEX Capital Appreciation Portfolio 1
(4) IDEX Global Portfolio 1
(5) IDEX Growth Portfolio 1
(6) IDEX C.A.S.E. Portfolio 3
(7) IDEX Value Equity Portfolio 2
(8) IDEX Strategic Total Return Portfolio 1
(9) IDEX Tactical Asset Allocation Portfolio4
(10) IDEX Balanced Portfolio 1
(11) IDEX Flexible Income Portfolio 1
- --------
2 Filed previously with Post-Effective Amendment No. 25 to Registration
Statement filed on January 31, 1997 (File No. 33- 2659).
3 Filed previously with Post-Effective Amendment No. 20 to Registration
Statement filed on November 17, 1995 (File No. 33- 2659)
4 Filed previously with Post-Effective Amendment No. 18 to Registration
Statement filed on June 30, 1995 (File No. 33-2659)
2
<PAGE>
(12) IDEX Income Plus Portfolio 1
(13) IDEX Tax -Exempt Portfolio 1
(b) Investment Counsel Agreement
(1) IDEX Aggressive Growth Portfolio 1
(2) (i) IDEX International Equity Portfolio 2
(ii) IDEX International Equity Portfolio 2
(3) IDEX Capital Appreciation Portfolio 1
(4) IDEX Global Portfolio 1
(5) IDEX Growth Portfolio 1
(6) IDEX C.A.S.E. Portfolio 3
(7) IDEX Value Equity Portfolio5
(8) IDEX Strategic Total Return Portfolio 1
(9) IDEX Tactical Asset Allocation Portfolio 4
(10) IDEX Balanced Portfolio 1
(11) IDEX Flexible Income Portfolio 1
(12) IDEX Income Plus Portfolio 1
(13) IDEX Tax-Exempt Portfolio 1
(c) Administrative Services Agreement
(1) IDEX Capital Appreciation Portfolio 1
(2) IDEX Global Portfolio 1
(3) IDEX Growth Portfolio 1
(4) IDEX Balanced Portfolio 1
(5) IDEX Flexible Income Portfolio 1
Exhibit 6 (a) Underwriting Agreement 5
(b) Dealer's Sales Agreement 1
(c) Service Agreement 2
(d) Wholesaler's Agreement 3
Exhibit 7 Trustees/Directors Deferred Compensation Plan
Exhibit 8 Custody Agreement 2
Exhibit 9 Transfer Agency Agreement with Idex Investor Services, Inc. 1
Exhibit 10 Opinion of Counsel (to be filed by amendment)
Exhibit 11 (a) Consent of ____________________ (to be filed by amendment)
(b) Consent of Sutherland Asbill & Brennan, L.L.P.
(to be filed by amendment)
Exhibit 12 Not Applicable
Exhibit 13 Investment Letter from Sole Shareholder 5
- --------
5 Filed previously with Post-Effective Amendment No. 26 to Registration
Statement filed on July 16, 1997 (File Nol 33-2659)
3
<PAGE>
Exhibit 14 (a) Model Individual Retirement Plan 1
(b) Model Section 403(b)(7) Plan 1
(c) Model 401(k) Plan 1
Exhibit 15 (a) Plan of Distribution under Rule 12b-1 - Class A Shares
(1) IDEX Aggressive Growth Portfolio 1
(2) IDEX International Equity Portfolio 1
(3) IDEX Capital Appreciation Portfolio 1
(4) IDEX Global Portfolio 1
(5) IDEX Growth Portfolio 1
(6) IDEX C.A.S.E. Portfolio 3
(7) IDEX Value Equity Portfolio 1
(8) IDEX Strategic Total Return Portfolio 1
(9) IDEX Tactical Asset Allocation Portfolio 4
(10) IDEX Balanced Portfolio 1
(11) IDEX Flexible Income Portfolio 1
(12) IDEX Income Plus Portfolio 1
(13) IDEX Tax-Exempt Portfolio 1
(b) Plan of Distribution under Rule 12b-1 - Class B Shares
(1) IDEX Aggressive Growth Portfolio 1
(2) IDEX International Equity Portfolio 1
(3) IDEX Capital Appreciation Portfolio 1
(4) IDEX Global Portfolio 1
(5) IDEX Growth Portfolio 1
(6) IDEX C.A.S.E. Portfolio 3
(7) IDEX Value Equity Portfolio 1
(8) IDEX Strategic Total Return Portfolio 1
(9) IDEX Tactical Asset Allocation Portfolio 4
(10) IDEX Balanced Portfolio 1
(11) IDEX Flexible Income Portfolio 1
(12) IDEX Income Plus Portfolio 1
(13) IDEX Tax Exempt Portfolio 1
(c) Plan of Distribution under Rule 12b-1 - Class C Shares
(1) IDEX Aggressive Growth Portfolio 1
(2) IDEX International Equity Portfolio 1
(3) IDEX Capital Appreciation Portfolio 1
(4) IDEX Global Portfolio 1
(5) IDEX Growth Portfolio 1
(6) IDEX C.A.S.E. Portfolio 3
(7) IDEX Value Equity Portfolio1
(8) IDEX Strategic Total Return Portfolio 1
(9) IDEX Tactical Asset Allocation Portfolio 4
(10) IDEX Balanced Portfolio 1
(11) IDEX Flexible Income Portfolio 1
(12) IDEX Income Plus Portfolio 1
(13) IDEX Tax-Exempt Portfolio 1
4
<PAGE>
Exhibit 16 (a) Computation of Performance Quotation
Class A Shares
(1) IDEX Aggressive Growth Portfolio 4
(2) IDEX International Equity Portfolio 5
(3) IDEX Capital Appreciation Portfolio 4
(4) IDEX Global Portfolio 5
(5) IDEX Growth Portfolio 5
(6) IDEX C.A.S.E. Portfolio 6
(7) IDEX Value Equity Portfolio5
(8) IDEX Strategic Total Return Portfolio 4
(9) IDEX Tactical Asset Allocation Portfolio6
(10) IDEX Balanced Portfolio 4
(11) IDEX Flexible Income Portfolio 5
(12) IDEX Income Plus Portfolio 5
(13) IDEX Tax-Exempt Portfolio 5
(b) Computation of Performance Quotation
Class B Shares
(1) IDEX Aggressive Growth Portfolio6
(2) IDEX International Equity Portfolio5
(3) IDEX Capital Appreciation Portfolio 6
(4) IDEX Global Portfolio 6
(5) IDEX Growth Portfolio 6
(6) IDEX C.A.S.E. Portfolio 6
(7) IDEX Value Equity Portfolio5
(8) IDEX Strategic Total Return Portfolio 6
(9) IDEX Tactical Asset Allocation Portfolio 6
(10) IDEX Balanced Portfolio 6
(11) IDEX Flexible Income Portfolio 6
(12) IDEX Income Plus Portfolio 6
(13) IDEX Tax-Exempt Portfolio 6
(c) Computation of Performance Quotation
Class C Shares
(1) IDEX Aggressive Growth Portfolio 4
(2) IDEX International Equity Portfolio 5
(3) IDEX Capital Appreciation Portfolio 4
(4) IDEX Global Portfolio 3
(5) IDEX Growth Portfolio 3
(6) IDEX C.A.S.E. Portfolio6
(7) IDEX Value Equity Portfolio5
(8) IDEX Strategic Total Return Portfolio4
(9) IDEX Tactical Asset Allocation Portfolio 6
(10) IDEX Balanced Portfolio 4
(11) IDEX Flexible Income Portfolio 3
(12) IDEX Income Plus Portfolio 3
(13) IDEX Tax-Exempt Portfolio 3
- --------
6 Filed previously with Post-Effective Amendment No. 23 to Registration
Statement filed on July 19, 1996 (File No. 33-2659).
5
<PAGE>
(d) Computation of Performance Quotation
Class T Shares
(1) IDEX Growth Portfolio
Exhibit 18 Multiple Class Plan 7
Exhibit 19 Powers of Attorney
Exhibit 27 Financial Data Schedule (to be filed by amendment)
Item 25 Persons Controlled by or under Common Control with Registrant
To the knowledge of the Registrant, IDEX International Equity, Aggressive
Growth, Capital Appreciation, Global, Growth, C.A.S.E., Value Equity, Strategic
Total Return, Tactical Asset Allocation, Balanced, Flexible Income, Income Plus
and Tax-Exempt Portfolios 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 ___________________, was as follows:
Title of Class A Shares Number of Record Holders
Shares of Beneficial Interest
IDEX Aggressive Growth Portfolio
IDEX International Equity Portfolio
IDEX Capital Appreciation Portfolio
IDEX Global Portfolio
IDEX Growth Portfolio
IDEX C.A.S.E. Portfolio
IDEX Value Equity Portfolio
IDEX Strategic Total Return Portfolio
IDEX Tactical Asset Allocation Portfolio
IDEX Balanced Portfolio
IDEX Flexible Income Portfolio
IDEX Income Plus Portfolio
IDEX Tax-Exempt Portfolio
Title of Class B Shares Number of Record Holders
Shares of Beneficial Interest
IDEX Aggressive Growth Portfolio
IDEX International Equity Portfolio
IDEX Capital Appreciation Portfolio
IDEX Global Portfolio
IDEX Growth Portfolio
IDEX C.A.S.E. Portfolio
IDEX Value Equity Portfolio
IDEX Strategic Total Return Portfolio
IDEX Tactical Asset Allocation Portfolio
- --------
7 Filed previously with Registrant's Registration Statement filed on
Form N-14 filed on June 3, 1996 (File No. 333-05113).
6
<PAGE>
IDEX Balanced Portfolio
IDEX Flexible Income Portfolio
IDEX Income Plus Portfolio
IDEX Tax-Exempt Portfolio
Title of Class C Shares Number of Record Holders
Shares of Beneficial Interest
IDEX Aggressive Growth Portfolio
IDEX International Equity Portfolio
IDEX Capital Appreciation Portfolio
IDEX Global Portfolio
IDEX Growth Portfolio
IDEX C.A.S.E. Portfolio
IDEX Value Equity Portfolio
IDEX Strategic Total Return Portfolio
IDEX Tactical Asset Allocation Portfolio
IDEX Balanced Portfolio
IDEX Flexible Income Portfolio
IDEX Income Plus Portfolio
IDEX Tax-Exempt Portfolio
Title of Class T Shares Number of Record Holders
Shares of Beneficial Interest
IDEX Growth Portfolio
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.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to Trustees, officers and controlling persons, or
otherwise, Registrant has been advised that in the opinion of the Commission
such indemnification may be against public policy as expressed in the Act and
may be, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a Trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28 Business and Other Connections of Investment Advisers
(a). Capital Appreciation, Global, Growth, Balanced and Flexible Income
Portfolios
The only business of Idex Management, Inc. ("IMI") is to serve as the
investment adviser of Capital Appreciation, Global, Growth, Balanced and
Flexible Income Portfolios of IDEX Series Fund.
Janus Capital Corporation ("Janus Capital") serves as sub-adviser to
certain portfolios in the IDEX Series Fund and as investment adviser to each
portfolio of 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 and President of Janus Capital and
Chairman of the Board of Directors of Idex Management, Inc., has no business,
profession, vocation or employment
7
<PAGE>
of a substantial nature other than his positions with Idex Management, Inc.,
Janus Investment Fund, Janus Aspen Series and Janus Capital. Steven R. Goodbarn,
Vice President of Finance, Treasurer and Chief Financial Officer of Janus
Capital, Treasurer and Chief Financial Officer of Janus Investment Fund and
Janus Aspen Series 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, Scott W. Schoelzel, 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. Michael N. Stolper, a
director of Janus Capital, is President of Stolper & Company, Inc., 525 "B"
Street, Suite 1080, San Diego, CA 92101, an investment performance consultant.
Michael E. Herman, a director of Janus Capital, is Chairman of the Finance
Committee of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas City, MO 64112.
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 64105, a provider of data processing and recordkeeping services for various
mutual funds (including the IDEX Series Fund), 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, information processing and financial services.
The only business, professions, vocations or employments of a substantial nature
of Messrs. Kenney, Hurley, Moriarty, Geiger and Mr. Pierpan, 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). Aggressive Growth, International Equity, C.A.S.E., Value Equity,
Strategic Total Return, Tactical Asset Allocation, Income Plus and
Tax-Exempt Portfolios
InterSecurities, Inc. ("ISI") serves as investment adviser to IDEX
Tax-Exempt, Income Plus, International Equity, Value Equity, Aggressive Growth,
Strategic Total Return, Tactical Asset Allocation and C.A.S.E. Portfolios, and
serves as principal underwriter to the Fund. 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 Pierpan, 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:
William G. Cummings, Vice President and Treasurer of ISI, is also Vice President
of Associated Mariner Financial Group; Kristy L. Dowd is a Vice President of
ISI; Ronald L. Hall 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.; 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.
* * *
Fred Alger Management, Inc. ("Alger Management"), sub-adviser to the
Aggressive Growth Portfolio, 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"), Fred Alger International Advisory SA
("International") and Analysts Resources, Inc. David D. Alger serves as
President and Director of Associates, Alger Management, Alger Inc., Properties,
Services, International and Agency; and Executive Vice President and Director of
Analysts Resources, Inc. Gregory S. Duch serves as Executive Vice President,
Treasurer and Director of Alger Management, Associates and Properties; Executive
Vice President and Treasurer of Alger Inc., Analysts Resources, Inc., Services
and Agency; and Treasurer and Director of International. Mary Marsden-Cochran
serves as Secretary of Associates, Alger Management, Alger Inc., Properties,
Analysts Resources, Inc., Services, International and Agency. The principal
business address of each of the companies listed above, other than Alger, Inc.
and Services, is 75 Maiden Lane, New York, NY 10038. The principal business
address of Alger, Inc. and Services is 30 Montgomery Street, Jersey City, NJ
07302.
8
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* * *
Scottish Equitable Investment Management Limited ("Scottish Equitable"),
incorporated in Scotland, United Kingdom, serves as sub-adviser to the
International Equity Portfolio. William W. Stewart is Chairman of the Board and
Executive Director, Strategy; Otto Thoresen is Director, International Business;
Niall A.M. Franklin is Finance Director; Russell Hogan is Director and Chief
Investment Officer; Roy Patrick is Director and Secretary; Paul N. Ritchie is
Director and Investment Administration Manager. The principal address of
Scottish Equitable is Edinburgh Park, Edinburgh EH129SE, Scotland.
GE Investment Management Incorporated ("GEIM"), a Delaware corporation, is
a wholly-owned subsidiary of General Electric Company and a registered
investment adviser under the Investment Advisers Act of 1940, as amended.
GEIM serves as sub-adviser to the International Equity Portfolio. John H.
Myers is Chairman, CEO and President; Michael J. Cosgrove, Ralph R. Layman,
Robert A. MacDougall, Donald W. Torey, Eugene K. Bolton and Geoffrey R. Norman
are Executive Vice Presidents; Alan M. Lewis is Executive Vice President,
General Counsel and Secretary; Thomas J. Szkutak is Executive Vice President and
CFO. The principal address of GEIM is 3003 Summer Street, Stamford, CT 06905.
* * *
C.A.S.E. Management, Inc. ("C.A.S.E".), sub-adviser to the C.A.S.E.
Portfolio, is a registered investment advisory firm and a wholly-owned
subsidiary of C.A.S.E., Inc. C.A.S.E., Inc. is indirectly controlled by William
Edward Lange, President and Chief Executive Officer of C.A.S.E. C.A.S.E.
provides investment management services to financial institutions, high net
worth individuals, and other professional money managers.
William E. Lange is the President, Chief Executive Officer and Founder;
Robert G. Errigo, Executive Vice President; John Gordon, Senior Vice President;
and Bruce H. Jordan, Senior Vice President. Officers of C.A.S.E. have no other
business, professions, vocations or employments of a substantial nature. The
business address of each of the officers is 2255 Glades Road, Suite 221-A, Boca
Raton, FL 33431.
* * *
NWQ Investment Management Company, Inc. ("NWQ") is a Massachusetts
corporation and is a wholly-owned subsidiary of United Asset Management
Corporation. NWQ provides investment advice to individuals, pension funds,
profit sharing funds, charitable institutions, educational institutions, trust
accounts, corporations, insurance companies, municipalities and governmental
agencies.
NWQ, sub-adviser to the Value Equity Portfolio, is located at 2049 Century
Park East, 4th Floor, Los Angeles, CA 90067. David A. Polak is President,
Director & Chief Investment Officer; Edward C. Friedel, Jr. is Director &
Managing Director; James H. Galbreath (Denver) is Director & Managing Director;
Mary-Gene Slaven is Secretary/Treasurer & Managing Director; Michael C. Mendez
(Scottsdale, AZ) is Managing Director; Phyllis G. Thomas is Managing Director;
Thomas J. Laird is Managing Director; Jon D. Bosse is Managing Director; Justin
T. Clifford is Managing Director; Louis T. Chambers (Atlanta, GA), Jeffrey M.
Cohen, Ronald R. Halverson (Minneapolis, MN), Carl Katerndahl (San Francisco,
CA), Karen S. McCue, Martin Pollack and Ronald R. Sternal (Minneapolis, MN) are
Vice Presidents.
* * *
Luther King Capital Management Corporation ("Luther King"), sub-adviser to
the Strategic Total Return Portfolio, 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, Paul W. Greenwell, Steven
R. Purvis, Robert M. Holt, Jr., Scot C. Hollmann, David L. Dowler, Donald R.
Andrews, Joan M. Maynard, Vincent G. Melashenko, Timothy E. Harris and Barbara
S. Garcia, officers of Luther King, have no substantial business, profession,
vocation or employment other than their positions with Luther King.
9
<PAGE>
* * *
Dean Investment Associates ("Dean Investment"), a division of C.H. Dean and
Associates, Inc., sub-adviser to the Tactical Asset Allocation Portfolio, 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; Robert D.
Dean is President; 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.
* * *
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 AEGON USA Securities, Inc. ("AEGON
Securities"). AEGON Management and AEGON Securities are wholly-owned
subsidiaries of AUSA Holding Company, which is a wholly-owned subsidiary of
AEGON USA, Inc.
AEGON Management serves as sub-adviser to Tax-Exempt and Income Plus
Portfolios. 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 and Chief Investment Officer of AUSA Life
Insurance Company, Inc. Mr. Falconio is also currently an officer and/or a
director of other AEGON affiliates. Brenda K. Clancy, Director of AEGON
Management, is also Senior Vice President and Treasurer of AEGON USA, Inc. Ms.
Clancy is also Treasurer of AUSA Life Insurance Company, Inc. and is currently
an officer and/or director of other AEGON affiliates. Craig D. Vermie, Director
of AEGON Management, is also Secretary of AUSA Life Insurance Company, Inc. and
Vice President, Secretary and General Counsel of AEGON USA, Inc. Mr. Vermie is
also currently an officer and/or a director of other AEGON affiliates. Douglas
C. Kolsrud, Executive Vice President of AEGON Management, is also Executive Vice
President- Asset Allocation and Risk Management of AEGON USA, Inc. Mr. Kolsrud
is also currently an officer and/or a director of other AEGON affiliates. Donald
E. Flynn, Executive Vice President of AEGON Management is also a Vice President
of AUSA Life Insurance Company, Inc. Mr. Flynn is also currently an officer
and/or director of other AEGON affiliates. James D. Ross is an Executive Vice
President of AEGON Management; Clifford A. Sheets is an Executive Vice President
of AEGON Management; Ralph M. O'Brien, a Senior Vice President of AEGON
Management, is also a Vice President of AUSA Life Insurance Company, Inc. Mr.
O'Brien is also currently an officer and/or a director of other AEGON
affiliates. Michael Van Meter is a Senior Vice President of AEGON Management;
David R. Halfpap is a Senior Vice President of AEGON Management and a Vice
President of AUSA Life Insurance Company, Inc. Mr. Halfpap is also currently an
officer and/or a director of other AEGON affiliates. Steven P. Opp is Senior
Vice President of AEGON Management. Robert L. Hansen is Vice President of AEGON
Management and Vice President of AUSA Life Insurance Company, Inc.; Jon D.
Kettering is Vice President and Treasurer of AEGON Management and Vice President
of AUSA Life Insurance Company, Inc.; Gregory W. Theobald, Vice President and
Secretary of AEGON Management, is also Vice President and Asst. Secretary of
AUSA Life Insurance Company, Inc. Mr. Theobald is also currently an officer
and/or a director of other AEGON affiliates. Rachel A. Dennis, Michael N. Meese,
David M. Carney, Lewis O. Funkhouser, Thomas A. Keel, James E. Fine, Thomas E.
Myers, Bradley J. Berman and Daniel H. Thatcher are Vice Presidents of AEGON
Management. Mary T. Pech and Karen J. Green are Assistant Vice Presidents of
AEGON Management. Robert S. Jett is Assistant Secretary of AEGON Management.
* * *
10
<PAGE>
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 33758-9053, to act as the principal underwriter of Fund
shares.
(b) Directors and Officers of Principal Underwriter
Name Positions and Offices Positions and Offices with
with Underwriter Registrant
John R. Kenney Chairman and Director Chairman and Trustee
G. John Hurley President, Chief Executive President, Chief Executive
Officer and Director Officer and Trustee
William H. Geiger Director and Secretary Vice President and
Assistant Secretary
Thomas R. Moriarty Senior Vice President Senior Vice President,
Treasurer and Principal
Financial Officer
Ronald L. Hall Vice President, Sales and Senior Vice President,
Marketing Sales and Marketing
Kristy L. Dowd Vice President N/A
Thomas E. Pierpan Assistant Vice President, Vice President, Counsel
Counsel and Assistant and Secretary
Secretary
Christopher G. Roetzer Assistant Vice President Vice President, Assistant
Treasurer and Principal
Accounting Officer
Cynthia L. Remley Vice President, Counsel and N/A
Assistant Secretary
Terry L. Garvin Vice President N/A
Stanley R. Orr Vice President N/A
William G. Cummings Vice President and Treasurer N/A
Diane Rogers Assistant Vice President N/A
Ronald T. Klimas Assistant Vice President N/A
Russell W. Crooks Assistant Vice President N/A
Greg Limardi Assistant Vice President N/A
11
<PAGE>
Christine M. Goodwin Assistant Vice President N/A
Stuart Walsky Assistant Vice President N/A
Duncan H. Cameron Assistant Vice President N/A
James Keily Assistant Secretary N/A
Laura Schneider Assistant Secretary N/A
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
33758-9015.
(b) All other accounting records of the Registrant are maintained at the
offices of the Registrant at 201 Highland Avenue, Largo, FL,
33770-2957 or 33 N. Garden Avenue, Suites 1000 & 1100, Clearwater, FL
33755, and are in the physical possession of the officers of the Fund,
or at the offices of the Custodian, Investors Fiduciary Trust Company,
801 Pennsylvania, Kansas City, MO 64105-1307.
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 IMI, ISI, Alger Management, Scottish Equitable,
GEIM, Janus Capital, C.A.S.E., NWQ, Luther King, Dean Investment and AEGON
Management 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) Not applicable
(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.
12
<PAGE>
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 29th day of December 1997.
IDEX Series Fund
/S/
By:_______________________________________
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:
/s/ John R. Kenney Chairman and Trustee December 29, 1997
- -----------------------------
John R. Kenney
/s/ G. John Hurley President and Trustee December 29, 1997
- ----------------------------- (Principal Executive
G. John Hurley Officer)
/s/ ^ Thomas R. Moriarty Senior Vice President, December 29, 1997
- ----------------------------- Treasurer and Principal
Thomas R. Moriarty Financial Officer
/s/ Christopher G. Roetzer Vice President, Assistant December 29, 1997
- ----------------------------- Treasurer and Principal
Christopher G. Roetzer Accounting Officer
/s/ Peter R. Brown * Trustee December 29, 1997
- -----------------------------
Peter R. Brown *
/s/ Daniel Calabria* Trustee December 29, 1997
- -----------------------------
Daniel Calabria *
/s/ James L. Churchill * Trustee December 29, 1997
- -----------------------------
James L. Churchill *
/s/ Charles C. Harris * Trustee December 29, 1997
- -----------------------------
Charles C. Harris*
/s/ Julian A. Lerner* Trustee December 29, 1997
- -----------------------------
Julian A. Lerner *
/s/ William W. Short, Jr. * Trustee December 29, 1997
- -----------------------------
William W. Short, Jr. *
/s/ Jack E. Zimmerman * Trustee December 29, 1997
- -----------------------------
Jack E. Zimmerman *
/s/ G. John Hurley
*Signed by G. John Hurley
Attorney in Fact
<PAGE>
CLASS A SHARES OF
IDEX AGGRESSIVE GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
Aggressive Growth Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX AGGRESSIVE GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX AGGRESSIVE GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
Aggressive Growth Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX AGGRESSIVE GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX AGGRESSIVE GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
Aggressive Growth Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX AGGRESSIVE GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS A SHARES OF
IDEX CAPITAL APPRECIATION PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX Capital
Appreciation Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX CAPITAL APPRECIATION PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX CAPITAL APPRECIATION PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX Capital
Appreciation Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX CAPITAL APPRECIATION PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX CAPITAL APPRECIATION PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX Capital
Appreciation Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX CAPITAL APPRECIATION PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX GLOBAL PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX Global
Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX GLOBAL PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX GLOBAL PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX Global
Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX GLOBAL PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX GLOBAL PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX Global
Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX GLOBAL PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX Growth
Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX Growth
Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX Growth
Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS T SHARES OF
IDEX GROWTH PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class T Shares (without par value) of IDEX Growth
Portfolio, a series of shares (the "Series") of IDEX 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 T 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS T SHARES OF IDEX GROWTH PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS A SHARES OF
IDEX C.A.S.E. PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
C.A.S.E. Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX C.A.S.E. PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX C.A.S.E. PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
C.A.S.E. Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX C.A.S.E. PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX C.A.S.E. PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
C.A.S.E. Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX C.A.S.E. PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX STRATEGIC TOTAL RETURN PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
STRATEGIC TOTAL RETURN Portfolio, a series of shares (the "Series") of IDEX
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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX STRATEGIC TOTAL RETURN PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX STRATEGIC TOTAL RETURN PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
STRATEGIC TOTAL RETURN Portfolio, a series of shares (the "Series") of IDEX
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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX STRATEGIC TOTAL RETURN PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX STRATEGIC TOTAL RETURN PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
STRATEGIC TOTAL RETURN Portfolio, a series of shares (the "Series") of IDEX
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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX STRATEGIC TOTAL RETURN PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX TACTICAL ASSET ALLOCATION PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX BALANCED PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
Balanced Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX BALANCED PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX BALANCED PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
Balanced Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX BALANCED PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX BALANCED PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
Balanced Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX BALANCED PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX FLEXIBLE INCOME PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
Flexible Income Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX FLEXIBLE INCOME PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX FLEXIBLE INCOME PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
Flexible Income Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX FLEXIBLE INCOME PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX FLEXIBLE INCOME PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
Flexible Income Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX FLEXIBLE INCOME PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX INCOME PLUS PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX Income
Plus Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX INCOME PLUS PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX INCOME PLUS PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX Income
Plus Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX INCOME PLUS PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX INCOME PLUS PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX Income
Plus Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX INCOME PLUS PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
CLASS A SHARES OF
IDEX TAX-EXEMPT PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class A Shares (without par value) of IDEX
Tax-Exempt Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS A SHARES OF IDEX TAX-EXEMPT PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS B SHARES OF
IDEX TAX-EXEMPT PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class B Shares (without par value) of IDEX
Tax-Exempt Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS B SHARES OF IDEX TAX-EXEMPT PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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>
CLASS C SHARES OF
IDEX TAX-EXEMPT PORTFOLIO
A series of shares of
IDEX SERIES FUND
(A MASSACHUSETTS BUSINESS TRUST)
SHARES OF BENEFICIAL INTEREST
THIS CERTIFIES that is the owner of ACCOUNT NO. ALPHA CODE
fully paid and non-assessable Class C Shares (without par value) of IDEX
Tax-Exempt Portfolio, a series of shares (the "Series") of IDEX 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/Thomas R. Moriarty BY
Treasurer --------------------------------------------
/S/G. John Hurley AUTHORIZED SIGNATURE
President
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
CLASS C SHARES OF IDEX TAX-EXEMPT PORTFOLIO
A SERIES OF IDEX SERIES FUND SHARES
NUMBER IM
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.
<PAGE>
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:
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)
Additionalabbreviations 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
IDENTIFYING 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)
<PAGE>
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.
DEFERRED COMPENSATION PLAN
FOR
TRUSTEES OF IDEX SERIES FUND
AND FOR
DIRECTORS OF WRL SERIES FUND, INC.
Article I
Purpose & Authority
1.1 Purpose. The purpose of the Plan is to offer Trustees and Directors the
opportunity to defer receipt of a portion of their fees from the Funds, under
terms advantageous both to the Trustees and Directors and to the Funds.
1.2 Effective Date. The Plan is effective as of January 1, 1996.
1.3 Authority. Any decision made or action taken by the Funds and any of
its officers or employees involved in the administration of this Plan, or any
member of the Committee, arising out of or in connection with the construction,
administration, interpretation and effect of the Plan shall be within the
absolute discretion of all and each of them, as the case may be, and will be
conclusive and binding on all parties. No officer or employee of the Funds shall
be liable for any act or action hereunder, whether of omission or commission, by
any other member or employee or by any agent to whom duties in connection with
the administration of the Plan have been delegated or, except in circumstances
involving the member's or employee's bad faith, for anything done or omitted to
be done by himself or herself.
Article II
Definitions
2.1 "Account" means, for any Participant, the memorandum account
established for the Participant under Section 4.1.
2.2 "Account Balance" means, for any Participant as of any date, the
aggregate amount reflected in his or her Account.
2.3 "Beneficiary" means the person or persons designated from time to time
in writing by a Participant to receive payments under the Plan after the death
of such Participant or, in the absence of such designation or in the event that
such designated person or persons predeceases the Participant, the Participant's
estate.
2.4 "Committee" means the committee established by the Boards of Trustees
and the Board of Directors (as applicable) of the Funds to administer the Plan.
2.5 "Deferral Election" means an election by a Trustee or Director to defer
a portion of his or her fees from the Funds under the Plan, as described in
Section 3.1.
2.6 "Director" means a member of the Board of Directors of WRL Series Fund,
Inc.
2.7 "Fund" means IDEX Series Fund or WRL Series Fund, Inc.
2.8 "Participant" means a Trustee or Director or a former Trustee or
Director who has made a Deferral Election and who has not received a
distribution of his or her entire Account Balance.
2.9 "Plan" means the Deferred Compensation Plan for Trustees of IDEX Series
Fund and for Directors of WRL Series Fund, Inc.
1
<PAGE>
2.10 "Revised Election" means an election made by a Participant, in
accordance with Section 5.2, to change the date as of which payment of his or
her Account Balance is to commence and/or the form in which such payment is to
be made.
2.11 "Trustee" means a member of the Board of Trustees of IDEX Series Fund,
including a trustee emeritus. 2.12 "Valuation Date" means each March 31, June
30, September 30, December 31, and such other dates as may be determined by the
Committee. Article III Deferral of Compensation
3.1 Deferral Election.
(a) During any calendar year, each individual who is a Trustee or
Director for such calendar year may, by properly completing a Deferral
Election, elect to defer all or a portion of the fees that, absent
deferral, would be paid to him or her for services rendered during the next
following calendar year.
(b) To be effective, a Deferral Election must be made in writing by
the Trustee or Director on a form furnished by the Committee on or before
the September 30 preceding the calendar year during which the amounts to be
deferred, absent deferral, would be paid to the Trustee or Director;
provided, however, that an individual who becomes a Trustee or Director
after the effective date of the Plan (as set forth in Section 1.2) may make
a Deferral Election with respect to fees that, absent deferral, would be
paid to him or her during the remainder of the calendar year in which he or
she becomes a Trustee or Director by filing the required written election
with the Committee on or before the date that is 30 days after the date on
which he or she becomes a Trustee or Director.
(c) Notwithstanding any provision of the Plan to the contrary, a
Trustee or Director may make a Deferral Election with respect to fees that,
absent deferral, would be paid to him or her in 1996 by filing the required
written election with the Committee on or before January 30, 1996.
(d) Once made, a Deferral Election shall become effective upon
approval by the Committee and is thereafter irrevocable, except to the
extent otherwise provided in Section 5.2. A Deferral Election will be
deemed to have been approved by the Committee if it is not disapproved by
the Committee within ten days of the date on which it is received.
(e) A Deferral Election filed by a Trustee or a Director must specify
either a percentage or a certain dollar amount of his or her fees to be
deferred under the Plan. In addition, the Deferral Election must specify
the date on which payment of the Trustee's or the Director's Account
Balance is to commence and the manner in which such payment is to be made.
(1) The Trustee or Director must specify the date as of which
payment of his or her Account Balance is to commence and may specify
that such payment is to commence as of:
(A) the termination of his or her status as a Trustee or
Director; or
2
<PAGE>
(B) a specific date (which may be determined by reference to
the termination of his or her status as a Trustee or Director)
that is at least five years after the date on which the amounts
to be deferred, absent deferral, would be paid to the Trustee or
Director.
(2) The Trustee or Director must specify the manner in which
payment of his or her Account Balance is to be made and may specify
that such payment is to be made either in a single sum or in a number
of quarterly installments (not to exceed 40).
(f) Deferrals of a Trustee's or a Director's fees shall be credited to
the Plan ratably throughout the year (or, where applicable, the portion of
the year) to which the Deferral Election applies.
(g) Unless the Deferral Election form specifically provides otherwise,
a Deferral Election shall expire as of the last day of the calendar year
that includes the first day on which any amount, absent deferral, would be
paid to the Trustee or Director.
Article IV
Treatment of Deferred Amounts
4.1 Memorandum Account. The Funds shall establish on their books an Account
for each Participant. Amounts deferred by a Participant pursuant to a Deferral
Election shall be credited to the Participant's Account on the date on which the
deferred amounts, absent deferral, would have been paid to the Participant. In
addition, as of each Valuation Date, incremental amounts determined in
accordance with Section 4.2 will be credited or debited to each Participant's
Account. Any payments made to or on behalf of the Participant and for his or her
Beneficiary shall be debited from the Account. No assets shall be segregated or
earmarked in respect to any Account and no Participant or Beneficiary shall have
any right to assign, transfer, pledge or hypothecate his or her interest or any
portion thereof in his or her Account. The Plan and the crediting of Accounts
hereunder shall not constitute a trust or a funded arrangement of any sort and
shall be merely for the purpose of recording an unsecured contractual obligation
of the Fund.
4.2 Hypothetical Investment Designation.
(a) Subject to the provisions of this Section 4.2, a Participant's
Account shall be credited or debited with amounts equal to the amounts that
would be earned or lost with respect to the Participant's Account Balance
if amounts equal to that Account Balance were actually invested in A Shares
of the IDEX Series Fund in the manner specified by the Participant. In
determining the number of such shares by which a Participant's Account
Balance will be determined as of any date, no front-end sales charge will
be applied.
(b) Each Participant shall elect, in 10 percent increments, one or
more of the portfolios available under the IDEX Series Fund to be used as a
measure of the hypothetical investment performance of his or her Account.
Any such election shall continue in effect until modified by a subsequent
election. A Participant may modify his or her hypothetical investment
designations in accordance with rules prescribed by the Committee.
(c) Any investment designation made under this Section shall be
hypothetical only. No Fund shall be obligated to invest any amounts in the
portfolios selected by a Participant, but will merely maintain bookkeeping
entries to reflect the hypothetical earnings or losses that would have been
credited to or debited from the Participant's Account if in fact amounts
had been invested in the selected portfolios.
3
<PAGE>
(d) Notwithstanding the foregoing, until such time as an exemptive
order is granted with respect to the Plan by the Division of Investment
Management of the Securities and Exchange Commission which has the effect
of permitting hypothetical investment performance to be measured by the
performance of a Fund or Funds, each Account shall be deemed to earn
interest at an annual rate, effective on each January 1, determined by the
Committee; provided, however, that if the Committee does not select a new
interest rate on or prior to any subsequent January 1, the rate in effect
prior to such date shall remain in effect until a new rate is determined by
the Committee. The initial interest rate shall be six percent.
Article V
Payment of Deferred Amounts
5.1 Form and Time of Payment. The benefits to which a Participant or a
Beneficiary may be entitled under the Plan shall be paid in accordance with this
Section 5.1.
(a) All payments under the Plan shall be made in cash.
(b) Except as otherwise provided in Section 5.2 or Section 5.3,
payment of a Participant's Account Balance shall commence as of the
Valuation Date next following the date or dates specified in the
Participant's Deferral Election or Elections or (where applicable) the
Participant's Revised Election or Elections; provided, however, that where
the Participant's Deferral Election or Elections or (where applicable) the
Participant's Revised Election or Elections specify that payments with
respect to a Participant's Account Balance are to commence as of a
specified date or specified dates not determined by reference to the
termination of the Participant's status as a Trustee or Director and the
Participant's status as such terminates prior to such date or dates,
payment of the portion of the Participant's Account Balance that was
deferred to such date or dates shall commence as of the Valuation Date next
following the termination of the Participant's status as a Trustee or
Director.
(c) All payments shall be made in the form or forms specified in the
Participant's Deferral Election or Elections or (where applicable) the
Participant's Revised Election or Elections.
(d) To the extent a Participant has not specified the form or time of
payment of his or her Account Balance, payment will be made in a single sum
as soon as administratively practicable, but in any event within 90 days,
after the first Valuation Date following the termination of the
Participant's status as a Trustee or a Director.
(e) Notwithstanding any election made by a Participant, any portion of
a Participant's Account Balance that has not been paid to the Participant
as of the date of his or her death shall be paid to the Participant's
Beneficiary in the form elected by the Participant. If the Participant dies
after payments of his or her Account Balance have begun, payments will
continue as if the Participant had not died. If the Participant dies before
payments have commenced, payments will commence as soon as administratively
practicable, after the Valuation Date following the date on which the
Committee receives notification of the Participant's death.
5.2 Revised Election.
(a) Pursuant to a Revised Election, a Participant may specify:
(1) a date for the commencement of the payment of the
Participant's Account Balance that is after the date specified in the
Participant's Deferral Election; and/or
4
<PAGE>
(2) a form of payment that calls for a greater number of
installment payments than that specified in the Participant's Deferral
Election, or a number of annual installment payments where the
Participant specified a single sum payment in his or her Deferral
Election.
(b) If a Participant has made a Revised Election with respect to
amounts the payment of which has been deferred to a certain date, the
Participant may not thereafter make another Revised Election with respect
to amounts the payment of which, as of the date on which such Revised
Election is made and before giving effect to the Revised Election, has been
deferred to the same date.
(c) To be effective, a Revised Election must be:
(1) made in writing by the Participant on a form furnished for
such purpose by the Committee;
(2) submitted to the Committee on or before the date that is one
year and one day before the date on which the portion of the
Participant's Account Balance that is the subject of the Revised
Election would, absent the Revised Election, first become payable; and
(3) approved by the Committee. A Revised Election will be deemed
to have been approved by the Committee if it is not disapproved by the
Committee within ten days of the date on which it is received.
5.3 Payments in the Event of Financial Hardship.
(a) Notwithstanding any other provision of the Plan to the contrary, a
Participant may receive payment of all or a portion of his or her Account
Balance as soon as administratively practicable following the approval by
the Committee of a written application for such payment which demonstrates
that the Participant has incurred a severe financial hardship as a result
of an unanticipated emergency beyond the control of the Participant. The
amount of any payment made pursuant to this Section 5.3 shall be limited to
the amount necessary to meet the financial hardship (including any taxes
that Participant will be required to pay as a result of the payment).
(b) Where a Participant receives a payment of less than his or her
entire Account Balance pursuant to Subsection 5.3(a), the portion of the
Participant's Account Balance to which each hypothetical investment Fund
designation is applied shall be reduced proportionately so that the
investment Fund designations apply to the Participant's Account Balance in
the same percentages immediately before and immediately after the payment.
5.4 Acceleration of Payment.
(a) Notwithstanding any provision of the Plan to the contrary, in the
event the Committee determines that any portion of a Participant's Account
Balance is the subject of a final determination by the Internal Revenue
Service that such portion is includible in the Participant's taxable
income, the Participant's Account Balance shall be distributed to the
extent it is so includible. All income taxes and related interest and
penalties associated with credits to or distributions from a Participant's
Account shall be borne by the Participant.
(b) Notwithstanding any other provision of this Plan to the contrary,
the portion of any Account Balances attributable to fees earned from a Fund
shall be paid to all or any group of similarly situated Participants or
Beneficiaries, whether before or after the termination of the Participants'
status as Trustees or Directors, upon the dissolution, liquidation or
winding up of such Fund, whether voluntary or involuntary, or the
disposition of all or substantially all of the Fund's assets (unless the
Fund's obligations under the Plan have been assumed by a financially
responsible party purchasing such
5
<PAGE>
assets) or upon the merger or consolidation of the Fund (unless prior to
the merger or consolidation the Fund's Board of Trustees or Directors
determines that the deferrals under the Plan shall survive the merger or
consolidation).
Article VI
Miscellaneous
6.1 Amendment. The Committee may modify or amend, in whole or in part, any
of or all the provisions of the Plan, or suspend or terminate it entirely;
provided, however, that any such modification, amendment, suspension or
termination may not, without the Participant's consent, adversely affect any
deferred amount credited to him or her for any period prior to the effective
date of such modification, amendment, suspension or termination. The Plan shall
remain in effect until terminated pursuant to this provision.
6.2 Administration. The Committee shall have the sole authority to
interpret the Plan and in its discretion to establish and modify administrative
rules for the Plan. All expenses and costs in connection with the operation of
this Plan shall be borne by the Corporation. The Corporation shall have the
right to deduct from any payment to be made pursuant to this Plan any federal,
state or local taxes required by law to be withheld, and any associated interest
and/or penalties.
6.3 Governing Law. The Plan shall be construed and its provisions enforced
and administered in accordance with the laws of the state of Florida, except as
such laws may be superseded by the federal law.
6
<PAGE>
DEFERRED COMPENSATION PLAN
FOR
TRUSTEES OF IDEX SERIES FUND
AND FOR
DIRECTORS OF WRL SERIES FUND, INC. ("PLAN")
1998
DEFERRAL ELECTION FORM
I. DEFERRAL OF FEES
I wish to defer the payment of the Trustee's fees or Director's fees that would
be payable to me during calendar year 1998. Specifically, beginning with any
fees that are payable to me as of January 1, 1998, I wish to defer (choose one):
______ _____ percent of these fees.
------ $-----.
II. TIME OF DISTRIBUTION
I wish to receive the amounts deferred pursuant to Part I above beginning as of
(check one):
______ my retirement or other termination of active employment.
______ (a) the earlier of my retirement or other termination of active
employment or
(b)________________, ______ (enter a date which is at least five years from
the date on which the first deferral is to be made).
III. FORM OF DISTRIBUTION
I wish to receive payment of the amounts deferred pursuant to Part I (choose
one):
______ as a lump sum.
______ in ______ (enter a number not to exceed 40) quarterly installments.
IV. HYPOTHETICAL INVESTMENT DESIGNATION
I wish to have the hypothetical investment designations applied to the amounts
deferred pursuant to Part I above in the following percentages:
______% IDEX Aggressive Growth Portfolio
______% IDEX International Equity Portfolio
______% IDEX Capital Appreciation Portfolio
______% IDEX Global Portfolio
______% IDEX Growth Portfolio
______% IDEX C.A.S.E. Portfolio
______% IDEX Value Equity Portfolio
______% IDEX Strategic Total Return Portfolio
______% IDEX Tactical Asset Allocation Portfolio
______% IDEX Balanced Portfolio
______% IDEX Flexible Income Portfolio
______% IDEX Income plus Portfolio
______% IDEX Tax-Exempt Portfolio
NOTE:Hypothetical Investment Designations must be selected in percentages that
are multiples of ten percent and that add up to 100 percent.
7
<PAGE>
V. BENEFICIARY DESIGNATION: I hereby designate the following beneficiary:
Primary Beneficiary:
Name:
Address:
Social Security No.:
Relationship:
Contingent Beneficiary:
Name:
Address:
Social Security No.:
Relationship:
I understand that my elections set forth in Parts I, II and III above are
generally irrevocable. I may, however, change my elections set forth in Parts IV
and V above in accordance with the procedures set forth in the Plan.
-------------------------------
Name
-------------------------------
Signature
-------------------------------
Date
Return to:
Tom Moriarty, Senior Vice President
IDEX Series Fund
P.O. Box 9015
Clearwater, FL 34618-9771
By: September 30, 1997
8
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
John R. Kenney
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
James L. Churchill
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
William W. Short, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
Jack E. Zimmerman
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
Peter R. Brown
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
Charles C. Harris
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN, 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 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 Series Fund, hereby ratifying
and confirming all actions of said attorney thereunder.
DATED this day, December 8, 1997
/S/
G. John Hurley
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
Daniel Calabria
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby makes,
constitutes and appoints THOMAS E. PIERPAN 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 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 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, December 8, 1997
/S/
Julian A. Lerner
<PAGE>
Performance -- Average Annual Return since Inception
through October 31, 1997
All assuming no sales charges
Portfolio Inception T ERV P N
Class T
Growth 06/04/85 17.14% $7,132 $1,000 0.08
<PAGE>
