IDEX SERIES FUND
Annual
Report
OCTOBER 31, 1997
TABLE OF CONTENTS
PORTFOLIO MANAGERS' COMMENTARY,
PORTFOLIO PERFORMANCE, STATISTICS AND
SCHEDULE OF INVESTMENTS
Aggressive Growth Portfolio 2 28
International Equity Portfolio 4 30
Capital Appreciation Portfolio 6 34
Global Portfolio 8 36
Growth Portfolio . 10 40
C.A.S.E. Portfolio. 12 42
Value Equity Portfolio 14 44
Strategic Total Return Portfolio (formerly Equity-Income Portfolio) 16 46
Tactical Asset Allocation Portfolio 18 48
Balanced Portfolio 20 50
Flexible Income Portfolio 22 52
Income Plus Portfolio 24 53
Tax-Exempt Portfolio 26 54
FINANCIAL STATEMENTS
Statement of Assets and Liabilities 56
Statement of Operations 58
Statement of Changes in Net Assets 60
Financial Highlights 64
Notes to Financial Statements 72
REPORT OF INDEPENDENT ACCOUNTANTS 78
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION 80
To Contact Us 85
Fellow Shareholders:
Reality check.
There is nothing like a vicious stock market plunge to remind us that prices
can, and most assuredly will, move both ways. And sometimes with absolutely
stunning speed.
Indeed, just as our period was gliding to a graceful and well-turned close, the
financial markets quite unbecomingly stumbled and fell. Tripped up by currency
turmoil in Southeast Asia and the attendant pressure on stock prices there, the
Dow Jones Industrial Average dropped a staggering 554 points in a single
session-Monday, October 27. The plunge marked the largest one-day point decline
in the history of the market.
Recognizing, perhaps, that the selloff was an unduly harsh reaction to the Asian
market's hysteria, the U.S. bellwether index bounced right back the following
session, vaulting 337 points-the largest single-day advance in the history of
the market. Despite all the great effort, however, the Dow still gave up 273
points, or just about 3.5%, for the final week of the month-and of our period.
Ordinarily, of course, we are not that interested in the short-term vagaries of
the stock market. But there is something important to be found in this recent
turbulence: after a relentless three-year run to higher levels, volatility is
back in the stock market.
That is not to say that something important has happened to hurt the long-term
bull case for financial assets. It has not. To be sure, the potential for
ripples in global growth rates is real, but relative valuations are as favorable
as they have been in years. In fact, we are still reaching for superlatives to
describe the combination of low inflation, strong earnings, and global
capitalism that has been powering equities of all stripes. We remain undeniably
at an amazing point in our economic history.
Nevertheless, with the reemergence of real and potentially significant
volatility, this looks like a good time for prudent investors to conduct a
reality check on their expectations-for risk as well as reward. The market has,
after all, doubled in just the last three years and we are all, most likely, a
bit spoiled. The biggest challenge in the near term may be accepting far less
robust returns than those to which we have grown accustomed.
The good news in all of this is that professional investors are finding great
reasons to like the financial markets. On the following pages, the IDEX Series
Fund portfolio managers share their perspective on investing and discuss how
they have responded to this period's changes and why. We encourage you to take
the time to review these reports in order to better understand your investment
and its performance. Knowing your Fund's Portfolio's-how they react to market
volatility, securities in which they invest, the portfolio managers' investment
style-can only make you a smarter investor. And smart investors are more likely
to stick to their long-term investment horizons.
Within that long-term context, October's turmoil could be viewed as a character
building exercise-the perfect medicine for an impetuous bull market with an
invincibility complex. For that reason there may be cause for greater optimism
now than even a few weeks ago. But no matter what the markets do, or when, we
will do our best to provide you with solid, well-managed products and superior
service. We respect your personal task of financial planning and appreciate the
opportunity to assist.
Sincerely yours,
/s/ John R. Kenney /s/ G. John Hurley
November 18, 1997
Aggressive Growth Portfolio
OBJECTIVE
Long-term capital appreciation through investments in domestic equities of
developing companies or companies with promising growth potential.
This has been a challenging 12 months for growth stock investors. Early this
period, the market was rewarding larger companies noted for their earnings
predictability and liquidity, leaving less liquid and less stable growth stocks
to become increasingly undervalued relative to blue chips. This effect was
substantially magnified in the small cap market where quality growth stocks were
selling at a discount to the broader market despite having the potential to grow
their earnings three to four times faster.
The Aggressive Growth Portfolio, with its ability to invest in any size company,
was able to offset this unfavorable investor psychology by increasing its
exposure to large cap stocks. Although the Portfolio's small-cap exposure
negatively impacted returns, the effect was minimized by a deliberate
underweighting.
With economic data throughout the third quarter indicating the economy was in
fact slowing and that inflation was not an imminent problem, market psychology
began to improve and many investors began shifting their assets into stocks with
greater return potential. As a result, premiums for quality growth stocks
increased. This, coupled with strong earnings, helped the Portfolio rebound
significantly from an unimpressive first half. The Portfolio's small-cap
exposure and its heavy weighting in the technology sector added to an
exceptional quarter of relative and absolute performance.
In August, as the economy displayed signs of increasing strength, investors grew
a bit fearful of potential Federal Reserve action and the market stumbled
slightly. This short-lived selloff was particularly acute for several prominent,
multinational companies, which slid further amid negative earnings pre-
announcements. Although the Portfolio had a negative month, its performance
relative to the S&P 500 Index was favorable.
As October approached, many investors grew nervous. A great deal of press was
generated on the similarities between the current market and 1987. Investors,
many of whom had enjoyed substantial increases for the past several years,
appeared looking for an excuse to sell. The catalyst came on October 27th.
Triggered by a dramatic drop in the Hong Kong stock market, the Dow Jones
Industrial Average slid 554 points. The drop was particularly acute in the
semiconductor industry, causing the Portfolio to experience a volatile October,
capping off another challenging yet successful year.
However, despite our Portfolio's respectable year, we are disappointed to note
that we underperformed our benchmark measure, the S&P 500. Please refer to the
Portfolio Peformance on page 3 for details.
Looking ahead, it seems the events in late October have subsided. The market
bounced back the following day and appears to have stabilized. Moreover, there
is no indication that the American economy has been damaged, or even will be
damaged, in any systemic way by the events in Asia. Nor does it seem likely the
Federal Reserve will raise rates as it would not want to further destabilize
world markets. The outlook for the remainder of the calendar year is optimistic
and a strong finish is anticipated.
/s/ David Alger
David Alger
Portfolio Manager
Fred Alger Management, Inc.
Top Five Industries (% of Net Assets)
Pharmaceuticals 11.7%
Computers 6.7%
Semiconductors 6.5%
Industrial Diversified 6.4%
Software 6.2%
Five Largest Holdings (% of Net Assets)
Sunbeam Corp. 3.3%
Compaq Computer Corp. 3.1%
Cisco Systems, Inc. 3.1%
Home Depot, Inc. 2.8%
Tyco International, Ltd. 2.7%
Aggressive Growth Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $19,763.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year Inception Date
Class A (without sales load) 24.71% 28.82% 12/2/94
Class A(2) (with sales load) 17.85% 26.35% 12/2/94
S&P 500(3) 32.12% 30.06% 12/2/94
Class B (without sales load) 24.47% 8.02% 10/1/95
Class B(2) (with sales load) 19.47% 6.69% 10/1/95
Class C 24.50% 28.47% 12/2/94
(1) Aggressive Growth Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
(2) Aggressive Growth Portfolio Class A Shares performance reflects the maximum
sales charge of 5.5%. Aggressive Growth Portfolio Class B Shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 1.2% 1.7%
Consumer Cyclical 14.5% 16.1%
Consumer Non-Cyclical 18.3% 14.7%
Energy 7.4% 4.1%
Financial 12.7% 11.4%
Industrial 8.4% 6.2%
Technology 28.0% 41.4%
Utilities 1.6% 1.1%
Short-term 12.0% 2.9%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
International Equity Portfolio
OBJECTIVE
Long-term growth of capital by investing primarily in the common stock and other
equity securities of foreign issuers traded on overseas exchanges and foreign
over-the-counter markets.
Since its inception on February 3, 1997, the Portfolio received a substantial
boost early on from the use of tactical currency strategies. Our outlook at the
start of the year focused on the potential of the U.S. dollar and we
consequently hedged all European and yen exposure back to dollars. As a result
of the dollar's continued strength, the strong advances were protected as we
unwound the positions in April and May.
The U.S. equity market has lead international markets in most regions, producing
significant double digit returns for the nine month period. European, Latin
American, and the UK markets have produced strong growth as well and, as such,
have been the focus of our investment strategy over the period. In stark
contrast, many Asian markets have endured turmoil caused by weakening
currencies, while Japan's economy and its stock market have failed to impress.
During October, returns from almost every world market were pared back as a
barrage of attacks on the Hong Kong currency rocked equity markets, causing them
to reappraise their recent advances. In an attempt to rear its ugly head, the
legacy of October 1987 would seem to have been smartly brushed aside by the
bulls.
Asset allocation and stock selection strategies contributed equally to the
Portfolio's performance for the period. On the asset allocation side,
underweighted positions in Japan and the Far East, notably Hong Kong and
Malaysia, combined with a significant overweighting in Finland and Europe were
the ingredients for our positive results.
Looking forward, we remain bullish on European equities, buoyed by the positive
outlook for economic growth in the region. More specific, in the UK we have
moved to a neutral stance since the recent correction, which has made equity
valuations look somewhat more reasonable. In Japan we continue to hold an
underweighted position as well as in the Far East where the worst may be over
but there is a long way to go before the light shines at the end of the tunnel.
Investment Management Board
Co-Portfolio Manager
Scottish Equitable Investment
Management Limited
International Equity Portfolio's performance for the nine months ended October
31, 1997, lagged its comparative index, the Morgan Stanley Capital Intl-
Europe, Asia and Far East Index. Please review the Portfolio Performance on
page 5 for details.
Early on, these returns were bolstered by strong European equity markets, where
low inflation and weak currencies helped fuel a broad surge in stock prices.
Our exposure to the Pacific Basin, however, although an underweighted position,
still proved to be a negative influence on returns. Indeed, currency
devaluations there caused problems for many markets in the region. In addition,
Japan remained mired in an economic slowdown, though the country did show signs
of rebounding early in the period. Concerns leading up to the much-anticipated
British handover of Hong Kong to China in July proved to be unwarranted, as that
event passed with little impact on equity prices.
Despite the problems in the Pacific Basin, several of the Portfolio's holdings
there performed well, particularly in Japan. Examples include NTT Data, a
computer equipment and consulting company, Honda Motor Company, and Sony among
others. Most of our equity investments in Europe contributed favorably to
performance. Companies benefiting from the restructuring taking place on the
European Continent registered some of the best returns for the Portfolio,
including Coflexip SA, a French-based oil services company, and Merita, a
Finnish bank. Across the Atlantic, we also enjoyed strong performance from
Telebras, Brazil's largest telecommunications company.
Generally, the outlook for established international markets is positive, which
should bode well for the International Equity Portfolio. We continue to have a
favorable outlook for Europe where growth prospects and interest-rate conditions
remain generally good. The Continent appears to be on target to achieve economic
union by January 1, 1999. Improving economic conditions are needed for Japan's
market to recover, though select areas within Japan look good, particularly well
capitalized banks. The currency turmoil in Southeast Asia may continue to pose a
short-term problem for stocks in the region but should eventually attract
investment there.
/s/ Ralph R. Layman
Ralph R. Layman
Co-Portfolio Manager
GE Investment Management Incorporated
Top Five Countries (% of Net Assets)
United Kingdom 16.6%
Japan 16.5%
France 10.9%
Germany 9.2%
Switzerland 7.8%
Five Largest Holdings (% of Net Assets)
Novartis 2.3%
Total SA 1.8%
Telecom Italia SpA 1.7%
Honda Motor Co. Ltd. 1.7%
Siebe PLC 1.3%
International Equity Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (2/3/97) was
worth $10,004.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
Inception Date
Class A (without sales load) 5.70% 2/3/97
Class A(2) (with sales load) (0.11)% 2/3/97
MSCI-EAFE(3) 11.44% 2/3/97
Class B (without sales load) 5.20% 2/3/97
Class B(2) (with sales load) 0.20% 2/3/97
Class C 5.30% 2/3/97
(1) International Equity Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
(2) International Equity Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. International Equity Portfolio Class B Shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
(3) The Morgan Stanley Capital International - Europe, Asia, and Far East (MSCI
EAFE) Index is an unmanaged index used as a general measure of market
performance. Calculations assume dividends and capital gains are reinvested and
do not include any managerial expenses.
From inception calculation is based on life of Class A.
Investments by REGION as a percentage of net assets
10/31/97
Asia/Pacific Rim 19.1%
Australia 1.5%
Europe 64.8%
Latin America 6.0%
Middle East 1.1%
North America 0.3%
South Africa 0.7%
Short-term 5.2%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Capital Appreciation Portfolio
OBJECTIVE
Long-term growth of capital through investments by normally investing at least
50% in medium sized companies.
Although financial markets continued to display substantial volatility, domestic
equities moved higher during the year. Recent market volatility was largely the
result of mixed signals from the economy, along with growing fluctuations in
global equity markets. Indeed, the downturn in the Far Eastern markets sent
shock waves worldwide, dragging most international markets sharply lower as
October came to a close.
During the period, we saw a dramatic reversal of fortune among equities.
Earnings uncertainty took the wind out of the mega-caps' sails, and many of
these former market leaders reversed course to end the third quarter lower. The
resurgence of small and midsize stocks helped create much greater breadth and a
healthier market. For well over a year, smaller stocks have been largely
ignored by investors, which made for a very narrow rally.
In this environment, the Capital Appreciation Portfolio did close the period
higher but failed to keep pace with the mid-cap market and therefore, trailed
its benchmark indices, the S&P 500 and the S&P Midcap 400 for the year. Please
refer to the corresponding Portfolio Performance on page 7 for details. The
Portfolio was heavily weighted with high-growth equities and, with the notable
exception of technology and a few other sectors, the market remained somewhat
skittish of high price-to-earning multiples. We were also underweighted in
financials and energy stocks, both of which were strong catalysts for the S&P
MidCap 400's returns.
The companies represented in the Portfolio, however, are experiencing earnings
growth that is often more robust than the market leadership. The estimated
average forward earnings growth rate of the stocks in the portfolio is well
above our benchmark index, roughly 30% versus 20%. But while the vast majority
of our companies keep meeting, and in many cases exceeding, estimates,
unfortunately some of our largest holdings have seen their stock price retreat
of late. Papa John's, Omnicare, Paychex, and Barnett Industrial all ended the
period lower.
I remain convinced that these companies will be recognized for their outstanding
results and potential. I do not intend to change my discipline, but I do not
want to be inflexible either. I have, in fact, made several moderate adjustments
to the Portfolio over the last several months. It is now somewhat more
diversified, with more names in the bottom quartile of assets. I have also added
several stocks that are transforming themselves into predictable growth stories.
Examples include British-based Imperial Chemical, which is undergoing a major
restructuring, and AES, the largest power producer in the world. These are
companies in which I have a high degree of confidence, and where I believe
management will execute effectively.
During the period, several stocks did perform very well, gaining between 20% and
30%. These would include Heftel and Clear Channel in the media group and Charles
Schwab and American Capital Strategies in the financial group. On the sell side,
I took profits in HFS and cut Wisconsin Central, both longtime holdings.
All together, I am disappointed with our results this year. We continue to see
substantial fundamental improvement throughout the Portfolio, but, to date, our
stocks have reflected only a fraction of that progress. While I remain extremely
constructive on the Portfolio's potential, I am actively pursuing new ideas. My
promise to you is that I will continue to search for companies with compelling
potential, and where our intensive analysis can add value.
/s/ James P. Goff
James P. Goff
Portfolio Manager
Janus Capital Corporation
Top Five Industries (% of Net Assets)
Restaurants 13.0%
Retailers - Specialty 11.3%
Broadcasting 6.1%
Pharmaceuticals 4.1%
Computers 4.0%
Five Largest Holdings (% of Net Assets)
J.D. Wetherspoon PLC 6.3%
Fastenal Company 5.8%
PizzaExpress PLC 4.6%
Petco Animal Supplies, Inc. 4.1%
Omnicare, Inc. 3.8%
Capital Appreciation Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $16,280.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year Inception Date
Class A (without sales load) 4.09% 20.53% 12/2/94
Class A(2) (with sales load) (1.63)% 18.21% 12/2/94
S&P 500(3) 32.12% 30.06% 12/2/94
S&P 400(3) 32.53% 26.24% 12/2/94
Class B (without sales load) 3.56% 11.66% 10/1/95
Class B(2) (with sales load) (1.44)% 10.37% 10/1/95
Class C 3.64% 20.01% 12/2/94
(1) Capital Appreciation Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
(2) Capital Appreciation Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Capital Appreciation Portfolio Class B Shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index and Standard & Poor's MidCap 400
(S&P 400) Index are unmanaged indices used as a general measure of market
performance. Calculations assume dividends and capital gains are reinvested and
do not include any managerial expenses. From inception calculation is based on
life of Class A.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 1.6% 2.1%
Consumer Cyclical 37.1% 37.5%
Consumer Non-Cyclical 10.3% 15.0%
Energy 2.7% -
Financial 14.3% 5.9%
Industrial 8.6% 11.7%
Technology 13.7% 22.5%
Utilities 3.7% 1.5%
Short-term 6.4% 1.9%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Global Portfolio
OBJECTIVE
Long-term growth and preservation of capital through investments primarily in
common stocks of foreign and domestic issuers.
This year saw a dramatic increase in equity volatility around the world, which
generally proved unsettling for global investors. However, within this
environment, the Global Portfolio continued its stellar performance as it
outperformed its benchmark index, the Morgan Stanley Capital International World
Index by more than 5%. Please refer to the Portfolio Performance on page 9 for
highlights. Many established markets, particularly in Europe, saw major swings
in stock prices, and some markets (such as Germany, France, and Japan) actually
experienced a true correction of over 10%. Fluctuations in the dollar
precipitated the turmoil, but the summer doldrums distorted the situation.
The Far East, however, provided much of the impetus for global fluctuations.
After the devaluation of Thailand's currency, most of Southeast Asia was forced
to follow suit. This debacle quickly spilled over to the equity markets, with
many exchanges posting significant declines in local terms. Asian markets remain
in disarray and the near-term picture is disconcerting. It will take time for
the dust to settle, but the Far East certainly has a long road to haul.
We were fortunate to sidestep much of Southeast Asia's free fall due to our
small weighting in the region, but the Portfolio was unable to dodge every
bullet. Volkswagen, for example, dropped significantly. The position had
performed exceedingly well but management opted to take advantage of the stock's
strong run to issue six million new shares, which will dilute earnings going
forward.
Securitas, Hitachi, Fujitsu, and Telebras also ended lower. Securitas dropped
after earnings were impacted by restructuring charges taken at its German
division. Both Hitachi and Fujitsu were heavily influenced by the Japanese
market, which gave up its second quarter advances. Economic uncertainty
continues to roil the Japanese markets and yields on the 10-year bonds dropped
to their lowest recorded levels ever. The economy seems to have lost its recent
momentum and may be on the brink of another recession.
On a positive note, our European airlines and Ericsson, a telecommunication
equipment company, moved higher during the period. European airlines are
experiencing very solid demand, and load factors (a measure of people per
flight) are up dramatically. SAS Danmark's "Star Alliance" agreement with United
Airlines and Lufthansa has created substantial cost savings, while Lufthansa
recently topped analysts' earnings estimates by tripling its pretax profits.
Ericsson, which dominates the global wireless equipment infrastructure market,
has a number of great new mobile handset models that are rapidly gaining market
share.
Other stocks that performed well this period include Philips Electronics, the
Netherlands-based electronics company, Elf Acquitane, a French oil company, and
Siebe, a U.K.-based engineering company.
Going forward, I expect the current volatility in global equity markets to
continue. We have had an almost vertical ascent in our domestic markets, and
European stocks had a powerful run as well. Interest rates, I believe, remain
the overriding factor for international markets. While our economic growth
domestically has been strong, Europe's growth remains moderate and Southeast
Asia may be turning recessionary. In this mixed environment, I intend to stick
to my discipline of focusing on finding individual companies with strong growth
potential. Superior stock picking has allowed us to generate good returns with
relatively low volatility, and I believe this approach will serve us well going
forward.
/s/ Helen Young Hayes
Helen Young Hayes
Portfolio Manager
Janus Capital Corporation
Top Five Countries (% of Net Assets)
United States 20.7%
United Kingdom 15.9%
Netherlands 11.6%
France 11.4%
Japan 7.9%
Five Largest Holdings (% of Net Assets)
Philips Electronics NV ADR 2.7%
Philips Electronics NV 2.5%
Rentokil Initial Group PLC 2.5%
NTT Data Communications 2.3%
Elf Aquitaine SA 2.2%
Global Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (10/1/92) was
worth $26,662.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year 5 year Inception Date
Class A (without sales load) 22.72% 21.01% 22.66% 10/1/92
Class A(2) (with sales load) 15.98% 19.65% 21.30% 10/1/92
MSCIW(3) 17.25% 15.79% 10.40% 10/1/92
Class B (without sales load) 22.53% - 22.54% 10/1/95
Class B(2) (with sales load) 17.53% - 21.38% 10/1/95
Class C 22.72% - 19.65% 10/1/93
(1) Global Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) Global Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. Global Portfolio Class B Shares reflects the maximum applicable
contingent deferred sales charge (5% in the first year, decreasing to 0% after 6
years).
(3) The Morgan Stanley Capital International World (MSCIW) Index is an
unmanaged index used as a general measure of market performance. Calculations
assume dividends and capital gains are reinvested and do not include any
managerial expenses. From inception calculation is based on life of Class A.
Investments by REGION as a percentage of net assets
10/31/97 10/31/96
Asia/Pacific Rim 8.8% 12.1%
Australia - 1.0%
Europe 64.4% 56.2%
Latin America 4.7% 5.4%
Middle East - 0.8%
North America 14.1% 9.4%
South Africa 0.5% 0.2%
Short-term 6.6% 13.1%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Growth Portfolio
OBJECTIVE
Long-term growth of capital through investments in companies selected solely for
their earnings and growth potential.
Despite the dramatic volatility in the equity markets this year, the Growth
Portfolio posted solid returns, though lagging in comparison to its benchmark
index, the S&P 500. Please review details on the corresponding Portfolio
Performance on page 11. Equities tracked bonds for much of the period, rising in
July, falling in August when interest rates rose, and then turning up again in
September, when rates declined. During October, however, we saw dramatic
fluctuations stemming from the turmoil in Southeast Asia, which dampened
returns.
In general, smaller companies finally gathered momentum, especially during the
third quarter. The net effect was that valuations in all market capitalization
categories were brought into greater equilibrium. As a result, we are now in a
broader market environment with fewer excesses, and this is good news for
stocks. The keys to continued progress are interest rates and earnings-we need
rates to continue to work lower, which I believe they will, and earnings to move
up. Until economic growth and inflation are once again linked up, I expect
equities to produce exceptionally attractive returns.
This does not mean, however, that we will see a seamless advance in equity
prices. With valuations and earnings expectations this high, almost any
disappointment, or pickup in economic growth, will likely buffet the market. In
fact, skittishness has been a hallmark of market pricing for approximately two
years.
Our positons in the drug sector contributed nicely to the Portfolio's
performance this period. Warner-Lambert, Eli Lilly, and Pfizer all moved ahead
on the strength of exciting products that are currently in the market or in
company pipelines. Energy and oil service companies also performed well.
International demand for oil and natural gas is excellent, technology is making
energy producers more cost-effective, and management is behaving more
rationally. Our main position is Schlumberger, the premier provider of new
technology to the oil and gas industry. Among our technology stocks, Microsoft
posted solid returns for us. Microsoft virtually owns the PC and network
operating systems market and is benefiting from explosive growth in the Internet
and in commercial applications for computer networks despite recent attention to
the company from Washington regulators.
We have recently added a healthy mix of very exciting stocks in both the large
and smaller capitalization categories. Many of these companies are benefiting
from important secular developments in the financial services,
telecommunications, technology, pharmaceutical, and agribiotech sectors. These
sectors are themselves the beneficiaries of immense fundamental changes in
economic and demographic trends.
Looking forward, I remain enthusiastic about the Portfolio's potential and about
the long-term prospects for the stock market. I do, however, expect continued
price volatility. Given that the advance the domestic markets enjoyed in 1995-
1996 was unusual by historical standards, this year's volatility would seem to
be a reversion to (or through) the mean. Stock selection is always important,
but I expect it will become increasingly so if cash continues to spread out over
a wider range of assets. This is an environment where I believe our stock
picking discipline can best add value and where we have a chance to show our
true colors.
/s/ Scott W. Schoelzel
Scott W. Schoelzel
Portfolio Manager
Janus Capital Corporation
Top Five Industries (% of Net Assets)
Pharmaceuticals 19.2%
Software 9.7%
Banks 9.0%
Semiconductors 6.7%
Computers 5.4%
Five Largest Holdings (% of Net Assets)
Microsoft Corp. 6.1%
Pfizer, Inc. 5.2%
Merrill Lynch & Co., Inc. 5.2%
Dell Computer Corp. 5.2%
Warner - Lambert Co., Inc. 4.7%
Growth Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (5/8/86) was
worth $54,510.
Note: Performance of Class B, C and T Shares will differ from the performance
shown in this chart for Class A Shares, based upon the different loads and fees
paid by shareholders investing in these classes. On October 1, 1996, the
Portfolio changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year 5 year 10 year Incep Date
Class A (without sales load) 16.40% 15.30% 17.87% 16.49% 5/8/86
Class A(2) (with sales load) 10.00% 14.00% 17.21% 15.91% 5/8/86
S&P 500(3) 32.12% 19.87% 17.17% 15.93% 5/8/86
Class B (without sales load) 16.11% - - 17.48% 10/1/95
Class B(2) (with sales load) 11.11% - - 16.26% 10/1/95
Class C 16.19% - - 15.06% 10/1/93
Class T(4) (w/o sales load) 16.54% 15.93% 17.99% 17.16% 9/20/96
Class T(4) (with sales load) 6.64% 13.89% 16.94% 16.32% 9/20/96
(1) Growth Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) Growth Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. Growth Portfolio Class B Shares performance reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
(4) Growth Portfolio Class T Shares are owned by the former shareholders of
IDEX Fund and IDEX Fund 3 as a result of a reorganization on September 20, 1996.
The performance shown is that of IDEX Fund, from inception on 6/4/85 until the
reorganization. All future performance will be based solely on Class T Shares.
Class T Shares performance with sales load reflects the maximum sales charge of
8.5%. Class T Shares are not available to new investors.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 0.5% -
Consumer Cyclical 1.8% 9.1%
Consumer Non-Cyclical 25.6% 17.5%
Energy 6.1% -
Financial 18.5% 17.8%
Independent - 1.7%
Industrial 5.9% -
Technology 33.2% 37.0%
Utilities 2.9% 0.2%
Long-term U.S. Gov't - 1.5%
Short-term 5.4% 15.2%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
C.A.S.E. Portfolio
OBJECTIVE
Growth of capital through investments in stocks exhibiting below market risk and
below market multiples with above average fundamentals.
Over the past several years, the U.S. economy has benefited greatly from the
effects of corporate downsizing, baby-boomer purchasing, and a flurry of
exciting new technologies. For what is now the longest period in its history,
our market has been experiencing low inflation, declining interest rates, and
earnings that exceeded analysts' expectations. During the past seven years, the
fundamental valuations of America's largest companies have escalated to nearly
twice their long-term historical levels.
Unabated, the market could push to the upper limits of its confidence range
(9100 Dow). On the other hand, an unanticipated economic event could just as
easily drive the market to the low end of its range (5500 Dow). The world
economies are at historically high levels and latent with debt. As they adjust
for these excesses, the resulting margin calls are causing global monetary
misalignments which materially decrease our country's exports.
Recent events in the Far East proved to be little more than a fire drill. In the
seventh year of an unprecedented expansionary economy, it seems very risky to be
buyers of the high multiple, high capitalization growth stocks. With the
valuations of these stocks nearly twice their historical levels, we find it
increasingly difficult to justify the characteristics of this class of
investment. On a going forward basis, we are no longer buyers of that market. We
intend to only be cautious buyers of individual stocks that meet a very
stringent code of growth and value characteristics.
To be sure, the C.A.S.E. Portfolio has performed well. Even with its respectible
returns, we slightly underperformed our comparative index, the S&P 500, for the
year. Please glance to page 13 for further details.
Positioning for the near future, we believe stocks which make up the Portfolio
exhibit below average price earnings multiples, higher than average returns and
five year earnings growth rates nearly double that of the market. We believe our
"blending" of both growth and value disciplines will reduce the Portfolio's
downside market volatility and it should also perform in line with the market on
the upside. C.A.S.E.'s focus seeks to protect and to nurture your investment in
the C.A.S.E. Portfolio.
/s/ William E. Lange
William E. Lange
Portfolio Manager
C.A.S.E. Management, Inc.
Top Five Industries (% of Net Assets)
Computers 9.1%
Oilfield Equipment & Services 8.0%
Banks 6.0%
Aerospace/Defense 4.8%
Diversified Technology 4.8%
Five Largest Holdings (% of Net Assets)
Tidewater, Inc. 2.2%
Sun Company, Inc. 2.1%
USX - US Steel Group, Inc. 2.0%
US Freightways, Inc. 2.0%
Airbourne Freight Corp. 2.0%
C.A.S.E. Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (2/1/96) was
worth $12,795.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 Year Inception Date
Class A (without sales load) 28.31% 18.94% 2/1/96
Class A(2) (with sales load) 21.25% 15.15% 2/1/96
S&P 500(3) 32.12% 25.63% 2/1/96
Class B (without sales load) 27.62% 18.27% 2/1/96
Class B(2) (with sales load) 22.62% 16.23% 2/1/96
Class C 27.73% 18.37% 2/1/96
(1) C.A.S.E. Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) C.A.S.E. Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. C.A.S.E. Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 2.0% 5.0%
Consumer Cyclical 5.6% 9.2%
Consumer Non-Cyclical 7.8% 19.6%
Energy 10.1% 1.7%
Financial 13.6% 12.5%
Independent 1.7% 1.5%
Industrial 19.5% 6.7%
Technology 28.1% 10.6%
Utilities 1.1% 8.7%
Short-term 15.4% 27.5%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Value Equity Allocation Portfolio
OBJECTIVE
Maximum total return with minimum risk through investments primarily in common
stocks showing above average statistical value and are in fundamentally
attractive industries.
The Value Equity Portfolio commenced operations on February 3, 1997. During the
initial nine months ended October 31, 1997, the Portfolio paralleled the
performance of its benchmark index, the S&P 500. Please refer to the Portfolio
Performance on page 15 for details.
The cornerstone of our investment process is a disciplined approach to value
recognition within industries representing long-term market leadership. We
believe that investment opportunity is created by changes in the economic,
monetary, political and social environment. We seek to recognize change early in
asset categories, market sectors, industries and companies - before these
changes are reflected in securities' prices. Stock selection emphasizes medium-
to large-capitalization companies representing above-average statistical value.
Investments are concentrated in those fundamentally attractive industries
identified as the beneficiaries of long-term investment trends. NWQ's value
equity discipline serves as a complimentary, risk-averse style to other more
aggressive growth managers.
Despite the recent turmoil in the emerging market currencies and virtually all
of the global equity markets, the fundamentals for the U.S. economy and the U.S.
financial markets remain generally favorable. While the domestic economy
continues along its "Goldilocks" path, the clouds appearing on foreign horizons
bear watching. The currency turmoil that has recently engulfed Thailand,
Malaysia, Hong Kong, and others in Asia may be nothing more than a bit of
passing turbulence. Should the economic crisis currently developing among the
"Asian Tiger" economies be contained, there is little reason to believe that
instability there will have any greater impact upon the U.S. than did the 1994-
95 Mexican currency debacle.
In the last three years, the stock market has soared. In fact, the annual
returns for the S&P 500 Index during this period have compounded at over 32% per
year. This has resulted in a stock market that is somewhat expensive, but we do
not believe it is excessively overpriced, and realize that overvaluation can
persist for a long time. The old adage that it is not a stock market but a
market of stocks should be recalled, given today's generally high valuations.
Investors need to focus on those areas of the market where prices are still
reasonable based on traditional measures.
The Portfolio's stock holdings are concentrated in the industrial, manufacturing
and financial sectors where price-to-earnings ratios are still 13-16 times
earnings and where the long-term profit outlook remains favorable. We believe
investments in these areas should carry more opportunity during the current
economic expansion and far less risk in any market correction than stocks
selling at much higher multiples in other sectors of the market.
/s/ Edward C. Fridel
Edward C. Fridel
Portfolio Manager
NWQ Investment Management
Company, Inc.
Top Five Industries (% of Net Assets)
Banks 9.8%
Heavy Construction 9.4%
Oil Drilling 8.9%
Insurance 8.8%
Chemicals 5.8%
Five Largest Holdings (% of Net Assets)
Loews Corp. 3.1%
Deere & Company 3.0%
Caterpillar, Inc. 2.9%
The Boeing Company 2.8%
U.S. West Media Group, Inc. 2.4%
Value Equity Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (2/3/97) was
worth $11,070.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
Inception Date
Class A (without sales load) 17.14% 2/3/97
Class A(2) (with sales load) 10.70% 2/3/97
S&P 500(3) 17.94% 2/3/97
Class B (without sales load) 16.65% 2/3/97
Class B(2) (with sales load) 11.65% 2/3/97
Class C 16.73% 2/3/97
(1) Value Equity Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
(2) Value Equity Portfolio Class A Shares performance reflects the maximum
sales charge of 5.5%. Value Equity Portfolio Class B Shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
Investments by SECTOR as a percentage of net assets
10/31/97
Basic Materials 11.1%
Consumer Cyclical 7.9%
Consumer Non-Cyclical 3.2%
Energy 14.1%
Financial 20.0%
Independent 1.5%
Industrial 17.5%
Technology 11.6%
Short-term 12.1%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Strategic Total Return Portfolio
OBJECTIVE
Long-term growth of capital and income by investing in common stocks and bonds
of well established and fundamentally strong companies.
Currently, the Strategic Total Return Portfolio is invested in companies where
we anticipate significant structural changes to occur, such as a sale or spin-
off of a non-core business, a strategic acquisition or a major share repurchase.
A keen eye toward valuation levels of specific securities continues to be an
important means of controlling portfolio risk.
In addition, we utilize corporate bonds to generate portfolio income, as well as
to moderate overall portfolio volatility. Our approach to fixed-income
securities is based on the same investment principles as our equity approach:
investing in well-managed, fundamentally sound businesses at attractive
valuations. This disciplined approach to equity selection and investment in
convertible and fixed-income securities is designed to allow the Strategic Total
Return Portfolio to participate in a significant part of the upside potential of
the stock market while controlling downside risk.
Given its emphasis on guarding against downside volatility, the Portfolio did an
excellent job of keeping pace with the incredible advance in the stock market
during the period. Performance between the Portfolio and that of its benchmark
indices, the S&P 500 and the Lehman Brothers Intermediate/Government Corporate
Bond Index, as expected, was split. However, we are pleased to report that the
Portfolio outperformed a composite (equal blend) of both indices. Please refer
to the Portfolio Performance on page 17 for details.
While the investments in common stocks provided most of the Portfolio's growth,
fixed-income securities, while generating a solid return in their own right,
provided the valuable benefit of stability. In fact, on a cumulative basis, the
Portfolio suffered only about half the decline of the Standard & Poor's 500
Index during the months of decline over the past year (December, March, and
August).
While we correctly anticipated the continued outperformance by established,
quality companies this period, we believe valuation measures have become
extended in some of these stocks. Accordingly, though we will continue to invest
in some large U.S. companies given their global leadership in many industries,
we will become increasingly selective. At the same time, the recent strength
among stocks of small and mid-sized companies appears to hold promise. In
addition to the exciting prospects for many of these companies that serve niche
markets, values seem much more compelling. Convertible securities are also
playing an increasingly important role in the management of the Portfolio as we
strive to combine the company characteristics we view as appealing with the
security type that offers a favorable reward/risk trade off.
The Portfolio's asset mix is expected to remain relatively stable over time and
dividend and interest income remain an important variable in the Portfolio's
success formula. Nevertheless, we think the Strategic Total Return Portfolio is
well suited for an environment where the outlook for financial assets is
compelling but with valuation concerns looming as a potential risk. We remain
diligent in our efforts to identify specific investment opportunities with
attractive valuations.
/s/ Luther King
Luther King
/s/ Scot C. Hollmann
Scot C. Hollmann
Co-Portfolio Managers
Luther King Capital Management Corporation
Top Five Industries (% of Net Assets)
Industrial - Diversified 6.9%
Insurance 5.8%
Pharmaceuticals 4.9%
Real Estate 4.5%
Oil Companies - Major 4.2%
Credit Quality (% of Net Assets)
AAA 13.0%
AA 2.3%
A 7.2%
BBB 5.9%
BB -
B 2.9%
Not Rated 1.0%
NA 1.2%
Five Largest Holdings (% of Net Assets)
US Treasury Notes 5-31-2001 2.0%
US Treasury Notes 11-15-1999 1.7%
Parker Drilling Co. 1.7%
US Treasury Notes 9-30-2001 1.7%
US Treasury Notes 3-31-2001 1.6%
Strategic Total Return Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $16,133.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year Inception Date
Class A (without sales load) 22.80% 20.15% 12/2/94
Class A(2) (with sales load) 16.05% 17.84% 12/2/94
S&P 500(3) 32.12% 30.06% 12/2/94
LBIGCB(3) 7.49% 9.01% 12/2/94
Composite Index(4) 19.81% 19.54% 12/2/94
Class B (without sales load) 22.03% 18.47% 10/1/95
Class B(2) (with sales load) 17.03% 17.27% 10/1/95
Class C 22.15% 19.52% 12/2/94
(1) Strategic Total Return Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results.
(2) Strategic Total Return Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Strategic Total Return Portfolio Class B Shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
(4) The Composite Index reflects an equal blend of the two benchmark indices.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 6.2% 6.6%
Consumer Cyclical 6.9% 8.1%
Consumer Non-Cyclical 18.2% 19.1%
Energy 9.2% 8.6%
Financial 19.3% 17.9%
Independent 1.3% 1.1%
Industrial 13.3% 15.5%
Technology 5.6% 8.3%
Utilities 5.7% 6.7%
Long-term U.S. Gov't 13.1% 4.6%
Short-term 0.2% 3.1%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Tactical Asset Allocation Portfolio
OBJECTIVE
Enhance value during strong markets through increased weighting in stocks and
preserve capital during
weak/volatile markets primarily through increased weighting in U.S. Treasuries.
Stock and bond markets were highly volatile during the latter part of 1996 and
the first part of 1997, a result of shifting market sentiment regarding the
outlook for earnings, interest rates, and the general pace of the economic
expansion. For the year, performance between the Tactical Asset Allocation
Portfolio and that of its benchmark indices, the S&P 500 and the Lehman Brothers
Intermediate Government/Corporate Bond Index, was split. However, the Portfolio
performed marginally better than a composite (equal blend) of both indices.
Please refer to the Portfolio Performance on page 19 for details.
The recent strength in market indices has been highly concentrated in a
relatively small number of "mega-cap" stocks-essentially, the largest companies
with the largest capitalizations and highest amount of market liquidity.
Meantime, funds and portfolios which emphasize small- and mid-cap holdings have
lagged the S&P 500, and even a majority of the large-cap names have been
disappointing in a relative sense. In other words, only a manager who emphasizes
price momentum and has concentrated a portfolio in the "mega-caps" will have out
performed in the recent market environment. Our philosophy, on the other hand,
adheres to a "value" discipline. Companies will be scrutinized for their growth
potential, market positioning, and strategic planning, but only companies with
reasonable valuations are candidates to be included in the Portfolio. Our
performance during the period reflects the fact that "value" is out of favor in
this particular market environment.
Nevertheless, we have had success with many companies in this market utilizing a
value-oriented approach. A good example would be Green Tree Financial, a
financial services firm with a leading position in providing consumer loans for
the purchase of manufactured housing.
While many stocks in the high-growth technology sector often do not fit our
investment criteria, we believe it is necessary to take a representative
position in the group. Simply put, technological advancements are providing
outstanding opportunities for above-average growth, and, as a manager, we need
to take advantage of these opportunities. Identifying undervalued opportunities
in the technology sector is challenging, but we have had success with Seagate
Technology, a maker of high-end disk drives and other data storage products and
components, and Applied Materials, the leading manufacturer of semiconductor
equipment.
Looking ahead, economic conditions continue to be strong, with steady corporate
earnings growth, higher productivity, and healthy capital spending, especially
in the area of technology. Such conditions make the long-term fundamental
outlook for stocks quite favorable. Several other factors are helping sustain
the bull market as well, including inflationary measures which appear to be
largely benign, greater demand for stocks, and a relative lack of new equity
supply. But even with these conditions in place, sentiment has often turned
anxious, and sharp downturns in the market have become common.
The potential for higher interest rates-which could slow economic growth and
scare off investors-has been very closely scrutinized. In addition, valuation
measures are signaling caution in our forecasting models. Our allocation to
stocks moved higher during the period to take advantage of selected
opportunities, but ended the period at 56%, slightly below a neutral position.
We believe a neutral stance is appropriate given the current status of the
market, and is consistent with our stated portfolio management objective.
Our stock selection process and asset allocation models have provided long-term
clients with returns that have exceeded the returns produced by "growth" or
"momentum" managers. Going forward, we expect our approach to once again gain
favor and reward investors, while providing downside protection in times of
market instability.
/s/ John Riazzi
John Riazzi
/s/ Arvind Sachdeva
Arvind Sachdeva
Co-Portfolio Managers
Dean Investment Associates
Top Five Industries (% of Net Assets)
Financial - Diversified 6.8%
Insurance 5.6%
Real Estate 5.8%
Auto Manufacturers 4.8%
Communications 4.3%
Credit Quality (% of Net Assets)
AAA 13.6%
AA 3.8%
A 9.3%
BBB 4.1%
BB -
B -
Not Rated 1.8%
NA 1.3%
Five Largest Holdings (% of Net Assets)
E.I. DuPont De Nemours 9-1-2002 3.7%
US Treasury Notes 2-15-2004 3.7%
Ford Motor Credit Co. 11-9-1998 3.7%
Countrywide Funding Corp. 1-15-2003 3.7%
Cox Communications, Inc. Class A 2.3%
Tactical Asset Allocation Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (10/1/95) was
worth $12,761.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 Year Inception Date
Class A (without sales load) 19.84% 15.51% 10/1/95
Class A(2) (with sales load) 13.25% 12.41% 10/1/95
S&P 500(3) 32.12% 26.58% 10/1/95
LBIGCB(3) 7.49% 6.95% 10/1/95
Composite Index(4) 19.81% 16.77% 10/1/95
Class B (without sales load) 19.08% 14.78% 10/1/95
Class B(2) (with sales load) 14.08% 13.53% 10/1/95
Class C 19.20% 14.89% 10/1/95
(1) Tactical Asset Allocation Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results.
(2) Tactical Asset Allocation Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Tactical Asset Allocation Portfolio Class B
Shares reflects the maximum applicable contingent deferred sales charge (5% in
the first year, decreasing to 0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
(4) The Composite Index reflects an equal blend of the two benchmark indices.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 8.2% 9.4%
Consumer Cyclical 18.3% 13.9%
Consumer Non-Cyclical - 3.1%
Energy - 2.0%
Financial 25.3% 17.8%
Independent 2.2% 1.5%
Industrial 2.2% 5.4%
Technology 9.0% 8.2%
Utilities 7.9% -
Long-term U.S. Gov't 16.8% 18.8%
Short-term 9.6% 20.1%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Balanced Portfolio
OBJECTIVE
Long-term growth and preservation of capital balanced with current income
through investments in stocks and income producing securities.
Despite some dramatic volatility, the Balanced Portfolio generated solid returns
this year, as did its benchmark indices, the S&P 500 Index and the Lehman
Brothers Long Government/Corporate Bond Index. Performance between the
Portfolio and that of its benchmarks, as expected, was split. However, we are
pleased to report that the Portfolio outperformed a composite (equal blend) of
both indices. Please refer to the Portfolio Performance on page 21 for details.
The stock market, however, has begun to be more selective recently. Technology
and economically sensitive stocks have fared well, while companies with pricing
power-oil service companies, for example-or companies that could best use
operating leverage in a robust economy were afforded a premium. Smaller
companies have also picked up momentum, while larger companies reached an
inflection point and stalled out. As a result, we are now in a broader market
environment, with fewer excesses. This is constructive news for stocks.
The bond market, meanwhile, has been a "hot reactor" to economic data, rising
quickly in anticipation of faster growth and falling again when growth
moderates. Although it always pays to keep an eye on interest rates, the recent
rate volatility has been within a relatively narrow range, and that is
encouraging. Viewed from a broader time horizon, interest rates have been fairly
steady.
There were several significant changes in the Portfolio during the later half of
the year. On the fixed-income side, maturities on all new Treasury positions
were lengthened to the 8-10 year range. This was done because, despite the
strength of the economy, inflation is extremely low and the supply of Treasury
issues is declining along with the U.S. budget deficit. If the economy should
slow from here, we could see rates move even lower.
The most significant change on the equity side of the portfolio was the increase
in oil service and natural gas stocks. Schlumberger, the premier provider of new
drilling and pumping technology to oil and gas drillers, Smith International, a
leader in drilling fluids and drill bits, Burlington Resources and Pioneer
Natural Resources, the best of the gas producers, were among the positions that
were added or increased.
Meanwhile, we continued to do well with our drug and retail stocks. Warner-
Lambert, Monsanto, Costco, and Dayton Hudson are among our better performers. We
also did well with TCI Communications, one of the largest cable operators in the
U.S., and with Carnival Cruise Lines.
We cut back our financial holdings recently, due in part to excesses in the
lending market; I took profits in Associates First Capital after the stock hit
my price target. United Healthcare was sold when it hit our price targets. The
Portfolio experienced declines in Cincinnati Bell and Minnesota Mining &
Manufacturing. Cincinnati Bell's phone rep business softened due to increased
competition, and 3M was not able to translate good top-line growth during the
quarter into significantly stronger earnings.
Although the overall environment is very favorable for financial assets, I
expect stock prices to remain volatile because investor expectations are very
high, and it will be virtually impossible for some companies to live up to
analysts' estimates. In this very robust and nearly inflation-free economy,
however, companies that perform up to expectations will be rewarded. I believe
the stocks we own will receive good marks and benefit from investors' ongoing
enthusiasm for equities, while our fixed-income holdings will continue to
provide competitive yields.
/s/ Blaine Rollins
Blaine Rollins
Portfolio Manager
Janus Capital Corporation
Top Five Industries (% of Net Assets)
Banks 8.8%
Entertainment 6.5%
Financial - Diversified 5.8%
Oilfield Equipment & Services 5.5%
Industrial - Diversified 4.8%
Credit Quality (% of Net Assets)
AAA 23.6%
AA 2.3%
A 4.5%
BBB 4.5%
BB -
B 1.7%
Not Rated 1.4%
Five Largest Holdings (% of Net Assets)
US Treasury Notes 5-15-1999 5.2%
US Treasury Notes 8-15-2000 3.3%
US Treasury Notes 4-30-2002 2.9%
Schweizerische Lebens 2.8%
US Treasury Notes 8-15-2007 2.3%
Balanced Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $17,459.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year Inception Date
Class A (without sales load) 22.96% 21.08% 12/2/94
Class A(2) (with sales load) 16.20% 18.75% 12/2/94
S&P 500(3) 32.12% 30.06% 12/2/94
LBLGCB(3) 8.81% 10.40% 12/2/94
Composite Index(4) 20.47% 20.23% 12/2/94
Class B (without sales load) 22.19% 21.28% 10/1/95
Class B(2) (with sales load) 17.19% 20.11% 10/1/95
Class C 22.31% 20.44% 12/2/94
(1) Balanced Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) Balanced Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. Balanced Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
(3) The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Long
Government/Corporate Bond (LBLGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
(4) The Composite Index reflects an equal blend of the two benchmark indices.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 1.6% 0.3%
Consumer Cyclical 12.8% 11.4%
Consumer Non-Cyclical 3.4% 6.6%
Energy 9.8% -
Financial 20.6% 36.9%
Industrial 10.4% 9.6%
Technology 8.4% 8.7%
Utilities 5.5% 1.4%
Long-term U.S. Gov't 23.7% 13.7%
Long-term Foreign Gov't - 3.1%
Short-term 2.3% 8.4%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Flexible Income Portfolio
OBJECTIVE
Maximum total return, consistent with preservation of capital, by investing in
income producing securities of any grade.
The bond market essentially traded within two distinct ranges during the last
twelve months. Late in 1996 and continuing into 1997, economic growth picked up
and bonds responded by sending yields to the high end of its trading range. But
more recently, economic growth has moderated, and inflationary pressures remain
modest. At the same time, the recent turmoil in international markets has
created a flight to quality, and the U.S. bond market proved to be the main
beneficiary.
As always, it has paid to keep a close eye on rate movements, but it is
encouraging that the recent volatility has been within a relatively narrow
range. Over the past year, this keen sight has afforded the Flexible Income
Portfolio excellent performance. We are please to report that the Portfolio
outperformed its benchmark measure, the Lehman Brothers Long
Government/Corporate Bond Index. Please focus your attention on page 23 which
provides additional detail.
Globally, the economic backdrop is very positive. In our own economy, the
fastest growing sector of gross domestic product is technology, which is in a
deflationary mode. Overseas, mature and developing countries alike have only
recently begun to scramble up the technology curve. The dramatic increase in
global capacity and productivity are also largely responsible for the secular
decline in interest rates and the resurgence of the high-yield bond market, not
to mention the long life rally in stocks.
Meanwhile, the demand for U.S. obligations is still robust both at home and
abroad. This is because our bonds continue to look inexpensive relative to the
debt of other countries. The real rate of return on U.S. bonds (the yield minus
the rate of inflation) is the highest in thirty years and is very attractive
compared to yields in the other mature economies of the world.
Our holdings in 10-year U.S. Treasuries and our investment-grade corporate bonds
benefited from this very positive economic backdrop, as well as from the general
decline in interest rates. Our corporate holdings in the banking/financial
services area also benefited from industry consolidation.
Our high-yield positions were helped by the ongoing strength in stocks and
investors' desire for better yields. In fact, 1997 is turning into a record year
for bond issuance and capital raised through high-yield securities. During the
summer, the calendar of new high-yield and corporate bond offerings was
extremely busy, as companies moved to lock in lower interest rates and foreign
and domestic demand was strong. Among our high-yield holdings, Star Markets, a
regional supermarket chain, is an example of how attractive high-yield bonds are
in the current low-yield environment. Our Star bonds carry a 13% coupon, which
the company would like to redeem in order to refinance at a lower rate.
As we look ahead to next year, low inflation and moderate growth in the U.S.,
Europe, and Japan should provide a favorable, stable-growth environment for
bonds. Turmoil in the markets of Southeast Asia is also keeping wage and pricing
pressure at a minimum. As long as these conditions are in place, and technology
continues to improve global productivity, we should see solid returns from fixed
income securities.
/s/ Sandy Rufenact
Sandy R. Rufenact
/s/ Ronald V. Speaker
Ronald V. Speaker*
Co-Portfolio Managers
Janus Capital Corporation
* On January 13, 1997, Mr. Speaker settled a Securities and Exchange Commission
administrative action involving two personal trades made by him in January 1993.
Without admitting or denying fault, Mr. Speaker agreed to a civil money penalty,
disgorgement of profits and interest payments totaling $37,199, and a 90 day
suspension which ended April 25, 1997. Sandy R. Rufenacht was appointed Co-
Portfolio Manager and will share responsiblity for portfolio management with Mr.
Speaker.
Top Five Industries (% of Net Assets)
Banks 15.1%
Industrial - Diversified 12.9%
Financial - Diversified 10.8%
Broadcasting 7.1%
Insurance 5.4%
Credit Quality (% of Net Assets)
AAA 5.8%
AA 3.0%
A 14.0%
BBB 13.2%
BB 15.6%
B 23.0%
CCC 3.2%
NA 13.0%
Not Rated 3.3%
Five Largest Holdings (% of Net Assets)
US Treasury Notes 5-15-2007 5.8%
Time Warner, Inc. 8-15-2007 4.8%
Ford Motor Credit Co. 8-15-2008 4.4%
Selmer Co., Inc. 5-15-2005 3.9%
Anchor Bancorp, Inc. 7-9-2003 3.6%
Flexible Income Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (6/29/87) was
worth $22,251.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 11.53% 8.93% 9.06% 8.55% 6/29/87
Class A(2) (with sales load) 6.23% 7.88% 8.53% 8.04% 6/29/87
LBLGCB(3) 8.81% 7.62% 9.19% 9.07% 6/29/87
Class B (without sales load) 10.79% - - 9.07% 10/1/95
Class B(2) (with sales load) 5.79% - - 7.75% 10/1/95
Class C 10.91% - - 6.68% 10/1/93
(1) Flexible Income Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) Flexible Income Portfolio Class A Shares performance reflects the maximum
sales charge of 4.75%. Flexible Income Portfolio Class B Shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
(3) The Lehman Brothers Long Government/Corporate Bond (LBLGCB) Index is an
unmanaged index used as a general measure of market performance. Calculations
assume dividends and capital gains are reinvested and do not include any
managerial expenses. From inception calculation is based on life of Class A.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 3.1% -
Consumer Cyclical 13.3% 9.1%
Consumer Non-Cyclical 12.5% 4.4%
Financial 31.2% 45.4%
Industrial 17.2% 10.5%
Technology 9.0% 5.6%
Utilities 2.6% 2.9%
Long-term U.S. Gov't 5.8% 11.4%
Short-term 2.8% 10.3%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Income Plus Portfolio
OBJECTIVE
High current income while avoiding excessive risk by investing primarily in
fixed income and dividend paying equity securities.
High-yield bonds continued to outper-form their investment-grade counter parts
throughout the period, pushing spreads to historically tight levels.
Fundamentals remained strong with moderate inflation and strong economic growth
creating excellent earnings and cash flow prospects for many companies. Low
default rates and a strong equity environment also helped provide support to the
high-yield sector. Technically, mutual fund cash flows have been extremely
strong with continued support from cross-over buyers, pension accounts, and
collateralized bond obligations.
In the investment-grade sector, participants began the period as Federal Reserve
watchers and ended the period as Asia watchers. Collapsing currency and equity
values in most of the Southeast Asian countries led to drastic widening in the
"Yankee" sector (bonds of foreign borrowers issued in the U.S. and denominated
in dollars). While the Income Plus Portfolio typically doesn't hold Yankee
issues, the spillover effect into domestic names has been significant, pushing
spreads wider across all sectors. These events led to a dramatic reduction in
new issues as well. But as volatility begins to wane and the new issue calendar
picks up, investment-grade spreads should begin to stabilize.
The key determinate for interest rate risk appears to be inflation expectations.
Investors are nervous that an accelerating economy will re-ignite inflation,
especially that of wage induced inflation. We prefer not to attempt a prediction
of this outcome, but rather react to those numerous variables that create bond
price movement. Currently, the Portfolio's duration is approximately equal that
of the blended index which should help mitigate any further rise in interest
rates.
For the year ended October 31, 1997, the Portfolio underperformed its
comparative benchmark, the Merrill Lynch High Yield Master Index. Please refer
to the Portfolio Performance on page 25 for additional details.
Overall, the outlook for the Income Plus Portfolio remains favorable, but not
without challenges. It has become rather cliche to state that we are living in a
more global environment, but the events of the past month vividly point out how
interdependent financial markets worldwide have become. Given the significant
percentage of worldwide GDP growth represented by Southeast Asia (approximately
33%), we believe the slowing of these economies along with their lower exported
prices will continue to provide a positive backdrop for inflation in the U.S.
Accordingly, our strategy for fiscal 1998 will be looking for signs that would
signal a slowing of this economy, which would provide more solid evidence that a
portfolio structure toward higher quality and longer duration is the strategy of
choice.
/s/ David R. Halfpap
David R. Halfpap
Portfolio Manager
AEGON USA Investment Management, Inc.
Top Five Industries (% of Net Assets)
Financial - Diversified 11.4%
Banks 7.4%
Electric 5.7%
Publishing 5.3%
Food Retail 4.6%
Credit Quality (% of Net Assets)
AAA -
AA -
A 10.1%
BBB 47.1%
BB 10.0%
B 19.1%
Not Rated 0.5%
Five Largest Holdings (% of Net Assets)
Bank of Boston Corp. 12-15-2026 4.5%
Chase Capital Corp. 3-1-2027 4.1%
Inco, Ltd. 6-15-2022 4.0%
Time Warner, Inc. 144A 3.7%
Mark IV Industries, Inc. 4-1-2003 3.6%
Income Plus Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (6/14/85) was
worth $33,685.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 11.86% 9.71% 10.94% 10.74% 6/14/85
Class A(2) (with sales load) 6.55% 8.65% 10.40% 10.31% 6/14/85
MLHYM(3) 13.57% 12.25% 12.49% 12.39% 6/14/85
Class B (without sales load) 11.10% - - 9.97% 10/1/95
Class B(2) (with sales load) 6.10% - - 8.66% 10/1/95
Class C 11.22% - - 7.55% 10/1/93
(1) Income Plus Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) Income Plus Portfolio Class A Shares performance reflects the maximum sales
charge of 4.75%. Income Plus Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
(3) The Merrill Lynch High Yield Master (MLHYM) Index is an unmanaged index
used as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial expenses.
From inception calculation is based on life of Class A.
Investments by SECTOR as a percentage of net assets
10/31/97 10/31/96
Basic Materials 4.0% 3.9%
Consumer Cyclical 26.5% 25.1%
Consumer Non-Cyclical 9.5% 17.3%
Energy 4.5% 11.2%
Financial 26.2% 10.7%
Industrial 10.3% 15.0%
Technology 5.2% -
Utilities 7.2% 5.7%
Short-term 4.7% 9.1%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Tax-Exempt Portfolio
OBJECTIVE
Maximum interest income exempt from federal income tax while preserving capital
by investing primarily in high quality municipal obligations.
Moderate economic growth, benign inflation, favorable supply/demand dynamics,
and progress toward fiscal reform all helped the municipal market fare well this
period.
Early in the year, bond yields rose in all maturities and the yield curve
flattened slightly as bond market participants braced for a Federal Reserve
interest-rate tightening. The municipal market also benefited from a continued
improvement in credit conditions and limited new-issue supply. After the March
Fed Funds increase, yields declined sharply. The result of this decline was a 30
year bond yield lower than 6.50% and long-term municipal yields 10 basis points
from the record lows attained in 1993.
Buoyed by economic releases that reflected the slowest inflation rate for the
first half of a year in eleven years, July was marked as the best performing
month in the last four years. August and September served as correction months,
with yields gyrating and the yield curve flattening from its steepest level seen
earlier in the year.
Bond yields moved significantly lower during October. On top of comments from
Federal Reserve Chairman Alan Greenspan early in the month that renewed fears of
a rate increase, came the global awareness of Asia's economic problems and
tumbling foreign markets. While the Treasury market rallied to yield 6.15%, a
decline of 30 basis points, municipals fell only 15 basis points. In part, this
lag in the municipal market was the result of exploding new issue volume during
September. The heavy volume was influenced by the lower interest rate levels and
is expected to remain relatively robust for the remainder of the year. New issue
volume in 1997 was expected to exceed the $200 billion mark for the first time
since 1993.
For the year ended October 31, 1997, the Tax-Exempt Portfolio underperformed the
Lehman Brothers Long Municipal Bond Index while paralleling the Lehman Brothers
General Municipal Bond Index. Please reference the Portfolio Performance on
page 27 for further details.
Going forward, many are touting municipal bonds as a performing asset class.
While municipals may continue to underperform Treasuries a short while longer, I
believe steady demand for tax-exempt bonds will help the municipal market
outperform Treasury bonds over the long haul. This should provide Portfolio
investors relative good value.
/s/ Rachel Dennis
Rachel Dennis
Portfolio Manager
AEGON USA Investment Management, Inc.
Credit Quality (% of Net Assets)
AAA 29.6%
AA 32.4%
A 12.9%
BBB -
BB -
B -
Not Rated 21.0%
Regional Concentrations
(% of Net Assets)
Northeast 8.2%
Midwest 47.3%
South 21.9%
West 21.3%
Tax-Exempt Portfolio
A hypothetical $10,000 invested in Class A Shares at inception (4/1/85) was
worth $25,763.
Note: Performance of Class B and C Shares will differ from the performance shown
in this chart for Class A Shares, based upon the different loads and fees paid
by shareholders investing in these classes. On October 1, 1996, the Portfolio
changed its fiscal year end from September 30 to October 31.
Average Annual Total Returns For the Period Ended 10/31/97(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 8.68% 6.57% 8.06% 8.23% 4/1/85
Class A(2)(with sales load) 3.52% 5.54% 7.54% 7.81% 4/1/85
LBGMB(3) 8.49% 7.52% 8.80% 9.46% 4/1/85
LBLMB(3) 10.02% 8.67% 10.00% 10.58% 4/1/85
Class B (without sales load) 7.93% - - 6.69% 10/1/95
Class B(2) (with sales load) 2.93% - - 5.34% 10/1/95
Class C 8.39% - - 5.24% 10/1/93
(1) Tax-Exempt Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results.
(2) Tax-Exempt Portfolio Class A Shares performance reflects the maximum sales
charge of 4.75%. Tax-Exempt Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
(3) The Lehman Brothers General Municipal Bond (LBGMB) Index is an unmanaged
index used as a general measure of market performance. Calculations assume
dividends and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A. For
reporting periods through the six months ended April 30, 1997, the Portfolio had
selected the Lehman Brothers Long Municipal Bond (LBLMB) Index as its benchmark
measure, however, LBGMB values were inadvertently shown in reports. The LBGMB
Index is more widely used as a benchmark for municipal income funds, and
therefore, is considered more appropriate for comparisons to the Portfolio.
Differences in the LBLMB Index that was previously used and the LBGMB Index
values for such periods were relatively insignificant (see above). Commencing
with periods ended October 31, 1997, the Portfolio has changed its benchmark
index from LBLMB to LBGMB.
Investments by ISSUER TYPE as a percentage of net assets
10/31/97 10/31/96
General Obligation Bonds 22.6% 27.2%
Education 12.8% 17.5%
Hospital 4.2% 4.0%
Housing - 11.8%
Industrial 16.7% 16.3%
Public Facilities 16.1% 11.9%
Transportation 8.3% 4.0%
Utility 18.0% 7.0%
Revenue Bonds 76.1% 72.5%
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
October 31, 1997
SCHEDULE OF INVESTMENTS
AGGRESSIVE GROWTH PORTFOLIO
Description Shares Value
COMMON STOCK (92.1%)
Basic Materials (1.2%)
Chemicals (0.6%)
E.I. Du Pont de Nemours and Company 4,100 $233,188
Precious Metals (0.6%)
Titanium Metals Corp. * 8,000 250,000
Consumer, Cyclical (14.5%)
Airlines (2.6%)
AMR Corp. * 9,000 1,047,938
Clothing/Fabric (0.7%)
Tommy Hilfiger Corp. * 7,500 296,719
Entertainment (2.9%)
Carnival Corp. 12,500 606,250
International Game Technology 15,900 406,444
Mirage Resorts, Inc. * 5,000 125,000
1,137,694
Home Furnishings (0.4%)
Newell Company 4,400 168,850
Retailers - Broadline (2.3%)
Wal-Mart Stores, Inc. 25,500 895,688
Retailers - Drug Based (1.8%)
Cardinal Health, Inc. 6,500 482,625
Rite Aid Corp. 4,000 237,500
720,125
Retailers - Specialty (3.3%)
General Nutrition Companies * 6,900 217,350
Home Depot, Inc. 19,650 1,093,031
1,310,381
Toys (0.5%)
Mattel, Inc. 5,000 194,375
Consumer, Non-Cyclical (18.3%)
Beverages (0.2%)
PepsiCo, Inc. 2,300 84,669
Consumer Services (1.8%)
CUC International, Inc. * 24,750 730,125
Healthcare (1.3%)
Bergen Brunswig Corp. 5,000 200,313
PhyCor, Inc. * 13,300 306,731
507,044
Household Products (3.3%)
Sunbeam Corp. 29,200 1,323,125
Pharmaceuticals (11.7%)
AmeriSource Health Corp. * 3,500 204,750
BioChem Pharma, Inc. * 15,000 375,938
Bristol-Myers Squibb Company, Inc. 11,300 991,575
Eli Lilly and Company 10,200 682,125
McKesson Corp. 2,000 214,625
Merck and Company, Inc. 4,200 374,850
Pfizer, Inc. 4,200 297,150
Schering Plough Corp. 15,400 863,362
Warner-Lambert Company, Inc. 4,300 615,706
4,620,081
Energy (7.4%)
Oil Drilling (2.8%)
Diamond Offshore Drilling, Inc. 10,700 666,075
Nabors Industries, Inc. 10,500 431,812
1,097,887
Oilfield Equipment and Services (4.6%)
EVI, Inc. * 4,400 $282,425
Halliburton Company 9,600 572,400
Schlumberger, Ltd. 7,700 673,750
Smith International, Inc. * 4,000 305,000
1,833,575
Financial (12.7%)
Banks (3.6%)
Bank of New York Company, Inc. 10,700 503,569
Banc One Corp. 8,000 417,000
Citicorp 2,400 300,150
First Union Corp. 4,000 196,250
1,416,969
Diversified (2.3%)
Equifax, Inc. 5,000 155,312
Household International, Inc. 1,700 192,525
The Money Store, Inc. 20,000 567,500
915,337
Insurance (1.7%)
American International Group, Inc. 6,650 678,716
Real Estate (0.6%)
Starwood Lodging Trust 3,800 227,287
Securities Brokers (3.4%)
Charles Schwab Corp. 12,000 409,500
Morgan Stanley, Dean Witter, Discover and Company 15,075 738,675
Paine Webber Group, Inc. 4,400 194,425
1,342,600
United States Government Agencies (1.1%)
Federal Home Loan Mortgage Corp. 11,500 435,563
Industrial (8.4%)
Diversified (6.4%)
General Electric Company 2,500 161,406
Textron, Inc. 5,100 294,844
Tyco International, Ltd. 28,702 1,083,501
Westinghouse Electric Corp. 37,000 978,187
2,517,938
Pollution Control (1.5%)
U.S.A. Waste Services, Inc. * 16,125 596,625
Railroads (0.5%)
Burlington Northern Santa Fe, Inc. 2,100 199,500
Technology (28.0%)
Advanced Medical Devices (1.0%)
Guidant Corp. 7,000 402,500
Aerospace/Defense (0.8%)
Gulfstream Aerospace Corp. * 5,500 159,500
Sunstrand Corp. 3,000 163,125
322,625
Communications (5.2%)
America Online, Inc. 6,500 500,500
Cisco Systems, Inc. * 14,800 1,214,062
Tellabs, Inc. * 6,300 340,200
2,054,762
Computers (6.7%)
Adaptec, Inc. * 5,000 242,187
Bay Networks, Inc. * 16,000 506,000
Compaq Computer Corp. 19,400 1,236,750
International Business Machines Corp. 5,500 539,344
Teradyne, Inc. * 3,800 142,263
2,666,544
Diversified (1.6%)
Ciena Corp. * 11,800 649,000
Semiconductors (6.5%)
Altera Corp. * 17,900 $794,313
Applied Materials, Inc. * 5,700 190,237
Linear Technology Corp. 13,200 829,950
Maxim Integrated Products, Inc. * 5,700 377,625
Texas Instruments, Inc. 3,400 362,737
2,554,862
Software (6.2%)
Electronics For Imaging, Inc. * 7,200 336,600
HBO & Company 13,500 587,250
Microsoft Corp. * 6,100 793,000
Oracle Systems Corp. * 11,050 395,383
Parametric Technology Corp. * 7,500 330,937
2,443,170
Utilities (1.6%)
Telephone
WorldCom, Inc. * 18,300 615,337
Total Common Stock (cost $ 29,771,221) 36,490,799
Description Principal Value
SHORT-TERM SECURITIES (12.0%)
Commercial Paper (5.1%)
France Telecom 5.510% 11-5-1997 $500,000 $499,694
GTE Corp. 5.560% 11-6-1997 1,000,000 999,228
Omnibus Funding 5.530% 11-4-1997 500,000 499,769
1,998,691
Repurchase Agreement (6.9%)
State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 10-31-1997 to be repurchased at
$ 2,746,597 on 11-3-1997 2,745,638 2,745,638
Total Short-Term Securities (cost $ 4,744,329) 4,744,329
Total Investments (104.1%) (cost $ 34,515,550) 41,235,128
Liabilities in Excess of Other Assets (4.1%) (1,626,644)
Net Assets (100.0%) $39,608,484
October 31, 1997
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO
Description Shares Value
Argentina (0.3%)
COMMON STOCK
Perez Companc SA 1,755 $10,958
Australia (1.5%)
COMMON STOCK
Brambles Industries, Ltd. 1,421 27,259
Burns, Philip & Company, Ltd. 7,630 4,015
Coca-Cola Amatil, Ltd. 941 7,065
National Australia Bank, Ltd. 1,200 16,377
WMC, Ltd. 2,320 8,221
62,937
Austria (1.4%)
COMMON STOCK
EVN Energie-Versorgung Niegeroesterreich AG 97 11,257
OEMV AG 140 19,905
VA Technologie AG 147 26,086
57,248
Belgium (0.4%)
COMMON STOCK
Generale de Banque SA 35 14,261
Brazil (2.6%)
COMMON STOCK
Companhia Brasileira de Distribuicao Grupo
Pao de Acucar ADR 425 7,863
Telecommunicacoes Brasileiras SA ADR 447 45,370
Telecomunicacoes de Sao Paulo SA 97,449 25,174
Unibanco de Bancos Brasileiros SA GDR 960 26,160
104,567
Canada (0.3%)
COMMON STOCK
Bombardier, Inc. Class B ADR 718 13,751
Chili (0.7%)
COMMON STOCK
Enersis SA ADR 900 29,700
Denmark (0.8%)
COMMON STOCK
Danisco A/S 126 7,110
Den Danske Bank 216 24,310
31,420
Finland (1.9%)
COMMON STOCK (1.1%)
Cultor OY 315 17,003
Merita, Ltd. 3,981 19,416
Pohjola Insurance Group 65 2,481
Sampo Insurance Company 168 5,020
43,920
CONVERTIBLE PREFERRED STOCK (0.8%)
Nokia Corp. 374 32,588
76,508
France (10.9%)
COMMON STOCK
AXA-UAP 547 37,333
Alcatel Alsthom 151 18,159
Cap Gemini Sogeti SA 271 21,446
Carrefour SA 42 21,844
Coflexip SA ADR 333 18,315
Compagnie Generale des Eaux 278 32,328
Elf Aquitaine SA 188 23,194
Lyonnaise des Eaux SA 254 26,289
Michelin Generale de Etablissments 492 25,155
Renault SA * 761 21,104
Rhone-Poulenc Rorer, Inc. 288 12,515
Schneider SA 838 44,597
Total SA 664 73,428
Usinor Sacilor 2,316 $38,217
Valeo SA 437 29,048
442,972
Germany (9.2%)
COMMON STOCK (9.0%)
Adidas AG 247 35,879
BASF AG 607 20,849
BHW Holding AG 1,460 25,179
Commerzbank AG 727 24,823
Daimler-Benz AG 322 21,859
Fresenius AG * 191 13,762
Gehe AG 224 11,732
Mannesman AG 138 58,300
SGL Carbon AG 241 34,240
Siemens AG 904 55,978
VEBA AG 814 45,695
Volkswagen AG 35 20,741
369,037
NON-CONVERTIBLE PREFERRED STOCK (0.2%)
Fresenius Medical Care AG * 103 5,931
374,968
Greece (0.2%)
COMMON STOCK
Alpha Credit Bank 108 7,117
Hong Kong (1.9%)
COMMON STOCK
Cheung Kong, Ltd. 2,000 13,907
China Light & Power Company, Ltd. 1,000 5,265
Costco Pacific 5,000 5,800
Dao Heng Bank Group Ltd. 2,000 4,605
Giordano International, Ltd. 12,000 4,424
HSBC Holdings PLC 1,225 27,733
Hutchison Whampoa, Ltd. 1,000 6,921
Johnson Electric Holdings, Ltd. 2,300 6,278
Lai Sun Development Company, Ltd. 5,000 2,070
77,003
India (0.1%)
COMMON STOCK
BSES, Ltd. GDR * 123 1,986
Mahindra & Mahindra, Ltd. ADR 290 3,045
5,031
Indonesia (0.3%)
COMMON STOCK
PT Astra International 12,000 12,316
PT Mulia Industrindo 8,500 1,533
13,849
Israel (1.1%)
COMMON STOCK
ECI Telecom, Ltd. 1,098 30,332
Teva Pharmaceutical Industries, Ltd. 350 16,363
46,695
Italy (4.0%)
COMMON STOCK
Credito Italiano 2,256 6,004
ENI SpA 917 5,146
Industrie Natuzzi SpA ADR 98 2,193
Instituto Bancario San Paolo di Torino 2,000 15,143
Montedison SpA 25,653 20,776
Saipem SpA 4,470 25,044
Telecom Italia Mobile SpA 18,746 69,393
Telecom Italia SpA 4,374 17,635
161,334
Japan (16.5%)
COMMON STOCK
Canon, Inc. 1,000 $24,279
Credit Saison Company, Ltd. 1,360 36,524
DDI Corp. 4 13,370
Daiwa House Industry Company, Ltd. 1,000 9,645
East Japan Railway Company * 3 14,592
Fuji Bank, Ltd. 1,000 8,647
Fujisawa Pharmaceutical Company 1,000 8,481
Hitachi Construction Machinery Company 1,000 5,097
Hitachi Maxell, Ltd. 1,000 22,283
Hitachi, Ltd. 2,000 15,382
Honda Motor Company, Ltd. 2,000 67,348
Industrial Bank of Japan, Ltd. 1,000 9,894
Ishikawajima-Harima Heavy Industries
Company, Ltd. 3,000 6,810
Matsushita Electric Industrial Company, Ltd. 1,000 16,796
Minebea Company, Ltd. 1,000 9,978
Mitsui & Company, Ltd. 2,000 15,182
Mitsui Fudosan Company, Ltd. 1,000 11,308
Mycal Corp. 2,000 19,124
NEC Corp. 2,000 21,951
NTT Data Communications Systems Corp. 10 47,809
Namco, Ltd. 400 13,404
Nichiei Company 100 10,975
Nintendo Company 100 8,647
Nippon Steel Corp. 2,000 4,124
Nippon Telegraph & Telephone Corp. 20 16,962
Nissan Motor Company 1,000 5,330
Olympus Optical Company, Ltd. 1,000 7,392
Osaka Gas Company 4,000 8,847
Sanwa Bank 1,000 10,061
Sapporo Breweries 2,000 12,472
Shin-Etsu Chemical Company, Ltd. 1,000 24,445
Sony Corp. 600 49,838
Sumitomo Bank 1,000 10,643
Sumitomo Electric Industries 1,000 13,220
Sumitomo Realty and Development Company 1,000 7,309
Sumitomo Sitix Corp. 1,000 17,627
Sumitomo Special Metals Company 1,000 19,207
Suzuki Motor Company Limited 1,000 10,643
Tohoku Electric Power 300 4,889
Toray Industries, Inc. 3,000 16,712
Uniden Corp. 1,000 12,306
669,553
Mexico (1.7%)
COMMON STOCK
Controladora Commercial Mexicana ADR 890 17,689
Gruma SA * 1,026 4,018
Grupo Carso SA de C.V. ADR 732 8,967
Grupo Financiero Bancomer SA ADR * 500 4,822
Grupo Industrial Maseca SA de C.V. ADR 1,380 20,096
Panamerican Beverages, Inc. Class A 373 11,563
67,155
Netherlands (5.6%)
COMMON STOCK
ABN Amro Holding NV 440 8,829
Baan Company NV * 463 32,673
Elsevier NV 1,886 29,522
Gucci Group NV ADR 67 2,437
IHC Caland NV 501 30,700
ING Groep NV 769 32,165
Philips Electronics NV 424 33,076
VNU-Verenigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 1,366 32,248
Vendex International NV 471 25,623
227,273
Peru (0.7%)
COMMON STOCK
Telefonica del Peru SA ADR 1,117 $22,061
Philippines (0.2%)
COMMON STOCK
Metropolitan Bank & Trust Company * 480 3,326
San Miguel Corp. Class B 5,500 6,146
9,472
Portugal (0.6%)
COMMON STOCK (0.6%)
Banco Comercial Portugues SA 847 17,175
Banco Comercial Portugues SA ADR 309 6,180
23,355
CONVERTIBLE PREFERRED STOCK (0.0%)
Banco Comercial Portugues SA ADR 17 1,239
24,594
Singapore (0.1%)
COMMON STOCK
Uraco Holdings, Ltd. 22,000 4,957
South Africa (0.7%)
COMMON STOCK
Barlow, Ltd. 519 5,228
Dimension Data Holdings, Ltd. * 4,392 18,245
Iscor, Ltd. 11,209 5,820
29,293
South Korea (0.0%)
COMMON STOCK
Kookmin Bank GDR 1 7
Spain (2.4%)
COMMON STOCK
Banco Bilbao Vizccaya SpA 862 22,965
Banco Santander SA 409 11,415
Repsol SA 932 38,937
Telefonica de Espana * 920 25,015
98,332
Sweden (3.0%)
COMMON STOCK
Autoliv, Inc. 876 35,070
Electrolux AB 205 16,933
Hoganas AB 788 29,185
Investor AB Class B 66 3,069
Kinnevik Investments AB B-Free 164 3,256
L.M. Ericsson Telephone Company Class B 121 5,320
Modern Times Group MTG AB * 164 1,169
Netcom Systems AB * 322 5,384
Sandvik AB 810 24,604
123,990
Switzerland (7.8%)
COMMON STOCK
ABB AG 48 62,333
Holderbank Financiere Glarus AG 8 6,415
Nestle SA 22 30,886
Novartis 59 92,067
Oerlikon-Buehrle Holding AG 169 21,526
Roche Holding AG 4 35,023
Schweizerische Rueckversicherungs Gesellschaft 9 13,506
Zurich Versicherungs Gesellschaft 138 56,757
318,513
Description Principal Value
U.S.A. (5.2%)
SHORT-TERM SECURITIES
Time Deposit
State Street Bank & Trust
4.750% Euro Time Deposit
dated 10-31-1997 to mature at
$ 213,083 on 11-3-1997 (cost $ 213,000) $213,000 $213,000
Description Shares Value
United Kingdom (16.6%)
COMMON STOCK
Airtours PLC 2,290 $45,370
BAA PLC 1,180 10,864
BG PLC 2,280 9,961
Barclays PLC 608 15,341
Bass PLC 217 2,999
Billiton PLC * 4,378 12,708
British Aerospace PLC 613 16,299
British Land Company PLC 1,390 16,046
British Telecommunications PLC 2,720 20,587
Cadbury Schweppes PLC 400 3,998
Cordiant PLC 5,403 11,316
D.F.S. Furniture Company PLC 855 7,721
Devro PLC 1,070 6,624
Electrocomponents PLC 2,970 23,039
Fairey Group PLC 1,270 13,086
GKN PLC 570 12,845
General Electric Company PLC 680 4,324
Glaxo Wellcome PLC 463 9,898
Granada Group PLC 2,460 33,797
Guinness PLC 2,150 19,236
Legal & General Group PLC 1,000 8,126
Lloyds TSB Group PLC 1,050 12,816
LucasVarity PLC 5,809 19,855
Marks and Spencer PLC 1,000 10,371
Medeva PLC 4,175 14,375
Railtrack Group PLC 2,931 46,480
Reed International PLC 4,567 44,916
SEMA Group PLC 765 17,175
Safeway PLC 2,705 17,653
ScottishPower PLC 2,930 21,821
Seven Trent PLC 1,021 14,840
Shell Transport & Trading Company 3,202 22,666
Siebe PLC 2,799 53,508
Sun Life and Provincial Holding PLC 2,000 12,030
Tesco PLC 1,460 11,540
The Berkeley Group PLC 1,086 11,763
WPP Group PLC 3,950 18,067
Zeneca Group PLC 679 21,501
675,562
Total Investments (98.7%) (cost $ 4,082,576) 4,014,081
Notional
Description Amount Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (0.0%) @
A Austrian Schilling 11-3-1997 Buy 128,670 $336
D German Deutschemark 11-10-1997 Sell 70,457 (1,725)
D German Deutschemark 11-28-1997 Sell 44,353 (668)
F French Franc 10-31-1997 Buy 364,143 1,340
F French Franc 10-31-1997 Sell 114,458 (245)
L Italian Lira 10-31-1997 Sell 12,278,030 58
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (904)
Other Assets in Excess of Liabilities (1.3%) 50,754
Net Assets (100.0%) $4,063,931
October 31, 1997
SCHEDULE OF INVESTMENTS
CAPITAL APPRECIATION PORTFOLIO
Description Shares Value
COMMON STOCK (91.1%)
Basic Materials (1.6%)
Chemicals
Imperial Chemical Industries PLC + 27,992 $416,933
Consumer, Cyclical (37.1%)
Advertising (1.7%)
Outdoor Systems, Inc. * 9,037 277,888
Snyder Communications, Inc. * 4,825 142,337
420,225
Airlines (0.5%)
Ryanair Holdings PLC ADR * 5,025 125,625
Auto Parts And Equipment (0.4%)
OEA Inc. 2,275 91,568
Broadcasting (6.1%)
Chancellor Media Corp. Class A * 5,325 292,210
Clear Channel Communications, Inc. * 10,100 666,600
Heftel Broadcasting Corp. Class A * 4,775 317,537
Univision Communications, Inc. * 4,275 265,050
1,541,397
Entertainment (3.1%)
Family Golf Centers, Inc. * 6,050 161,838
Premier Parks, Inc. * 5,425 217,000
Regal Cinemas, Inc. * 4,875 112,125
Royal Caribbean Cruises, Ltd. 6,100 283,269
774,232
Home Construction (0.1%)
Apogee Group, Inc. Class A 1,400 33,425
Publishing (0.4%)
Central Newspapers, Inc. 1,725 113,311
Restaurants (13.0%)
J. D. Wetherspoon PLC + * 58,914 1,594,125
Papa John's International, Inc. * 17,893 528,962
PizzaExpress PLC + 93,607 1,166,844
3,289,931
Retailers - Broadline (0.5%)
Fred Meyer, Inc. * 4,400 125,675
Retailers - Specialty (11.3%)
CompUSA, Inc. * 6,775 221,882
Fastenal Company 29,850 1,462,650
MSC Industrial Direct Company * 3,050 126,956
Petco Animal Supplies, Inc. * 33,440 1,028,280
2,839,768
Consumer, Non-Cyclical (10.3%)
Consumer Services (3.3%)
A. C. Nielsen Corp. * 1,400 32,025
Apollo Group, Inc. Class A * 16,150 682,338
Profit Recovery Group International * 7,350 114,844
829,207
Food - Other (1.0%)
JP Foodservice, Inc. * 8,150 260,291
Food Retailers (0.5%)
Quality Food Centers, Inc. 2,550 121,444
Healthcare (1.2%)
AmeriPath, Inc. * 2,800 46,200
Pediatrix Medical Group, Inc. * 6,050 255,613
301,813
Medical Supplies (0.2%)
ESC Medical Systems, Ltd. * 1,450 56,912
Pharmaceuticals (4.1%)
Omnicare, Inc. 34,475 $958,836
Forest Laboratories, Inc. * 1,375 63,594
1,022,430
Energy (2.7%)
Oil Drilling (2.1%)
Diamond Offshore Drilling, Inc. 4,375 272,343
Santa Fe International Corp. 2,825 138,955
Transocean Offshore, Inc. 2,400 129,600
540,898
Oilfield Equipment and Services (0.6%)
Camco International, Inc. 1,425 102,956
Hanover Compressor Company * 2,375 51,360
154,316
Financial (14.3%)
Banks (2.1%)
First Empire State Corp. 350 143,150
Northern Trust Corp. 2,200 128,700
Regions Financial Corp. 4,050 148,838
Star Banc Corp 1,975 96,898
517,586
Diversified (3.2%)
AmeriCredit Corp. * 3,800 110,438
American Capital Strategies, Ltd. * 6,675 120,150
Amvescap PLC + 40,829 268,497
HealthCare Financial Partners, Inc. * 2,200 75,900
Medallion Financial Corp. 11,375 238,875
813,860
Insurance (2.7%)
Progressive Corp. 3,350 349,238
Protective Life Corp. 3,700 195,638
UCI, Inc. * 3,875 129,812
674,688
Real Estate (3.5%)
Insignia Financial Group, Inc. * 23,250 502,781
Security Capital Group, Inc. * 7,350 235,200
Vornado Realty Trust SBI 3,475 155,072
893,053
Savings & Loans (0.5%)
H. F. Ahmanson & Company 2,200 129,800
Securities Brokers (2.0%)
Charles Schwab Corp. 15,013 512,301
United States Government Agencies (0.3%)
Federal Agricutural Mortgage Corp. * 1,550 80,600
Industrial (8.6%)
Building Materials (1.5%)
Barnett, Inc. * 18,550 382,594
Containers and Packaging (2.0%)
Sealed Air Corp. * 9,600 495,000
Electronic Components and Equipment (2.8%)
Berg Electronics Corp. * 9,175 214,466
Littlefuse, Inc. - Warrants 3,400 85,000
Littlefuse, Inc. * 13,600 416,500
715,966
Other Industrial Services (1.5%)
Trigen Energy Corp. 15,925 379,214
Pollution Control (0.8%)
Culligan Water Technologies, Inc. * 4,450 189,681
Technology (12.8%)
Advanced Medical Devices (1.9%)
Sofamor Danek Group, Inc. * 7,125 $490,734
Communications (2.7%)
America Online, Inc. 2,875 221,375
PriCellular Corp. * 41,460 450,878
672,253
Computers (4.0%)
Capita Group PLC + 34,799 180,159
Paychex, Inc. 21,675 826,360
1,006,519
Diversified (1.7%)
Ceridian Corp. * 4,825 188,476
Philips Electronics NV ADR 3,050 239,044
427,520
Semiconductors (1.4%)
Maxim Integrated Products, Inc. * 3,650 241,813
Sanmina Corp. * 700 52,325
BMC Industries, Inc. 1,700 54,719
348,856
Software (1.1%)
Aspen Technology, Inc. 3,750 141,094
Parametric Technology Corp. * 2,850 125,756
266,850
Utilities (3.7%)
Electric (3.2%)
AES Corp. * 20,300 804,387
Telephone (0.5%)
NEXTEL Communications, Inc. Class A * 4,500 118,125
Total Common Stock (cost $ 19,367,602) 22,978,988
CONVERTIBLE PREFERRED STOCK (0.9%)
Technology
Diversified
Nokia Corp. + (cost $ 267,722) 2,685 233,955
Description Principal Value
SHORT-TERM SECURITIES (6.4%)
United States Government Agencies (2.4%)
Federal Home Loan Mortgage Acceptance Corp.
5.650% 11-3-1997 $600,000 599,812
Commercial Paper (4.0%)
Household Finance Company
5.680% 11-3-1997 1,000,000 999,684
Total Short-term Securities (cost $ 1,599,496) 1,599,496
Total Investments (98.4%) (cost $ 21,234,820) 24,812,439
Notional
Description Amount Value
UNREALZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (-0.3%) @
B British Pound 11-5-1997 Buy 23,430 $ 89
B British Pound 11-6-1997 Buy 9,414 79
B British Pound 11-28-1997 Sell 150,000 (7,652)
B British Pound 12-4-1997 Sell 2,000 (73)
B British Pound 1-20-1998 Sell 75,000 1,114
B British Pound 2-11-1998 Sell 120,000 (468)
B British Pound 2-19-1998 Sell 225,000 890
B British Pound 2-25-1998 Sell 350,000 (30,813)
B British Pound 2-26-1998 Sell 290,000 709
B British Pound 2-26-1998 Sell 152,000 (12,549)
B British Pound 3-4-1998 Sell 210,000 (14,099)
N Norwegian Krone 11-3-1997 Sell 22,096 (16)
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (62,790)
Other Assets in Excess of Liabilities (1.9%) 472,657
Net Assets (100.0%) $25,222,306
October 31, 1997
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO
Description Shares Value
Argentina (1.7%)
COMMON STOCK
Banco Frances del Rio la Plata SA ADR 8,047 $198,157
Banco Rio de la Plata SA ADR * 20,375 213,938
Disco SA ADR * 15,325 620,663
Nortel Inversora SA ADR 41,650 1,041,250
Telecom Argentina France SA ADR 20,850 527,766
Telefonica de Argentina SA ADR 30,075 845,859
YPF Sociedad Anonima SA ADR 46,125 1,476,000
4,923,633
Belgium (0.4%)
COMMON STOCK
Barco NV 842 161,796
Credit Communal Holding/Dexia 8,793 957,048
1,118,844
Brazil (1.1%)
COMMON STOCK (0.8%)
Centrais Eletricas de Santa Catarina SA 54,000 58,776
Companhia Cervejaria Brahma 770,000 488,190
Companhia Energetica de Minas Gerais SA ADR 2,725 108,782
Companhia Paranaense de Energia-Copel # 4,000,000 49,342
Ericsson Telecomunicacoes SA 9,200,000 271,202
Telecommunicacoes Brasileiros SA ADR 4,450 456,120
Unibanco de Bancos Brasileiros SA GDR 34,075 928,544
2,360,956
NON-CONVERTIBLE PREFERRED STOCK (0.4%)
Companhia Energetica de Minas Gerais SA 18,088,000 722,043
Petroleo Brasileiro SA 1,563,000 310,474
1,032,517
3,393,473
Denmark (1.2%)
COMMON STOCK
Amtssparekassen Fyn A/S * 7,880 546,506
BG Bank A/S 28,898 1,853,076
SAS Danmark 37,152 638,506
Unidanmark A/S * 7,318 493,061
3,531,149
Finland (1.2%)
COMMON STOCK (0.9%)
Amer Group, Ltd. 34,380 715,781
Merita, Ltd. 96,366 469,996
Metra OY * 15,737 418,650
Raision Tehtaat OY 9,252 998,789
Sampo Insurance Company 4,340 129,680
2,732,896
CONVERTIBLE PREFERRED STOCK (0.3%)
Nokia Corp. 5,492 478,541
Nokia Corp. ADR 5,575 491,994
970,535
3,703,431
France (11.4%)
COMMON STOCK
Alcatel Alsthom 8,215 987,938
Assurances Generales de France 8,411 441,082
Atos SA * 18,549 2,076,865
Banque Nationale de Paris 9,481 417,741
CLF-Dexia France 12,865 1,287,067
Cap Gemini Sogeti SA 39,066 3,091,556
Carrefour SA 693 360,423
Compagnie Bancaire SA 1,908 243,962
Dassault Systems SA ADR 12,000 360,000
Elf Aquitaine SA 51,800 6,390,587
Grand Optical Photoservice SA 12,950 2,078,731
Lagardere Group SA 88,560 2,538,614
Lyonnaise des Eaux SA 44,359 4,591,148
Michelin Generale de Etablissments 46,790 $2,392,273
Renault SA * 94,676 2,625,595
Rhone-Poulenc Rorer, Inc. 35,746 1,553,382
Rhone-Poulenc Rorer, Inc. Warrants 5,213 901
Societe Generale 3,515 479,805
Total SA 9,165 1,013,503
32,931,173
Germany (6.1%)
COMMON STOCK
Adidas AG 9,391 1,364,126
Allianz Holding AG 4,503 1,013,726
Altana AG * 3,961 287,685
Bayerische Bereinsbank AG 33,223 1,920,760
Bayerische Motoren Werke (BMW) AG 413 298,764
Deutsche Bank AG 52,388 3,453,221
Deutsche Lufthansa AG 49,400 866,240
Deutsche Pfandbrief & Hypothekenbank AG 32,050 1,825,122
Fresenius Medical Care AG ADR * 45,150 1,063,847
Gehe AG 15,820 828,560
Pfeiffer Vacuum Technology SpA ADR * 1,900 61,750
Siemens AG 7,499 464,361
Tarkett AG 11,102 273,703
Volkswagen AG 6,875 4,070,213
17,792,078
Hong Kong (0.6%)
COMMON STOCK
China Telecom Ltd. * 218,000 348,292
First Pacific Company, Ltd. 810,200 510,961
Hutchison Whampoa, Ltd. 84,000 581,371
Swire Pacific, Ltd. 73,500 392,697
1,833,321
India (0.3%)
COMMON STOCK
Bajaj Auto, Ltd. GDR 2,547 40,536
Tata Engineering & Locomotive, Ltd. 144A GDR 63,214 657,426
Tata Engineering & Locomotive, Ltd. GDR 23,600 245,440
943,402
Ireland (0.3%)
COMMON STOCK
Ryanair Holdings PLC ADR * 31,850 796,250
Italy (1.4%)
COMMON STOCK
Aeroporti di Roma SpA 34,259 310,079
Assicurazioni Generali 27,417 611,691
Banca Commerciale Italiana SpA 432,792 1,178,602
Credito Italiano 161,845 430,728
Telecom Italia SpA 226,148 1,414,341
3,945,441
Japan (7.9%)
COMMON STOCK
Denso Corp. 57,000 1,232,227
Fujitsu, Ltd. 108,000 1,185,333
Hitachi, Ltd. 186,000 1,430,531
Kita Kyushu Coca-Cola Bottling Company 1,500 32,676
Matsushita Electric Work, Ltd. 48,000 435,021
Mitsubishi Motors Corp. 19,000 83,412
Mitsubishi Trust & Banking Corp. 38,000 467,615
Mitsui Estate Company, Ltd. 167,000 2,110,585
Mitsui Fudosan Company, Ltd. 87,000 983,786
Mitsui Trust & Banking Company * 130,000 $451,817
NTT Data Communications Systems Corp. 1,370 6,549,846
Nippon Telegraph & Telephone Corp. 4,870 4,130,207
Nomura Securities Company, Ltd. 45,000 523,821
Sony Corp. 5,700 473,460
Sumitomo Trust & Banking Company, Ltd. * 122,000 930,190
Takeda Chemical Industries, Ltd. 46,000 1,254,511
Tokio Marine & Fire Insurance Company 59,000 588,675
22,863,713
Luxembourg (0.2%)
COMMON STOCK
Millicom International Cellular SA ADR * 13,725 576,450
Mexico (1.6%)
COMMON STOCK
Cifra SA de C.V. Series B # 18,256 35,749
Fomento Economico Mexicano, SA de C.V. 177,800 1,252,561
Grupo Carso SA de C.V. 74,917 474,996
Grupo Casa Autrey SA ADR 41,025 702,553
Grupo Financiero Inbursa SA Class B 1 4
Grupo Televisa SA GDS 61,575 1,908,825
Kimberly Clark de Mexico SA 47,600 205,177
Kimberly Clark de Mexico SA ADR 100 2,000
4,581,865
Netherlands (11.6%)
COMMON STOCK
ASM Lithography Holding NV ADR * 3,850 282,013
Akzo Nobel NV 20,160 3,539,510
Akzo Nobel NV 144A 12,238 2,148,637
Elsevier NV 84,830 1,327,850
Getronics NV 56,463 1,857,469
KLM 35,514 1,199,292
Koninklijke Nedlloyd Groep NV * 11,533 341,521
Koninklijke Nutricia Verenigde Bedrijven NV 85,005 2,421,236
Philips Electronics NV 92,746 7,234,997
Philips Electronics NV ADR 100,350 7,864,931
Royal PTT Nederland NV 10,054 382,862
Simac Techniek NV 12,000 1,529,176
Vedior NV 15,219 311,644
Wolters Kluwer NV 26,362 3,225,405
33,666,543
Norway (0.4%)
COMMON STOCK
Merkantildata A/S 23,628 786,435
SAS Norske ASA 9,750 163,646
Tomra Systems ASA 4,593 117,595
1,067,676
Peru (0.3%)
COMMON STOCK
Telefonica del Peru SA ADR 42,525 839,869
Russia (0.5%)
COMMON STOCK
Lukoil Holding Company ADR * 7,375 619,500
Mosenergo ADR 4,525 201,933
Unified Energy System GDR 18,616 586,404
1,407,837
South Africa (0.5%)
COMMON STOCK
Dimension Data Holdings, Ltd. * 328,832 1,366,007
Spain (0.5%)
COMMON STOCK
Adolfo Dominguez SA * 19,168 $523,146
Azkoyen SA 1 82
Corp Financiera Reunida SA * 19,433 103,813
Prosegur CIA de Segundad SA 4,118 45,972
Tele Pizza SA * 9,730 665,726
1,338,739
Sweden (7.3%)
COMMON STOCK
Assa Abloy AB 182,248 4,151,933
Astra AB Class A 15,256 245,934
Electrolux AB 46,919 3,875,537
Investment Bure AB 43,218 526,838
L.M. Ericsson Telephone Company ADR 36,448 1,612,824
L.M. Ericsson Telephone Company Class B 53,674 2,359,768
Nordbanken AB 5,454 170,755
Pricer AB B Shares * 32,828 761,001
Prosolvia AB * 16,650 572,302
Securitas AB 151,896 4,047,322
Skandia Forsakrings AB 30,127 1,404,803
WM Data AB Class B 88,950 1,540,568
21,269,585
Switzerland (6.0%)
COMMON STOCK
ABB AG 232 301,277
Ares-Serono Group 457 861,743
Clariant AG 298 228,374
Credit Suisse Group 12,484 1,752,210
Hero AG * 537 282,762
Kuoni Reisen AG 100 377,130
Novartis 1,818 2,836,926
Roche Holding AG 469 4,106,482
Schweizerische Lebensversicherungs und Rentenanstalt 4,734 3,193,391
Swissair AG * 652 870,818
TAG Heuer International SA * 1,401 159,505
Zurich Versicherungs Gesellschaft 5,773 2,374,351
17,344,969
U.S.A. (20.7%)
COMMON STOCK (14.1%)
Analog Devices, Inc. * 4,100 125,306
BankAmerica Corp. 7,050 504,075
Bristol-Myers Squibb Company, Inc. 26,250 2,303,438
Cardinal Health, Inc. 6,175 458,494
Cincinnati Bell, Inc. 26,275 709,425
Cisco Systems, Inc. * 39,725 3,258,691
Compaq Computer Corp. 19,150 1,220,813
E.I. Du Pont de Nemours and Company 29,400 1,672,125
Electronics For Imaging, Inc. * 17,075 798,256
General Electric Company 4,350 280,847
Halliburton Company 6,000 357,750
Immunex Corp. 2,775 177,600
Manpower, Inc. 9,825 377,034
Microsoft Corp. * 17,200 2,236,000
Minnesota Mining & Manufacturing Company 9,125 834,937
Monsanto Company 109,725 4,690,744
Parametric Technology Corp. * 68,225 3,010,428
Pfizer, Inc. 18,475 1,307,106
Sara Lee Corp. 27,675 1,414,884
Schlumberger, Ltd. 30,450 2,664,375
SLM Holdings Corp. 17,375 2,439,016
Solutia, Inc. 62,830 1,390,114
Tele Communications, Inc. Class A * 143,000 $3,280,063
Texas Instruments, Inc. 13,975 1,490,958
Transocean Offshore, Inc. 11,200 604,800
Wang Laboratories, Inc. * 2,775 64,172
Warner-Lambert Company, Inc. 7,050 1,009,472
Westinghouse Electric Corp. 80,725 2,134,167
40,815,090
Description Principal Value
SHORT-TERM SECURITIES (6.6%)
Commerical Paper
General Electric Capital Corp.
5.700% 11-3-97 $4,200,000 4,198,670
Household Finance Company
5.680% 11-3-97 15,000,000 14,995,267
19,193,937
60,009,027
Description Shares Value
United Kingdom (15.9%)
COMMON STOCK
Barclays PLC 59,571 $1,503,112
British Petroleum Corp. 72,105 1,058,885
Compass Group PLC 144A 166,016 1,745,401
Electrocomponents PLC 289,971 2,249,402
Glaxo Wellcome PLC 54,229 1,159,348
Grand Metropolitan PLC 92,112 827,975
Hays PLC 261,685 3,055,928
Imperial Chemical Industries PLC 62,794 935,301
Ionica Group PLC * 258,333 1,330,934
JBA Holdings PLC 81,374 1,305,437
Lloyds TSB Group PLC 230,067 2,808,118
Logica PLC 155,052 2,195,157
Misys PLC 94,565 2,380,545
Misys (Jersey) PLC 27,018 680,141
Pearson PLC 74,546 946,103
Pilkington PLC 393,066 994,429
Powerscreen International PLC 13,457 157,262
Premier Farnell PLC 159,878 1,242,906
Rentokil Initial Group PLC 1,803,147 7,220,388
Royal and Sun Alliance Insurance Group PLC 110,280 1,061,496
Siebe PLC 301,416 5,762,135
SmithKline Beecham PLC 56,196 531,497
SmithKline Beecham PLC ADR 18,800 895,350
Stagecoach Holdings PLC 182,759 2,232,224
TI Group PLC 85,188 777,869
Tomkins PLC 90,482 461,995
Victrex PLC 24,380 95,992
Williams PLC 71,870 424,762
46,040,092
Total Investments (99.1%) (cost $ 250,215,149) 287,284,567
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (-0.5%)@
B 92,935 British Pound 11-3-1997 Sell $(1,520)
B 650,592 British Pound 11-4-1997 Sell (290)
B 696,068 British Pound 11-4-1997 Buy 311
B 422,465 British Pound 11-5-1997 Buy 1,597
B 165,354 British Pound 11-6-1997 Buy 1,381
B 10,700,000 British Pound 2-11-1998 Sell (425,452)
B 10,700,000 British Pound 2-11-1998 Buy 153,523
B 6,800,000 British Pound 2-18-1998 Sell (291,784)
B 1,500,000 British Pound 2-19-1998 Sell 5,933
B 300,000 British Pound 2-19-1998 Buy (458)
D 214,639 German Deutschmark 11-4-1997 Sell 756
D 1,200,000 German Deutschmark 1-9-1998 Sell (21,656)
D 4,500,000 German Deutschmark 2-3-1998 Sell (121,134)
D 4,500,000 German Deutschmark 2-3-1998 Buy 21,895
D 1,750,000 German Deutschmark 2-18-1998 Sell (76,953)
D 400,000 German Deutschmark 2-18-1998 Buy 1,061
D 7,250,000 German Deutschmark 2-19-1998 Sell (210,184)
D 7,250,000 German Deutschmark 2-19-1998 Buy 132,470
D 5,287,000 German Deutschmark 2-26-1998 Sell (154,459)
D 4,850,000 German Deutschmark 2-26-1998 Buy 14,418
F 1,376,232 French Franc 11-4-1997 Buy 5,152
F 19,284,833 French Franc 11-28-1997 Sell (25,971)
F 3,929,010 French Franc 11-28-1997 Buy 572
F 20,000,000 French Franc 1-9-1998 Sell (153,817)
F 20,000,000 French Franc 1-9-1998 Buy 68,485
F 29,300,000 French Franc 2-18-1998 Sell (353,088)
F 11,000,000 French Franc 2-18-1998 Buy (2,026)
G 614,548 Dutch Guilder 11-3-1997 Buy 904
G 70,806 Dutch Guilder 11-4-1997 Sell 163
G 305,714 Dutch Guilder 11-4-1997 Buy (705)
G 2,000,000 Dutch Guilder 2-18-1998 Sell (78,204)
G 16,000,000 Dutch Guilder 2-19-1998 Sell (409,732)
G 11,500,000 Dutch Guilder 2-19-1998 Buy 98,524
H 122,438 Hong Kong Dollar 11-3-1997 Buy (2)
J 460,000,000 Japanese Yen 11-4-1997 Sell 158,520
J 460,000,000 Japanese Yen 11-4-1997 Buy (78,955)
J 210,000,000 Japanese Yen 12-18-1997 Sell 143,839
J 271,000,000 Japanese Yen 1-20-1998 Sell 163,183
J 310,000,000 Japanese Yen 2-18-1998 Sell (378)
J 1,351,000,000 Japanese Yen 3-18-1998 Sell 241,492
J 650,000,000 Japanese Yen 3-18-1998 Buy 58,906
J 50,000,000 Japanese Yen 3-25-1998 Sell (173)
K 5,000,000 Swedish Krona 2-2-1998 Sell (19,606)
K 26,900,000 Swedish Krona 2-11-1998 Sell (164,714)
K 17,000,000 Swedish Krona 2-11-1998 Buy (7,228)
R 587,000 South African Rand 11-3-1997 Sell (9,412)
R 587,000 South African Rand 11-3-1997 Buy (3,640)
R 2,600,000 South African Rand 10-2-1998 Sell 15,717
S 307,438 Swiss Franc 11-3-1997 Buy 1,763
S 2,248 Swiss Franc 11-4-1997 Sell 3
S 48,581 Swiss Franc 11-4-1997 Buy (67)
S 2,018,000 Swiss Franc 11-12-1997 Sell 6,534
S 2,000,000 Swiss Franc 11-12-1997 Buy 479
S 2,500,000 Swiss Franc 1-20-1998 Sell (55,596)
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (1,369,623)
Other Assets in Excess of Liabilities (1.4%) 3,927,546
Net Assets (100.0%) $289,842,490
October 31, 1997
SCHEDULE OF INVESTMENTS
GROWTH PORTFOLIO
Description Shares Value
COMMON STOCK (90.9%)
Basic Materials (0.5%)
Chemicals
E.I. Du Pont de Nemours and Company 106,650 $6,065,719
Solutia, Inc. 34,595 765,414
6,831,133
Consumer, Cyclical (1.8%)
Airlines (0.9%)
UAL Corp. 128,625 11,270,766
Retailers - Broadline (0.9%)
Price / Costco, Inc. * 287,925 11,085,113
Toys (0.0%)
Mattel, Inc. 13,950 542,306
Consumer, Non-Cyclical (25.6%)
Beverages (1.4%)
Coca-Cola Company 316,850 17,902,025
Consumer Services (0.1%)
Federal Express Corp. 14,100 941,175
META Group, Inc. 9,525 205,978
1,147,153
Cosmetics (2.3%)
Avon Products, Inc. 203,775 13,347,262
The Gillette Company 169,250 15,073,828
28,421,090
Food Retailers (0.5%)
Starbucks Corp. 204,400 6,745,200
Household Products (2.0%)
Colgate-Palmolive Company 384,025 24,865,619
Pharmaceuticals (19.2%)
Astra AB Class A + 542,442 8,744,402
Bristol-Myers Squibb Company, Inc. 314,725 27,617,119
Eli Lilly and Company 640,050 42,803,344
Pfizer, Inc. 919,250 65,036,938
SmithKline Beecham PLC ADR 723,800 34,470,975
SmithKline Beecham PLC + 87,262 825,317
Warner Chilcott Laboratories ADR * 17,150 242,244
Warner-Lambert Company, Inc. 411,375 58,903,758
238,644,097
Energy (6.1%)
Oil Companies - Major (4.9%)
Amoco Corp. 168,550 15,453,928
Mobil Corp. 168,350 12,257,984
Texaco, Inc. 586,100 33,371,069
61,082,981
Oilfield Equipment and Services (1.2%)
Schlumberger, Ltd. 164,525 14,395,938
Financial (18.5%)
Banks (9.0%)
BankAmerica Corp. 659,225 47,134,588
Chase Manhattan Corp. 123,425 14,240,159
Citicorp 264,870 33,125,304
Wells Fargo & Company 60,533 17,637,803
112,137,854
Diversified (3.9%)
American Express Company 291,475 22,735,050
Grupo Financiero Inbursa SA Class B + 514,375 1,811,828
Household International, Inc. 207,350 23,482,388
48,029,266
Real Estate (0.4%)
Vornado Realty Trust SBI 124,325 $5,548,003
Securities Brokers (5.2%)
Merrill Lynch & Company, Inc. 956,375 64,674,859
Industrial (5.9%)
Diversified (5.1%)
General Electric Company 862,850 55,707,753
Monsanto Company 172,975 7,394,681
63,102,434
Electronic Components and Equipment (0.5%)
. International Manufacturing Services, Inc. * 12,850 1
39,744
KLA-Tencor Corp. * 3,675 161,470
Kulicke and Soffa Industries, Inc. * 216,075 5,563,931
Sawtek, Inc. * 2,875 97,750
5,962,895
Heavy Construction (0.3%)
Caterpillar, Inc. 82,250 4,215,313
Technology (29.6%)
Advanced Medical Devices (1.4%)
Bio-Technology General Corp. 14,550 178,238
Guidant Corp. 282,275 16,230,812
Photoelectron Corp. * 43,150 474,650
16,883,700
Biotechnology (0.0%)
U.S. Bioscience, Inc. * 1,593 16,229
Communications (3.7%)
Advanced Fibre Communications 82,200 2,388,937
Cisco Systems, Inc. * 288,725 23,684,473
L.M. Ericsson Telephone Company ADR 7,650 338,513
LCC International, Inc. Class A * 8,275 155,156
Lucent Technologies, Inc. 195,975 16,155,689
Northern Telecom, Ltd. 3,775 338,570
Objective Communications, Inc. * 2,050 47,663
QUALCOMM, Inc. * 6,225 350,934
TTI Team Telecom International, Ltd. 41,775 240,206
Telecommunicacoes Brasileiras SA ADR 9,900 1,004,850
Tellabs, Inc. * 8,275 446,850
ViaSat, Inc. 14,000 257,250
45,409,091
Computers (5.4%)
3COM Corp. * 2,075 85,983
Asustek Computer, Inc. GDR * 10,175 127,611
BEA Systems, Inc. 6,225 84,038
Check Point Software Technologies, Ltd. * 4,150 176,375
Compaq Computer Corp. 7,813 498,047
Dell Computer Corp. * 800,600 64,148,075
EMC Corp. * 5,100 285,600
International Business Machines Corp. 4,950 485,409
MMC Networks, Inc. 3,675 80,391
Sun Microsystems, Inc. * 11,150 381,888
Teradyne, Inc. * 32,025 1,198,936
Western Digital Corp. * 4,925 147,442
67,699,795
Diversified (2.7%)
Brilliant Digital Entertainment, Inc. 46,475 377,609
Ciena Corp. * 452,100 24,865,500
First Data Corp. 139,400 4,051,312
GenRad, Inc. * 4,550 134,225
HMT Technology Corp. * 4,150 70,031
Jabil Circuit, Inc. * 2,050 93,019
Philips Electronics NV + 17,180 1,340,190
Philips Electronics NV ADR 40,475 3,172,228
Retix * 16,450 83,278
34,187,392
Industrial Technology (0.0%)
ASM Lithography Holding NV ADR * 5,325 $390,056
Semiconductors (6.7%)
8x8, Inc. * 24,850 347,900
Advanced Micro Devices, Inc. 4,925 113,275
Altera Corp. * 1,700 75,437
Analog Devices, Inc. * 17,192 525,430
Applied Materials, Inc. * 8,200 273,675
Atmel Corp. * 4,150 107,381
Credence Systems Corp. * 4,925 145,287
Intel Corp. 313,775 24,160,675
Lam Research Corp. * 118,525 4,281,716
Micron Technology, Inc. 3,700 99,206
Sanmina Corp. * 6,175 461,581
Texas Instruments, Inc. 486,925 51,948,811
Xilinx, Inc. * 5,725 195,366
82,735,740
Software (9.7%)
Aspen Technology, Inc. 4,100 154,262
Aware, Inc. * 4,150 50,319
BMC Software, Inc. * 5,925 357,722
Cadence Design Systems, Inc. 20,550 1,094,287
Cognos, Inc. * 4,125 94,359
Compuware Corp. * 4,300 284,338
HBO & Company 166,350 7,236,225
JBA Holdings PLC + 7,566 121,377
Microsoft Corp. * 581,500 75,595,000
Oracle Systems Corp. * 5,975 213,793
Parametric Technology Corp. * 22,625 998,328
PeopleSoft, Inc. * 495,650 31,163,994
Sapient Corp. 12,775 680,269
VIASOFT, Inc. 22,975 941,975
Vantive Corp. 9,025 227,881
Veritas Software Corp. 26,487 1,102,521
Visio Corp. 7,425 276,117
Whittman-Hart, Inc. 11,100 321,900
Xylan Corp. * 12,350 197,600
121,112,267
Utilities (2.9%)
Electric (0.7%)
Telephone (2.4%)
AES Corp. * 227,225 9,003,791
Telephone (2.2%)
NEXTEL Communications, Inc. Class A * 1,028,500 26,998,125
Telefonica del Peru SA ADR 45,525 899,119
27,897,244
Total Common Stock (cost $ 794,038,931) 1,131,939,350
CONVERTIBLE PREFERRED STOCK (3.6%)
Technology
Diversified
Nokia Corp. ADR (cost $ 35,162,297) 506,625 44,709,656
NON-CONVERTIBLE PREFERRED STOCK (0.0%)
Technology
Software
SAP AG Vorzug + (cost $ 42,825) 300 89,326
NON-CONVERTIBLE CORPORATE BONDS (0.0%)
Technology
Communications
Lernout & Hauspie Speech Products NV 144A ADR
8.000% 11-15-2001 (cost $ 101,700) $101,700 $247,258
SHORT-TERM SECURITIES (5.4%)
United States Government Agencies (2.0%)
Federal National Mortgage Association Corp.
5.470% 11-25-1997 25,000,000 24,908,833
Commercial Paper (3.4%)
Citi Group Holdings
5.700% 11-3-1997 5,000,000 4,998,417
Household Finance Company
5.680% 11-3-1997 36,800,000 36,788,388
41,786,805
Repurchase Agreement (0.0%)
State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 10-31-97 to be repurchaed at
$ 24,008 on 11-3-1997 24,000 24,000
Total Short-Term Securities (cost $ 66,719,638) 66,719,638
Total Investments (99.9%) (cost $ 896,065,391) 1,243,705,228
Notional
Description Amount Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN CURRENCY
CONTRACTS (-0.2%)@
B British Pound 2-25-1998 Sell 22,100,000 (1,940,501)
B British Pound 2-25-1998 Buy 7,000,000 320,422
B British Pound 3-4-1998 Sell 3,000,000 (209,505)
B British Pound 3-4-1998 Buy 125,000 7,017
B British Pound 3-11-1998 Sell 600,000 (35,969)
D German Deutschmark 3-4-1998 Sell 159,000 (6,008)
D German Deutschmark 3-4-1998 Buy 25,000 537
D German Deutschmark 3-4-1998 Sell 8,000 (116)
G Dutch Guilder 1-12-1998 Sell 2,400,000 (37,300)
G Dutch Guilder 1-12-1998 Buy 975,000 17,153
G Dutch Guilder 2-25-1998 Sell 750,000 (24,879)
G Dutch Guilder 3-5-1998 Sell 150,000 (3,670)
G Dutch Guilder 3-5-1998 Buy 100,000 2,246
G Dutch Guilder 3-31-1998 Sell 300,000 (2,068)
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (1,912,641)
Other Assets in Excess of Liabilities (0.3%) 3,221,637
Net Assets (100.0%) $1,245,014,224
October 31, 1997
SCHEDULE OF INVESTMENTS
C.A.S.E. PORTFOLIO
Description Shares Value
COMMON STOCK (89.5%)
Basic Materials (2.0%)
Steel
USX - US Steel Group, Inc. 4,900 $166,600
Consumer, Cyclical (5.6%)
Entertainment (0.9%)
Eastman Kodak Company 1,300 77,838
Retailers - Apparel (1.0%)
TJX Companies, Inc. 2,900 85,913
Retailers - Broadline (2.3%)
Dayton Hudson Corp. 2,200 138,187
Woolworth Corp. * 3,100 58,900
197,087
Retailers - Specialty (1.4%)
Toys R Us, Inc. * 3,400 115,813
Consumer, Non-Cyclical (7.8%)
Beverages (0.7%)
Coca-Cola Company 1,000 56,500
Consumer Services (1.8%)
Federal Express Corp. 2,300 153,525
Food Retailers (1.3%)
Ruddick Corp. 7,200 112,500
Healthcare (2.2%)
NovaCare, Inc. * 5,000 65,313
Tenet Healthcare Corp. * 3,800 116,137
181,450
Medical Supplies (1.8%)
Respironics, Inc. * 5,400 151,875
Energy (10.1%)
Oil Companies - Secondary (2.1%)
Sun Company, Inc. 4,400 176,275
Oilfield Equipment and Services (8.0%)
Pennzoil Company 2,200 162,800
SEACOR SMIT, Inc. * 2,500 162,812
Tidewater, Inc. 2,800 183,925
Trico Marine Services, Inc. * 4,400 161,700
671,237
Financial (13.6%)
Banks (6.0%)
Chase Manhattan Corp. 700 80,762
City National Corp. 4,300 129,269
North Folk Bancorp. 2,800 82,425
PNC Bank Corp. 2,700 128,250
Provident Financial Group 1,700 78,200
498,906
Communications (1.6%)
DSC Communications Corp. * 5,400 131,625
Diversified (1.7%)
SunAmerica, Inc. 3,900 140,156
Insurance (4.3%)
Loews Corp. 1,100 122,856
Torchmark Corp. 3,200 127,600
Travelers Group, Inc. 1,600 112,000
362,456
Independent (1.7%)
Conglomerate
U.S. Industries, Inc. * 5,400 $145,125
Industrial (19.5%)
Air Freight (2.0%)
Airborne Freight Corp. 2,600 164,775
Building Materials (1.0%)
Southdown, Inc. 1,500 83,063
Diversified (4.7%)
Dexter Corp. 3,200 125,600
Manitowoc Company, Inc. 4,100 124,281
SPS Technologies, Inc. * 700 32,375
Timken Company 3,400 113,900
396,156
Electronic Components and Equipment (4.2%)
Arrow Electronics, Inc. * 2,500 70,938
Harris Corp. 1,600 69,800
Park Electrochemical Corp. 4,700 133,362
Read-Rite Corp. * 4,000 79,500
353,600
Heavy Construction (1.9%)
Deere & Company 3,000 157,875
Heavy Machinery (1.8%)
Cincinnati Milacron, Inc. 5,300 147,075
Other Industrial Services (0.9%)
CalEnergy Company, Inc. * 2,300 78,775
Trucking (3.0%)
USFreightways, Inc. 5,100 165,112
Yellow Corp. * 3,000 82,313
247,425
Technology (28.1%)
Aerospace/Defense (4.8%)
AAR Corp. 3,700 132,506
Gencorp, Inc. 5,100 124,631
Thiokol Corp. 1,600 146,500
403,637
Communications (2.7%)
Komag, Inc. * 6,000 103,875
SBC Communications, Inc. 1,900 120,888
224,763
Computers (9.1%)
3COM Corp. * 3,000 124,312
Compaq Computer Corp. 1,200 76,500
International Business Machines Corp. 800 78,450
Quantum Corp. * 5,000 158,125
Storage Technology Corp. 1,700 99,769
Sun Microsystems, Inc. * 2,500 85,625
Western Digital Corp. * 4,900 146,694
769,475
Diversified (4.8%)
Applied Magnetics Corp. * 6,400 147,200
Creative Technology, Ltd. * 4,000 101,750
Inacom Corp. * 4,900 150,981
399,931
Office Equipment (1.8%)
Xerox Corp. 1,900 150,694
Semiconductors (1.8%)
Intel Corp. 2,000 154,000
Software (3.1%)
Oracle Systems Corp. * 4,100 $146,703
Symantec Corp. * 5,200 113,750
260,453
Utilities (1.1%)
Gas
National Fuel Gas Company 2,000 88,250
Total Common Stock (cost $ 6,936,751) 7,504,828
Description Principal Value
SHORT-TERM SECURITIES (15.4%)
Repurchase Agreement
State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 10-31-1997 to be repurchased at
$ 1,291,384 on 11-3-1997 (cost $ 1,291,235) $1,291,235 $1,291,235
Total Investments (104.9%) (cost $ 8,227,986) 8,796,063
Liabilities in Excess of Other Assets (4.9%) (411,612)
Net Assets (100.0%) $8,384,451
October 31, 1997
SCHEDULE OF INVESTMENTS
VALUE EQUITY PORTFOLIO
Description Shares Value
COMMON STOCK (86.9%)
Basic Materials (11.1%)
Aluminum (2.2%)
Alumax, Inc. * 4,400 $143,000
Reynolds Metals Company 1,200 73,125
216,125
Chemicals (5.8%)
Air Products & Chemicals, Inc. 700 53,200
E.I. Du Pont de Nemours and Company 2,200 125,125
IMC Global, Inc. 1,900 64,006
Morton International, Inc. 4,000 132,000
W.R. Grace & Company 2,800 190,400
564,731
Forest Products (1.0%)
Champion International Corp. 1,000 55,188
Weyerhaeuser Company 900 42,975
98,163
Precious Metals (0.7%)
Placer Dome, Inc. 4,500 69,750
Steel (1.4%)
USX - US Steel Group, Inc. 4,000 136,000
Consumer, Cyclical (7.9%)
Airlines (2.5%)
AMR Corp. * 400 46,575
Delta Air Lines, Inc. 2,000 201,500
248,075
Auto Manufacturers (1.2%)
General Motors Corp. 1,900 121,956
Auto Parts and Equipment (0.2%)
Exide Corp. 800 18,650
Entertainment (1.9%)
Time Warner Inc. 3,200 184,600
Retailers - Apparel (2.1%)
Federated Department Stores, Inc. * 4,700 206,800
Consumer, Non-Cyclical (3.2%)
Food - Other (2.0%)
Unilever NV ADR 3,600 192,150
Healthcare (1.2%)
Columbia / HCA Healthcare Corp. 4,200 118,650
Energy (14.1%)
Oil Companies - Major (0.8%)
The Coastal Corp. 1,300 78,163
Oil Drilling (8.9%)
Noble Affiliates, Inc. 3,400 139,612
Noble Drilling Corp. * 4,100 145,806
Reading & Bates Corp. * 2,400 101,700
Santa Fe International Corp. 3,700 181,994
Transocean Offshore, Inc. 3,500 189,000
United Meridian Corp. * 3,200 108,600
866,712
Oilfield Equipment and Services (4.4%)
B.J. Services Company * 500 42,375
Dresser Industries, Inc. 3,400 143,225
Halliburton Company 2,200 131,175
Tidewater, Inc. 1,700 111,669
428,444
Financial (20.0%)
Banks (9.8%)
Bank of New York Company, Inc. 3,900 $183,544
Chase Manhattan Corp. 1,700 196,137
First Union Corp. 4,700 230,594
National City Corp. 2,300 137,425
Norwest Corp. 6,600 211,613
959,313
Diversified (0.9%)
Household International, Inc. 800 90,600
Insurance (8.8%)
Aetna, Inc. 2,600 184,762
Allstate Corp. 2,600 215,638
American International Group, Inc. 1,500 153,094
Loews Corp. 2,700 301,556
855,050
Securities Brokers (0.5%)
Bear Stearns Companies, Inc. 1,200 47,625
Independent (1.5%)
Conglomerate
Cooper Industries, Inc. 2,800 145,950
Industrial (17.5%)
Diversified (3.1%)
Harnischfeger Industries, Inc. 2,000 78,750
United Technologies Corp. 3,200 224,000
302,750
Electronic Components and Equipment (4.4%)
Emerson Electric Company 3,100 162,556
W. W. Grainger, Inc. 1,900 166,131
York International Corp. 2,200 100,375
429,062
Heavy Construction (9.4%)
Case Corp. 2,400 143,550
Caterpillar, Inc. 5,600 287,000
Deere & Company 5,500 289,438
Foster Wheeler Corp. 1,000 32,813
Ingersoll-Rand Company 4,200 163,537
916,338
Railroads (0.6%)
Burlington Northern Santa Fe, Inc. 600 57,000
Technology (11.6%)
Aerospace/Defense (4.4%)
Sunstrand Corp. 2,900 157,687
The Boeing Company 5,700 272,887
430,574
Communications (2.4%)
U.S. WEST Media Group, Inc. * 9,400 237,350
Diversified (1.0%)
Ceridian Corp. * 2,600 101,563
Industrial Technology (1.5%)
Thomas & Betts Corp. 2,900 144,275
Office Equipment (1.4%)
Xerox Corp. 1,700 134,831
Semiconductors (0.9%)
Texas Instruments, Inc. 800 85,350
Total Common Stock (cost $ 7,812,926) 8,486,600
Description Principal Value
SHORT-TERM SECURITIES (12.1%)
United States Government Securities (5.1%)
Treasury Bills 5.070% 11-20-1997 $500,000 $498,662
Other Short-Term Securities (7.0%)
State Street Bank & Trust
State Street Global Advisors Fund
7-day yield of 5.250% 685,000 685,000
Total Short-Term Securities (cost $ 1,183,662) 1,183,662
Total Investments (99.0%) (cost $ 8,996,588) 9,670,262
Other Assests in Excess of Liabilities (1.0%) 92,146
Net Assets (100.0%) $9,762,408
October 31, 1997
SCHEDULE OF INVESTMENTS
STRATEGIC TOTAL RETURN PORTFOLIO
Description Shares Value
COMMON STOCK (57.9%)
Basic Materials (4.8%)
Chemicals (2.5%)
E.I. Du Pont de Nemours and Company 3,800 $216,125
Lawter International, Inc. 15,400 172,287
Morton International, Inc. 11,000 363,000
751,412
Forest Products (0.6%)
Longview Fibre Company 12,100 192,087
Other Non-Ferrous (0.4%)
Tremont Corp. * 2,500 136,406
Paper Products (1.3%)
Kimberly-Clark Corp. 7,500 389,531
Consumer, Cyclical (3.1%)
Entertainment (0.4%)
Walt Disney Company 1,500 123,375
Lodging (0.5%)
La Quinta Inns, Inc. 8,000 143,000
Publishing (1.3%)
A.H. Belo Corp. 8,300 392,175
Retailers - Broadline (0.9%)
Sears, Roebuck & Company 6,700 280,562
Consumer, Non-Cyclical (17.4%)
Beverages (1.2%)
PepsiCo, Inc. 10,100 371,806
Consumer Services (1.3%)
Accustaff, Inc. * 13,500 385,594
Cosmetics (2.1%)
Estee Lauder Companies, Inc. Class A 7,900 351,056
The Gillette Company 3,392 302,100
653,156
Food - Other (2.7%)
H.J. Heinz Company 9,000 417,938
Nabisco Holdings Corp. Class A 9,800 403,025
820,963
Healthcare (0.5%)
Hooper Holmes, Inc. 11,000 162,250
Household Products (2.3%)
Colgate-Palmolive Company 5,800 375,550
Proctor & Gamble Company 5,000 340,000
715,550
Medical Supplies (2.4%)
Baxter International, Inc. 7,700 356,125
Sybron International Corp. * 9,500 381,188
737,313
Pharmaceuticals (4.9%)
Covance, Inc. * 8,500 150,344
Johnson & Johnson 4,200 240,975
Merck and Company, Inc. 4,000 357,000
Schering Plough Corp. 5,000 280,312
SmithKline Beecham PLC ADR 10,000 476,250
1,504,881
Energy (6.6%)
Oil Companies - Major (4.2%)
Amoco Corp. 2,500 $229,219
Exxon Corp. 6,000 368,625
Mobil Corp. 6,000 436,875
Union Pacific Resources Group, Inc. 9,800 241,325
1,276,044
Oil Companies - Secondary (1.4%)
Baker Hughes, Inc. 9,500 436,406
Oilfield Equipment and Services (1.0%)
Schlumberger, Ltd. 3,500 306,250
Financial (13.9%)
Banks (4.2%)
Compass Bancshares, Inc. 12,500 471,094
First Colorado Bancorp, Inc. 22,500 458,437
Mellon Bank Corp. 6,800 350,625
1,280,156
Diversified (0.4%)
Marsh & McLennan Companies, Inc. 1,600 113,600
Insurance (4.0%)
American General Corp. 8,500 433,500
American International Group, Inc. 3,150 321,497
E.W. Blanch Holdings, Inc. 5,500 184,250
PartnerRe, Ltd. 7,000 287,000
1,226,247
Real Estate (4.5%)
Boykin Lodging Trust, Inc. 8,000 213,500
Crescent Operating, Inc. * 1,480 34,410
Crescent Real Estate Equities, Inc. 12,000 432,000
Imperial Credit Commercial Mortgage
Investment Corp. * 16,000 264,000
Starwood Lodging Trust 7,500 448,594
1,392,504
United States Government Agencies (0.8%)
Federal National Mortgage Association 5,300 256,719
Independent (1.3%)
Conglomerate
Philip Morris Companies, Inc. 9,800 388,325
Industrial (6.8%)
Diversified (4.5%)
Corning, Inc. 9,500 428,687
General Electric Company 6,400 413,200
Tyco International, Ltd. 8,400 317,100
Westinghouse Electric Corp. 8,200 216,787
1,375,774
Electronic Components and Equipment (1.3%)
Emerson Electric Company 7,800 409,013
Other Industrial Services (1.0%)
Manpower, Inc. 8,000 307,000
Technology (3.1%)
Communications (0.7%)
SBC Communications, Inc. 3,500 222,687
Computers (1.3%)
Hewlett-Packard Company 6,200 382,463
Office Equipment (1.1%)
Danka Business Systems PLC ADR 9,000 333,000
Utilities (0.9%)
Telephone
ALLTEL Corp. 8,100 $286,538
Total Common Stock (cost $ 14,319,669) 17,752,787
CONVERTIBLE PREFERRED STOCK (7.4%)
Basic Materials (1.4%)
Precious Metals
TIMET Capital Trust 144A 8,300 435,750
Consumer, Cyclical (1.3%)
Broadcasting
Sinclair Broadcasting Group, Inc. 8,000 399,000
Financial (2.2%)
Diversified
Merrill Lynch & Company, Inc. * 4,500 316,125
SunAmerica, Inc. Series E 3,000 349,500
665,625
Technology (1.2%)
Computers
Microsoft Corp. Series A 4,000 353,000
Utilities (1.3%)
Telephone
WorldCom, Inc. 3,500 409,500
Total Convertible Preferred Stock (cost $ 2,187,760) 2,262,875
Description Principal Value
CONVERTIBLE CORPORATE BONDS (6.0%)
Consumer, Cyclical (2.5%)
Lodging (1.2%)
CapStar Hotel, Inc. 4.750% 10-15-2004 $350,000 $356,563
Retailers - Specialty (1.3%)
Home Depot, Inc. 3.250% 10-1-2001 300,000 386,250
Energy (2.6%)
Oil Drilling
Nabors Industries, Inc. 5.000% 5-15-2006 125,000 294,375
Parker Drilling Company 5.500% 8-1-2004 425,000 506,281
800,656
Industrial (0.9%)
Pollution Control
USA Waste Services, Inc. 4.000% 2-1-2002 250,000 264,687
Total Convertible Bonds (cost $ 1,464,610) 1,808,156
NON-CONVERTIBLE CORPORATE BONDS (14.4%)
Consumer, Non-Cyclical (0.8%)
Food - Other
Nabisco Brands, Inc. 8.300% 4-15-1999 250,000 258,125
Financial (3.2%)
Banks (0.7%)
J.P. Morgan & Company, Inc. 7.625% 9-15-2004 200,000 213,000
Diversified (0.7%)
Norwest Financial, Inc. 7.000% 1-15-2003 200,000 205,750
Insurance (1.8%)
Hartford Life, Inc. Class A 6.900% 6-15-2004 400,000 408,500
Torchmark Corp. 8.625% 3-1-2017 135,000 141,013
549,513
Industrial (5.6%)
Diversified (2.4%)
Dexter Corp. 9.250% 12-15-2016 $105,000 $109,681
Lockheed Martin Corp. 7.450% 6-15-2004 300,000 316,500
Robbins & Myers, Inc. 6.500% 9-1-2003 200,000 294,000
720,181
Electronic Components and Equipment (1.2%)
Kent Electronics Corp. 4.500% 9-1-2004 400,000 380,000
Other Industrial Services (0.8%)
Olsten Corp. 7.000% 3-15-2006 250,000 256,250
Railroads (1.2%)
Union Pacific Corp.
7.375% 5-15-2001 100,000 103,500
8.500% 1-15-2017 250,000 260,625
364,125
Technology (1.3%)
Communications
Airtouch Communications, Inc. 7.000% 10-1-2003 150,000 153,563
Lucent Technologies, Inc. 6.900% 7-15-2001 250,000 256,875
410,438
Utilities (3.5%)
Electric (1.5%)
Interstate Power Company 8.625% 9-15-2021 175,000 187,031
Kentucky Utilities Company 8.550% 5-15-2027 250,000 275,625
462,656
Gas (0.5%)
Southwest Gas Corp. 7.500% 8-1-2006 150,000 159,750
Telephone (1.5%)
ALLTEL Corp. 7.250% 4-1-2004 200,000 209,500
GTE Hawaiian Telephone Company, Ltd.
7.375% 9-1-2006 225,000 236,250
445,750
Total Non-Convertible Corporate Bonds
(cost $ 4,283,821) 4,425,538
LONG-TERM GOVERNMENT BONDS (13.1%)
United States Government Securities
Treasury Notes
5.875% 1-31-1999 450,000 451,310
6.000% 10-15-1999 475,000 478,529
7.875% 11-15-1999 500,000 520,970
6.375% 1-15-2000 300,000 304,467
6.375% 5-15-2000 475,000 482,339
6.125% 9-30-2000 175,000 176,769
6.375% 3-31-2001 475,000 483,745
6.500% 5-31-2001 600,000 613,932
6.375% 9-30-2001 500,000 510,060
Total Long-Term Government Bonds (cost $ 3,985,055) 4,022,121
SHORT-TERM SECURITIES (0.2%)
Repurchase Agreement
State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 10-31-1997 to be repurchased at
$ 68,785 on 11-3-1997 68,761 68,761
Total Short-Term Securities (cost $ 68,761) 68,761
Total Investments (99.0%) (cost $ 26,309,676) 30,340,238
Other Assets in Excess of Liabilities (1.0%) 318,321
Net Assets (100.0%) $30,658,559
October 31, 1997
SCHEDULE OF INVESTMENTS
TACTICAL ASSET ALLOCATION PORTFOLIO
Description Shares Value
COMMON STOCK (54.1%)
Basic Materials (4.5%)
Aluminum (2.0%)
Alumax, Inc. * 8,000 $260,000
Aluminum Company of America 4,000 292,000
552,000
Chemicals (1.0%)
Dow Chemical Company 3,000 272,250
Mining (1.5%)
Potash Corp. of Saskatchewan, Inc. 5,000 409,687
Consumer, Cyclical (12.3%)
Airlines (1.6%)
Comair Holdings, Inc. 12,000 441,000
Auto Manufacturers (2.9%)
Chrysler Corp. 15,000 528,750
Ford Motor Company 6,000 262,125
790,875
Broadcasting (2.3%)
Cox Communications, Inc. Class A * 20,000 615,000
Footwear (1.4%)
Payless ShoeSource, Inc. * 6,820 380,215
Home Construction (1.4%)
Clayton Homes, Inc. 23,750 390,390
Retailers - Specialty (2.7%)
Fingerhut Companies, Inc. 17,000 376,125
Toys R Us, Inc. * 10,000 340,625
716,750
Financial (17.9%)
Diversified (3.1%)
Countrywide Credit Industries, Inc. 11,000 377,437
Green Tree Financial Corp. 11,000 463,375
840,812
Insurance (5.6%)
AFLAC, Inc. 7,000 356,125
AMBAC, Inc. 6,800 287,300
Frontier Insurance Group, Inc. 8,000 269,500
PMI Group, Inc. 10,000 604,375
1,517,300
Real Estate (5.8%)
Imperial Credit Commercial Mortgage Investment
Corp. * 33,000 544,500
Merry Land & Development Company 15,000 327,188
Simon DeBartolo Group, Inc. 6,000 185,625
Trizec Hahn Corp. 12,000 300,750
United Dominion Realty Trust, Inc. 15,000 208,125
1,566,188
Securities Brokers (1.0%)
Lehman Brothers Holding, Inc. 6,000 282,375
United States Government Agencies (2.4%)
Federal Home Loan Mortgage Corp. 8,000 303,000
Federal National Mortgage Association 7,000 339,063
642,063
Independent (2.2%)
Conglomerate
Philip Morris Companies, Inc. 15,000 594,375
Industrial (2.2%)
Electronic Components and Equipment (1.1%)
Arrow Electronics, Inc. * 10,000 283,750
Heavy Machinery (1.1%)
AGCO Corp. 10,000 $290,000
Technology (9.0%)
Communications (4.3%)
360 Communications Company * 25,000 528,125
Cabletron Systems, Inc. * 12,500 362,500
ECI Telecom, Ltd. 10,000 276,250
1,166,875
Computers (2.6%)
NCR Corp. * 10,000 303,125
Seagate Technology, Inc. * 15,000 406,875
710,000
Semiconductors (2.1%)
Applied Materials, Inc. * 8,000 267,000
Intel Corp. 2,000 154,000
MEMC Electric Material, Inc. * 7,000 140,438
561,438
Utilities (6.0%)
Electric (2.7%)
DPL, Inc. 10,000 248,125
Illinova Corp. 12,000 267,000
Southern Company 10,000 229,375
744,500
Telephone (3.3%)
AT&T Corp. 11,000 538,312
Sprint Corp. 7,000 364,000
902,312
Total Common Stock (cost $ 12,153,401) 14,670,155
NON-CONVERTIBLE PREFERRED STOCK (1.9%)
Consumer, Cyclical
Broadcasting
News Corp., Ltd. ADR (cost $ 502,500) 30,000 532,500
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (17.1%)
Basic Materials (3.7%)
Chemicals
E.I. DuPont De Nemours 6.500% 9-1-2002 $1,000,000 1,016,250
Consumer, Cyclical (4.1%)
Auto Manufacturers (1.9%)
Chrysler Financial Corp. 6.950% 3-25-2002 500,000 513,750
Lodging (2.2%)
Hilton Hotels Corp. 7.000% 7-15-2004 600,000 605,250
Financial (7.4%)
Banks (3.7%)
Countrywide Funding Corp. 6.280% 1-15-2003 1,000,000 996,250
Diversified (3.7%)
Ford Motor Credit Company 5.810% 11-9-1998 1,000,000 998,495
Utilities (1.9%)
Electric
Potomac Capital Investment Corp. 6.800% 9-12-2001 500,000 502,500
Total Non-Convertible Corporate Bonds
(cost $ 4,585,255) 4,632,495
LONG-TERM GOVERNMENT BONDS (16.8%)
United States Government Agencies (7.6%)
Federal Home Loan Bank
8.600% 8-25-1999 $100,000 $104,733
7.880% 2-9-2000 100,000 104,366
6.200% 7-7-2000 500,000 499,955
0.000% 1-21-2003 500,000 350,930
Federal Home Loan Mortgage Corp.
5.990% 1-27-2003 500,000 492,490
Federal National Mortgage Association
5.950% 4-14-2000 500,000 499,595
2,052,069
United States Government Securities (9.2%)
Treasury Notes
5.875% 3-31-1999 500,000 501,600
6.000% 10-15-1999 500,000 503,715
5.500% 4-15-2000 500,000 497,835
5.875% 2-15-2004 1,000,000 1,002,110
2,505,260
Total Long-Term Government Bonds (cost $ 4,554,639) 4,557,329
SHORT-TERM SECURITIES (9.6%)
Commercial Paper (9.4%)
Electric (2.1%)
GTE Corp. 5.600% 11-4-1997 $100,000 $99,953
Greentree Financial 5.680% 11-3-1997 150,000 149,952
KZH Crescent
5.600% 11-7-1997 1,000,000 999,068
5.600% 11-14-1997 1,000,000 997,978
Reliastar Mortgage Corp. 5.570% 11-4-1997 300,000 299,861
2,546,812
Repurchase Agreement (0.2%)
State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 10-31-1997 to be repurchased
at $56,258 on 11-3-1997 56,238 56,238
Total Short-Term Securities (cost $ 2,603,050) 2,603,050
Total Investments (99.5%) (cost $ 24,398,845) 26,995,529
Other Assests in Excess of Liabilities (0.5%) 130,702
Net Assets (100.0%) $27,126,231
October 31, 1997
SCHEDULE OF INVESTMENTS
BALANCED PORTFOLIO
Description Shares Value
COMMON STOCK (54.3%)
Basic Materials (1.6%)
Chemicals
Imperial Chemical Industries PLC + 4,927 $73,386
Solutia, Inc. 9,200 203,550
276,936
Consumer, Cyclical (8.8%)
Airlines (0.1%)
Ryanair Holdings PLC ADR * 400 10,000
Auto Parts and Equipment (0.7%)
Federal-Mogul Corp. 3,000 126,938
Consumer Electronics (0.5%)
Electrolux AB + 1,143 94,412
Entertainment (4.1%)
Bally Total Fitness Holding Corp. * 4,750 84,313
Carnival Corp. 3,300 160,050
Royal Caribbean Cruises, Ltd. 7,825 363,373
Steinway Musical Instruments, Inc. * 4,475 106,281
714,017
Household Products (0.2%)
Asko OY Class A + 1,391 26,279
Publishing (0.3%)
Meredith Corp. 1,700 57,906
Retailers - Apparel (0.2%)
TJX Companies, Inc. 950 28,144
Retailers - Broadline (2.7%)
Dayton Hudson Corp. 3,650 229,266
Family Dollar Stores, Inc. 3,025 71,088
Fred Meyer, Inc. * 1,650 47,128
Price / Costco, Inc. * 3,475 133,787
481,269
Consumer, Non-Cyclical (3.5%)
Food - Other (0.6%)
Unilever NV ADR 2,000 106,750
Pharmaceuticals (2.9%)
Pfizer, Inc. 2,925 206,944
SmithKline Beecham PLC ADR 1,050 50,006
Warner-Lambert Company, Inc. 1,700 243,419
500,369
Energy (8.8%)
Oil Companies - Major (0.7%)
Burlington Resources, Inc. 1,075 52,608
Royal Dutch Petroleum Company 1,300 68,412
121,020
Oil Drilling (2.6%)
Pioneer Natural Resources Company 3,125 125,195
Santa Fe International Corp. 4,850 238,560
Transocean Offshore, Inc. 1,800 97,200
460,955
Oilfield Equipment and Services (5.5%)
Camco International, Inc. 3,425 247,456
Halliburton Company 5,375 320,484
Schlumberger, Ltd. 2,075 181,563
Smith International, Inc. * 2,750 209,688
959,191
Financial (11.5%)
Banks (5.4%)
Bank of New York Company, Inc. 1,350 63,534
Barclays PLC + 9,166 231,279
Chester Bancorp, Inc. 1,625 30,469
Community Financial Corp. 4,000 68,000
FSF Financial Corp. 1,100 21,037
First Defiance Financial Corp. 1,825 28,972
First Savings Bancorp, Inc. 1,175 27,319
Home Bancorp Elgin, Inc. 3,400 59,712
Lloyds TSB Group PLC + 17,351 211,780
Northern Trust Corp. 775 45,338
Star Banc Corp 3,200 157,000
TCF Financial Corp. 1 33
944,473
Diversified (1.3%)
FirstSpartan Financial Corp. 4,100 149,650
HealthCare Financial Partners, Inc. * 2,300 79,350
Tele-Communications TCI Ventures Group * 0 2
229,002
Insurance (1.5%)
Berkley Corp. 1,312 53,956
Liberty Corp. 700 29,969
Sumitomo Marine & Fire Insurance Company + 9,000 60,015
Tokio Marine & Fire Insurance Company + 2,000 19,955
UNUM Corp. 1,975 96,281
260,176
Savings & Loans (2.2%)
Calumet Bancorp, Inc. * 850 42,925
Citizens First Financial Corp. * 4,000 73,500
Empire Federal Bancorp, Inc. 4,000 66,000
Flushing Financial Corp. 1,525 33,169
Little Falls Bancorp, Inc. 3,000 54,750
Park Bancorp, Inc. * 3,000 51,750
River Valley Bancorp 4,000 65,000
387,094
Securities Brokers (1.1%)
Charles Schwab Corp. 5,587 190,656
Industrial (8.8%)
Containers and Packaging (0.3%)
Sealed Air Corp. * 1,025 52,852
Diversified (3.8%)
Minnesota Mining & Manufacturing Company 3,025 276,788
Monsanto Company 2,750 117,562
Parker Hannifin Corp. 1,537 64,266
Westinghouse Electric Corp. 2,950 77,991
Zellweger Luwa AG + * 198 136,663
673,270
Electronic Components and Equipment (3.6%)
American Power Conversion Corp. * 2,800 76,300
Dionex Corp. * 8,000 399,000
Pittway Corp. Class A 512 31,904
Siebe PLC + 6,650 127,127
634,331
Other Industrial Services (1.1%)
Robert Half International, Inc. * 2,700 110,531
Roper Industries, Inc. 3,050 81,397
191,928
Technology (7.8%)
Aerospace/Defense (0.4%)
Doncasters PLC ADR * 2,600 70,038
Communications (0.9%)
Cisco Systems, Inc. * 2,000 164,062
Computers (1.5%)
Compaq Computer Corp. 1,775 113,156
Dell Computer Corp. * 1,775 142,222
255,378
Diversified (1.5%)
Philips Electronics NV + 1,450 $113,112
Philips Electronics NV ADR 200 15,675
Tele Communications, Inc. Class A * 5,802 133,082
261,869
Industrial Technology (0.5%)
Pfeiffer Vacuum Technology SpA ADR * 2,825 91,813
Semiconductors (0.5%)
Intel Corp. 1,200 92,400
Software (2.5%)
Cadence Design Systems, Inc. 1,925 102,506
Microsoft Corp. * 1,350 175,500
Parametric Technology Corp. * 3,750 165,468
443,474
Utilities (3.5%)
Insurance (2.8%)
Schweizerische Lebensversicherungs und Rentenanstalt + 740 499,178
Telephone (0.7%)
Cincinnati Bell, Inc. 4,600 124,200
Total Common Stock (cost $ 8,176,395) 9,530,380
CONVERTIBLE PREFERRED STOCK (3.9%)
Financial (1.2%)
Securities Brokers
Salomon, Inc. 4,020 217,080
Industrial (0.7%)
Transportation Equipment
CNF Transportation, Inc. Series A 2,025 128,588
Utilities (2.0%)
Electric
Houston Industries, Inc. 6,275 343,556
Total Convertible Preferred Stock (cost $ 635,515) 689,224
Description Principal Value
CONVERTIBLE CORPORATE BONDS (1.0%)
Energy (1.0%)
Oil Drilling
Diamond Offshore Drilling, Inc.
3.750% 2-15-2007 (cost $ 148,535) $114,000 184,822
NON-CONVERTIBLE CORPORATE BONDS (13.4%)
Consumer, Cyclical (4.0%)
Entertainment (2.4%)
Royal Caribbean Cruises, Ltd. 7.000% 10-15-2007 300,000 301,047
Walt Disney Company 6.375% 3-30-2001 120,000 121,350
422,397
Retailers - Broadline (1.6%)
Sears Roebuck Acceptance Corp. 6.500% 6-15-2000 275,000 277,406
Financial (7.9%)
Banks (3.4%)
Bank of Boston Corp. 6.625% 12-1-2005 200,000 200,000
First Nationwide Holdings, Inc. 9.125% 1-15-2003 150,000 155,625
ITT Promedia, Inc. 144A 9.125% 9-15-2007 @ D 410,000 239,648
595,273
Diversified (4.5%)
Associates Corp. of North America 5.600% 1-15-2001 400,000 395,000
International Lease Finance Corp. 5.750% 12-15-1999 400,000 398,000
793,000
Industrial (0.9%)
Diversified
Dade International, Inc. 11.125% 5-1-2006 $145,000 $161,313
Technology (0.6%)
Aerospace-Defense
Lockheed Martin Corp. 6.550% 5-15-1999 100,000 101,000
Total Non-Convertible Corporate Bonds (cost $ 2,311,837) 2,350,389
LONG-TERM GOVERNMENT BONDS (23.6%)
United States Government Securities
Treasury Notes
6.125% 5-15-1998 100,000 100,341
6.375% 5-15-1999 900,000 909,297
6.250% 5-31-1999 400,000 403,544
6.000% 6-30-1999 150,000 150,852
5.875% 11-15-1999 200,000 200,730
6.000% 8-15-2000 575,000 579,606
5.625% 2-28-2001 200,000 199,232
6.625% 4-30-2002 500,000 515,980
5.750% 10-31-2002 350,000 352,450
6.625% 5-15-2007 300,000 315,261
6.125% 8-15-2007 400,000 408,704
Total Long-Term Government Bonds (cost $ 4,090,154) 4,135,997
SHORT-TERM SECURITIES (2.3%)
Commercial Paper
Household Finance Company
5.680% 11-3-1997 (cost $ 399,874) 400,000 399,874
Total Investments (98.5%) (cost $ 15,762,310) 17,290,686
Notional
Amount Description Value
UNREALZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (-0.2%) @
B British Pound 11-5-1997 Sell 33,648 $ (127)
B British Pound 11-6-1997 Sell 16,191 (135)
B British Pound 2-11-1998 Sell 135,000 (4,497)
B British Pound 2-18-1998 Sell 110,000 (4,720)
B British Pound 2-18-1998 Buy 110,000 2,290
B British Pound 2-25-1998 Sell 125,000 (11,005)
B British Pound 2-25-1998 Buy 40,000 2,801
B British Pound 3-4-1998 Sell 35,000 (2,350)
B British Pound 3-4-1998 Buy 15,000 1,340
B British Pound 5-6-1998 Sell 100,000 (5,464)
D German Deutschemark 3-4-1998 Sell 230,000 (6,536)
D German Deutschemark 3-4-1998 Buy 230,000 7,040
G Dutch Guilder 11-4-1997 Sell 188,577 435
G Dutch Guilder 3-5-1998 Sell 700,000 (20,287)
G Dutch Guilder 3-5-1998 Buy 700,000 15,717
J Japanese Yen 11-4-1997 Sell 1,250,810 (28)
J Japanese Yen 11-5-1997 Sell 1,228,235 (20)
L Italian Lira 11-4-1997 Sell 54,108,483 (27)
L Italian Lira 11-5-1997 Sell 66,529,716 (121)
M Finnish Markka 11-3-1997 Sell 25,349 (14)
M Finnish Markka 11-4-1997 Sell 64,908 43
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (25,664)
Other Assets in Excess of Liabilities (1.7%) 292,526
Net Assets (100.0%) $ 17,557,548
October 31, 1997
SCHEDULE OF INVESTMENTS
FLEXIBLE INCOME PORTFOLIO
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (86.0%)
Basic Materials (3.1%)
Steel
Weirton Steel Corp. 11.375% 7-1-2004 $490,000 $529,200
Consumer, Cyclical (11.0%)
Broadcasting (4.8%)
Time Warner, Inc. 8.180% 8-15-2007 750,000 817,500
Entertainment (0.0%)
United Artists Theatres 9.300% 7-1-2015 1 1
Home Furnishings (3.9%)
Selmer Company, Inc. 11.000% 5-15-2005 600,000 661,500
Publishing (0.9%)
Digital Television Services, LLC 12.500% 8-1-2007 150,000 161,250
Retailers - Specialty (1.4%)
Zale Corp. 144A 8.500% 10-1-2007 250,000 246,875
Consumer, Non-Cyclical (12.5%)
Beverages (2.3%)
Dr. Pepper Bottling Company of Texas, Inc.
0.000% 2-15-2003 400,000 399,000
Consumer Services (1.6%)
Service Corp. International 7.700% 4-15-2009 250,000 271,250
Food - Other (3.0%)
Ralston Purina Company 7.875% 6-15-2025 475,000 520,719
Food Retailers (0.7%)
Star Markets Company, Inc. 13.000% 11-1-2004 100,000 113,750
Healthcare (3.2%)
Tenet Healthcare Corp. 10.125% 3-1-2005 500,000 548,750
Household Products (1.7%)
Sherwin-Williams Company 6.850% 2-1-2007 290,000 300,512
Financial (30.6%)
Banks (14.4%)
Anchor Bancorp, Inc. 8.938% 7-9-2003 600,000 624,750
First National Bank of Boston, Inc.
7.375% 9-15-2006 300,000 316,500
First Nationwide Holding Corp. 10.625% 10-1-2003 250,000 273,750
HUBCO, Inc. 8.200% 9-15-2006 300,000 322,500
ITT Promedia, Inc. 144A 9.125% 9-15-2007 300,000 175,352
Standard Federal Bancorp, Inc. 7.750% 7-17-2006 250,000 267,813
Swiss Bank Corp. 7.000% 10-15-2015 500,000 506,875
2,487,540
Diversified (10.8%)
Ford Motor Credit Company 6.750% 8-15-2008 750,000 762,188
Intertek Finance PLC ADR 10.250% 11-1-2006 500,000 525,000
Lifestyle Furnishings, Inc. 10.875% 8-1-2006 400,000 446,000
MESA, Inc. 0.000% 7-1-2006 150,000 120,375
1,853,563
Insurance (5.4%)
Delphi Financial Group, Inc. 8.000% 10-1-2003 500,000 515,625
Orion Capital Corp. 7.250% 7-15-2005 400,000 413,500
929,125
Industrial (17.2%)
Containers and Packaging (1.5%)
Pathmark Stores, Inc. 7.850% 5-15-2004 250,000 260,000
Diversified (12.9%)
Consolidated Cigar Acquisition Corp.
10.500% 3-1-2003 $390,000 $405,600
Isle of Capri Black Hawk, LLC 13.000% 8-31-2004 525,000 531,562
The Pantry, Inc. 10.250% 10-15-2007 350,000 349,125
USG Corp. 8.500% 8-1-2005 225,000 241,312
USG Corp. Series B 9.250% 9-15-2001 400,000 429,500
Unifrax Investment Corp. 10.500% 11-1-2003 250,000 258,750
2,215,849
Railroads (1.5%)
CSX Corp. 7.250% 5-1-2004 250,000 260,625
Transportation Equipment (1.3%)
Ryder Trucks, Inc. 10.000% 12-1-2006 225,000 224,437
Technology (9.0%)
Advanced Medical Devices (1.5%)
Alaris Medical Systems, Inc. 9.750% 12-1-2006 250,000 261,250
Communications (2.4%)
Talton Holdings, Inc. 144A 11.000% 6-30-2007 400,000 424,000
Computers (1.9%)
International Business Machines Corp.
7.500% 6-15-2013 300,000 323,625
Diversified (3.2%)
Neodata Services, Inc. 12.000% 5-1-2003 500,000 545,625
Utilities (2.6%)
Electric
El Paso Electric Company 9.400% 5-1-2011 400,000 444,500
Total Non-Convertible Corporate Bonds (cost $ 14,055,544) 14,800,447
CONVERTIBLE CORPORATE BONDS (2.3%)
Consumer, Cyclical
Broadcasting
Pegasus Media & Communications, Inc.
12.500% 7-1-2005 (cost $ 350,000) 350,000 396,375
LONG-TERM GOVERNMENT BONDS (5.8%)
United States Government Securities
Treasury Notes
6.625% 5-15-2007 (cost $ 974,744) 950,000 998,326
Description Shares Value
NON-CONVERTIBLE PREFERRED STOCK (0.6%)
Financial
Banks
Chevy Chase Bank (cost $ 116,375) 3,500 $106,750
Description Principal Value
SHORT-TERM SECURITIES (2.8%)
Commercial Paper
Household Finance Company
5.680% 11-3-1997 (cost $ 479,849) $480,000 479,849
Total Investments (97.5%) (cost $ 15,976,512) 16,781,747
Other Assets in Excess of Liabilities (2.5%) 424,226
Net Assets (100.0%) $17,205,973
October 31, 1997
SCHEDULE OF INVESTMENTS
INCOME PLUS PORTFOLIO
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (86.8%)
Basic Materials (4.0%)
Precious Metals
Inco, Ltd. 9.600% 6-15-2022 $2,500,000 $2,851,950
Consumer, Cyclical (26.5%)
Airlines (2.1%)
Piedmont Aviation, Inc. 10.100% 5-13-2007 1,048,000 1,085,990
USAir, Inc. 10.800% 1-1-2005 400,000 426,500
1,512,490
Auto Parts and Equipment (3.6%)
Mark IV Industries, Inc. 8.750% 4-1-2003 2,430,000 2,551,500
Broadcasting (1.5%)
Walt Disney Company 144A 2.000% 3-1-2000 1,000,000 1,080,000
Casinos (4.3%)
Circus Circus Enterprises, Inc. 6.450% 2-1-2006 2,000,000 1,930,220
Majestic Star LLC 12.750% 5-15-2003 1,000,000 1,085,000
3,015,220
Clothing/Fabric (2.2%)
Dyersburg Corp. 9.750% 9-1-2007 1,500,000 1,545,000
Home Construction (1.6%)
M.D.C. Holdings, Inc. 11.125% 12-15-2003 1,000,000 1,102,500
Publishing (5.3%)
Golden Books Publishing, Inc. 7.650% 9-15-2002 2,250,000 2,160,000
News America Holdings, Inc. 8.625% 2-1-2003 1,500,000 1,623,660
3,783,660
Retailers - Broadline (4.5%)
Dayton Hudson Corp. 8.500% 12-1-2022 2,000,000 2,151,260
Kmart Corp. 8.125% 12-1-2006 1,000,000 995,000
3,146,260
Retailers - Specialty (1.4%)
Specialty Retailers, Inc. 144A 9.000% 7-15-2007 1,000,000 1,022,500
Consumer, Non-Cyclical (9.5%)
Consumer Services (2.8%)
Hertz Corp. 6.000% 1-15-2003 2,000,000 1,967,960
Food Retailers (4.6%)
American Stores Company 9.125% 4-1-2002 1,000,000 1,108,970
Gt Atlantic & Pacific Tea, Inc. 7.700% 1-15-2004 2,000,000 2,115,700
3,224,670
Medical Supplies (2.1%)
C. R. Bard, Inc. 6.700% 12-1-2026 1,500,000 1,520,625
Energy (4.5%)
Oil Drilling (3.0%)
Louisiana Land Exploration Company
7.625% 4-15-2013 2,000,000 2,152,700
Oilfield Equipment and Services (1.5%)
McDermott, Inc. 9.375% 3-15-2002 1,000,000 1,060,000
Financial (23.3%)
Banks (7.4%)
Bank of Boston Corp. 8.250% 12-15-2026 3,000,000 3,178,410
Peoples Bank - Bridgeport CT 7.200% 12-1-2006 2,000,000 2,043,200
5,221,610
Diversified (11.4%)
BAT Capital Corp. 6.500% 11-24-2003 2,000,000 2,001,340
Chase Capital Corp. 6.269% 3-1-2027 3,000,000 2,883,240
First Security Cptl Trust Corp. 8.410% 12-15-2026 2,000,000 2,144,800
GNS Financial Corp. 9.250% 3-15-2003 1,000,000 1,051,070
8,080,450
Insurance (1.5%)
American Financial Group, Inc. 10.625% 4-15-2000 $1,000,000 $1,093,030
Securities Brokers (3.0%)
Lehman Brothers, Inc. 7.625% 6-1-2006 2,000,000 2,115,700
Industrial (10.3%)
Air Freight (1.5%)
Federal Express Corp. 9.625% 10-15-2019 1,000,000 1,076,760
Containers and Packaging (1.6%)
Stone Container Corp. 12.580% 8-1-2016 1,000,000 1,090,000
Diversified (1.4%)
Bucyrus International, Inc. 9.750% 9-15-2007 1,000,000 1,005,000
Other Industrial Services (1.5%)
Figgie International, Inc. 9.875% 10-1-1999 1,000,000 1,047,500
Railroads (1.5%)
CSX Corp. 144A 7.250% 5-1-2027 1,000,000 1,061,250
Transportation Equipment (2.8%)
AAR Corp. 7.250% 10-15-2003 2,000,000 2,011,520
Technology (1.5%)
Semiconductors
Fairchild Semiconductor Corp. 144A
10.125% 3-15-2007 1,000,000 1,055,000
Utilities (7.2%)
Electric (5.7%)
El Paso Electric Company
8.250% 2-1-2003 1,000,000 1,050,400
8.900% 2-1-2006 500,000 542,590
First PV Funding Corp. 10.300% 1-15-2014 868,000 920,080
Texas Utilities Electric Company 6.750% 4-1-20031,500,000 1,523,580
4,036,650
Telephone (1.5%)
McLeodUSA, Inc. 9.250% 7-15-2007 1,000,000 1,022,500
Total Non-Convertible Corporate Bonds
(cost $ 58,472,338) 61,454,005
Description Shares Value
CONVERTIBLE PREFERRED STOCK (6.6%)
Financial (2.9%)
Real Estate
Duke Realty Investment, Inc. 40,000 $2,087,600
Technology (3.7%)
Communications
Time Warner, Inc. 144A 2,319 2,646,559
Total Convertible Preferred Stock
(cost $ 4,324,870) 4,734,159
Description Principal Value
SHORT-TERM SECURITIES (4.7%)
Commercial Paper
Real Estate (3.2%)
Banc One Funding5.650% 11-5-1997
(cost $ 3,297,928) $3,300,000 3,297,928
Total Investments (98.1%) (cost $ 66,095,136) 69,486,092
Other Assests in Excess of Liabilities (1.9%) 1,367,197
Net Assets (100.0%) $70,853,289
October 31, 1997
SCHEDULE OF INVESTMENTS
TAX-EXEMPT PORTFOLIO **
Description Principal Value
MUNICIPAL BONDS (95.9%)
Alabama (4.3%)
City of Huntsville, Public Building Authority,
Revenue Bonds, Series 1996A,
6.000%, 10-1-2025, AAA/Aaa $1,000,000 $1,063,710
Alaska (4.1%)
Valdez Alaska Marine Project, Revenue Bonds,
Series A, 5.850%, 8-1-2025, AA/Aa2 1,000,000 1,013,560
California (0.3%)
Los Angeles, Convention and Exhibition
Center, Certificates of Participation,
9.000%, 12-1-2020, AAA/Aaa 50,000 65,580
Florida (4.1%)
City of Lakeland Electric and Water Agency,
Revenue Bonds, 5.625%, 10-1-2036, AA-/Aa2 1,000,000 1,018,320
Illinois (12.7%)
Calumet City, General Obligation Bonds,
Series B, 5.350%, 1-1-2017, NR/Aaa 1,000,000 1,002,020
McHenry County Community School District,
General Obligation Bonds, Series 1996
5.850%, 1-1-2016, AAA/Aaa 1,000,000 1,045,600
West Chicago, IDR-Leggett and Platt, Inc.
Project, Revenue Bonds, Series 1994,
6.900%, 9-1-2024, A/NR 1,000,000 1,079,530
3,127,150
Indiana (12.5%)
City of Petersburg, Pollution Control,
Revenue Bonds, Series 1977,
5.500%, 10-1-2023, AA-/Aa2 1,000,000 990,410
Indiana Transportation Financing Authority
Revenue Bonds, Series A,
6.250%, 11-1-2016, A/A2 1,000,000 1,064,370
Vigo County Middle School Building Corp.
Revenue Bonds, 5.800%, 7-1-2013, NR/A3 1,000,000 1,028,930
3,083,710
Iowa (8.6%)
Iowa Finance Authority, Drake University
Project, Revenue Bonds,
5.400%, 12-1-2016, AAA/Aaa 1,000,000 1,007,680
Iowa State Certificate of Participation,
Revenue Bonds, Series 1992A,
6.500%, 7-1-2006, AAA/Aaa 1,000,000 1,101,290
2,108,970
Kentucky (4.2%)
Jefferson County, Pollution Control,
Revenue Bonds, Series A,
5.900%, 4-15-2023, AA/Aa2 1,000,000 1,041,800
Massachusetts (4.0%)
Massachusetts State Turnpike Authority,
Revenue Bonds, Series A,
5.125%, 1-1-2023, AAA/Aaa 1,000,000 971,700
Michigan (3.2%)
Michigan State Building Authority, Revenue
Refunding Special Sinking Fund, Series
1992A, 6.800%, 10-1-2021, AA-/A1 730,000 792,291
Nebraska (4.5%)
Nebraska Higher Education Loan Program,
Revenue AMT Bonds, Series 1992A-6,
6.950%, 6-1-2008, NR/A2 $1,000,000 $1,110,860
Nevada (4.3%)
Municipal Bond Authority, Project No. 52,
Series A, 6.000%, 5-15-2024, AA/Aa2 1,000,000 1,045,760
Ohio (4.2%)
Franklin County Hospital, Holy Cross Health
Systems Corp., Revenue Bonds,
5.800%, 6-1-2016, AA/Aa3 1,000,000 1,034,650
Pennsylvania (0.0%)
Pennsylvania Housing Finance Agency,
Multi-Family Mortgage Revenue
Bonds, Series 1985A,
9.375%, 8-1-2028, AAA/Aa2 5,000 5,093
Rhode Island (4.2%)
Rhode Island Clean Water Financing Agency
Revenue Bonds, 5.800%, 9-1-2022, AAA/Aaa 1,000,000 1,024,010
Texas (4.1%)
Carroll Independent School District,
General Obligation Bonds,
5.625%, 2-15-2019, AAA/Aaa 1,000,000 1,012,120
Utah (4.2%)
Salt Lake County, Municipal Building
Authority, Revenue Bonds,
5.850%, 10-1-2017, A/A1 1,000,000 1,024,660
Virginia (4.0%)
City of Norfolk Water Systems, Revenue Bonds,
Series 1995, 5.375%, 11-1-2023, AAA/Aaa 1,000,000 992,390
Washington (4.1%)
City of Seattle Water Systems, Revenue Bonds,
5.625%, 8-1-2026 AAA/Aaa 1,000,000 1,016,680
Wyoming (4.3%)
Wyoming State Farm Loan Board, Capital
Facilities Revenue Bonds,
5.750%, 10-1-2020, AA-/NR 1,000,000 1,055,140
Total Municipal Bonds (cost $ 22,672,158) 23,608,154
SHORT-TERM SECURITIES (2.8%)
Georgia (1.2%)
Municipal Electric Authority of Georgia,
Revenue Bonds, Put Bonds - Weekly, Series B
3.600%, 6-1-2020, AA/Aa3 300,000 300,000
Illinois (1.6%)
City of Chicago, General Obligation Bonds
Put Bonds - Weekly, Series B
3.800%, 1-1-2012, AA-/Aa3 400,000 400,000
Total Short-Term Securities (cost $ 700,000) 700,000
Total Investments (98.7%) (cost $ 23,372,158) 24,308,154
Other Assets in Excess of Liabilities (1.3%) 309,858
Net Assets (100.0%) $24,618,012
October 31, 1997
SCHEDULE OF INVESTMENTS
NOTES TO SCHEDULE OF INVESTMENTS
ADR or GDR after the name of a security represents American Depository
Receipts or Global Depository Receipts, respectively, representing
ownership of foreign securities on deposit with a domestic custodian.
144A after the name of a security represents a security exempt from
registration under 144A of the Securities Act of 1933. These securities
may be resold as transactions exempt from registration, normally to
qualified institutional buyers.
* Presently non-income producing.
+ Foreign securities.
@ Notional amount of forward foreign currency contracts and principal
amount of foreign bonds are denominated in the indicated currency:
A-Austrian Schilling; B-British Pound; D-German Deutschemark;
F-French Franc; G-Dutch Guilder; H-Hong Kong Dollar; J-Japanese
Yen; K-Swedish Krona; L-Italian Lira; M-Finnish Markka;
N-Norwegian Krone; R-South African Rand; S-Swiss Franc.
** Ratings indicated are by Standard and Poor's/Moody's, respectively,
and are unaudited; NR: not rated by this service.
# Affiliated company.
See Note 1 in the Notes to Financial Statements for security valuation,
futures, forward foreign currency contracts and other derivative
transactions as well as other significant accounting policies.
See Note 5 in the Notes to Financial Statements for cost and unrealized
appreciation and depreciation of investments for Federal income tax
purposes.
*** Aggressive Growth Portfolio
Collateralized by $2,720,000 principal of U.S. Treasury Notes 6.125%,
due 5-15-1998; market value and accrued interest aggregated $2,805,000
for this collateral at October 31, 1997.
*** Growth Portfolio
Collateralized by $25,000 principal of U.S. Treasury Notes 6.250%,
due 6-30-1998; market value and accrued interest aggregated $25,639
for this collateral at October 31, 1997.
*** C.A.S.E. Portfolio
Collateralized by $1,280,000 principal of U.S. Treasury Notes 6.125%,
due 3-31-1998; market value and accrued interest aggregated $1,320,000
for this collateral at October 31, 1997.
*** Strategic Total Return Portfolio
Collateralized by $70,000 principal of U.S. Treasury Notes 5.125%,
due 11-30-1998; market value and accrued interest aggregated $71,150
for this collateral at October 31, 1997.
*** Tactical Asset Allocation Portfolio
Collateralized by $50,000 principal of U.S. Treasury Bonds 7.500%,
due 11-15-2016; market value and accrued interest aggregated $58,519
for this collateral at October 31, 1997.
October 31, 1997
STATEMENTS OF ASSETS AND LIABILITIES
All numbers (except per share amounts) in thousands
Aggressive International
Growth Equity
Assets:
Investment securities, at market value $41,235 $4,014
Cash (1) 1 26
Receivables:
Investment securities sold 952 19
Shares of beneficial interest sold 241 14
Interest - -
Dividends 7 6
Due from investment adviser - 31
Forward foreign currency contracts - 2
Other 4 2
42,440 4,114
Liabilities:
Accounts payable:
Investment securities purchased 2,679 18
Shares of beneficial interest redeemed 33 3
Accrued liabilities:
Management and advisory fees 46 -
Distribution fees 17 2
Transfer agent fees and expenses 21 2
Forward foreign currency contracts - 3
Due to Custodian - -
Other 36 22
2,832 50
Net Assets $39,608 $4,064
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized $31,634 $4,144
Undistributed net investment income (loss)
or (distribution in excess of net
investment income) (4) 21
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions 1,259 (31)
Net unrealized appreciation (depreciation) of
investments, futures contracts and on
translation of assets and liabilities in
foreign currencies 6,719 (70)
Total net assets $39,608 $4,064
Investment securities, at cost $34,516 $4,083
Shares Of Beneficial Interest Outstanding:
Class A shares 1,666 291
Class B shares 263 56
Class C shares 186 38
Class T shares (2)
Net Asset Value Per Share:
Class A shares $18.77 $10.57
Class B shares $18.58 $10.52
Class C shares $18.61 $10.53
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $19.86 $11.19
Class T shares (2)
All numbers (except per share amounts) in thousands
Capital
Appreciation Global
Assets:
Investment securities, at market value $24,812 $287,285
Cash (1) 68 161
Receivables:
Investment securities sold 182 6,602
Shares of beneficial interest sold 720 3,487
Interest - -
Dividends 16 239
Due from investment adviser - -
Forward foreign currency contracts 3 1,297
Other 5 390
25,806 299,461
Liabilities:
Accounts payable:
Investment securities purchased 438 5,789
Shares of beneficial interest redeemed 8 94
Accrued liabilities:
Management and advisory fees 4 81
Distribution fees 10 127
Transfer agent fees and expenses 15 91
Forward foreign currency contracts 66 2,667
Due to Custodian - -
Other 43 770
584 9,619
Net Assets $25,222 $289,842
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized $20,985 $227,520
Undistributed net investment income (loss) or
(distribution in excess of net investment income) (2) (16)
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions 725 26,581
Net unrealized appreciation (depreciation) of
investments, futures contracts and on translation
of assets and liabilities in foreign currencies 3,514 35,757
Total net assets $25,222 $289,842
Investment securities, at cost $21,235 $250,215
Shares Of Beneficial Interest Outstanding:
Class A shares 1,296 9,212
Class B shares 182 1,880
Class C shares 111 1,168
Class T shares (2)
Net Asset Value Per Share:
Class A shares $15.90 $23.74
Class B shares $15.74 $23.38
Class C shares $15.77 $23.30
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $16.83 $25.12
Class T shares (2)
All numbers (except per share amounts) in thousands
Growth C.A.S.E.
Assets:
Investment securities, at market value $1,243,705 $8,796
Cash (1) - 161
Receivables:
Investment securities sold 3,334 -
Shares of beneficial interest sold 2,477 123
Interest 4 -
Dividends 734 4
Due from investment adviser - 38
Forward foreign currency contracts 347 -
Other 106 2
1,250,707 9,124
Liabilities:
Accounts payable:
Investment securities purchased 281 691
Shares of beneficial interest redeemed 950 3
Accrued liabilities:
Management and advisory fees 148 -
Distribution fees 220 5
Transfer agent fees and expenses 181 9
Forward foreign currency contracts 2,260 -
Due to Custodian 1,390 -
Other 263 2
5,693 739
Net Assets $1,245,014 $8,384
Net Assets Consist Of:
Shares of beneficial interest, unlimited shares
authorized $734,950 $7,258
Undistributed net investment income (loss) or
(distributions in excess of net investment income) 713 (1)
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions 163,620 559
Net unrealized appreciation (depreciation) of
investments, futures contracts and on translation
of assets and liabilities in foreign currencies 345,731 568
Total net assets $1,245,014 $8,384
Investment securities, at cost $896,065 $8,228
Shares Of Beneficial Interest Outstanding:
Class A shares 24,541 304
Class B shares 531 190
Class C shares 581 158
Class T shares (2) 23,833
Net Asset Value Per Share:
Class A shares $25.04 $12.90
Class B shares $24.55 $12.85
Class C shares $24.62 $12.86
Class T shares (2) $25.31
Maximum Offering Price Per Share (3):
Class A shares $26.50 $13.65
Class T shares (2) $27.66
All numbers (except per share amounts) in thousands
Value Strategic
Equity Total Return
Assets:
Investment securities, at market value $9,670 $30,340
Cash (1) 3 1
Receivables:
Investment securities sold - 93
Shares of beneficial interest sold 91 216
Interest - 155
Dividends 6 27
Due from investment adviser 13 -
Forward foreign currency contracts - -
Other 1 3
9,784 30,835
Liabilities:
Accounts payable:
Investment securities purchased - -
Shares of beneficial interest redeemed 3 72
Accrued liabilities:
Management and advisory fees - 45
Distribution fees 5 14
Transfer agent fees and expenses 4 14
Forward foreign currency contracts - -
Due to Custodian - -
Other 10 31
22 176
Net Assets $9,762 $30,659
Net Assets Consist Of:
Shares of beneficial interest, unlimited shares
authorized $9,048 $25,334
Undistributed net investment income (loss) or
(distribution in excess of net investment income) 4 70
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions 36 1,224
Net unrealized appreciation (depreciation) of
investments, futures contracts and on translation
of assets and liabilities in foreign currencies 674 4,031
Total net assets $9,762 $30,659
Investment securities, at cost $8,997 $26,310
Shares Of Beneficial Interest Outstanding:
Class A shares 453 1,360
Class B shares 244 296
Class C shares 138 273
Class T shares (2)
Net Asset Value Per Share:
Class A shares $11.71 $15.91
Class B shares $11.67 $15.89
Class C shares $11.67 $15.90
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $12.39 $16.84
Class T shares (2)
All numbers (except per share amounts) in thousands
Tactical Asset
Allocation Balanced
Assets:
Investment securities, at market value $26,996 $17,291
Cash (1) - 7
Receivables:
Investment securities sold - 572
Shares of beneficial interest sold 127 145
Interest 103 119
Dividends 18 7
Due from investment adviser - -
Forward foreign currency contracts - 30
Other 2 5
27,246 18,176
Liabilities:
Accounts payable:
Investment securities purchased - 503
Shares of beneficial interest redeemed 9 4
Accrued liabilities:
Management and advisory fees 48 3
Distribution fees 16 7
Transfer agent fees and expenses 6 8
Forward foreign currency contracts - 55
Due to Custodian - -
Other 41 38
120 618
Net Assets $27,126 $17,558
Net Assets Consist Of:
Shares of beneficial interest, unlimited shares
authorized $22,915 $14,316
Undistributed net investment income (loss) or
(distribution in excess of net investment income) 62 23
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions 1,552 1,715
Net unrealized appreciation (depreciation) of
investments, futures contracts and on translation
of assets and liabilities in foreign currencies 2,597 1,504
Total net assets $27,126 $17,558
Investment securities, at cost $24,399 $15,762
Shares Of Beneficial Interest Outstanding:
Class A shares 932 935
Class B shares 740 180
Class C shares 386 109
Class T shares (2)
Net Asset Value Per Share:
Class A shares $13.19 $14.34
Class B shares $13.18 $14.33
Class C shares $13.18 $14.33
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $13.96 $15.17
Class T shares (2)
All numbers (except per share amounts) in thousands
Flexible Income
Income Plus
Assets:
Investment securities, at market value $16,782 $69,486
Cash (1) 9 74
Receivables:
Investment securities sold 85 -
Shares of beneficial interest sold 53 101
Interest 392 1,327
Dividends - -
Due from investment adviser - -
Forward foreign currency contracts - -
Other 1 6
17,322 70,994
Liabilities:
Accounts payable:
Investment securities purchased - -
Shares of beneficial interest redeemed 34 17
Accrued liabilities:
Management and advisory fees 16 36
Distribution fees 6 24
Transfer agent fees and expenses 19 16
Forward foreign currency contracts - -
Due to Custodian - -
Other 41 48
116 141
Net Assets $17,206 $70,853
Net Assets Consist Of:
Shares of beneficial interest, unlimited shares
authorized $17,036 $65,719
Undistributed net investment income (loss) or
(distribution in excess of net investment income) 54 308
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions (689) 1,434
Net unrealized appreciation (depreciation) of
investments, futures contracts and on translation
of assets and liabilities in foreign currencies 805 3,392
Total net assets $17,206 $70,853
Investment securities, at cost $15,977 $66,095
Shares Of Beneficial Interest Outstanding:
Class A shares 1,593 5,986
Class B shares 77 161
Class C shares 95 318
Class T shares (2)
Net Asset Value Per Share:
Class A shares $9.75 $10.96
Class B shares $9.75 $10.96
Class C shares $9.75 $10.96
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $10.24 $11.51
Class T shares (2)
All numbers (except per share amounts) in thousands
Tax-
Exempt
Assets:
Investment securities, at market value $24,308
Cash (1) 75
Receivables:
Investment securities sold -
Shares of beneficial interest sold 1
Interest 344
Dividends -
Due from investment adviser 5
Forward foreign currency contracts -
Other 2
24,735
Liabilities:
Accounts payable:
Investment securities purchased -
Shares of beneficial interest redeemed 51
Accrued liabilities:
Management and advisory fees -
Distribution fees 8
Transfer agent fees and expenses 17
Forward foreign currency contracts -
Due to Custodian -
Other 41
117
Net Assets $24,618
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized $23,359
Undistributed net investment income (loss)
or (distribution in excess of net investment
income) 40
Undistributed net realized gain (loss) from
investments, futures contracts and foreign
currency transactions 283
Net unrealized appreciation (depreciation) of
investments, futures contracts and on translation
of assets and liabilities in foreign currencies 936
Total net assets $24,618
Investment securities, at cost $23,372
Shares Of Beneficial Interest Outstanding:
Class A shares 1,985
Class B shares 32
Class C shares 78
Class T shares (2)
Net Asset Value Per Share:
Class A shares $11.75
Class B shares $11.74
Class C shares $11.75
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $12.34
Class T shares (2)
(1) International Equity cash balance includes foreign cash of $ 26 with a cost
of $ 25.
(2) Class T shares are not available to new investors; only existing Class T
shareholders may purchase additional Class T shares.
(3) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in the
Prospectus. Net asset value per share for Class B and Class C shares represents
offering price. The redemption price for class B equals net asset value less
any applicable contingent deferred sales charges.
The notes to the financial statements are an integral part of these statements.
For the year ended October 31, 1997
STATEMENTS OF OPERATIONS
All numbers in thousands Aggressive International
Growth Equity (1)
Investment Income:
Interest $59 $10
Dividends 196 27
Withholding taxes on foreign dividends (1) (4)
254 33
Expenses:
Management and advisory fees 324 18
Transfer agent fees and expenses 218 12
Custody and accounting fees and expenses 22 43
Registration fees 82 72
Trustees fees and expenses 6 -
Audit fees and expenses 11 5
Other 16 2
Subtotal 679 152
Distribution and service fees:
Class A 92 5
Class B 33 2
Class C 25 1
Less fees waived/reimbursed by the
investment adviser ..... (193) (128)
Net expenses ...... 636 32
Net investment income (loss) ...... (382) 1
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 3,842 (17)
Net realized (loss) on futures contracts ..... - -
Net realized gain (loss) from foreign
currency transactions ....... - 6
Net realized gain (loss) ........ 3,842 (11)
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 3,219 (69)
Futures contracts ........ - -
Translation of assets and liabilities denominated
in foreign currency ....... - (1)
Net unrealized appreciation (depreciation)
during the period ...... 3,219 (70)
Net gain (loss) on investments, futures contracts
and foreign currency .... 7,061 (81)
Net increase (decrease) in net assets resulting
from operations ........ $6,679 $(80)
All numbers in thousands Capital
Appreciation Global
Investment Income:
Interest ....... $78 $597
Dividends ....... 64 2,923
Withholding taxes on foreign dividends .... (4) (363)
138 3,157
Expenses:
Management and advisory fees ..... 239 2,224
Transfer agent fees and expenses .... 134 629
Custody and accounting fees and expenses ... 71 393
Registration fees ...... 82 110
Trustees fees and expenses ..... 4 25
Audit fees and expenses ....... 10 30
Other ......... 11 80
Subtotal 551 3,491
Distribution and service fees:
Class A ...... 68 643
Class B ....... 25 220
Class C ....... 18 151
Less fees waived/reimbursed by the
investment adviser ..... (193) -
Net expenses ...... 469 4,505
Net investment income (loss) ...... (331) (1,348)
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 871 23,432
Net realized (loss) on futures contracts ...... - (15)
Net realized gain (loss) from foreign
currency transactions ....... (93) 4,922
Net realized gain (loss) ........ 778 28,339
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 564 14,820
Futures contracts ........ - -
Translation of assets and liabilities denominated
in foreign currency ....... (10) (1,605)
Net unrealized appreciation (depreciation)
during the period ...... 554 13,215
Net gain (loss) on investments, futures contracts
and foreign currency .... 1,332 41,554
Net increase (decrease) in net assets resulting
from operations ........ $1,001 $40,206
All numbers in thousands
Growth C.A.S.E.
Investment Income:
Interest ....... $8,686 $27
Dividends ....... 9,906 54
Withholding taxes on foreign dividends .... (69) -
18,523 81
Expenses:
Management and advisory fees ..... 11,677 54
Transfer agent fees and expenses .... 2,811 33
Custody and accounting fees and expenses ... 257 13
Registration fees ...... 120 120
Trustees fees and expenses ..... 71 1
Audit fees and expenses ....... 79 8
Other ......... 477 2
Subtotal 15,492 231
Distribution and service fees:
Class A ...... 2,108 9
Class B ....... 93 16
Class C ....... 121 11
Less fees waived/reimbursed by the
investment adviser ..... - (150)
Net expenses ...... 17,814 117
Net investment income (loss) ...... 709 (36)
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 163,729 774
Net realized (loss) on futures contracts ...... - -
Net realized gain (loss) from foreign
currency transactions ....... 413 -
Net realized gain (loss) ........ 164,142 774
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 21,905 444
Futures contracts ........ - -
Translation of assets and liabilities denominated
in foreign currency ....... (2,327) -
Net unrealized appreciation (depreciation)
during the period ...... 19,578 444
Net gain (loss) on investments, futures contracts
and foreign currency .... 183,720 1,218
Net increase (decrease) in net assets resulting
from operations ........ $184,429 $1,182
All numbers in thousands Value Strategic
Equity (1) Total Return
Investment Income:
Interest ....... $38 $401
Dividends ....... 39 330
Withholding taxes on foreign dividends .... - (1)
77 730
Expenses:
Management and advisory fees ..... 41 224
Transfer agent fees and expenses .... 21 90
Custody and accounting fees and expenses ... 8 16
Registration fees ...... 72 78
Trustees fees and expenses ..... 1 3
Audit fees and expenses ....... 5 10
Other ......... 5 11
Subtotal 153 432
Distribution and service fees:
Class A ...... 7 58
Class B ....... 12 29
Class C ....... 6 26
Less fees waived/reimbursed by the
investment adviser ..... (105) (96)
Net expenses ...... 73 449
Net investment income (loss) ...... 4 281
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 36 1,228
Net realized (loss) on futures contracts ...... - -
Net realized gain (loss) from foreign
currency transactions ....... - -
Net realized gain (loss) ........ 36 1,228
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 674 2,713
Futures contracts ........ - -
Translation of assets and liabilities denominated
in foreign currency ....... - -
Net unrealized appreciation (depreciation)
during the period ...... 674 2,713
Net gain (loss) on investments, futures contracts
and foreign currency .... 710 3,941
Net increase (decrease) in net assets resulting
from operations ........ $714 $4,222
All numbers in thousands Tactical Asset
Allocation Balanced
Investment Income:
Interest ....... $560 $295
Dividends ....... 197 129
Withholding taxes on foreign dividends .... (4) (3)
753 421
Expenses:
Management and advisory fees ..... 220 134
Transfer agent fees and expenses .... 71 49
Custody and accounting fees and expenses ... 21 68
Registration fees ...... 95 77
Trustees fees and expenses ..... 3 1
Audit fees and expenses ....... 10 9
Other ......... 8 2
Subtotal 428 340
Distribution and service fees:
Class A ...... 37 37
Class B ....... 74 17
Class C ....... 38 11
Less fees waived/reimbursed by the
investment adviser ..... (99) (139)
Net expenses ...... 478 266
Net investment income (loss) ...... 275 155
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 1,555 1,721
Net realized (loss) on futures contracts ...... - -
Net realized gain (loss) from foreign
currency transactions ....... - 30
Net realized gain (loss) ........ 1,555 1,751
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 1,892 895
Futures contracts ........ - -
Translation of assets and liabilities denominated
in foreign currency ....... - (19)
Net unrealized appreciation (depreciation)
during the period ...... 1,892 876
Net gain (loss) on investments, futures contracts
and foreign currency .... 3,447 2,627
Net increase (decrease) in net assets resulting
from operations ........ $3,722 $2,782
All numbers in thousands Flexible Income
Income Plus
Investment Income:
Interest ....... $1,419 $5,502
Dividends ....... 13 355
Withholding taxes on foreign dividends .... - -
1,432 5,857
Expenses:
Management and advisory fees ..... 156 417
Transfer agent fees and expenses .... 49 86
Custody and accounting fees and expenses ... 36 36
Registration fees ...... 82 81
Trustees fees and expenses ..... 2 (2)
Audit fees and expenses ....... 26 21
Other ......... 5 12
Subtotal 356 651
Distribution and service fees:
Class A ...... 56 229
Class B ....... 6 13
Class C ....... 7 26
Less fees waived/reimbursed by the
investment adviser ..... (95) -
Net expenses ...... 330 919
Net investment income (loss) ...... 1,102 4,938
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 339 1,592
Net realized (loss) on futures contracts ...... (10) -
Net realized gain (loss) from foreign
currency transactions ....... (1) -
Net realized gain (loss) ........ 328 1,592
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 439 1,205
Futures contracts ........ - -
Translation of assets and liabilities denominated
in foreign currency ....... - -
Net unrealized appreciation (depreciation)
during the period ...... 439 1,205
Net gain (loss) on investments, futures contracts
and foreign currency .... 767 2,797
Net increase (decrease) in net assets resulting
from operations ........ $1,869 $7,735
All numbers in thousands Tax-
Exempt
Investment Income:
Interest ....... $1,380
Dividends ....... -
Withholding taxes on foreign dividends .... -
1,380
Expenses:
Management and advisory fees ..... 148
Transfer agent fees and expenses .... 35
Custody and accounting fees and expenses ... 23
Registration fees ...... 83
Trustees fees and expenses ..... 2
Audit fees and expenses ....... 20
Other ......... 4
Subtotal 315
Distribution and service fees:
Class A ...... 83
Class B ....... 3
Class C ....... 4
Less fees waived/reimbursed by the
investment adviser ..... (155)
Net expenses ...... 250
Net investment income (loss) ...... 1,130
Realized and Unrealized Gain (Loss) on Investments,
Futures Contracts and Foreign Currency:
Net realized gain (loss) on investments ...... 286
Net realized (loss) on futures contracts ...... -
Net realized gain (loss) from foreign
currency transactions ....... -
Net realized gain (loss) ........ 286
Net unrealized appreciation (depreciation)
during the period on:
Investments ...... 619
Futures contracts ........ -
Translation of assets and liabilities denominated
in foreign currency ....... -
Net unrealized appreciation (depreciation)
during the period ...... 619
Net gain (loss) on investments, futures contracts
and foreign currency .... 905
Net increase (decrease) in net assets resulting
from operations ........ $2,035
(1) From commencement of investment operations on February 3, 1997.
The notes to the financial statements are an integral part of these statements.
For the year ended October 31,
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands Aggressive
Growth
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $(382) $(26)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 3,842 248
Net unrealized appreciation (depreciation) during
Period 3,219 (301)
Net increase (decrease) in net assets resulting
from operations 6,679 (79)
Distributions To Shareholders:
From net investment income:
Class A ..... - -
Class B ...... - -
Class C ...... - -
Class T ......
- -
From net realized gains:
Class A ..... (941) -
Class B ....... (91) -
Class C ....... (95) -
Class T ......
(1,127) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 4,799 (73)
Class B ...... 2,314 199
Class C ...... 884 (116)
Class T ......
Total net increase (decrease) from share
transactions ... 7,997 10
Net increase (decrease) in net assets ..... 13,549 (69)
Net Assets:
Beginning of period ..... 26,059 26,128
End of period ...... $39,608 $26,059
Undistributed Net Investment Income (Loss) or
(Distributions in Excess of Net Investment Income): $(4) $(1)
All numbers in thousands International
Equity
Increase (Decrease) In Net Assets From: 1997 (2)
Operations:
Net investment income (loss) ..... $1
Net realized gain (loss) on investments, futures contracts and
foreign currency transactions .................... (11)
Net unrealized appreciation (depreciation) during period ....
(70)
Net increase (decrease) in net assets resulting from operations (80)
Distributions To Shareholders:
From net investment income:
Class A ..... -
Class B ...... -
Class C ...... -
Class T ......
-
From net realized gains:
Class A ..... -
Class B ....... -
Class C ....... -
Class T ......
-
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 3,108
Class B ...... 611
Class C ...... 425
Class T ......
Total net increase (decrease) from share transactions ... 4,144
Net increase (decrease) in net assets ..... 4,064
Net Assets:
Beginning of period ..... -
End of period ...... $4,064
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ......................... $21
All numbers in thousands Capital
Appreciation
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $(331) $(31)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 778 (27)
Net unrealized appreciation (depreciation) during period 554 (358)
Net increase (decrease) in net assets resulting from
operations .... 1,001 (416)
Distributions To Shareholders:
From net investment income:
Class A ..... - -
Class B ...... - -
Class C ...... - -
Class T ......
- -
From net realized gains:
Class A ..... (271) -
Class B ....... (31) -
Class C ....... (32) -
Class T ......
(334) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 690 976
Class B ...... 651 149
Class C ...... (511) (88)
Class T ......
Total net increase (decrease) from share
transactions ... 830 1,037
Net increase (decrease) in net assets ..... 1,497 621
Net Assets:
Beginning of period ..... 23,725 23,104
End of period ...... $25,222 $23,725
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ................ $(2) $(1)
All numbers in thousands
Global
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $(1,348) $(153)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions . 28,339 2,413
Net unrealized appreciation (depreciation) during 13,215 (2,313)
Net increase (decrease) in net assets resulting
from operations .... 40,206 (53)
Distributions To Shareholders:
From net investment income:
Class A ..... - -
Class B ...... - -
Class C ...... - -
Class T ......
- -
From net realized gains:
Class A ..... (13,750) -
Class B ....... (762) -
Class C ....... (956) -
Class T ......
(15,468) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 61,654 4,519
Class B ...... 36,024 978
Class C ...... 16,999 555
Class T ......
Total net increase (decrease) from share
transactions ... 114,677 6,052
Net increase (decrease) in net assets 139,415 5,999
Net Assets:
Beginning of period ..... 150,427 144,428
End of period ...... $289,842 $150,427
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ........... $(16) $(13)
All numbers in thousands
Growth
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $709 $34
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions .. 164,142 18,010
Net unrealized appreciation (depreciation) during
period .... 19,578 (30,572)
Net increase (decrease) in net assets resulting
from operations .... 184,429 (12,528)
Distributions To Shareholders:
From net investment income:
Class A ..... - -
Class B ...... - -
Class C ...... - -
Class T ...... - -
- -
From net realized gains:
Class A ..... (11,899) -
Class B ....... (130) -
Class C ....... (256) -
Class T ...... (11,980) -
(24,265) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... (28,708) 3,691
Class B ...... 6,651 772
Class C ...... 1,582 (19)
Class T ...... (49,849) (5,514)
Total net increase (decrease) from share
transactions ... (70,324) (1,070)
Net increase (decrease) in net assets ..... 89,840 (13,598)
Net Assets:
Beginning of period ..... 1,155,174 1,168,772
End of period ...... $1,245,014 $1,155,174
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ................ $713 $20
All numbers in thousands
C.A.S.E.
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $(36) $(1)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions ... 774 12
Net unrealized appreciation (depreciation) during period 444 21
Net increase (decrease) in net assets resulting from
operations .... 1,182 32
Distributions To Shareholders:
From net investment income:
Class A ..... (89) -
Class B ...... (45) -
Class C ...... (42) -
Class T ......
(176) -
From net realized gains:
Class A ..... - -
Class B ....... - -
Class C ....... - -
Class T ......
- -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 1,775 205
Class B ...... 957 48
Class C ...... 1,125 68
Class T ......
Total net increase (decrease) from share
transactions ... 3,857 321
Net increase (decrease) in net assets ..... 4,863 353
Net Assets:
Beginning of period ..... 3,521 3,168
End of period ...... $8,384 $3,521
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ..................... $(1) $175
All numbers in thousands Value
Equity
Increase (Decrease) In Net Assets From: 1997 (2)
Operations:
Net investment income (loss) ..... $4
Net realized gain (loss) on investments, futures contracts and
foreign currency transactions .................... 36
Net unrealized appreciation (depreciation) during period ....
674
Net increase (decrease) in net assets resulting from operations 714
Distributions To Shareholders:
From net investment income:
Class A ..... -
Class B ...... -
Class C ...... -
Class T ......
-
From net realized gains:
Class A ..... -
Class B ....... -
Class C ....... -
Class T ......
-
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 4,887
Class B ...... 2,646
Class C ...... 1,515
Class T ......
Total net increase (decrease) from share transactions ..
9,048
Net increase (decrease) in net assets ..... 9,762
Net Assets:
Beginning of period ..... -
End of period ...... $9,762
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ......................... $4
All numbers in thousands Strategic
Total Return
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $281 $17
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 1,228 36
Net unrealized appreciation (depreciation) during
period .... 2,713 120
Net increase (decrease) in net assets resulting
from operations .... 4,222 173
Distributions To Shareholders:
From net investment income:
Class A ..... (207) -
Class B ...... (18) -
Class C ...... (20) -
Class T ......
(245) -
From net realized gains:
Class A ..... (291) -
Class B ....... (43) -
Class C ....... (45) -
Class T ......
(379) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 7,161 295
Class B ...... 2,574 129
Class C ...... 2,106 44
Class T ......
Total net increase (decrease) from share
transactions ... 11,841 468
Net increase (decrease) in net assets ..... 15,439 641
Net Assets:
Beginning of period ..... 15,220 14,579
End of period ...... $30,659 $15,220
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): .................. $70 $34
All numbers in thousands Tactical Asset
Allocation
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $275 $14
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions ..... 1,555 14
Net unrealized appreciation (depreciation) during per 1,892 218
Net increase (decrease) in net assets resulting from
operations .... 3,722 246
Distributions To Shareholders:
From net investment income:
Class A ..... (138) -
Class B ...... (54) -
Class C ...... (35) -
Class T ......
(227) -
From net realized gains:
Class A ..... (30) -
Class B ....... (18) -
Class C ....... (17) -
Class T ......
(65) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 2,291 884
Class B ...... 3,578 107
Class C ...... (340) 40
Class T ......
Total net increase (decrease) from share
transactions 5,529 1,031
Net increase (decrease) in net assets ..... 8,959 1,277
Net Assets:
Beginning of period ..... 18,167 16,890
End of period ...... $27,126 $18,167
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ................. $(4) $(1)
All numbers in thousands
Balanced
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $155 $15
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 1,751 74
Net unrealized appreciation (depreciation) during period 876 (12)
Net increase (decrease) in net assets resulting from
operations .... 2,782 77
Distributions To Shareholders:
From net investment income:
Class A ..... (155) -
Class B ...... (15) -
Class C ...... (12) -
Class T ......
(182) -
From net realized gains:
Class A ..... (1,109) -
Class B ....... (130) -
Class C ....... (128) -
Class T ......
(1,367) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... 4,082 281
Class B ...... 1,501 186
Class C ...... 495 17
Class T ......
Total net increase (decrease) from share
transactions ... 6,078 484
Net increase (decrease) in net assets ..... 7,311 561
Net Assets:
Beginning of period ..... 10,247 9,686
End of period ...... $17,558 $10,247
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): .................. $23 $23
All numbers in thousands
Flexible Income
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $1,102 $95
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 328 48
Net unrealized appreciation (depreciation) during period 439 241
Net increase (decrease) in net assets resulting from
operations .... 1,869 384
Distributions To Shareholders:
From net investment income:
Class A ..... (1,022) (95)
Class B ...... (37) (2)
Class C ...... (49) (5)
Class T ......
(1,108) (102)
From net realized gains:
Class A ..... - -
Class B ....... - -
Class C ....... - -
Class T ......
- -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... (2,161) (325)
Class B ...... 194 20
Class C ...... 43 (50)
Class T ......
Total net increase (decrease) from share
transactions ... (1,924) (355)
Net increase (decrease) in net assets ..... (1,163) (73)
Net Assets:
Beginning of period ..... 18,369 18,442
End of period ...... $17,206 $18,369
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): .................. $54 $48
All numbers in thousands
Income Plus
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $4,938 $327
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 1,592 227
Net unrealized appreciation (depreciation) during
period .... 1,205 1,216
Net increase (decrease) in net assets resulting from
operations .... 7,735 1,770
Distributions To Shareholders:
From net investment income:
Class A ..... (4,601) (397)
Class B ...... (80) (4)
Class C ...... (191) (16)
Class T ......
(4,872) (417)
From net realized gains:
Class A ..... (598) -
Class B ....... (8) -
Class C ....... (26) -
Class T ......
(632) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... (2,758) (252)
Class B ...... 905 15
Class C ...... 605 44
Class T ......
Total net increase (decrease) from share
transactions ... (1,248) (193)
Net increase (decrease) in net assets ..... 983 1,160
Net Assets:
Beginning of period ..... 69,870 68,710
End of period ...... $70,853 $69,870
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ................ $308 $243
All numbers in thousands
Tax-Exempt
Increase (Decrease) In Net Assets From: 1997 1996 (1)
Operations:
Net investment income (loss) ..... $1,130 $100
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions ...... 286 (1)
Net unrealized appreciation (depreciation) during period 619 97
Net increase (decrease) in net assets resulting from
operations .... 2,035 196
Distributions To Shareholders:
From net investment income:
Class A ..... (1,091) (101)
Class B ...... (11) (1)
Class C ...... (32) (3)
Class T ......
(1,134) (105)
From net realized gains:
Class A ..... (167) -
Class B ....... (2) -
Class C ....... (5) -
Class T ......
(174) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A ..... (1,816) (356)
Class B ...... 169 9
Class C ...... (38) 28
Class T ......
Total net increase (decrease) from share
transactions ... (1,685) (319)
Net increase (decrease) in net assets ..... (958) (228)
Net Assets:
Beginning of period ..... 25,576 25,804
End of period ...... $24,618 $25,576
Undistributed Net Investment Income (Loss) or (Distributions in
Excess of Net Investment Income): ................... $40 $44
(1) For the month ended October 31, 1996. On October 1, 1996, each Portfolio
changed its fiscal year end from September 30 to October 31.
(2) From commencement of investment operations on February 3, 1997.
The notes to the financial statements are an integral part of these statements.
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period:
Investment Operations (13)
Net Asset
Year or Value, Net Net Rlzd
Period Beginning Investment & Unrlzd Total
Ended of Period Inc (L) G (L) Operations
Aggressive Growth
Class A
10/31/97 $15.70 $0.05 $3.69 $3.74
10/31/96 (1) 15.75 (0.01) (0.04) (0.05)
09/30/96 (2) 17.68 (0.15) (0.76) (0.91)
09/30/95 (3) 10.00 (0.14) 7.82 7.68
Class B
10/31/97 15.58 (0.02) 3.69 3.67
10/31/96 (1) 15.63 (0.01) (0.04) (0.05)
09/30/96 (2) 17.64 (0.23) (0.76) (0.99)
Class C
10/31/97 15.60 (0.01) 3.69 3.68
10/31/96 (1) 15.65 (0.01) (0.04) (0.05)
09/30/96 (2) 17.64 (0.21) (0.76) (0.97)
09/30/95 (3) 10.00 (0.18) 7.82 7.64
International Equity
Class A
10/31/97 (4) 10.00 0.07 0.50 0.57
Class B
10/31/97 (4) 10.00 0.02 0.50 0.52
Class C
10/31/97 (4) 10.00 0.03 0.50 0.53
Capital Appreciation
Class A
10/31/97 15.49 0.04 0.58 0.62
10/31/96 (1) 15.75 (0.02) (0.24) (0.26)
09/30/96 (2) 13.54 (0.02) 3.12 3.10
09/30/95 (3) 10.00 (0.03) 3.57 3.54
Class B
10/31/97 15.42 (0.05) 0.58 0.53
10/31/96 (1) 15.69 (0.03) (0.24) (0.27)
09/30/96 13.49 (0.10) 3.12 3.02
Class C
10/31/97 15.43 (0.03) 0.58 0.55
10/31/96 (1) 15.70 (0.03) (0.24) (0.27)
09/30/96 (2) 13.49 (0.08) 3.12 3.04
09/30/95 (3) 10.00 (0.08) 3.57 3.49
Global
Class A
10/31/97 21.39 0.07 4.38 4.45
10/31/96 (1) 21.40 (0.02) 0.01 (0.01)
09/30/96 17.73 (0.09) 4.38 4.29
09/30/95 15.93 (0.06) 2.42 2.36
09/30/94 13.35 (0.04) 2.62 2.58
Class B
10/31/97 21.13 (0.03) 4.38 4.35
10/31/96 (1) 21.14 (0.02) 0.01 (0.01)
09/30/96 17.57 (0.19) 4.38 4.19
Class C
10/31/97 21.03 (0.01) 4.38 4.37
10/31/96 (1) 21.04 (0.02) 0.01 (0.01)
09/30/96 17.46 (0.18) 4.38 4.20
09/30/95 15.74 (0.14) 2.42 2.28
09/30/94 13.35 (0.23) 2.62 2.39
Growth
Class A
10/31/97 $21.97 $(0.02) $3.56 $3.54
10/31/96 (1) 22.21 - (0.24) (0.24)
09/30/96 22.84 (0.11) 4.66 4.55
09/30/95 16.78 (0.05) 6.18 6.13
09/30/94 (2,7) 18.46 0.01 (1.22) (1.21)
Class B
10/31/97 21.60 (0.14) 3.56 3.42
10/31/96 (1) 21.85 (0.01) (0.24) (0.25)
09/30/96 22.64 (0.27) 4.66 4.39
Class C
10/31/97 21.65 (0.12) 3.56 3.44
10/31/96 (1) 21.91 (0.02) (0.24) (0.26)
09/30/96 22.64 (0.21) 4.66 4.45
09/30/95 16.68 (0.15) 6.18 6.03
09/30/94 (2) 18.46 (0.09) (1.22) (1.31)
Class T
10/31/97 22.17 0.05 3.56 3.61
10/31/96 (1) 22.41 - (0.24) (0.24)
09/30/96 (5) 22.23 - 0.18 0.18
C.A.S.E.
Class A
10/31/97 (2) 10.56 (0.01) 2.86 2.85
10/31/96 (1) 10.46 (0.07) 0.17 0.10
09/30/96 (6) 10.00 0.61 (0.15) 0.46
Class B
10/31/97 (2) 10.51 (0.07) 2.86 2.79
10/31/96 (1) 10.41 (0.07) 0.17 0.10
09/30/96 (6) 10.00 0.56 (0.15) 0.41
Class C
10/31/97 (2) 10.52 (0.06) 2.86 2.80
10/31/96 (1) 10.42 (0.07) 0.17 0.10
09/30/96 (6) 10.00 0.57 (0.15) 0.42
Value Equity
Class A
10/31/97 (4) 10.00 0.02 1.69 1.71
Class B
10/31/97 (4) 10.00 (0.02) 1.69 1.67
Class C
10/31/97 (4) 10.00 (0.02) 1.69 1.67
Strategic Total Return
Class A
10/31/97 13.43 0.20 2.79 2.99
10/31/96 (1) 13.27 0.01 0.15 0.16
09/30/96 11.74 0.20 1.65 1.85
09/30/95 (3) 10.00 0.09 1.75 1.84
Class B
10/31/97 13.42 0.10 2.79 2.89
10/31/96 (1) 13.27 - 0.15 0.15
09/30/96 11.73 0.13 1.65 1.78
Class C
10/31/97 13.42 0.12 2.79 2.91
10/31/96 (1) 13.27 - 0.15 0.15
09/30/96 11.73 0.15 1.65 1.80
09/30/95 (3) 10.00 0.03 1.75 1.78
Tactical Asset Allocation
Class A
10/31/97 $11.19 $0.19 $2.02 $2.21
10/31/96 (1) 11.03 0.02 0.14 0.16
09/30/96 10.00 0.08 1.03 1.11
Class B
10/31/97 11.18 0.11 2.02 2.13
10/31/96 (1) 11.02 0.02 0.14 0.16
09/30/96 10.00 - 1.03 1.03
Class C
10/31/97 11.18 0.12 2.02 2.14
10/31/96 (1) 11.03 0.01 0.14 0.15
09/30/96 10.00 0.02 1.03 1.05
Balanced
Class A
10/31/97 13.58 0.19 2.52 2.71
10/31/96 (1) 13.47 0.01 0.10 0.11
09/30/96 11.47 0.24 2.25 2.49
09/30/95 (3) 10.00 0.05 1.47 1.52
Class B
10/31/97 13.56 0.12 2.52 2.64
10/31/96 (1) 13.46 - 0.10 0.10
09/30/96 11.47 0.15 2.25 2.40
Class C
10/31/97 13.57 0.12 2.52 2.64
10/31/96 (1) 13.46 0.01 0.10 0.11
09/30/96 11.47 0.16 2.25 2.41
09/30/95 (3) 10.00 0.01 1.47 1.48
Flexible Income
Class A
10/31/97 9.33 0.61 0.42 1.03
10/31/96 (1) 9.19 0.05 0.14 0.19
09/30/96 9.17 0.60 - 0.60
09/30/95 8.83 0.61 0.37 0.98
09/30/94 (7) 9.59 0.65 (0.81) (0.16)
Class B
10/31/97 9.32 0.56 0.42 0.98
10/31/96 (1) 9.18 0.05 0.14 0.19
09/30/96 9.17 0.53 - 0.53
Class C
10/31/97 9.32 0.57 0.42 0.99
10/31/96 (1) 9.18 0.05 0.14 0.19
09/30/96 9.17 0.54 - 0.54
09/30/95 8.83 0.56 0.37 0.93
09/30/94 (7) 9.59 0.60 (0.81) (0.21)
Income Plus
Class A
10/31/97 $10.61 $0.76 $0.44 $1.20
10/31/96 (1) 10.41 0.04 0.22 0.26
09/30/96 10.36 0.72 0.04 0.76
09/30/95 9.75 0.75 0.71 1.46
09/30/94 10.98 0.76 (1.10) (0.34)
Class B
10/31/97 10.61 0.69 0.44 1.13
10/31/96 (1) 10.40 0.05 0.22 0.27
09/30/96 10.35 0.65 0.04 0.69
Class C
10/31/97 10.61 0.70 0.44 1.14
10/31/96 (1) 10.40 0.05 0.22 0.27
09/30/96 10.35 0.66 0.04 0.70
09/30/95 9.74 0.69 0.71 1.40
09/30/94 10.98 0.66 (1.10) (0.44)
Tax-Exempt
Class A
10/31/97 11.40 0.53 0.43 0.96
10/31/96 (1) 11.36 0.05 0.04 0.09
09/30/96 11.34 0.55 0.10 0.65
09/30/95 11.10 0.55 0.29 0.84
09/30/94 12.07 0.56 (0.60) (0.04)
Class B
10/31/97 11.40 0.44 0.43 0.87
10/31/96 (1) 11.36 0.04 0.04 0.08
09/30/96 11.34 0.48 0.10 0.58
Class C
10/31/97 11.40 0.50 0.43 0.93
10/31/96 (1) 11.36 0.04 0.04 0.08
09/30/96 11.34 0.52 0.10 0.62
09/30/95 11.10 0.52 0.29 0.81
09/30/94 12.07 0.53 (0.60) (0.07)
Distributions
Net Asset
Year or From Net From Net Value,
Period Investment Realized Total End
Ended Income Cptl Gains Distbns of Period
Aggressive Growth
Class A
10/31/97 $- $(0.67) $(0.67) $18.77
10/31/96 (1) - - - 15.70
09/30/96 (2) - (1.02) (1.02) 15.75
09/30/95 (3) - - - 17.68
Class B
10/31/97 - (0.67) (0.67) 18.58
10/31/96 (1) - - - 15.58
09/30/96 (2) - (1.02) (1.02) 15.63
Class C
10/31/97 - (0.67) (0.67) 18.61
10/31/96 (1) - - - 15.60
09/30/96 (2) - (1.02) (1.02) 15.65
09/30/95 (3) - - - 17.64
International Equity
Class A
10/31/97 (4) - - - 10.57
Class B
10/31/97 (4) - - - 10.52
Class C
10/31/97 (4) - - - 10.53
Capital Appreciation
Class A
10/31/97 - (0.21) (0.21) 15.90
10/31/96 (1) - - - 15.49
09/30/96 (2) (0.07) (0.82) (0.89) 15.75
09/30/95 (3) - - - 13.54
Class B
10/31/97 - (0.21) (0.21) 15.74
10/31/96 (1) - - - 15.42
09/30/96 - (0.82) (0.82) 15.69
Class C
10/31/97 - (0.21) (0.21) 15.77
10/31/96 (1) - - - 15.43
09/30/96 (2) (0.01) (0.82) (0.83) 15.70
09/30/95 (3) - - - 13.49
Global
Class A
10/31/97 - (2.10) (2.10) 23.74
10/31/96 (1) - - - 21.39
09/30/96 - (0.62) (0.62) 21.40
09/30/95 - (0.56) (0.56) 17.73
09/30/94 - - - 15.93
Class B
10/31/97 - (2.10) (2.10) 23.38
10/31/96 (1) - - - 21.13
09/30/96 - (0.62) (0.62) 21.14
Class C
10/31/97 - (2.10) (2.10) 23.30
10/31/96 (1) - - - 21.03
09/30/96 - (0.62) (0.62) 21.04
09/30/95 - (0.56) (0.56) 17.46
09/30/94 - - - 15.74
Growth
Class A
10/31/97 $- $(0.47) $(0.47) $25.04
10/31/96 (1) - - - 21.97
09/30/96 - (5.18) (5.18) 22.21
09/30/95 - (0.07) (0.07) 22.84
09/30/94 (2,7) - (0.47) (0.47) 16.78
Class B
10/31/97 - (0.47) (0.47) 24.55
10/31/96 (1) - - - 21.60
09/30/96 - (5.18) (5.18) 21.85
Class C
10/31/97 - (0.47) (0.47) 24.62
10/31/96 (1) - - - 21.65
09/30/96 - (5.18) (5.18) 21.91
09/30/95 - (0.07) (0.07) 22.64
09/30/94 (2) - (0.47) (0.47) 16.68
Class T
10/31/97 - (0.47) (0.47) 25.31
10/31/96 (1) - - - 22.17
09/30/96 (5) - - - 22.41
C.A.S.E.
Class A
10/31/97 (2) (0.51) - (0.51) 12.90
10/31/96 (1) - - - 10.56
09/30/96 (6) - - - 10.46
Class B
10/31/97 (2) (0.45) - (0.45) 12.85
10/31/96 (1) - - - 10.51
09/30/96 (6) - - - 10.41
Class C
10/31/97 (2) (0.46) - (0.46) 12.86
10/31/96 (1) - - - 10.52
09/30/96 (6) - - - 10.42
Value Equity
Class A
10/31/97 (4) - - - 11.71
Class B
10/31/97 (4) - - - 11.67
Class C
10/31/97 (4) - - - 11.67
Strategic Total Return
Class A
10/31/97 (0.19) (0.32) (0.51) 15.91
10/31/96 (1) - - - 13.43
09/30/96 (0.17) (0.15) (0.32) 13.27
09/30/95 (3) (0.10) - (0.10) 11.74
Class B
10/31/97 (0.10) (0.32) (0.42) 15.89
10/31/96 (1) - - - 13.42
09/30/96 (0.09) (0.15) (0.24) 13.27
Class C
10/31/97 (0.11) (0.32) (0.43) 15.90
10/31/96 (1) - - - 13.42
09/30/96 (0.11) (0.15) (0.26) 13.27
09/30/95 (3) (0.05) - (0.05) 11.73
Tactical Asset Allocation
Class A
10/31/97 $(0.17) $(0.04) $(0.21) $13.19
10/31/96 (1) - - - 11.19
09/30/96 (0.08) - (0.08) 11.03
Class B
10/31/97 (0.09) (0.04) (0.13) 13.18
10/31/96 (1) - - - 11.18
09/30/96 (0.01) - (0.01) 11.02
Class C
10/31/97 (0.10) (0.04) (0.14) 13.18
10/31/96 (1) - - - 11.18
09/30/96 (0.02) - (0.02) 11.03
Balanced
Class A
10/31/97 (0.20) (1.75) (1.95) 14.34
10/31/96 (1) - - - 13.58
09/30/96 (0.21) (0.28) (0.49) 13.47
09/30/95 (3) (0.05) - (0.05) 11.47
Class B
10/31/97 (0.12) (1.75) (1.87) 14.33
10/31/96 (1) - - - 13.56
09/30/96 (0.13) (0.28) (0.41) 13.46
Class C
10/31/97 (0.13) (1.75) (1.88) 14.33
10/31/96 (1) - - - 13.57
09/30/96 (0.14) (0.28) (0.42) 13.46
09/30/95 (3) (0.01) - (0.01) 11.47
Flexible Income
Class A
10/31/97 (0.61) - (0.61) 9.75
10/31/96 (1) (0.05) - (0.05) 9.33
09/30/96 (0.58) - (0.58) 9.19
09/30/95 (0.64) - (0.64) 9.17
09/30/94 (7) (0.60) - (0.60) 8.83
Class B
10/31/97 (0.55) - (0.55) 9.75
10/31/96 (1) (0.05) - (0.05) 9.32
09/30/96 (0.52) - (0.52) 9.18
Class C
10/31/97 (0.56) - (0.56) 9.75
10/31/96 (1) (0.05) - (0.05) 9.32
09/30/96 (0.53) - (0.53) 9.18
09/30/95 (0.59) - (0.59) 9.17
09/30/94 (7) (0.55) - (0.55) 8.83
Income Plus
Class A
10/31/97 $(0.75) $(0.10) $(0.85) $10.96
10/31/96 (1) (0.06) - (0.06) 10.61
09/30/96 (0.71) - (0.71) 10.41
09/30/95 (0.75) (0.10) (0.85) 10.36
09/30/94 (0.75) (0.14) (0.89) 9.75
Class B
10/31/97 (0.68) (0.10) (0.78) 10.96
10/31/96 (1) (0.06) - (0.06) 10.61
09/30/96 (0.64) - (0.64) 10.40
Class C
10/31/97 (0.69) (0.10) (0.79) 10.96
10/31/96 (1) (0.06) - (0.06) 10.61
09/30/96 (0.65) - (0.65) 10.40
09/30/95 (0.69) (0.10) (0.79) 10.35
09/30/94 (0.66) (0.14) (0.80) 9.74
Tax-Exempt
Class A
10/31/97 (0.53) (0.08) (0.61) 11.75
10/31/96 (1) (0.05) - (0.05) 11.40
09/30/96 (0.56) (0.07) (0.63) 11.36
09/30/95 (0.56) (0.04) (0.60) 11.34
09/30/94 (0.54) (0.39) (0.93) 11.10
Class B
10/31/97 (0.45) (0.08) (0.53) 11.74
10/31/96 (1) (0.04) - (0.04) 11.40
09/30/96 (0.49) (0.07) (0.56) 11.36
Class C
10/31/97 (0.50) (0.08) (0.58) 11.75
10/31/96 (1) (0.04) - (0.04) 11.40
09/30/96 (0.53) (0.07) (0.60) 11.36
09/30/95 (0.53) (0.04) (0.57) 11.34
09/30/94 (0.51) (0.39) (0.90) 11.10
Ratios/Supplemental Data
Net Assets,
Year or End of Ratio of Exps to Avg NA (9) (10)
Period Total Period Excluding Including
Ended Return (8) (000's) Credits Gross Credits
Aggressive Growth
Class A
10/31/97 24.71 % $31,260 1.85% 2.44% 1.85%
10/31/96 (1) (0.32) 21,938 1.85 2.62 1.85
09/30/96 (2) (4.91) 22,078 1.85 2.60 1.85
09/30/95 (3) 76.80 16,747 2.85 3.35 2.85
Class B
10/31/97 24.47 4,880 2.50 3.09 2.50
10/31/96 (1) (0.32) 1,992 2.50 3.27 2.50
09/30/96 (2) (5.33) 1,800 2.50 3.25 2.50
Class C
10/31/97 24.50 3,468 2.40 2.99 2.40
10/31/96 (1) (0.32) 2,129 2.40 3.17 2.40
09/30/96 (2) (5.22) 2,250 2.40 3.15 2.40
09/30/95 (3) 76.40 1,736 3.40 3.91 3.40
International Equity
Class A
10/31/97 (4) 5.70 3,076 1.70 8.93 1.70
Class B
10/31/97 (4) 5.20 589 2.35 9.58 2.35
Class C
10/31/97 (4) 5.30 399 2.25 9.48 2.25
Capital Appreciation
Class A
10/31/97 4.09 20,605 1.85 2.66 1.85
10/31/96 (1) (1.59) 19,350 1.85 2.48 1.85
09/30/96 (2) 24.35 18,713 1.85 2.72 1.85
09/30/95 (3) 35.40 6,241 2.90 4.17 2.85
Class B
10/31/97 3.56 2,866 2.50 3.31 2.50
10/31/96 (1) (1.66) 2,132 2.50 3.13 2.50
09/30/96 23.63 2,022 2.50 3.37 2.50
Class C
10/31/97 3.64 1,751 2.40 3.21 2.40
10/31/96 (1) (1.66) 2,243 2.40 3.03 2.40
09/30/96 (2) 23.81 2,369 2.40 3.27 2.40
09/30/95 (3) 34.90 2,565 3.45 4.72 3.40
Global
Class A
10/31/97 22.72 218,681 1.91 - 1.91
10/31/96 (1) (0.05) 135,837 2.08 - 2.07
09/30/96 25.04 131,347 2.09 - 2.06
09/30/95 15.47 89,397 2.10 - 1.97
09/30/94 19.33 81,241 2.14 - -
Class B
10/31/97 22.53 43,951 2.56 - 2.56
10/31/96 (1) (0.05) 5,966 2.73 - 2.72
09/30/96 24.70 5,000 2.74 - 2.71
Class C
10/31/97 22.72 27,210 2.46 - 2.46
10/31/96 (1) (0.05) 8,624 2.63 - 2.62
09/30/96 24.91 8,081 2.64 - 2.61
09/30/95 15.14 3,567 2.65 - 2.52
09/30/94 17.90 3,571 4.04 - -
Growth
Class A
10/31/97 16.40 % $614,544 1.61% - % 1.61%
10/31/96 (1) (1.09) 565,032 1.68 - 1.68
09/30/96 22.41 567,564 1.83 - 1.82
09/30/95 36.70 485,935 1.86 - 1.84
09/30/94 (2,7) (6.72) 431,207 1.76 - -
Class B
10/31/97 16.11 13,046 2.26 - 2.26
10/31/96 (1) (1.14) 5,242 2.32 - 2.32
09/30/96 21.87 4,536 2.46 - 2.45
Class C
10/31/97 16.19 14,295 2.16 - 2.16
10/31/96 (1) (1.19) 11,016 2.23 - 2.23
09/30/96 22.15 11,167 2.34 - 2.33
09/30/95 36.32 5,593 2.41 - 2.38
09/30/94 (2) (7.72) 3,423 3.48 - -
Class T
10/31/97 16.54 603,129 1.26 - 1.26
10/31/96 (1) (1.03) 573,884 1.33 - 1.33
09/30/96 (5) 0.81 585,505 1.18 - 1.17
C.A.S.E.
Class A
10/31/97 (2) 28.31 3,920 1.85 4.62 1.85
10/31/96 (1) 0.96 1,675 1.85 6.79 1.84
09/30/96 (6) 4.60 1,455 2.85 5.89 2.85
Class B
10/31/97 (2) 27.62 2,436 2.50 5.27 2.50
10/31/96 (1) 0.96 1,159 2.50 7.44 2.49
09/30/96 (6) 4.10 1,100 3.50 6.54 3.50
Class C
10/31/97 (2) 27.73 2,028 2.40 5.17 2.40
10/31/96 (1) 0.96 687 2.40 7.34 2.39
09/30/96 (6) 4.20 613 3.40 6.44 3.40
Value Equity
Class A
10/31/97 (4) 17.14 5,305 1.50 4.05 1.50
Class B
10/31/97 (4) 16.65 2,850 2.15 4.70 2.15
Class C
10/31/97 (4) 16.73 1,607 2.05 4.60 2.05
Strategic Total Return
Class A
10/31/97 22.80 21,629 1.85 2.28 1.85
10/31/96 (1) 1.20 11,744 1.85 2.76 1.82
09/30/96 16.00 11,314 1.85 2.79 1.79
09/30/95 (3) 18.43 5,167 2.99 4.57 2.85
Class B
10/31/97 22.03 4,698 2.50 2.93 2.50
10/31/96 (1) 1.13 1,684 2.50 3.40 2.47
09/30/96 15.38 1,537 2.50 3.44 2.44
Class C
10/31/97 22.15 4,332 2.40 2.83 2.40
10/31/96 (1) 1.13 1,792 2.40 3.30 2.37
09/30/96 15.49 1,728 2.40 3.34 2.34
09/30/95 (3) 17.95 281 3.54 5.12 3.40
Tactical Asset Allocation
Class A
10/31/97 19.84% $12,291 1.85% 2.30% 1.85%
10/31/96 (1) 1.45 8,396 1.85 2.65 1.85
09/30/96 11.07 7,401 2.85 3.20 2.85
Class B
10/31/97 19.08 9,747 2.50 2.95 2.50
10/31/96 (1) 1.45 5,013 2.50 3.30 2.50
09/30/96 10.39 4,848 3.50 3.85 3.50
Class C
10/31/97 19.20 5,088 2.40 2.85 2.40
10/31/96 (1) 1.36 4,758 2.40 3.20 2.40
09/30/96 10.50 4,641 3.40 3.75 3.40
Balanced
Class A
10/31/97 22.96 13,414 1.85 2.88 1.85
10/31/96 (1) 0.81 8,402 1.85 3.44 1.85
09/30/96 22.12 8,056 1.85 3.11 1.85
09/30/95 (3) 15.27 3,670 2.92 4.48 2.85
Class B
10/31/97 22.19 2,583 2.50 3.53 2.50
10/31/96 (1) 0.74 878 2.50 4.09 2.50
09/30/96 21.38 687 2.50 3.76 2.50
Class C
10/31/97 22.31 1,561 2.40 3.43 2.40
10/31/96 (1) 0.81 967 2.40 3.99 2.40
09/30/96 21.49 943 2.40 3.66 2.40
09/30/95 (3) 14.77 3,365 3.47 5.03 3.40
Flexible Income
Class A
10/31/97 11.53 15,532 1.85 2.40 1.85
10/31/96 (1) 2.08 17,001 1.85 2.98 1.85
09/30/96 6.73 17,065 1.85 2.07 1.85
09/30/95 11.57 19,786 1.87 1.94 1.85
09/30/94 (7) (1.54) 21,527 1.85 2.13 -
Class B
10/31/97 10.79 746 2.50 3.05 2.50
10/31/96 (1) 2.04 522 2.50 3.63 2.50
09/30/96 5.94 494 2.50 2.72 2.50
Class C
10/31/97 10.91 928 2.40 2.95 2.40
10/31/96 (1) 2.04 846 2.40 3.53 2.40
09/30/96 6.03 883 2.40 2.62 2.40
09/30/95 10.95 558 2.42 2.49 2.40
09/30/94 (7) (2.15) 691 2.40 8.59 -
Income Plus
Class A
10/31/97 11.86 % $65,612 1.27% - % 1.27%
10/31/96 (1) 2.53 66,285 1.33 - 1.32
09/30/96 7.64 65,252 1.33 - 1.31
09/30/95 15.85 68,746 1.29 - 1.26
09/30/94 (3.28) 63,995 1.33 - -
Class B
10/31/97 11.10 1,761 1.92 - 1.92
10/31/96 (1) 2.59 804 1.98 - 1.97
09/30/96 6.95 774 1.98 - 1.96
Class C
10/31/97 11.22 3,480 1.82 - 1.82
10/31/96 (1) 2.59 2,781 1.88 - 1.87
09/30/96 7.05 2,684 1.88 - 1.86
09/30/95 15.08 1,980 1.84 - 1.81
09/30/94 (4.55) 2,112 3.52 - -
Tax-Exempt
Class A
10/31/97 8.68 23,320 1.00 1.63 1.00
10/31/96 (1) 0.76 24,439 1.00 1.89 1.00
09/30/96 5.89 24,708 1.00 1.46 1.00
09/30/95 7.75 27,401 1.02 1.35 1.00
09/30/94 (0.41) 29,096 1.00 1.30 -
Class B
10/31/97 7.93 377 1.65 2.28 1.65
10/31/96 (1) 0.71 198 1.65 2.54 1.65
09/30/96 5.21 189 1.65 2.11 1.65
Class C
10/31/97 8.39 921 1.25 1.88 1.25
10/31/96 (1) 0.74 939 1.25 2.14 1.25
09/30/96 5.63 907 1.25 1.71 1.25
09/30/95 7.48 454 1.27 1.60 1.25
09/30/94 (0.73) 277 1.25 20.88 -
Net Investment
Year or Income (Loss) Portfolio Average
Period to Average Turnover Commission
Ended Net Assets (10) Rate (11) Rate (12)
Aggressive Growth
Class A
10/31/97 (1.07)% 120.96% $0.0707
10/31/96 (1) (1.06) 9.40 0.0662
09/30/96 (2) (1.15) 127.49 0.0715
09/30/95 (3) (2.39) 88.28 -
Class B
10/31/97 (1.71) 120.96 0.0707
10/31/96 (1) (1.71) 9.40 0.0662
09/30/96 (2) (1.80) 127.49 0.0715
Class C
10/31/97 (1.62) 120.96 0.0707
10/31/96 (1) (1.62) 9.40 0.0662
09/30/96 (2) (1.70) 127.49 0.0715
09/30/95 (3) (2.94) 88.28 -
International Equity
Class A
10/31/97 (4) 0.19 21.85 0.0209
Class B
10/31/97 (4) (0.45) 21.85 0.0209
Class C
10/31/97 (4) (0.35) 21.85 0.0209
Capital Appreciation
Class A
10/31/97 (1.27) 130.48 0.0447
10/31/96 (1) (1.41) 10.11 0.0340
09/30/96 (2) (0.35) 160.72 0.0369
09/30/95 (3) 0.75 262.97 -
Class B
10/31/97 (1.92) 130.48 0.0447
10/31/96 (1) (2.06) 10.11 0.0340
09/30/96 (1.00) 160.72 0.0369
Class C
10/31/97 (1.82) 130.48 0.0447
10/31/96 (1) (1.96) 10.11 0.0340
09/30/96 (2) (0.90) 160.72 0.0369
09/30/95 (3) 0.20 262.97 -
Global
Class A
10/31/97 (0.50) 91.02 0.0457
10/31/96 (1) (1.15) 2.59 0.0520
09/30/96 (0.67) 97.94 0.0489
09/30/95 (0.43) 161.48 -
09/30/94 (0.55) 148.01 -
Class B
10/31/97 (1.15) 91.02 0.0457
10/31/96 (1) (1.80) 2.59 0.0520
09/30/96 (1.32) 97.94 0.0489
Class C
10/31/97 (1.05) 91.02 0.0457
10/31/96 (1) (1.70) 2.59 0.0520
09/30/96 (1.22) 97.94 0.0489
09/30/95 (0.98) 161.48 -
09/30/94 (2.46) 148.01 -
Growth
Class A
10/31/97 (0.10)% 91.52% $0.0443
10/31/96 (1) (0.13) 9.40 0.0360
09/30/96 (0.22) 57.80 0.0385
09/30/95 (0.26) 123.26 -
09/30/94 (2,7) 0.04 63.73 -
Class B
10/31/97 (0.75) 91.52 0.0443
10/31/96 (1) (0.78) 9.40 0.0360
09/30/96 (0.86) 57.80 0.0385
Class C
10/31/97 (0.65) 91.52 0.0443
10/31/96 (1) (0.68) 9.40 0.0360
09/30/96 (0.77) 57.80 0.0385
09/30/95 (0.81) 123.26 -
09/30/94 (2) (1.68) 63.73 -
Class T
10/31/97 0.25 91.52 0.0443
10/31/96 (1) (0.20) 9.40 0.0360
09/30/96 (5) 0.36 57.80 0.0385
C.A.S.E.
Class A
10/31/97 (2) (0.34) 183.06 0.0604
10/31/96 (1) 0.27 20.69 0.0603
09/30/96 (6) 10.00 654.49 0.0396
Class B
10/31/97 (2) (0.99) 183.06 0.0604
10/31/96 (1) 0.38 20.69 0.0603
09/30/96 (6) 9.35 654.49 0.0396
Class C
10/31/97 (2) (0.89) 183.06 0.0604
10/31/96 (1) 0.28 20.69 0.0603
09/30/96 (6) 9.45 654.49 0.0396
Value Equity
Class A
10/31/97 (4) 0.38 6.40 0.0673
Class B
10/31/97 (4) (0.28) 6.40 0.0673
Class C
10/31/97 (4) (0.18) 6.40 0.0673
Strategic Total Return
Class A
10/31/97 1.41 51.44 0.0607
10/31/96 (1) 1.47 5.50 0.0591
09/30/96 1.67 40.58 0.0622
09/30/95 (3) 0.85 34.67 -
Class B
10/31/97 0.76 51.44 0.0607
10/31/96 (1) 0.82 5.50 0.0591
09/30/96 1.02 40.58 0.0622
Class C
10/31/97 0.86 51.44 0.0607
10/31/96 (1) 0.92 5.50 0.0591
09/30/96 1.12 40.58 0.0622
09/30/95 (3) 0.30 34.67 -
Tactical Asset Allocation
Class A
10/31/97 1.57% 71.63% $0.0732
10/31/96 (1) 1.26 2.38 0.0800
09/30/96 0.72 56.22 0.0828
Class B
10/31/97 0.92 71.63 0.0732
10/31/96 (1) 0.61 2.38 0.0800
09/30/96 0.07 56.22 0.0828
Class C
10/31/97 1.02 71.63 0.0732
10/31/96 (1) 0.71 2.38 0.0800
09/30/96 0.17 56.22 0.0828
Balanced
Class A
10/31/97 1.29 127.08 0.0481
10/31/96 (1) 1.84 9.08 0.0408
09/30/96 1.87 175.78 0.0443
09/30/95 (3) 0.56 82.48 -
Class B
10/31/97 0.64 127.08 0.0481
10/31/96 (1) 1.18 9.08 0.0408
09/30/96 1.22 175.78 0.0443
Class C
10/31/97 0.74 127.08 0.0481
10/31/96 (1) 1.28 9.08 0.0408
09/30/96 1.32 175.78 0.0443
09/30/95 (3) 0.01 82.48 -
Flexible Income
Class A
10/31/97 6.41 135.53 -
10/31/96 (1) 6.15 16.16 -
09/30/96 6.46 135.38 -
09/30/95 7.03 149.58 -
09/30/94 (7) 6.57 105.40 -
Class B
10/31/97 5.76 135.53 -
10/31/96 (1) 5.50 16.16 -
09/30/96 5.81 135.38 -
Class C
10/31/97 5.86 135.53 -
10/31/96 (1) 5.60 16.16 -
09/30/96 5.91 135.38 -
09/30/95 6.48 149.58 -
09/30/94 (7) 6.03 105.40 -
Income Plus
Class A
10/31/97 7.14% 62.28% $-
10/31/96 (1) 5.60 1.58 -
09/30/96 6.89 65.96 -
09/30/95 7.53 25.07 -
09/30/94 7.35 48.12 -
Class B
10/31/97 6.49 62.28 -
10/31/96 (1) 4.95 1.58 -
09/30/96 6.24 65.96 -
Class C
10/31/97 6.59 62.28 -
10/31/96 (1) 5.05 1.58 -
09/30/96 6.34 65.96 -
09/30/95 6.98 25.07 -
09/30/94 5.16 48.12 -
Tax-Exempt
Class A
10/31/97 4.60 71.29 -
10/31/96 (1) 4.60 3.79 -
09/30/96 4.88 71.05 -
09/30/95 4.83 126.48 -
09/30/94 4.83 59.84 -
Class B
10/31/97 3.95 71.29 -
10/31/96 (1) 3.94 3.79 -
09/30/96 4.23 71.05 -
Class C
10/31/97 4.35 71.29 -
10/31/96 (1) 4.34 3.79 -
09/30/96 4.63 71.05 -
09/30/95 4.58 126.48 -
09/30/94 4.58 59.84 -
Notes to Financial Highlights
(1) For the month ended October 31, 1996. On October 1, 1996, each Portfolio
changed its fiscal year end from September 30 to October 31.
(2) Distributions from net realized capital gains include distributions in
excess of current net realized capital gains for the Aggressive Growth Portfolio
Classes A, B and C, for the period ended 9/30/96, in the amount of $1.02, and
for the Growth Portfolio Classes A and C, for the period ended 9/30/94, in the
amount of $0.14. Dividends from net investment income include distributions in
excess of current net investment income for the Capital Appreciation Portfolio
Classes A and C, for the period ended 9/30/96 in the amount of $.01 and for the
C.A.S.E. Portfolio Classes A, B and C for the period ended 10/31/97 in the
amount of $.08.
(3) From commencement of investment operations, December 2, 1994.
(4) From commencement of investment operations, February 3, 1997.
(5) From commencement of investment operations, September 20, 1996.
(6) From commencement of investment operations, February 1, 1996.
(7) On October 1, 1993, Flexible Income Class A initiated a 12b-1 plan of
distribution. On October 1, 1993, Growth changed its distribution rate to 0.35%
from 0.25%.
(8) Total return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase for Class A or Class T
Shares. Periods of less than one year are not annualized.
(9) Ratio of expenses to average net assets shows:
Excluding Credits (total expenses less amounts waived/reimbursed by the
investment adviser).
Gross (total expenses not taking into account waived/reimbursed amounts
by the investment adviser or affiliated brokerage and custody earnings credits).
Including Credits (expenses less amounts waived/reimbursed by the investment
adviser and reduced by affiliated brokerage and custody earnings credits).
(10) Periods of less than one year are annualized. The ratio of Net
Investment Income (Loss) is based upon Net Investment Income (Loss) prior to
certain reclassifications as discussed in Note 1 of the Notes to the Financial
Statements.
(11) Growth's acquisition of investment securities of IDEX Fund and IDEX Fund 3
has been eliminated from the September 30, 1996 portfolio turnover calculation.
Periods of less than one year are not annualized.
(12) Amount represents average commission rate paid per share of securities
purchased or sold during the period. For fiscal years beginning on or after
September 1, 1995, disclosure of this rate is required for Portfolios in which
equity securities constitute more than 10% of average net assets for the period.
(13) Certain amounts for the periods ended 9/30/96 and 10/31/96 have been
reclassified between Net Investment Income (Loss) and Net Realized and
Unrealized Gain (Loss).
The notes to the financial statements are an integral part of these statements.
IDEX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
NOTE 1.Organization and significant accounting policies:
IDEX Series Fund (the "Fund") is a Massachusetts business trust registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. The Fund is comprised of thirteen portfolios
(each a "Portfolio" and collectively the "Portfolios"). All Portfolios are
diversified except Capital Appreciation. Effective February 1, 1997, Strategic
Total Return changed its name from Equity-Income. Effective February 3, 1997,
International Equity and Value Equity commenced investment operations.
Multiple class operations: The Portfolios offer for sale three classes of shares
(four classes for Growth), each with a public offering price that reflects
different sales charges, if any, and expense levels. Income, non-class specific
expenses and realized and unrealized gains and losses are allocated daily to
each class based upon a simultaneous equation methodology in accordance with
Rule 18f-3 of the 1940 Act. Growth Class T is closed to new shareholders.
The following policies are consistently observed by the Portfolios, and conform
with generally accepted accounting principles ("GAAP") for investment companies.
In preparing the Portfolios' financial statements in accordance with GAAP,
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures.
Security valuations: Portfolio investments traded on an exchange are stated at
the last reported sales price on the day of valuation on the exchange where the
security is principally traded. Securities traded in the over-the-counter
market and listed securities for which no sale was reported on that date are
valued at the last quoted bid price. Debt securities are valued by independent
pricing services, however, those that mature in sixty days or less are valued at
amortized cost, which approximates market. Other securities for which quotations
are not readily available are valued at fair value determined in such manner as
the sub-advisers, under the supervision of the Board of Trustees, determine in
good faith.
Security transactions and related investment income: Security transactions are
accounted for on the trade date. Security gains and losses are calculated on the
specific identification basis. Dividend income is recorded on the ex-dividend
date except those of foreign securities which are recorded as soon as the
Portfolio is informed of the ex-dividend date. Interest income, adjusted for
discounts and premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency translation: The accounting records of the Portfolios are
maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Portfolios
combine fluctuations from currency exchange rates and fluctuations in market
value when computing net realized and unrealized gain or loss from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include foreign currency fluctuations between trade date and settlement date of
investment security transactions, gains and losses on forward foreign currency
contracts and the difference between the receivable amounts of interest and
dividends recorded in the accounting records in U.S. dollars and the amounts
actually received. Foreign denominated assets may involve risks not typically
associated with domestic transactions, including unanticipated movements in
exchange rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Portfolios (except Income Plus and Tax-
Exempt) may enter into forward foreign currency contracts to hedge against
exchange rate risk arising from investments in securities denominated in foreign
currencies. Contracts are valued at the contractual forward rate and are marked
to market daily, with the change in market value recorded as an unrealized gain
or loss. When the contracts are closed, a realized gain or loss is incurred.
Risks may arise from changes in market value of the underlying instruments and
from the possible inability of counter parties to meet the terms of their
contracts.
Futures contracts: The Portfolios (except Income Plus and Tax-Exempt) may enter
into futures contracts to manage exposure to market, interest rate or currency
fluctuations. Contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. The primary risk
associated with the use of futures contracts is imperfect correlation between
the change in the value of the contracts and the market value of the securities
held by a Portfolio.
Federal taxes: No provisions for Federal income or excise taxes have been made
as the Portfolios intend to distribute all income and realized gains to
shareholders and otherwise qualify as regulated investment companies under the
Internal Revenue Code.
Dividend distributions and expenses: Distributions to shareholders are recorded
on the ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP. Each Portfolio bears its own specific
expenses as well as a portion of general common expenses.
Reclassifications are made to each Portfolio's components of net assets to
reflect income and gains available for distribution (or available capital loss
carryforwards) under Federal income tax regulations. Certain reclassification
adjustments are made among undistributed net investment income, undistributed
net realized gains and shares of beneficial interest due to different book and
tax accounting for such items as wash sales, foreign currency transactions, net
operating losses and capital loss carryforwards.
NOTE 2.Fees, earnings credits and related party transactions:
Idex Management, Inc. ("IMI") is the investment adviser for Capital
Appreciation, Global, Growth, Balanced and Flexible Income; InterSecurities,
Inc. ("ISI") is the investment adviser for Aggressive Growth, International
Equity, C.A.S.E., Value Equity, Tactical Asset Allocation, Strategic Total
Return, Income Plus and Tax-Exempt. ISI is the Portfolios' underwriter. Idex
Investor Services, Inc. ("IIS") is the Portfolios' transfer agent. IMI is owned
equally by AUSA Holding Company ("AUSA") and Janus Capital Corporation ("JCC").
ISI and IIS are 100% owned by AUSA. AUSA is a wholly owned subsidiary of AEGON
NV, a Netherlands corporation.
Investment advisory and distribution and service fees: The Portfolios pay
management fees based upon average daily net assets to their respective
investment advisers which will reimburse the Portfolios to the extent that
certain operating expenses exceed the stated annual limitation, if any. The
Portfolios (except Growth Class T) have a 12b-1 distribution plan under the 1940
Act pursuant to which an annual fee based on average daily net assets is paid to
ISI for various disbursements such as broker-dealer account servicing fees and
other promotional expenses of the Portfolios. The 12b-1 fee for all Portfolios
is comprised of a 0.25% service fee and the remaining amount is an asset-based
sales charge/distribution fee. IMI and ISI have entered into sub-advisory
agreements with various management companies to provide investment services to
the Portfolios. The advisers compensate the sub-advisers as described in the
Prospectus. JCC and AEGON USA Investment Management, Inc. are affiliates and
are sub-advisers to certain Portfolios.
Management fees paid IMI and ISI for their services and other information for
the period ended October 31, 1997 is as follows:
Annual Rates Underwriter Commissions (3)
Exp
Limit
(excl Cls A Cls B Cls C Rcvd Rtnd Ctngnt
Mgmt 12b-1 12b-1 12b-1 12b-1 by by Sales
Fee fees-2) Fee Fee Fee ISI ISI Chrgs
Aggressive
Growth 1.00% 1.50% 0.35% 1.00% 0.90% $ 330,689 $ 47,828 $ 4,964
Intl
Equity 1.00% 1.35% 0.35% 1.00% 0.90% 48,603 7,335 323
Capital
Apprec 1.00% 1.50% 0.35% 1.00% 0.90% 271,016 42,668 5,270
Global 1.00% -none- 0.35% 1.00% 0.90% 2,336,372 353,015 13,492
Growth 0.85% 1.50% 0.35% 1.00% 0.90% 2,541,907 396,160 20,142
C.A.S.E. 1.00% 1.50% 0.35% 1.00% 0.90% 69,637 10,625 5,160
Value Equity1.00% 1.15% 0.35% 1.00% 0.90% 105,441 15,512 274
Strategic
Total
Return 1.00% 1.50% 0.35% 1.00% 0.90% 260,944 41,330 9,907
Tactical
Asset
Allocation1.00% 1.50% 0.35% 1.00% 0.90% 208,715 34,415 15,466
Balanced 1.00% 1.50% 0.35% 1.00% 0.90% 174,256 27,931 5,411
Flexible
Income 0.90% 1.50% 0.35% 1.00% 0.90% 28,133 4,862 446
Income Plus 0.60% 1.25% 0.35% 1.00% 0.90% 99,411 17,322 3,792
Tax-Exempt 0.60% 0.65% 0.35% 1.00% 0.60% 25,760 4,591 -
(1) The rates for Growth are 1% on $750 million in average net assets, 0.90% on
the next $250 million and 0.85% thereafter. The rate for Flexible Income
applies to the first $100 million in average net assets. The rates for the
remaining Portfolios apply to the first $750 million in average net assets.
(2) International Equity and Value Equity rates are in effect for the first nine
months of operations, through October 31, 1997.
(3)Underwriter commissions relate only to front-end sales charges imposed for
Class A and Class T shares and contingent deferred sales charges result from
Class B share redemptions.
Transfer agency fees and expenses: Each Portfolio incurs IIS annual per-account
charges of $15.55 for each open shareholder account, $2.71 for each new account
opened, $1.62 for each closed account maintained, and certain out-of-pocket
expenses.
Custody earnings credits: Investors Fiduciary Trust Company ("IFTC") is
custodian for the Portfolios. Custody earnings credits represent reductions in
IFTC's fees in lieu of interest income earned on incidental uninvested cash
balances. Such credits have been added back to custody fees to reflect total
gross expenses of the Portfolios as applicable. No such credits were received
for the period ended October 31, 1997.
Brokerage commissions: Brokerage commissions incurred by Aggressive Growth on
security transactions placed with an affiliate of its sub-adviser totalled
$78,761 for the year ended October 31, 1997.
Deferred compensation plan: Each eligible Fund trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such trustees
may defer payment of a percentage of their total fees earned as a Fund trustee.
These deferred amounts may be invested in any Portfolio. Contributions made
under the Plan and appreciation (depreciation) and income of Plan assets are
included in Trustees fees and expenses. At October 31, 1997, invested plan
amounts are included in Other Assets, and the total liability for deferred
compensation to trustees is included in Other Liabilities as follows:
Aggressive Growth $ 3,271 Strategic Total Return $ 2,528
International Equity 336 Tactical Asset Allocation 2,239
Capital Appreciation 2,031 Balanced 1,450
Global 23,784 Flexible Income 1,421
Growth 102,756 Income Plus 5,854
C.A.S.E. 691 Tax-Exempt 5,035
Value Equity 805 Total $ 149,201
NOTE 3. Investment transactions:
The cost of securities purchased and proceeds from securities sold (excluding
non-U.S. Government short-term securities) for the period ended October 31, 1997
were as follows:
Non-U.S. Non-U.S. U.S. U.S.
Government Government Governement Government
Purchases Sales Purchases sales
Aggressive Growth $ 41,516,254 $ 37,276,573$ - $ -
International Equity 4,381,618 494,578 - -
Capital Appreciation 29,160,490 30,259,231 19,251,745 18,678,638
Global 292,290,534 190,364,119 98,052,756 104,162,441
Growth 964,857,680 934,996,346 674,489,454 702,585,890
C.A.S.E. 12,411,844 8,781,345 - -
Value Equity 8,091,623 314,998 1,036,473 550,000
Strategic Total Return 17,437,639 9,045,645 5,363,024 2,087,576
Tactical Asset Allocation14,363,090 9,133,285 6,525,027 5,367,922
Balanced 16,786,354 14,559,576 5,809,358 3,322,175
Flexible Income 19,328,018 19,103,240 5,573,093 6,670,677
Income Plus 42,003,029 40,749,062 - -
Tax-Exempt 16,742,420 18,317,263 - -
NOTE 4.Shares of beneficial interest transactions (all amounts in thousands):
Aggressive Growth
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 856 $15,228 45 $717
Class B 151 2,597 13 200
Class C 108 1,867 3 40
Shares issued on reinvestment
of distributions
Class A 60 $932 - $-
Class B 6 90 - -
Class C 6 95 - -
Cost of shares repurchased
Class A (647) $(11,361) (50) $(790)
Class B (22) (373) - (1)
Class C (65) (1,078) (10) (156)
International Equity
Year Ended 10/31/97
Shares Amount
Proceeds for shares sold
Class A 299 $3,192
Class B 59 647
Class C 50 567
Shares issued on reinvestment
of distributions
Class A - $-
Class B - -
Class C - -
Cost of shares repurchased
Class A (8) $(84)
Class B (3) (36)
Class C (12) (142)
Capital Appreciation
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 2,282 $33,846 231 $3,643
Class B 99 1,447 14 221
Class C 65 943 7 113
Shares issued on reinvestment
of distributions
Class A 18 $268 - $-
Class B 2 31 - -
Class C 2 31 - -
Cost of shares repurchased
Class A (2,253) $(33,424) (170) $(2,667)
Class B (57) (827) (5) (72)
Class C (101) (1,485) (13) (201)
Global
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 6,033 $135,749 341 $7,350
Class B 1,616 36,594 49 1,064
Class C 841 18,979 35 736
Shares issued on reinvestment
of distributions
Class A 679 $13,478 - $-
Class B 38 737 - -
Class C 49 954 - -
Cost of shares repurchased
Class A (3,849) $(87,573) (130) $(2,831)
Class B (56) (1,307) (4) (86)
Class C (132) (2,934) (9) (181)
Growth
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 7,142 $167,262 690 $15,361
Class B 330 7,645 36 790
Class C 298 6,873 21 462
Class T 1,555 36,454 136 3,066
Shares issued on reinvestment
of distributions
Class A 523 $11,526 - $-
Class B 6 127 - -
Class C 12 252 - -
Class T 531 11,812 - -
Cost of shares repurchased
Class A (8,843) $(207,496) (523) $(11,670)
Class B (48) (1,121) (1) (18)
Class C (238) (5,543) (22) (481)
Class T (4,132) (98,115) (381) (8,580)
C.A.S.E.
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 206 $2,482 20 $211
Class B 114 1,352 6 70
Class C 154 1,821 14 148
Class T
Shares issued on reinvestment
of distributions
Class A 9 $87 - $-
Class B 5 44 - -
Class C 4 42 - -
Class T
Cost of shares repurchased
Class A (69) $(794) (1) $(6)
Class B (39) (439) (2) (22)
Class C (65) (738) (8) (80)
Class T
Value Equity
Year Ended 10/31/97
Shares Amount
Proceeds for shares sold
Class A 524 $5,686
Class B 249 2,700
Class C 155 1,708
Shares issued on reinvestment
of distributions
Class A - $-
Class B - -
Class C - -
Cost of shares repurchased
Class A (71) $(799)
Class B (5) (54)
Class C (17) (193)
Strategic Total Return
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 617 $9,130 48 $649
Class B 196 2,958 10 132
Class C 199 2,996 6 80
Shares issued on reinvestment
of distributions
Class A 35 $490 - $-
Class B 4 60 - -
Class C 5 65 - -
Cost of shares repurchased
Class A (167) $(2,459) (26) $(354)
Class B (29) (444) (1) (3)
Class C (64) (955) (3) (36)
Tactical Asset Allocation
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 511 $6,308 87 $973
Class B 397 4,885 18 204
Class C 275 3,406 20 225
Shares issued on reinvestment
of distributions
Class A 14 $163 - $-
Class B 6 72 - -
Class C 4 52 - -
Cost of shares repurchased
Class A (343) $(4,180) (8) $(89)
Class B (112) (1,379) (9) (97)
Class C (318) (3,798) (16) (185)
Balanced
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 352 $4,647 27 $365
Class B 132 1,732 15 203
Class C 62 813 2 26
Shares issued on reinvestment
of distributions
Class A 103 $1,251 - $-
Class B 11 133 - -
Class C 10 119 - -
Cost of shares repurchased
Class A (139) $(1,816) (6) $(84)
Class B (28) (364) (1) (17)
Class C (34) (437) (1) (9)
Flexible Income
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 109 $1,032 9 $88
Class B 30 285 3 25
Class C 53 507 6 51
Shares issued on reinvestment
of distributions
Class A 84 $791 8 $74
Class B 3 30 - 2
Class C 5 45 - 4
Cost of shares repurchased
Class A (423) $(3,984) (52) $(487)
Class B (12) (121) (1) (7)
Class C (54) (509) (11) (105)
Income Plus
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 558 $5,959 45 $477
Class B 108 1,147 3 28
Class C 284 3,033 15 154
Shares issued on reinvestment
of distributions
Class A 360 $3,818 27 $287
Class B 6 64 - 3
Class C 18 189 1 13
Cost of shares repurchased
Class A (1,179) $(12,535) (96) $(1,016)
Class B (29) (306) (1) (16)
Class C (246) (2,617) (12) (123)
Tax-Exempt
Year Ended 10/31/97 Month Ended 1
0/31/96 *
Shares Amount Shares Amount
Proceeds for shares sold
Class A 85 $984 14 $153
Class B 14 167 1 9
Class C 45 522 14 156
Shares issued on reinvestment
of distributions
Class A 74 $843 6 $67
Class B 1 7 - -
Class C 3 31 - 3
Cost of shares repurchased
Class A (318) $(3,643) (51) $(576)
Class B (1) (5) - -
Class C (52) (591) (12) (131)
* On October 1, 1996, each Portfolio changed its fiscal year end from September
30 to October 31.
NOTE 5.Information for federal income tax purposes:
At October 31, 1997:
Unrealized Unrealized
Apprec Deprec Net unrlzd
Cost of of of apprec
securities investments investments (deprec)
Aggressive Growth $ 34,539,780 $ 7,161,024 $ (465,676) $ 6,695,348
International Eqty 4,086,314 220,112 (292,345) (72,235)
Capital Appreciation 21,268,759 3,847,055 (303,375) 3,543,680
Global 250,329,944 45,976,407 (9,021,784) 36,954,623
Growth 896,843,064 360,843,919 (13,981,755) 346,862,164
C.A.S.E. 8,346,651 764,229 (314,817) 449,412
Value Equity 8,996,588 925,758 (252,084) 673,674
Strategic Ttl Return 26,309,676 4,253,927 (223,365) 4,030,562
Tactical Asset Alloc 24,398,845 2,905,318 (308,634) 2,596,684
Balanced 15,762,310 1,639,060 (110,684) 1,528,376
Flexible Income 15,976,512 829,121 (23,886) 805,235
Income Plus 66,095,136 3,762,407 (371,451) 3,390,956
Tax-Exempt 23,372,158 943,606 (7,610) 935,996
Realized net capital gains available to distribute will be paid to shareholders
in December 1997. Capital loss carryforwards utilized during the fiscal year
ended October 31, 1997 were:
Aggressive Growth $ 2,547,037 Flexible Income $ 298,509
Capital Appreciation 68,919 Tax-Exempt 766
Capital loss carryforwards for International Equity aggregated $28,802 and are
available to offset future realized net capital gains through October 31, 2005.
Capital loss carryforwards for Flexible Income aggregated $669,528 and are
available to offset future realized net capital gains through October 31, 1998;
of this amount, $188,609 is available through October 31, 2002. Flexible Income
at October 31, 1997, had capital loss carryforwards in the amount of $1,744,936
expire. International Equity and Flexible Income will make net capital gain
distributions in future years to the extent that net capital gains are realized
in excess of available loss carryforwards.
IDEX Series Fund
Report of Independent Accountants
To the Trustees and Shareholders of
IDEX Series Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the portfolios constituting
IDEX Series Fund (hereafter referred to as the "Fund") at October 31, 1997, the
results of each of their operations, the changes in each of their net assets and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1997 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
December 8, 1997
IDEX SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION
October 31, 1997
(unaudited)
The following dividend information for the period ended October 31, 1997, is
being provided on a per share basis according to notice requirements under
Internal
Revenue Code section 852; however, refer to form 1099-DIV information to prepare
income tax returns.
FOR INDIVIDUAL/OTHER
Class A Shares
Portfolio Ordinary Long-term
Record Date Total Income Capital Gain
Aggressive Growth
12/20/96 $0.66956 $0.18557 $0.48399
Capital Appreciation
12/20/96 0.20976 - 0.20976
Global
12/20/96 2.09884 0.44680 1.65204
Growth
12/20/96 0.46765 0.02151 0.44614
Growth - Class T
12/20/96 0.46765 0.02151 0.44614
C.A.S.E.
12/20/96 0.51225 0.51225 -
Strategic Total Return
12/20/96 0.38489 0.36756 0.01733
03/14/97 0.03787 0.03787 -
06/13/97 0.03834 0.03834 -
09/12/97 0.04890 0.04890 -
0.51000 0.49267 0.01733
Tactical Asset Allocation
12/20/96 0.07773 0.07761 0.00012
03/14/97 0.04121 0.04121 -
06/13/97 0.03898 0.03898 -
09/12/97 0.04682 0.04682 -
0.20474 0.20462 0.00012
Balanced
12/20/96 1.80611 1.54570 0.26041
03/14/97 0.05124 0.05124 -
06/13/97 0.05461 0.05461 -
09/12/97 0.03911 0.03911 -
1.95107 1.69066 0.26041
Flexible Income
11/14/96 $0.05253 $0.05253 $-
12/20/96 0.06818 0.06818 -
01/14/97 0.02866 0.02866 -
02/14/97 0.05085 0.05085 -
03/14/97 0.05353 0.05353 -
04/14/97 0.04777 0.04777 -
05/14/97 0.04849 0.04849 -
06/13/97 0.05189 0.05189 -
07/14/97 0.05003 0.05003 -
08/14/97 0.05103 0.05103 -
09/12/97 0.05339 0.05339 -
10/14/97 0.05276 0.05276 -
0.60911 0.60911 -
Income Plus
11/14/96 0.06668 0.06668 -
12/20/96 0.17557 0.14638 0.02919
01/14/97 0.04679 0.04679 -
02/14/97 0.06721 0.06721 -
03/14/97 0.07165 0.07165 -
04/14/97 0.05888 0.05888 -
05/14/97 0.05790 0.05790 -
06/13/97 0.06053 0.06053 -
07/14/97 0.06340 0.06340 -
08/14/97 0.05483 0.05483 -
09/12/97 0.05860 0.05860 -
10/14/97 0.06469 0.06469 -
0.84673 0.81754 0.02919
Class B Shares
Portfolio Ordinary Long-term
Record Date Total Income Capital Gain
Aggressive Growth
12/20/96 $0.66956 $0.18557 $0.48399
Capital Appreciation
12/20/96 0.20976 - 0.20976
Global
12/20/96 2.09884 0.44680 1.65204
Growth
12/20/96 0.46765 0.02151 0.44614
Growth - Class T
12/20/96
C.A.S.E.
12/20/96 0.45276 0.45276 -
Strategic Total Return
12/20/96 0.35995 0.34262 0.01733
03/14/97 0.01747 0.01747 -
06/13/97 0.01522 0.01522 -
09/12/97 0.02388 0.02388 -
0.41652 0.39919 0.01733
Tactical Asset Allocation
12/20/96 0.05706 0.05694 0.00012
03/14/97 0.02392 0.02392 -
06/13/97 0.01982 0.01982 -
09/12/97 0.02632 0.02632 -
0.12712 0.12700 0.00012
Balanced
12/20/96 1.78099 1.52058 0.26041
03/14/97 0.03325 0.03325 -
06/13/97 0.03421 0.03421 -
09/12/97 0.01767 0.01767 -
1.86612 1.60571 0.26041
Flexible Income
11/14/96 $0.04745 $0.04745 $-
12/20/96 0.06052 0.06052 -
01/14/97 0.02484 0.02484 -
02/14/97 0.04294 0.04294 -
03/14/97 0.04899 0.04899 -
04/14/97 0.04521 0.04521 -
05/14/97 0.04358 0.04358 -
06/13/97 0.04659 0.04659 -
07/14/97 0.04516 0.04516 -
08/14/97 0.04579 0.04579 -
09/12/97 0.04810 0.04810 -
10/14/97 0.04763 0.04763 -
0.54680 0.54680 -
Income Plus
11/14/96 0.06091 0.06091 -
12/20/96 0.16685 0.13766 0.02919
01/14/97 0.04248 0.04248 -
02/14/97 0.06085 0.06085 -
03/14/97 0.06654 0.06654 -
04/14/97 0.05348 0.05348 -
05/14/97 0.05239 0.05239 -
06/13/97 0.05457 0.05457 -
07/14/97 0.05790 0.05790 -
08/14/97 0.04892 0.04892 -
09/12/97 0.05267 0.05267 -
10/14/97 0.05894 0.05894 -
0.77650 0.74731 0.02919
Class C Shares
Portfolio Ordinary Long-term
Record Date Total Income Capital Gain
Aggressive Growth
12/20/96 $0.66956 $0.18557 $0.48399
Capital Appreciation
12/20/96 0.20976 - 0.20976
Global
12/20/96 2.09884 0.44680 1.65204
Growth
12/20/96 0.46765 0.02151 0.44614
Growth - Class T
12/20/96
C.A.S.E.
12/20/96 0.46191 0.46191 -
Strategic Total Return
12/20/96 0.36379 0.34646 0.01733
03/14/97 0.02061 0.02061 -
06/13/97 0.01878 0.01878 -
09/12/97 0.02773 0.02773 -
0.43091 0.41358 0.01733
Tactical Asset Allocation
12/20/96 0.06024 0.06012 0.00012
03/14/97 0.02658 0.02658 -
06/13/97 0.02277 0.02277 -
09/12/97 0.02948 0.02948 -
0.13907 0.13895 0.00012
Balanced
12/20/96 1.78486 1.52445 0.26041
03/14/97 0.03602 0.03602 -
06/13/97 0.03735 0.03735 -
09/12/97 0.02097 0.02097 -
1.87920 1.61879 0.26041
Flexible Income
11/14/96 $0.04823 $0.04823 $-
12/20/96 0.06170 0.06170 -
01/14/97 0.02543 0.02543 -
02/14/97 0.04608 0.04608 -
03/14/97 0.04969 0.04969 -
04/14/97 0.04369 0.04369 -
05/14/97 0.04434 0.04434 -
06/13/97 0.04740 0.04740 -
07/14/97 0.04591 0.04591 -
08/14/97 0.04659 0.04659 -
09/12/97 0.04892 0.04892 -
10/14/97 0.04842 0.04842 -
0.55640 0.55640 -
Income Plus
11/14/96 0.06180 0.06180 -
12/20/96 0.16819 0.13900 0.02919
01/14/97 0.04314 0.04314 -
02/14/97 0.06183 0.06183 -
03/14/97 0.06733 0.06733 -
04/14/97 0.05431 0.05431 -
05/14/97 0.05323 0.05323 -
06/13/97 0.05549 0.05549 -
07/14/97 0.05874 0.05874 -
08/14/97 0.04983 0.04983 -
09/12/97 0.05357 0.05357 -
10/14/97 0.05982 0.05982 -
0.78728 0.75809 0.02919
Class A Shares
Exempt-
Interest Long-term
Total Dividends (1) Capital Gain
Tax-Exempt
11/14/96 0.04703 0.04703 -
12/20/96 0.12360 0.07447 0.04913
01/14/97 0.03215 0.03215 -
02/14/97 0.04977 0.04977 -
03/14/97 0.04728 0.04728 -
04/14/97 0.04112 0.04112 -
05/14/97 0.04277 0.04277 -
06/13/97 0.04500 0.04500 -
07/14/97 0.04329 0.04329 -
08/14/97 0.04631 0.04631 -
09/12/97 0.04707 0.04707 -
10/14/97 0.04436 0.04436 -
0.60975 0.56062 0.04913
Class B Shares
Exempt-
Interest Long-term
Total Dividends (1) Capital Gain
Tax-Exempt
11/14/96 0.04080 0.04080 -
12/20/96 0.11427 0.06514 0.04913
01/14/97 0.02752 0.02752 -
02/14/97 0.04294 0.04294 -
03/14/97 0.04177 0.04177 -
04/14/97 0.03530 0.03530 -
05/14/97 0.03679 0.03679 -
06/13/97 0.03853 0.03853 -
07/14/97 0.03734 0.03734 -
08/14/97 0.03990 0.03990 -
09/12/97 0.04067 0.04067 -
10/14/97 0.03814 0.03814 -
0.53397 0.48484 0.04913
Class C Shares
Exempt-
Interest Long-term
Total Dividends (1) Capital Gain
Tax-Exempt
11/14/96 0.04463 0.04463 -
12/20/96 0.12001 0.07088 0.04913
01/14/97 0.03037 0.03037 -
02/14/97 0.04714 0.04714 -
03/14/97 0.04516 0.04516 -
04/14/97 0.03888 0.03888 -
05/14/97 0.04047 0.04047 -
06/13/97 0.04251 0.04251 -
07/14/97 0.04100 0.04100 -
08/14/97 0.04384 0.04384 -
09/12/97 0.04461 0.04461 -
10/14/97 0.04197 0.04197 -
0.58059 0.53146 0.04913
(1) Tax-Exempt Portfolio is a municipal bond portfolio, therefore, for tax
purposes, the dividends declared are considered exempt-interest dividends,
exempt from Federal income tax. Short-term capital gains are ordinary income
and are not exempt from federal income taxes.
IDEX SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION (continued)
October 31, 1997
(unaudited)
QUALIFYING DIVIDENDS - FOR CORPORATION USE ONLY
For long-term capital gain information, refer to the two preceding pages.
Portfolio
Record Date Cls A Shares Cls B Shares Cls C Shares
Cls T Shares
Growth
12/20/96 $0.02151 $0.02151 $0.02151 $0.02151
Strategic Total Return
12/20/96 0.24803 0.23120 0.23379
03/14/97 0.02555 0.01179 0.01391
06/13/97 0.02587 0.01027 0.01267
09/12/97 0.03300 0.01611 0.01871
0.33245 0.26937 0.27908
Tactical Asset Allocation
12/20/96 0.00407 0.00298 0.00315
03/14/97 0.00216 0.00125 0.00139
06/13/97 0.00204 0.00104 0.00119
09/12/97 0.00245 0.00138 0.00155
0.01072 0.00665 0.00728
Balanced
12/20/96 1.08873 1.07104 1.07371
03/14/97 0.03609 0.02342 0.02537
06/13/97 0.03847 0.02410 0.02537
09/12/97 0.03847 0.02410 0.02631
1.20176 1.14266 1.15076
Income Plus
11/14/96 0.06668 0.06091 0.06180
12/20/96 0.14638 0.13766 0.13900
01/14/97 0.04679 0.04248 0.04314
02/14/97 0.06721 0.06085 0.06183
03/14/97 0.07165 0.06654 0.06733
04/14/97 0.05888 0.05348 0.05431
05/14/97 0.05790 0.05239 0.05323
06/13/97 0.06053 0.05457 0.05549
07/14/97 0.06340 0.05790 0.05874
08/14/97 0.05483 0.04892 0.04983
09/12/97 0.05860 0.05267 0.05357
10/14/97 0.06469 0.05894 0.05982
0.81754 0.74731 0.75809
Corporate Deductions: Under Federal tax law, the amounts reportable as
qualifying dividends are eligible for the dividends received deduction in the
year received as provided by section 243 of the Internal Revenue Code. The tax
status of dividends paid will be reported to recipients of Form 1099-DIV after
the close of the applicable calendar year. Shareholders are advised to consult
their tax adviser concerning the tax treatment of dividends and distributions
paid by the Portfolios.
IDEX Series Fund
TRUSTEES
Peter R. Brown
Largo, Florida
Chairman of the Board,
Peter Brown Construction Company
Daniel Calabria
South Pasadena, Florida
Retired; former President/CEO,
Templeton Funds Management, Inc.
James L. Churchill
Hilton Head, South Carolina
Retired; former President of the Avionics
Group of Rockwell International Corporation
Charles C. Harris
Belleair, Florida
Retired; former Senior Vice President,
Western Reserve Life Assurance Co. of Ohio
G. John Hurley
Largo, Florida
President and Chief Executive Officer
of the Fund;
President and Chief Executive Officer
of InterSecurities, Inc.
John R. Kenney
Largo, Florida
Chairman of the Board of the Fund;
Chairman of the Board of InterSecurities, Inc.
Julian Lerner
Dallas, Texas
Advisor to the Board of Associated
Financial Group;
former Investment Consultant and Senior Vice
President, AIM Capital Management
William W. Short, Jr.
Largo, Florida
President, Shorts, Inc.
Chairman, Southern Apparel Corporation
and S.A.C. Distributors
Jack E. Zimmerman
Dayton, Ohio
Retired; former Director, Regional Marketing,
Martin Marietta Corporation
CORPORATE ADDRESS
201 Highland Avenue
Largo Florida, 33770-2597
OFFICERS
John R. Kenney
Chairman of the Board
G. John Hurley
President and Chief Executive Officer
Ronald L. Hall
Senior Vice President - Sales & Marketing
Thomas R. Moriarty
Senior Vice President and Treasurer
Thomas E. Pierpan
Vice President, Counsel and Secretary
William H. Geiger
Vice President and Assistant Secretary
Christopher G. Roetzer
Vice President and Assistant Treasurer
SEND YOUR CORRESPONDENCE TO:
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, Florida 34618-9015
CUSTOMER SERVICE
(888) 233-IDEX (4339)
toll free call
Hours: 8 a.m. to 7 p.m. Monday - Thursday,
8 a.m. to 6 p.m. Friday Eastern time
IDEX Intouch
(800) 421-IDEX (4339)
24-hour automated account information
INVESTMENT ADVISERS
Idex Management, Inc.
201 Highland Avenue
Largo, Florida 33770-2597
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 33770-2597
SUB-ADVISERS
AEGON USA Investment
Management, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
C.A.S.E. Management, Inc.
2255 Glades Road, Suite 221-A
Boca Raton, Florida 33431
Dean Investment Associates
2480 Kettering Tower
Dayton, Ohio 45423
Fred Alger Management Inc.
30 Montgomery Street
Jersey City, New Jersey 07302
GE Investment Management Incorporated
3003 Summer Street
Stanford, Connecticut 06905
Janus Capital Corporation
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Luther King Capital
Management Corporation
301 Commerce Street, Suite 1600
Fort Worth, Texas 76102
NWQ Investment Management
Company, Inc.
655 South Hope Street, 11th Floor
Los Angeles, California 90017
Scottish Equitable Investment
Management Limited
Edinburgh Park,
Edinburgh EH12 9SE, Scotland
PRINCIPAL UNDERWRITER
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 33770-2597
CUSTODIAN
Investors Fiduciary Trust Company
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1055 Broadway, 10th Floor
Kansas City, Missouri 64105
If you receive duplicate mailings because you have more than one account in the
same Portfolio or in the IDEX Series Fund, at the same household, you may wish
to save your Fund money by consolidating your accounts by address. Please call
IDEX Customer Service toll free at (888) 233-IDEX (4339).
