SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Registration No. 33-2659
Pre-Effective Amendment No. __
Post-Effective Amendment No. 29
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
1940 Act File No. 811-4556
Amendment No. 31
(Check appropriate box or boxes.)
IDEX SERIES FUND
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
570 CARILLON PARKWAY, ST. PETERSBURG, FLORIDA 33716
---------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (727) 299-1800
JOHN HURLEY, P.O. BOX 5068, CLEARWATER, FLORIDA 33758-5068
----------------------------------------------------------
(Name and Address of Agent for Service)
Approximate date of proposed public offering:
It is proposed that this filing will become effective:
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485.
[X] 75 days after filing pursuant to paragraph (a) (2) of Rule 485.
[ ] On (date) pursuant to paragraph (a) (1) of Rule 485.
[ ] On (date) pursuant to paragraph (a) (2) of Rule 485.
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[ ] On (date) pursuant to paragraph (b) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
_________________
<PAGE>
IDEX MUTUAL FUNDS
PROSPECTUS
MARCH 1, 1999
Neither the Securities and
Exchange Commission nor any
state securities commission
has approved or disapproved
these securities or passed
upon the adequacy or
accuracy of this
prospectus. Any
representation to the
contrary is a criminal
offense.
<PAGE>
IDEX MUTUAL FUNDS
IDEX MUTUAL FUNDS CONSIST OF 18 INDIVIDUAL FUNDS. EACH FUND INVESTS IN A WIDE
RANGE OF SECURITIES, SUCH AS STOCKS AND BONDS, AND COVER A FULL SPECTRUM OF
RISKS AND REWARDS, APPEALING TO VIRTUALLY EVERY TYPE OF INVESTOR.
PLEASE READ THIS PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. IT HAS
BEEN WRITTEN TO PROVIDE INFORMATION AND ASSIST YOU IN MAKING AN INFORMED
DECISION, WHILE NOT OVERWHELMING YOU WITH UNNECESSARY DATA.
IF YOU WOULD LIKE ADDITIONAL INFORMATION, PLEASE REQUEST A COPY OF THE STATEMENT
OF ADDITIONAL INFORMATION (SEE BACK COVER).
IN ADDITION, WE SUGGEST YOU CONTACT YOUR FINANCIAL PROFESSIONAL OR AN IDEX
CUSTOMER REPRESENTATIVE, WHO WILL BE HAPPY TO ASSIST YOU.
TABLE OF CONTENTS
THE RISK/REWARD SCALE................................................1
ALL ABOUT THE IDEX FUNDS..........................................2-36
/bullet/ International Equity Fund...................................2
/bullet/ Global Fund.................................................4
/bullet/ Small Cap Frontier Fund.....................................6
/bullet/ Mid-Cap Summit Fund.........................................8
/bullet/ Capital Appreciation Fund..................................10
/bullet/ C.A.S.E. Fund..............................................12
/bullet/ Value Equity Fund..........................................14
/bullet/ Mid-Cap Opportunities Fund.................................16
/bullet/ Aggressive Growth Fund.....................................18
/bullet/ Growth Fund................................................20
/bullet/ Blue Chip Fund.............................................22
/bullet/ Dividend Growth Fund.......................................24
/bullet/ Tactical Asset Allocation Fund.............................26
/bullet/ Strategic Total Return Fund................................28
/bullet/ Balanced Fund..............................................30
/bullet/ Flexible Income Fund.......................................32
/bullet/ Income Plus Fund...........................................34
/bullet/ Tax-Exempt Fund............................................36
FULL EXPLANATION OF
STRATEGIES AND RISKS.............................................38-40
HOW THE IDEX FUNDS ARE
MANAGED AND ORGANIZED............................................41-42
SHAREHOLDER INFORMATION..........................................43-49
/bullet/ How to Buy Shares..........................................44
/bullet/ How to Redeem (Sell) Shares................................45
/bullet/ How to Exchange Shares.....................................47
/bullet/ Other Account Information..................................47
FINANCIAL HIGHLIGHTS.............................................50-57
/bullet/ Aggressive Growth, International Equity
Capital Appreciation, Global............................50-51
/bullet/ Growth, C.A.S.E., Value Equity,
Strategic Total Return..................................52-53
/bullet/ Tactical Asset Allocation,
Balanced, Flexible Income...............................54-55
/bullet/ Income Plus, Tax-Exempt.................................56-57
DISTRIBUTION ARRANGEMENTS...........................................59
<PAGE>
AS AN INFORMED INVESTOR, YOU SHOULD KNOW....
All of the 18 Funds involve risk, and all of them offer the potential for
reward. This means you can lose money--and you can make money. At IDEX, we've
structured the Funds so that each offers a slightly different degree of risk and
reward than the others.
In this prospectus, we've arranged the Funds in order of risk/reward from
highest to lowest. Notice the scale at the right. It represents the full range
of risks and rewards, along with the types of securities associated with each
level. This scale appears near the explanation of each Fund, with an arrow
pointing to the risk/reward level of that Fund.
What risk/reward level is for you? Here's how you can tell:
HOW WELL DO YOU HANDLE FLUCTUATIONS IN SHARE PRICE (ACCOUNT VALUE)? The higher a
Fund is on the risk/reward scale, the more its price is likely to move up and
down from day to day. If this makes you uncomfortable, you might prefer an
investment at the lower end of the scale that doesn't fluctuate in price as
much.
ARE YOU LOOKING FOR A HIGHER RATE OF RETURN? Generally, the higher the potential
return, the higher the risk. If you find the potential to make more money to be
worth the possibility of losing more, then a Fund at the higher end of the scale
may be right for you.
A final note: Except for money market funds, MUTUAL FUNDS ARE LONG-TERM
INVESTMENTS. For best results, you should be prepared to commit to this
investment for at least several years due to market cycles.
Each Fund has an investment objective that it tries to achieve through
investing. The objective can be changed without shareholder vote.
TO HELP YOU UNDERSTAND...
In this prospectus, you'll see symbols like the ones at right. These are
"icons", graphic road signs that let you know at a glance the subject of the
nearby paragraphs. The icons serve as tools for your convenience as you read
this prospectus.
[GRAPHIC OMITTED] The target directs you to a Fund's goals or objective.
[GRAPHIC OMITTED] The chess piece indicates discussion about a Fund's
strategies.
[GRAPHIC OMITTED] The warning sign indicates the risks of investing in a Fund.
[GRAPHIC OMITTED] The graph indicates investment performance.
[GRAPHIC OMITTED] The dollar sign indicates fees and expenses of a Fund.
[GRAPHIC OMITTED] The question mark indicates Fund information or it will direct
you on how to obtain further information.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 1
<PAGE>
IDEX INTERNATIONAL EQUITY FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE INTERNATIONAL EQUITY FUND IS LONG-TERM GROWTH OF CAPITAL.
Its sub-advisers, Scottish Equitable Investment Management Limited (SEIM) and GE
Investment Management Incorporated (GEIM), seek to achieve this objective by
investing Fund assets in:
/bullet/ common stocks and other equity securities of foreign ("non-U.S.")
companies traded on overseas exchanges and foreign over-the-counter
markets
/bullet/ preferred stocks, as well as convertible stocks and bonds of such
companies
/bullet/ warrants and rights, which are securities that entitle the Fund to
buy more stock at a later date (rights expire, warrants do not)
/bullet/ Depository receipts including American Depository Receipts ("ADRS"),
Global Depository Receipts ("GDRS") and European Depository Receipts
("EDRS")
This Fund aims to appeal to investors who seek long-term capital growth through
foreign investments, and who are able to tolerate the significant risks in such
investments.
[GRAPHIC OMITTED] STRATEGIES
Each day, the cash that flows into the Fund for investment is divided equally by
SEIM and GEIM, and they manage each portion separately from then on.
Normally, 65% of the Fund's assets are invested in at least 50 stocks of
companies of 15 to 25 different countries. The Fund is never invested in
companies of fewer than 12 countries, other than the U.S.
The Fund invests broadly, not only in the larger stock markets of Europe and
Japan, but also, to a lesser extent in the smaller markets of Asia, Emerging
Europe and Latin America.
Overseas economies usually don't move in the same direction and operate
differently. This creates situations the Fund aims to take advantage of through
asset allocation among international markets.
SEIM looks for countries where economic growth conditions are favorable and
where stock market valuations don't reflect that potential. It then looks for
companies whose earnings potential is not reflected in the share price.
GEIM looks for companies expected to grow faster than their markets, and whose
stock prices don't fully reflect that. Attributes of such companies are strong
earnings growth, low price-to-book value, strong cash flow and presence in an
industry that is experiencing strong growth and has high quality management,
financial strength and sufficient liquidity.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ FOREIGN SECURITIES
Investments in foreign securities involve risks relating to political, social
and economic developments abroad as well as risks resulting from difference in
regulations to which U.S. and foreign issuers and markets are subject. These
risks include:
/bullet/ Changes in currency values
/bullet/ Currency speculation
/bullet/ Currency trading costs
/bullet/ Different accounting and reporting practices
/bullet/ Less information available to the public
/bullet/ Less (or different) regulation of securities' markets
/bullet/ More complex business negotiations
/bullet/ Less liquidity
/bullet/ More fluctuations in market prices
/bullet/ Delays in settling foreign securities transactions
/bullet/ Higher costs for holding foreign securities (custodial fees)
/bullet/ Vulnerability to seizure and taxes
/bullet/ Political instability and small markets
/bullet/ Different market trading days
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of convertible debt securities
tends to decline as interest rates increase and, conversely, to increase as the
interest rates decline.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
2 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the Morgan Stanley Capital
International-Europe, Asia and Far East Index (MSCI-EAFE), a widely recognized
unmanaged index of market performance. Both tables assume reinvestment of
dividends and capital gain distributions. As with all mutual funds, past
performance is not a prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
THREE SINCE
ONE YEAR YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0%
MSCI-EAFE 00.0% 00.0% 00.0%
* Since inception of Class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
----------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $750 $1,170 $1,620 $2,850
B* $780 $1,150 $1,550 $2,920
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $750 $1,170 $1,620 $2,850
B* $280 $850 $1,450 $2,920
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 3
<PAGE>
IDEX GLOBAL FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE GLOBAL FUND IS LONG-TERM GROWTH OF CAPITAL IN A MANNER
CONSISTENT WITH PRESERVATION OF CAPITAL. The sub-adviser, Janus Capital
Corporation (Janus), seeks to achieve this objective by investing primarily in:
/bullet/ foreign stocks of foreign and domestic issuers
The Fund may invest on a worldwide basis in companies and other organizations of
any size, regardless of country of organization or place of principal business
activity.
The Fund may use forward foreign currency contracts for hedging. A forward
foreign currency contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate. These
contracts are used as a hedge against fluctuations in foreign exchange rates.
The Fund aims to appeal to investors who want capital growth without being
limited to investments in U.S. securities, and who can stand the risks
associated with foreign investing.
[GRAPHIC OMITTED] STRATEGIES
Janus' main strategy is to use a "bottom up" approach to build the Fund's
portfolio. They seek to identify individual companies with earnings growth
potential that may not be recognized by the market at large.
Foreign securities are generally selected on a stock-by-stock basis without
regard to defined allocation among countries or geographic regions.
When evaluating foreign investments, Janus (in addition to looking at individual
companies) considers such factors as:
/bullet/ expected levels of inflation in various countries
/bullet/ government policies that might affect business conditions
/bullet/ the outlook for currency relationships
/bullet/ prospects for economic growth among countries, regions or geographic
areas
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ FOREIGN SECURITIES
Investments in foreign (non-U.S.) securities risks relating to political, social
and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. and foreign issuer markets are
subject.
/bullet/ Changes in currency values
/bullet/ Currency speculation
/bullet/ Currency trading costs
/bullet/ Different accounting and reporting practices
/bullet/ Less information available to the public
/bullet/ Less (or different) regulation of securities markets
/bullet/ More complex business negotiations
/bullet/ Less liquidity
/bullet/ More fluctuations in prices
/bullet/ Delays in settling foreign securities transactions
/bullet/ Higher costs for holding shares (custodial fees)
/bullet/ Vulnerability to seizure and taxes
/bullet/ Political instability and small markets
/bullet/ Different market trading days
/bullet/ Forward foreign currency contracts for hedging
/bullet/ HEDGING
The hedging strategy may not be successful if the Fund manager is unable to
accurately predict movements in the prices of individual securities held by the
Fund, or if the strategy does not correlate well with the Fund's investments. A
loss may result when hedging currency exposure.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
4 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the Morgan Stanley Capital International World
Index (MSCIW), a widely recognized unmanaged index of market performance. Both
tables assume reinvestment of dividends and distributions. As with all mutual
funds, past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0%
MSCIW 00.0% 00.0% 00.0%
* Since Inception of class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
---------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,120 $1,520 $2,660
B* $760 $1,110 $1,460 $2,730
C $___ $___ $___ $___
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,120 $1,520 $2,660
B* $260 $800 $1,360 $2,730
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 5
<PAGE>
SMALL CAP FRONTIER FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE INVESTMENT OBJECTIVE OF THE SMALL CAP FRONTIER FUND IS TO SEEK LONG-TERM
GROWTH OF CAPITAL BY INVESTING PRIMARILY IN COMMON STOCKS OF SMALL GROWTH
COMPANIES. The Fund's sub-adviser, T. Rowe Price Associates, Inc. ("T. Rowe
Price"), seeks to achieve this objective by investing Fund assets in:
/bullet/ Common stocks of small-cap growth companies
/bullet/ Futures
This Fund aims to appeal to investors who want an aggressive, long-term approach
to building capital and who can tolerate significant fluctuations inherent in
small-cap stock investing.
[GRAPHIC OMITTED] STRATEGIES
This Fund will invest at least 80% of total assets in common stocks of small-cap
growth companies. Small-cap growth companies are those companies that are still
in the process of developing and are expected by T. Rowe Price to achieve
long-term earnings growth rates that reach new highs over time. For the purposes
of this Fund, a small-cap growth company is defined as one whose market
capitalization is smaller than 90% of the companies in the S&P 500. As of
December 31, 1998, this included companies with market caps under approximately
$__billion, but the upper size limit will vary with market fluctuations. (A
company's market "cap" is found by multiplying its shares outstanding by its
stock price.)
The Fund will be more broadly diversified than the typical small-cap growth
fund; once the Fund achieves sufficient size, the top 25 holdings will not
compose a significant portion of total Fund assets.
Stock selection is based on a variety of quantitative models designed by T. Rowe
Price to identify the key characteristics of small-cap growth stocks. Based on
these models, stocks are selected in a "top down" manner so that the portfolio
as a whole reflects characteristics T. Rowe Price considers important, such as
valuations (price/earnings or price/book value ratios, for example) and
projected earnings growth.
The Fund will typically hold minimum cash reserves to maximize exposure to this
market area. To help the Fund manage cash flow efficiently and maintain
consistent market exposure, the Fund may also buy and sell stock index futures.
The Fund may take a temporary defensive position when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse conditions exist. Under these circumstances,
the Fund may be unable to achieve its investment objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over
the long term, they tend to go up and down more dramatically over the
shorter term. These price movements may result from factors affecting
individual companies, industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ SMALL-CAP COMPANIES
Investing in small companies involves greater risk than is customarily
associated with more established companies. Stocks of small companies
may be subject to more abrupt or erratic price movements than larger
company securities. Small companies often have limited product lines,
markets, or financial resources, and their management may lack depth
and experience.
Also, growth stocks can experience steep price declines if the
company's earnings disappoint investors. Since the Fund will typically
be fully invested in this market sector, investors are fully exposed to
its volatility.
/bullet/ QUANTITATIVE MODELS
Stocks selected using quantitative models may not be effective and may
cause overall returns to be lower than if other methods are used.
/bullet/ FUTURES
Futures involve additional investment risks and transaction costs, and
draw upon skills and experience which are different than those needed
to pick other securities. Special risks include:
/bullet/ Inaccurate market predictions
/bullet/ Imperfect correlation
/bullet/ Illiqudity
/bullet/ Tax considerations
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page __.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
6 IDEX MUTUAL FUNDS / PROSPETUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
Because the Fund is just starting investment operations, it has no historical
performance information to present to you. Performance history will be available
for the Fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases
(AS A % OF OFFERING PRICE)
Deferred sales charge (a) (b)
(AS A % OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees ____% ____% ____%
12b-1 fee ____% ____% ____%
Other expenses ____% ____% ____%
TOTAL (b) (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The investment adviser has voluntarily agreed to reimburse the Fund to the
extent that the management fee, other expenses and total operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses), as a percentage of its average net assets, exceed __%. This
arrangement can be terminated at any time by the investment adviser.
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 7
<PAGE>
MID-CAP SUMMIT FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE INVESTMENT OBJECTIVE OF THE MID-CAP SUMMIT FUND IS TO SEEK CAPITAL
APPRECIATION. The Fund's sub-adviser, Pilgrim Baxter & Associates, Ltd.
("Pilgrim") seeks to achieve this objective by investing Fund assets in:
/bullet/ common stocks of medium capitalization companies
/bullet/ convertible securities
This Fund aims to appeal to investors who want long-term growth of capital and
who can tolerate fluctuations inherent in stock investing.
[GRAPHIC OMITTED] STRATEGIES
In seeking capital appreciation, Pilgrim normally invests at least 65% of the
Fund's total assets in common stocks and convertible securities issued by
companies with market capitalizations between $500 million and $10 billion. The
Fund invests primarily in companies that Pilgrim believes have outlooks for
significant earnings growth and capital-appreciation potential. The Fund may
also invest in foreign (non-U.S.) securities, warrants and rights.
Pilgrim may take a temporary defensive position when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse conditions exist. Under these circumstances,
the Fund may be unable to achieve its investment objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over
the long term, they tend to go up and down more dramatically over the
shorter term. These price movements may result from factors affecting
individual companies, industries or the securities market as a whole.
Because the stocks the Funds may hold fluctuate in prices, the value
of your investment in the Fund will go up and down.
/bullet/ MEDIUM SIZED COMPANIES
These companies present additional risks because their earnings are
less predictable, their share price more volatile, and their securities
less liquid than larger, more established companies.
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of convertible debt
securities tends to decline as interest rates increase and, conversely,
to increase as interest rates decline.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page __.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
8 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
Because the Fund is just starting investment operations, it has no historical
performance information to present to you. Performance history will be presented
for the Fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charge
on purchases
(AS A % OF OFFERING PRICE)
Deferred sales charge (a) (b)
(AS A % OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
A $10 fee will be charged twice a year for an account opened for more than 2
years with at balance belowthe share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees ____% ____% ____%
12b-1 fee ____% ____% ____%
Other expenses ____% ____% ____%
-----------------------------
TOTAL (b) (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The investment adviser has voluntarily agreed to reimburse the Fund to the
extent that the management fee, other expenses and total operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses), as a percentage of its average net assets, exceed __%. This
arrangement can be terminated at any time by the investment adviser.
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 9
<PAGE>
IDEX CAPITAL APPRECIATION FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE CAPITAL APPRECIATION FUND IS LONG-TERM GROWTH OF CAPITAL.
Its sub-adviser, Janus Capital Corporation (Janus), seeks to achieve this
objective by:
/bullet/ investing at least 50% of the Fund's assets in the stocks of
medium-sized companies
Medium-sized companies are those whose market capitalizations, at the time of
purchase, fall within the range of the S&P Mid Cap 400 Index. As of December 31,
1998, this range was $______million to $_____billion.
Subject to this policy, the Fund may also invest in the stocks of smaller or
larger companies as well.
This Fund is classifies as "non-diversiifed." As it's used in this prospectus,
the term "non-diversified" means a fund focuses its investments in a particular
type of investment, industry or country. This fund may invest as much as 50% of
its assets in the securities of as few as two issuers.
This Fund aims to appeal to investors who want capital growth and who can stand
the risks associated with common stock investments.
[GRAPHIC OMITTED] STRATEGIES
This Fund invests in industries and stocks of companies that Janus believes are
experiencing favorable demand for their products and services, and are operating
in favorable competitive and regulatory environments.
Janus use a "bottom up" approach by seeking to identify individual companies
with earnings growth potential that may not be recognized by the market.
Although themes may emerge in the Fund, stocks are usually selected without
regard to any defined industry sector or other similarly defined selection
procedure. Though income is not an objective of the Fund, some holdings might
produce incidental income.
[GRAPHIC OMITTED] RISKS
The Fund is subjet to the following investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ MEDIUM-SIZED COMPANIES
These companies present additional risks because their earnings are less
predictable, their share price more volatile, and their securities less liquied
than larger, more established companies.
/bullet/ NON-DIVERSIFIED
This Funds non-diversification characteristic makes it more susceptible to any
single economic, political or regulatory occurrence. The share price will
flucutate more than a comparable diversified fund.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- ------------------------------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
10 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P MidCap 400 Index (S&P 400), a widely
recognized unmanaged index of stock performance. Both tables assume reinvestment
of dividends and capital gain distributions. As with all mutual funds, past
performance is not a prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
THREE SINCE
ONE YEAR YEARS INCEPTION*
A Shares 00.0% 0.00% 00.0%
B Shares 00.0% 0.00% 00.0%
C Shares 00.0% 0.00% 00.0%
S&P 400 00.0% 0.00% 00.0%
* Since inception of Class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
--------------------------
Total (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $750 $1,080 $1,430 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 11
<PAGE>
IDEX C.A.S.E. FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE C.A.S.E. FUND IS ANNUAL GROWTH OF CAPITAL THROUGH
INVESTMENT IN COMPANIES WHOSE MANAGEMENT, FINANCIAL RESOURCES AND FUNDAMENTALS
APPEAR ATTRACTIVE ON A SCALE MEASURED AGAINST EACH COMPANY'S PRESENT VALUE. Its
sub-adviser, C.A.S.E. Management, Inc. (C.A.S.E.), intends to achieve this
objective by investing Fund assets in:
/bullet/ common stocks
/bullet/ preferred stocks
/bullet/ convertible stocks
The Fund's assets are invested in companies whose stocks are traded on national
exchanges or over-the-counter markets. C.A.S.E. focuses on companies that are
fundamentally strong compared to other companies in the same industry, the same
sector and the broad market.
C.A.S.E. believes that above-average performance is as much a matter of
eliminating bad situations as it is discovering good ones.
This Fund aims to appeal to investors who seek growth in excess of the S&P 500
in good and bad markets, but want a diversified portfolio of companies with
below-market risk characteristics. Investors should be comfortable with the
price fluctuations of such a stock portfolio.
[GRAPHIC OMITTED] STRATEGIES
Using proprietary forms of research, C.A.S.E. selects companies after evaluating
the current economic cycle, and identifying attractive sectors, industries and
company-specific circumstances.
The Fund invests in common, preferred and convertible stocks of firms that
C.A.S.E. believes show below-market risk, supported by below-market multiples,
along with above-average fundamentals. These fundamentals include return on
equity, price-to-earnings ratio and other balance sheet factors that contribute
to long-term capital growth.
C.A.S.E. applies its proprietary forms of research to companies that exhibit
superior products and above-average growth rates along with sound management and
financials.
Each company selected for the Fund is monitored against more than two dozen
disciplines, including:
/bullet/ insiders' activity
/bullet/ market style leadership
/bullet/ earnings surprise
/bullet/ analysts' change in earnings projections
/bullet/ return on equity
/bullet/ 5-year earnings-per-share growth rate
/bullet/ price-earnings ratio
/bullet/ price-to-book ratio
/bullet/ price-to-cash flow
/bullet/ institutional activity and holdings
/bullet/ relative strength price change
/bullet/ price-to-200-day moving average
/bullet/ price-to-historical rising inflation
/bullet/ price-to-declining U.S. dollar
/bullet/ earnings projected change
/bullet/ quarterly earnings per-share growth rate
Stocks are sold when C.A.S.E. views them as overvalued, or when C.A.S.E. feels
the stocks have lost their strong fundamentals.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ PROPRIETARY RESEARCH
C.A.S.E.'s proprietary forms of research may not be effective and may cause
overall returns to be lower than if other forms of research are used.
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of convertible debt securities
tends to decline as interest rates increase and, conversely, to increase as the
interest rates decline.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- ------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
12 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P 500, a widely recognized unmanaged
index of stock performance. Both tables assume reinvestment of dividends and
capital gain distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION*
A Shares 00.0% 00.0%
B Shares 00.0% 00.0%
C Shares 00.0% 00.0%
S&P 500 00.0% 00.0%
* Since inception of Class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
--------------------------
Total (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $750 $1,080 $1,430 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 13
<PAGE>
IDEX VALUE EQUITY FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE VALUE EQUITY FUND IS MAXIMUM CONSISTENT TOTAL RETURN WITH
MINIMUM RISK TO PRINCIPAL. Its sub-adviser, NWQ Investment Management Company,
Inc. (NWQ), employs a value-oriented approach to investing.
The Fund seeks to achieve this objective by investing primarily in:
/bullet/ common stocks
/bullet/ money market and short-term instruments (Treasury Bills)
/bullet/ Amercian Depositary Receipts and exchange listed foreign stocks
This Fund aims to appeal to investors who seek both capital preservation and
long-term capital appreciation.
[GRAPHIC OMITTED] STRATEGIES
NWQ will use statistical measures to look for above-average stock valuations,
screening for below-average price-to-earnings and price-to-book ratios,
above-average dividend yields and strong financial stability.
NWQ also identifies those market sectors believed to benefit from long-term
positive fundamentals, and focuses on the companies within these sectors which
represent above-average statistical value and are undervalued when purchased.
The Fund consists of ________ mid-capitalization to large-capitalization
companies. NWQ differs from many other value-oriented managers in that it:
/bullet/ uses earnings averaged over both strong and weak periods in evaluating
cyclical companies
/bullet/ focuses on quality of earnings
/bullet/ invests in relative value
/bullet/ concentrates in industries and sectors that have strong long-term
fundamentals
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ MEDIUM-SIZED COMPANIES
These companies present additional risks because their earnings are less
predictable, their share price more volatile, and their securities less liquid
than larger more established companies.
/bullet/ FOREIGN SECURITIES
Investments in foreign securities involve risks relating to political, social
and economic developments abroad as well as risks resulting from difference in
regulations to which U.S. and foreign issuers and markets are subject.
These risks include:
/bullet/ Changes in currency values
/bullet/ Currency speculation
/bullet/ Currency trading costs
/bullet/ Different accounting and reporting practices
/bullet/ Less information available to the public
/bullet/ Less (or different) regulation of securities' markets
/bullet/ More complex business negotiations
/bullet/ Less liquidity
/bullet/ More fluctuations in market prices
/bullet/ Delays in settling foreign securities transactions
/bullet/ Higher costs for holding foreign securities (custodial fees)
/bullet/ Vulnerability to seizure and taxes
/bullet/ Political instability and small markets
/bullet/ Different market trading days
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
14 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P 500, a widely recognized unmanaged
index of stock performance. Both tables assume reinvestment of dividends and
capital gain distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION*
A Shares 00.0% 00.0%
B Shares 00.0% 00.0%
C Shares 00.0% 00.0%
S&P 500 00.0% 00.0%
*Since inception of Class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
===============================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
-------------------------
Total (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Certain purchases of Class C shares after February 28, 1999 are subject to
a 1% contingent deferred sales charge if redeemed within 18 months of
purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $690 $1,000 $1,320 $2,240
B* $720 $970 $1,250 $2,320
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $640 $1,000 $1,320 $2,240
B* $220 $670 $1,150 $2,320
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 15
<PAGE>
MID-CAP OPPORTUNITIES FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE INVESTMENT OBJECTIVE OF THE MID-CAP OPPORTUNITIES FUND IS TO SEEK CAPITAL
APPRECIATION. The Fund's sub-adviser, Salomon Brothers Asset Management Inc.
("SBAM"), seeks to achieve this objective by investing Fund assets in:
/bullet/ common stocks
/bullet/ convertible securities
/bullet/ cash and cash equivalents
This Fund aims to appeal to investors who want long-term growth of capital and
who can tolerate fluctuations in their investments.
[GRAPHIC OMITTED] STRATEGIES
This Fund is classified as "non-diversified." As it is used in this prospectus,
the term "non-diversified" means a fund focuses its investments in a particular
type of investment, industry or country. The Fund will primarily invest in
common stocks, or securities convertible into or exchangeable for common stocks,
such as convertible preferred stocks or convertible debentures.
In seeking capital appreciation, the Fund may purchase securities of: seasoned
issuers; small companies; newer companies; and new issues. The Fund may be
subject to wide fluctuations in market value. Portfolio securities may have
limited marketability or may be widely and publicly traded.
SBAM anticipates that the Fund's investments generally will be in securities of
companies which it considers to reflect the following characteristics:
/solid box/ Undervalued share prices
/solid box/ Special situations such as existing or possible changes in
management or management policies, corporate structure or control,
capitalization, regulatory environment, or other circumstances
which could be expected to favor earnings or market price of such
company's shares
/solid box/ Growth potential due to technological advances, new methods in
marketing or production, new or unique products or services, changes
in demands for products or services or other significant new
developments
SBAM uses a bottom-up, fundamental research process to select the Fund's
securities. They seek to identify individual companies with earnings growth
potential that may not be recognized by the market.
SBAM may take a temporary defensive position when the securities trading markets
or the economy are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. Under these circumstances, the Fund
may be unable to pursue its investment objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over
the long term, they tend to go up and down more dramatically over the
shorter term. These price movements may result from factors affecting
individual companies, industries or the securities market as a whole.
Because the Fund's holdings may fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ CONVERTIBLE SECURITIES
The market value of convertible debt securities tends to decline as
interest rates increase and, conversely, to increase as interest rates
decline.
/bullet/ NON-DIVERSIFIED
This Fund's non-diversification makes it more susceptible to any
single, economic, political or regulatory occurrence. The share price
will fluctuate more than a comparable diversified fund.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page __.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
16 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
Because the Fund is just starting investment operations, it has no historical
performance information to present to you. Performance history will be available
for the Fund after the Fund has been in operation for one calendar year.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases
(as a % of offering price)
Deferred sales charge (a) (b)
(as a % of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees ____% ____% ____%
12b-1 fee ____% ____% ____%
Other expenses ____% ____% ____%
---------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The investment adviser has voluntarily agreed to reimburse the Fund to the
extent that the management fee, other expenses and total operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses), as a percentage of its average net assets, exceed __%. This
arrangement can be terminated at any time by the investment adviser.
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $_____ $_____
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 17
<PAGE>
IDEX AGGRESSIVE GROWTH FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE AGGRESSIVE GROWTH FUND IS LONG-TERM CAPITAL APPRECIATION.
The Fund's sub-adviser, Fred Alger Management, Inc. (Alger), seeks to achieve
this objective by investing Fund assets in:
/bullet/ equity securities such as common or perferred stocks
/bullet/ convertible securities (convertible securities are securities which can
be exchanged for or converted into common stock of such companies)
/bullet/ U.S. dollar denominated securities of foreign issuers (American
Depository Receipts)
/bullet/ money market instruments, including repurchase agreements
/bullet/ repurchase agreements
This Fund aims to appeal to investors who seek capital growth aggressively, and
who can tolerate wide swings in the value of their investment.
[GRAPHIC OMITTED] STRATEGIES
Except during defensive periods (as when the markets are down), the Fund invests
at least 85% of its assets in common stocks, which may include stocks of
developing companies, of older companies that are entering a new stage of
growth, and of companies whose products or services have a high unit volume
growth rate.
The Fund may also use leveraging, a technique that involves borrowing money to
invest in an effort to enhance shareholder returns.
The Fund's manager may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist. During this time,
the Fund may invest up to 100% of its assets in money market instruments and
cash equivalents. Under these circumstances, the Fund may be unable to pursue
its investment objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ INVESTING AGGRESSIVELY
/bullet/ Value of developing-company stocks may drop significantly
/bullet/ Rights, options and futures contracts may not be exercised and
may expire worthless
/bullet/ Warrants and rights may be less liquid than stocks
/bullet/ Leveraging practices may make the Fund more volatile.
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of convertible debt securities
tends to decline as interest rates increase and, conversely, to increase as
the interest rates decline.
/bullet/ REPURCHASE AGREEMENTS
Repurchase agreements involve the risk that the seller will fail to repurchase
the security, as agreed. In that case, the Fund will bear the risk of market
value fluctuations until the security can be sold and may encounter delays and
incur costs in liquidating the securitiy. In the event of bankruptcy or
insolvency of the seller, delays and costs are incurred.
/bullet/ ADRs
Investments in foreign securities involve risks relating to political, social
and economic developments abroad as well as risks resulting from differences
in regulations to which U.S. and foreign issuers and markets are subject. These
risks include:
/bullet/ Changes in currency values
/bullet/ Currency specuation
/bullet/ Currency trading costs
/bullet/ More fluctuations in market prices
/bullet/ Less information available
The value of these securities may change daily based on changes in interest
rates, and other market conditions and factors.
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to pay interest or
return principal
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- --------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
18 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P 500 Composite Stock Price Index(S&P
500), a widely recognized unmanaged index of stock performance. Both tables
assume reinvestment of dividends and capital gain distributions. As with all
mutual funds, past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS as of 12/31/98
THREE SINCE
ONE YEAR YEARS INCEPTION*
A Shares 00.0% 0.00% 00.0%
B Shares 00.0% 0.00% 00.0%
C Shares 00.0% 0.00% 00.0%
S&P 500 00.0% 0.00% 00.0%
*Since inception of Class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
--------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $750 $1,080 $1,430 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 19
<PAGE>
IDEX GROWTH FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE GROWTH FUND IS GROWTH OF CAPITAL. Its sub-adviser, Janus
Capital Corporation (Janus), seeks to achieve this objective by investing mainly
in:
/bullet/ common stocks listed on national exchanges or on NASDAQ which Janus
believes have a good potential for capital growth
This Fund aims to appeal to investors who want capital growth in a broadly
diversified stock portfolio, and who can tolerate significant fluctuations in
the value of their investment.
[GRAPHIC OMITTED] STRATEGIES
The Fund's main strategy is to invest almost all of its assets in common stocks
at times when Janus believes the market environment favors such investing.
Janus generally takes a "bottom up" approach to building the stock portfolio. In
other words, Janus seeks to identify individual companies with earnings growth
potential that may not be recognized by the stock market at large.
Although themes may emerge in the Fund, securities are generally selected
without regard to any defined industry sector or other similarly defined
selection procedure. Realization of income is not a significant investment
consideration for the Fund and any income realized on the Fund's investments is
incidental to its objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
20 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P 500, a widely recognized unmanaged
index of stock performance. Both tables assume reinvestment of dividends and
capital gain distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0% 0.00%
B Shares 00.0% 00.0% 00.0% 0.00%
C Shares 00.0% 00.0% 00.0% 0.00%
T Shares 00.0% 00.0% 00.0% 0.00%
S&P 500 00.0% 00.0% 00.0% 0.00%
*Since inception of Class "A" Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C T*
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00% 8.50%
Deferred sales charge None(a) 5.00% 1.00% None(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
* Not available to new investors.
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
----------------------------
TOTAL (c) ____% ____% ____%
================================================================================
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $700 $1,030 $1,380 $2,360
B* $750 $1,010 $1,310 $2,430
C $___ $___ $___ $___
T $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $700 $1,030 $1,380 $2,360
B* $230 $710 $1,210 $2,430
C $970 $1,220 $1,480 $2,240
T $___ $___ $___ $___
- --------------------------------------------------------------------------------
*Examples for Class B Shares assume they'll convert to Class A shares eight
years after you purchase them, and you'll own the shares on the first day of the
first year.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 21
<PAGE>
BLUE CHIP FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE INVESTMENT OBJECTIVE OF THE BLUE CHIP FUND IS TO SEEK LONG-TERM GROWTH OF
CAPITAL. The Fund's sub-adviser, Goldman Sachs Asset Management ("GSAM"), seeks
to achieve this objective by investing primarily in:
/bullet/ equity securities
This Fund aims to appeal to investors who seek long- term growth of capital and
who can tolerate fluctuations inherent in stock investing.
[GRAPHIC OMITTED] STRATEGIES
This Fund will invest at least 90% of total assets in a diversified portfolio of
equity securities that are considered by GSAM to have long term capital
appreciation potential. Although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 10% of its total assets in foreign
(non-U.S.) securities, including securities of issuers in emerging (developing)
countries and securities quoted in foreign currencies.
Equity securities for this Fund are selected based on their prospects for above
average growth. GSAM will select securities of growth companies trading, in
GSAM's opinion, at a reasonable price relative to other industries, competitors
and historical price/earnings multiples.
In order to determine whether a security has favorable growth prospects, GSAM
ordinarily looks for one or more of the following characteristics in relation to
the security's prevailing price: prospects for above average sales and earnings
growth per share; high return on invested capital; free cash flow generation;
sound balance sheet, financial and accounting policies, and overall financial
strength; strong competitive advantages; effective research, product
development, and marketing; pricing flexibility; strength of management; and
general operating characteristics that will enable the company to compete
successfully in its marketplace.
The Fund generally will invest in companies whose earnings are believed to be in
a relatively strong growth trend, or, to a lesser extent, in companies in which
significant further growth is not anticipated but whose market value per share
is thought to be undervalued.
The Fund's manager may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist. Under these
circumstances, the Fund may be unable to achieve its investment objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over
the long term, they tend to go up and down more dramatically over the
shorter term. These price movements may result from factors affecting
individual companies, industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment will go up and down.
/bullet/ FOREIGN SECURITIES
Investments in foreign securities involve risks relating to political, social
and economic developments abroad as well as risks resulting from difference in
regulations to which U.S. and foreign issuers and markets are subject.
These risks include:
/bullet/ Changes in currency values
/bullet/ Currency speculation
/bullet/ Currency trading costs
/bullet/ Different accounting and reporting practices
/bullet/ Less information available to the public
/bullet/ Less (or different) regulation of securities' markets
/bullet/ More complex business negotiations
/bullet/ Less liquidity
/bullet/ More fluctuations in market prices
/bullet/ Delays in settling foreign securities transactions
/bullet/ Higher costs for holding foreign securities (custodial fees)
/bullet/ Vulnerability to seizure and taxes
/bullet/ Political instability and small markets
/bullet/ Different market trading days
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page __.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
22 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
Because the Fund is just starting investment operations, it has no historical
performance information to present to you. Performance history will be available
for the Fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases
(AS A % OF OFFERING PRICE)
Deferred sales charge (a) (b)
(AS A % OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
(A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the class share minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees ____% ____% ____%
12b-1 fee ____% ____% ____%
Other expenses ____% ____% ____%
---------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The investment adviser has voluntarily agreed to reimburse the Fund to the
extent that the management fee, other expenses and total operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses), as a percentage of its average net assets, exceed __%. This
arrangement can be terminated at any time by the investment adviser.
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $_____ $_____
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 23
<PAGE>
DIVIDEND GROWTH FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
The investment objective of the Dividend Growth Fund is to provide an increasing
level of dividend income, long-term capital appreciation, and reasonable current
income through investments primarily in dividend-paying stocks. The fund's
sub-adviser, T. Rowe Price Associates, Inc. ("T. Rowe Price"), seeks to achieve
this objective by investing Fund assets in:
/bullet/ Dividend-paying common stocks with favorable prospects for increasing
dividends and long-term appreciation
/bullet/ Foreign securities
/bullet/ Futures and options
This Fund aims to appeal to investors who want increasing income over time along
with capital appreciation and who can tolerate significant fluctuations in the
value of their investment.
[GRAPHIC OMITTED] STRATEGIES
This Fund typically invests at least 65% of total assets in common stocks of
dividend-paying companies that T. Rowe Price expects these companies to increase
their dividends over time and also provide long-term appreciation.
T. Rowe Price looks for stocks with sustainable, above-average growth in
earnings and dividends, and attempts to buy them when they are temporarily out
of favor or undervalued by the market. In selecting investments, T. Rowe Price
favors companies with one or more of the following:
/bullet/ Either a track record of, or the potential for, above-average earnings
and dividend growth
/bullet/ A competitive current dividend yield
/bullet/ A sound balance sheet and solid cash flow to support future dividend
increases
/bullet/ A sustainable competitive advantage and leading market position
/bullet/ Attractive valuations such as a relatively high dividend yield
Most of the Fund's assets will be invested in U.S. common stocks. However, T.
Rowe Price may also purchase other types of securities such as foreign
securities, convertibles, warrants, preferred stocks, and corporate and
government debt when considered consistent with the Fund's objective. Futures
and options may be used for any number of reasons, including: managing the
Fund's exposure to securities prices and foreign currencies; to enhance income;
to manage cash flows efficiently; or to protect the value of portfolio
securities.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over
the long term, they tend to go up and down more dramatically over the
shorter term. These price movements may result from factors affecting
individual companies, industries or the securities market as a whole.
Because the stocks the Fund may hold fluctuates in price, the value of
your investment in the Fund will go up and down.
/bullet/ FOREIGN SECURITIES
Investments in foreign securities involve risks relating to political,
social and economic developments abroad as well as risks resulting from
differences in regulations to which U.S. and foreign issuers and
markets are subject. These risks include:
/bullet/ Changes in currency values
/bullet/ Currency speculation
/bullet/ Currency trading costs
/bullet/ Different accounting and reporting practices
/bullet/ Less information available to the public
/bullet/ Less (or different), regulation of securities markets
/bullet/ More complex business negotiations
/bullet/ Less liquidity
/bullet/ More fluctuations in market prices
/bullet/ Delays in settling foreign securities transactions
/bullet/ Higher costs for holding foreign securities (custodial fees)
/bullet/ Vulnerability to seizure and taxes
/bullet/ Political instability and small markets
/bullet/ Different market trading days
/bullet/ FUTURES AND OPTIONS
Futures and options involve additional investment risks and transaction
costs, and draw upon skills and experience which are different than
those needed to pick other securities. Special risks include:
/bullet/ Inaccurate market predictions
/bullet/ Imperfect correlation
/bullet/ Illiquidity
/bullet/ Tax considerations
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page __.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR
FINANCIAL PROFESSIONAL OR CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX
(4339).
24 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
Because the Fund is just starting investment operations, it has no historical
performance information to present to you. Performance history will be available
for the Fund after the Fund has been in operation for one calendar year.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases
(AS A % OF OFFERING PRICE)
Deferred sales charge (a) (b)
(AS A % OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
(A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees ____% ____% ____%
12b-1 fee ____% ____% ____%
Other expenses ____% ____% ____%
---------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1998 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The investment adviser has voluntarily agreed to reimburse the Fund to the
extent that the management fee, other expenses and total operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses), as a percentage of its average net assets, exceed __%. This
arrangement can be terminated at any time by the investment adviser.
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $____ $_____
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $___ $___ $_____ $_____
B* $___ $___ $_____ $_____
C $___ $___ $_____ $_____
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 25
<PAGE>
IDEX TACTICAL ASSET ALLOCATION FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE TACTICAL ASSET ALLOCATION FUND IS PRESERVATION OF CAPITAL
AND COMPETITIVE INVESTMENT RETURNS. The Fund's sub-adviser, Dean Investment
Associates (Dean), seeks to achieve this objective by investing Fund assets in:
/bullet/ income-producing common and preferred stocks
/bullet/ debt obligations of U.S. issuers, some of which will be convertible
into common stocks
/bullet/ U.S. Treasury bonds, notes and bills
/bullet/ money market funds
In selecting stocks, Dean focuses on high-quality, liquid, large capitalization
stocks, using a "bottom-up" screening process to identify stocks that are
statistically undervalued. Dean's ultimate goal is to choose stocks whose price
has been driven down by a market that has "over-reacted" to its perceived risks.
With this approach, the Fund seeks to achieve a dividend income yield higher
than that of the Russell 1000 Index.
This Fund aims to appeal to investors who want a combination of capital growth
and income, and who can tolerate the risks associated with an actively-traded
portfolio which shifts assets between equity and debt.
[GRAPHIC OMITTED] STRATEGIES
This Fund employs an investment technique called "asset allocation," which
shifts assets from one class of investment to another (such as from equity to
debt) when Dean anticipates changes in market direction.
The Fund will seek to enhance returns in rising stock markets by increasing its
allocation to equity, then protect itself in falling stock markets by reducing
equity exposure and shifting into fixed-income investments, as well as into
money market funds (up to 10% of total assets).
Dean has developed forecasting models to predict movements in the stock market
for both short (12 to 18-month) and long (3 to 5-year) time periods. These
models help compare the risks and rewards Dean anticipates in holding stocks
versus debt instruments and money market funds.
Thus, the models determine when Dean is to "tactically" adjust the Fund's asset
allocation among stocks, bonds, U.S. debt obligations and money market funds.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over
the long term, they tend to go up and down more dramatically over the shorter
term. These price movements may result from factors affecting individual
companies, industries, or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of convertible debt securities
tends to decline as interest rates increase and, conversely, to increase as the
interest rates decline.
/bullet/ FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. The risks include:
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to pay interest or
return principal
/bullet/ STATISTICAL MODELS
Securities selected using statistical models may result in incorrect asset
allocations causing overall returns to be lower than if other methods of
selection were used.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
26 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the Lehman Brothers Intermediate Government
Corporate Bond Index (LBIGCB) and the Russell 1000 Index ("Russell 1000"),
widely recognized unmanaged index of market performance. Both tables assume
reinvestment of dividends and capital gain distributions. As with all mutual
funds, past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
THREE SINCE
ONE YEAR YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0%
LBIGCB 00.0% 00.0% 00.0%
S&P 500 00.0% 00.0% 00.0%
* Since inception of Class "A" shares.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
----------------------------
TOTAL (b) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $750 $1,080 $1,430 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 27
<PAGE>
IDEX STRATEGIC TOTAL RETURN FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE STRATEGIC TOTAL RETURN FUND IS CURRENT INCOME, LONG-TERM
GROWTH OF INCOME, AND CAPITAL APPRECIATION. Its sub-adviser, Luther King Capital
Management Corporation (Luther King), seeks to achieve this objective by
investing Fund assets in a blend of equity and fixed-income securities which
include:
/bullet/ common stocks
/bullet/ corporate bonds
/bullet/ convertible preferred stocks
/bullet/ corporate convertible bonds
/bullet/ U.S. Treasury notes
The Fund seeks to achieve an income yield greater than the average yield of the
stocks in the S&P 500.
The Fund invests mainly in the stocks and bonds of companies with established
operating histories and strong fundamental characteristics. The majority of the
stocks the Fund buys will be listed on a national exchange or traded on NASDAQ
or domestic over-the-counter markets.
This Fund aims to appeal to investors who seek capital appreciation and income
growth through a strategic blend of stocks and bonds, and who desire a
fundamentally-oriented investment approach, emphasizing risk management.
[GRAPHIC OMITTED] STRATEGIES
The Fund seeks to invest in a blend of equity and fixed-income securities to
achieve a balance of capital appreciation and investment income while limiting
volatility. The Fund will also invest in convertible securities, which have both
equity and fixed-income characteristics. In choosing such securities, Luther
King looks for companies with strong fundamental characteristics. It considers
factors such as:
/bullet/ balance sheet quality
/bullet/ cash flow generation
/bullet/ earnings and dividend growth record and outlook
/bullet/ profitability levels
In some cases, Luther King bases its selections on other factors. For example,
some securities may be bought at an apparent discount to their appropriate
value, with the anticipation that they'll increase in value over time.
Luther King closely analyzes a company's financial status and a security's
valuation in an effort to control risk at the individual security level. In
addition, the growth elements of the Fund's equity investments drive capital
appreciation.
As part of its income-oriented strategy, Luther King expects to invest about 25%
of the Fund's assets in fixed-income securities, some of which will be
convertible into common stocks, and no more than 20% of its assets in stocks
that don't pay a dividend. Up to 10% of the Fund's assets may be invested in
high yield/high-risk bonds (commonly known as "junk bonds"). These bonds are
rated below investment grade by the primary rating agencies.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. The risks include:
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to
pay interest or return principal
/bullet/ HIGH-YIELD/HIGH-RISK SECURITIES
/bullet/ Credit risk
/bullet/ Greater sensitivity to interest rate movements
/bullet/ More speculative
/bullet/ Greater vulnerability to economic changes
/bullet/ Decline in market value in event of default
/bullet/ Less liquidity
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of convertible debt securities
tends to decline as interest rates increase and, conversely, to increase as
interest rates decline.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- ------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
28 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P 500, a widely recognized unmanaged
index of stock performance. Both tables assume reinvestment of dividends and
capital gain distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION*
A Shares 00.0% 00.0%
B Shares 00.0% 00.0%
C Shares 00.0% 00.0%
S&P 500 00.0% 00.0%
* Since inception of Class "A" shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
---------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $750 $1,080 $1,430 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 29
<PAGE>
IDEX BALANCED FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE BALANCED FUND IS LONG-TERM CAPITAL GROWTH, CONSISTENT WITH
PRESERVATION OF CAPITAL AND BALANCED BY CURRENT INCOME. The Fund's sub-adviser,
Janus Capital Corporation (Janus), seeks to achieve this objective by normally
investing in:
/bullet/ equity securities
/bullet/ convertible securities
/bullet/ fixed-income securities
/bullet/ high-yield/high-risk securities (commonly known as "junk bonds")
This Fund aims to appeal to investors who seek capital growth and income from
the same investment, but who also want an investment that sustains value by
maintaining a balance between equity and debt (stocks and bonds). The Fund is
not for investors who desire a consistent level of income.
[GRAPHIC OMITTED] STRATEGIES
The basic strategy of the Fund is to maintain a growth component and an
income component. Normally, 40% to 60% of the Fund's securities are chosen for
their GROWTH potential, and the remaining 40% to 60% are chosen for their INCOME
potential.
The growth component is expected to consist mainly of common stocks in companies
and industries that Janus believes are experiencing favorable demand for their
products and services, and that are operating in a favorable competitive and
regulatory climate. In its analysis, Janus looks for companies with earnings
growth potential that may not be recognized by the market.
The income component will consist of securities that Janus believes have income
potential. Such securities may include equity securities, convertible securities
and all types of debt securities.
At least 25% of the Fund's assets will normally be invested in fixed-income
securities, including bonds and preferred stock.
The sub-adviser uses a "bottom up" approach by seeking to identify individual
companies with earning potential that may not be recognized by the market at
large. Securities are selected without regard to any industry sector or other
similarly defined selection procedure.
Up to 35% of the Fund's assets may be invested in high/yield/high-risk bonds
(commonly known as "junk bonds"). These bonds are rated below investment grade
by the primary rating agencies.
The Fund may shift assets between the growth and income portions of its
portfolio, based on Janus' analysis of the market and conditions in the economy.
If Janus believes that at a particular time growth investments will provide
better returns than the yields from income-producing investments, the Fund may
put a greater emphasis on growth. The reverse may also take place.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of a convertible debt security
tends to decline as interest rates increase and, conversely, to increase as the
interest rates decline.
/bullet/ FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. The risks include:
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to pay interest or
return principal
/bullet/ HIGH-YIELD/HIGH-RISK SECURITIES
/bullet/ Credit risk
/bullet/ Greater sensitivity to interest rate movements
/bullet/ More speculative
/bullet/ Greater vulnerability to economic changes
/bullet/ Decline in market value in event of default
/bullet/ Less liquidity
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
30 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the S&P 500, the Lehman Brothers
Government/Corporate Bond Index (LBGCB) and the Lehman Brothers Long
Government/Corporate Bond Index (LBLGCB), widely recognized unmanaged indexes of
market performance. The tables assume reinvestment of dividends and capital gain
distributions. As with all mutual funds, past performance is not a prediction of
future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR THREE YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0%
LBGCB 00.0% 00.0% 00.0%
S&P 500 00.0% 00.0% 00.0%
LBLGCB 00.0% 00.0% 00.0%
* Since inception of Class "A" shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account open for more than 2 years
with a balance below the share class minimum. (Before the fee is assessed, you
will be given 60 days notice to have the opportunity to increase your balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
----------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $750 $1,080 $1,430 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $730 $1,100 $1,500 $2,600
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 31
<PAGE>
IDEX FLEXIBLE INCOME FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE FLEXIBLE INCOME FUND IS MAXIMUM TOTAL RETURN FOR
SHAREHOLDERS, CONSISTENT WITH PRESERVATION OF CAPITAL, BY ACTIVELY MANAGING A
PORTFOLIO OF INCOME-PRODUCING SECURITIES.
The Fund normally invests at least 80% of its total assets in income-producing
securities of both foreign and domestic companies. The Fund's sub-adviser, Janus
Capital Corporation ("Janus"), seeks to achieve this objective by investing
primarily in:
/bullet/ corporate debt securities
/bullet/ lower-rated securities, including bonds considered less than investment
grade (high-yield/high risk bonds) of both foreign and domestic issuers
/bullet/ mortgage- and other asset-backed securities
/bullet/ convertible securities
/bullet/ preferred stock
/bullet/ income-producing common stock
This Fund aims to appeal to investors who want current income enhanced by the
potential for capital growth, and who are willing to tolerate fluctuation in
principal value caused by changes in interest rates as well as the risks
associated with substantial investments in high-yield/high-risk bonds (commonly
known as "junk bonds") or unrated bonds of domestic or foreign issuers.
[GRAPHIC OMITTED] STRATEGIES
The Fund seeks maximum current income by investing mainly in corporate bonds
that offer higher yields, but more risk than higher rated bonds. While the Fund
may buy bonds of any maturity, the Fund's average maturity may vary
substantially, depending upon Janus' analysis of market, economic and financial
conditions at the time.
To increase the potential of higher returns, the Fund has no pre-established
standards for the quality of the debt instruments it buys.
The Fund may also buy unrated debt securities of both domestic and foreign
issuers, and may at times have substantial holdings of such high-yield/high-risk
bonds.
In determining the creditworthiness of bond issuers, Janus uses, but doesn't
rely solely on, credit ratings.
Janus seeks to diversify the Fund's investments across many securities and
sectors. Currency risk is generally avoided through hedging and other means.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ FIXED-INCOME SECURITIES
The value of these securites may change daily based on changes in the interest
rates, and other market conditions and factors. Risks include:
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to pay interest or
return principal
/bullet/ HIGH-YIELD/HIGH-RISK SECURITIES
/bullet/ Credit risk
/bullet/ Greater sensitivity to interest rate movements
/bullet/ More speculative
/bullet/ Greater vulnerability to economic changes
/bullet/ Decline in market value in event of default
/bullet/ Less liquidity
/bullet/ STOCKS
While stocks have historically outperformed other asset classes over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the Fund holds fluctuate in price, the value of your
investment in the Fund will go up and down.
/bullet/ CONVERTIBLE SECURITIES
As with all debt securities, the market value of a convertible debt security
tends to decline as interest rates increase and, conversely, to increase as the
interest rates decline.
/bullet/ FOREIGN SECURITIES
Investments in foreign securities involve risks relating to political, social
and economic developments abroad as well as risks resulting from difference in
regulations to which U.S. and foreign issuers and markets are subject. These
risks include:
/bullet/ Changes in currency values
/bullet/ Currency speculation
/bullet/ Currency trading costs
/bullet/ Different accounting and reporting practices
/bullet/ Less information available to the public
/bullet/ Less (or different) regulation of securities' markets
/bullet/ More complex business negotiations
/bullet/ Less liquidity
/bullet/ More fluctuations in market prices
/bullet/ Delays in settling foreign securities transactions
/bullet/ Higher costs for holding foreign securities (custodial fees)
/bullet/ Vulnerability to seizure and taxes
/bullet/ Political instability and small markets
/bullet/ Different market trading days
/bullet/ MORTGAGE- AND OTHER ASSET-BACKED SECURITIES
/bullet/ Repayment sooner than stated maturity dates resulting in
greater price and yield volatility than with traditional
fixed-income securities
/bullet/ Prepayments resulting in lower return
/bullet/ Values may change based on creditworthiness of issuers
/bullet/ Interest rate risks
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
32 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the Lehman Brothers Government/Corporate Bond
Index (LBGCB) and the Lehman Brothers Long Government/Corporate Bond Index,
widely recognized unmanaged indexes of market performance. Both tables assume
reinvestment of dividends and capital gain distributions. As with all mutual
funds, past performance is not a prediction of the future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YRS INCEPTION*
A Shares 00.0% 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0% 00.0%
LBGCB 00.0% 00.0% 00.0% 00.0%
LBLGCB 00.0% 00.0% 00.0% 00.0%
* Since inception of Class "A" shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 5.50% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
--------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $650 $1,030 $1,430 $2,540
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $650 $1,030 $1,430 $2,540
B* $250 $780 $1,330 $2,670
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 33
<PAGE>
IDEX INCOME PLUS FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE INCOME PLUS FUND IS TO SEEK AS HIGH A LEVEL OF CURRENT
INCOME AS IS CONSISTENT WITH THE AVOIDANCE OF EXCESSIVE RISK. Its sub-adviser,
AEGON USA Investment Management, Inc. (AIMI), seeks to achieve this objective by
investing Fund assets in a diversified portfolio of:
/bullet/ fixed-income securities including investment grade bonds and
high-yield/high-risk bonds (commonly known as "junk bonds").
This Fund aims to appeal to investors who seek high current income and are
willing to tolerate the fluctuation in principal value associated with changes
in interest rates.
Consistent with this policy, when investing in rated securities, the Fund buys
those rated B or better by Moody's or S&P. When investing in rated commercial
paper, the Fund buys those rated Prime-2 or better by Moody's or A-2 or better
by S&P. The Fund may invest in unrated securities which, in AIMI's judgment, are
of equivalent quality. If the rated securities held by the Fund are downgraded,
AIMI will consider whether to keep these securities.
The Fund may not invest in rated corporate securities that are rated below
investment grade, if such holdings are more than 50% of its total holdings of
securities (other than commercial paper).
[GRAPHIC OMITTED] STRATEGIES
AIMI's strategy is to achieve yields as high as possible while managing
risk. AIMI uses a "top down/bottom up" approach in managing the Fund's assets.
The "top down' approach is to adjust the risk profile of the Fund. They analyze
four factors that affect the movement of fixed-income bond prices which include:
economic indicators; technical indicators that are specific to the high-yield
market; investor sentiment and valuation. Analysis of these factors assists AIMI
in its decisions regarding the Fund's portfolio allocations.
AIMI has developed a proprietary credit model that is the foundation of its
"bottom up" analysis. The model tracks historical cash flow numbers and
calculates credit financial ratios. Because high-yield companies are of higher
financial risk, AIMI does a thorough credit analysis of all companies in the
Fund's portfolio, as well as all potential acquisitions.
Each potential buy and sell candidate is analyzed by AIMI from both the "top
down" and "bottom up" strategies. An industry may look attractive in one area,
but not the other. They can then review the results of their analysis and decide
whether or not to proceed with a transaction.
For temporary defensive purposes, the Fund may invest some or all of its assets
in short-term obligations.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following principal investment risks:
/bullet/ FIXED-INCOME SECURITIES
The Value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. Risks include:
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to pay interest or
return principal
/bullet/ HIGH-YIELD/HIGH-RISK SECURITIES
/bullet/ Credit risk
/bullet/ Greater sensitivity to interest rate movements
/bullet/ More speculative
/bullet/ Greater vulnerability to economic changes
/bullet/ Decline in market value in event of default
/bullet/ Less liquidity
/bullet/ PROPRIETARY RESEARCH
AIMI's proprietary forms of research may not be effective and may cause overall
returns to be lower than if other forms of research are used.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
34 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the Merrill Lynch High Yield Master Index
(MLHYM), a widely recognized unmanaged index of market performance. Both tables
assume reinvestment of dividends and capital gain distributions. As with all
mutual funds, past performance is not a prediction of the future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0% 00.0%
MLHYM 00.0% 00.0% 00.0% 00.0%
* Since inception of Class "A" shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
- --------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 4.75% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00%
12b-1 fee 0.35% 1.00% 0.90%
Other expenses ____% ____% ____%
--------------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the investment adviser, and are
voluntary.) With the reimbursement/waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $600 $860 $1,140 $1,940
B* $690 $900 $1,140 $2,070
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $600 $860 $1,140 $1,940
B* $190 $600 $1,040 $2,070
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 35
<PAGE>
IDEX TAX-EXEMPT FUND
SUMMARY OF RISKS AND RETURNS
[GRAPHIC OMITTED] OBJECTIVE AND POLICIES
THE OBJECTIVE OF THE TAX-EXEMPT FUND IS MAXIMUM CURRENT INTEREST INCOME EXEMPT
FROM FEDERAL INCOME TAX, CONSISTENT WITH PRESERVATION OF CAPITAL. Its
sub-adviser, AEGON USA Investment Management, Inc. (AIMI), seeks to achieve this
objective by ordinarily investing at least 75% of its net assets in:
/bullet/ municipal obligations rated in the four highest grades of Moody's
or S&P
/bullet/ municipal commercial paper rated the highest by Moody's or S&P
/bullet/ unrated municipal notes (6-month to 3-year maturity) of issuers with at
least one issue of bonds outstanding that are rated in Moody's or S&P's
four highest grades.
Also, the Fund may buy unrated municipal obligations that AIMI considers equal
in quality to the four highest ratings of Moody's or S&P. Unrated municipal
securities may be less liquid than rated securities, and therefore may be
riskier than rated municipal securities.
Bonds in the fourth category are speculative. The Fund's policies doe not limit
how much of the portfolio may be bonds in these categories, as long as AIMI
believes the objective of preserving capital is being met.
These obligations are issued by states, territories or possessions of the U.S.,
the District of Columbia and their political subdivisions, agencies, etc., and
the Fund will invest in them only if the interest they pay is based on the
opinion of bond counsel, exempt from federal income tax.
The maturity of securities in the Fund is expected to be between 20 and 35
years.
This Fund aims to appeal to investors who seek high current federal tax-free
income and are willing to tolerate the fluctuation in principal value associated
with changes in interest rates. Yields on municipal obligations are typically
lower than on similar taxable securities. Such investors will generally have
higher taxable incomes.
The Fund is not for tax-exempt retirement programs, since they would receive no
benefit from the tax-exempt nature of most of the Fund's income.
[GRAPHIC OMITTED] STRATEGIES
AIMI takes an approach it believes to be conservative, trying to participate in
the market's advances while preserving capital on the downside, in order to
provide solid risk-adjusted returns for the shareholders of the Fund. The Fund
is managed by assessing key factors for the tax-exempt environment. The duration
and maturity structure of the Fund's portfolio generally reflects the interest
rate outlook of AIMI's Fixed Income Strategy Committee.
Yields on municipal obligations depend upon:
/bullet/ Type or classification of the issuer
/bullet/ Maturity
/bullet/ Size and structure of the deal
/bullet/ Creditworthiness
Continuous changes in these areas are monitored by AIMI, who decides when the
awards are appropriate for the degree of risk taken. The Fund's portfolio is
broadly diversifed among all municipal obligations.
AIMI may take a temporary defensive position by investing up to 20% of its
assets in lower-yielding and taxable instruments when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse conditions exist. Under these circumstances,
the Fund may be unable to achieve its investment objective.
[GRAPHIC OMITTED] RISKS
The Fund is subject to the following investment risks:
/bullet/ MUNICIPAL OBLIGATIONS
/bullet/ Their yields are usually lower than on similar, but taxable
securities
/bullet/ The income may be subject to state and local taxes
/bullet/ The income may be a preference item for determining the federal
alternative minimum tax
/bullet/ Unrated municipal securities may be less liquid than rated
securities
/bullet/ Congress occasionally considers restricting or eliminating the
federal tax exemption
/bullet/ Obligations could ultimately be federally taxable
/bullet/ FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. These risks include:
/bullet/ Fluctuations in market value
/bullet/ Changes in interest rates
/bullet/ Length of time to maturity
/bullet/ Issuers defaulting on their obligations to pay interest or
return principal
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. You may lose money if you invest in this Fund.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 28.
- -----------------------------------------------
FOR MORE INFORMATION ON THIS FUND, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL OR
CALL IDEX CUSTOMER SERVICE TOLL-FREE AT 1-888-233-IDEX (4339).
36 IDEX MUTUAL FUNDS / PROPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] PAST PERFORMANCE
The two tables below show the Fund's annual returns and its long-term
performance. The first table shows you how the Fund's performance has varied
from year to year. Results are for Class A shares without deducting the sales
load. (If deducted, the results would be less.) The second compares the Fund's
performance over time to that of the Lehman Brothers Municipal Bond Index (LBMB)
and the Lehman Brothers Long Municipal Bond Index (LBLMB), widely recognized
unmanaged indexes of market performance. Both tables assume reinvestment of
dividends and capital gain distributions. As with all mutual funds, past
performance is not a prediction of future results.
- --------------------------------------------------------------------------------
YEAR-BY-YEAR TOTAL RETURN as of 12/31 each year (%)
CLASS "A" SHARES
----------------
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
Best Quarter: _______ _______%
Worst Quarter: _______ _______%
- --------------------------------------------------------------------------------
Average annual total returns as of 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION*
A Shares 00.0% 00.0% 00.0% 00.0%
B Shares 00.0% 00.0% 00.0% 00.0%
C Shares 00.0% 00.0% 00.0% 00.0%
LBMB 00.0% 00.0% 00.0% 00.0%
LBLMB 00.0% 00.0% 00.0% 00.0%
* Since inception of Class "A" shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Shareholder transaction fees are paid
from your account. Annual Fund operating expenses are paid out from Fund assets,
so their effect is included in the share price. The sales charge (load) is
included in the fee table.
FEE TABLE
SHAREHOLDER TRANSACTION FEES
CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Maximum sales charges
on purchases (as a % of
offering price) 4.75% None 1.00%
Deferred sales charge None(a) 5.00% 1.00%(b)
(as a percentage of purchase price or
redemption proceeds, whichever is lower)
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum. (Before the fee is assessed,
you will be given 60 days notice to have the opportunity to increase your
balance.)
================================================================================
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS CLASS OF SHARES
A B C
- --------------------------------------------------------------------------------
Management fees 0.60% 0.60% 0.60%
12b-1 fee 0.35% 1.00% 0.60%
Other expenses ____% ____% ____%
-------------------------
TOTAL (c) ____% ____% ____%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class C shares after February 28, 1999 are subject to a 1%
contingent deferred sales charge if redeemed within 18 months of purchase.
(c) The actual total annual Fund operating expenses were less than the amount
shown above due to expense reimbursements and/or fee waivers. (The
reimbursements/waivers are paid by the invest ment adviser, and are
voluntary.) With the reimbursement /waiver, the actual total annual
operating expenses were: ____% A shares; ____% B shares; and ____% C
shares.
================================================================================
EXPENSE EXAMPLE
This example is here to help you compare the cost of investing in this Fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return. This return is for illustration purposes and is not guaranteed.
If the shares are redeemed at the end of each period:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $610 $880 $1,180 $2,020
B* $700 $930 $1,180 $2,160
C $___ $___ $___ $___
If the shares are not redeemed and there's no deferred sales charge:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
A $610 $880 $1,180 $2,020
B* $200 $630 $1,080 $2,160
C $___ $___ $___ $___
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY'LL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM, AND YOU'LL OWN THE SHARES ON THE FIRST DAY OF THE
FIRST YEAR.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 37
<PAGE>
FULL EXPLANATION OF STRATEGIES
AND RISKS
HOW TO USE THIS SECTION
In the discussions of the individual Funds on pages 2 through __, you found
descriptions of the strategies and risks associated with each. In those pages,
you were referred to this section for a more complete description of the risks.
For best understanding, first read the description of the Fund you're interested
in. Then refer to this section and read about the risks particular to that Fund.
For even more discussions of strategies and risks, see the Statement of
Additional Information, which is available upon request. See the back cover of
this prospectus for information on how to order the SAI.
[GRAPHIC OMITTED]
THE FUNDS ARE DIVERSIFIED. All the Funds (except the Capital Appreciation Fund
and Mid-Cap Opportunities Fund) place their assets in a number of different
investments and investment classes. Sometimes this involves investing in other
countries; often it means choosing investments that produce lower returns, but
are expected to decline less in value during adverse markets. Diversification
reduces risk by making it less likely that a poor performance by one investment
will materially affect the Fund's portfolio as a whole. This is one of the
reasons mutual funds are such popular and widely-held investments.
[GRAPHIC OMITTED]
INVESTING IN COMMON STOCKS. Many factors cause common stocks to go up and down
in price. A major one is the financial performance of the company. Other factors
include the overall economy, conditions in a particular industry, and monetary
factors like interest rates. When your Fund holds stocks, there's a risk that
some or all of them may be down in price when you choose to sell, causing you to
lose money. This is called MARKET RISK.
[GRAPHIC OMITTED]
INVESTING IN PREFERRED STOCKS. Because these stocks come with a promise to pay a
stated dividend, their price depends more on the size of the dividend than on
the company's performance. But if a company fails to pay the dividend, its
preferred stock is likely to drop in price. Changes in interest rates can also
affect their price. (See "Investing in Bonds", below.)
[GRAPHIC OMITTED]
INVESTING IN "CONVERTIBLES", PREFERRED STOCKS, AND BONDS. Since preferred stocks
and corporate bonds pay a stated return, their prices usually don't depend on
the price of the company's common stock. But some companies issue preferred
stocks and bonds that are CONVERTIBLE into their common stocks. Linked to the
common stock in this way, convertible securities go up and down in price as the
common stock does, adding to their market risk.
[GRAPHIC OMITTED]
VOLATILITY. The more an investment goes up and down in price, the more VOLATILE
it's said to be. Volatility increases the market risk because even though your
Fund may go UP more than the market in good times, it may also go DOWN more than
the market in bad times. If you decide to sell when a volatile Fund is down, you
could lose more.
[GRAPHIC OMITTED]
INVESTING IN BONDS. Like common stocks, bonds fluctuate in value, though the
factors causing this are different, including:
/bullet/ CHANGES IN INTEREST RATES. Bond prices tend to move the
opposite of interest rates. Why? Because when interest rates on new
bond issues go up, rates on existing bonds stay the same and they
become less desirable. When rates go down, the reverse happens. This is
also true for most preferred stocks and some convertibles.
/bullet/ LENGTH OF TIME TO MATURITY. When a bond matures, the issuer
must pay the owner its face value. If the maturity date is a long way
off, many things can affect its value, so a bond is more volatile the
farther it is from maturity. As that date approaches, fluctuations
usually become smaller and the price gets closer to face value.
/bullet/ DEFAULTS. All bond issuers make at least two promises: (1) to
pay interest during the bond's term and (2) to return principal when it
matures. If an issuer fails to keep one or both of these promises, the
bond will probably drop in price dramatically, and may even become
worthless.
/bullet/ DECLINES IN RATINGS. At the time of issue, most bonds are rated
by professional rating services, such as Moody's Investors Service,
Inc. (Moody's) and Standard & Poor's Corporation (S&P). The stronger
the financial backing behind the bond, the higher the rating. If this
backing is weakened or lost, the rating service may downgrade the
bond's rating. This is virtually certain to cause the bond to drop in
price.
38 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
/bullet/ LOW RATING. High-yield/high-risk securities (commonly known as
"junk bonds") have greater credit risk, are more sensitive to interest
rate movements, are considered more speculative, have a greater
vulnerability to economic changes and are less liquid.
/bullet/ LACK OF RATING. Some bonds are considered speculative, or for
other reasons are not rated. Such bonds must pay a higher interest rate
in order to attract investors. They're considered riskier because of
the higher possibility of default or loss of liquidity.
/bullet/ LOSS OF LIQUIDITY. If a bond is downgraded, or for other
reasons drops in price, the market demand for it may "dry up." In that
case, the bond may be hard to sell or "liquidate" (convert to cash).
[GRAPHIC OMITTED]
INVESTING IN FOREIGN (NON-U.S.) SECURITIES. These are investments offered by
foreign companies, governments and government agencies. They involve risks not
usually associated with U.S. securities, including:
/bullet/ CHANGES IN CURRENCY VALUES. Foreign securities are sold in
currencies other than U.S. dollars. If a currency's value drops, the
value of your Fund shares could drop too, even if the securities are
strong. Dividend and interest payments may be lower. Factors affecting
exchange rates are: differing interest rates among countries; balances
of trade; amount of a country's overseas investments; and any currency
manipulation by banks.
/bullet/ CURRENCY SPECULATION. The foreign currency market is largely
unregulated and subject to speculation.
/bullet/ CURRENCY TRADING COSTS. Some Funds also invest in American
Depository Receipts (ADRs) and American Depository Shares (ADSs). They
represent securities of foreign companies traded on U.S. exchanges, and
their values are expressed in U.S. dollars. Changes in the value of the
underlying foreign currency will change the value of the ADR or ADS.
The Fund incurs costs when it converts other currencies into dollars,
and vice-versa.
/bullet/ EURO CONVERSION. On January 1. 1999, certain participating countries in
the European Economic Monetary Union will adopt the "Euro" as their
official currency. Other EU member countries may convert to the Euro at
a later date. As of January 1, 1999, governments in participating
countries will issue new debt and redenominate existing debt in Euros;
corporations may choose to issue stocks or bonds in Euros or national
currency. The new European Central Bank (the "ECB") will assume
responsibility for a uniform monetary policy in participating
countries. Euro conversion risks that could affect the Funds' foreign
investments include: (1) the rediness of Euro payment, clearing, and
other operational systems; (2) the legal treatment of debt instruments
and financial contracts in existing national currencies rather than the
Euro; (3) exchange-rate fluctuations between the Euro and non-Euro
currencies during the transition period of January 1, 1999 through
December 31, 2001 and beyond; (4) potential U.S. tax issues with
respect to Fund securities; and (5) the ECB's abilities to manage
monetary policies among the participating countries.
/bullet/ DIFFERING ACCOUNTING AND REPORTING PRACTICES. Foreign tax laws
are different, as are laws, practices and standards for accounting,
auditing and reporting data to investors.
/bullet/ LESS INFORMATION AVAILABLE TO THE PUBLIC. Foreign companies usually
make far less information available to the public.
/bullet/ LESS REGULATION. Securities regulations in many foreign
countries are more lax than in the U.S.
/bullet/ MORE COMPLEX NEGOTIATIONS. Because of differing business and
legal procedures, the Fund might find it hard to enforce obligations or
negotiate favorable brokerage commission rates.
/bullet/ LESS LIQUIDITY/MORE VOLATILITY. Some foreign securities are
harder to convert to cash than U.S. securities,and their prices may
fluctuate more dramatically.
/bullet/ SETTLEMENT DELAYS. "Settlement" is the process of completing a
securities transaction. In many countries, this process takes longer
than it does in the U.S.
/bullet/ HIGHER CUSTODIAL CHARGES. Fees charged by the Fund's custodian for
holding shares are higher for foreign securities than that of domestic
securities.
/bullet/ VULNERABILITY TO SEIZURE AND TAXES. Some governments can seize
assets. They may also limit movement of assets from the country. Fund
interest, dividends and capital gains may be subject to foreign
withholding taxes.
/bullet/ POLITICAL INSTABILITY AND SMALL MARKETS. Developing countries
can be politically unstable. Economies can be dominated by a few
industries, and markets may trade a small number of securities.
Regulation of banks and capital markets can be weak.
/bullet/ DIFFERENT MARKET TRADING DAYS. Foreign markets not be open for trading
as U.S. markets are, and asset values can change before your
transaction occurs.
/bullet/ HEDGING. A Fund may enter into forward currency contracts to
hedge against declines in the value of securities denominated in, or
whose value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency fluctuation on purchases, and sales of
such securities.
[GRAPHIC OMITTED]
INVESTING IN FUTURES, OPTIONS AND DERIVATIVES. Besides conventional securities,
your Fund may seek to increase returns by investing in financial contracts
related to its primary investments. Such contracts involve additional risks and
costs. Risks include:
/bullet/ INACCURATE MARKET PREDICTIONS. If the sub-adviser is wrong in
its expectation, for example, with respect to interest rates,
securities prices or currency markets, the contracts could produce
losses instead of gains.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 39
<PAGE>
/bullet/ PRICES MAY NOT MATCH. Movements in the price of the financial contracts
may be used to offset movements in the price of other securities you
own. If those prices don't correlate or match closely, the benefits of
the transaction might be diminished.
/bullet/ ILLIQUID MARKETS. If there's no market for the contracts, the Fund may
not be able to control losses.
/bullet/ TAX CONSEQUENCES. Sometimes the possibility of incurring high taxes on
a transaction may delay closing out a position and limit the gains it
would have produced.
[GRAPHIC OMITTED]
INVESTING IN TAX-EXEMPT SECURITIES. Some municipal obligations pay interest
that, while tax-exempt, may be considered a "preference item" for determining
the federal alternative minimum tax. This may result in your paying more tax
than you would have otherwise. Also, Congress periodically threatens to limit or
do away with the tax exemption or municipal obligations. If that happened, it
would substantially reduce the value of your Fund's assets.
[GRAPHIC OMITTED]
INVESTING IN SPECIAL
SITUATIONS. Each Fund may invest in "special situations" from time to time.
Special situations arise when, in the opinion of a Fund manager, a company's
securities may be recognized, then increase considerably in price, due to:
/bullet/ A NEW PRODUCT OR PROCESS
/bullet/ A MANAGEMENT CHANGE
/bullet/ A TECHNOLOGICAL BREAKTHROUGH
/bullet/ AN EXTRAORDINARY CORPORATE EVENT
/bullet/ A TEMPORARY IMBALANCE IN THE SUPPLY OF, AND DEMAND FOR, THE SECURITIES
OF AN ISSUER
Investing in a special situation carries an additional risk of loss if the
expected development does not happen or does not attract the expected attention.
The impact of special situation investing to a Fund will depend on the size of
the Fund's investment in a situation.
40 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] HOW THE IDEX FUNDS ARE
MANAGED AND ORGANIZED
IDEX Mutual Funds, is run by a BOARD OF TRUSTEES. The assets of each Fund are
managed by an investment adviser, who in turn selects sub-advisers, who have
hired Fund managers. All such advisers to the Funds are supervised by the Board
of Trustees. You can find information about the Trustees and officers of the
Fund in the SAI.
IDEX MANAGEMENT, INC. (IMI), located at 570 Carillon Parkway, St. Petersburg,
Florida 33716, serves as investment adviser to the Fund.
The Investment Adviser hires sub-advisers to furnish investment advice and
recommendations and has entered into Investment Counsel Agreements with each
sub-advisers for each Fund. The investment adviser also supervises the
sub-advisers' buying and selling of securities and administration of the Funds.
For these services, it is paid an Advisory Fee. This fee is based on the average
daily net assets of each Fund, and is paid at the rates shown in the table
below.
IMI is a wholly-owned direct subsidiary of AUSA Holding Company ("AUSA"). AUSA
is a holding company which is wholly-owned by AEGON USA, Inc. ("AEGON USA"), a
financial services holding company whose primary emphasis is on life and health
insurance, and annuity and investment products. AEGON USA is a wholly-owned
indirect subsidiary of AEGON nv, a Netherlands corporation and publicly traded
international insurance group. Here is a listing of the sub-advisers and the
Funds they manage:
- --------------------------------------------------------------------------------
SUB-ADVISER FUND NAME
Alger Aggressive Growth
SEIM International Equity
GEIM International Equity
Janus Capital Appreciation
Global
Growth
Balanced
Flexible Income
C.A.S.E. C.A.S.E.
NWQ Value Equity
Luther King Strategic Total Return
Dean Tactical Asset Allocation
AIMI Income Plus
Tax-Exempt
T. Rowe Price Dividend Growth Fund
Small Cap Frontier Fund
SBAM Mid-Cap Opportunities Fund
GSAM Blue Chip Fund
Pilgrim Mid-Cap Summit Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
ADVISORY FEE SCHEDULE ANNUAL RATES
- ---------------------------------------------------------------------------------------------------------------------------
AVERAGE DAILY NET ASSETS CAPITAL APPRECIATION GLOBAL GROWTH BALANCED FLEXIBLE INCOME INCOME PLUS TAX-EXEMPT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
First $750 million 1.00% 1.00% 1.00% 1.00% N/A 0.60% 0.60%
- ---------------------------------------------------------------------------------------------------------------------------
the next $250 million 0.90% 0.90% 0.90% 0.90% N/A 0.60% 0.60%
- ---------------------------------------------------------------------------------------------------------------------------
over $1 billion 0.85% 0.85% 0.85% 0.85% N/A 0.60% 0.60%
- ---------------------------------------------------------------------------------------------------------------------------
First $100 million 0.90%
- ---------------------------------------------------------------------------------------------------------------------------
the next $150 million 0.80%
- ---------------------------------------------------------------------------------------------------------------------------
over $250 million 0.70%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE DAILY DIVIDEND SMALL CAP MID-CAP BLUE MID-CAP AGGRESIVE
NET ASSETS GROWTH FRONTIER OPPORTUNITIES CHIP SUMMIT FUNDS GROWTH
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First $500 million 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
- -------------------------------------------------------------------------------------------
Over $500 million 0.70% 0.70% 0.70% 0.70% 0.70% 0.70%
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE DAILY INTERNATIONAL VALUE STRATEGIC TACTICAL
NET ASSETS EQUITY C.A.S.E EQUITY TOTAL RETURN ASSET ALLOCATION
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
First $500 million 0.80% 0.80% 0.80% 0.80% 0.80%
- -------------------------------------------------------------------------------------------------
over $500 million 0.70% 0.70% 0.70% 0.70% 0.70%
- -------------------------------------------------------------------------------------------------
</TABLE>
IDEX MUTUAL FUNDS / PROSPECTUS 1999 41
<PAGE>
DAY-TO-DAY MANAGEMENT OF THE INVESTMENTS IN EACH FUND IS THE RESPONSIBILITY OF
THE FUND MANAGER. THE FUND MANAGERS OF THE IDEX MUTUAL FUNDS ARE:
AGGRESSIVE GROWTH FUND
DAVID D. ALGER has been employed by Alger since 1971 and has served as president
since 1995. He has managed this Fund since inception.
DAVID HYUN has served as co-manager of this Fund since February 1998. He has
been employed by Alger as a senior research analyst since 1991 and a portfolio
manager since 1997.
INTERNATIONAL EQUITY FUND
At SEIM, investment strategy is formulated by the Investment Strategy Group.
RUSSELL HOGAN leads the investment strategy team. Mr. Hogan is the Investment
Director of Scottish Equitable plc, parent company of Scottish Equitable. He
oversees all aspects of asset management. He has been with Scottish equitable
for 14 years and has been the team leader since the Fund's inception.
At GEIM, RALPH R. LAYMAN leads a team of fund managers. He has 20 years
investment experience and has been with GEIM since 1991. Mr. Layman has been the
team leader since the Fund's inception.
CAPITAL APPRECIATION FUND
JAMES P. GOFF has managed this Fund since its inception. He joined Janus in
1988.
GLOBAL FUND
HELEN YOUNG HAYES has been employed by Janus since 1987 and has managed this
Fund since its inception.
GROWTH FUND
SCOTT W. SCHOELZEL and EDWARD KEELY serve as co-managers of this Fund. Mr.
Schoelzel has managed this Fund since January 1996. Before that, he was
co-manager of this Fund since 1995. He has been employed by Janus since 1994.
From 1991 to 1993, Mr. Schoelzel was a portfolio manager with Founders Asset
Management, Denver, CO.
Mr. Keely has managed this Fund since January 1999. He has been employed by
Janus since 1998. Prior to joining Janus, he was a senior vice president of
investments at Founders.
C.A.S.E. FUND
This Fund is managed by a team of professionals, called the Portfolio Management
Committee. WILLIAM E. LANGE is the head manager on this committee. He has been
president of C.A.S.E. since 1984.
VALUE EQUITY FUND
EDWARD C. FRIEDEL has been the senior manager of this Fund since inception. He
has been a managing director and investment strategist with NWQ since 1983.
STRATEGIC TOTAL RETURN FUND
LUTHER KING, JR., CFA and SCOT C. HOLLMANN, CFA have co-managed this Fund since
its inception. Mr. King has been the president of Luther King since 1979. Mr.
Hollmann has been a vice president since 1983.
TACTICAL ASSET ALLOCATION FUND
JOHN C. RIAZZI, CFA is the senior manager of this Fund. He joined Dean in 1989.
ARVIND SACHDEVA, CFA is the senior equity strategist of this Fund. He joined
Dean in 1993. They have co-managed this Fund since inception.
BALANCED FUND
BLAINE P. ROLLINS assisted in the management of this Fund from its inception
until February 1996, when he was named Fund manager. He has been with Janus
since 1990.
FLEXIBLE INCOME FUND
RONALD V. SPEAKER has managed this Fund since October 1993. He has been with
Janus since 1986. On January 13, 1997, Mr. Speaker settled an SEC administrative
action involving two personal trades that he made in January 1993. Without
admitting or denying the allegations, he agreed to civil monetary penalty,
disgorgement and interest payments totaling $37,199 and a 90-day suspension
starting January 29, 1997.
INCOME PLUS FUND
DAVID R. HALFPAP has served as manager of this Fund since its inception. He has
been employed by AIMI since 1975 and currently is a senior vice president.
BRADLEY BEMAN, CFA became a co-manager of this Fund in August 1998. He joined
AIMI in 1988 after working in various capacities with AEGON USA, Inc. and Life
Investors.
CRAIG ENRIGHT, became a co-manager of this Fund in August 1998. He joined AIMI
in 1996. His prior work experience includes ten years with the Chicago Board of
Trade, two years with the Securities Corporation of Iowa and five years at
Northern Trust Company.
TAX-EXEMPT FUND
JARRELL D. FREY, CFA, is a senior securities analyst and has managed this Fund
since August 1998. Mr Frey joined AIMI in June 1994. Prior to joining AIMI, Mr.
Frey was employed for five years by Woodmen Accident and Life Company in
Lincoln, NE.
DIVIDEND GROWTH FUND
WILLIAM J. STROMBERG, CFA, has managed this Fund since inception and heads the
Investment Team for this Fund. He joined T. Rowe Price in 1986.
SMALL CAP FRONTIER FUND
RICHARD T. WHITNEY, CFA has managed this Fund since inception and heads the
Investment Team for this Fund. He joined T. Rowe Price in 1985.
MID-CAP SUMMIT FUND
JEFF A. WRONA, CFA, has managed this Fund since inception. Prior to joining
Pilgrim, he was a senior portfolio manager at Munder Capital Management.
MID-CAP OPPORTUNITIES FUND
ROSS S. MARGOLIES has managed this Fund since inception. Mr. Margolies joined
Salomon in 1992.
BLUE CHIP FUND
HERBERT E. EHLERS has served as head of a six person investment team that has
managed the Fund since inception. Prior to joining GSAM in 1997, he was chief
investment officer at Liberty Investment Management, Inc. from 1994-1997.
42 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
SHAREHOLDER INFORMATION
[GRAPHIC OMITTED] OPENING AN ACCOUNT
If you are opening an account through an IDEX representative, he or she can
assist you with all phases of your investment.
If you are investing through an authorized dealer, the dealer is responsible for
opening your account and providing your taxpayer ID number. If you already have
an IDEX account, you do not need additional documentation.
CHOOSING A SHARE CLASS
The Fund offers three share classes, each with its own sales charge and expense
structure. (An additional class, Class T, is offered through the Growth
Portfolio but Class T shares are not available to new investors.)
If you are investing a large amount and plan to hold your shares for a long
period, Class A shares may make the most sense for you. If you are investing a
lesser amount, you may want to consider Class B shares (if you plan to invest
for a period of at least 5 years) or Class C shares (if you plan to invest for a
period less than 5 years).
Because all of your future investments in your account will be in the same share
class you designate when opening an account, you should make this decision
carefully. Your financial professional can help you choose the share class that
makes the best sense for you.
CLASS A SHARES - FRONT LOAD
With Class A shares, you pay a sales charge only when you buy shares.
If you are investing $1 million or more (either as a lump sum or through any of
the methods described above), you can purchase Class A shares without any sales
charge. However, if you redeem any of those shares within the first 24 months
after buying them, you will pay a 1% redemption charge, unless they were
purchased through a qualified retirement plan.
CLASS B SHARES - BACK LOAD
Class B shares are sold in amounts up to $500,000. With Class B shares, you
pay no sales charge when you invest, but you are charged a "contingent deferred
sales charge" (CDSC) when you sell shares you have held for six years or less,
as described in the table __________.
Class B shares automatically convert to Class A shares after 8 years, lowering
annual expenses from that time on.
CLASS C SHARES
With class C shares, you pay an up-front sales charge of 1.00% based on offering
price. There are distribution and service fees of 0.90% per year. If you redeem
within 18 months from the date of purchase, you may incur a CDSC of 1.00%.
CONTINGENT DEFERRED SALES CHARGE
Class B and Class C shares are subject to a CDSC.
- --------------------------------------------------------------------------------
CLASS A SHARES -
FRONT LOAD
- --------------------------------------------------------------------------------
/bullet/ Initial sales charge of 5.5% or less; see table regarding Class A Share
Quantity Discounts Table.
/bullet/ Discounts of sales charge for larger investments
/bullet/ 12b-1 distribution and service fee of 0.35%
/bullet/ Lower annual expenses than Class B or C shares due to lower
distribution and service fees of 3.5%
- --------------------------------------------------------------------------------
CLASS B SHARES -
BACK LOAD
- --------------------------------------------------------------------------------
/bullet/ No up-front sales charge
/bullet/ Deferred sales charge of 5% or less on shares you sell within 6 years
(see deferred sales charge table)
/bullet/ 12b-1 distribution and service fees of 1.00%
/bullet/ Automatic conversion to Class A shares after 8 years, reducing
future annual expenses
- --------------------------------------------------------------------------------
CLASS C SHARES
LEVEL LOAD
- --------------------------------------------------------------------------------
/bullet/ Initial sales charge of 1%
/bullet/ 12b-1 distribution and service fees of 0.90% per year (except for the
Tax-Exempt Fund which the distribution and service fee is 0.60%)
/bullet/ Deferred sales charge of 1% if you sell within 18 months of
purchase.
/bullet/ No conversion to Class A shares after 8 years, so annual expenses do
not decrease
- --------------------------------------------------------------------------------
CLASS T SHARES
(CLOSED TO NEW INVESTORS)
- --------------------------------------------------------------------------------
/bullet/ Initial sales charge of 8.5% or less
/bullet/ Not subject to 12b-1 distribution and service fees
/bullet/ Sales charge percentage can be reduced in the sale four ways as Class A
shares (see Class A Share Quantity Discounts Table)
- --------------------------------------------------------------------------------
Dividends and capital gains are not subject to the sales charge. There is no
charge on any increase in the value of your shares. To ensure that you pay the
lowest CDSC possible, IDEX will always use the shares with the lowest CDSC to
fill your redemption requests. If your shares are worth less than when you
bought them, the charge will be assessed on their current, lower value. In some
cases, the sales charge may be waived. See the SAI for complete information
about waivers.
CLASS T SHARES (GROWTH FUND ONLY)
(CLOSED TO NEW INVESTORS)
When you buy Class T shares of the Growth Portfolio, you pay an up-front sales
charge. You can reduce the sales charge percentage in the same four ways that
are described under Class A shares. Class T shares are not subject to annual
distribution and service fees.
You pay no sales charge when you redeem Class T shares. As with Class A shares,
if you pay no up-front sales charge because you are purchasing $1 million or
more of Class T shares. You will pay a deferred sales charge of 1% if you redeem
any of those shares within the first 24 months after buying them, unless they
were purchased through a qualified retirement plan. The charge is assessed on an
amount equal to the lesser of the then current market value of the original cost
of the shares being redeemed. No sales charge is imposed on net asset value
above the initial purchase.
Waivers of the sale charges are granted under certain conditions. Please see the
SAI for a description of these waivers. Persons eligible to buy Class T shares
at NAV may not impose a sales charge when they re-sell those shares.
NEW ACCOUNT APPLICATION
Fill out the New Account Application form which is included in this prospectus.
IRAs and other retirement accounts require a different application, which you
can request by calling or writing IDEX. You can avoid future inconvenience by
signing up for any services you think you may later use.
Note: On your application, be sure to include your social security number or
taxpayer identification number. If you don't, your account may be subject to
backup withholding, or be closed.
There are four ways that you can pay for your shares (shown below). The minimum
initial purchase is $500 for Class A, B and T Shares, and $1000 for Class C
shares. Later purchases are at least $50. Purchases through regular investment
plans, like the Automatic Investment Plan, have no minimum to open an account,
but you must invest at least $50 monthly per account.
- --------------------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGES - CLASS B SHARES
AS A % OF DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CHANGE
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth and Sixth 1%
Seventh and Later 0%
43 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
[GRAPHIC OMITTED] HOW TO BUY, SELL OR
EXCHANGE SHARES
Depending on privileges established on your account, you may buy, sell (redeem)
or exchange shares in several ways. You may do so in writing, by a phone request
or you may access your account through the internet. You may make payments, or
receive payment for your redemptions, via an electronic funds transfer or by
check.
If you are a new investor to IDEX, you must first open an account by mailing a
completed application to IDEX or you may open an account through a securities
dealer that represents IDEX.
- --------------------------------------------------------------------------------
HOW TO BUY SHARES TO OPEN A NEW ACCOUNT
(FIRST-TIME IDEX INVESTORS)
- --------------------------------------------------------------------------------
BY MAIL Send your completed application
[GRAPHIC OMITTED] and check payable to: Idex
Investor Services, Inc. P.O. Box
9015 Clearwater, Florida
33758-9015; or for Overnight
Delivery: 570 Carillon Parkway St.
Petersburg, Florida 33716
- --------------------------------------------------------------------------------
THROUGH AN AUTHORIZED DEALER The dealer is responsible for
[GRAPHIC OMITTED] opening your account and providing
IDEX with your Taxpayer ID Number.
The minimum order from an
authorized dealer is $1000.
- --------------------------------------------------------------------------------
BY AUTOMATIC INVESTMENT PLAN Send your completed application,
[GRAPHIC OMITTED] along with a check for your
initial investment, payable to
IDEX Investor Services, Inc.
P.O. BOX 9015, Clearwater, Florida
33758-9015.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HOW TO BUY SHARES TO ADD TO YOUR EXISTING ACCOUNT
- --------------------------------------------------------------------------------
BY CHECK: [GRAPHIC OMITTED] Make your check payable to Idex
Investor Services Inc. and send it
to P.O. Box 9015 Clearwater, FL
33758-9015; or for overnight
delivery: 570 Carillon Parkway,
St.Petersburg, FL 33716.
- --------------------------------------------------------------------------------
BY AUTOMATIC [GRAPHIC OMITTED] With an Automatic Investment Plan
INVESTMENT PLAN: ("AIP"), a level dollar amount is
invested monthly and payment is
deducted electronically from your
bank account. To do this, call or
write IDEX to establish an AIP.
- --------------------------------------------------------------------------------
BY TELEPHONE: [GRAPHIC OMITTED] The electronic funds transfer
privilege must be established in
advance at the time you opened
your account, or it can be
established on your existing
account. Select "Telephone
Purchase" on the Application, or
write to IDEX. Funds can then be
transferred electronically from
your bank to IDEX. Call IDEX to
invest by phone either through our
automated touch-tone system IDEX
In Touch(SM), or by
person-to-person request.
- --------------------------------------------------------------------------------
THROUGH AUTHORIZED [GRAPHIC OMITTED] If you open an IDEX account
DEALERS: through an authorized dealer, the
minimum order is $1000. The dealer
is responsible for opening your
account and providing your
taxpayer ID number. If you already
have an IDEX account, no
additional documentation is
needed. The dealer's bank may
charge you for a wire transfer.
IDEX currently does not charge for
this service. The Fund must
receive your payment within three
business days after your order is
accepted.
BY THE INTERNET: [GRAPHIC OMITTED] The electronic funds transfer
privilege must be established in
advance when you opened your
account, or it can be added to
your existing account. Visit our
website at www.idexfunds.com.
Payments will be transferred from
your bank account electronically
to IDEX.
BY PAYROLL DEDUCTION: [GRAPHIC OMITTED] You can establish this feature to
have money transferred regularly
from your payroll to IDEX. You
would instruct your employer's
payroll department to do so. Call
IDEX to establish this privilege.
- --------------------------------------------------------------------------------
HOW TO SELL (REDEEM) SHARES
You can request redemptions and receive payment in several ways depending on
circumstances such as:
/bullet/ The privileges or features established on your account
/bullet/ The type of account you have and if there are several account owners
/bullet/ The dollar amount you are requesting
/bullet/ If there have been recent changes made to your account, such as an
address change, or other circumstances that may require written request
or signature guarantees (see "Policies for Selling Shares")
Considering the information above, you can request a redemption:
/bullet/ In writing (by mail or fax)
/bullet/ By internet access to your account(s) at WWW.IDEXFUNDS.COM
/bullet/ By telephone request using our touch-tone automated system, IDEX In
Touch(SM), or by a person-to-person verbal request
Also, subject to the information above, the proceeds of your redemption can be
paid in either check form or by direct deposit (electronic funds transfer by ACH
or Federal Funds Bank Wire).
- --------------------------------------------------------------------------------
TO RECEIVE PAYMENT BY HOW TO REQUEST YOUR REDEMPTION
- --------------------------------------------------------------------------------
DIRECT DEPOSIT Call IDEX to be sure this feature is in
(ELECTRONIC FUNDS TRANSFER-ACH) place on your account. Maximum amount per
day is the lesser of your available balance
(ONLY FOR ACCOUNTS THAT ARE NOT or $50,000. REQUEST AN "ACH REDEMPTION" IN
QUALIFIED RETIREMENT PLANS) WRITING, OR BY PHONE (AUTOMATED IN-TOUCH(SM)
OR PERSON-TO PERSON), OR BY INTERNET ACCESS
TO YOUR ACCOUNT. Payment should usually be
received by your bank account in 3-5 banking
days after your request. There is no charge
for this payment option.
- --------------------------------------------------------------------------------
DIRECT DEPOSIT Call IDEX to be sure this feature is in
(ELECTRONIC FUNDS TRANSFER-FEDERAL place on your account. Maximum amount per
FUNDS BANK WIRE) day is the lesser of your available balance
or $50,000. REQUEST AN "EXPEDITED
REDEMPTION" IN WRITING, OR VIA PHONE
(PERSON-TO PERSON REQUEST). Payment should
usually be received into your bank account
the next banking day after your request.
IDEX charges $10 for this service and your
bank may charge a fee as well.
- --------------------------------------------------------------------------------
CHECK TO THE ADDRESS OF RECORD WRITTEN REQUEST:
Send a letter of instruction to IDEX and
include any share certificates you may
have. Specify the Fund, account number, and
dollar amount or number of shares you wish
to redeem. Mail to: Idex Investor Services,
Attention: Redemptions. Be sure to include
all account owners' signatures and any
additional documents, as well as a signature
guarantee(s) if required (see "Policies for
Selling Shares").
TELEPHONE OR INTERNET REQUEST:
If your request is not required to be in
writing (see "Policies for Selling Shares"),
you may call IDEX and make your request by
automated IDEX In-Touch(SM) system, or by
person-to-person, or by accessing your
account on the internet. Maximum amount per
day is the lesser of your available balance
or $50,000.
- --------------------------------------------------------------------------------
CHECK TO ANOTHER PARTY/ADDRESS THIS MUST BE REQUESTED IN WRITING,
regardless of amount, with all account
owners signatures guaranteed. Mail to: Idex
Investor Services, Attention: Redemptions
- --------------------------------------------------------------------------------
PERIOD AUTOMATIC PAYMENT (BY You can establish a SYSTEMATIC WITHDRAWAL
DIRECT DEPOSIT-ACH OR CHECK) PLAN either at the time you open your
account or at a later date. Call IDEX for
assistance.
- --------------------------------------------------------------------------------
BY EXCHANGE No payment to or from you is made. You are
buying shares of one Fund and selling shares
of another Fund (an "exchange
purchase/redemption"). Read the prospectus
for information on exchanging Fund shares.
REQUEST AN EXCHANGE IN WRITING, OR BY PHONE
(AUTOMATED IDEX IN-TOUCH(SM) SYSTEM OR
PERSON-TO-PERSON), OR BY INTERNET ACCESS TO
YOUR ACCOUNT.
- --------------------------------------------------------------------------------
THROUGH AN AUTHORIZED DEALER You may redeem your shares through an
investment/securities dealer that
represents IDEX. Contact your Registered
Representative or call IDEX for assistance.
- --------------------------------------------------------------------------------
IDEX MUTUAL FUNDS / PROSPECTUS 1999 44
<PAGE>
HOW TO EXCHANGE SHARES
You can exchange $50 or more of one Fund for shares in the same class of another
Fund. You may also exchange your shares into any one of the Money Market Funds
without a sales charge. Any CDSC will be calculated from the date you bought
your original shares. This means your new shares will be the same age as your
old shares, so your sales charge will not increase because of the exchange.
Prior to making exchange into a Fund that you do not own, read the prospectus
carefully. You can exchange shares over the telephone unless you have declined
the privilege on your application. You can also exchange shares of the same
class automatically at regular intervals, from one Fund to another. The
Systematic Exchange is set up similarly to that of a SWP.
MONEY MARKET EXCHANGE PRIVILEGE
You can exchange Class A and T shares for any of the Money Market Funds. You may
exchange Class B and C shares only into the Cash Equivalent Fund ("CEF") Money
Market Portfolio.
SPECIAL RULES FOR CLASS B OR C SHARES
IN MONEY MARKET FUND EXCHANGES
When exchanging Class B or C shares for shares of the CEF Money Market Fund, you
will not be charged a CDSC. If you later sell the Class B or C shares of the
CEF, you will be charged the sales charge, but the time that you held those
Class B or C shares of the CEF will not count toward calculating the sales
charge.
There is no fee for exchanges; however, if three or more exchanges occur in a
calendar quarter, a $10 service fee per exchange will be assessed to your
account, on the account from which shares are being exchanged, for each exchange
after three.
SPECIAL SITUATIONS FOR EXCHANGING SHARES
/bullet/ Class T shares may be exchanged for only Class A shares of any
IDEX Fund, other than the IDEX Growth Fund. Class A shares of all IDEX
Funds are subject to 12b-1 distribution and service fees.
/bullet/ You may not exchange other classes of shares of the IDEX Funds for
Class T shares.
/bullet/ The Fund reserves the right to modify or terminate the exchange
privilege at any time.
[GRAPHIC OMITTED]
OTHER ACCOUNT INFORMATION
MINIMUM INITIAL PURCHASE
/bullet/ $500 for Class A, B and T shares; $1,000 for Class C shares; additional
purchases are a minimum of $50.
/bullet/ No minimum initial purchase for accounts that use the Automatic
Investment Plan, but there is a $50 minimum purchase per account each
month.
/bullet/ $1000, through authorized dealers.
IF YOUR CHECK, DRAFT OR ELECTRONIC TRANSFER IS RETURNED UNPAID BY YOUR BANK, THE
FUND MAY CHARGE A $15 FEE.
PRICING OF SHARES
The Fund calculates its net asset value per share (NAV) each day as of the close
of business on the New York Stock Exchange (currently 4:00 p.m. eastern time).
The share price of each class is calculated by dividing its net assets less
liability by the number of its shares outstanding.
If IDEX receives your order by that time you'll pay that day's NAV. If later, it
will be priced at the next day's NAV. Share prices may change when a Fund holds
shares in companies traded on foreign exchanges that are open on days the NYSE
is closed.
In determining NAV, portfolio investments are valued at market value.
Investments for which quotations are not readily available are valued at fair
value determined in good faith under the supervision of the Board of Trustees.
CLASS A SALES CHARGE REDUCTIONS AND WAIVERS
YOU CAN LOWER THE SALES CHARGE PERCENTAGE IN FOUR WAYS:
/bullet/ Substantial investments receive lower sales charge rates; see the table
below _______.
/bullet/ The "right of accumulation" allows you to include your existing Class A
Shares (or Class T shares of the Growth Fund) as part of your current
investments for sales charge purposes.
/bullet/ A "letter of intent" allows you to count all Class A share investments
in an IDEX Fund over the next 13 months, as if you were making them all
at once, to qualify for a reduced sales charge.
/bullet/ By investing as part of a qualified group.
For a complete description of discounts and how they work, see the SAI.
- --------------------------------------------------------------------------------
CLASS A SHARE QUANTITY DISCOUNTS
SALES CHARGE AS %
AMOUNT OF PURCHASE OF OFFERING PRICE
Under $50,000 5.50%
$50,000 to under $100,000 4.75%
$100,000 to under $250,000 3.50%
$250,000 to under $500,000 2.75%
$500,000 to under $1,000,000 2.00%
$1,000,000 and over 0.00%
- --------------------------------------------------------------------------------
46 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
MINIMUM ACCOUNT BALANCE
IDEX will provide a 60-day notification to you prior to assessing a minimum
account fee to any account. The following describes the fees assessed to
accounts with low balances:
- --------------------------------------------------------------------------------
ACCOUNT BALANCE FEE ASSESSMENT
If your balance is below $500 $10 fee assessed every 6 months, until
(Class A, B & T shares) balance reaches $500 for Class A, B & T
($1,000 for Class C shares) and $1,000 for Class T shares
If your balance is below Your account will be charged a fee,
$250, due to redemptions liquidated,and any applicable CDSC will
be deducted, and a check will be mailed
to you.
- --------------------------------------------------------------------------------
No Fees will be charged on:
/bullet/ Accounts opened within the preceding 24 months
/bullet/ Accounts with an active monthly Automatic Investment Plan ($50 minimum
per account)
/bullet/ Accounts owned by individuals which, combined have a balance of
$10,000 or more
TELEPHONE TRANSACTIONS
The Fund, (ISI), and IDEX are not liable for complying with telephone
instructions which are believed by the Fund, ISI and IDEX to be genuine. The
Fund, ISI and IDEX will employ reasonable procedures to make sure telephone
instructions are genuine. In situations where the Fund, ISI and IDEX reasonably
believe they were acting on genuine telephone instructions, you bear the risk of
loss. These procedures may include requiring personal identification, providing
written confirmation of transactions, and tape recording conversations. The Fund
has the right to modify the telephone redemption privilege.
Telephone redemption with payment by check is not allowed within 10 days of a
change of registration/address, and other certain situations. Call Customer
Service or see the SAI for details. You may redeem up to $50,000 worth of shares
by phone and get your money by direct deposit electronically to a pre-authorized
bank account. No fee is charged. To receive this privilege, complete the
appropriate section of the Application.
WIRE TRANSACTIONS
In most cases, the Fund can send your redemption money via Federal Funds bank
wire. IDEX charges a $10 fee for this service, in addition to any fee your bank
may charge. For more details, call Customer Service or see the SAI.
REINVESTMENT PRIVILEGE
Within a 90 day period after you sell your Class A, B or C shares, you have the
right to "reinvest" your shares in any Fund of the same class. You will not
incur a new sales charge by using this privilege within the allotted time frame.
Any CDSC you paid on Class B or C shares will be credited to your account. You
may reinvest the proceeds of a Class B share sale (less the sales charge) in
Class A shares without paying the up-front sales charge. Send your written
request to IDEX along with your check for your reinvestment privilege.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or registration. If you are enrolled in the
Automatic Investment Plan and invest on a monthly basis, you will receive a
quarterly confirmation. Information about the tax status of income dividends and
capital gains distributions will be mailed to shareholders early each year.
Financial reports for the Funds, which include a list of the holdings, will be
mailed twice a year to all shareholders.
A Historical Statement may be ordered for transactions of prior years.
SHARE CERTIFICATES
The majority of shareholders prefer their shares to be recorded on the Fund's
books and no certificates issued.
If you would like certificates representing your shares, call or write IDEX to
request them. You may return share certificates to IDEX for re-deposit at any
time. If your share certificates are lost or stolen, notify IDEX immediately.
There may be a charge for canceling and replacing lost or stolen share
certificates. Remember, if you ask for a certificate for your shares, you will
not be able to redeem or exchange your shares by telephone. You will have to
send your share certificates to IDEX in order to redeem or exchange your shares.
Share certificates can be issued with the following limitations:
IDEX MUTUAL FUNDS / PROSPECTUS 1999 47
<PAGE>
/bullet/ No certificates issued for fractional shares
/bullet/ No certificates issued for less than 30 shares, with the exception of
sales or transfers from other funds that you have certificates issued
/bullet/ No certificates issued for retirement plan accounts with Investors
Fiduciary Trust as custodian
/bullet/ Certificates are issued to the owner of the account on file
PERSONAL SECURITIES TRADING
The Fund permits "Access Persons" as defined by Rule 17j-1 under the 1940 Act to
engage in personal securities transactions, subject to the terms of the Code of
Ethics and Insider Trading Policy that has been adopted by the Board of Trustees
of the Fund. Access Persons must use the guidelines established by this Policy
for all personal securities transactions and are subject to certain prohibitions
on personal trading. The Fund's sub-advisers, pursuant to Rule 17j-1 and other
applicable laws, and pursuant to the terms of the Policy, must adopt and enforce
their own Code of Ethics and Insider Trading Policies appropriate to their
particular business needs. Each sub-adviser must report to the Board of Trustees
on a quarterly basis with respect to the administration and enforcement of such
Policy, including any violations thereof which may potentially affect the Fund.
[GRAPHIC OMITTED] DISTRIBUTION AND TAXES
The Fund may make distributions generally, in the form of income dividends,
exempt-interest dividends (dividends that are not subject to federal tax) and
capital gains. Distributions will be reinvested in, unless you request cash
payment.
For taxable accounts, income dividends and short-term capital gains are taxable
as "ordinary dividends." Ordinary dividends and capital gain distributions are
taxable whether reinvested in your account or paid in cash.
When you redeem or exchange shares, if you realize a gain you will owe taxes,
unless your account is a tax-qualified retirement plan. If the sale or exchange
produces a loss, you may be able to use the loss to offset taxable gains. Tax
forms and/or Statements showing taxable transactions for the calendar year are
mailed by January 31 of the next year.
The foregoing information is not tax advice. Consult your tax advisor about tax
consequences for your personal situation.
The Tax-Exempt Fund may invest in securities that generate income that is not
exempt from federal or state income tax. Income exempt from federal tax may be
subject to state and local tax. Capital gains distributed by the Fund may be
taxable.
48 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
IDEX MUTUAL FUNDS / PROSPECTUS 1999 49
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------
Investment Operations (2)
---------------------------------------
Year or Net Asset Value Net Net Realized
Period Beginning Investment & Unrealized Total
Ended (1) of Period Income (Loss) Gain (Loss) Operations
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AGGRESSIVE GROWTH* CLASS A 10/31/98 $18.77 ($0.10) $3.31 $3.21
10/31/97 15.70 0.05 3.69 3.74
10/31/96 (3) 15.75 (0.01) (0.04) (0.05)
9/30/96 (4) 17.68 (0.15) (0.76) (0.91)
9/30/95 (3) 10.00 (0.14) 7.82 7.68
-------------------------------------------------------------------------------
CLASS B 10/31/98 18.58 (0.14) 3.31 3.17
10/31/97 15.58 (0.02) 3.69 3.67
10/31/96 (3) 15.63 (0.01) (0.04) (0.05)
9/30/96 (4) 17.64 (0.23) (0.76) (0.99)
-------------------------------------------------------------------------------
CLASS C 10/31/98 18.61 (0.14) 3.31 3.17
10/31/97 15.60 (0.01) 3.69 3.68
10/31/96 (3) 15.65 (0.01) (0.04) (0.05)
9/30/96 (4) 17.64 (0.21) (0.76) (0.97)
9/30/95 (3) 10.00 (0.18) 7.82 7.64
- -------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY* CLASS A 10/31/98 10.57 (0.01) 1.85 1.84
10/31/97 (1) 10.00 0.07 0.50 0.57
-------------------------------------------------------------------------------
CLASS B 10/31/98 10.52 (0.04) 1.85 1.81
10/31/97 (1) 10.00 0.02 0.50 0.52
-------------------------------------------------------------------------------
CLASS C 10/31/98 10.53 (0.04) 1.85 1.81
10/31/97 (1) 10.00 0.03 0.50 0.53
- -------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION* CLASS A 10/31/98 15.90 (0.12) 2.89 2.77
10/31/97 15.49 0.04 0.58 0.62
10/31/96 (3) 15.75 (0.02) (0.24) (0.26)
9/30/96 (4) 13.54 (0.02) 3.12 3.10
9/30/95 (1) 10.00 (0.03) 3.57 3.54
-------------------------------------------------------------------------------
CLASS B 10/31/98 15.74 (0.17) 2.89 2.72
10/31/97 15.42 (0.05) 0.58 0.53
10/31/96 (3) 15.69 (0.03) (0.24) (0.27)
9/30/96 13.49 (0.10) 3.12 3.02
-------------------------------------------------------------------------------
CLASS C 10/31/98 15.77 (0.17) 2.89 2.72
10/31/97 15.43 (0.03) 0.58 0.55
10/31/96 (3) 15.70 (0.03) (0.24) (0.27)
9/30/96 (4) 13.49 (0.08) 3.12 3.04
9/30/95 (3) 10.00 (0.08) 3.57 3.49
- -------------------------------------------------------------------------------------------------------
GLOBAL* CLASS A 10/31/98 23.74 (0.03) 4.67 4.64
10/31/97 21.39 0.07 4.38 4.45
10/31/96 (3) 21.40 (0.02) 0.01 (0.01)
9/30/96 17.73 (0.09) 4.38 4.29
9/30/95 15.93 (0.06) 2.42 2.36
9/30/94 13.35 (0.04) 2.62 2.58
-------------------------------------------------------------------------------
CLASS B 10/31/98 23.38 (0.10) 4.67 4.57
10/31/97 21.13 (0.03) 4.38 4.35
10/31/96 (3) 21.14 (0.02) 0.01 (0.01)
9/30/96 17.57 (0.19) 4.38 4.19
-------------------------------------------------------------------------------
CLASS C 10/31/98 23.30 (0.10) 4.67 4.57
10/31/97 21.03 (0.01) 4.38 4.37
10/31/96 (3) 21.04 (0.02) 0.01 (0.01)
9/30/96 17.46 (0.18) 4.38 4.20
9/30/95 15.74 (0.14) 2.42 2.28
9/30/94 13.35 (0.23) 2.62 2.39
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------
Distributions
----------------------------------------
From Net From Net
Investment Realized Total
Income Capital Gains Distributions
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AGGRESSIVE GROWTH* CLASS A $0.00 ($0.45) ($0.45)
0.00 (0.67) (0.67)
0.00 0.00 0.00
0.00 (1.02) (1.02)
0.00 0.00 0.00
--------------------------------------------------
CLASS B 0.00 (0.45) (0.45)
0.00 (0.67) (0.67)
0.00 0.00 0.00
0.00 (1.02) (1.02)
--------------------------------------------------
CLASS C 0.00 (0.45) (0.45)
0.00 (0.67) (0.67)
0.00 0.00 0.00
0.00 (1.02) (1.02)
0.00 0.00 0.00
- --------------------------------------------------------------------------
INTERNATIONAL EQUITY* CLASS A (0.07) 0.00 (0.07)
0.00 0.00 0.00
--------------------------------------------------
CLASS B (0.01) 0.00 (0.01)
0.00 0.00 0.00
--------------------------------------------------
CLASS C (0.02) 0.00 (0.02)
0.00 0.00 0.00
- --------------------------------------------------------------------------
CAPITAL APPRECIATION* CLASS A 0.00 (0.45) (0.45)
0.00 (0.21) (0.21)
0.00 0.00 0.00
(0.07) (0.82) (0.89)
0.00 0.00 0.00
--------------------------------------------------
CLASS B 0.00 (0.45) (0.45)
0.00 (0.21) (0.21)
0.00 0.00 0.00
0.00 (0.82) (0.82)
--------------------------------------------------
CLASS C 0.00 (0.45) (0.45)
0.00 (0.21) (0.21)
0.00 0.00 0.00
(0.01) (0.82) (0.83)
0.00 0.00 0.00
- --------------------------------------------------------------------------
GLOBAL* CLASS A 0.00 (2.07) (2.07)
0.00 (2.10) (2.10)
0.00 0.00 0.00
0.00 (0.62) (0.62)
0.00 (0.56) (0.56)
0.00 0.00 0.00
--------------------------------------------------
CLASS B 0.00 (2.07) (2.07)
0.00 (2.10) (2.10)
0.00 0.00 0.00
0.00 (0.62) (0.62)
--------------------------------------------------
CLASS C 0.00 (2.07) (2.07)
0.00 (2.10) (2.10)
0.00 0.00 0.00
0.00 (0.62) (0.62)
0.00 (0.56) (0.56)
0.00 0.00 0.00
- --------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
50 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year or Net Asset Net Assets
Period Value at End Total at End of
Ended (1) of Period Return(5) Period (000's)
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AGGRESSIVE GROWTH* CLASS A 10/31/98 $21.53 18.48% $41,853
10/31/97 18.77 24.71 31,260
10/31/96 (3) 15.70 (0.32) 21,938
9/30/96 (4) 15.75 (4.91) 22,078
9/30/95 (3) 17.68 76.80 16,747
--------------------------------------------------------------
CLASS B 10/31/98 21.30 18.42 7,288
10/31/97 18.58 24.47 4,880
10/31/96 (3) 15.58 (0.32) 1,992
9/30/96 (4) 15.63 (5.33) 1,800
--------------------------------------------------------------
CLASS C 10/31/98 21.33 18.43 4,745
10/31/97 18.61 24.50 3,468
10/31/96 (3) 15.60 (0.32) 2,129
9/30/96 (4) 15.65 (5.22) 2,250
9/30/95 (3) 17.64 76.40 1,736
- --------------------------------------------------------------------------------------
INTERNATIONAL EQUITY* CLASS A 10/31/98 12.34 17.34 4,165
10/31/97 (1) 10.57 5.70 3,076
--------------------------------------------------------------
CLASS B 10/31/98 12.32 16.98 912
10/31/97 (1) 10.52 5.20 589
--------------------------------------------------------------
CLASS C 10/31/98 12.32 17.04 503
10/31/97 (1) 10.53 5.30 399
- --------------------------------------------------------------------------------------
CAPITAL APPRECIATION* CLASS A 10/31/98 18.22 17.92 24,727
10/31/97 15.90 4.09 20,605
10/31/96 (3) 15.49 (1.59) 19,350
9/30/96 (4) 15.75 24.35 18,713
9/30/95 (1) 13.54 35.40 6,241
--------------------------------------------------------------
CLASS B 10/31/98 18.01 17.77 3,440
10/31/97 15.74 3.56 2,866
10/31/96 (3) 15.42 (1.66) 2,132
9/30/96 15.69 23.63 2,022
--------------------------------------------------------------
CLASS C 10/31/98 18.04 17.79 1,593
10/31/97 15.77 3.64 1,751
10/31/96 (3) 15.43 (1.66) 2,243
9/30/96 (4) 15.70 23.81 2,369
9/30/95 (3) 13.49 34.90 2,565
- --------------------------------------------------------------------------------------
GLOBAL* CLASS A 10/31/98 26.31 21.53 282,173
10/31/97 23.74 22.72 218,681
10/31/96 (3) 21.39 (0.05) 135,837
9/30/96 21.40 25.04 131,347
9/30/95 17.73 15.47 89,397
9/30/94 15.93 19.33 81,241
--------------------------------------------------------------
CLASS B 10/31/98 25.88 21.55 72,696
10/31/97 23.38 22.53 43,951
10/31/96 (3) 21.13 (0.05) 5,966
9/30/96 21.14 24.70 5,000
--------------------------------------------------------------
CLASS C 10/31/98 25.80 21.66 49,856
10/31/97 23.30 22.72 27,210
10/31/96 (3) 21.03 (0.05) 8,624
9/30/96 21.04 24.91 8,081
9/30/95 17.46 15.14 3,567
9/30/94 15.74 17.90 3,571
- --------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets(6) Net Investment
Year or ------------------------------------------ Income (Loss) Portfolio
Period Excluding Including to Average Turnover
Ended (1) Credits Gross Credits Net Assets(7) Rate(8)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AGGRESSIVE GROWTH* CLASS A 10/31/98 1.85% 2.10% 1.85% (0.01)% 70.87%
10/31/97 1.85 2.44 1.85 (1.07) 120.96
10/31/96 (3) 1.85 2.62 1.85 (1.06) 9.40
9/30/96 (4) 1.85 2.60 1.85 (1.15) 127.49
9/30/95 (3) 2.85 3.35 2.85 (2.39) 88.28
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 2.75 2.50 (1.71) 70.87
10/31/97 2.50 3.09 2.50 (1.71) 120.96
10/31/96 (3) 2.50 3.27 2.50 (1.71) 9.40
9/30/96 (4) 2.50 3.25 2.50 (1.80) 127.49
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.65 2.40 (1.61) 70.87
10/31/97 2.40 2.99 2.40 (1.62) 120.96
10/31/96 (3) 2.40 3.17 2.40 (1.62) 9.40
9/30/96 (4) 2.40 3.15 2.40 (1.70) 127.49
9/30/95 (3) 3.40 3.91 3.40 (2.94) 88.28
- --------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY* CLASS A 10/31/98 1.93 5.17 1.93 (0.32) 22.25
10/31/97 (1) 1.70 8.93 1.70 0.19 21.85
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.58 5.82 2.58 (0.97) 22.25
10/31/97 (1) 2.35 9.58 2.35 (0.45) 21.85
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.48 5.72 2.48 (0.87) 22.25
10/31/97 (1) 2.25 9.48 2.25 (0.35) 21.85
- --------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION* CLASS A 10/31/98 1.85 2.32 1.85 (1.42) 69.52
10/31/97 1.85 2.66 1.85 (1.27) 130.48
10/31/96 (3) 1.85 2.48 1.85 (1.41) 10.11
9/30/96 (4) 1.85 2.72 1.85 (0.35) 160.72
9/30/95 (1) 2.90 4.17 2.85 0.75 262.97
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 2.97 2.50 (2.07) 69.52
10/31/97 2.50 3.31 2.50 (1.92) 130.48
10/31/96 (3) 2.50 3.13 2.50 (2.06) 10.11
9/30/96 2.50 3.37 2.50 (1.00) 160.72
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.87 2.40 (1.97) 69.52
10/31/97 2.40 3.21 2.40 (1.82) 130.48
10/31/96 (3) 2.40 3.03 2.40 (1.96) 10.11
9/30/96 (4) 2.40 3.27 2.40 (0.90) 160.72
9/30/95 (3) 3.45 4.72 3.40 0.20 262.97
- --------------------------------------------------------------------------------------------------------------------
GLOBAL* CLASS A 10/31/98 1.78 0.00 1.78 (0.43) 33.21
10/31/97 1.91 0.00 1.91 (0.50) 91.02
10/31/96 (3) 2.08 0.00 2.07 (1.15) 2.59
9/30/96 2.09 0.00 2.06 (0.67) 97.94
9/30/95 2.10 0.00 1.97 (0.43) 161.48
9/30/94 2.14 0.00 0.00 (0.55) 148.01
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.43 0.00 2.43 (1.08) 33.21
10/31/97 2.56 0.00 2.56 (1.15) 91.02
10/31/96 (3) 2.73 0.00 2.72 (1.80) 2.59
9/30/96 2.74 0.00 2.71 (1.32) 97.94
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.33 0.00 2.33 (0.98) 33.21
10/31/97 2.46 0.00 2.46 (1.05) 91.02
10/31/96 (3) 2.63 0.00 2.62 (1.70) 2.59
9/30/96 2.64 0.00 2.61 (1.22) 97.94
9/30/95 2.65 0.00 2.52 (0.98) 161.48
9/30/94 4.04 0.00 0.00 (2.46) 148.01
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU TO UNDERSTAND EACH FUND'S
PERFORMANCE FOR AS LONG AS IT'S BEEN OPERATING, OR FOR FIVE YEARS, WHICHEVER IS
LONGER. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE FUND SHARE.
THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE AN INVESTOR WOULD HAVE EARNED
(OR LOST) ON AN INVESTMENT IN THE FUND FOR THE PERIOD SHOWN, ASSUMING
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS, LLP, WHOSE REPORT, ALONG WITH THE FUND'S
FINANCIAL STATEMENTS, IS INCLUDED IN THE ANNUAL REPORT, WHICH IS AVAILABLE TO
YOU UPON REQUEST.
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
IDEX MUTUAL FUNDS / PROSPECTUS 1999 51
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------
Investment Operations (2)
---------------------------------------
Year or Net Asset Value Net Net Realized
Period Beginning Investment & Unrealized Total
Ended (1) of Period Income (Loss) Gain (Loss) Operations
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GROWTH* CLASS A 10/31/98 $25.04 ($0.07) $6.58 $6.51
10/31/97 21.97 (0.02) 3.56 3.54
10/31/96 (3) 22.21 0.00 (0.24) (0.24)
9/30/96 22.84 (0.11) 4.66 4.55
9/30/95 16.78 (0.05) 6.18 6.13
9/30/94 (4,9) 18.46 0.01 (1.22) (1.21)
-------------------------------------------------------------------------------
CLASS B 10/31/98 24.55 (0.20) 6.58 6.38
10/31/97 21.60 (0.14) 3.56 3.42
10/31/96 (3) 21.85 (0.01) (0.24) (0.25)
9/30/96 22.64 (0.27) 4.66 4.39
-------------------------------------------------------------------------------
CLASS C 10/31/98 24.62 (0.17) 6.58 6.41
10/31/97 21.65 (0.12) 3.56 3.44
10/31/96 (3) 21.91 (0.02) (0.24) (0.26)
9/30/96 22.64 (0.21) 4.66 4.45
9/30/95 16.68 (0.15) 6.18 6.03
9/30/94 (4) 18.46 (0.09) (1.22) (1.31)
-------------------------------------------------------------------------------
CLASS T 10/31/98 25.31 0.02 6.58 6.6
10/31/97 22.17 0.05 3.56 3.61
10/31/96 (3) 22.41 0.00 (0.24) (0.24)
9/30/96 (10) 22.23 0.00 0.18 0.18
- -------------------------------------------------------------------------------------------------------
C.A.S.E.* CLASS A 10/31/98 12.90 (0.04) 0.91 0.87
10/31/97 (4) 10.56 (0.01) 2.86 2.85
10/31/96 (3) 10.46 (0.07) 0.17 0.10
9/30/96 (6) 10.00 0.61 (0.15) 0.46
-------------------------------------------------------------------------------
CLASS B 10/31/98 12.85 (0.09) 0.91 0.82
10/31/97 (4) 10.51 (0.07) 2.86 2.79
10/31/96 (3) 10.41 (0.07) 0.17 0.10
9/30/96 (6) 10.00 0.56 (0.15) 0.41
-------------------------------------------------------------------------------
CLASS C 10/31/98 12.86 (0.08) 0.91 0.83
10/31/97 (4) 10.52 (0.06) 2.86 2.80
10/31/96 (3) 10.42 (0.07) 0.17 0.10
9/30/96 (6) 10.00 0.57 (0.15) 0.42
- -------------------------------------------------------------------------------------------------------
VALUE EQUITY* CLASS A 10/31/98 11.71 (0.01) 1.68 1.67
10/31/97 (1) 10.00 0.02 1.69 1.71
-------------------------------------------------------------------------------
CLASS B 10/31/98 11.67 (0.05) 1.68 1.63
10/31/97 (1) 10.00 (0.02) 1.69 1.67
-------------------------------------------------------------------------------
CLASS C 10/31/98 11.67 (0.04) 1.68 1.64
10/31/97 (1) 10.00 (0.02) 1.69 1.67
- -------------------------------------------------------------------------------------------------------
STRATEGIC TOTAL RETURN* CLASS A 10/31/98 15.91 0.09 1.71 1.8
10/31/97 13.43 0.20 2.79 2.99
10/31/96 (3) 13.27 0.01 0.15 0.16
9/30/96 11.74 0.20 1.65 1.85
9/30/95 (1) 10.00 0.09 1.75 1.84
-------------------------------------------------------------------------------
CLASS B 10/31/98 15.89 0.05 1.71 1.76
10/31/97 13.42 0.10 2.79 2.89
10/31/96 (3) 13.27 0.00 0.15 0.15
9/30/96 11.73 0.13 1.65 1.78
-------------------------------------------------------------------------------
CLASS C 10/31/98 15.90 0.05 1.71 1.76
10/31/97 13.42 0.12 2.79 2.91
10/31/96 (3) 13.27 0.00 0.15 0.15
9/30/96 11.73 0.15 1.65 1.80
9/30/95 (1) 10.00 0.03 1.75 1.78
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------
Distributions
----------------------------------------
Year or From Net From Net
Period Investment Realized Total
Ended (1) Income Capital Gains Distributions
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GROWTH* CLASS A 10/31/98 $0.00 ($3.31) ($3.31)
10/31/97 0.00 (0.47) (0.47)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 0.00 (5.18) (5.18)
9/30/95 0.00 (0.07) (0.07)
9/30/94 (4,9) 0.00 (0.47) (0.47)
---------------------------------------------------------------
CLASS B 10/31/98 0.00 (3.31) (3.31)
10/31/97 0.00 (0.47) (0.47)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 0.00 (5.18) (5.18)
---------------------------------------------------------------
CLASS C 10/31/98 0.00 (3.31) (3.31)
10/31/97 0.00 (0.47) (0.47)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 0.00 (5.18) (5.18)
9/30/95 0.00 (0.07) (0.07)
9/30/94 (4) 0.00 (0.47) (0.47)
---------------------------------------------------------------
CLASS T 10/31/98 (0.03) (3.31) (3.34)
10/31/97 0.00 (0.47) (0.47)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (10) 0.00 0.00 0.00
- ---------------------------------------------------------------------------------------
C.A.S.E.* CLASS A 10/31/98 0.00 (0.95) (0.95)
10/31/97 (4) (0.51) 0.00 (0.51)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (6) 0.00 0.00 0.00
---------------------------------------------------------------
CLASS B 10/31/98 0.00 (0.95) (0.95)
10/31/97 (4) (0.45) 0.00 (0.45)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (6) 0.00 0.00 0.00
---------------------------------------------------------------
CLASS C 10/31/98 0.00 (0.95) (0.95)
10/31/97 (4) (0.46) 0.00 (0.46)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (6) 0.00 0.00 0.00
- ---------------------------------------------------------------------------------------
VALUE EQUITY* CLASS A 10/31/98 0.00 (0.04) (0.04)
10/31/97 (1) 0.00 0.00 0.00
---------------------------------------------------------------
CLASS B 10/31/98 0.00 (0.04) (0.04)
10/31/97 (1) 0.00 0.00 0.00
---------------------------------------------------------------
CLASS C 10/31/98 0.00 (0.04) (0.04)
10/31/97 (1) 0.00 0.00 0.00
- ---------------------------------------------------------------------------------------
STRATEGIC TOTAL RETURN* CLASS A 10/31/98 (0.11) (0.61) (0.72)
10/31/97 (0.19) (0.32) (0.51)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.17) (0.15) (0.32)
9/30/95 (1) (0.10) 0.00 (0.10)
---------------------------------------------------------------
CLASS B 10/31/98 (0.06) (0.61) (0.67)
10/31/97 (0.10) (0.32) (0.42)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.09) (0.15) (0.24)
---------------------------------------------------------------
CLASS C 10/31/98 (0.07) (0.61) (0.68)
10/31/97 (0.11) (0.32) (0.43)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.11) (0.15) (0.26)
9/30/95 (1) (0.05) 0.00 (0.05)
- ---------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
52 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year or Net Asset Net Assets
Period Value at End Total at End of
Ended (1) of Period Return(5) Period (000's)
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GROWTH* CLASS A 10/31/98 $28.24 30.10% $775,360
10/31/97 25.04 16.40 614,544
10/31/96 (3) 21.97 (1.09) 565,032
9/30/96 22.21 22.41 567,564
9/30/95 22.84 36.70 485,935
9/30/94 (4,9) 16.78 (6.72) 431,207
--------------------------------------------------------------
CLASS B 10/31/98 27.62 30.23 21,564
10/31/97 24.55 16.11 13,046
10/31/96 (3) 21.60 (1.14) 5,242
9/30/96 21.85 21.87 4,536
--------------------------------------------------------------
CLASS C 10/31/98 27.72 30.21 20,442
10/31/97 24.62 16.19 14,295
10/31/96 (3) 21.65 (1.19) 11,016
9/30/96 21.91 22.15 11,167
9/30/95 22.64 36.32 5,593
9/30/94 (4) 16.68 (7.72) 3,423
--------------------------------------------------------------
CLASS T 10/31/98 28.57 30.22 751,156
10/31/97 25.31 16.54 603,129
10/31/96 (3) 22.17 (1.03) 573,884
9/30/96 (10) 22.41 0.81 585,505
- --------------------------------------------------------------------------------------
C.A.S.E.* CLASS A 10/31/98 12.82 7.68 5,090
10/31/97 (4) 12.90 28.31 3,920
10/31/96 (3) 10.56 0.96 1,675
9/30/96 (6) 10.46 4.60 1,455
--------------------------------------------------------------
CLASS B 10/31/98 12.72 7.42 2,938
10/31/97 (4) 12.85 27.62 2,436
10/31/96 (3) 10.51 0.96 1,159
9/30/96 (6) 10.41 4.10 1,100
--------------------------------------------------------------
CLASS C 10/31/98 12.74 7.46 1,922
10/31/97 (4) 12.86 27.73 2,028
10/31/96 (3) 10.52 0.96 687
9/30/96 (6) 10.42 4.20 613
- --------------------------------------------------------------------------------------
VALUE EQUITY* CLASS A 10/31/98 13.34 14.33 9,114
10/31/97 (1) 11.71 17.14 5,305
--------------------------------------------------------------
CLASS B 10/31/98 13.26 14.06 4,526
10/31/97 (1) 11.67 16.65 2,850
--------------------------------------------------------------
CLASS C 10/31/98 13.27 14.10 2,617
10/31/97 (1) 11.67 16.73 1,607
- --------------------------------------------------------------------------------------
STRATEGIC TOTAL RETURN* CLASS A 10/31/98 16.99 11.79 29,311
10/31/97 15.91 22.80 21,629
10/31/96 (3) 13.43 1.20 11,744
9/30/96 13.27 16.00 11,314
9/30/95 (1) 11.74 18.43 5,167
--------------------------------------------------------------
CLASS B 10/31/98 16.98 11.45 7,526
10/31/97 15.89 22.03 4,698
10/31/96 (3) 13.42 1.13 1,684
9/30/96 13.27 15.38 1,537
--------------------------------------------------------------
CLASS C 10/31/98 16.98 11.50 6,662
10/31/97 15.90 22.15 4,332
10/31/96 (3) 13.42 1.13 1,792
9/30/96 13.27 15.49 1,728
9/30/95 (1) 11.73 17.95 281
- --------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets(6) Net Investment
Year or ------------------------------------------ Income (Loss) Portfolio
Period Excluding Including to Average Turnover
Ended (1) Credits Gross Credits Net Assets(7) Rate
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GROWTH* CLASS A 10/31/98 1.55% 0.00% 1.55% (0.44)% 19.86%
10/31/97 1.61 0.00 1.61 (0.10) 91.52
10/31/96 (3) 1.68 0.00 1.68 (0.13) 9.40
9/30/96 1.83 0.00 1.82 (0.22) 57.80
9/30/95 1.86 0.00 1.84 (0.26) 123.26
9/30/94 (4,9) 1.76 0.00 0.00 0.04 63.73
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.20 0.00 2.20 (1.09) 19.86
10/31/97 2.26 0.00 2.26 (0.75) 91.52
10/31/96 (3) 2.32 0.00 2.32 (0.78) 9.40
9/30/96 2.46 0.00 2.45 (0.86) 57.80
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.10 0.00 2.10 (0.99) 19.86
10/31/97 2.16 0.00 2.16 (0.65) 91.52
10/31/96 (3) 2.23 0.00 2.23 (0.68) 9.40
9/30/96 2.34 0.00 2.33 (0.77) 57.80
9/30/95 2.41 0.00 2.38 (0.81) 123.26
9/30/94 (4) 3.48 0.00 0.00 (1.68) 63.73
--------------------------------------------------------------------------------------------
CLASS T 10/31/98 1.20 0.00 1.20 (0.09) 19.86
10/31/97 1.26 0.00 1.26 0.25 91.52
10/31/96 (3) 1.33 0.00 1.33 (0.20) 9.40
9/30/96 (10) 1.18 0.00 1.17 0.36 57.80
- --------------------------------------------------------------------------------------------------------------------
C.A.S.E.* CLASS A 10/31/98 1.85 2.40 1.85 (0.70) 58.22
10/31/97 (4) 1.85 4.62 1.85 (0.34) 183.06
10/31/96 (3) 1.85 6.79 1.84 0.27 20.69
9/30/96 (6) 2.85 5.89 2.85 10.00 654.49
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 3.05 2.50 (1.35) 58.22
10/31/97 (4) 2.50 5.27 2.50 (0.99) 183.06
10/31/96 (3) 2.50 7.44 2.49 0.38 20.69
9/30/96 (6) 3.50 6.54 3.50 9.35 654.49
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.95 2.40 (1.25) 58.22
10/31/97 (4) 2.40 5.17 2.40 (0.89) 183.06
10/31/96 (3) 2.40 7.34 2.39 0.28 20.69
9/30/96 (6) 3.40 6.44 3.40 9.45 654.49
- --------------------------------------------------------------------------------------------------------------------
VALUE EQUITY* CLASS A 10/31/98 1.85 2.60 1.85 (0.15) 12.24
10/31/97 (1) 1.50 4.05 1.50 0.38 6.40
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 3.25 2.50 (0.80) 12.24
10/31/97 (1) 2.15 4.70 2.15 (0.28) 6.40
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 3.15 2.40 (0.70) 12.24
10/31/97 (1) 2.05 4.60 2.05 (0.18) 6.40
- --------------------------------------------------------------------------------------------------------------------
STRATEGIC TOTAL RETURN* CLASS A 10/31/98 1.85 1.87 1.85 1.35 15.85
10/31/97 1.85 2.28 1.85 1.41 51.44
10/31/96 (3) 1.85 2.76 1.82 1.47 5.50
9/30/96 1.85 2.79 1.79 1.67 40.58
9/30/95 (1) 2.99 4.57 2.85 0.85 34.67
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 2.52 2.50 0.71 15.85
10/31/97 2.50 2.93 2.50 0.76 51.44
10/31/96 (3) 2.50 3.40 2.47 0.82 5.50
9/30/96 2.50 3.44 2.44 1.02 40.58
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.42 2.40 0.81 15.85
10/31/97 2.40 2.83 2.40 0.86 51.44
10/31/96 (3) 2.40 3.30 2.37 0.92 5.50
9/30/96 2.40 3.34 2.34 1.12 40.58
9/30/95 (1) 3.54 5.12 3.40 0.30 34.67
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
IDEX MUTUAL FUNDS / PROSPECTUS 1999 53
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------
Investment Operations (2)
---------------------------------------
Year or Net Asset Value Net Net Realized
Period Beginning Investment & Unrealized Total
Ended (1) of Period Income (Loss) Gain (Loss) Operations
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TACTICAL ASSET CLASS A 10/31/98 $13.19 $0.11 $1.12 $1.23
ALLOCATION* 10/31/97 11.19 0.19 2.02 2.21
10/31/96 (3) 11.03 0.02 0.14 0.16
9/30/96 10.00 0.08 1.03 1.11
-------------------------------------------------------------------------------
CLASS B 10/31/98 13.18 0.07 1.12 1.19
10/31/97 11.18 0.11 2.02 2.13
10/31/96 (3) 11.02 0.02 0.14 0.16
-------------------------------------------------------------------------------
CLASS C 10/31/98 13.18 0.08 1.12 1.20
10/31/97 11.18 0.12 2.02 2.14
10/31/96 (3) 11.03 0.01 0.14 0.15
9/30/96 10.00 0.02 1.03 1.05
- -------------------------------------------------------------------------------------------------------
BALANCED* CLASS A 10/31/98 14.34 0.08 1.60 1.68
10/31/97 13.58 0.19 2.52 2.71
10/31/96 (3) 13.47 0.01 0.10 0.11
9/30/96 11.47 0.24 2.25 2.49
9/30/95 (1) 10.00 0.05 1.47 1.52
-------------------------------------------------------------------------------
CLASS B 10/31/98 14.33 0.04 1.60 1.64
10/31/97 13.56 0.12 2.52 2.64
10/31/96 (3) 13.46 0.00 0.10 0.10
9/30/96 11.47 0.15 2.25 2.40
-------------------------------------------------------------------------------
CLASS C 10/31/98 14.33 0.04 1.60 1.64
10/31/97 13.57 0.12 2.52 2.64
10/31/96 (3) 13.46 0.01 0.10 0.11
9/30/96 11.47 0.16 2.25 2.41
9/30/95 (1) 10.00 0.01 1.47 1.48
- -------------------------------------------------------------------------------------------------------
FLEXIBLE INCOME* CLASS A 10/31/98 9.75 0.26 0.15 0.41
10/31/97 9.33 0.61 0.42 1.03
10/31/96 (3) 9.19 0.05 0.14 0.19
9/30/96 9.17 0.60 0.00 0.60
9/30/95 8.83 0.61 0.37 0.98
9/30/94 (9) 9.59 0.65 (0.81) (0.16)
-------------------------------------------------------------------------------
CLASS B 10/31/98 9.75 0.23 0.15 0.38
10/31/97 9.32 0.56 0.42 0.98
10/31/96 (3) 9.18 0.05 0.14 0.19
9/30/96 9.17 0.53 0.00 0.53
-------------------------------------------------------------------------------
CLASS C 10/31/98 9.75 0.24 0.15 0.39
10/31/97 9.32 0.57 0.42 0.99
10/31/96 (3) 9.18 0.05 0.14 0.19
9/30/96 9.17 0.54 0.00 0.54
9/30/95 8.83 0.56 0.37 0.93
9/30/94 9.59 0.60 (0.81) (0.21)
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------
Distributions
----------------------------------------
Year or From Net From Net
Period Investment Realized Total
Ended (1) Income Capital Gains Distributions
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TACTICAL ASSET CLASS A 10/31/98 ($0.10) ($0.73) ($0.83)
ALLOCATION* 10/31/97 (0.17) (0.04) (0.21)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.08) 0.00 (0.08)
---------------------------------------------------------------
CLASS B 10/31/98 (0.06) (0.73) (0.79)
10/31/97 (0.09) (0.04) (0.13)
10/31/96 (3) 0.00 0.00 0.00
---------------------------------------------------------------
CLASS C 10/31/98 (0.07) (0.73) (0.80)
10/31/97 (0.10) (0.04) (0.14)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.02) 0.00 (0.02)
- ---------------------------------------------------------------------------------------
BALANCED* CLASS A 10/31/98 (0.08) (1.35) (1.43)
10/31/97 (0.20) (1.75) (1.95)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.21) (0.28) (0.49)
9/30/95 (1) (0.05) 0.00 (0.05)
---------------------------------------------------------------
CLASS B 10/31/98 (0.04) (1.35) (1.39)
10/31/97 (0.12) (1.75) (1.87)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.13) (0.28) (0.41)
---------------------------------------------------------------
CLASS C 10/31/98 (0.04) (1.35) (1.39)
10/31/97 (0.13) (1.75) (1.88)
10/31/96 (3) 0.00 0.00 0.00
9/30/96 (0.14) (0.28) (0.42)
9/30/95 (1) (0.01) 0.00 (0.01)
- ---------------------------------------------------------------------------------------
FLEXIBLE INCOME* CLASS A 10/31/98 (0.27) 0.00 (0.27)
10/31/97 (0.61) 0.00 (0.61)
10/31/96 (3) (0.05) 0.00 (0.05)
9/30/96 (0.58) 0.00 (0.58)
9/30/95 (0.64) 0.00 (0.64)
9/30/94 (9) (0.60) 0.00 (0.60)
---------------------------------------------------------------
CLASS B 10/31/98 (0.24) 0.00 (0.24)
10/31/97 (0.55) 0.00 (0.55)
10/31/96 (3) (0.05) 0.00 (0.05)
9/30/96 (0.52) 0.00 (0.52)
---------------------------------------------------------------
CLASS C 10/31/98 (0.25) 0.00 (0.25)
10/31/97 (0.56) 0.00 (0.56)
10/31/96 (3) (0.05) 0.00 (0.05)
9/30/96 (0.53) 0.00 (0.53)
9/30/95 (0.59) 0.00 (0.59)
9/30/94 (0.55) 0.00 (0.55)
- ---------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
54 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year or Net Asset Net Assets
Period Value at End Total at End of
Ended (1) of Period Return(5) Period (000's)
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TACTICAL ASSET CLASS A 10/31/98 $13.59 9.88% $14,991
ALLOCATION* 10/31/97 13.19 19.84 12,291
10/31/96 (3) 11.19 1.45 8,396
9/30/96 11.03 11.07 7,401
--------------------------------------------------------------
CLASS B 10/31/98 13.58 9.54 12,896
10/31/97 13.18 19.08 9,747
10/31/96 (3) 11.18 1.45 5,013
--------------------------------------------------------------
CLASS C 10/31/98 13.58 9.59 7,040
10/31/97 13.18 19.20 5,088
10/31/96 (3) 11.18 1.36 4,758
9/30/96 11.03 10.50 4,641
- --------------------------------------------------------------------------------------
BALANCED* CLASS A 10/31/98 14.59 12.89 18,545
10/31/97 14.34 22.96 13,414
10/31/96 (3) 13.58 0.81 8,402
9/30/96 13.47 22.12 8,056
9/30/95 (1) 11.47 15.27 3,670
--------------------------------------------------------------
CLASS B 10/31/98 14.58 12.55 4,461
10/31/97 14.33 22.19 2,583
10/31/96 (3) 13.56 0.74 878
9/30/96 13.46 21.38 687
--------------------------------------------------------------
CLASS C 10/31/98 14.58 12.60 2,722
10/31/97 14.33 22.31 1,561
10/31/96 (3) 13.57 0.81 967
9/30/96 13.46 21.49 943
9/30/95 (1) 11.47 14.77 3,365
- --------------------------------------------------------------------------------------
FLEXIBLE INCOME* CLASS A 10/31/98 9.89 4.80 14,281
10/31/97 9.75 11.53 15,532
10/31/96 (3) 9.33 2.08 17,001
9/30/96 9.19 6.73 17,065
9/30/95 9.17 11.57 19,786
9/30/94 (9) 8.83 (1.54) 21,527
--------------------------------------------------------------
CLASS B 10/31/98 9.89 4.46 911
10/31/97 9.75 10.79 746
10/31/96 (3) 9.32 2.04 522
9/30/96 9.18 5.94 494
--------------------------------------------------------------
CLASS C 10/31/98 9.89 4.52 1,058
10/31/97 9.75 10.91 928
10/31/96 (3) 9.32 2.04 846
9/30/96 9.18 6.03 883
9/30/95 9.17 10.95 558
9/30/94 8.83 (2.15) 691
- --------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets(6) Net Investment
Year or ------------------------------------------ Income (Loss) Portfolio
Period Excluding Including to Average Turnover
Ended (1) Credits Gross Credits Net Assets(7) Rate(8)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TACTICAL ASSET CLASS A 10/31/98 1.85% 1.87% 1.85% 1.82% 30.70%
ALLOCATION* 10/31/97 1.85 2.30 1.85 1.57 71.634
10/31/96 (3) 1.85 2.65 1.85 1.26 2.38
9/30/96 2.85 3.20 2.85 0.72 56.22
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 2.52 2.50 1.17 30.70
10/31/97 2.50 2.95 2.50 0.92 71.634
10/31/96 (3) 2.50 3.30 2.50 0.61 2.38
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.42 2.40 1.27 30.70
10/31/97 2.40 2.85 2.40 1.02 71.63
10/31/96 (3) 2.40 3.20 2.40 0.71 2.38
9/30/96 3.40 3.75 3.40 0.17 56.22
- --------------------------------------------------------------------------------------------------------------------
BALANCED* CLASS A 10/31/98 1.85 2.20 1.85 1.19 35.07
10/31/97 1.85 2.88 1.85 1.29 127.08
10/31/96 (3) 1.85 3.44 1.85 1.84 9.08
9/30/96 1.85 3.11 1.85 1.87 175.78
9/30/95 (1) 2.92 4.48 2.85 0.56 82.48
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 2.85 2.50 0.55 35.07
10/31/97 2.50 3.53 2.50 0.64 127.08
10/31/96 (3) 2.50 4.09 2.50 1.18 9.08
9/30/96 2.50 3.76 2.50 1.22 175.78
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.75 2.40 0.65 35.07
10/31/97 2.40 3.43 2.40 0.74 127.08
10/31/96 (3) 2.40 3.99 2.40 1.28 9.08
9/30/96 2.40 3.66 2.40 1.32 175.78
9/30/95 (1) 3.47 5.03 3.40 0.01 82.48
- --------------------------------------------------------------------------------------------------------------------
FLEXIBLE INCOME* CLASS A 10/31/98 1.85 1.95 1.85 6.46
10/31/97 1.85 2.40 1.85 6.41 135.53
10/31/96 (3) 1.85 2.98 1.85 6.15 16.16
9/30/96 1.85 2.07 1.85 6.46 135.38
9/30/95 1.87 1.94 1.85 7.03 149.58
9/30/94 (9) 1.85 2.13 0.00 6.57 105.40
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 2.50 2.60 2.50 5.81 47.38
10/31/97 2.50 3.05 2.50 5.76 135.53
10/31/96 (3) 2.50 3.63 2.50 5.50 16.16
9/30/96 2.50 2.72 2.50 5.81 135.38
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 2.40 2.50 2.40 5.91 47.38
10/31/97 2.40 2.95 2.40 5.86 135.53
10/31/96 (3) 2.40 3.53 2.40 5.60 16.16
9/30/96 2.40 2.62 2.40 5.91 135.38
9/30/95 2.42 2.49 2.40 6.48 149.58
9/30/94 2.40 8.59 0.00 6.03 105.40
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
IDEX MUTUAL FUNDS / PROSPECTUS 1999 55
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------
Investment Operations(2)
---------------------------------------
Year or Net Asset Value Net Net Realized
Period Beginning Investment & Unrealized Total
Ended (1) of Period Income (Loss) Gain (Loss) Operations
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCOME PLUS* CLASS A 10/31/98 $10.96 $0.27 $0.01 $0.28
10/31/97 10.61 0.76 0.44 1.20
10/31/96 (3) 10.41 0.04 0.22 0.26
9/30/96 10.36 0.72 0.04 0.76
9/30/95 9.75 0.75 0.71 1.46
9/30/94 10.98 0.76 (1.10) (0.34)
-------------------------------------------------------------------------------
CLASS B 10/31/98 10.96 0.23 0.01 0.24
10/31/97 10.61 0.69 0.44 1.13
10/31/96 (3) 10.40 0.05 0.22 0.27
9/30/96 10.35 0.65 0.04 0.69
-------------------------------------------------------------------------------
CLASS C 10/31/98 10.96 0.25 0.01 0.26
10/31/97 10.61 0.70 0.44 1.14
10/31/96 (3) 10.40 0.05 0.22 0.27
9/30/96 10.35 0.66 0.04 0.70
9/30/95 9.74 0.69 0.71 1.40
9/30/94 10.98 0.66 (1.10) (0.44)
- -------------------------------------------------------------------------------------------------------
TAX-EXEMPT* CLASS A 10/31/98 11.75 0.20 0.05 0.25
10/31/97 11.40 0.53 0.43 0.96
10/31/96 (3) 11.36 0.05 0.04 0.09
9/30/96 11.34 0.55 0.10 0.65
9/30/95 11.10 0.55 0.29 0.84
9/30/94 12.07 0.56 (0.60) (0.04)
-------------------------------------------------------------------------------
CLASS B 10/31/98 11.74 0.18 0.05 0.23
10/31/97 11.40 0.44 0.43 0.87
10/31/96 (3) 11.36 0.04 0.04 0.08
9/30/96 11.34 0.48 0.10 0.58
-------------------------------------------------------------------------------
CLASS C 10/31/98 11.75 0.19 0.05 0.24
10/31/97 11.40 0.50 0.43 0.93
10/31/96 (3) 11.36 0.04 0.04 0.08
9/30/96 11.34 0.52 0.10 0.62
9/30/95 11.10 0.52 0.29 0.81
9/30/94 12.07 0.53 (0.60) (0.07)
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------
Distributions
----------------------------------------
Year or From Net From Net
Period Investment Realized Total
Ended (1) Income Capital Gains Distributions
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME PLUS* CLASS A 10/31/98 ($0.29) ($0.22) ($0.51)
10/31/97 (0.75) (0.10) (0.85)
10/31/96 (3) (0.06) 0.00 (0.06)
9/30/96 (0.71) 0.00 (0.71)
9/30/95 (0.75) (0.10) (0.85)
9/30/94 (0.75) (0.14) (0.89)
---------------------------------------------------------------
CLASS B 10/31/98 (0.26) (0.22) (0.48)
10/31/97 (0.68) (0.10) (0.78)
10/31/96 (3) (0.06) 0.00 (0.06)
9/30/96 (0.64) 0.00 (0.64)
---------------------------------------------------------------
CLASS C 10/31/98 (0.27) (0.22) (0.49)
10/31/97 (0.69) (0.10) (0.79)
10/31/96 (3) (0.06) 0.00 (0.06)
9/30/96 (0.65) 0.00 (0.65)
9/30/95 (0.69) (0.10) (0.79)
9/30/94 (0.66) (0.14) (0.80)
- ---------------------------------------------------------------------------------------
TAX-EXEMPT* CLASS A 10/31/98 (0.20) (0.15) (0.35)
10/31/97 (0.53) (0.08) (0.61)
10/31/96 (3) (0.05) 0.00 (0.05)
9/30/96 (0.56) (0.07) (0.63)
9/30/95 (0.56) (0.04) (0.60)
9/30/94 (0.54) (0.39) (0.93)
---------------------------------------------------------------
CLASS B 10/31/98 (0.17) (0.15) (0.32)
10/31/97 (0.45) (0.08) (0.53)
10/31/96 (3) (0.04) 0.00 (0.04)
9/30/96 (0.49) (0.07) (0.56)
---------------------------------------------------------------
CLASS C 10/31/98 (0.19) (0.15) (0.34)
10/31/97 (0.50) (0.08) (0.58)
10/31/96 (3) (0.04) 0.00 (0.04)
9/30/96 (0.53) (0.07) (0.60)
9/30/95 (0.53) (0.04) (0.57)
9/30/94 (0.51) (0.39) (0.90)
- ---------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
56 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year or Net Asset Net Assets
Period Value at End Total at End of
Ended (1) of Period Return(5) Period (000's)
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME PLUS* CLASS A 10/31/98 $10.73 3.24% $64,905
10/31/97 10.96 11.86 65,612
10/31/96 (3) 10.61 2.53 66,285
9/30/96 10.41 7.64 65,252
9/30/95 10.36 15.85 68,746
9/30/94 9.75 (3.28) 63,995
--------------------------------------------------------------
CLASS B 10/31/98 10.72 2.91 2,860
10/31/97 10.96 11.10 1,761
10/31/96 (3) 10.61 2.59 804
9/30/96 10.40 6.95 774
--------------------------------------------------------------
CLASS C 10/31/98 10.73 2.96 4,420
10/31/97 10.96 11.22 3,480
10/31/96 (3) 10.61 2.59 2,781
9/30/96 10.40 7.05 2,684
9/30/95 10.35 15.08 1,980
9/30/94 9.74 (4.55) 2,112
- --------------------------------------------------------------------------------------
TAX-EXEMPT* CLASS A 10/31/98 11.65 2.57 22,742
10/31/97 11.75 8.68 23,320
10/31/96 (3) 11.40 0.76 24,439
9/30/96 11.36 5.89 24,708
9/30/95 11.34 7.75 27,401
9/30/94 11.10 (0.41) 29,096
--------------------------------------------------------------
CLASS B 10/31/98 11.65 2.24 399
10/31/97 11.74 7.93 377
10/31/96 (3) 11.40 0.71 198
9/30/96 11.36 5.21 189
--------------------------------------------------------------
CLASS C 10/31/98 11.65 2.45 874
10/31/97 11.75 8.39 921
10/31/96 (3) 11.40 0.74 939
9/30/96 11.36 5.63 907
9/30/95 11.34 7.48 454
9/30/94 11.10 (0.73) 277
- --------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets(6) Net Investment
Year or ------------------------------------------ Income (Loss) Portfolio
Period Excluding Including to Average Turnover
Ended (1) Credits Gross Credits Net Assets(7) Rate(8)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME PLUS* CLASS A 10/31/98 1.25% 0.00% 1.25% 6.46% 32.30%
10/31/97 1.27 0.00 1.27 7.14 62.28
10/31/96 (3) 1.33 0.00 1.32 5.60 1.58
9/30/96 1.33 0.00 1.31 6.89 65.96
9/30/95 1.29 0.00 1.26 7.53 25.07
9/30/94 1.33 0.00 0.00 7.35 48.12
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 1.90 0.00 1.90 5.81 32.30
10/31/97 1.92 0.00 1.92 6.49 62.28
10/31/96 (3) 1.98 0.00 1.97 4.95 1.58
9/30/96 1.98 0.00 1.96 6.24 65.96
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 1.80 0.00 1.80 5.91 32.30
10/31/97 1.82 0.00 1.82 6.59 62.28
10/31/96 (3) 1.88 0.00 1.87 5.05 1.58
9/30/96 1.88 0.00 1.86 6.34 65.96
9/30/95 1.84 0.00 1.81 6.98 25.07
9/30/94 3.52 0.00 0.00 5.16 48.12
- --------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT* CLASS A 10/31/98 1.12 1.34 1.12 4.28 21.08
10/31/97 1.00 1.63 1.00 4.60 71.29
10/31/96 (3) 1.00 1.89 1.00 4.60 3.79
9/30/96 1.00 1.46 1.00 4.88 71.05
9/30/95 1.02 1.35 1.00 4.83 126.48
9/30/94 1.00 1.30 0.00 4.83 59.84
--------------------------------------------------------------------------------------------
CLASS B 10/31/98 1.77 1.99 1.77 3.63 21.08
10/31/97 1.65 2.28 1.65 3.95 71.29
10/31/96 (3) 1.65 2.54 1.65 3.94 3.79
9/30/96 1.65 2.11 1.65 4.23 71.05
--------------------------------------------------------------------------------------------
CLASS C 10/31/98 1.37 1.59 1.37 4.03 21.08
10/31/97 1.25 1.88 1.25 4.35 71.29
10/31/96 (3) 1.25 2.14 1.25 4.34 3.79
9/30/96 1.25 1.71 1.25 4.63 71.05
9/30/95 1.27 1.60 1.25 4.58 126.48
9/30/94 1.25 20.88 0.00 4.58 59.84
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 48
IDEX MUTUAL FUNDS / PROSPECTUS 1999 57
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
(1) The Growth Fund Class A, Global Fund Class A, IDEX Total Income
Trust (predecessor to Flexible Income Fund Class A) and AEGON USA High
Yield Portfolio(predecessor to Income Plus Fund Class A) commenced
operations on May 8, 1986, October 1, 1992, June 29, 1987, April 1, 1985
and June 14, 1985, respectively. The Class C Shares of Growth, Global,
Flexible Income Tax-Exempt and Income Plus Funds commenced operations on
October 1, 1993. The Class A and Class C shares of Balanced, Capital
Appreciation, Aggressive Growth and Strategic Total Return Funds commenced
operations on December 2, 1994. The Class B Shares of each of the above
Funds commenced operations on October 1, 1995. The Class A, Class B and
Class C shares of the Tactical Asset Allocation Fund commenced operations
on October 1, 1995. Commencement of operations for Class A, Class B, and
Class C shares of the C.A.S.E. Fund commenced operations on February 1,
1996. The Class A, Class B and Class C shares of the International Equity
and Value Equity Fund commenced operations on February 1, 1997.
(2) 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).
(3) For the month ended October 31, 1996. On October 1, 1996, each Fund changed
its fiscal year end from September 30 to October 31.
(4) Distributions from net realized capital gains include distributions in
excess of current net realized capital gains for the Aggressive Growth
Fund Classes A, B and C, for the period ended 9/30/96, in the amount of
$1.02, and for the Growth Fund 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 Fund Classes A and C, for the period ended 9/30/96 in
the amount of $.01 and for the C.A.S.E. Fund Classes A, B and C for the
period ended 10/31/97 in the amount of $.08.
(5) 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 and assumes all dividends and capital gain distributions are
reinvested. Periods of less than one year are not annualized.
(6) 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).
(7) 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
Statement in the Fund's Annual Report to shareholders dated October 31,
1998.
(8) 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.
(9) 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%. On October 1, 1993, Flexible Income Fund Class A
initiated a 12b-1 plan of distribution. Effective October 1, 1993, Flexible
Income Fund incurred 12b-1 fees at the rate of 0.35% in accordance with the
Plan of Distribution under Rule 12b-1 of the Investment Company Act of
1940.
(10) The information shown for Class T shares is for the period from inception
on September 30, 1996, through the fiscal year ended September 30, 1996.
58 IDEX MUTUAL FUNDS / PROSPECTUS 1999
<PAGE>
DISTRIBUTION ARRANGEMENTS
[GRAPHIC OMITTED] UNDERWRITING AGREEMENT
[GRAPHIC OMITTED]
IDEX Mutual Funds has an Underwriting Agreement with ISI, a registered
broker/dealer. Under this agreement, ISI underwrites and distributes all three
classes of Fund shares and bears the expenses of offering these shares to the
public. The Funds pay ISI fees for its services.
Of the distribution and service fees it receives for Class A and B shares, ISI
reallows, or pays, to brokers or dealers who sold them, 0.25% of the average
daily net assets of those shares. In the case of Class C shares, ISI reallows
its entire fee to those sellers.
[GRAPHIC OMITTED] DISTRIBUTION PLANS
DISTRIBUTION OF CLASS A SHARES. ISI receives the sales fees or loads imposed on
these shares (up to 5.5% of the offering price, which includes the sales load)
and reallows a portion of those fees to the sellers of the shares. ISI also
receives fees under a Rule 12b-1 Plan of Distribution. Under its Plan for Class
A shares, the Funds may pay ISI a distribution fee of up to 0.35% annually and a
service fee of 0.25%. Fees are based on the average daily net assets of Class A
shares. However, if the service fees rise, the distribution fee is lowered so
that the total fees payable don't exceed 0.35% annually.
DISTRIBUTION OF CLASS B SHARES. For these shares, the Funds may pay ISI an
annual distribution fee of up to 0.75% and an annual service fee of 0.25%.
DISTRIBUTION OF CLASS C SHARES. The fees paid to ISI for these shares may go as
high as for Class B (O.75% and 0.25%), but the total annual fee may not exceed
0.90% of the average daily net assets of the funds.
GROWTH FUND CLASS T SHARES. This class of shares does not have a 12b-1 Plan of
Distribution, and is closed to new shareholders.
THE EFFECT OF RULE 12b-1. Because these Funds have a 12b-1 Plan, even though
Class B shares don't carry an up-front sales load, the higher distribution and
service fees payable by those shares may, over time, be higher than the total
fees paid by owners of A shares. For a complete description of the Funds' 12b-1
Plans, see the SAI.
PREPARING FOR YEAR 2000
Like all financial service providers, the Fund and the investment adviser
utilize systems that may be affected by Year 2000 transition issues. The Fund
also relies on service providers, including the Fund's custodian and the
sub-advisers, which may be affected. The Fund and the investment adviser have
developed, and are in the process of implementing, a Year 2000 transition plan.
Management of the Fund is in the process of confirming that the service
providers to the Fund are also engaged in similar transition plans.
While the investment adviser and each sub-adviser has made a representation to
Management that each party is implementing a Year 2000 transition plan, the
resources that are being devoted to this effort are substantial and it is
difficult to predict with precision whether the amount of resources ultimately
devoted, or the outcome of these efforts, will have any negative impact on the
Fund or the investment adviser. If systems of the investment adviser,
sub-advisers, or other service providers fail at Year 2000, the Funds could be
unable to process portfolio or shareholder transactions or provide accurate
_______ to investors.
The Fund and the investment adviser currently anticipate that their systems will
be Year 2000 compliant prior to the end of 1999, but there can be no assurance
that the Fund or investment adviser will be successful, or that interaction with
other service providers will not impair the Funds or investment advisers
services in year 2000.
IDEX MUTUAL FUNDS / PROSPECTUS 1999 59
<PAGE>
ADDITIONAL INFORMATION about
these Funds is contained in the
Statement of Additional
Information, dated March 1, 1999,
which is incorporated by
reference into this prospectus.
Other information about these
Funds has been filed with and is
available from the U.S.
Securities and Exchange
Commission. Information about the
Funds (including the Statement of
Additional Information) can be
reviewed and copied at the
Securities and Exchange
Commission's Public Reference
Room in Washington, D.C.
Information on the operation of
the public reference room may be
obtained by calling the
Commission at 1-800-SEC-0330.
Copies of this information may be
obtained, upon payment of a
duplicating fee, by writing the
Public Reference Section of the
Commission, Washington, D.C.
20549-6009. Reports and other
information about the Funds are
also available on the
Commission's Internet site at
http://www.sec.gov. For more
information about these Funds,
you may obtain a copy of the
Statement of Additional
Information or the Annual and
Semi-Annual Reports, without
charge, or to make other
inquiries about these Funds, call
or write to IDEX Mutual Funds at
the phone number or address at
the bottom of this page.
WHERE TIME IS ON YOUR SIDE
[LOGO]
P.O. Box 9015 /diamond/ Clearwater, FL /diamond/ 33758-9015
Customer Service 1-888-233-IDEX (4339)
Principal Underwriter: InterSecurities, Inc.
File No. 811-4556
(C) 1999 InterSecurities, Inc. ID00835-3/99
<PAGE>
IDEX AGGRESSIVE GROWTH FUND
IDEX INTERNATIONAL EQUITY FUND
IDEX CAPITAL APPRECIATION FUND
IDEX GLOBAL FUND
IDEX GROWTH FUND
IDEX C.A.S.E. FUND
IDEX VALUE EQUITY FUND
IDEX STRATEGIC TOTAL RETURN FUND
IDEX TACTICAL ASSET ALLOCATION FUND
IDEX BALANCED FUND
IDEX FLEXIBLE INCOME FUND
IDEX INCOME PLUS FUND
IDEX TAX-EXEMPT FUND
BLUE CHIP FUND
DIVIDEND GROWTH FUND
MID-CAP OPPORTUNITIES FUND
MID-CAP SUMMIT FUND
SMALL CAP FRONTIER FUND
STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 1999
IDEX MUTUAL FUNDS
570 Carillon Parkway
St. Petersburg, Florida 33716
Customer Service (888) 233-4339 (toll free)
IDEX Aggressive Growth, International Equity, Capital Appreciation,
Global, Growth, C.A.S.E., Value Equity, Strategic Total Return, Tactical Asset
Allocation, Balanced, Flexible Income, Income Plus, Tax-Exempt, Blue Chip,
Dividend Growth, Mid-Cap Opportunities, Mid-Cap Summit and Small Cap Frontier
Funds (each a "Fund" and collectively, the "Funds") are series of IDEX Series
Fund (the "Fund"), an open-end management investment company that offers a
selection of investment funds. The Fund is registered under the Investment
Company Act of 1940 (the "1940 Act"). All Funds other than the Capital
Appreciation Fund and Mid-Cap Opportunities Fund are diversified, while those
Funds are nondiversified.
This Statement of Additional Information is not a Prospectus, and should
be read in conjunction with the Prospectus dated March 1, 1999 which may be
obtained free of charge by writing or calling the Fund at the above address or
telephone number. This Statement of Additional Information contains additional
and more detailed information about each Fund's operations and activities than
that set forth in the Prospectus. The annual report is incorporated by reference
into this SAI.
ISF00065-3/99
<PAGE>
<TABLE>
<CAPTION>
IDEX MUTUAL FUNDS
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<S> <C>
INVESTMENT OBJECTIVES.....................................................................................1
INVESTMENT RESTRICTIONS, POLICIES AND PRACTICES...........................................................1
Investment Restrictions of IDEX Aggressive Growth Fund .............................................1
Investment Restrictions of IDEX International Equity Fund...........................................2
Investment Restrictions of IDEX Capital Appreciation Fund and IDEX Balanced Fund....................4
Investment Restrictions of IDEX Global Fund.........................................................5
Investment Restrictions of IDEX Growth Fund and IDEX Flexible Income Fund...........................7
Investment Restrictions of IDEX C.A.S.E. Fund.......................................................8
Investment Restrictions of IDEX Value Equity Fund..................................................10
Investment Restrictions of IDEX Strategic Total Return Fund........................................11
Investment Restrictions of IDEX Tactical Asset Allocation Fund.....................................12
Investment Restrictions of IDEX Income Plus Fund...................................................14
Investment Restrictions of IDEX Tax-Exempt Fund....................................................15
Investment Restrictions of Blue Chip Fund..........................................................17
Investment Restrictions of Dividend Growth Fund....................................................18
Investment Restrictions of Mid-Cap Opportunities Fund..............................................19
Investment Restrictions of Mid-Cap Summit Fund.....................................................20
Investment Restrictions of Small Cap Frontier Fund.................................................21
OTHER POLICIES AND PRACTICES OF THE FUNDS................................................................22
Futures, Options and Other Derivative Instruments..................................................22
Futures Contracts .................................................................................22
Options on Futures Contracts.......................................................................25
Options on Securities..............................................................................26
Options on Foreign Currencies......................................................................29
Forward Contracts..................................................................................30
Swaps and Swap-Related Products....................................................................31
Eurodollar Instruments.............................................................................32
Special Investment Considerations and Risks........................................................32
Additional Risks of Options on Foreign Currencies, Forward Contracts and Foreign Instruments.......33
Other Investment Companies.........................................................................34
Zero Coupon, Pay-In-Kind and Step Coupon Securities................................................34
Income-Producing Securities........................................................................35
Lending of Fund Securities.........................................................................36
Joint Trading Accounts.............................................................................36
Illiquid Securities................................................................................36
Repurchase and Reverse Repurchase Agreements.......................................................37
Pass-through Securities............................................................................37
High-Yield/High-Risk Bonds.........................................................................38
Warrants and Rights................................................................................39
U.S. Government Securities.........................................................................39
Fund Turnover......................................................................................40
INVESTMENT ADVISORY AND OTHER SERVICES...................................................................40
Additional Investment Advisory or Sub-Advisory Services Provided by the Sub-Advisers...............43
DISTRIBUTOR..............................................................................................44
ADMINISTRATIVE SERVICES................................................................................. 44
CUSTODIAN, TRANSFER AGENT AND OTHER AFFILIATES ..........................................................45
i
<PAGE>
FUND TRANSACTIONS AND BROKERAGE..........................................................................46
TRUSTEES AND OFFICERS ...................................................................................50
PURCHASE OF SHARES ......................................................................................55
DISTRIBUTION PLANS ......................................................................................55
DISTRIBUTION FEES .......................................................................................56
NET ASSET VALUE DETERMINATION............................................................................58
DIVIDENDS AND OTHER DISTRIBUTIONS .......................................................................60
SHAREHOLDER ACCOUNTS.....................................................................................60
RETIREMENT PLANS.........................................................................................60
REDEMPTION OF SHARES ....................................................................................60
TAXES ...................................................................................................61
PRINCIPAL SHAREHOLDERS...................................................................................63
MISCELLANEOUS ...........................................................................................63
Organization ......................................................................................63
Shares of Beneficial Interest .....................................................................63
Legal Counsel and Auditors ........................................................................64
Registration Statement ............................................................................64
PERFORMANCE INFORMATION .................................................................................64
FINANCIAL STATEMENTS ....................................................................................68
CERTAIN SECURITIES IN WHICH THE FUNDS MAY INVEST ................................................APPENDIX A
</TABLE>
ii
<PAGE>
INVESTMENT OBJECTIVES
The Prospectus discusses the investment objective of each Fund of the IDEX
Mutual Funds, the principal types of securities in which each Fund will invest,
and the policies and practices of each Fund. The following discussion of
Investment Restrictions, Policies and Practices supplements that set forth in
the Prospectus.
There can be no assurance that a Fund will, in fact, achieve its
objective. A Fund's investment objective may be changed by the Board of Trustees
without shareholder approval. A change in the investment objective of a Fund may
result in the Fund having an investment objective different from that which the
shareholder deemed appropriate at the time of investment. A Fund will not change
its objective without 30 days prior notice to its shareholders, nor will it
charge shareholders an exchange fee or redemption fee after such notice and
prior to the expiration of such 30-day notice period. However, should a
shareholder decide to redeem Fund shares because of a change in the objective,
the shareholder may realize a taxable gain or loss.
INVESTMENT RESTRICTIONS, POLICIES AND PRACTICES
As indicated in the Prospectus, each Fund is subject to certain
fundamental policies and restrictions which as such may not be changed without
shareholder approval. Shareholder approval would be the approval by the lesser
of (i) more than 50% of the outstanding voting securities of a Fund, or (ii) 67%
or more of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities of a Fund are present or
represented by proxy.
INVESTMENT RESTRICTIONS OF IDEX AGGRESSIVE GROWTH FUND
IDEX Aggressive Growth Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")), if immediately after and as a
result of such purchase (a) the value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value of the Fund's total assets, or
(b) the Fund owns more than 10% of the outstanding voting securities of any one
class of securities of such issuer;
2. Purchase any securities that would cause more than 25% of the value of
the Fund's total assets to be invested in the securities of issuers conducting
their principal business activities in the same industry; provided that there
shall be no limit on the purchase of U.S. government securities;
3. Purchase or sell real estate or real estate limited partnerships,
except that the Fund may purchase and sell securities secured by real estate,
mortgages or interests therein and securities that are issued by companies that
invest or deal in real estate;
4. Invest in commodities, except that the Fund may purchase or sell stock
index futures contracts and related options thereon if thereafter no more than
5% of its total assets are invested in aggregate initial margin and premiums;
5. Make loans to others, except through purchasing qualified debt
obligations, lending Fund securities or entering into repurchase agreements;
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its Fund securities;
7. Borrow money, except that the Fund may borrow from banks for investment
purposes as set forth in the Prospectus and may also engage in reverse
repurchase agreements. Immediately after any borrowing, including reverse
repurchase agreements, the Fund will maintain asset coverage of not less than
300% with respect to all borrowings; and
8. Issue senior securities, except that the Fund may borrow from banks for
investment purposes so long as the Fund maintains the required coverage.
1
<PAGE>
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the Funds without
shareholder approval:
(A) The Fund may not sell securities short or purchase securities on
margin, except that the Fund may obtain any short-term credit necessary for the
clearance of purchases and sales of securities. These restrictions shall not
apply to transactions involving selling securities "short against the box";
(B) The Fund may not pledge, hypothecate, mortgage or otherwise encumber
more than 15% of the value of the Fund's total assets except in connection with
borrowings described in number 7 above. These restrictions shall not apply to
transactions involving reverse repurchase agreements or the purchase of
securities subject to firm commitment agreements or on a when-issued basis;
(C) The Fund may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(D) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(E) The Fund may not invest in companies for the purpose of exercising
control or management; and
(F) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 (the "1933 Act"), or any successor to
such Rule, Section 4(2) commercial paper or any other securities as to which the
Board of Trustees has made a determination as to liquidity, as permitted under
the 1940 Act.
INVESTMENT RESTRICTIONS OF IDEX INTERNATIONAL EQUITY FUND
IDEX International Equity Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer. All securities
of a foreign government and its agencies will be treated as a single issuer for
purposes of this restriction;
2. Invest 25% or more of the value of the Fund's total assets in any
particular industry (other than U.S. government securities). For purposes of
this restriction, the term industry shall include (a) the government of any one
country other than the U.S., but not the U.S. government and (b) all
supranational organizations;
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the Fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the Fund may own securities or other
instruments backed by real estate, including mortgage-backed securities, or debt
or equity securities issued by companies engaged in those businesses;
5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the Fund;
2
<PAGE>
6. Lend any security or make any other loan if, as a result, more than 30%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 33-1/3% of the value of
the Fund's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 33-1/3% of the value of the Fund's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 33-1/3% limitation.
This policy shall not prohibit reverse repurchase agreements or deposits of
assets to provide margin or guarantee positions in connection with transactions
in options, futures contracts, swaps, forward contracts, or other derivative
instruments or the segregation of assets in connection with such transactions;
and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the Funds without
shareholder approval:
(A) The Fund may not, as a matter of non-fundamental policy (i) enter into
any futures contracts or options on futures contracts for purposes other than
bona fide hedging transactions within the meaning of Commodity Futures Trading
Commission regulations if the aggregate initial margin deposits and premiums
required to establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions would exceed 5%
of the fair market value of the Fund's net assets, after taking into account
unrealized profits and losses on such contracts it has entered into and (ii)
enter into any futures contracts or options on futures contracts if the
aggregate amount of the Fund's commitments under outstanding futures contracts
positions and options on futures contracts would exceed the market value of its
total assets;
(B) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(C) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short;
(D) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or other securities for which the Board of Trustees has made a
determination of liquidity, as permitted under the 1940 Act;
(F) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization. The
Fund may also invest in the GEI Short-Term Investment Fund, an investment fund
advised by GE Investment Management Incorporated ("GEIM"), created specifically
to serve as a vehicle for the collective investment of cash balances of the Fund
and other accounts advised by GEIM or General Electric Investment Corporation.
Investments in GEI Short-Term Investment Fund are not considered investments in
another investment company for the purposes of this restriction;
(G) The Fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses; and
3
<PAGE>
(H) The Fund may not invest in companies for the purpose of exercising
control or management.
With respect to investment restriction No. 2 above, the Fund may use the
industry classifications reflected by the S&P 500 Composite Stock Index, if
applicable at the time of determination. For all other Fund holdings the Fund
may use the Directory of Companies Required to File Annual Reports with the SEC
and Bloomberg, Inc. In addition, the Fund may select its own industry
classifications, provided such classifications are reasonable.
INVESTMENT RESTRICTIONS OF IDEX CAPITAL APPRECIATION FUND AND IDEX BALANCED FUND
IDEX Capital Appreciation Fund and IDEX Balanced Fund each may not, as a matter
of fundamental policy:
1. With respect to 75% of its total assets in the case of the Balanced
Fund, and 50% of its total assets in the case of the Capital Appreciation Fund,
purchase the securities of any one issuer (except cash items and "government
securities" as defined under the 1940 Act, if immediately after and as a result
of such purchase the value of the holdings of the Fund in the securities of such
issuer exceeds 5% of the value of such Fund's total assets or the Fund owns more
than 10% of the outstanding voting securities of such issuer. With respect to
the remaining 50% of the value of its total assets, IDEX Capital Appreciation
Fund may invest in the securities of as few as two issuers;
2. Invest more than 25% of the value of its assets in any particular
industry (other than U.S. government securities);
3. Invest directly in real estate or interests in real estate; however, a
Fund may own debt or equity securities issued by companies engaged in those
businesses;
4. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this limitation
shall not prevent a Fund from purchasing or selling options, futures, swaps and
forward contracts or from investing in securities or other instruments backed by
physical commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or repurchase
agreements);
6. Act as underwriter of securities issued by others, except to the extent
that a Fund may be deemed an underwriter in connection with the disposition of
portfolio securities of that Fund; and
7. The Fund may borrow money for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 25% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). If borrowings exceed 25% of the value of the Fund's total assets by
reason of a decline in net assets, the Fund will reduce its borrowings within
three business days to the extent necessary to comply with the 25% limitation.
This policy shall not prohibit reverse repurchase agreements, or deposits of
assets to margin or guarantee positions in futures, options, swaps or forward
contracts, and the segregation of assets in connection with such contracts.
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Funds have adopted the following non-fundamental
investment restrictions which may be changed by the Board of Trustees without
shareholder approval:
(A) The Fund may not: (i) enter into any futures contracts and related
options for purposes other than bona fide hedging transactions within the
meaning of Commodity Futures Trading Commission ("CFTC") regulations if the
aggregate initial margin and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions will exceed 5% of the fair market value of a Fund's
net assets, after taking into account unrealized profits and unrealized losses
on any such contracts it has entered into; and (ii) enter into any futures
contracts if the aggregate amount of such Fund's commitments under outstanding
futures contracts positions of that Fund would exceed the market value of its
total assets;
4
<PAGE>
(B) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short without the payment of any additional consideration therefore, and
provided that transactions in futures, options, swaps and forward contracts are
not deemed to constitute selling securities short;
(C) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in futures, options, contracts, swaps, and forward contracts,
shall not be deemed to constitute purchasing securities on margin;
(D) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(E) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of that Fund's net asset
value, provided that this limitation does not apply to reverse repurchase
agreements, deposits of assets to margin, guarantee positions in futures,
options, swaps or forward contracts or segregation of assets in connection with
such contracts;
(F) The Fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(G) The Fund may not purchase any security or enter into a repurchase
agreement, if as a result, more than 15% of its net assets would be invested in
repurchase agreements not entitling the holder to payment of principal and
interest within seven days and in securities that are illiquid by virtue of
legal or contractual restrictions on resale or the absence of a readily
available market. The Trustees, or the Fund's investment adviser or sub-adviser
acting pursuant to authority delegated by the Trustees, may determine that a
readily available market exists for securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper and municipal lease obligations. Accordingly, such securities
may not be subject to the foregoing limitation;
(H) The Fund may not invest in companies for the purpose of exercising
control or management; and
(I) With respect to the Balanced Fund only, at least 25% of the total
assets of that Fund will normally be invested in fixed-income senior securities,
which include corporate debt securities and preferred stock.
INVESTMENT RESTRICTIONS OF IDEX GLOBAL FUND
IDEX Global Fund may not, as a matter of fundamental policy:
1. Own more than 10% of the outstanding voting securities of any one
issuer and, as to seventy-five percent (75%) of the value of its total assets,
purchase the securities of any one issuer (except cash items and "government
securities" as defined under the 1940 Act), if immediately after and as a result
of such purchase, the value of the holdings of the Fund in the securities of
such issuer exceeds 5% of the value of the Fund's total assets;
2. Invest more than 25% of the value of its assets in any particular
industry (other than government securities);
3. Invest directly in real estate or interests in real estate; however,
the Fund may own debt or equity securities issued by companies engaged in those
businesses;
4. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this shall not
prevent the Fund from purchasing or selling options, futures, swaps and forward
contracts or from investing in securities or other instruments backed by
physical commodities);
5
<PAGE>
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities; and
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
margin or guarantee positions in futures, options, swaps or forward contracts,
or the segregation of assets in connection with such contacts.
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The Fund may not (i) enter into any futures contracts or options on
futures contracts for purposes other than bona fide hedging transactions within
the meaning of Commodity Futures Trading Commission regulations if the aggregate
initial margin deposits and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions would exceed 5% of the fair market value of the Fund's
net assets, after taking into account unrealized profits and losses on such
contracts it has entered into; and (ii) enter into any futures contracts or
options on futures contracts if the aggregate amount of the Fund's commitments
under outstanding futures contracts positions and options on futures contracts
would exceed the market value of its total assets;
(B) The Fund may not sell securities short, unless it owns or has the
right, without the payment of any additional compensation, to obtain securities
equivalent in kind and amount to the securities sold short, and provided that
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(C) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin;
(D) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(E) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(F) The Fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(G) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees have
made a determination as to liquidity, as permitted under the 1940 Act; and
(H) The Fund may not invest in companies for the purpose of exercising
control or management.
6
<PAGE>
INVESTMENT RESTRICTIONS OF IDEX GROWTH FUND AND IDEX FLEXIBLE INCOME FUND
IDEX Growth Fund and IDEX Flexible Income Fund each may not, as a matter of
fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than cash items and "government securities" as defined
under the 1940 Act), if immediately after and as a result of such purchase (a)
the value of the holdings of the Fund in the securities of such issuer exceeds
5% of the value of the Fund's total assets, or (b) the Fund owns more than 10%
of the outstanding voting securities of such issuer;
2. Invest more than 25% of the value of its assets in any particular
industry (other than government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the Fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the Fund may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as underwriter of securities issued by others, except to the extent
that it may be deemed an underwriter in connection with the disposition of
portfolio securities of the Fund;
6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements); and
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
provide margin or guarantee positions in connection with transactions in
options, futures contracts, swaps, forward contracts, and other derivative
instruments or the segregation of assets in connection with such transactions.
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the Fund will not invest
25% or more of its total assets in any one particular industry, other than U.S.
government securities.
Furthermore, each Fund has adopted the following non-fundamental
investment restrictions which may be changed by the Board of Trustees without
shareholder approval:
(A) The Fund may not: (i) enter into any futures contracts or options on
futures contracts for purposes other than bona fide hedging transactions within
the meaning of Commodity Futures Trading Commission regulations if the aggregate
initial margin deposits and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions would exceed 5% of the fair market value of the Fund's
net assets, after taking into account unrealized profits and losses on such
contracts it has entered into; and (ii) enter into any futures contracts or
options on futures contracts if the aggregate amount of the Fund's commitments
under outstanding futures contracts positions and options on futures contracts
would exceed the market value of its total assets;
(B) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
7
<PAGE>
(C) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts, and other derivative instruments are not deemed to constitute
selling securities short;
(D) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any securities which the Board of Trustees or the investment
sub-adviser, as appropriate, has made a determination of liquidity, as permitted
under the 1940 Act;
(F) The Fund may not invest in companies for the purpose of exercising
control or management;
(G) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization; and
(H) The Fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses.
In making all investments for the IDEX Flexible Income Fund, the
sub-adviser will emphasize economic or financial factors or circumstances of the
issuer, rather than opportunities for short-term arbitrage.
INVESTMENT RESTRICTIONS OF IDEX C.A.S.E. FUND
IDEX C.A.S.E. Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than cash items and "government securities" as defined
in the 1940 Act) if immediately after and as a result of such purchase (a) the
value of the holdings of the Fund in the securities of such issuer exceeds 5% of
the value of the Fund's total assets, or (b) the Fund owns more than 10% of the
outstanding voting securities of any one class of securities of such issuer.
2. Invest 25% or more of the value of the Fund's assets in any particular
industry (other than government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the Fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the Fund may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the Fund;
6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
8
<PAGE>
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
provide margin or guarantee positions in connection with transactions in
options, futures contracts, swaps, forward contracts, or other derivative
instruments or the segregation of assets in connection with such transactions;
and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the Funds without
shareholder approval:
(A) The Fund may not, as a matter of non-fundamental policy (i) enter into
any futures contracts or options on futures contracts for purposes other than
bona fide hedging transactions within the meaning of Commodity Futures Trading
Commission regulations if the aggregate initial margin deposits and premiums
required to establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions would exceed 5%
of the fair market value of the Fund's net assets, after taking into account
unrealized profits and losses on such contracts it has entered into and (ii)
enter into any futures contracts or options on futures contracts if the
aggregate amount of the Fund's commitments under outstanding futures contracts
positions and options on futures contracts would exceed the market value of its
total assets;
(B) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(C) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short;
(D) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or other securities for which the Board of Trustees has made a
determination of liquidity, as permitted under the 1940 Act;
(F) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(G) The Fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(H) The Fund may not invest more than 25% of its net assets at the time of
purchase in the securities of foreign issuers and obligors; and
(I) The Fund may not invest in companies for the purpose of exercising
control or management.
9
<PAGE>
INVESTMENT RESTRICTIONS OF IDEX VALUE EQUITY FUND
IDEX Value Equity Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
2. Invest 25% or more of the value of the Fund's total assets in any
particular industry (other than U.S. government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the Fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the Fund may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the Fund;
6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 10% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 10% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 10% limitation. The
Fund may not purchase additional securities when borrowings exceed 5% of total
assets. This policy shall not prohibit reverse repurchase agreements or deposits
of assets to provide margin or guarantee positions in connection with
transactions in options, futures contracts, swaps, forward contracts, or other
derivative instruments or the segregation of assets in connection with such
transactions; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the Funds without
shareholder approval:
(A) The Fund may not, as a matter of non-fundamental policy (i) enter into
any futures contracts or options on futures contracts for purposes other than
bona fide hedging transactions within the meaning of Commodity Futures Trading
Commission regulations if the aggregate initial margin deposits and premiums
required to establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions would exceed 5%
of the fair market value of the Fund's net assets, after taking into account
unrealized profits and losses on such contracts it has entered into and (ii)
enter into any futures contracts or options on futures contracts if the
aggregate amount of the Fund's commitments under outstanding futures contracts
positions and options on futures contracts would exceed the market value of its
total assets;
(B) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
10
<PAGE>
(C) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short;
(D) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or other securities for which the Board of Trustees has made a
determination of liquidity, as permitted under the 1940 Act;
(F) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker=s commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(G) The Fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(H) The Fund may not invest more than 25% of its net assets at the time of
purchase in the securities of foreign issuers and obligors; and
(I) The Fund may not invest in companies for the purpose of exercising
control or management.
INVESTMENT RESTRICTIONS OF IDEX STRATEGIC TOTAL RETURN FUND
IDEX Strategic Total Return Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of such issuer;
2. Invest more than 25% of the Fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services; for example: gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances;
3. Purchase or sell real estate (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business);
4. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by physical
commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper or debt securities);
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities;
11
<PAGE>
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the Funds without
shareholder approval:
(A) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply in the case of assets deposited to
margin or guarantee positions in options, futures contracts and options on
futures contracts or placed in a segregated account in connection with such
contracts;
(B) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(C) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin;
(D) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(E) The Fund may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(F) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act;
(G) The Fund may not invest in companies for the purpose of exercising
control or management; and
(H) The Fund may not invest in securities of foreign issuers denominated
in foreign currency and not publicly traded in the United States if at the time
of acquisition more than 10% of the Fund's total assets would be invested in
such securities.
INVESTMENT RESTRICTIONS OF IDEX TACTICAL ASSET ALLOCATION FUND
IDEX Tactical Asset Allocation Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of such issuer;
2. Invest more than 25% of the Fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services, for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers acceptances;
12
<PAGE>
3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this limitation shall not
prevent the Fund from investing in securities or other instruments backed by
physical commodities);
4. Purchase or sell real estate (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper or debt securities);
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities;
7. The Fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
Fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the Funds without
shareholder approval:
(A) The Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward and futures contracts are not deemed
to constitute selling securities short;
(B) The Fund may not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin;
(C) The Fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(D) The Fund may not mortgage or pledge any securities owned or held by
the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements,
deposits of assets to margin, guarantee positions in futures, options, swaps or
forward contracts or segregation of assets in connection with such contracts;
(E) The Fund may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the Fund may own debt or
equity securities of companies engaged in those businesses;
(F) The Fund may not invest in companies for the purpose of exercising
control or management; and
(G) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act.
13
<PAGE>
INVESTMENT RESTRICTIONS OF IDEX INCOME PLUS FUND
IDEX Income Plus Fund may not, as a matter of fundamental policy:
1. Borrow money, except from a bank for temporary or emergency purposes
(not for leveraging or investment) in an amount not to exceed 1/3 of the current
value of the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the borrowing is
made. If at any time the Fund's borrowings exceed this limitation due to a
decline in net assets, such borrowings will be reduced within 3 business days to
the extent necessary to comply with the limitation. The Fund will borrow only to
facilitate redemptions requested by shareholders which might otherwise require
untimely disposition of portfolio securities and will not purchase securities
while borrowings are outstanding;
2. Pledge assets, except that the Fund may pledge not more than 1/3 of its
total assets (taken at current value) to secure borrowings made in accordance
with paragraph 1 above. Initial margin deposits under interest rate futures
contracts, which are made to guarantee the Fund's performance under such
contracts, shall not be deemed a pledging of Fund assets for the purpose of this
investment restriction. As a matter of non-fundamental operating policy, in
order to permit the sale of shares of the Fund under certain state laws, the
Fund will not pledge its assets in excess of an amount equal to 10% of its net
assets unless such state restrictions are changed;
3. Invest more than 25% of its assets, measured at the time of investment,
in a single industry (which term shall not include governments or their
political subdivisions), outside the industries of the Fund's public utilities
portfolio concentration, except that the Fund may, for temporary defensive
purposes, invest more than 25% of its total assets in the obligations of banks;
4. Purchase the securities (other than government securities) of any
issuer if, as a result, more than 5% of the Fund's total assets would be
invested in the securities of such issuer, provided that up to 25% of the Fund's
total net assets may be invested without regard to this 5% limitation and in the
case of certificates of deposit, time deposits and banker's acceptances, up to
25% of total Fund assets may be invested without regard to such 5% limitation,
but shall instead be subject to a 10% limitation;
5. Invest in mineral leases;
6. Invest in bank time deposits with maturities of over 7 calendar days,
or invest more than 10% of the Fund's total assets in bank time deposits with
maturities of from 2 business days through 7 calendar days;
7. Issue senior securities, except to the extent that senior securities
may be deemed to arise from bank borrowings and purchases of government
securities on a "when-issued" or "delayed delivery" basis, as described in the
Prospectus;
8. Underwrite any issue of securities, except to the extent the Fund may
be deemed to be an underwriter in connection with the sale of its portfolio
securities, although the Fund may purchase securities directly from the issuers
thereof for investment in accordance with the Fund's investment objective and
policies;
9. Purchase or sell commodities or commodity contracts, except that the
Fund may purchase and sell interest rate futures contracts for hedging purposes
as set forth in the Prospectus;
10. Purchase securities on margin or sell "short," but the Fund may obtain
such short-term credits as may be necessary for the clearance of purchases and
sales of securities. (Initial and maintenance margin deposits and payment with
respect to interest rate futures contracts are not considered the purchase of
securities on margin);
11. Purchase or retain the securities of any issuer, if, to the Fund's
knowledge, those officers and directors of the manager and sub-adviser who
individually own beneficially more than 0.5% of the outstanding securities of
such issuer together own beneficially more than 5% of such outstanding
securities;
12. Invest in securities of other investment companies, except in the
event of merger or reorganization with another investment company;
14
<PAGE>
13. Make loans, except to the extent the purchase of notes, bonds,
bankers' acceptances or other evidence of indebtedness or the entry into
repurchase agreements or deposits (including time deposits and certificates of
deposit) with banks may be considered loans;
14. Invest in companies for the purpose of exercising management control;
15. Invest in oil, gas or other mineral exploration or development
programs;
16. Purchase or hold any real estate or mortgage loans thereon, except
that the Fund may invest in securities secured by real estate or interests
therein or issued by persons (such as real estate investment trusts) which deal
in real estate or interests therein; and
17. Purchase the securities (other than government securities) of any
issuer if, as a result, the Fund would hold more than 10% of any class of
securities (including any class of voting securities) of such issuer; for this
purpose, all debt obligations of an issuer, and all shares of stock of an issuer
other than common stock, are treated as a single class of securities.
Furthermore, the Fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval. The Income Plus Fund may not:
(A) Write or purchase put, call, straddle or spread options, or
combinations thereof;
(B) Invest more than 10% of its net assets in illiquid securities;
(C) Invest in real estate limited partnerships;
(D) Invest more than 25% of its net assets at the time of purchase in the
securities of foreign issuers and obligors; and
(E) Purchase or sell interest rate futures contracts (a) involving
aggregate delivery or purchase obligations in excess of 30% of the Fund's net
assets, or aggregate margin deposits made by the Fund in excess of 5% of the
Fund's net assets, (b) which are not for hedging purposes only, or (c) which are
executed under custodial, reserve and other arrangements inconsistent with
regulations and policies adopted or positions taken (i) by the Securities and
Exchange Commission for exemption from enforcement proceedings under Section
17(f) or 18(f) of the 1940 Act, (ii) by the CFTC for exemption of investment
companies registered under the 1940 Act from registration as "commodity pool
operators" and from certain provisions of Subpart B of Part 4 of the CFTC's
regulations, or (iii) by state securities commissioners or administrators in the
states in which the Fund's shares have been qualified for public offering.
INVESTMENT RESTRICTIONS OF IDEX TAX-EXEMPT FUND
IDEX Tax-Exempt Fund may not, as a matter of fundamental policy:
1. Underwrite any issue of securities, except to the extent the Fund may
be deemed to be an underwriter in connection with the sale of its portfolio
securities, although the Fund may purchase Municipal Obligations directly from
the issuers thereof for investment in accordance with the Fund's investment
objective and policies.
2. Purchase the securities (other than government securities) of any
issuer if, as a result, more than 5% of the Fund's total assets would be
invested in the securities of such issuer, provided that up to 25% of the Fund's
total net assets may be invested without regard to this 5% limitation;
3. Invest in any direct interest in an oil, gas or other mineral
exploration or development program;
4. Purchase securities on margin or sell "short," but the Fund may obtain
such short-term credits as may be necessary for the clearance of purchases and
sales of securities;
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<PAGE>
5. Purchase or hold any real estate or mortgage loans thereon, except that
the Fund may invest in securities secured by real estate or interests therein or
issued by persons (such as real estate investment trusts) which deal in real
estate or interests therein;
6. Purchase or retain the securities of any issuer, if, to the Fund's
knowledge, those officers and directors of the manager or sub-adviser who
individually own beneficially more than 0.5% of the outstanding securities of
such issuer together own beneficially more than 5% of such outstanding
securities;
7. Invest in securities of other investment companies, except in the event
of merger or reorganization with another investment company;
8. Make loans, except to the extent the purchase of notes, bonds, or other
evidences of indebtedness or the entry into repurchase agreements or deposits
with banks may be considered loans;
9. Invest in companies for the purpose of exercising management or
control;
10. Write, purchase or sell put, call, straddle or spread options, except
for hedging purposes only, in accordance with such non-fundamental policies that
the Board may from time to time adopt;
11. Purchase or sell commodities or commodity contracts; and
12. The Fund may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 1/3 of the current
value of the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed at the time the borrowing is
made). For purposes of this limitation, reverse repurchase agreements would not
constitute borrowings.
As a fundamental policy governing concentration, the Fund will not invest
25% or more of its total assets in any one particular industry, other than U.S.
government securities.
Furthermore, the Fund has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The Fund may not invest more than 10% of its net assets in illiquid
securities;
(B) The Fund may not invest in oil, gas or mineral leases;
(C) The Fund may not invest in real estate limited partnerships; and
(D) For hedging purposes only, the Tax-Exempt Fund may adopt policies
permitting:
(1) the purchase and sale of interest rate futures contracts, the
purchase of put and call options thereon, and the writing of
covered call or secured put options thereon, not involving
delivery or purchase obligations in excess of 30% of the Fund's
net assets, and
(2) the purchase of put and call options related to portfolio
securities and securities to be purchased for the Tax-Exempt
Fund, the writing of secured put and covered call options, and
the entering into of closing purchase transactions with respect
to such options, where such transactions will not involve futures
contract margin deposits and premiums on option purchases which,
in the aggregate, exceed 5% of the Fund's net assets, in the
judgment of the sub-adviser are economically appropriate to the
reduction of risks inherent in the ongoing management of the
Fund, and are executed under custodial, reserve and other
arrangements consistent with regulations and policies adopted or
positions taken (i) by the Securities and Exchange Commission for
exemption from enforcement proceedings under Section 17(f) or
18(f) of the Investment Company Act of 1940, as amended (the
"1940 Act"), (ii) by the Commodity Futures Trading Commission
(the "CFTC") for exemption of investment
16
<PAGE>
companies registered under the 1940 Act from registration as
"commodity pool operators" and from certain provisions of Subpart
B of Part 4 of the CFTC's regulations, and (iii) by state
securities commissioners or administrators in the states in which
the Fund's shares have been qualified for public offering.
The Tax-Exempt Fund does not intend in the foreseeable future to adopt the
foregoing investment policies to permit trading in interest rate futures
contracts, options thereon, and options on portfolio securities.
INVESTMENT RESTRICTIONS OF IDEX BLUE CHIP FUND
The Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than Government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer.
2. Borrow money except (a) the Fund may borrow from banks (as defined in
the 1940 Act) or through reverse repurchase agreements in amounts up to 33-1/3%
of its total assets (including the amount borrowed), (b) the Fund may, to the
extent permitted by applicable law, borrow up to an additional 5% of its total
assets for temporary purposes, (c) the Fund may obtain such short-term credits
as may be necessary for the clearance of purchases and sales of Fund securities,
(d) the Fund may purchase securities on margin to the extent permitted by
applicable law and (e) the Fund may engage in mortgage dollar rolls which are
accounted for as financings.
3. Purchase or sell physical commodities (but this shall not prevent the
Fund from investing in currency and financial instruments and contracts that are
commodities or commodity contracts).
4. Invest more than 25% of the Fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services; for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction,
provided that there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptance.
5. Make loans, except through (a) the purchase of debt obligations in
accordance with the Fund's investment objective and policies, (b) repurchase
agreements with banks, brokers, dealers and other financial institutions, and
(c) loans of securities as permitted by applicable law.
6. Purchase or sell real estate (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business).
7. Issue senior securities, except as permitted by the 1940 Act.
8. Underwrite securities issued by other persons, except to the extent
that the Fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with the purchase and sale of its Fund
securities in the ordinary course of pursuing its investment objective.
Furthermore, the Fund has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees of the Trust without
shareholder approval:
(A) The Fund may not invest in companies for the purpose of exercising
control or management.
(B) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Trustees, as permitted under the 1940 Act.
17
<PAGE>
(C) The Fund may not purchase additional securities when money borrowed
exceeds 5% of its total assets.
(D) The Fund may not make short sales of securities, except short sales
"against the box."
INVESTMENT RESTRICTIONS OF IDEX DIVIDEND GROWTH FUND
The Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than Government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer.
2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 33-1/3% of the value of the
Fund's total assets (including amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 33-1/3% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 33-1/3% limitation.
This policy shall not prohibit reverse repurchase agreements or deposits of
assets to margin or guarantee positions in futures, options, swaps or forward
contracts, or the segregation of assets in connection with such contracts.
3. Purchase or sell physical commodities (but this shall not prevent the
Fund from entering into future contracts and options thereon).
4. Invest more than 25% of the Fund's total assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptance.
5. Lend any security although the Fund may lend Fund securities provided
that the aggregate of such loans do not exceed 33-1/3% of the value of the
Fund's total assets. The Fund may purchase money market securities, enter into
repurchase agreements and acquire publicly distributed or privately placed debt
securities, and purchase debt.
6. Purchase or sell real estate (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business).
7. Issue senior securities, except as permitted by the 1940 Act.
8. Underwrite securities issued by other persons, except to the extent
that the Fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with the purchase and sale of its Fund
securities in the ordinary course of pursuing its investment objective.
Furthermore, the Fund has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees of the Fund without
shareholder approval:
(A) The Fund may not purchase additional securities when money borrowed
exceeds 5% of its total assets.
(B) The Fund may not purchase a futures contract or an option thereon, if,
with respect to positions in futures or options on futures which do not
represent bona fide hedging, the aggregate initial margin and premiums on such
options would exceed 5% of the Fund's net asset value.
18
<PAGE>
(C) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Trustees, as permitted under the 1940 Act.
(D) The Fund may not invest in companies for the purpose of exercising
control or management.
(E) The Fund may not purchase securities of open-end or closed-end
investment companies except (i) in compliance with the Investment Company Act of
1940; or (ii) securities of the T. Rowe Price Reserve Investment or Government
Reserve Investment Funds.
(F) The Fund may not purchase securities on margin, except (i) for use of
short-term credit necessary for clearance of purchases of Fund securities; and
(ii) it may make margin deposits in connection with futures contracts or other
permissible investments.
(G) The Fund may not mortgage, pledge, hypothecate or, in any manner,
transfer any security owned by the Fund as security for indebtedness except as
may be necessary in connection with permissible borrowings or investments and
then such mortgaging, pledging or hypothecating may not exceed 33-1/3% of the
Fund's total assets at the time of borrowing or investment.
(H) The Fund may not sell securities short, except short sales "against
the box."
INVESTMENT RESTRICTIONS OF IDEX MID-CAP OPPORTUNITIES FUND
The Fund may not, as a matter of fundamental policy:
1. Purchase or sell real estate, real estate mortgages, commodities or
commodity contracts; however, the Fund may: (a) purchase interests in real
estate investment trusts or companies which invest in or own real estate if the
securities of such trusts or companies are registered under the Securities Act
of 1933 and are readily marketable or holding or selling real estate received in
connection with securities it holds; and (b) may enter into futures contracts,
including futures contracts on interest rates, stock indices and currencies, and
options thereon, and may engage in forward currency contracts and buy, sell and
write options on currencies. This policy shall not prohibit reverse repurchase
agreements or deposits of assets to margin or guarantee positions in futures,
options, swaps or forward contracts, or the segregation of assets in connection
with such contracts.
2. Invest more than 25% of the Fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services; for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances.
3. Borrow money, except that the Fund may borrow from banks for investment
purposes up to an aggregate of 15% of the value of its total assets taken at the
time of borrowing. The Fund may borrow for temporary or emergency purposes an
aggregate amount not to exceed 5% of the value of its total assets at the time
of borrowing.
4. Issue senior securities, except as permitted by the 1940 Act.
5. Underwrite securities issued by other persons, except to the extent
that the Fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with the purchase and sale of its Fund
securities in the ordinary course of pursuing its investment objective.
6. Make loans, except that the Fund may purchase debt obligations in which
the Fund may invest consistent with its investment objectives and policies or
enter into, and make loans of, its portfolio securities, as permitted under the
1940 Act.
Furthermore, the Fund has adopted the following non-fundamental
restrictions that may be changed by the Board of Directors of the Fund without
shareholder approval:
19
<PAGE>
(A) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Directors, as permitted under the 1940 Act.
(B) The Fund may not invest in companies for the purpose of exercising
control or management.
(C) The Fund may not sell securities short.
INVESTMENT RESTRICTIONS OF IDEX MID-CAP SUMMIT FUND
The Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than Government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer.
2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 10% of the value of the Fund's
total assets. This borrowing provision is included solely to facilitate the
orderly sale of Fund securities to accommodate substantial redemption requests
if they should occur and is not for investment purposes. All borrowings in
excess of 5% of the Fund's total assets will be repaid before making
investments.
3. Make loans, except that the Fund, in accordance with its investment
objectives and policies, may purchase or hold debt securities, and enter into
repurchase agreements as described in the Fund's prospectus and this Statement
of Additional Information.
4. Purchase or sell real estate, real estate limited partnership
interests, futures contracts, commodities or commodity contracts, except that
this shall not prevent the Fund from (i) investing in readily marketable
securities of issuers which can invest in real estate or commodities,
institutions that issue mortgages, or real estate investment trusts which deal
in real estate or interests therein, pursuant to the Fund's investment objective
and policies, and (ii) entering into futures contracts and options thereon that
are listed on a national securities or commodities exchange where, as a result
thereof, no more than 5% of the Fund's total assets (taken at market value at
the time of entering into the futures contracts) would be committed to margin
deposits on such futures contracts and premiums paid for unexpired options on
such futures contracts; provided that, in the case of an option that is
"in-the-money" at the time of purchase, the "in-the-money" amount, as defined
under the Commodities Futures Trading Commission regulations, may be excluded in
computing the 5% limit. The Fund (as a matter of operating policy) will utilize
only listed futures contracts and options thereon.
5. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a Fund security.
6. Issue senior securities, except as permitted by the 1940 Act.
7. Invest more than 25% of the Fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services, for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances.
Furthermore, the Fund has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees of the Fund without
shareholder approval:
(A) The Fund may not invest in companies for the purpose of exercising
control.
20
<PAGE>
(B) The Fund may not pledge, mortgage or hypothecate assets, except (i) to
secure temporary borrowings as permitted by the Fund's limitation on permitted
borrowings, or (ii) in connection with permitted transactions regarding options
and futures contracts.
(C) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act.
(D) The Fund may not purchase securities of other investment companies
except as permitted by the 1940 Act and the rules and regulations thereunder.
INVESTMENT RESTRICTIONS OF IDEX SMALL CAP FRONTIER FUND
The Fund may not, as a matter of fundamental policy:
1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (other than Government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value of
the Fund's total assets, or (b) the Fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer.
2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 33-1/3% of the value of the
Fund's total assets (including amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 33-1/3% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 33-1/3% limitation.
This policy shall not prohibit reverse repurchase agreements or deposits of
assets to margin or guarantee positions in futures, options, swaps or forward
contracts, or the segregation of assets in connection with such contracts.
3. Purchase or sell physical commodities (but this shall not prevent the
Fund from entering into futures contracts and options thereon).
4. Invest more than 25% of the Fund's total assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.
5. Lend any security although the Fund may lend Fund securities provided
that the aggregate of such loans do not exceed 33-1/3% of the value of the
Fund's total assets. The Fund may purchase money market securities, enter into
repurchase agreements and acquire publicly distributed or privately placed debt
securities, and purchase debt.
6. Purchase or sell real estate (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business).
7. Issue senior securities, except as permitted by the 1940 Act.
8. Underwrite securities issued by other persons, except to the extent
that the Fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with the purchase and sale of its Fund
securities in the ordinary course of pursuing its investment objective.
Furthermore, the Trust has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees of the Fund without
shareholder approval:
(A) The Fund may not purchase additional securities when money borrowed
exceeds 5% of its total assets.
21
<PAGE>
(B) The Fund may not purchase a futures contract or an option thereon, if,
with respect to positions in futures or options on futures which do not
represent bona fide hedging, the aggregate initial margin and premiums on such
options would exceed 5% of the Fund's net asset value.
(C) The Fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Directors, as permitted under the 1940 Act.
(D) The Fund may not invest in companies for the purpose of exercising
control or management.
(E) The Fund may not purchase securities of open-end or closed-end
investment companies except (i) in compliance with the Investment Company Act of
1940; or (ii) securities of the T. Rowe Price Reserve Investment or Government
Reserve Investment Funds.
(F) The Fund may not purchase securities on margin, except (i) for use of
short-term credit necessary for clearance of purchases of Fund securities; and
(ii) it may make margin deposits in connection with futures contracts or other
permissible investments.
(G) The Fund may not mortgage, pledge, hypothecate or, in any manner,
transfer any security owned by the Fund as security for indebtedness except as
may be necessary in connection with permissible borrowings or investments and
then such mortgaging, pledging or hypothecating may not exceed 33-1/3% of the
Fund's total assets at the time of borrowing or investment.
(H) The Fund may not sell securities short, except short sales "against
the box."
Except with respect to borrowing money, if a percentage limitation set
forth above is complied with at the time of the investment, a subsequent change
in the percentage resulting from any change in value of the net assets of any of
the Funds will not result in a violation of such restriction. Additional
limitations on borrowing that are imposed by state law and regulations may
apply.
In addition to the above, as a fundamental policy, each of the Funds,
other than the Tax-Exempt Fund and the Income Plus Fund, may, notwithstanding
any other investment policy or limitation (whether or not fundamental), invest
all of its assets in the securities of a single open-end management investment
company with substantially the same fundamental investment objectives, policies
and limitations as such Fund.
OTHER POLICIES AND PRACTICES OF THE FUNDS
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS.
The following investments are subject to limitations as set forth in each
Fund's investment restrictions and policies:
A. FUTURES CONTRACTS. A Fund may enter into futures contracts. Futures
contracts are for the purchase or sale, for future delivery, of
equity or fixed-income securities, foreign currencies or contracts
based on financial indices, including indices of U.S. government
securities, foreign government securities and equity or fixed-income
securities. The Income Plus Fund may enter into interest rate futures
contracts. These contracts are for the purchase or sale of
fixed-income securities. U.S. futures contracts are traded on
exchanges which have been designated "contract markets" by the
Commodity Futures Trading Commission ("CFTC") and must be executed
through a Futures Trading Commission merchant ("FCM"), or brokerage
firm, which is a member of the relevant contract market. Through
their clearing corporations, the exchanges guarantee performance of
the contracts as between the clearing members of the exchange.
When a Fund buys or sells a futures contract, it must receive or
deliver the underlying instrument (or a cash payment based on the
difference between the underlying instrument's closing price and the
price at which the contract was
22
<PAGE>
entered into) at a specified price on a specified date. Transactions
in futures contracts may be made to attempt to hedge against
potential changes in interest or currency exchange rates, or the
price of a security or a securities index which might correlate with,
or otherwise adversely affect, either the value of the Fund's
securities or the prices of securities which the Fund is considering
buying at a later date.
The buyer or seller of a futures contract is not required to deliver
or pay for the underlying instrument unless the contract is held
until the delivery date. However, both the buyer and seller are
required to deposit "initial margin" for the benefit of the FCM when
the contract is entered into. Initial margin deposits are equal to a
percentage of the contract's value, as set by the exchange on which
the contract is traded, and may be maintained in cash or liquid
assets by the Fund's custodian for the benefit of the FCM. Initial
margin payments are similar to good faith deposits or performance
bonds.
Unlike margin extended by a securities broker, initial margin
payments do not constitute purchasing securities on margin for
purposes of a Fund's investment limitations. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments with the FCM to settle the
change in value on a daily basis. The party that has a gain may be
entitled to receive all or a portion of this amount. In the event of
the bankruptcy of the FCM that holds margin on behalf of a Fund, that
Fund may be entitled to return of the margin owed to such Fund only
in proportion to the amount received by the FCM's other customers.
The Fund's sub-adviser will attempt to minimize the risk by careful
monitoring of the creditworthiness of the FCMs with which a Fund does
business and by segregating margin payments with the custodian.
Although a Fund would segregate with the custodian cash and liquid
assets in an amount sufficient to cover its open futures obligations,
the segregated assets would be available to that Fund immediately
upon closing out the futures position, while settlement of securities
transactions could take several days. However, because a Fund's cash
that may otherwise be invested would be held uninvested or invested
in liquid assets so long as the futures position remains open, such
Fund's return could be diminished due to the opportunity losses of
foregoing other potential investments.
The acquisition or sale of a futures contract may occur, for example,
when a Fund holds or is considering purchasing equity or debt
securities and seeks to protect itself from fluctuations in prices or
interest rates without buying or selling those securities. For
example, if stock or debt prices were expected to decrease, a Fund
might sell equity index futures contracts, thereby hoping to offset a
potential decline in the value of equity securities in the Fund by a
corresponding increase in the value of the futures contract position
held by that Fund and thereby preventing the Fund's net asset value
from declining as much as it otherwise would have.
Similarly, if interest rates were expected to rise, a Fund might sell
bond index futures contracts, thereby hoping to offset a potential
decline in the value of debt securities in the Fund by a
corresponding increase in the value of the futures contract position
held by the Fund. A Fund also could seek to protect against potential
price declines by selling Fund securities and investing in money
market instruments. However, since the futures market is more liquid
than the cash market, the use of futures contracts as an investment
technique allows a Fund to maintain a defensive position without
having to sell Fund securities.
Likewise, when prices of equity securities are expected to increase,
or interest rates are expected to fall, futures contracts may be
bought to attempt to hedge against the possibility of having to buy
equity securities at higher prices. This technique is sometimes known
as an anticipatory hedge. Since the fluctuations in the value of
futures contracts should be similar to those of equity securities, a
Fund could take advantage of the potential rise in the value of
equity or debt securities without buying them until the market has
stabilized. At that time, the futures contracts could be liquidated
and such Fund could buy equity or debt securities on the cash market.
To the extent a Fund enters into futures contracts for this purpose,
the segregated assets maintained to cover such Fund's obligations
(with respect to futures contracts) will consist of liquid assets
from its portfolio in an amount equal to the difference between the
contract price and the aggregate value of the initial and variation
margin payments made by that Fund.
The ordinary spreads between prices in the cash and futures markets,
due to differences in the nature of those markets, are subject to
distortions:
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/diamond/ First, all participants in the futures market are subject to
initial margin and variation margin requirements. Rather than
meeting additional variation margin requirements, investors may
close out futures contracts through offsetting transactions which
could distort the normal price relationship between the cash and
futures markets.
/diamond/ Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to
make or take delivery, liquidity in the futures market could be
reduced and prices in the futures market distorted.
/diamond/ Third, from the point of view of speculators, the margin deposit
requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased
participation by speculators in the futures market may cause
temporary price distortions.
Due to the possibility of the foregoing distortions, a correct
forecast of general price trends by the Fund manager still may not
result in a successful use of futures contracts.
Futures contracts entail risks. Although each of the Funds that
invests in such contracts believes that their use will benefit the
Fund, if the Fund sub-adviser's investment judgment proves incorrect,
the Fund's overall performance could be worse than if the Fund had
not entered into futures contracts.
For example, if a Fund has hedged against the effects of a possible
decrease in prices of securities held in its Fund and prices increase
instead, that Fund may lose part or all of the benefit of the
increased value of the securities because of offsetting losses in the
Fund's futures positions. In addition, if a Fund has insufficient
cash, it may have to sell securities from its Fund to meet daily
variation margin requirements. Those sales may, but will not
necessarily, be at increased prices which reflect the rising market
and may occur at a time when the sales are disadvantageous to the
Fund.
The prices of futures contracts depend primarily on the value of
their underlying instruments. Because there are a limited number of
types of futures contracts, it is possible that the standardized
futures contracts available to a Fund will not exactly match that
Fund's current or potential investments. A Fund may buy and sell
futures contracts based on underlying instruments with different
characteristics from the securities in which it typically invests.
For example, by hedging investments in Fund securities with a futures
contract based on a broad index of securities may involve a risk that
the futures position will not correlate precisely with such
performance of the Fund's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments correlate with a
Fund's investments. Futures prices are affected by factors such as:
current and anticipated short-term interest rates; changes in
volatility of the underlying instruments; and the time remaining
until expiration of the contract. Those factors may affect securities
prices differently from futures prices.
Imperfect correlations between a Fund's investments and its futures
positions may also result from: differing levels of demand in the
futures markets and the securities markets; from structural
differences in how futures and securities are traded; and from
imposition of daily price fluctuation limits for futures contracts.
A Fund may buy or sell futures contracts with a greater or lesser
value than the securities it wishes to hedge or is considering
purchasing in order to attempt to compensate for differences in
historical volatility between the futures contract and the
securities. This may not be successful in all cases. If price changes
in a Fund's futures positions are poorly correlated with its other
investments, its futures positions may fail to produce desired gains
or may result in losses that are not offset by the gains in that
Fund's other investments.
Because futures contracts are generally settled within a day from the
date they are closed out, compared with a settlement period of seven
days for some types of securities, the futures markets can provide
superior liquidity to the securities markets. Nevertheless, there is
no assurance a liquid secondary market will exist for any particular
futures contract at any particular time.
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In addition, futures exchanges may establish daily price fluctuation
limits for futures contracts and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On
volatile trading days when the price fluctuation limit is reached, it
may be impossible for a Fund to enter into new positions or close out
existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, the Fund
may not be able to promptly liquidate unfavorable futures positions
and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value.
As a result, such Fund's access to other assets held to cover its
futures positions also could be impaired.
Although futures contracts by their terms call for the delivery or
acquisition of the underlying commodities, or a cash payment based on
the value of the underlying commodities, in most cases the
contractual obligation is offset before the delivery date of the
contract. This is accomplished by buying, in the case of a
contractual obligation to sell, or selling, in the case of a
contractual obligation to buy, an identical futures contract on a
commodities exchange. Such a transaction cancels the obligation to
make or take delivery of the commodities.
If applicable each Fund intends to comply with guidelines of
eligibility for exclusion from the definition of the term "commodity
pool operator" with the CFTC and the National Futures Association,
which regulate trading in the futures markets. The Funds will use
futures contracts and related options primarily for bona fide hedging
purposes within the meaning of CFTC regulations. In addition, the
Funds may hold positions in futures contracts and related options
that do not fall within the definition of bona fide hedging
transactions, provided that the aggregate initial margin and premiums
required to establish such positions will not exceed 5% of the fair
market value of a Fund's net assets, after taking into account
unrealized profits and unrealized losses on any such contracts it has
entered into.
The Aggressive Growth Fund may not enter into a futures contract or
related option (except for closing transactions) if, immediately
thereafter, the sum of the amount of its initial margin and premiums
on open futures contracts and options thereon would exceed 5% of the
Aggressive Growth Fund's total assets (taken at current value);
however, in the case of an option that is in-the-money at the time of
the purchase, the in-the-money amount may be excluded in calculating
the 5% limitation.
B. OPTIONS ON FUTURES CONTRACTS. A Fund may buy and write put and call
options on futures contracts. An option on a futures contract gives a
Fund the right (but not the obligation) to buy or sell the contract
at a specified price on or before a specified date. Transactions in
options on futures contracts may be made to attempt to hedge against
potential changes in interest rates or currency exchange rates, or
the price of a security or a securities index which might correlate
with, or otherwise adversely affect, either the value of the Fund's
securities or the prices of securities which the Fund is considering
buying at a later date. Transactions in options on future contracts
will not be made for speculation.
The purchase of a call option on a futures contract is similar in
some respects to the purchase of a call option on an individual
security. Depending on the pricing of the option compared to either
the price of the futures contract upon which it is based or the price
of the underlying instrument, ownership of the option may or may not
be less risky than ownership of the futures contract or the
underlying instrument. As with the purchase of futures contracts,
when a Fund is not fully invested it may buy a call option on a
futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the security or foreign
currency which is deliverable under, or of the index comprising, the
futures contract. If the futures price at the expiration of the
option is below the exercise price, a Fund will retain the full
amount of the option premium which provides a partial hedge against
any decline that may have occurred in such Fund's holdings.
The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or foreign
currency which is deliverable under, or of the index comprising, the
futures contract. If the futures price at expiration of the option is
higher than the exercise price, a Fund will retain the full amount of
the option premium which provides a partial hedge against any
increase in the price of securities which that Fund is considering
buying.
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<PAGE>
If a call or put option a Fund has written is exercised, such Fund
will incur a loss which will be reduced by the amount of the premium
it received. Depending on the degree of correlation between the
change in the value of its Fund securities and changes in the value
of the futures positions, that Fund's losses from existing options on
futures may to some extent be reduced or increased by changes in the
value of Fund securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on Fund
securities. For example, a Fund may buy a put option on a futures
contract to hedge its Fund securities against the risk of falling
prices or rising interest rates.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the
value of the options bought.
C. OPTIONS ON SECURITIES. In an effort to increase current income and to
reduce fluctuations in net asset value, each of the Funds, other than
the Tax-Exempt and the Income Plus Funds, may write covered put and
call options and buy put and call options on securities that are
traded on United States and foreign securities exchanges, and
over-the-counter. A Fund also may write call options that are not
covered for cross-hedging purposes. A Fund may write and buy options
on the same types of securities that the Fund may purchase directly.
There are no specific limitations on a Fund's writing and buying of
options on securities.
A put option gives the holder the right, upon payment of a premium,
to deliver a specified amount of a security to the writer of the
option on or before a fixed date at a predetermined price. A call
option gives the holder the right, upon payment of a premium, to call
upon the writer to deliver a specified amount of a security on or
before a fixed date at a predetermined price.
A put option written by a Fund is "covered" if the Fund: (i)
segregates cash not available for investment or other liquid assets
with a value equal to the exercise price with its custodian; or (ii)
continues to own an equivalent number of puts of the same "series"
(that is, puts on the same underlying securities having the same
exercise prices and expiration dates as those written by the Fund),
or an equivalent number of puts of the same "class" (that is, puts on
the same underlying securities) with exercise prices greater than
those it has written (or if the exercise prices of the puts it holds
are less than the exercise prices of those it has written, the
difference is segregated with the custodian).
The premium paid by the buyer of an option will reflect, among other
things, the relationship of the exercise price to the market price
and the volatility of the underlying security, the remaining term of
the option, supply and demand and interest rates.
A call option written by a Fund is "covered" if the Fund owns the
underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash
consideration (or has segregated additional cash with its custodian)
upon conversion or exchange of other securities held in its Fund. A
call option written by a Fund is also deemed to be covered: (i) if
that Fund holds a call at the same exercise price for the same
exercise period and on the same securities as the call written; (ii)
in the case of a call on a stock index, if the Fund owns a Fund of
securities substantially replicating the movement of the index
underlying the call option; or (iii) if at the time the call is
written an amount of cash, U.S. government securities or other liquid
assets equal to the fluctuating market value of the optioned
securities is segregated with the custodian.
A Fund may also write call options that are not covered for
cross-hedging purposes. A Fund collateralizes its obligation under a
written call option for cross-hedging purposes by segregating cash or
other liquid assets in an amount not less than the market value of
the underlying security, marked-to-market daily. A Fund would write a
call option for cross-hedging purposes, instead of writing a covered
call option, when the premium to be received from the cross-hedge
transaction would exceed that which would be received from writing a
covered call option and the Fund manager believes that writing the
option would achieve the desired hedge.
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<PAGE>
If a put or call option written by a Fund were exercised, the Fund
would be obligated to buy or sell the underlying security at the
exercise price. Writing a put option involves the risk of a decrease
in the market value of the underlying security, in which case the
option could be exercised and the underlying security would then be
sold by the option holder to the Fund at a higher price than its
current market value. Writing a call option involves the risk of an
increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would
then be sold by the Fund to the option holder at a lower price than
its current market value. Those risks could be reduced by entering
into an offsetting transaction. A Fund retains the premium received
from writing a put or call option whether or not the option is
exercised.
The writer of an option may have no control when the underlying
security must be sold, in the case of a call option, or bought, in
the case of a put option, since with regard to certain options, the
writer may be assigned an exercise notice at any time prior to the
termination of the obligation. Whether or not an option expires
unexercised, the writer retains the amount of the premium.
This amount, of course, may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security
during the option period. If a call option is exercised, the writer
experiences a profit or loss from the sale of the underlying
security. If a put option is exercised, the writer must fulfill the
obligation to buy the underlying security at the exercise price,
which will usually exceed the then market value of the underlying
security.
The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written.
The effect of the purchase is that the writer's position will be
canceled by the clearing corporation. However, a writer may not
effect a closing purchase transaction after being notified of the
exercise of an option. Likewise, an investor who is the holder of an
option may liquidate its position by effecting a "closing sale
transaction." This is accomplished by selling an option of the same
series as the option previously bought. There is no guarantee that
either a closing purchase or a closing sale transaction can be
effected.
In the case of a written call option, effecting a closing transaction
will permit a Fund to write another call option on the underlying
security with either a different exercise price or expiration date or
both. In the case of a written put option, such transaction will
permit the Fund to write another put option to the extent that the
exercise price thereof is secured by deposited other liquid assets.
Effecting a closing transaction also will permit the cash or proceeds
from the concurrent sale of any securities subject to the option to
be used for other Fund investments. If a Fund desires to sell a
particular security on which the Fund has written a call option, such
Fund will effect a closing transaction prior to or concurrent with
the sale of the security.
A Fund will realize a profit from a closing transaction if the price
of a purchase transaction is less than the premium received from
writing the option or the price received from a sale transaction is
more than the premium paid to buy the option. The Fund will realize a
loss from a closing transaction if the price of the purchase
transaction is more than the premium received from writing the option
or the price received from a sale transaction is less than the
premium paid to buy the option. Because increases in the market price
of a call option will generally reflect increases in the market price
of the underlying security, any loss resulting from the repurchase of
a call option is likely to be offset in whole or in part by
appreciation of the underlying security owned by the Fund.
An option position may be closed out only where a secondary market
for an option of the same series exists. If a secondary market does
not exist, a Fund may not be able to effect closing transactions in
particular options and that Fund would have to exercise the options
in order to realize any profit. If a Fund is unable to effect a
closing purchase transaction in a secondary market, it will not be
able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise. Reasons for the
absence of a liquid secondary market may include the following: (i)
there may be insufficient trading interest in certain options; (ii)
restrictions may be imposed by a national securities exchange on
which the option is traded ("Exchange") on opening or closing
transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or
series of options or underlying securities; (iv) unusual or
unforeseen circumstances may interrupt normal operations on an
Exchange; (v) the facilities of an Exchange or the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle
current trading volume; or (vi) one or more Exchanges could, for
economic or other reasons, decide or be compelled at some future date
to discontinue the trading of options (or a particular class or
series of options). In that case, the secondary market on that
Exchange (or in that class or series of options) would cease to
exist, although outstanding options on that Exchange that had been
issued by the OCC as a result of trades on that Exchange would
continue to be exercisable in accordance with their terms.
Each of the Funds, other than the Tax-Exempt and the Income Plus
Funds, may write options in connection with buy-and-write
transactions. In other words, the Fund may buy a security and then
write a call option against that security. The exercise price of such
call will depend upon the expected price movement of the underlying
security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money"), or above
("out-of-the-money") the current value of the underlying security at
the time the option is written.
Buy-and-write transactions using in-the-money call options may be
used when it is expected that the price of the underlying security
will remain flat or decline moderately during the option period.
Buy-and-write transactions using at-the-money call options may be
used when it is expected that the price of the underlying security
will remain fixed or advance moderately during the option period.
Buy-and-write transactions using out-of-the-money call options may be
used when it is expected that the premiums received from writing the
call option plus the appreciation in the market price of the
underlying security up to the exercise price will be greater than the
appreciation in the price of the underlying security alone.
If the call options are exercised in such transactions, the Fund's
maximum gain will be the premium received by it for writing the
option, adjusted upwards or downwards by the difference between that
Fund's purchase price of the security and the exercise price. If the
options are not exercised and the price of the underlying security
declines, the amount of such decline will be offset by the amount of
premium received.
The writing of covered put options is similar in terms of risk and
return characteristics to buy-and-write transactions. If the market
price of the underlying security rises or otherwise is above the
exercise price, the put option will expire worthless and a Fund's
gain will be limited to the premium received. If the market price of
the underlying security declines or otherwise is below the exercise
price, a Fund may elect to close the position or take delivery of the
security at the exercise price and that Fund's return will be the
premium received from the put options minus the amount by which the
market price of the security is below the exercise price.
A Fund may buy put options to hedge against a decline in the value of
its Fund. By using put options in this way, a Fund will reduce any
profit it might otherwise have realized in the underlying security by
the amount of the premium paid for the put option and by transaction
costs.
A Fund may buy call options to hedge against an increase in the price
of securities that it may buy in the future. The premium paid for the
call option plus any transaction costs will reduce the benefit, if
any, realized by such Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option
may expire worthless to that Fund.
In purchasing an option, a Fund would be in a position to realize a
gain if, during the option period, the price of the underlying
security increased (in the case of a call) or decreased (in the case
of a put) by an amount in excess of the premium paid. The Fund would
realize a loss if the price of the underlying security did not
increase (in the case of a call) or decrease (in the case of a put)
during the period by more than the amount of the premium. If a put or
call option purchased by a Fund were permitted to expire without
being sold or exercised, the Fund would lose the amount of the
premium.
Although they entitle the holder to buy equity securities, warrants
on and options to purchase equity securities do not entitle the
holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the
issuer of those securities.
In addition to options on securities, a Fund may also purchase and
sell call and put options on securities indexes. A
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stock index reflects in a single number the market value of many
different stocks. Relative values are assigned to the stocks included
in an index and the index fluctuates with changes in the market
values of the stocks. The options give the holder the right to
receive a cash settlement during the term of the option based on the
difference between the exercise price and the value of the index. By
writing a put or call option on a securities index, a Fund is
obligated, in return for the premium received, to make delivery of
this amount. A Fund may offset its position in stock index options
prior to expiration by entering into a closing transaction on an
exchange or it may let the option expire unexercised.
Use of options on securities indexes entails the risk that trading in
the options may be interrupted if trading in certain securities
included in the index is interrupted. A Fund will not purchase these
options unless a Fund's sub-adviser is satisfied with the
development, depth and liquidity of the market and believes the
options can be closed out.
Price movements in a Fund's securities may not correlate precisely
with movements in the level of an index and, therefore, the use of
options on indexes cannot serve as a complete hedge and will depend,
in part, on the ability of its sub-adviser to predict correctly
movements in the direction of the stock market generally or of a
particular industry. Because options on securities indexes require
settlement in cash, a Fund's sub-adviser may be forced to liquidate
Fund securities to meet settlement obligations.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the
value of the options bought.
D. OPTIONS ON FOREIGN CURRENCIES. Each of the Funds, other than the
Tax-Exempt and the Income Plus Funds, may buy and write options on
foreign currencies in a manner similar to that in which futures
contracts or forward contracts on foreign currencies will be
utilized. For example, a decline in the U.S. dollar value of a
foreign currency in which Fund securities are denominated will reduce
the U.S. dollar value of such securities, even if their value in the
foreign currency remains constant. In order to protect against such
diminutions in the value of Fund securities, a Fund may buy put
options on the foreign currency. If the value of the currency
declines, such Fund will have the right to sell such currency for a
fixed amount in U.S. dollars and will offset, in whole or in part,
the adverse effect on its portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in
which securities to be acquired are denominated is projected, thereby
increasing the cost of such securities, a Fund may buy call options
thereon. The purchase of such options could offset, at least
partially, the effects of the adverse movements in exchange rates. As
in the case of other types of options, however, the benefit to a Fund
from purchases of foreign currency options will be reduced by the
amount of the premium and related transaction costs. In addition, if
currency exchange rates do not move in the direction or to the extent
desired, a Fund could sustain losses on transactions in foreign
currency options that would require such Fund to forego a portion or
all of the benefits of advantageous changes in those rates. In
addition, in the case of other types of options, the benefit to the
Fund from purchases of foreign currency options will be reduced by
the amount of the premium and related transaction costs.
A Fund may also write options on foreign currencies. For example, in
attempting to hedge against a potential decline in the U.S. dollar
value of foreign currency denominated securities due to adverse
fluctuations in exchange rates, a Fund could, instead of purchasing a
put option, write a call option on the relevant currency. If the
expected decline occurs, the option will most likely not be exercised
and the diminution in value of Fund securities will be offset by the
amount of the premium received.
Similarly, instead of purchasing a call option to attempt to hedge
against a potential increase in the U.S. dollar cost of securities to
be acquired, a Fund could write a put option on the relevant currency
which, if rates move in the manner projected, will expire unexercised
and allow that Fund to hedge the increased cost up to the amount of
premium. As in the case of other types of options, however, the
writing of a foreign currency option will constitute only a partial
hedge up to the amount of the premium. If exchange rates do not move
in the expected direction, the option may be exercised and a Fund
would be required to buy or sell the underlying currency at a loss
which may not be offset by the amount of the premium. Through the
writing of options on foreign currencies, a Fund also may lose
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all or a portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.
A Fund may write covered call options on foreign currencies. A call
option written on a foreign currency by a Fund is "covered" if that
Fund owns the underlying foreign currency covered by the call or has
an absolute and immediate right to acquire that foreign currency
without additional cash consideration (or for additional cash
consideration that is segregated by its custodian) upon conversion or
exchange of other foreign currency held in its Fund. A call option is
also covered if: (i) the Fund holds a call at the same exercise price
for the same exercise period and on the same currency as the call
written; or (ii) at the time the call is written, an amount of cash,
U.S. government securities or other liquid assets equal to the
fluctuating market value of the optioned currency is segregated with
the custodian.
A Fund may write call options on foreign currencies for cross-hedging
purposes that would not be deemed to be covered. A call option on a
foreign currency is for cross-hedging purposes if it is not covered
but is designed to provide a hedge against a decline due to an
adverse change in the exchange rate in the U.S. dollar value of a
security which the Fund owns or has the right to acquire and which is
denominated in the currency underlying the option. In such
circumstances, a Fund collateralizes the option by segregating cash
or other liquid assets in an amount not less than the value of the
underlying foreign currency in U.S. dollars marked-to-market daily.
E. FORWARD CONTRACTS. A forward contract is an agreement between two
parties in which one party is obligated to deliver a stated amount of
a stated asset at a specified time in the future, and the other party
is obligated to pay a specified invoice amount for the assets at the
time of delivery. A Fund may enter into forward contracts to purchase
and sell government securities, foreign currencies or other financial
instruments. Forward contracts generally are traded in an interbank
market conducted directly between traders (usually large commercial
banks) and their customers. Unlike futures contracts, which are
standardized contracts, forward contracts can be specifically drawn
to meet the needs of the parties that enter into them. The parties to
a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and
complete the contemplated exchange.
The following discussion summarizes a Fund's principal uses of
forward foreign currency exchange contracts ("forward currency
contracts"):
A Fund may enter into forward currency contracts with stated contract
values of up to the value of that Fund's assets. A forward currency
contract is an obligation to buy or sell an amount of a specified
currency for an agreed price (which may be in U.S. dollars or another
currency). A Fund will exchange foreign currencies for U.S. dollars
and for other foreign currencies in the normal course of business.
They may buy and sell currencies through forward currency contracts
in order to fix a price for securities it has agreed to buy or sell
("transaction hedge"). A Fund also may hedge some or all of its
investments denominated in foreign currency, or exposed to foreign
currency fluctuations against a decline in the value of that currency
relative to the U.S. dollar. This is accomplished by entering into
forward currency contracts to sell an amount of that currency (or a
proxy currency whose performance is expected to replicate or exceed
the performance of that currency relative to the U.S. dollar)
approximating the value of some or all of its Fund securities
denominated in that currency ("position hedge"), or by participating
in options or futures contracts with respect to the currency.
A Fund also may enter into a forward currency contract with respect
to a currency where such Fund is considering the purchase or sale of
investments denominated in that currency but has not yet selected the
specific investments ("anticipatory hedge"). In any of these
circumstances a Fund may, alternatively, enter into a forward
currency contract to purchase or sell one foreign currency for a
second currency that is expected to perform more favorably relative
to the U.S. dollar if the Fund's sub-adviser believes there is a
reasonable degree of correlation between movements in the two
currencies ("cross-hedge").
These types of hedging seek to minimize the effect of currency
appreciation as well as depreciation, but do not eliminate
fluctuations in the underlying U.S. dollar equivalent value of the
proceeds of, or rates of return on, a Fund's foreign currency
denominated Fund securities. The matching of the increase in value of
a forward contract and the
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decline in the U.S. dollar equivalent value of the foreign currency
denominated asset that is the subject of the hedge generally will not
be precise. Shifting a Fund's currency exposure from one foreign
currency to another removes that Fund's opportunity to profit from
increases in the value of the original currency and involves a risk
of increased losses to such Fund if the Fund's sub-adviser's
projection of future exchange rates is inaccurate. Proxy hedges and
cross-hedges may result in losses if the currency used to hedge does
not perform similarly to the currency in which hedged securities are
denominated. Unforeseen changes in currency prices may result in
poorer overall performance for a Fund than if it had not entered into
such contracts.
A Fund will cover outstanding forward currency contracts by
maintaining liquid Fund securities denominated in the currency
underlying the forward contract or the currency being hedged. To the
extent that a Fund is not able to cover its forward currency
positions with underlying Fund securities, its custodian will
segregate cash or other liquid assets having a value equal to the
aggregate amount of such Fund's commitments under forward contracts
entered into with respect to position hedges, cross-hedges and
anticipatory hedges. If the value of the securities used to cover a
position or the value of segregated assets declines, the Fund will
find alternative cover or segregate additional cash or other liquid
assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of a Fund's commitments
with respect to such contracts.
As an alternative to segregating assets, a Fund may buy call options
permitting the Fund to buy the amount of foreign currency being
hedged by a forward sale contract, or a Fund may buy put options
permitting it to sell the amount of foreign currency subject to a
forward buy contact.
While forward contracts are not currently regulated by the CFTC, the
CFTC may in the future assert authority to regulate forward
contracts. In such event, a Fund's ability to utilize forward
contracts may be restricted. In addition, a Fund may not always be
able to enter into forward contracts at attractive prices and may be
limited in its ability to use these contracts to hedge its assets.
F. SWAPS AND SWAP-RELATED PRODUCTS. In order to attempt to protect the
value of its investments from interest rate or currency exchange rate
fluctuations, each of the Funds, other than the Tax-Exempt and the
Income Plus Funds, may enter into interest rate and currency exchange
rate swaps, and may buy or sell interest rate and currency exchange
rate caps and floors. A Fund's sub-adviser may enter into these
transactions primarily to attempt to preserve a return or spread on a
particular investment or portion of its portfolio. A Fund also may
enter into these transactions to attempt to protect against any
increase in the price of securities the Fund may consider buying at a
later date.
The Funds do not intend to use these transactions as a speculative
investment. Interest rate swaps involve the exchange by a Fund with
another party of their respective commitments to pay or receive
interest, E.G., an exchange of floating rate payments for fixed rate
payments. The exchange commitments can involve payments to be made in
the same currency or in different currencies. The purchase of an
interest rate cap entitles the purchaser, to the extent that a
specified index exceeds a predetermined interest rate, to receive
payments of interest on a contractually based principal amount from
the party selling the interest rate cap. The purchase of an interest
rate floor entitles the purchaser, to the extent that a specified
index falls below a predetermined interest rate, to receive payments
of interest on a contractually based principal amount from the party
selling the interest rate floor.
Each of the Funds, other than the Tax-Exempt and Income Plus Funds,
may enter into interest rate swaps, caps and floors on either an
asset-based or liability-based basis, depending upon whether it is
hedging its assets or its liabilities, and will usually enter into
interest rate swaps on a net basis, (I.E., the two payment streams
are netted out, with a Fund receiving or paying, as the case may be,
only the net amount of the two payments). The net amount of the
excess, if any, of a Fund's obligations over its entitlements with
respect to each interest rate swap, will be calculated on a daily
basis. An amount of cash or other liquid assets having an aggregate
net asset at least equal to the accrued excess will be segregated by
its custodian.
If a Fund enters into an interest rate swap on other than a net
basis, it will maintain a segregated account in the full amount
accrued on a daily basis of its obligations with respect to the swap.
A Fund will not enter into any interest rate swap, cap or floor
transaction unless the unsecured senior debt or the claims-paying
ability of the other party thereto
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is rated in one of the three highest rating categories of at least
one nationally recognized statistical rating organization at the time
of entering into such transaction. A Fund's sub-adviser will monitor
the creditworthiness of all counterparties on an ongoing basis. If
there is a default by the other party to such a transaction, the Fund
will have contractual remedies pursuant to the agreements related to
the transaction.
The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as
principals and as agents utilizing standardized swap documentation.
The sub-advisers have determined that, as a result, the swap market
has become relatively liquid. Caps and floors are more recent
innovations for which standardized documentation has not yet been
developed and, accordingly, they are less liquid than swaps. To the
extent a Fund sells (I.E., writes) caps and floors, it will segregate
cash or other liquid assets having an aggregate net asset value at
least equal to the full amount, accrued on a daily basis, of its
obligations with respect to any caps or floors.
There is no limit on the amount of interest rate swap transactions
that may be entered into by the Funds (except the Tax-Exempt and
Income Plus Funds which may not participate in these transactions),
although none of the Funds presently intends to engage in such
transactions in excess of 5% of its total assets. These transactions
may in some instances involve the delivery of securities or other
underlying assets by a Fund or its counterparty to collateralize
obligations under the swap.
Under the documentation currently used in those markets, the risk of
loss with respect to interest rate swaps is limited to the net amount
of the interest payments that a Fund is contractually obligated to
make. If the other party to an interest rate swap that is not
collateralized defaults, a Fund would risk the loss of the net amount
of the payments that it contractually is entitled to receive. A Fund
may buy and sell (I.E., write) caps and floors without limitation,
subject to the segregation requirement described above.
In addition to the instruments, strategies and risks described in
this Statement of Additional Information and in the Prospectus, there
may be additional opportunities in connection with options, futures
contracts, forward currency contracts and other hedging techniques
that become available as a Fund's sub-adviser develops new
techniques, as regulatory authorities broaden the range of permitted
transactions, and as new instruments are developed. The Funds'
sub-advisers may use these opportunities to the extent they are
consistent with each Fund's investment objective and as are permitted
by a Fund's investment limitations and applicable regulatory
requirements.
G. EURODOLLAR INSTRUMENTS. The Funds may each make investments in
Eurodollar instruments. Eurodollar instruments are U.S.
dollar-denominated futures contracts, or options thereon, which are
linked to the London Interbank Offered Rate (the "LIBOR"), although
foreign currency-denominated instruments are available from time to
time. Eurodollar futures contracts enable purchasers to obtain a
fixed rate for the lending of funds, and sellers to obtain a fixed
rate for borrowings. A Fund might use Eurodollar futures contracts
and options thereon to hedge against changes in LIBOR, which may be
linked to many interest rate swaps and fixed income instruments.
H. SPECIAL INVESTMENT CONSIDERATIONS AND RISKS. The successful use of
the investment practices described above with respect to futures
contracts, options on futures contracts, forward contracts, options
on securities, options on foreign currencies and swaps and
swap-related products draws upon skills and experience which are
different from those needed to select the other instruments in which
a Fund may invest. Should interest or exchange rates, or the prices
of securities or financial indices move in an unexpected manner, a
Fund may not achieve the desired benefits of the foregoing
instruments or may realize losses and thus be in a worse position
than if such strategies had not been used. Unlike many
exchange-traded futures contracts and options on futures contracts,
there are no daily price fluctuation limits with respect to options
on currencies, forward contracts and other negotiated or
over-the-counter instruments, and adverse market movements could
therefore continue to an unlimited extent over a period of time. In
addition, the correlation between movements in the price of the
securities and currencies hedged or used for cover will not be
perfect and could produce unanticipated losses.
A Fund's ability to dispose of its positions in the foregoing
instruments will depend on the availability of liquid markets in the
instruments. Markets in a number of the instruments are relatively
new and still developing, and it is impossible
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to predict the amount of trading interest that may exist in those
instruments in the future.
Particular risks exist with respect to the use of each of the
foregoing instruments and could result in such adverse consequences
to a Fund as: the possible loss of the entire premium paid for an
option bought by a Fund; the inability of the Fund, as the writer of
a covered call option, to benefit from the appreciation of the
underlying securities above the exercise price of the option; and the
possible need to defer closing out positions in certain instruments
to avoid adverse tax consequences. As a result, no assurance can be
given that a Fund will be able to use those instruments effectively
for their intended purposes.
In connection with certain of its hedging transactions, a Fund must
segregate assets with the Fund's custodian bank to ensure that such
Fund will be able to meet its obligations pursuant to these
instruments. Segregated assets generally may be not be disposed of
for so long as a Fund maintains the positions giving rise to the
segregation requirement. Segregation of a large percentage of a
Fund's assets could impede implementation of that Fund's investment
policies or its ability to meet redemption requests or other current
obligations.
I. ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD CONTRACTS
AND FOREIGN INSTRUMENTS. Unlike transactions entered into by a Fund
in futures contracts, options on foreign currencies and forward
contracts are not traded on contract markets regulated by the CFTC or
(with the exception of certain foreign currency options) by the SEC.
To the contrary, such instruments are traded through financial
institutions acting as market-makers, although foreign currency
options are also traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board Options
Exchange, subject to SEC regulation.
Options on currencies may be traded over-the-counter. In an
over-the-counter trading environment, many of the protections
afforded to exchange participants will not be available. For example,
there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a
period of time. Although the buyer of an option cannot lose more than
the amount of the premium plus related transaction costs, this entire
amount could be lost. Moreover, an option writer and a buyer or
seller of futures or forward contracts could lose amounts
substantially in excess of any premium received or initial margin or
collateral posted due to the potential additional margin and
collateral requirements associated with such positions.
Options on foreign currencies traded on national securities exchanges
are within the jurisdiction of the SEC, as are other securities
traded on such exchanges. As a result, many of the protections
provided to traders on organized exchanges will be available with
respect to such transactions. In particular, all foreign currency
option positions entered into on a national securities exchange are
cleared and guaranteed by the OCC, thereby reducing the risk of
counterparty default. Further, a liquid secondary market in options
traded on a national securities exchange may be more readily
available than in the over-the-counter market, potentially permitting
a Fund to liquidate open positions at a profit prior to exercise or
expiration, or to limit losses in the event of adverse market
movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature of
the foreign currency market, possible intervention by governmental
authorities and the effects of other political and economic events.
In addition, exchange-traded options on foreign currencies involve
certain risks not presented by the over-the-counter market. For
example, exercise and settlement of such options must be made
exclusively through the OCC, which has established banking
relationships in applicable foreign countries for this purpose. As a
result, the OCC may, if it determines that foreign government
restrictions or taxes would prevent the orderly settlement of foreign
currency option exercises, or would result in undue burdens on the
OCC or its clearing member, impose special procedures on exercise and
settlement. These include such things as technical changes in the
mechanics of delivery of currency, the fixing of dollar settlement
prices or prohibitions on exercise.
In addition, options on U.S. government securities, futures
contracts, options on futures contracts, forward contracts and
options on foreign currencies may be traded on foreign exchanges and
over-the-counter in foreign countries. Such
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transactions are subject to the risk of governmental actions
affecting trading in or the prices of foreign currencies or
securities. The value of such positions also could be adversely
affected by: (i) other complex foreign political and economic
factors; (ii) less availability than that available in the United
States of data on which to make trading decisions; (iii) delays in a
Fund's ability to act upon economic events occurring in foreign
markets during nonbusiness hours in the United States; (iv) the
imposition of different exercise and settlement terms and procedures
and margin requirements than in the United States; and (v) low
trading volume.
OTHER INVESTMENT COMPANIES.
Some of the Funds may invest in securities issued by other investment
companies, within limits described in the investment restrictions for the
relevant Fund. A Fund may indirectly bear a portion of any investment advisory
fees and expenses paid by Funds in which it invests, in addition to the advisory
fees and expenses paid by the Fund.
The International Equity Fund may not purchase securities of other
investment companies, other than a security acquired in connection with a
merger, consolidation, acquisition, reorganization or offer of exchange and
except as otherwise permitted under the 1940 Act. An investment by the
International Equity Fund in GEI Short-Term Investment Fund, is not considered
an investment in another investment company for purposes of this resctriction.
The GEI Short-Term Investment Fund is an investment Fund advised by GEIM,
created specifically to serve as a vehicle for the collective investment of cash
balances of the Fund and other accounts advised by GEIM or its affiliate,
General Electric Investment Corporation.
ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES.
Subject to each Fund's investment restrictions, a Fund may invest in zero
coupon, pay-in-kind and step-coupon securities. Zero-coupon bonds are issued and
traded at a discount from their face value. They do not entitle the holder to
any periodic payment of interest prior to maturity. Step coupon bonds trade at a
discount from their face value and pay coupon interest. The coupon rate is low
for an initial period and then increases to a higher coupon rate thereafter. The
discount from the face amount or par value depends on the time remaining until
cash payments begin, prevailing interest rates, liquidity of the security and
the perceived credit quality of the issuer. Pay-in-kind bonds give the issuer an
option to pay cash at a coupon payment date or give the holder of the security a
similar bond with the same coupon rate and a face value equal to the amount of
the coupon payment that would have been made. The Flexible Income Fund may also
invest in "strips," which are debt securities that are stripped of their
interest after the securities are issued, but otherwise are comparable to zero
coupon bonds.
Current federal income tax law requires holders of zero-coupon securities
and step-coupon securities to report the portion of the original issue discount
on such securities that accrues that year as interest income, even though the
holders receive no cash payments of interest during the year. In order to
qualify as a "regulated investment company" under the Internal Revenue Code of
1986 ("Code"), a Fund must distribute its investment company taxable income,
including the original issue discount accrued on zero-coupon or step-coupon
bonds. Because it will not receive cash payments on a current basis in respect
of accrued original-issue discount on zero-coupon bonds or step-coupon bonds
during the period before interest payments begin, in some years a Fund may have
to distribute cash obtained from other sources in order to satisfy the
distribution requirements under the Code. A Fund might obtain such cash from
selling other portfolio holdings. These actions may reduce the assets to which
Fund expenses could be allocated and may reduce the rate of return for such
Fund. In some circumstances, such sales might be necessary in order to satisfy
cash distribution requirements even though investment considerations might
otherwise make it undesirable for a Fund to sell the securities at the time.
Generally, the market prices of zero-coupon bonds and strip securities are
more volatile than the prices of securities that pay interest periodically in
cash and they are likely to respond to changes in interest rates to a greater
degree than other types of debt securities having similar maturities and credit
quality.
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INCOME-PRODUCING SECURITIES.
The Flexible Income Fund focuses its investments in income-producing
securities.
The Flexible Income Fund will purchase defaulted securities only when the
sub-adviser believes, based upon analysis of the financial condition, results of
operations and economic outlook of an issuer, that there is potential for
resumption of income payments and that the securities offer an unusual
opportunity for capital appreciation. Notwithstanding the sub-adviser's belief
as to the resumption of income payments, however, the purchase of any security
on which payment of interest or dividends is suspended involves a high degree of
risk. Such risk includes, among other things, the following:
A. FINANCIAL AND MARKET RISKS. Investments in securities that are in
default involve a high degree of financial and market risks that can
result in substantial, or at times even total, losses. Issuers of
defaulted securities may have substantial capital needs and may
become involved in bankruptcy or reorganization proceedings. Among
the problems involved in investments in such issuers is the fact that
it may be difficult to obtain information about the condition of such
issuers. The market prices of such securities also are subject to
abrupt and erratic movements and above average price volatility, and
the spread between the bid and asked prices of such securities may be
greater than normally expected.
B. DISPOSITION OF PORTFOLIO SECURITIES. Although the Flexible Income
Fund generally intends to purchase securities for which its
sub-adviser expects an active market to be maintained, defaulted
securities may be less actively traded than other securities making
it more difficult to dispose of substantial holdings of such
securities at prevailing market prices. The Flexible Income Fund will
limit its holdings of any such securities to amounts that the
sub-adviser believes could be readily sold, and its holdings of such
securities would, in any event, be limited so as not to limit the
Flexible Income Fund's ability to readily dispose of its securities
to meet redemptions.
C. OTHER. Defaulted securities require active monitoring and may, at
times, require participation in bankruptcy or receivership
proceedings on behalf of the Flexible Income Fund.
Other types of income producing securities that the Funds may purchase
include, but are not limited to, the following:
VARIABLE AND FLOATING RATE OBLIGATIONS. These types of securities are
relatively long-term instruments that often carry demand features
permitting the holder to demand payment of principal at any time or at
specified intervals prior to maturity.
STANDBY COMMITMENTS. These instruments, which are similar to a put, give a
Fund the option to obligate a broker, dealer or bank to repurchase a
security held by a Fund at a specified price.
TENDER OPTION BONDS. Tender option bonds are relatively long-term bonds
that are coupled with the agreement of a third party (such as a broker,
dealer or bank) to grant the holders of such securities the option to
tender the securities to the institution at periodic intervals.
INVERSE FLOATERS. Inverse floaters are instruments whose interest bears an
inverse relationship to the interest rate on another security. The Funds
will not invest more than 5% of their respective assets in inverse
floaters.
The Funds will purchase instruments with demand features, standby
commitments and tender option bonds primarily for the purpose of increasing the
liquidity of their portfolios.
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LENDING OF FUND SECURITIES.
Subject to any applicable investment restriction relating to lending, each
of the Funds, other than the Tax-Exempt, Mid-Cap Summit and the Income Plus
Funds may lend securities from its portfolio. Under applicable regulatory
requirements (which are subject to change), the following conditions apply to
securities loans: a) the loan must be continuously secured by liquid assets
maintained on a current basis in an amount at least equal to the market value of
the securities loaned; b) a Fund must receive any dividends or interest paid by
the issuer on such securities; c) a Fund must have the right to call the loan
and obtain the securities loaned at any time upon notice of not more than five
business days, including the right to call the loan to permit voting of the
securities; and d) a Fund must receive either interest from the investment of
collateral or a fixed fee from the borrower. Securities loaned by a Fund remain
subject to fluctuations in market value. A Fund may pay reasonable finders,
custodian and administrative fees in connection with a loan. Securities lending,
as with other extensions of credit, involves the risk that the borrower may
default. Although securities loans will be fully collateralized at all times, a
Fund may experience delays in, or be prevented from, recovering the collateral.
During a period that a Fund seeks to enforce its rights against the borrower,
the collateral and the securities loaned remain subject to fluctuations in
market value. A Fund may also incur expenses in enforcing its rights. If a Fund
has sold the loaned security, it may not be able to settle the sale of the
security and may incur potential liability to the buyer of the security on loan
for its costs to cover the purchase. The Funds will not lend securities to any
advisers or sub-advisers to the Funds or their affiliates. By lending its
securities, a Fund can increase its income by continuing to receive interest or
dividends on the loaned securities as well as by either investing the cash
collateral in short-term securities or by earning income in the form of interest
paid by the borrower when U.S. government securities are used as collateral.
JOINT TRADING ACCOUNTS.
The Growth, Global, Flexible Income, Balanced and Capital Appreciation
Funds and other clients of Janus Capital and its affiliates may place assets in
joint trading accounts for the purpose of making short-term investments in money
market instruments. The Board of Trustees of the Fund must approve the
participation of each of these Funds in these joint trading accounts and
procedures pursuant to which the joint accounts will operate. The joint trading
accounts are to be operated pursuant to an exemptive order issued to Janus
Capital and certain of its affiliates by the SEC. All joint account
participants, including these Funds, will bear the expenses of the joint trading
accounts in proportion to their investments. Financial difficulties of other
participants in the joint accounts could cause delays or other difficulties for
the Funds in withdrawing their assets from joint trading accounts.
ILLIQUID SECURITIES.
Subject to each Fund's investment restrictions, a Fund may invest its
assets in illiquid securities (I.E., securities that are not readily
marketable). The Board of Trustees has authorized the sub-advisers to make
liquidity determinations with respect to its securities, including Rule 144A
securities, commercial paper and municipal lease obligations in accordance with
the guidelines established by the Board of Trustees. Under the guidelines, the
sub-adviser will consider the following factors in determining whether a Rule
144A security or a municipal lease obligation is liquid: 1) the frequency of
trades and quoted prices for the security; 2) the number of dealers willing to
purchase or sell the security and the number of other potential purchasers; 3)
the willingness of dealers to undertake to make a market in the security; and 4)
the nature of the marketplace trades, including the time needed to dispose of
the security, the method of soliciting offers and the mechanics of the transfer.
With respect to municipal lease obligations, the sub-adviser of the Tax-Exempt
and Flexible Income Funds will also consider factors unique to municipal lease
obligations including the general creditworthiness of the municipality, the
importance of the property covered by the lease obligation and the likelihood
that the marketability of the obligation will be maintained throughout the time
the obligation is held by the Fund. The sale of illiquid securities often
requires more time and results in higher brokerage charges or dealer discounts
and other selling expenses than does the sale of securities eligible for trading
on national securities exchanges or in the over-the-counter markets. A Fund may
be restricted in its ability to sell such securities at a time when the
sub-adviser deems it advisable to do so. In addition, in order to meet
redemption requests, a Fund may have to sell other assets, rather than such
illiquid securities, at a time which is not advantageous.
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REPURCHASE AND REVERSE REPURCHASE AGREEMENTS.
Subject to each Fund's investment restrictions, a Fund may enter into
repurchase and reverse repurchase agreements. In a repurchase agreement, a Fund
purchases a security and simultaneously commits to resell that security to the
seller at an agreed upon price on an agreed upon date within a number of days
(usually not more than seven) from the date of purchase. The resale price
reflects the purchase price plus an agreed upon incremental amount which is
unrelated to the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon price,
which obligation is in effect secured by the value (at least equal to the amount
of the agreed upon resale price and marked-to-market daily) of the underlying
security or collateral). A Fund may engage in a repurchase agreement with
respect to any security in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delays and costs to a Fund in connection with bankruptcy
proceedings), it is the policy of each Fund to limit repurchase agreements to
those parties whose creditworthiness has been reviewed and found satisfactory by
the sub-adviser for that Fund and approved by the Board of Trustees of the Fund.
In addition, the Funds currently intend to invest primarily in repurchase
agreements collateralized by cash, U.S. government securities, or money market
instruments whose value equals at least 100% of the repurchase price,
marked-to-market daily.
In a reverse repurchase agreement, a Fund sells a portfolio instrument to
another party, such as a bank or broker-dealer, in return for cash and agrees to
repurchase the instrument at a particular price and time. While a reverse
repurchase agreement is outstanding, a Fund will segregate with its custodian
cash and appropriate liquid assets with the Funds' custodian to cover its
obligation under the agreement. The Funds will enter into reverse repurchase
agreements only with parties the investment sub-adviser for each Fund deems
creditworthy and that have been reviewed by the Board of Trustees of the Funds.
PASS-THROUGH SECURITIES.
Each of the Funds may, in varying degrees, invest in various types of
pass-through securities, such as mortgage-backed securities, asset-backed
securities and participation interests. A pass-through security is a share or
certificate of interest in a pool of debt obligations that have been repackaged
by an intermediary, such as a bank or broker-dealer. The purchaser receives an
undivided interest in the underlying pool of securities. The issuers of the
underlying securities make interest and principal payments to the intermediary
which are passed through to purchasers, such as the Funds.
The most common type of pass-through securities are mortgage-backed
securities. Government National Mortgage Association ("GNMA") Certificates are
mortgage-backed securities that evidence an undivided interest in a pool of
mortgage loans. GNMA Certificates differ from traditional bonds in that
principal is paid back monthly by the borrowers over the term of the loan rather
than returned in a lump sum at maturity. A Fund will generally purchase
"modified pass-through" GNMA Certificates, which entitle the holder to receive a
share of all interest and principal payments paid and owned on the mortgage
pool, net of fees paid to the "issuer" and GNMA, regardless of whether or not
the mortgagor actually makes the payment. GNMA Certificates are backed as to the
timely payment of principal and interest by the full faith and credit of the
U.S. government.
The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC guarantees timely payments of
interest on PCs and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay interest
semi-annually and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment of principal
and interest, but is not backed by the full faith and credit of the U.S.
government.
The Federal National Mortgage Association ("FNMA") issues guaranteed
mortgage pass-through certificates ("FNMA Certificates"). FNMA Certificates
resemble GNMA Certificates in that each FNMA Certificate represents a pro rata
share of all interest and principal payments made and owned on the underlying
pool. This type of security is guaranteed by FNMA as to timely payment of
principal and interest, but it is not backed by the full faith and credit of the
U.S. government.
Each of the mortgage-backed securities described above is characterized by
monthly payments to the holder, reflecting the monthly payments made by the
borrowers who received the underlying mortgage loans. The payments to the
security holders (such as a Fund), like the payments on the underlying loans,
represent both principal and interest. Although the underlying
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mortgage loans are for specified periods of time, such as 20 or 30 years, the
borrowers can, and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the principal that is
part of the regular monthly payments. A borrower is more likely to prepay a
mortgage that bears a relatively high rate of interest. This means that in times
of declining interest rates, some of a Fund's higher yielding mortgage-backed
securities may be converted to cash. That Fund will then be forced to accept
lower interest rates when that cash is used to purchase additional securities in
the mortgage-backed securities sector or in other investment sectors. Mortgage
and asset-backed securities may have periodic income payments or may pay
interest at maturity (as is the case with Treasury bills or zero-coupon bonds).
Asset-backed securities represent interests in pools of consumer loans and
are backed by paper or accounts receivables originated by banks, credit card
companies or other providers of credit. Generally, the originating bank or
credit provider is neither the obligor or guarantor of the security and interest
and principal payments ultimately depend upon payment of the underlying loans by
individuals. Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales agreements
that may be created when a municipality enters into an installment purchase
contract or lease with a vendor. Such securities may be secured by the assets
purchased or leased by the municipality; however, if the municipality stops
making payments, there generally will be no recourse against the vendor. The
market for tax-exempt asset-backed securities is still relatively new. These
obligations are likely to involve unscheduled prepayments of principal.
HIGH-YIELD/HIGH-RISK BONDS.
High-yield/high-risk, below investment grade securities (commonly known as
"junk bonds") involve significant credit and liquidity concerns and fluctuating
yields, and are not suitable for short-term investing. Higher yields are
ordinarily available on fixed-income securities which are unrated or are rated
in the lower rating categories of recognized rating services such as Moody's and
Standard & Poor's.
Lower rated bonds also involve the risk that the issuer will not make
interest or principal payments when due. In the event of an unanticipated
default, a Fund owning such bonds would experience a reduction in its income,
and could expect a decline in the market value of the securities so affected.
Such Funds, furthermore, may incur additional costs in seeking the recovery of
the defaulted securities. More careful analysis of the financial condition of
each issuer of lower rated securities is therefore necessary. During an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress which would adversely affect their
ability to service their principal and interest payments obligations, to meet
projected business goals and to obtain additional financing.
The market prices of lower grade securities are generally less sensitive
to interest rate changes than higher rated investments, but more sensitive to
adverse economic or political changes or individual developments specific to the
issuer. Periods of economic or political uncertainty and change can be expected
to result in volatility of prices of these securities. Since the last major
economic recession, there has been a substantial increase in the use of
high-yield debt securities to fund highly leveraged corporate acquisitions and
restructurings, so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of future performance
during such periods. Lower rated securities also may have less liquid markets
than higher rated securities, and their liquidity as well as their value may be
more severely affected by adverse economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a greater
negative impact on the market for lower rated bonds.
Unrated securities are not necessarily of lower quality than rated
securities, but the markets for lower rated and nonrated securities are more
limited than those in which higher rated securities are traded. In addition, an
economic downturn or increase in interest rates is likely to have a greater
negative effect on: (i) the market for lower rated and nonrated securities; (ii)
the value of high yield debt securities held by a Fund; (iii) the new asset
value of a Fund holding such securities; and (iv) the ability of the bonds'
issuers to repay principal and interest, meet projected business goals and
obtain additional financing than on higher rated securities.
37
<PAGE>
WARRANTS AND RIGHTS.
Each of the Funds, other than the Tax-Exempt Fund, may invest in warrants
and rights. A warrant is a type of security that entitles the holder to buy a
proportionate amount of common stock at a specified price, usually higher than
the market price at the time of issuance, for a period of years or to
perpetuity. In contrast, rights, which also represent the right to buy common
shares, normally have a subscription price lower than the current market value
of the common stock and a life of two to four weeks.
U.S. GOVERNMENT SECURITIES.
Examples of the types of U.S. government securities that the Funds may
hold include, in addition to those described in the Prospectus and direct
obligations of the U.S. Treasury, the obligations of the Federal Housing
Administration, Farmers Home Administration, Small Business Administration,
General Services Administration, Central Bank for Cooperatives, Federal Farm
Credit Banks, Federal Home Loan Bank, Federal Intermediate Credit Banks, Federal
Land Banks and Maritime Administration. U.S. government securities may be
supported by the full faith and credit of the U.S. government (such as
securities of the Small Business Administration); by the right of the issuer to
borrow from the Treasury (such as securities of the Federal Home Loan Bank); by
the discretionary authority of the U.S. government to purchase the agency's
obligations (such as securities of the Federal National Mortgage Association);
or only by the credit of the issuing agency.
38
<PAGE>
FUND TURNOVER RATE*
----------------------------- --------------------- ------------------------
FUND OCTOBER 31, 1998 OCTOBER 31, 1997
----------------------------- --------------------- ------------------------
AGGRESSIVE GROWTH % 120.96%
----------------------------- --------------------- ------------------------
INTERNATIONAL EQUITY % 21.85%
----------------------------- --------------------- ------------------------
CAPITAL APPRECIATION % 130.48%
----------------------------- --------------------- ------------------------
GLOBAL % 91.02%
----------------------------- --------------------- ------------------------
GROWTH % 91.52%
----------------------------- --------------------- ------------------------
C.A.S.E. % 183.06%
----------------------------- --------------------- ------------------------
VALUE EQUITY % 6.40%
----------------------------- --------------------- ------------------------
STRATEGIC TOTAL RETURN % 51.44%
----------------------------- --------------------- ------------------------
TACTICAL ASSET ALLOCATION % 71.63%
----------------------------- --------------------- ------------------------
BALANCED % 127.08%
----------------------------- --------------------- ------------------------
FLEXIBLE INCOME % 135.53%
----------------------------- --------------------- ------------------------
INCOME PLUS % 62.28%
----------------------------- --------------------- ------------------------
TAX-EXEMPT % 71.29%
----------------------------- --------------------- ------------------------
*No information is included for the Blue Chip, Dividend Growth,
Mid-Cap Opportunities, Mid-Cap Summit or Small Cap Frontier Funds as these Funds
commenced operations on March 1, 1999.
As stated in the Prospectus, each of the Funds generally intend to
purchase and sell securities as deemed appropriate by the Fund's sub-adviser to
further a Fund's stated investment objective, and the rate of Fund turnover is
not expected to be a limiting factor when changes are deemed to be appropriate.
Fund transactions for the Tax-Exempt Fund and Income Plus Fund are ordinarily
undertaken to achieve each Fund's investment objective in light of anticipated
movements in the level of interest rates. The investment policies of the
Tax-Exempt and the Income Plus Funds may lead to frequent changes in
investments, particularly in periods of rapidly fluctuating interest rates.
These percentages are calculated by dividing the lesser of purchases or
sales of Fund securities during the fiscal year by the monthly average of the
value of such securities (excluding from the computation all securities,
including options, with maturities at the time of acquisition of one year or
less). For example, a Fund turnover rate of 100% would mean that all of a Fund's
securities (except those excluded from the calculation) were replaced once in a
period of one year. A high rate of Fund turnover generally involves
correspondingly greater brokerage commission expenses.
Turnover rates may vary greatly from year to year, as well as within a
particular year, and may also be affected by cash requirements for redemptions
of a Fund's shares and by requirements, the satisfaction of which enable the
Fund to receive favorable tax treatment. Because the rate of Fund turnover is
not a limiting factor, particular holdings may be sold at any time if investment
judgment or Fund operations make a sale advisable. As a result, the annual Fund
turnover rate in future years may exceed the percentage shown above.
INVESTMENT ADVISORY AND OTHER SERVICES
IDEX Mutual Funds has entered into a Management and Investment Advisory
Agreement ("Advisory Agreement") on behalf of each Fund with IDEX Management,
Inc. ("IMI"), located at 570 Carillon Parkway, St. Petersburg, Florida 33716 and
each of the Funds. IMI supervises each respective Fund's investments and
conducts its investment program.
39
<PAGE>
The Advisory Agreement provides that IMI will perform the following
services or cause them to be performed by others: (i) furnish to the Fund with
investment advice and recommendations; (ii) supervise the purchase and sale of
securities as directed by appropriate Fund officers, and (iii) be responsible
for the administration of each Fund. For services to the Capital Appreciation,
Global, Growth and Balanced Funds, IMI receives an annual fee, computed daily
and paid monthly, equal to 1.00% of the first $750 million of that Fund's
average daily net assets, 0.90% of the next $250 million of that Fund's average
daily net assets, and 0.85% of the average daily net assets of that Fund in
excess of $1 billion. For services to the Flexible Income Fund, IMI receives
0.90% of the first $100 million, 0.80% of the next $150 million and 0.70% of
assets over $250 million; for the Income Plus and Tax-Exempt Funds, IMI receives
0.60% of each Fund's average daily net assets; and for the Aggressive Growth,
International Equity, C.A.S.E., Value Equity, Strategic Total Return, Tactical
Asset Allocation, Blue Chip, Dividend Growth, Mid-Cap Opportunities, Mid-Cap
Summit and Small Cap Frontier Fund, IMI receives 0.80% of the first $500 million
in assets and 0.70% of assets over $500 million.
The duties and responsibilities of the investment adviser are specified
in the Advisory Agreement. The Agreement was approved by the Board of Trustees
of the Funds (including a majority of trustees who are not parties to the
Agreement or interested persons, as defined by the 1940 Act, of any such party).
The Agreement is not assignable and may be terminated without penalty upon 60
days written notice at the option of either the Fund, IMI or by a vote of
shareholders of each Fund. The Advisory Agreement provides that it can be
continued from year to year so long as such continuance is specifically approved
annually (a) by the Board of Trustees of the Funds or by a majority of the
outstanding shares of the Fund and (b) by a majority vote of the Trustees who
are not parties to the Agreement or interested persons of any such party cast in
person at a meeting. Prior to March 1, 1999, InterSecurities, Inc. served as
investment adviser to the Tax-Exempt, Income Plus, International Equity,
C.A.S.E., Value Equity, Strategic Total Return, Tactical Asset Allocation and
Aggressive Growth Funds.
The Agreement also provides that IMI shall not be liable to the Funds or
to any shareholder for any error of judgment or mistake of law or for any loss
suffered by the Fund or by any shareholder in connection with matters to which
the Agreements relates, except for a breach of fiduciary duty or a loss
resulting from willful misfeasance, bad faith, gross negligence, or reckless
disregard on the part of IMI in the performance of its duties thereunder.
The Advisory Agreement became effective as follows: Aggressive Growth
Fund - September 30, 1994; International Equity Fund - February 1, 1997;
C.A.S.E. fund - November 15, 1995; Value Equity Fund - October 30, 1996;
Strategic Total Return Fund - September 30, 1994; Tactical Asset Allocation Fund
- - June 1, 1995; Income Plus Fund - April 22, 1992; Tax-Exempt Fund - April 22,
1991; Capital Appreciation, Global, Growth, Balanced and Flexible Income Funds -
June 25, 1998; and Blue Chip, Dividend Growth, Mid-Cap Opportunities, Mid-Cap
Summit and Small Cap Frontier Funds - March 1, 1999.
Each Fund pays its allocable share of the fees and expenses of the Funds'
non-interested trustees, custodian and transfer agent fees, brokerage
commissions and all other expenses in connection with the execution of its
portfolio transactions, administrative, clerical, recordkeeping, bookkeeping,
legal, auditing and accounting expenses, interest and taxes, expenses of
preparing tax returns, expenses of shareholders' meetings and preparing,
printing and mailing proxy statements (unless otherwise agreed to by the Funds
or IMI, expenses of preparing and typesetting periodic reports to shareholders
(except for those reports the Fund permits to be used as sales literature), and
the costs, including filing fees, of renewing or maintaining registration of
Fund shares under federal and state law. The investment adviser will reimburse a
Fund, or waive fees, or both, whenever, in any fiscal year, the total cost to a
Fund of normal operating expenses chargeable to its income account, including
the investment advisory fee but excluding brokerage commissions, interest, taxes
and 12b-1 fees, exceeds, in the case of the Capital Appreciation, Growth,
Balanced and Flexible Income Funds, 1.50% of each Fund's average daily net
assets; in the case of the Tax-Exempt, 1.00% of average daily net assets; and
1.20% of the Fund's average daily net assets for all other Funds. The Global
Fund does not have an expense limitation.
41
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT ADVISORY FEES*
ADVISORY FEES AFTER REIMBURSEMENT ADVISORY FEE REIMBURSEMENTS
--------------------------------- -----------------------------------
OCTOBER 31 OCTOBER 31 SEPTEMBER 30
-----------------------------------------------------------------------------------------
Fund Adviser 1998 1997 September 1998 1997 1996 1996
20, 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth** IMI $130,896 $5,163 $192,695 $17,394 $169,995
------------------------------------------------------------------------------------------------------------------
International Equity** IMI $(110,543) N/A $128,291 N/A N/A
------------------------------------------------------------------------------------------------------------------
Capital Appreciation IMI $45,071 $7,502 $193,491 $12,709 $122,710
------------------------------------------------------------------------------------------------------------------
Global IMI $2,224,062 $126,856 -- -- --
------------------------------------------------------------------------------------------------------------------
Growth IMI $11,676,637 $952,996 -- -- --
------------------------------------------------------------------------------------------------------------------
C.A.S.E.** IMI $(96,157) $(11,137) $150,161 $13,949 $55,165
------------------------------------------------------------------------------------------------------------------
Value Equity** IMI $(63,589) N/A $104,638 N/A N/A
------------------------------------------------------------------------------------------------------------------
Strategic Total Return** IMI $127,360 $1,140 $96,214 $11,492 $92,079
------------------------------------------------------------------------------------------------------------------
Tactical Asset IMI $120,873 $2,983 $99,277 $11,829 $28,453
Allocation**
------------------------------------------------------------------------------------------------------------------
Balanced IMI $(4,940) $(4,993) $139,247 $13,490 $106,223
------------------------------------------------------------------------------------------------------------------
Flexible Income IMI $60,744 $(3,566) $95,242 $17,675 $41,410
------------------------------------------------------------------------------------------------------------------
Income Plus** IMI $416,928 $35,332 -- -- --
------------------------------------------------------------------------------------------------------------------
Tax-Exempt ** IMI $(7,330) $(6,243) $155,172 $19,367 $123,530
------------------------------------------------------------------------------------------------------------------
<FN>
* No information is included for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit or Small Cap Frontier Funds as they did
not commence operations until March 1, 1999.
** Prior to March 1, 1999, ISI served as investment adviser to these Funds.
</FN>
</TABLE>
IMI has entered into an Investment Counsel Agreement with Janus Capital
Corporation ("Janus Capital"), 100 Fillmore Street, Denver, CO 80206, to serve
as sub-adviser to the Capital Appreciation, Global, Growth, Balanced and
Flexible Income Funds, respectively. The Investment Counsel Agreement for these
Funds became effective June 25, 1998.
Fred Alger Management, Inc. ("Alger Management"), 75 Maiden Lane, New
York, NY 10038, serves as the investment sub-adviser to the Aggressive Growth
Fund pursuant to an Investment Counsel Agreement dated September 30, 1994 with
IMI. Following are the sub-advisers of the respective Funds: Luther King Capital
Management Corporation ("Luther King"), 301 Commerce Street, Suite 1600, Fort
Worth, TX 76102, serves as the investment sub-adviser to the Strategic Total
Return Fund pursuant to an Investment Counsel Agreement dated as of September
30, 1994. Dean Investment Associates ("Dean Investment"), a Division of C.H.
Dean and Associates, Inc., 2480 Kettering Tower, Dayton, Ohio 45423-2480 serves
as the investment sub-adviser to the Tactical Asset Allocation Fund pursuant to
an Investment Counsel Agreement dated as of June 30, 1995. C.A.S.E. Management,
Inc. ("C.A.S.E."), 5355 Town Center Road, Suite 701, Boca Raton, FL 33486,
serves as the investment sub-adviser to the C.A.S.E. Fund pursuant to an
Investment Counsel Agreement dated November 15, 1995. NWQ Investment Management
Company, Inc. ("NWQ"), 2049 Century Park East, 4th Floor, Los Angeles, CA 90067,
serves as the investment sub-adviser to the Value Equity Fund pursuant to an
Investment Counsel Agreement dated October 30, 1996. Scottish Equitable
Investment Management Limited ("SEIM"), Edinburgh Park, Edinburgh EH12 9SE,
Scotland, and GEIM, 3003 Summer Street, Stamford, CT 06905, serve as the
investment sub-advisers to the International Equity Fund pursuant to respective
Investment Counsel Agreements dated February 1, 1997. T. Rowe Price Associates,
Inc. ("T. Rowe"), 100 E. Pratt Street, Baltimore, MD 21202 serves as investment
sub-adviser to the Dividend Growth and Small Cap Frontier Funds pursuant to an
Investment Counsel Agreement dated March 1, 199. Salomon Brothers Asset
Management, Inc. ("SBAM"), 7 World Trade Center, New York, NY 10048 serves as
investment sub-adviser to the Mid-Cap Opportunities Fund pursuant to an
Investment Counsel Agreement dated March 1, 1999; Pilgrim Baxter & Associates,
Ltd. ("Pilgrim"), 825 Duportail Road, Wayne, PA 1987 serves as investment
sub-adviser to the Mid-Management ("GSAM") One New York Plaza, New York, NY
10004 serves as investment sub-adviser to the Blue Chip Fund pursuant to an
Investment Counsel Agreement dated March 1, 1999.
42
<PAGE>
AEGON USA Investment Management, Inc. ("AEGON Management"), 4333 Edgewood
Road, N.E., Cedar Rapids, Iowa 52499, serves as the investment sub-adviser to
the Tax-Exempt Fund and the Income Plus Fund pursuant to an Investment Counsel
Agreement relating to each Fund. Each Investment Counsel Agreement was entered
into between ISI and AEGON Securities which assigned each Agreement to AEGON
Management, the parent of AEGON Securities, on September 30, 1992. AEGON
Management is a wholly-owned indirect subsidiary of AEGON USA and thus is an
affiliate of ISI and IMI.
Further discussions of the basic fee arrangements and allocation of
responsibilities relating to terms of the Investment Counsel Agreements for each
Fund are set forth in the Prospectus. Alger Management, SEIM, GEIM, Janus
Capital, C.A.S.E., NWQ, Luther King, Dean Investment, AEGON Management, T. Rowe,
Pilgrim, SBAM and GSAM also serve as sub-advisers to certain portfolios of the
WRL Series Fund, Inc., a registered investment company. They may be referred to
herein collectively as the "sub-advisers" and individually as a "sub-adviser."
<TABLE>
<CAPTION>
SUB-ADVISORY FEES*
(NET OF FEES REIMBURSED)
--------------------------- -------------------------- ------------ ---------------------------
OCTOBER 31 SEPTEMBER 30
--------------------------- ------------- ------------ ------------- ------------- ------------
FUND 1998 1997 1996 1996 1995
--------------------------- ------------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Aggressive Growth $ $52,358 $22,704 $12,252
--------------------------- ------------- ------------ ------------- ------------- -------------
International Equity $ -- N/A N/A
--------------------------- ------------- ------------ ------------- ------------- -------------
Capital Appreciation $ $22,536 $9,675 --
--------------------------- ------------- ------------ ------------- ------------- -------------
Global $ $1,112,031 $565,378 $436,960
--------------------------- ------------- ------------ ------------- ------------- -------------
Growth $ $5,838,319 $2,729,990 $2,146,215
--------------------------- ------------- ------------ ------------- ------------- -------------
C.A.S.E. $ -- -- N/A
--------------------------- ------------- ------------ ------------- ------------- -------------
Value Equity $ -- N/A N/A
--------------------------- ------------- ------------ ------------- ------------- -------------
Strategic Total Return $ $50,944 $2,236 --
--------------------------- ------------- ------------ ------------- ------------- -------------
Tactical Asset Allocation $ $48,349 $21,417 N/A
--------------------------- ------------- ------------ ------------- ------------- -------------
Balanced $ -- -- --
--------------------------- ------------- ------------ ------------- ------------- -------------
Flexible Income $ $30,372 $66,517 $84,848
--------------------------- ------------- ------------ ------------- ------------- -------------
Income Plus $ $208,464 $207,011 $201,015
--------------------------- ------------- ------------ ------------- ------------- -------------
Tax-Exempt $ -- $17,985 $39,027
--------------------------- ------------- ------------ ------------- ------------- -------------
<FN>
* No information is included for the Blue Chip, Dividend Growth,
Mid-Cap Opportunities, Mid-Cap Summit and Small Cap Frontier Funds
as they did not commence operations until March 1, 1999.
</FN>
</TABLE>
AUSA Holding Company ("AUSA") owns 100% of the outstanding stock of IMI.
AUSA also owns 100% of the outstanding shares of the Fund's distributor and
transfer agent. AUSA is wholly-owned by AEGON USA, Inc., a financial services
holding company located at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.
AEGON USA, Inc. is a wholly-owned indirect subsidiary of AEGON nv, a Netherlands
corporation and publicly traded international insurance group.
Each of the sub-advisers also serves as investment adviser or sub-adviser
to other funds and/or private accounts which may have investment objectives
identical or similar to that of the Funds. Securities frequently meet the
investment objectives of one or all of these Funds, the other funds and the
private accounts. In such cases, a sub-adviser's decision to recommend a
purchase to one fund or account rather than another is based on a number of
factors. The determining factors in most cases are the amounts available for
investment by each Fund or account, the amount of securities of the issuer then
outstanding, the value of those securities and the market for them. Another
factor considered in the investment recommendations is other investments which
each fund or account presently has in a particular industry.
It is possible that at times identical securities will be held by more
than one Fund or account. However, positions in the same issue may vary and the
length of time that any Fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that more than one of the Funds or
private accounts served by a sub-adviser seeks to acquire or sell
43
<PAGE>
the same security at about the same time, either the price obtained by the Funds
or the amount of securities that may be purchased or sold by a Fund at one time
may be adversely affected. On the other hand, if the same securities are bought
or sold at the same time by more than one Fund or account, the resulting
participation in volume transactions could produce better executions for the
Funds. In the event more than one Fund or account purchases or sells the same
security on a given date, the purchase and sale transactions are allocated among
the Fund(s), the other Funds and the private accounts in a manner believed by
the sub-advisers to be equitable to each.
DISTRIBUTOR
IDEX Mutual Funds has entered into an Underwriting Agreement with
InterSecurities, Inc., located at 570 Carillon Parkway, St. Petersburg, Florida
33716 ("ISI") to act as the principal underwriter of the shares of the Funds.
The Underwriting Agreement will continue from year to year so long as its
continuance is approved at least annually in the same manner as the Investment
Advisory Agreements discussed above. A discussion of ISI's responsibilities and
charges as principal underwriter of Fund shares is set forth in the Prospectus.
<TABLE>
UNDERWRITING COMMISSIONS*
----------------- ----------------- ------------------ ----------- ------------
NAME OF PRINCIPAL NET UNDERWRITING COMPENSATION ON BROKERAGE OTHER
FUND UNDERWRITER DISCOUNTS AND REDEMPTIONS AND COMMISSIONS COMPENSATION
COMMISSIONS REPURCHASES
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Aggressive Growth
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
International Equity
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
Capital Appreciation
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
Global
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
Growth
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
C.A.S.E.
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
Value Equity
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
Strategic Total
Return
- ---------------------- ----------------- ----------------- ------------------ ----------- ------------
Tactical Asset
Allocation
- ---------------------- ---------------- ----------------- ----------------- ------------ -----------
Balanced
- ---------------------- ---------------- ----------------- ------------------ ------------ -----------
Flexible Income
- ---------------------- ---------------- ----------------- ------------------ ------------ -----------
Income Plus
- ---------------------- ---------------- ----------------- ------------------ ------------ -----------
Tax-Exempt
- ---------------------- ---------------- ----------------- ------------------ ------------ -----------
<FN>
* No information is included for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit and Small Cap Frontier Funds as they did not
commence operations until March 1, 1999.
</FN>
</TABLE>
ADMINISTRATIVE SERVICES
IMI is responsible for the supervision all of the administrative
functions, providing office space, and paying its allocable portion of the
salaries, fees and expenses of all Fund officers and of those trustees who are
affiliated with IMI. The costs and expenses, including legal and accounting
fees, filing fees and printing costs in connection with the formation of a Fund
and the preparation and filing of a Fund's initial registration statements under
the 1933 Act and 1940 Act are also paid by the adviser.
IMI has entered into an Administrative Services Agreement
("Administrative Agreement") with ISI applicable to each Fund. Under each
Administrative Agreement, ISI carries out and supervises all of the
administrative functions of the Funds and incurs IMI's expenses related to such
functions. The basic fee arrangement and allocation of responsibilities is set
forth in the Prospectus.
44
<PAGE>
The administrative duties of ISI with respect to each Fund include:
providing the Fund with office space, telephones, office equipment and supplies;
paying the compensation of the Fund's officers for services rendered as such;
supervising and assisting in preparation of annual and semi-annual reports to
shareholders, notices of dividends, capital gain distributions and tax
information; supervising compliance by the Fund with the recordkeeping
requirements under the 1940 Act and regulations thereunder and with the state
regulatory requirements; maintaining books and records of the Fund (other than
those maintained by the Fund's custodian and transfer agent); preparing and
filing tax returns and reports; monitoring and supervising relationships with
the Fund's custodian and transfer agent; monitoring the qualifications of tax
deferred retirement plans providing for investment in shares of the Fund;
authorizing expenditures and approving bills for payment on behalf of the Fund;
and providing executive, clerical and secretarial help needed to carry out its
duties.
CUSTODIAN, TRANSFER AGENT AND OTHER AFFILIATES
Investors Fiduciary Trust Company ("IFTC"), 801 Pennsylvania, Kansas
City, Missouri 64105-1307, is Custodian for the Fund. The Custodian is not
responsible for any of the investment policies or decisions of a Fund, but holds
its assets in safekeeping, and collects and remits the income thereon subject to
the instructions of the Funds.
Idex Investor Services, Inc., P. O. Box 9015, Clearwater, Florida
33758-9015, is the Funds' transfer agent, withholding agent and dividend
disbursing agent. Idex Investor Services, Inc. is a wholly-owned subsidiary of
AUSA Holding Company and thus is an affiliate of IMI and AEGON Management. Each
Fund pays the transfer agent an annual per-account charge of $________ for each
of its shareholder accounts in existence, $______ for each new account opened
and $_______ for each closed account.
DST Systems Inc. ("DST"), provider of data processing and recordkeeping
services for the Fund's transfer agent, is a partially-owned subsidiary of
Kansas City Southern Industries ("KCSI") and, thus, is an affiliate of IMI and
Janus Capital. Each Fund may use another affiliate of DST as introducing broker
for certain portfolio transactions as a means to reduce expenses through a
credit against transfer agency fees with regard to commissions earned by such
affiliate. (See "Fund Transactions and Brokerage.")
<TABLE>
<CAPTION>
TRANSFER AGENCY FEES*
- -------------------------- --------------------------------------------------- ---------------------------------------------
FEES AND EXPENSES NET OF BROKERAGE CREDITS BROKERAGE CREDITS RECEIVED
- -------------------------- ------------------------------------- ------------- ---------------------------------------------
OCTOBER 31 SEPTEMBER 30 OCTOBER 31 SEPTEMBER 30
- -------------------------- ------------------------------------- ------------- ----------------------------- ---------------
FUND 1998 1997 1996 1996 1998 1997 1996 1996
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth $217,941 $141,668 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
International Equity $11,583 N/A -- N/A N/A
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Capital Appreciation $133,515 $61,086 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Global $628,833 $379,409 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Growth $2,811,027 $1,537,321 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
C.A.S.E. $32,500 $8,930 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Value Equity $20,957 N/A -- N/A N/A
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Strategic Total Return $89,918 $40,189 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Tactical Asset Allocation $71,335 $25,499 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Balanced $48,876 $26,374 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Flexible Income $48,615 $51,078 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Income Plus $86,126 $113,654 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
Tax-Exempt $34,786 $40,367 -- -- --
- -------------------------- ----------- ------------ ------------ ------------- -------- ---------- --------- ---------------
<FN>
* No information is included for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit and Small Cap Frontier Funds as they did not
commence operations until March 1, 1999.
</FN>
</TABLE>
45
<PAGE>
ADMINISTRATIVE FEES*
- ------------------------------------------------------------------
ADMINISTRATIVE FEES FOR PERIOD ENDED
FUND OCTOBER 31, 1998
- -------------------------- ---------------------------------------
Aggressive Growth
- -------------------------- ---------------------------------------
International Equity
- -------------------------- ---------------------------------------
Capital Appreciation
- -------------------------- ---------------------------------------
Global
- -------------------------- ---------------------------------------
Growth
- -------------------------- ---------------------------------------
C.A.S.E.
- -------------------------- ---------------------------------------
Value Equity
- -------------------------- --------------------------------------
Strategic Total Return
- -------------------------- --------------------------------------
Tactical Asset Allocation
- -------------------------- -------------------------------------
Balanced
- -------------------------- --------------------------------------
Flexible Income
- -------------------------- --------------------------------------
Income Plus
- -------------------------- --------------------------------------
Tax-Exempt
- -------------------------- --------------------------------------
*No information is included for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit or Small Cap Frontier Funds as these Funds
commenced operation on March 1, 1999.
FUND TRANSACTIONS AND BROKERAGE
Decisions as to the assignment of Fund business for each of the Funds and
negotiation of commission rates are made by a Fund's sub-adviser, whose policy
is to obtain the "best execution" (prompt and reliable execution at the most
favorable security price) of all Fund transactions. The Advisory Agreement and
Investment Counsel Agreement for each Fund specifically provide that in placing
portfolio transactions for a Fund, the Fund's sub-adviser may agree to pay
brokerage commissions for effecting a securities transaction in an amount higher
than another broker or dealer would have charged for effecting that transaction
as authorized, under certain circumstances, by the Securities Exchange Act of
1934.
In selecting brokers and dealers and in negotiating commissions, a Fund's
sub-adviser considers a number of factors, including but not limited to:
/bullet/ The sub-adviser's knowledge of currently available negotiated
commission rates or prices of securities and other current
transaction costs;
/bullet/ The nature of the security being traded;
/bullet/ The size and type of the transaction;
/bullet/ The nature and character of the markets for the security to be
purchased or sold;
/bullet/ The desired timing of the trade;
/bullet/ The activity existing and expected in the market for the
particular security;
/bullet/ The quality of the execution, clearance and settlement services;
/bullet/ Financial stability;
/bullet/ The existence of actual or apparent operational problems of any
broker or dealer; and
/bullet/ Research products and services provided.
In recognition of the value of the foregoing factors, the sub-adviser may
place portfolio transactions with a broker with whom it has negotiated a
commission that is in excess of the commission another broker would have charged
for effecting that transaction. This is done if the sub-adviser determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research provided by such broker viewed in terms of
either that particular transaction or of the overall responsibilities of the
sub-adviser. Research provided may include:
/bullet/ Furnishing advice, either directly or through publications or
writings, as to the value of securities, the advisability of
purchasing or selling specific securities and the availability of
securities or purchasers or sellers of securities;
46
<PAGE>
/bullet/ Furnishing seminars, information, analyses and reports concerning
issuers, industries, securities, trading markets and methods,
legislative developments, changes in accounting practices,
economic factors and trends and portfolio strategy;
/bullet/ Access to research analysts, corporate management personnel,
industry experts, economists and government officials; and
/bullet/ Comparative performance evaluation and technical measurement
services and quotation services, and other services (such as
third party publications, reports and analyses, and computer and
electronic access, equipment, software, information and
accessories that deliver process or otherwise utilize
information, including the research described above) that assist
the sub-adviser in carrying out its responsibilities.
Most of the brokers and dealers used by the Fund's sub-advisers provide
research and other services described above.
A sub-adviser may use research products and services in servicing other
accounts in addition to the Funds. If a sub-adviser determines that any research
product or service has a mixed use, such that it also serves functions that do
not assist in the investment decision-making process, a sub-adviser may allocate
the costs of such service or product accordingly. The portion of the product or
service that a sub-adviser determines will assist it in the investment
decision-making process may be paid for in brokerage commission dollars. Such
allocation may be a conflict of interest for a sub-adviser.
When a Fund purchases or sells a security in the over-the-counter market,
the transaction takes place directly with a principal market-maker without the
use of a broker, except in those circumstances where better prices and
executions will be achieved through the use of a broker.
A sub-adviser may also consider the sale or recommendation of a Fund's
shares by a broker or dealer to its customers as a factor in the selection of
brokers or dealers to execute portfolio transactions. In placing portfolio
business with brokers or dealers, a sub-adviser will seek the best execution of
each transaction, and all such brokerage placement must be consistent with the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
A sub-adviser may place transactions for the purchase or sale of portfolio
securities with affiliates of IMI, ISI or the sub-adviser, including DST
Securities, Inc., or Fred Alger & Company, Incorporated. It is anticipated that
Fred Alger & Company, Incorporated, an affiliate of Alger Management, will serve
as the Aggressive Growth Fund's broker in effecting substantially all of the
Aggressive Growth Fund's transactions on securities exchanges and will retain
commissions in accordance with certain regulations of the Securities and
Exchange Commission ("SEC"). A sub-adviser may place transactions if it
reasonably believes that the quality of the transaction and the associated
commission are fair and reasonable, and if overall the associated transaction
costs, net of any credits described above under "Custodian, Transfer Agent and
Other Affiliates," are lower than those that would otherwise be incurred. Under
rules adopted by the SEC, the Funds' Board of Trustees will conduct periodic
compliance reviews of such brokerage allocations and review certain procedures
adopted by the Board of Trustees to ensure compliance with these rules and to
determine their continued appropriateness. For the fiscal year ended October 31,
1998, the Aggressive Growth Fund paid the following commissions to Fred Alger &
Company, Incorporated:
<TABLE>
-------------------------------------------------------------------- --------------
COMMISSIONS PAID:
-------------------------------------------------------------------- --------------
<S> <C>
Fiscal 1998 $
-------------------------------------------------------------------- --------------
Fiscal 1998 Percentages: %
Commissions with affiliates to total commissions
-------------------------------------------------------------------- --------------
Value of brokerage transactions with affiliates to value of total %
brokerage transactions
-------------------------------------------------------------------- --------------
</TABLE>
As of October 31, 1998, the Balanced Fund owned $_______ of the common
stock of Charles Schwab and Company, Inc. Charles Schwab and Company, Inc. is
one of the ten brokers or dealers that received the greatest dollar amount of
brokerage commissions from the Balanced Fund during the fiscal year ended
October 31, 1998.
47
<PAGE>
As of October 31, 1998, the Strategic Total Return Fund owned a total of
$ of the common stock of Merrill Lynch and Company, Inc., which is one of the
ten brokers or dealers that received the greatest dollar amount of brokerage
commissions from the Strategic Total Return Fund during fiscal year ended
October 31, 1998.
48
<PAGE>
<TABLE>
<CAPTION>
BROKERAGE COMMISSIONS
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
BROKERAGE COMMISSIONS PAID AGGRESSIVE INTERNATIONAL CAPITAL
(including Affiliated Brokerage) GROWTH EQUITY APPRECIATION GLOBAL GROWTH C.A.S.E. VALUE EQUITY
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1998 $ $ $ $ $ $ $
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
October 31, 1997 $79,346 $6,337 $108,748 $119,665 $1,301,654 $34,840 $10,553
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
October 31, 1996 $5,156 N/A $14,114 $9,638 $34,732 $3,469 N/A
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
September, 1996 $43,591 N/A $109,526 $109,328 $314,230 $50,714 N/A
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
AFFILIATED BROKERAGE PAID
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
October 31, 1998 $ $ $ $ $ $ $
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
October 31, 1997 $78,761 -- -- -- -- -- --
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
October 31, 1996 $4,711 N/A -- -- -- -- N/A
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
September, 1996 $42,819 N/A -- -- -- -- N/A
- --------------------------------- ------------- -------------- ------------- ----------- ------------ ---------- -------------
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
BROKERAGE COMMISSIONS PAID STRATEGIC TACTICAL FLEXIBLE
(including Affiliated Brokerage) TOTAL RETURN ASSET BALANCED INCOME INCOME PLUS TAX-EXEMPT
ALLOCATION
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
October 31, 1998 $ $ $ $ $ $
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
October 31, 1997 $26,187 $48,786 $42,482 $101,213 -- --
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
October 31, 1996 $2,089 $2,800 $1,291 --- -- --
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
September, 1996 $16,340 $34,335 $37,881 $27,515 -- --
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
AFFILIATED BROKERAGE PAID
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
October 31, 1998
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
October 31, 1997 -- -- -- -- -- --
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
October 31, 1996 -- -- -- -- -- --
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
September, 1996 -- -- -- -- -- --
- ---------------------------------- --------------- -------------- -------------- --------------- -------------- ---------------
</TABLE>
During the fiscal year ended October 31, 1998, Growth, Global, Balanced,
Capital Appreciation, Strategic Total Return, Tactical Asset Allocation,
C.A.S.E., Value Equity and International Equity Funds had transactions in the
amounts of $____ , $____ , $____ , $____ , $____ , $____ , $____ , $____ and
$____ , respectively, which resulted in brokerage commission of $____ , $____ ,
$____ , $____ , $____ , $____ , $____ , $____ and $____ , respectively, that
were directed to brokers for brokerage and research services provided.
49
<PAGE>
TRUSTEES AND OFFICERS
The Fund is run by a Board of Trustees. Subject to the supervision of
the Board of Trustees, the assets of each Fund are managed by investment
advisers and sub-advisors, and by Fund managers. The Board of Trustees is
responsible for managing the business and affairs of the Fund. It oversees the
operation of the Fund by its officers. It also reviews the management of the
Funds' assets by the investment advisers and sub-advisers. Information about the
Trustees and officers of the Fund is as follows:
- ----------
Peter R. Brown
1475 Belcher Road South
Largo, FL 33771
05/10/28
Trustee of IDEX Mutual Funds; Director of WRL Series Fund, Inc. (investment
company); Chairman of the Board of Peter Brown Construction Co., Largo, FL
(construction, contractors and engineers); Rear Admiral (Retired), U.S. Navy
Reserve, Civil Engineer Corps.
- ----------
Daniel Calabria
7068 S. Shore Drive S.
South Pasadena, FL 33707-4605
03/05/36
Trustee of IDEX Mutual Funds; Trustee (1993 - present) and President (1993 -
1995) of The Florida Tax Free Funds (mutual funds); Director (1996 - present) of
ASM Fund (mutual fund); currently retired; formerly President and Director
(1995) of Sun Chiropractic Clinics, Inc. (medical services); Executive Vice
President (1993 - 1995) of William R. Hough & Co. (investment adviser, municipal
bond and underwriting firm); President/CEO (1986 - 1992) of Templeton Funds
Management, Inc. (investment advisers); and Vice President (1986 - 1992) of all
U.S. Templeton Funds (mutual funds).
- ---------
James L. Churchill
12 Lavington Road
Long Cove
Hilton Head, SC 29928
05/07/30
Trustee of IDEX Mutual Funds; currently retired 1990 to present.
- ---------
Thomas E. Pierpan(2)
10/18/43
Vice President, Associate General Counsel and Secretary (December 1997 -
present), of IDEX Mutual Funds; Vice President, Associate General Counsel and
Secretary (December 1997 - present), Assistant Secretary (March 1995 - December
1997) of WRL Series Fund, Inc. (investment company); Assistant Vice President,
Counsel and Assistant Secretary of InterSecurities, Inc. (November 1997 -
present) (broker-dealer); Vice President (November 1993 - present), Associate
General Counsel (February 1995 - present) and Assistant Secretary (February 1995
- - present), Assistant Vice President (November 1992 - November 1993) Western
Reserve Life Assurance Co. of Ohio (life insurance).
50
<PAGE>
- ----------
Charles C. Harris
35 Winston Drive
Clearwater, FL 33756
07/15/30
Trustee of IDEX Mutual Funds; Director (March 1994 - present) of WRL Series
Fund, Inc. (investment company); currently retired (1988 - present).
51
<PAGE>
- ---------
G. John Hurley(2)
09/12/48
President and Chief Executive Officer (September 1990 to present) and Trustee
(June 1990 to present) of IDEX Mutual Funds; Executive Vice President (June 1993
to present) and Director (March 1994 to present) of WRL Series Fund, Inc.
(investment company); President, Chief Executive Officer and Director (May 1988
to present) of InterSecurities, Inc. (broker-dealer); President (September 1992
to present) of ISI Insurance Agency, Inc.; Executive Vice President (April 1993
to present) of Western Reserve Life Assurance Co. of Ohio (life insurance);
President, Chief Executive Officer and Director (September 1990 to present) and
Executive Vice President and Director (May 1988 to September 1990) of Idex
Management, Inc. (investment adviser); President and Director (May 1988 to
present) of Idex Investor Services, Inc. (transfer agent).
- ----------
John R. Kenney(2)
02/08/38
Trustee (1987 to present) and Chairman (December 1989 to present), of IDEX
Mutual Funds; Chairman of the Board (1986 to present) of WRL Series Fund, Inc.
(investment company); Director (December 1990 to present) of Idex Management,
Inc. (investment adviser); Chairman (1988 to present) and Director (1985 to
present) of InterSecurities, Inc. (broker-dealer); Director (October 1992 to
present) of ISI Insurance Agency, Inc.; Chairman, President and Chief Executive
Officer (1992 to present) of Western Reserve Life Assurance Co. of Ohio (life
insurance); Senior Vice President (May 1992 to present) of AEGON USA, Inc.
(financial services holding company). Mr. Kenney is also the brother-in-law of
Jack Zimmerman, a trustee of the Fund.
- ---------
Julian A. Lerner
One Spurling Plaza, Suite 208
12850 Spurling Road
Dallas, TX 75230
11/12/24
Trustee of IDEX Mutual Funds; currently retired; Trustee of American Skandia
Trust; Director of American Skandia Advisory Funds; Trustee of American Skandia
Master Trust; Director of Atlas Assets, Inc. (mutual fund); Trustee of Atlas
Insurance Trust (variable annuity); formerly Investment Consultant (1995 - 1996)
and Sr. Vice President (1987 - 1995) of Aim Capital Management (investment
adviser).
- ---------
Thomas R. Moriarty(2)
05/03/51
Senior Vice President (March 1995 to present), Treasurer and Principal Financial
Officer (December 1996 to present) and Vice President and Principal Accounting
Officer (November 1990 to March 1995) of IDEX Mutual Funds; Senior Vice
President (June 1991 to present) of InterSecurities, Inc. (broker-dealer);
Senior Vice President (September 1992 to present) of ISI Insurance Agency, Inc.;
President (November 1990 to present) of PW Securities, Inc. (broker-dealer);
Senior Vice President (June 1991 to present) of Idex Investor Services, Inc.
(transfer agent); Vice President (November 1990 to present) of Idex Management,
Inc. (investment adviser); Vice President (June 1993 to present) of Western
Reserve Life Assurance Co. of Ohio (life insurance).
52
<PAGE>
- ----------
Christopher G. Roetzer(2)
01/11/63
Vice President, Assistant Treasurer and Principal Accounting Officer (March 1997
to Present); Principal Accounting Officer (March 1995 to March 1997) and
Assistant Vice President (November 1990 to March 1997) of IDEX Mutual Funds;
Assistant Vice President and Controller (May 1988 to present) of
InterSecurities, Inc. (broker-dealer); Assistant Vice President (September 1992
to present) of ISI Insurance Agency, Inc.; Assistant Vice President and
Controller (May 1988 to present) of Idex Investor Services, Inc. (transfer
agent); Assistant Vice President (November 1990 to present) of Idex Management,
Inc. (investment adviser).
- ---------
William W. Short, Jr.
12420 73rd Court
Largo, FL 33773
02/25/36
Trustee of IDEX Mutual Funds; President and sole shareholder of Shorts, Inc.
(men's retail apparel); Chairman of Southern Apparel Corporation and S.A.C.
Apparel Corporation and S.A.C. Distributors (nationwide wholesale apparel
distributors), Largo, Florida; Member of Advisory Board of Barnett Banks of
Pinellas County; Trustee of Morton Plant Hospital Foundation; former Chairman of
Advisory Board of First Florida Bank, Pinellas County, Florida.
- ---------
Jack E. Zimmerman
507 Saint Michel Circle
Kettering, OH 45429
02/03/28
Trustee of IDEX Mutual Funds; Director (1987 to present), Western Reserve Life
Assurance Co. of Ohio (life insurance); currently retired; formerly, Director,
Regional Marketing (September 1986 to January 1993) Martin Marietta Corporation,
Dayton (aerospace industry).
- ------------------
(1) The principal business address of each person listed, unless otherwise
indicated, is P.O. Box 9015, Clearwater, FL 33758-9015.
(2) Interested Person (as defined in the 1940 Act) of the Fund.
The Fund pays no salaries or compensation to any of its officers, all of
whom are officers or employees of either ISI, IMI or their affiliates.
Disinterested Trustees (I.E., Trustees who are not affiliated with ISI, IMI or
any of the sub-advisers) receive for each regular Board meeting: (a) a total
annual retainer fee of $13,000 from the Funds, of which the Funds pay a pro rata
share allocable to each Fund based on the relative assets of the Fund; plus (b)
$2,250 and incidental expenses per meeting attended. Three of the Disinterested
Trustees have been elected to serve on the Fund's Audit Committee, which meets
twice annually. Each Audit Committee member receives a total of $250 per Audit
Committee meeting attended in addition to the regular meetings attended. In the
case of a Special Board Meeting, each of the Disinterested Trustees receives a
fee of $500 per special meeting attended, in addition to the regular meetings
attended. Any fees and expenses paid to Trustees who are affiliates of IMI or
ISI are paid by IMI and/or ISI and not by the Funds.
53
<PAGE>
Commencing on January 1, 1996, a non-qualified deferred compensation plan
(the "Plan") became available to Trustees who are not interested persons of the
Fund. Under the Plan, compensation may be deferred that would otherwise be
payable by the Fund and/or WRL Series Fund, Inc., to a Disinterested Trustee or
Director on a current basis for services rendered as Trustee or Director.
Deferred compensation amounts will accumulate based on the value of Class A
shares of a Fund (without imposition of sales charge), as elected by the
Trustee. It is not anticipated that the Plan will have any impact on the Funds.
The following table provides compensation amounts paid to
Disinterested Trustees of the Fund for the fiscal year ended October 31, 1998.
<TABLE>
<CAPTION>
COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------------------
AGGREGATE PENSION OR RETIREMENT BENEFITS TOTAL COMPENSATION PAID TO
COMPENSATION FROM ACCRUED AS PART OF FUND TRUSTEES FROM FUND COMPLEX**
NAME OF PERSON, POSITION IDEX SERIES FUND * EXPENSES
- -----------------------------------------------------------------------------------------------------------------------------------
FOR YEAR ENDING 10/31/98 AS OF 10/31/98 10/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Peter R. Brown, Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Daniel Calabria, Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
James L. Churchill, Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Charles C. Harris, Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Julian A. Lerner, Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
William W. Short, Jr., Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Jack E. Zimmerman, Trustee $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Total $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
Of this aggregate compensation, the total amounts deferred (including
earnings) and accrued for the benefit of the participating Trustees for
the year ending October 31, 1998 were as follows: Peter R. Brown, $____ ;
Daniel Calabria, $____ ; James L. Churchill, $____ ; and Jack E.
Zimmerman, $____ .
** The Fund Complex consists of IDEX Mutual Fund (including IDEX Fund and
IDEX Fund 3 prior to their reorganization into IDEX Mutual Funds on
September 20, 1996) and WRL Series Fund, Inc.
</FN>
</TABLE>
The Board of Trustees has adopted a policy whereby any Disinterested
Trustee of the Funds in office on September 1, 1990 who has served at least
three years as a trustee may, subject to certain limitations, elect upon his
resignation to serve as a trustee emeritus for a period of two years. A trustee
emeritus has no authority, power or responsibility with respect to any matter of
the Funds. While serving as such, a trustee emeritus is entitled to receive from
the Funds an annual fee equal to one-half the fee then payable per annum to
Disinterested Trustees of the Fund, plus reimbursement of expenses incurred for
attendance at Board meetings.
The Funds have an executive committee whose members currently are
John R. Kenney, G. John Hurley and Peter R. Brown. The executive committee may
perform all of the functions which may be performed by the Board of Trustees,
except as set forth in the Declaration of Trust and By-Laws of the Fund or as
prohibited by applicable law.
During the fiscal year ended October 31, 1998, the Fund paid $____ in
trustees fees and expenses, and no trustee emeritus fees or expenses. As of
January 30, 1999, the trustees and officers held in the aggregate less than 1%
of the outstanding shares of each of the Aggressive Growth, International
Equity, Capital Appreciation, Global, Growth, C.A.S.E., Value Equity, Strategic
Total Return, Tactical Asset Allocation, Balanced, Flexible Income, Income Plus
and Tax-Exempt Funds.
54
<PAGE>
PURCHASE OF SHARES
As stated in the Prospectus, each Fund offers investors a choice of
three classes of shares. (The Growth Fund also includes a fourth class, Class T
shares, which are not available for new investors.) Class A, Class B or Class C
shares of a Fund can be purchased through ISI or through broker-dealers or other
financial institutions that have sales agreements with ISI. Shares of each Fund
are sold at the net asset value per share as determined at the close of the
regular session of business on the New York Stock Exchange next occurring after
a purchase order is received and accepted by the Funds. (The applicable sales
charge is added in the case of Class A and Class T shares.) The Prospectus
contains detailed information about the purchase of Fund shares.
DISTRIBUTION PLANS
As stated in the Prospectus under "Investment Advisory and Other
Services," each Fund has adopted a separate Distribution Plan pursuant to Rule
12b-1 under the 1940 Act (individually, a "Plan" and collectively, the "Plans"),
applicable to Class A, Class B and Class C shares of the Fund. CLASS T SHARES OF
THE GROWTH FUND ARE NOT SUBJECT TO ANNUAL DISTRIBUTION AND SERVICE FEES.
In determining whether to approve the Distribution Plan and the
Distribution Agreement, the Trustees considered the possible advantages afforded
shareholders from adopting the Distribution Plan and Distribution Agreement. The
Trustees were informed by representatives of ISI that reimbursements of
distribution-related expenses by the Fund under the Distribution Plan would
provide incentives to ISI to establish and maintain an enhanced distribution
system whereby new investors will be attracted to the Funds. The Trustees
believe that improvements in distribution services should result in increased
sales of shares in the Funds. In turn, increased sales are expected to lead to
an increase in the Fund's net asset levels, which would enable the Funds to
achieve economies of scale and lower their per-share operating expenses. In
addition, higher net asset levels could enhance the investment management of the
Funds, for net inflows of cash from new sales may enable the Fund's investment
adviser and sub-adviser to take advantage of attractive investment
opportunities. Finally, reduced redemptions could eliminate the potential need
to liquidate attractive securities positions in order to raise the capital
necessary to meet redemption requests.
Under the Plans for Class A shares (the "Class A Plans"), a Fund may
pay ISI an annual distribution fee of up to 0.35% and an annual service fee of
up to 0.25% of the average daily net assets of a Fund's Class A shares; however,
to the extent that a Fund pays service fees, the amount which a Fund may pay as
a distribution fee is reduced accordingly so that the total fees payable under
the Class A Plan may not exceed on an annualized basis 0.35% of the average
daily net assets of a Fund's Class A shares.
Under the Plans for Class B shares (the "Class B Plans"), a Fund may
pay ISI an annual distribution fee of up to 0.75% and an annual service fee of
up to 0.25% of the average daily net assets of the Fund's Class B shares.
Under the Plans for Class C shares (the "Class C Plans"), a Fund may
pay ISI an annual distribution fee of up to 0.75% and an annual service fee of
up to 0.25% of the average daily net assets of the Fund's Class C shares;
however, the total fee payable pursuant to the Class C Plan may not on an
annualized basis, exceed 0.90% of the average daily net assets of the Fund's
Class C shares.
ISI may use the fees payable under the Class A, Class B and Class C
Plans as it deems appropriate to pay for activities or expenses primarily
intended to result in the sale of the Class A, Class B or Class C shares,
respectively, or in personal service to and/or maintenance of these shareholder
accounts. For each class, these activities and expenses may include, but are not
limited to:
/bullet/ Compensation to employees of ISI;
/bullet/ Compensation to and expenses of ISI and other selected
dealers who engage in or otherwise support the distribution
of shares or who service shareholder accounts;
/bullet/ The costs of printing and distributing prospectuses,
statements of additional information and reports for other
than existing shareholders; and
/bullet/ The cost of preparing, printing and distributing sales
literature and advertising materials.
55
<PAGE>
Under the Plans, as required by Rule 12b-1, the Board of Trustees
will review, at least quarterly, a written report provided by ISI of the amounts
expended by ISI in distributing and servicing Class A, Class B or Class C shares
of the Funds and the purpose for which such expenditures were made. For so long
as the Plans are in effect, selection and nomination of the Trustees who are not
interested persons of the Fund shall be committed to the discretion of the
Trustees who are not interested persons of the Fund.
A Plan may be terminated as to a class of shares of a Fund at any
time by vote of a majority of the non-interested Trustees, or by vote of a
majority of the outstanding voting securities of the applicable class. A Plan
may be amended by vote of the Trustees, including a majority of the
non-interested Trustees who are not interested persons of the Funds and have no
direct or indirect financial interest in the operation of the Plan or any
agreement relating thereto ("non-interested Trustees"), cast in person at a
meeting called for that purpose. Any amendment of a Plan that would materially
increase the costs to a particular class of shares of a Fund requires approval
by the shareholders of that class. A Plan will remain in effect for successive
one year periods, so long as such continuance is approved annually by vote of
the Funds' Trustees, including a majority of the non-interested Trustees, cast
in person at a meeting called for the purpose of voting on such continuance.
DISTRIBUTION FEES
Distribution related expenses incurred by ISI for the fiscal year
ended October 31, 1998 are listed in the table below. These expenses have been
partially reimbursed to ISI by a 12b-1 arrangement with the Funds.
56
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH INTERNATIONAL EQUITY CAPITAL APPRECIATION GLOBAL
------------------------------------------------------------------------------------------------------
A B C A B C A B C A B C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advertising $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Printing/mailing
Prospectuses to other
than current Shareholders $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Compensation to underwriters $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Compensation to dealers $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Compensation to sales $ $ $ $ $ $ $ $ $ $ $ $
personnel
- -----------------------------------------------------------------------------------------------------------------------------------
Interest or other finance $ $ $ $ $ $ $ $ $ $ $ $
charges
- -----------------------------------------------------------------------------------------------------------------------------------
Travel $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Office Expenses $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Administrative Processing $ $ $ $ $ $ $ $ $ $ $ $
Costs
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ $ $ $ $ $ $ $ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
GROWTH* C.A.S.E. VALUE EQUITY STRATEGIC TOTAL RETURN
-------------------------------------------------------------------------------------------------------
A B C A B C A B C A B C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advertising $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Printing/mailing
Prospectuses to other
than current shareholders $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation to underwriters $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation to dealers $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation to sales $ $ $ $ $ $ $ $ $ $ $ $
personnel
- ------------------------------------------------------------------------------------------------------------------------------------
Interest or other finance $ $ $ $ $ $ $ $ $ $ $ $
charges
- ------------------------------------------------------------------------------------------------------------------------------------
Travel $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Office Expenses $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Processing $ $ $ $ $ $ $ $ $ $ $ $
Costs
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
TACTICAL ASSET ALLOCATION BALANCED FLEXIBLE INCOME INCOME PLUS
-------------------------------------------------------------------------------------------------------
A B C A B C A B C A B C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advertising $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Printing/mailing
Prospectuses to other
than current Shareholders $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation to underwriters $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation to dealers $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation to sales $ $ $ $ $ $ $ $ $ $ $ $
personnel
- ------------------------------------------------------------------------------------------------------------------------------------
Interest or other finance $ $ $ $ $ $ $ $ $ $ $
charges
- ------------------------------------------------------------------------------------------------------------------------------------
Travel $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Office Expenses $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Processing $ $ $ $ $ $ $ $ $ $ $ $
Costs
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL $ $ $ $ $ $ $ $ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
---------------------------
TAX-EXEMPT
---------------------------
A B C
SHARES SHARES SHARES
-----------------------------------------------------------
Advertising $ $ $
-----------------------------------------------------------
Printing/mailing
Prospectuses to other than
current Shareholders $ $ $
-----------------------------------------------------------
Compensation to underwriters $ $ $
-----------------------------------------------------------
Compensation to dealers $ $ $
-----------------------------------------------------------
Compensation to sales personnel $ $ $
-----------------------------------------------------------
Interest or other finance $ $ $
charges
-----------------------------------------------------------
Travel $ $ $
-----------------------------------------------------------
Office Expenses $ $ $
-----------------------------------------------------------
Administrative Processing Costs $ $ $
-----------------------------------------------------------
TOTAL $ $ $
-----------------------------------------------------------
* Class T shares of the Growth Fund are not subject to annual
distribution and service fees.
No expenses are listed for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit or Small Cap Frontier Funds as these Funds
commenced operations March 1, 1999.
NET ASSET VALUE DETERMINATION
Net asset value is determined separately for each class of shares of a Fund on
each day as of the close of the regular session of business on the New York
Stock Exchange (the "Exchange"), currently 4:00 p.m. Eastern Time, Monday
through Friday, except on: (i) days on which changes in the value of portfolio
securities will not materially affect the net asset value of a particular class
of shares of the Fund; (ii) days during which no shares of a Fund are tendered
for redemption and no orders to purchase shares of that Fund are received; or
(iii) customary national holidays on which the Exchange is closed. The per share
net asset value of each class of shares of a Fund is determined by dividing the
total value of the Fund's securities, receivables and other assets allocable to
that class by the total number of shares outstanding of that class. The public
offering price of a Class A, Class B, Class C or Class T share of a Fund is the
net asset value per share plus, the applicable sales charge in the case of Class
A or Class T shares. Investment securities are valued at the closing price for
securities traded on a principal securities exchange (U.S. or foreign), or on
the NASDAQ National Market. Investment securities traded on the over-the-counter
market and listed securities for which no sales are reported for the trading
period immediately preceding the time of determination are valued at the last
bid price. Foreign currency denominated assets and liabilities are converted
into U.S. dollars at the closing exchange rate each day. Other securities for
which quotations are not readily available are valued at fair values determined
in such manner as a Fund's sub-adviser, under the supervision of the Board of
Trustees, decides in good faith. (No information is included in the chart below
for the Blue Chip, Dividend Growth, Mid-Cap Opportunities, Mid-Cap Summit or
Small Cap Frontier Funds as these Funds commenced operations March 1, 1999.)
58
<PAGE>
<TABLE>
<CAPTION>
OFFERING PRICE PER SHARE CALCULATED AS FOLLOWS:
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ADD MAXIMUM AMOUNT OF SALES
AS OF OCTOBER 31, 1998 (NET ASSETS SHARES OUTSTANDING) SELLING CHARGE
COMMISSIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AGGRESSIVE GROWTH
OFFERING PRICE PER SHARE
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % $
Class C $ % $
- ---------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % $
- ---------------------------------------------------------------------------------------------------------------------------------
GLOBAL
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
GROWTH
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
Class T $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
C.A.S.E.
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
VALUE EQUITY
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
STRATEGIC TOTAL RETURN
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
TACTICAL ASSET ALLOCATION
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCED
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
FLEXIBLE INCOME
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME PLUS
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT
- ---------------------------------------------------------------------------------------------------------------------------------
Class A $ % % $
Class B $ % % $
Class C $ % % $
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
DIVIDENDS AND OTHER DISTRIBUTIONS
An investor may choose among several options with respect to dividends and
capital gain distributions payable to the investor. Dividends or other
distributions will be paid in full and fractional shares at the net asset value
determined as of the ex-dividend date unless the shareholder has elected another
distribution option as described in the Prospectus. Transaction confirmations
and checks for payments designated to be made in cash generally will be mailed
on the payable date. The per share income dividends on Class B and Class C
shares of a Fund are anticipated to be lower than the per share income dividends
on Class A shares of that Fund, (and Class T shares of the Growth Fund) as a
result of higher distribution and service fees applicable to the Class B and
Class C shares.
SHAREHOLDER ACCOUNTS
Detailed information about general procedures for Shareholder Accounts and
specific types of accounts is set forth in the Prospectus.
RETIREMENT PLANS
The Funds offer several types of retirement plans that an investor may
establish to invest in shares of a Fund with tax deductible dollars. Prototype
retirement plans for both corporations and self-employed individuals, and for
Individual Retirement Accounts, Code Section 401(k) Plans and Simplified
Employee Pension Plans are available by calling or writing IDEX Customer
Service. These plans require the completion of separate applications which are
also available from IDEX Customer Service. Investors Fiduciary Trust Company
("IFTC"), Kansas City, Missouri, acts as the custodian or trustee under these
plans for which it charges an annual fee of up to $15.00 on each such account
with a maximum of $30.00 per tax identification number. However, if your
retirement plan is under custody of IFTC and your combined retirement account
balances per taxpayer ID number are more than $50,000, there is generally no
fee. Shares of a Fund are also available for investment by Code Section
403(b)(7) retirement plans for employees of charities, schools, and other
qualifying employers. The Tax Exempt Fund is not well-suited as an investment
vehicle for tax-deferred retirement plans which cannot benefit from tax-exempt
income and whose distributed earnings are taxable to individual recipients as
ordinary income. To receive additional information or forms on these plans,
please call IDEX Customer Service at (888) 233-4339 (toll free) or write the
Idex Investor Services, Inc. at P. O. Box 9015, Clearwater, Florida 33758-9015.
No contribution to a retirement plan can be made until the appropriate forms to
establish the plan have been completed. It is advisable for an investor
considering the funding of any retirement plan to consult with an attorney,
retirement plan consultant or financial or tax advisor with respect to the
requirements of such plans and the tax aspects thereof.
REDEMPTION OF SHARES
Shareholders may redeem their shares at any time at any price equal to the
net asset value per share next determined following receipt of a valid
redemption order by the transfer agent, in proper form. Payment will ordinarily
be made within three days of the receipt of a valid redemption order. The value
of shares on redemption may be more or less than the shareholder's cost,
depending upon the market value of the Fund's net assets at the time of
redemption. CLASS B SHARES, CLASS C SHARES PURCHASED AFTER FEBRUARY 28, 1999 AND
CERTAIN CLASS A SHARE PURCHASES ARE ALSO SUBJECT TO A CONTINGENT DEFERRED SALES
CHARGE UPON CERTAIN REDEMPTIONS. THE PROSPECTUS DESCRIBES THE REQUIREMENTS AND
PROCEDURES FOR THE REDEMPTION OF SHARES.
Shares will normally be redeemed for cash, although each Fund retains the
right to redeem its shares in-kind under unusual circumstances in order to
protect the interests of the remaining shareholders by the delivery of
securities selected from its assets at its discretion. The Fund has, however,
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the
Fund is obligated to redeem shares solely in cash up to the lesser of $250,000
or 1% of the net asset value of a Fund during any 90-day period for any one
shareholder. Should redemptions by any shareholder exceed such limitation, the
Funds will have the option of redeeming the excess in cash or in kind. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage costs in
converting the assets to cash. The method of valuing securities used to make
redemptions in kind will be the same as the method of valuing portfolio
securities described under "Net Asset Value Determination," and such valuation
will be made as of the same time the redemption price is determined. Upon any
distributions in-kind, shareholders may appeal the valuation of such securities
by writing to the Funds.
Redemption of shares may be suspended, or the date of payment may be
postponed, whenever: (1) trading on the Exchange is restricted, as determined by
the SEC, or the Exchange is closed except for holidays and weekends; (2) the SEC
permits such suspension and so orders; or (3) an emergency exists as determined
by the SEC so that disposal of securities and determination of net asset value
is not reasonably practicable.
The Contingent Deferred Sales Charge ("CDSC") is waived on redemptions of
Class B and Class C shares in the circumstances described below:
60
<PAGE>
(a) REDEMPTION UPON TOTAL DISABILITY OR DEATH
The Fund will waive the CDSC on redemptions following the death or total
disability (as evidenced by a determination of the federal Social Security
Administration) of a Class B or C shareholder, but in the case of total
disability only as to shares owned at the time of the initial determination of
disability. The Transfer Agent or Distributor will require satisfactory proof of
death or disability before it determines to waive the CDSC.
(b) REDEMPTION PURSUANT TO A FUND'S SYSTEMATIC WITHDRAWAL PLAN
A shareholder may elect to participate in a systematic withdrawal plan
("Plan") with respect to the shareholder's investment in the Fund. Under the
Plan, a dollar amount of a participating shareholder investment in the Fund will
be redeemed systematically by the Fund on a periodic basis, and the proceeds
paid in accordance with shareholder's instructions. The amount to be redeemed
and frequency of the systematic withdrawals will be specified by the shareholder
upon his or her election to participate in the Plan. The CDSC will be waived on
redemptions made under the Plan subject to the limitations described below.
The amount of a shareholder's investment in a Fund at the time election to
participate in the Plan is made with respect to the Fund is hereinafter referred
to as the "Initial Account Balance." The amount to be systematically redeemed
from a Fund without the imposition of a CDSC may not exceed a maximum of 12%
annually of the shareholder's Initial Account Balance. The Funds reserve the
right to change the terms and conditions of the Plan and the ability to offer
the Plan.
(c) REINVESTMENT PRIVILEGE
The CDSC is also waived on redemption of Class B or C shares as it relates
to the reinvestment of redemption proceeds in the same class of shares of
another IDEX Fund within 90 days after redemption.
(d) CERTAIN RETIREMENT PLAN WITHDRAWALS
The Fund will waive the CDSC on withdrawals from IRS qualified and
nonqualified retirement plans, individual retirement accounts, tax- sheltered
accounts, and deferred compensation plans, where such withdrawals are permitted
under the terms of the plan or account (E.G., attainment of age 59-1/2,
separation from service, death, disability, loans, hardships, withdrawals of
excess contributions pursuant to applicable IRS rules or withdrawals based on
life expectancy under applicable IRS rules). This waiver does not include
transfer of asset redemptions, broker directed accounts or omnibus accounts.
TAXES
Each Fund has qualified, and intends to continue to qualify, for
treatment as a regulated investment company ("RIC") under the Internal Revenue
Code of 1986, as amended (the "Code"). In order to qualify for that treatment,
each Fund must distribute to its shareholders for each taxable year at least 90%
of its investment company taxable income (consisting generally of taxable net
investment income and net short-term capital gain) and must meet several
additional requirements. With respect to each Fund, these requirements include
the following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of securities, or other income
(including gains from futures contracts) derived with respect to its business of
investing in securities; (2) the Fund must derive less than 30% of its gross
income each taxable year from the sale or other disposition of securities or
futures contracts that were held for less than three months (the "Short-Short
Limitation") (however, this requirement has been repealed for tax years
beginning after August 5, 1997); (3) at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, U.S. government securities, securities of other RICs and
other securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the outstanding voting
securities of the issuer; and (4) at the close of each quarter of the Fund's
taxable year, not more than 25% of the value of its total assets may be invested
in securities (other than U.S. government securities or the securities of other
RICs) of any one issuer.
A Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts. Each Fund
intends to distribute annually a sufficient amount of any taxable income and
capital gains so as to avoid liability for this excise tax.
61
<PAGE>
If the Tax-Exempt Fund invests in any instruments that generate taxable
income, distributions of the interest earned thereon will be taxable to that
Fund's shareholders as ordinary income to the extent of its earnings and
profits. Moreover, if that Fund realizes capital gains as a result of market
transactions, any distributions of that gain also will be taxable to its
shareholders.
Proposals may be introduced before Congress for the purpose of
restricting or eliminating the federal income tax exemption for interest on
municipal securities. If such a proposal were enacted, the availability of
municipal securities for investment by the Tax-Exempt Fund and the value of its
portfolio securities would be affected. In that event, the Tax-Exempt Fund will
re-evaluate its investment objective and policies.
Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. However, tax conventions between
certain countries and the United States may reduce or eliminate these foreign
taxes, and foreign countries generally do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Global Fund's total assets at the close of its taxable year consists of
securities of foreign corporations, it will be eligible to, and may, file an
election with the Internal Revenue Service that will enable its shareholders, in
effect, to receive the benefit of the foreign tax credit with respect to any
foreign and U.S. possessions income taxes paid by it.
Pursuant to the election, a Fund will treat those taxes as dividends
paid to its shareholders and each shareholder will be required to: (1) include
in gross income, and treat as paid by him, his proportionate share of those
taxes; (2) treat his share of those taxes and of any dividend paid by the Fund
that represents income from foreign or U.S. possessions sources as his own
income from those sources; and (3) either deduct the taxes deemed paid by him in
computing his taxable income or, alternatively, use the foregoing information in
calculating the foreign tax credit against his federal income tax. The Global
Fund will report to its shareholders shortly after each taxable year their
respective shares of the income from sources within, and taxes paid to, foreign
countries and U.S. possessions if it makes this election.
Each Fund, except the Tax-Exempt Fund, may invest in the stock of
"passive foreign investment companies" ("PFICs"). A PFIC is a foreign
corporation that, in general, meets either of the following tests: (1) at least
75% of its gross income is passive; or (2) an average of at least 50% of its
assets produce, or are held for the production of, passive income. Under certain
circumstances, a Fund will be subject to federal income tax on a portion of any
"excess distribution" received on the stock of a PFIC or of any gain on
disposition of that stock (collectively "PFIC income"), plus interest thereon,
even if the Fund distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the Fund's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders. If a Fund invests in
a PFIC and elects to treat the PFIC as a "qualified electing fund," then in lieu
of the foregoing tax and interest obligation, the Fund will be required to
include in income each year its pro rata share of the qualified electing fund's
annual ordinary earnings and net capital gain (the excess of net long-term
capital gain over net short-term capital loss). This will occur even if they are
not distributed to the Fund and those amounts would be subject to the
distribution requirements described above. In most instances it will be very
difficult, if not impossible, to make this election because of certain
requirements thereof.
The use of hedging strategies, such as writing (selling) and purchasing
options and futures contracts and entering into forward contracts, involves
complex rules that will determine for income tax purposes the character and
timing of recognition of the income received in connection therewith by a Fund.
Income from foreign currencies (except certain gains therefrom that may be
excluded by future regulations), and income from transactions in options,
futures and forward contracts derived by a Fund with respect to its business of
investing in securities or foreign currencies, will qualify as permissible
income under the Income Requirement. However, income from the disposition of
foreign currencies that are not directly related to the Fund's principal
business of investing in securities (or options and futures with respect
thereto) also will be subject to the Short-Short Limitation if the securities
are held for less than three months; however, the Short-Short Limitation has
been repealed for federal tax purposes for tax years beginning after August 5,
1997. In states where the limitation has not been formally repealed, such as
California and Massachusetts, the states have indicated that they will not
enforce the limitation for tax years beginning after August 5, 1997.
If a Fund satisfies certain requirements, any increase in value on a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. Each
Fund intends that, when it engages in hedging transactions, they will qualify
for this treatment, but at the present time it is not clear whether this
treatment will be available for all of the Fund's hedging transactions. To the
extent this treatment is not available, a Fund may be forced to defer the
closing out of certain options and futures contracts beyond the time when it
otherwise would be advantageous to do so, in order for the Fund to continue to
qualify as an RIC.
The treatment of income dividends and capital gain distributions by a
Fund to shareholders under the various state income tax laws may not parallel
that under the federal law. Qualification as a regulated investment company does
not involve supervision of a Fund's management or of its investment policies and
practices by any governmental authority.
62
<PAGE>
Shareholders are urged to consult their own tax advisors with specific
reference to their own tax situations, including their state and local tax
liabilities.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Funds, as of January 30, 1999, no shareholder
owned beneficially or of record 5% or more of the outstanding shares of
beneficial interest of each of the Aggressive Growth, International Equity,
Capital Appreciation, Global, C.A.S.E., Value Equity, Strategic Total Return,
Tactical Asset Allocation, Balanced, Flexible Income or Tax-Exempt Funds, with
the following exceptions: Patrick J. Logue was record owner of approximately 5%
of the Balanced Fund, and ISI owned beneficially or of record approximately 6%
of the C.A.S.E. Fund and 23% of the International Equity Fund. As of January 30,
1999, certain affiliates of ISI and AEGON Management were the record owners of
shares of beneficial interest of the Income Plus Fund, as follows: AUSA Life
Insurance Company owned approximately ___%, and Bankers United Life Assurance
Company owned approximately ___%. As of January 30, 1999, State Street Bank and
Trust Company as Trustee for the ConAgra Retirement Income Savings Plan, Boston,
Massachusetts, owned approximately 9% of the outstanding shares of beneficial
interest of the Growth Fund.
MISCELLANEOUS
ORGANIZATION
Each Fund is a series of the IDEX Mutual Funds, a Massachusetts
business trust that was formed by a Declaration of Trust dated January 7, 1986.
The Trust currently is governed by a Restatement of Declaration of Trust
("Declaration of Trust") dated as of August 30, 1991.
On October 1, 1993, in a tax-free reorganization, the Flexible Income
Fund acquired all of the assets and assumed all of the liabilities of IDEX Total
Income Trust ("IDEX Total") in exchange for shares of the Flexible Income Fund
which were then distributed to IDEX Total shareholders. All historical financial
and performance information set forth in this Statement of Additional
Information relates to IDEX Total prior to the date it was reorganized into the
Flexible Income Fund.
On September 20, 1996 in a tax-free reorganization, IDEX Growth Fund
(formerly IDEX II Growth Fund) acquired all of the assets and assumed all of the
liabilities of IDEX Fund and IDEX Fund 3 in exchange for Class T shares of IDEX
Growth Fund which were then distributed on a pro rata basis to the respective
shareholders of IDEX Fund and IDEX Fund 3. Upon closing of the reorganization,
IDEX II Series Fund changed its name to IDEX Series Fund. IDEX Series Fund
became IDEX Mutual Funds effective March 1, 1999.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Funds to issue an unlimited number
of shares of beneficial interest. Shares of the Funds are fully paid and
nonassessable when issued. Shares of the Funds have no preemptive, cumulative
voting, conversion or subscription rights. Shares of the Funds are fully
transferable but the Funds are not bound to recognize any transfer until it is
recorded on the books.
The shares of beneficial interest of each Fund are divided into three
classes, Class A, Class B and Class C shares; the Growth Fund includes a fourth
class, Class T shares. Each class represents interests in the same assets of the
Fund and differ as follows: each class of shares has exclusive voting rights on
matters pertaining to its plan of distribution or any other matter appropriately
limited to that class; Class A shares are subject to an initial sales charge;
Class B shares are subject to a contingent deferred sales charge, or back-end
load, at a declining rate; Class C shares are subject to an initial sales charge
and are subject to a contingent deferred sales charge if redeemed within 18
months of purchase; Class B and Class C shares are subject to higher ongoing
distribution and service fees; each class may bear differing amounts of certain
class-specific expenses; and each class has a separate exchange privilege. Class
T shares of the Growth Fund are subject to an initial sales charge, but no
annual distribution and service fees. Class T shares are NOT available to new
investors; only existing Class T shareholders (who were shareholders of IDEX
Fund or IDEX Fund 3 on September 20, 1996) may purchase additional Class T
shares. The Funds do not anticipate that there will be any conflicts between the
interests of holders of the different classes of shares of the same Fund by
virtue of these classes. On an ongoing basis, the Board of Trustees will
consider whether any such conflict exists and, if so, take appropriate action.
On any matter submitted to a vote of shareholders of a series or class, each
full issued and outstanding share of that series or class has one vote.
The Declaration of Trust provides that each of the Trustees will
continue in office until the termination of the Trust or his earlier death,
resignation, bankruptcy or removal. A meeting will be called for the election of
trustees upon the written request of holders of 10% or more of the outstanding
shares of the Funds. Vacancies may be filled by majority of the remaining
trustees, subject to certain limitations imposed by the 1940 Act. Therefore, it
is not anticipated that annual or regular meetings of shareholders normally will
be held, unless otherwise required by the Declaration of Trust or the 1940 Act.
Subject to the foregoing, shareholders have the power to vote for the election
and removal of trustees, to
63
<PAGE>
terminate or reorganize the Funds, to amend the Declaration of Trust, on whether
to bring certain derivative actions and on any other matters on which a
shareholder vote is required by the 1940 Act, the Declaration of Trust, the
Funds' bylaws or the Trustees.
LEGAL COUNSEL AND AUDITORS
Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, N.W.,
Washington, D.C. 20004, serves as counsel to the Funds and certain of its
affiliates. PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105,
serves as independent accountants for the Funds.
REGISTRATION STATEMENT
This Statement of Additional Information and the Prospectuses for the
Funds do not contain all the information set forth in the registration statement
and exhibits relating thereto, which the Funds have filed with the SEC,
Washington, D.C. under the 1933 Act and the 1940 Act, to which reference is
hereby made.
PERFORMANCE INFORMATION
Quotations of average annual total return for a particular class of
shares of a Fund will be expressed in terms of the average annual compounded
rate of return of a hypothetical investment in the Fund over periods of 1, 5,
and 10 years. These are the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula:
P(1 + T)N = ERV
(where P = a hypothetical initial investment of $1,000; T = the average annual
total return; N = the number of years; and ERV = the ending redeemable value of
a hypothetical $1,000 investment made at the beginning of the period). All
average annual total return figures reflect the deduction of a proportionate
share of each Fund's expenses on an annual basis, and assume that the maximum
sales load (Class A and Class T shares) is deducted from the initial $1,000
investment and all dividends and distributions are paid in additional shares.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------------------------------------------------------------------------------------
AS OF OCTOBER 31, 1998 AGGRESSIVE GROWTH INTERNATIONAL EQUITY CAPITAL APPRECIATION
CLASS CLASS CLASS
---------------------------------------------------------------------------------------------------------------------------------
A B C A B C A B C
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 12/02/94 10/01/95 12/02/94 02/01/97 02/01/97 02/01/97 12/02/94 10/01/95 12/02/94
---------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE 5.50% * -- 5.50% * -- 5.50% * --
---------------------------------------------------------------------------------------------------------------------------------
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN INCLUDING SALES CHARGEs:
---------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
---------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
---------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
AS OF OCTOBER 31, 1998 GLOBAL GROWTH
CLASS CLASS
----------------------------------------------------------------------------------------------------------------------
A B C A B C T
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 10/01/92 10/01/95 10/01/93 05/08/86 10/01/95 10/01/93 9/20/96
----------------------------------------------------------------------------------------------------------------------
SALES CHARGE 5.50% * -- 5.50% * -- 8.50%
----------------------------------------------------------------------------------------------------------------------
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90% 0%
----------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN INCLUDING SALES Charges:
----------------------------------------------------------------------------------------------------------------------
1 year % % % % % % %
----------------------------------------------------------------------------------------------------------------------
5 years % % % % % % %
----------------------------------------------------------------------------------------------------------------------
10 years % % % % % % %
----------------------------------------------------------------------------------------------------------------------
Inception % % % % % % %
----------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
----------------------------------------------------------------------------------------------------------------------
1 year % % % % % % %
----------------------------------------------------------------------------------------------------------------------
5 years % % % % % % %
----------------------------------------------------------------------------------------------------------------------
10 years % % % % % % %
----------------------------------------------------------------------------------------------------------------------
Inception % % % % % % %
----------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
----------------------------------------------------------------------------------------------------------------------
1 year % % % % % % %
----------------------------------------------------------------------------------------------------------------------
5 years % % % % % % %
----------------------------------------------------------------------------------------------------------------------
10 years % % % % % % %
----------------------------------------------------------------------------------------------------------------------
Inception % % % % % % %
----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
AS OF OCTOBER 31, 1998 C.A.S.E. VALUE EQUITY STRATEGIC TOTAL RETURN
CLASS CLASS CLASS
- --------------------------------------------------------------------------------------------------------------------------------
A B C A B C A B C
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 02/01/96 2/01/96 2/01/96 02/01/97 02/01/97 02/01/97 12/02/94 10/01/95 12/02/94
- --------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE 5.50% * -- 5.50% * -- 5.50% * --
- --------------------------------------------------------------------------------------------------------------------------------
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
- --------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN INCLUDING SALES CHARGEs:
- --------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
- --------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
- --------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TACTICAL ASSET BALANCED FLEXIBLE INCOME
AS OF OCTOBER 31, 1998 ALLOCATION CLASS CLASS
CLASS
- -----------------------------------------------------------------------------------------------------------------------------------
A B C A B C A B C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 10/01/95 10/01/95 10/01/95 12/02/94 10/01/95 12/02/94 06/29/87 10/01/95 10/01/93
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE 5.50% * -- 5.50% * -- 4.75% * --
- -----------------------------------------------------------------------------------------------------------------------------------
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
- -----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN INCLUDING
SALES CHARGE:
- -----------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN WITHOUT DEDUCTION
OF SALES CHARGE:
- -----------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN WITHOUT DEDUCTION
OF SALES CHARGE:
- -----------------------------------------------------------------------------------------------------------------------------------
1 year % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
5 years % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
10 years % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
Inception % % % % % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
AS OF OCTOBER 31, 1998 INCOME PLUS TAX-EXEMPT
CLASS CLASS
-------------------------------------------------------------------------------------------------------------
A B C A B C
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCEPTION DATE 06/14/85 10/01/95 10/01/93 04/01/85 10/01/95 10/01/93
-------------------------------------------------------------------------------------------------------------
SALES CHARGE 4.75% * -- 4.75% * --
-------------------------------------------------------------------------------------------------------------
12B-1 FEE 0.35% 1.00% 0.90% 0.35% 1.00% 0.60%
-------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN INCLUDING
SALES CHARGEs:
-------------------------------------------------------------------------------------------------------------
1 year % % % % % %
-------------------------------------------------------------------------------------------------------------
5 years % % % % % %
-------------------------------------------------------------------------------------------------------------
10 years % % % % % %
-------------------------------------------------------------------------------------------------------------
Inception % % % % % %
-------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
-------------------------------------------------------------------------------------------------------------
1 year % % % % % %
-------------------------------------------------------------------------------------------------------------
5 years % % % % % %
-------------------------------------------------------------------------------------------------------------
10 years % % % % % %
-------------------------------------------------------------------------------------------------------------
Inception % % % % % %
-------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN WITHOUT DEDUCTION OF SALES CHARGE:
-------------------------------------------------------------------------------------------------------------
1 year % % % % % %
-------------------------------------------------------------------------------------------------------------
5 years % % % % % %
-------------------------------------------------------------------------------------------------------------
10 years % % % % % %
-------------------------------------------------------------------------------------------------------------
Inception % % % % % %
-------------------------------------------------------------------------------------------------------------
<FN>
* The deferred sales charge on redemption of Class B shares is 5% during the
first year, 4% during the second year, 3% during the third year, 2% during
the fourth year, 1% during the fifth and sixth years and 0% during the
seventh year and later. The Class C shares are subject to a 1% contingent
deferred sales charge.
** Performance of Class T Shares of the Growth Fund is based on the historical
performance of IDEX Fund from its inception on June 4, 1985 until the
reorganization of IDEX Fund and IDEX Fund 3 into Class T Shares of IDEX
Series Fund Growth Fund on September 20, 1996; and the historical
performance of Class T Shares of the Growth Fund thereafter.
</FN>
</TABLE>
No information is included for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit or Small Cap Frontier Funds as they did not
commence operations until March 1, 1999.
66
<PAGE>
The current yield for a particular class of shares of each of the
Flexible Income, Tax-Exempt, Income Plus, Balanced or Strategic Total Return
Funds is computed in accordance with a standardized method prescribed by rules
of the SEC. The yield is computed by dividing the Fund's investment income per
share earned during a particular 30-day base period (including dividends, if any
and interest earned, minus expenses excluding reductions for affiliated
brokerage and custody earnings credits accrued during the period) by the maximum
offering price per share on the last day of the base period and then annualizing
the result.
CURRENT YIELD
----------------------------------------------------------
STRATEGIC TOTAL RETURN 30 DAY PERIOD ENDED
10/31/98
----------------------------------------------------------
Class A %
----------------------------------------------------------
Class B %
----------------------------------------------------------
Class C %
----------------------------------------------------------
BALANCED
----------------------------------------------------------
Class A %
----------------------------------------------------------
Class B %
----------------------------------------------------------
Class C %
----------------------------------------------------------
FLEXIBLE INCOME
----------------------------------------------------------
Class A %
----------------------------------------------------------
Class B %
----------------------------------------------------------
Class C %
----------------------------------------------------------
INCOME PLUS
----------------------------------------------------------
Class A %
----------------------------------------------------------
Class B %
----------------------------------------------------------
Class C %
----------------------------------------------------------
The tax equivalent yield of the Tax-Exempt Fund is computed by dividing
that portion of the yield (as computed above) which is tax-exempt by one minus
an assumed tax rate of 28% and adding the product to that portion, if any, of
the Fund's yield that is not tax-exempt. The tax equivalent yield of the
Tax-Exempt Fund's Class A, Class B and Class C shares based on a 30-day period
ended October 31, 1998 was %, % and %, respectively.
From time to time in advertisements or sales material, a Fund may
present and discuss its performance rankings and/or ratings or other information
as published by recognized mutual fund statistical services or by publications
of general interest such as WALL STREET JOURNAL, BOSTON GLOBE, NEW YORK TIMES,
LOS ANGELES TIMES, CHRISTIAN SCIENCE MONITOR, USA TODAY, TAMPA TRIBUNE, ST.
PETERSBURG TIMES, FINANCIAL TIMES, HARTFORD CURRENT, INTERNATIONAL HERALD
TRIBUNE, INVESTOR'S BUSINESS DAILY, BOSTON HERALD, WASHINGTON POST, KIPLINGER'S
WASHINGTON LETTER, KIPLINGER'S TAX REPORT, KIPLINGER'S PERSONAL FINANCE
MAGAZINE, BARRON'S, BUSINESS WEEK, FINANCIAL SERVICES WEEK, NATIONAL
UNDERWRITER, TIME, NEWSWEEK, PENSIONS & INVESTMENTS, U.S. NEWS AND WORLD REPORT,
MORNINGSTAR MUTUAL FUND VALUES, ECONOMIST, BANK LETTER, BOSTON BUSINESS JOURNAL,
RESEARCH RECOMMENDATIONS, FACS OF THE WEEK, MONEY, MODERN MATURITY, FORBES,
FORTUNE, FINANCIAL PLANNER, AMERICAN BANKER, U.S. BANKER, ABA BANKING JOURNAL,
INSTITUTIONAL INVESTOR (U.S./EUROPE), REGISTERED REPRESENTATIVE, INDEPENDENT
AGENT, AMERICAN DEMOGRAPHICS, TRUSTS & ESTATES, CREDIT UNION MANAGEMENT,
PERSONAL INVESTOR, NEW ENGLAND BUSINESS, BUSINESS MONTH, GENTLEMEN'S QUARTERLY,
EMPLOYEE RESEARCH REPORT, EMPLOYEE BENEFIT PLAN REVIEW, ICI MUTUAL FUND NEWS,
SUCCEED, JOHNSON CHARTS, WEISENBERGER INVESTMENT COMPANIES SERVICE, MUTUAL FUND
QUARTERLY, FINANCIAL WORLD MAGAZINE, CONSUMER REPORTS, BABSON-UNITED MUTUAL FUND
SELECTOR AND MUTUAL FUND ENCYCLOPEDIA (DEARBORN FINANCIAL PUBLISHING). A Fund
may also advertise non-standardized performance information which is for a
period in addition to those required to be presented, or which provides actual
year-by-year return, or any combination thereof, or both. For Class A, Class B
and Class T shares, non-standardized performance may also be that which does not
reflect deduction of the maximum sales charge applicable to Class A and Class T
shares or the contingent deferred sales charge applicable to Class B shares. In
addition, a Fund may, as appropriate, compare its performance to that of other
types of investments such as certificates of deposit, savings accounts and U.S.
Treasuries,
67
<PAGE>
or to certain interest rate and inflation indices, such as the Consumer Price
Index. A Fund may also advertise various methods of investing including, among
others, dollar cost averaging, and may use compounding illustrations to show the
results of such investment methods. The Funds or the Distributor may also from
time to time in advertisements or sales material present tables or other
information comparing tax-exempt yields to the equivalent taxable yields,
whether with specific reference to the Tax-Exempt Fund or otherwise.
FINANCIAL STATEMENTS
Audited Financial Statements for IDEX Aggressive Growth, International
Equity, Capital Appreciation, Global, Growth, C.A.S.E., Value Equity, Strategic
Total Return, Tactical Asset Allocation, Balanced, Flexible Income, Income Plus
and Tax-Exempt Funds for the fiscal year ended October 31, 1998 are incorporated
by reference from the Fund's Annual Report dated October 31, 1998. No
information is included for the Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit or the Small Cap Frontier Funds as they did not
commence operations until March 1, 1999.
68
<PAGE>
APPENDIX A
CERTAIN SECURITIES IN WHICH THE FUNDS MAY INVEST
I. MUNICIPAL OBLIGATIONS IN WHICH THE TAX-EXEMPT FUND MAY INVEST
A. MUNICIPAL BONDS
GENERAL INFORMATION. Municipal Bonds are debt obligations issued to obtain
funds for various public purposes, including the construction of a wide range of
public facilities such as airports, highways, bridges, schools, hospitals,
housing, mass transportation, streets and water and sewer works, and that pay
interest that is exempt from federal income tax in the opinion of issuer's
counsel. Other public purposes for which Municipal Bonds may be issued include
the refunding of outstanding obligations, obtaining funds for general expenses
and obtaining funds to lend to other public institutions and facilities.
The two principal classifications of Municipal Bonds are "general
obligation" bonds and "revenue" or "special tax" bonds. General obligation bonds
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue or special tax bonds are
payable only from the revenues derived from a particular facility or class of
facilities or project or, in some cases, from the proceeds of a special excise
tax or other specific revenue source, but are not supported by the issuer's
power to levy general taxes. Most industrial development bonds are in this
category.
There are, of course, variations in the security of Municipal bonds, both
within a particular classification and between classifications, depending on
numerous factors. The yields of Municipal Bonds depend, among other things, upon
general money market conditions, general conditions of the Municipal Bond
market, size of a particular offering, the maturity of the obligations and
rating of the issue.
INDUSTRIAL DEVELOPMENT BONDS AND PRIVATE ACTIVITY BONDS. Industrial
development bonds ("IDBs") and private activity bonds ("PABs") are issued by or
on behalf of public authorities to finance various privately operated
facilities, such as airports or pollution control facilities. PABs generally are
such bonds issued after August 15, 1986. These obligations are included within
the term "municipal bonds" if the interest paid thereon is exempt from federal
income tax in the option of the bond counsel. IDBs and PABs are in most cases
revenue bonds and thus are not payable from the unrestricted revenues of the
issuer. The credit quality of IDBs and PABs is usually directly related to the
credit standing of the user of the facilities being financed.
PURCHASES ON "WHEN-ISSUED" OR "DELAYED DELIVERY" BASIS. Sometimes the
Tax-Exempt Fund may buy Municipal Bonds on a "when-issued" or "delayed delivery"
basis. This means that when it agrees to buy, the terms of the Bonds and the
price it will pay are fixed, but it does not purchase and take delivery of the
Bonds until a later date (the "settlement date"), which is usually within one
month. The Tax-Exempt Fund pays no money and receives no interest before the
settlement date. The commitment to purchase securities on a when-issued or
delayed delivery basis involves the risk that the market value of such
securities may fall below cost prior to the settlement date. While the
Tax-Exempt Fund may sell the Municipal Bonds before the settlement date, it will
ordinarily do so only for investment management reasons. Ordinarily, the
Tax-Exempt Fund purchases Municipal Bonds that it has agreed to buy on a
when-issued or delayed delivery basis. Gains or losses on sales prior to the
settlement date are not tax-exempt.
A Municipal Bond purchased on a when-issued or delayed delivery basis is
recorded as an asset on the commitment date. The Tax-Exempt Fund will direct the
Fund's custodian to segregate cash, U.S. Government securities or other
appropriate debt obligations owned by the Fund that are at least equal in value
to the amount the Tax-Exempt Fund will have to pay on the settlement date. If
necessary, additional assets will be placed in the account daily so that the
value of the account will at least equal the Fund's purchase commitment.
B. MUNICIPAL NOTES
The Tax-Exempt Fund may invest in the following types of Municipal Notes,
subject to the quality requirements described in the Prospectus:
1
<PAGE>
PROJECT NOTES. Project notes ("PNs") are issued on behalf of local
authorities at auctions conducted by the United States Department of Housing and
Urban Development to raise funds for federally sponsored urban renewal,
neighborhood development and housing programs. PNs are backed by the full faith
and credit of the Federal government through agreements with the local authority
which provide that, if required, the Federal government will lend the issuer an
amount equal to the principal of and interest on the PNs. Ordinarily, PNs are
repaid by rolling over the notes or from the proceeds of new bonds or other
securities which are issued to provide permanent financing.
BOND ANTICIPATION NOTES. Bond anticipation notes ("BANs") are usually
general obligations of state and local governmental issuers which are sold to
obtain interim financing for projects that will eventually be funded through the
sale of long-term debt obligations or bonds. The ability of an issuer to meet
its obligations on its BANs is primarily dependent on the issuer's access to the
long-term municipal bond market and the likelihood that the proceeds of such
bond sales will be used to pay the principal and interest on the BANs.
TAX ANTICIPATION NOTES. Tax anticipation notes ("TANs") are issued by state
and local governments to finance their current operations. Repayment is
generally to be derived from specific future tax revenues. TANs are usually
general obligations of the issuer. A weakness in an issuer's capacity to raise
taxes due to, among other things, a decline in its tax base or a rise in
delinquencies, could adversely affect the issuer's ability to meet its
obligations on outstanding TANs.
REVENUE ANTICIPATION NOTES. Revenue anticipation notes ("RANs") are issued
by governments or governmental bodies with the expectation that future revenues
from a designated source will be used to repay the notes. In general, they also
constitute general obligations of the issuer. A decline in the receipt of
projected revenues, such as anticipated revenues from another level of
government, could adversely affect an issuer's ability to meet its obligations
on outstanding RANs. In addition, the possibility that the revenues would, when
received, be used to meet other obligations could affect the ability of the
issuer to pay the principal and interest on RANs.
CONSTRUCTION LOAN NOTES. Construction loan notes are issued to provide
construction financing for specific projects. Frequently, these notes are
redeemed with funds obtained from the Federal Housing Administration.
BANK NOTES. Bank notes are notes issued by local governmental bodies and
agencies as those described above to commercial banks as evidence of borrowings.
Banks on occasion sell such notes to purchasers such as the Tax-Exempt Fund. The
purposes for which the notes are issued vary, but bank notes are frequently
issued to meet short-term working-capital or capital-project needs. These notes
typically are redeemed with revenue from taxes or from long-term financing
proceeds, and may have risks similar to the risks associated with TANs and RANs.
C. MUNICIPAL COMMERCIAL PAPER
Municipal Commercial Paper (also called "short-term discount notes")
represents short-term obligations of state and local governments and their
agencies issued typically to meet seasonal working capital or interim
construction financing requirements. Municipal Commercial Paper is often issued
at a discount, with shorter maturities than Municipal Notes. Such obligations
are repayable from general revenues of the issuer or refinanced with long-term
debt. In most cases, Municipal Commercial Paper is backed by letters of credit,
lending or note repurchase agreements, or other credit facility agreements
offered by banks or other institutions.
While the various types of Municipal Notes and Municipal Commercial Paper
described above as a group represent the major portion of the tax-exempt note
market, other types of notes are occasionally available in the marketplace and
the Tax-Exempt Fund may invest in such other types of notes to the extent
permitted under its investment objective and policies. Such short-term
obligations may be issued for different purposes and with different security
than those mentioned above.
2
<PAGE>
D. FLOATING RATE AND VARIABLE RATE OBLIGATIONS
The Tax-Exempt Fund may purchase floating rate and variable rate
obligations, including participation interests therein (see section E below).
Investments in floating or variable rate securities normally will include IDBs
which provide that the rate of interest is set as a specific percentage of a
designated base rate, such as the rate on Treasury Bonds or Bills or the prime
rate at a major commercial bank, and that the Fund can demand payment of the
obligation on short notice at par value plus accrued interest. Variable rate
securities provide for a specified periodic adjustment in the interest rate,
while floating rate securities have flexible rates that change whenever there is
a change in the designated base interest rate. Frequently, such securities are
secured by letters of credit or other credit support arrangements provided by
banks. The quality of the underlying creditor (i.e., the corporation utilizing
the IDBs financing) or the bank, as the case may be, must be equivalent to the
Municipal Obligation ratings required for purchases for the Tax-Exempt Fund.
E. PARTICIPATION INTERESTS
The Tax-Exempt Fund may invest in participation interests purchased from
banks in variable rate tax-exempt securities (such as IDBs) owned by the banks.
A participation interest gives the purchaser an undivided interest in the
tax-exempt security in the proportion that the Fund's participation interest
bears to the total principal amount of the tax-exempt security, and permits
demand repurchase as described in section D above. Participations are frequently
backed by an irrevocable letter of credit or guarantee of the bank offering the
participation which the sub-adviser, under the supervision of the Board of
Trustees, has determined meets the prescribed quality standards for the
Tax-Exempt Fund. The Fund has the right to sell the instrument back to the bank
and draw on the letter of credit on 7 days' notice for all or any part of the
Fund's participation interest in the tax-exempt security, plus accrued interest.
The Fund intends to exercise its demand rights under the letter of credit only
(1) upon a default under the terms of the tax-exempt security, (2) as needed to
provide liquidity in order to meet redemptions, or (3) upon a drop in the rating
or the sub-adviser's evaluation of the underlying security. Banks charge a
service and letter of credit fee and a fee for issuing repurchase commitments in
an amount equal to the excess of the interest paid on the tax-exempt securities
over the yield negotiated between the Fund and the bank at which the instruments
were purchased by the Tax-Exempt Fund. The sub-adviser will monitor the pricing,
quality and liquidity of the variable rate demand instruments held by the
Tax-Exempt Fund, including the IDBs supported by bank letters of credit or
guarantee, on the basis of published financial information, reports or rating
agencies and other bank analytical services. Participation interests will be
purchased only if, in the opinion of counsel, interest income on such interest
will be tax-exempt when distributed as dividends to shareholders.
Obligations of issuers of Municipal Bonds, Municipal Notes and Municipal
Commercial Paper are subject to the provisions of bankruptcy, insolvency and
other laws affecting the rights and remedies of creditors, such as the Federal
Bankruptcy Act, and laws, if any, which may be enacted by Congress or state
legislatures extending the time for payment of principal or interest, or
imposing other constraints upon enforcement of such obligations or upon
municipalities' power to levy taxes. There is also the possibility that
litigation or other conditions may materially affect the power or ability of an
issuer to pay, when due, the principal of and interest on its Municipal
Obligations.
II. OBLIGATIONS IN WHICH EACH FUND MAY INVEST
(UNLESS OTHERWISE NOTED)
The Funds may invest in the following obligations for temporary defensive
purposes or as otherwise described in the prospectus.
A. U.S. GOVERNMENT OBLIGATIONS
As described in the Prospectus, the Funds may invest in some or all of the
following types of direct obligations of the Federal Government, issued by the
Department of the Treasury, and backed by the full faith and credit of the
Federal Government.
TREASURY BILLS. Treasury bills are issued with maturities of up to one
year. They are issued in bearer form, are sold on a discount basis and are
payable at par value at maturity.
TREASURY NOTES. Treasury Notes are longer-term interest bearing obligations
with original maturities of one to seven years.
3
<PAGE>
TREASURY BONDS. Treasury bonds are longer-term interest bearing obligations
with original maturities from 5 to 30 years.
B. OBLIGATIONS OF FEDERAL AGENCIES, INSTRUMENTALITIES AND AUTHORITIES
Certain federal agencies have been established as instrumentalities of the
United States Government to supervise and finance certain types of activities.
These agencies include, but are not limited to, the Banks for Cooperatives,
Federal Land Banks, Federal Intermediate Credit Banks, Federal Home Loan Banks
("FHLB"), Federal National Mortgage Association ("FNMA"), Government National
Mortgage Association ("GNMA"), Export-Import Bank of the United States, and
Tennessee Valley Authority ("TVA"). Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA Certificates or certain TVA Bonds)
or are guaranteed by the Treasury (e.g., certain other TVA Bonds) or supported
by the issuing agencies' right to borrow from the Treasury (e.g., FHLB and FNMA
Bonds). There can be no assurance that the United States Government itself will
pay interest and principal on securities as to which it is not legally obligated
to do so.
C. CERTIFICATES OF DEPOSIT (ALL FUNDS) AND TIME DEPOSITS (INCOME PLUS FUND
ONLY)
A time deposit is a non-negotiable interest-bearing deposit with a bank
which generally cannot be withdrawn prior to a specified maturity date without
substantial interest penalties. A certificate of deposit ("CD") is a negotiable
instrument issued by a bank against a time deposit. CDs normally can be traded
in the secondary market prior to maturity, and are thus more liquid than other
forms of time deposits. The Funds will only invest in U.S. dollar denominated
time deposits and CDs representing deposits in U.S. banks with assets of $1
billion or more, whose deposits are insured by the Federal Deposit Insurance
Corporation.
D. COMMERCIAL PAPER
Commercial paper refers to short-term unsecured promissory notes issued by
commercial and industrial corporations to finance their current operations.
Commercial paper may be issued at a discount and redeemed at par, or issued at
par with interest added at maturity. The interest or discount rate depends on
general interest rates, the credit standing of the issuer, and the maturity of
the note, and generally moves in tandem with rates on large CDs and Treasury
bills. An established secondary market exists for commercial paper, particularly
that of stronger issuers which are rated by Moody's Investors Service, Inc. and
Standard and Poor's Ratings Group. Investments in commercial paper are subject
to the risks that general interest rates will rise, that the credit standing and
outside rating of the issuer will fall, or that the secondary market in the
issuer's notes will become too limited to permit their liquidation at a
reasonable price.
E. BANKER'S ACCEPTANCES
A banker's acceptance is a negotiable short-term draft, generally arising
from a bank customer's commercial transaction with another party, with payment
due for the transaction on the maturity date of the customer's draft. The draft
becomes a banker's acceptance when the bank, upon fulfillment of the obligations
of the third party, accepts the draft for later payment at maturity, thus adding
the bank's guarantee of payment to its customer's own obligation. In effect, a
banker's acceptance is a post-dated certified check payable to its bearer at
maturity. Such acceptances are highly liquid, but are subject to the risk that
both the customer and the accepting bank will be unable to pay at maturity. The
Funds may invest in U.S. dollar denominated bankers' acceptances issued by U.S.
banks, their foreign branches, and by U.S. branches of foreign banks.
F. REPURCHASE AGREEMENTS FOR U.S. GOVERNMENT SECURITIES (EXCEPT STRATEGIC
TOTAL RETURN FUND)
The Funds may enter into repurchase agreements with banks and dealers for
securities of or guaranteed by the U.S. Government, under which the Fund
purchases securities and agrees to resell the securities at an agreed upon time
and at an agreed upon price. The difference between the amount the Fund pays for
the securities and the amount it receives upon resale is accrued as interest and
reflected in the Fund's net investment income. When the Fund enters into
repurchase agreements, it relies on the seller to repurchase the securities.
Failure to do so may result in a loss for the Fund if the market value of the
securities is less than the repurchase price. Under the Investment Company Act
of 1940, repurchase agreements may be considered collateralized loans by the
Fund.
4
<PAGE>
At the time a Fund enters into a repurchase agreement, the value of the
underlying security including accrued interest will be equal to or exceed the
value of the repurchase agreement and, for repurchase agreements that mature in
more than one day, the seller will agree that the value of the underlying
security including accrued interest will continue to be at least equal to the
value of the repurchase agreement.
Although repurchase agreements carry certain risks not associated with
direct investment in securities, the Funds intend to enter into repurchase
agreements only with banks and dealers in transactions which the sub-adviser
believes present minimal credit risks in accordance with guidelines adopted by
the Trustees. To the extent that proceeds from any sales of collateral upon a
default in the counterparty's obligation to repurchase were less than the
repurchase price, the Fund would suffer a loss. If the counterpart's petitions
for bankruptcy or otherwise becomes subject to bankruptcy or liquidation
proceedings, there might be restrictions on the Fund's ability to sell the
collateral and the Fund could suffer a loss.
III. OTHER SECURITIES IN WHICH THE FUNDS MAY INVEST
A. CORPORATE DEBT SECURITIES
The Funds may invest in corporate bonds, notes and debentures of long and
short maturities and of various grades, including unrated securities. Corporate
debt securities exist in great variety, differing from one another in quality,
maturity, and call or other provisions. Lower grade bonds, whether rated or
unrated, usually offer higher interest income, but also carry increased risk of
default. Corporate bonds may be secured or unsecured, senior to or subordinated
to other debt of the issuer, and, occasionally, may be guaranteed by another
entity. In addition, they may carry other features, such as those described
under "Convertible Securities" and "Variable or Floating Rate Securities," or
have special features such as the right of the holder to shorten or lengthen the
maturity of a given debt instrument, rights to purchase additional securities,
rights to elect from among two or more currencies in which to receive interest
or principal payments, or provisions permitting the holder to participate in
earnings of the issuer or to participate in the value of some specified
commodity, financial index, or other measure of value.
B. INTERNATIONAL AGENCY OBLIGATIONS
The Funds may invest in bonds, notes or Eurobonds of international
agencies. Examples are securities issued by the Asian Development Bank, the
European Economic Community, and the European Investment Bank. The Funds may
also purchase obligations of the International Bank for Reconstruction and
Development which, while technically not a U.S. Government agency or
instrumentality, has the right to borrow from the participating countries,
including the United States.
C. BANK OBLIGATIONS OR SAVINGS AND LOAN OBLIGATIONS
The Funds may purchase certificates of deposit, bankers' acceptances and
other debt obligations of commercial banks and certificates of deposit and other
debt obligations of savings and loan associations ("S&L's"). Certificates of
deposit are receipts from a bank or an S&L for funds deposited for a specified
period of time at a specified rate of return. Bankers' acceptance are time
drafts drawn on commercial banks by borrowers, usually in connection with
international commercial transactions. These instruments may be issued by
institutions of any size, may be of any maturity, and may be insured or
uninsured. The quality of bank or savings and loan obligations may be affected
by such factors as (a) location - the strength of the local economy will often
affect financial institutions in the region, (b) asset mix -institutions with
substantial loans in a troubled industry may be weakened by those loans, and (c)
amount of equity capital - - under-capitalized financial institutions are more
vulnerable when loan losses are suffered. The Fund manager will evaluate these
and other factors affecting the quality of bank and savings and loan obligations
purchased by the Fund, but the Fund is not restricted to obligations or
institutions which satisfy specified quality criteria.
5
<PAGE>
D. VARIABLE OR FLOATING RATE SECURITIES
The Funds may purchase variable rate securities that provide for automatic
establishment of a new interest rate at fixed intervals (e.g., daily, monthly,
semi-annually, etc.). Floating rate securities provide for automatic adjustment
of the interest rate whenever some specified interest rate index changes. The
interest rate on variable and floating rate securities is ordinarily determined
by reference to, or is a percentage of, a bank's prime rate, the 90-day U.S.
Treasury bill rate, the rate of return on commercial paper or bank certificates
of deposit, an index of short-term interest rates, or some other objective
measure.
E. PREFERRED STOCKS (ALL FUNDS EXCEPT THE TAX-EXEMPT FUND)
Preferred stocks are securities which represent an ownership interest in a
corporation and which give the owner a prior claim over common stock on the
corporation's earnings and assets. Preferred stock generally pays quarterly
dividends. Preferred stocks may differ in many of their provisions. Among the
features that differentiate preferred stocks from one another are the dividend
rights, which may be cumulative or non-cumulative and participating or
non-participating, redemption provisions, and voting rights. Such features will
establish the income return and may affect the prospects for capital
appreciation or risks of capital loss.
F. CONVERTIBLE SECURITIES
The Funds may invest in debt securities convertible into or exchangeable
for equity securities, or debt securities that carry with them the right to
acquire equity securities, as evidenced by warrants attached to such securities
or acquired as part of units of the securities. Such securities normally pay
less current income than securities without conversion features, but add the
potential opportunity for appreciation from enhanced value for the equity
securities into which they are convertible, and the concomitant risk of loss
from declines in those values.
G. COMMON STOCKS
Each Fund (other than the Tax-Exempt Fund) invests in common stocks. The
Flexible Income Fund will consider investment in income-producing common stocks
if the yields of common stocks generally become competitive with the yields of
other income securities. Common stocks are junior to the debt obligations and
preferred stocks of an issuer. Hence, dividend payments on common stocks should
be regarded as less secure than income payments on corporate debt securities.
6
<PAGE>
IDEX SERIES FUND
OTHER INFORMATION
PART C
ITEM 23. EXHIBITS
List all exhibits filed as part of the Registration Statement.
(a) Restatement of Declaration of Trust (1)
(b) Bylaws, as amended (1)
(c) Not Applicable
(d) (1) Management and Investment Advisory Agreement
(aa) IDEX Aggressive Growth Portfolio (1)
(bb) IDEX International Equity Portfolio (2)
(cc) Agreement for IDEX Capital Appreciation, Global, Growth,
Balanced and Flexible Income Portfolios
(dd) IDEX C.A.S.E. Portfolio (3)
(ee) IDEX Value Equity Portfolio (3)
(ff) IDEX Strategic Total Return Portfolio (1)
(gg) IDEX Tactical Asset Allocation Portfolio (4)
(hh) IDEX Income Plus Portfolio (1)
(ii) IDEX Tax-Exempt Portfolio (1)
(jj) Form of Agreement for the Blue Chip, Dividend Growth,
Mid-Cap Opportunities, Mid-Cap Summit and Small Cap
Frontier Funds
(2) Investment Counsel Agreement
(aa) IDEX Aggressive Growth Portfolio (1)
(bb) (i) IDEX International Equity Portfolio (3)
(ii) IDEX International Equity Portfolio (3)
(cc) Agreement for IDEX Capital Appreciation, Global, Growth,
Balanced and Flexible Income Portfolios
(dd) IDEX C.A.S.E. Portfolio (4)
(ee) IDEX Value Equity Portfolio (6)
(ff) IDEX Strategic Total Return Portfolio (1)
(gg) IDEX Tactical Asset Allocation Portfolio (5)
(hh) IDEX Income Plus Portfolio (1)
(ii) IDEX Tax-Exempt Portfolio (1)
(jj) Form of Agreement for Blue Chip Fund
(kk) Form of Agreement for Dividend Growth Fund and Small Cap
Frontier Funds
(ll) Form of Agreement for Mid-Cap Opportunities Fund
(mm) Form of Agreement for Mid-Cap Summit Fund
(e) Administrative Services Agreement
(1) IDEX Capital Appreciation Portfolio (1)
- -------------------
(1) Filed previously with Post-Effective Amendment No. 24 to
Registration Statement filed on November 15, 1996 (File No.
33-2659).
(2) Filed previously with Post-Effective Amendment No. 25 to
Registration Statement filed on January 31, 1997 (File No.
33-2659).
(3) Filed previously with Post-Effective Amendment No. 20 to
Registration Statement filed on November 17, 1995 (File No.
33-2659)
(4) Filed previously with Post-Effective Amendment No. 18 to
Registration Statement filed on June 30, 1995 (File No. 33-2659)
1
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(2) IDEX Global Portfolio (1)
(3) IDEX Growth Portfolio (1)
(4) IDEX Balanced Portfolio (1)
(5) IDEX Flexible Income Portfolio (1)
(6) Form of Agreement for Aggressive Growth, International
Equity, C.A.S.E., Value Equity, Strategic Total Return,
Tactical Asset Allocation, Income Plus and Tax-Exempt
Funds
(7) Form of Agreement for Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit and Small Cap Frontier
Funds
(e) Underwriting Agreement (5)
(b) Dealer's Sales Agreement (1)
(c) Service Agreement (3)
(d) Wholesaler's Agreement (4)
(f) Trustees/Directors Deferred Compensation Plan (2)
(g) Custody Agreement (3)
(h) Transfer Agency Agreement with Idex Investor Services, Inc. (1)
(i) Opinion of Counsel (6)
(j) (1) Consent of PricewaterhouseCoopers LLP (6)
(2) Consent of Sutherland Asbill & Brennan, LLP (6)
(k) Not Applicable
(l) Investment Letter from Sole Shareholder (5)
(m) (1) Plan of Distribution under Rule 12b-1 - Class A Shares
(aa) IDEX Aggressive Growth Portfolio (1)
(bb) IDEX International Equity Portfolio (1)
(cc) IDEX Capital Appreciation Portfolio (1)
(dd) IDEX Global Portfolio (1)
(ee) IDEX Growth Portfolio (1)
(ff) IDEX C.A.S.E. Portfolio (4)
(gg) IDEX Value Equity Portfolio (1)
(hh) IDEX Strategic Total Return Portfolio (1)
- ----------------
(5) Filed previously with Post-Effective Amendment No. 26 to
Registration Statement filed on July 16, 1997 (File No. 33-2659)
(6) To be filed by Amendment.
2
<PAGE>
(ii) IDEX Tactical Asset Allocation Portfolio (5)
(jj) IDEX Balanced Portfolio (1)
(kk) IDEX Flexible Income Portfolio (1)
(ll) IDEX Income Plus Portfolio (1)
(mm) IDEX Tax-Exempt Portfolio (1)
(nn) Form of Plan for Blue Chip Fund
(oo) Form of Plan for Dividend Growth Fund
(pp) Form of Plan for Mid-Cap Opportunities Fund
(qq) Form of Plan for Mid-Cap Summit Fund
(rr) Form of Plan for Small Cap Frontier Fund
(2) Plan of Distribution under Rule 12b-1 - Class B Shares
(aa) IDEX Aggressive Growth Portfolio (1)
(bb) IDEX International Equity Portfolio (1)
(cc) IDEX Capital Appreciation Portfolio (1)
(dd) IDEX Global Portfolio (1)
(ee) IDEX Growth Portfolio (1)
(ff) IDEX C.A.S.E. Portfolio (4)
(gg) IDEX Value Equity Portfolio (1)
(hh) IDEX Strategic Total Return Portfolio (1)
(ii) IDEX Tactical Asset Allocation Portfolio (5)
(jj) IDEX Balanced Portfolio (1)
(kk) IDEX Flexible Income Portfolio (1)
(ll) IDEX Income Plus Portfolio (1)
(mm) IDEX Tax Exempt Portfolio (1)
(nn) Form of Plan for Blue Chip Fund
(oo) Form of Plan for Dividend Growth Fund
(pp) Form of Plan for Mid-Cap Opportunities Fund
(qq) Form of Plan for Mid-Cap Summit Fund
(rr) Form of Plan for Small Cap Frontier Fund
(3) Plan of Distribution under Rule 12b-1 - Class C Shares
(aa) IDEX Aggressive Growth Portfolio (1)
(bb) IDEX International Equity Portfolio (1)
(cc) IDEX Capital Appreciation Portfolio (1)
(dd) IDEX Global Portfolio (1)
(ee) IDEX Growth Portfolio (1)
(ff) IDEX C.A.S.E. Portfolio (4)
(gg) IDEX Value Equity Portfolio (1)
(hh) IDEX Strategic Total Return Portfolio (1)
(ii) IDEX Tactical Asset Allocation Portfolio (5)
(jj) IDEX Balanced Portfolio (1)
(kk) IDEX Flexible Income Portfolio (1)
(ll) IDEX Income Plus Portfolio (1)
(mm) IDEX Tax-Exempt Portfolio (1)
(nn) Form of Plan for Blue Chip Fund
(oo) Form of Plan for Dividend Growth Fund
(pp) Form of Plan for Mid-Cap Opportunities Fund
(qq) Form of Plan for Mid-Cap Summit Fund
(rr) Form of Plan for Small Cap Frontier Fund
3
<PAGE>
(n) Financial Data Schedule (6)
(o) Multiple Class Shares (7)
ITEM 24 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
To the knowledge of the Registrant, IDEX International Equity, Aggressive
Growth, Capital Appreciation, Global, Growth, C.A.S.E., Value Equity, Strategic
Total Return, Tactical Asset Allocation, Balanced, Flexible Income, Income Plus
and Tax-Exempt Portfolios and Blue Chip, Dividend Growth, Mid-Cap Opportunities,
Mid-Cap Summit and Small Cap Frontier Funds are not controlled by or under
common control with any other person. The Registrant has no subsidiaries.
ITEM 25 INDEMNIFICATION
Provisions relating to indemnification of the Registrant's Trustees and
employees are included in Registrant's Restatement of Declaration of Trust and
Bylaws which are incorporated herein by reference.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to Trustees, officers and controlling persons, or
otherwise, Registrant has been advised that in the opinion of the Commission
such indemnification may be against public policy as expressed in the Act and
may be, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a Trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 26 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
(a). Capital Appreciation, Global, Growth, Balanced, Flexible Income,
Aggressive Growth, International Equity, CA.S.E., Value Equity,
Strategic Total Return, Tactical Asset Allocation,, Income Plus,
Tax-Exempt Portfolios; Blue Chip, Dividend Growth, Mid-Cap
Opportunities, Mid-Cap Summit and Small Cap Frontier Funds:
The only business of Idex Management, Inc. ("IMI") is to serve as the
investment adviser to each Fund of IDEX Series Fund.
* * *
Janus Capital Corporation ("Janus Capital"), located at 100 Fillmore
Street, Denver, CO 80206, serves as sub-adviser to certain portfolios in the
IDEX Series Fund and as investment adviser to each portfolio of Janus Investment
Fund and Janus Aspen Series and as adviser or sub-adviser to several other
mutual funds and private and retirement accounts. Janus Capital also serves as
sub-adviser to certain portfolios of the WRL Series Fund, Inc. Thomas H. Bailey,
Chairman and President of Janus Capital, has no business, profession, vocation
or employment of a substantial nature other than his positions with, Janus
Investment Fund, Janus Aspen Series and Janus Capital. Steven R. Goodbarn, Vice
President of Finance, Treasurer and Chief Financial Officer of Janus Capital,
Treasurer and Chief Financial Officer of Janus Investment Fund and Janus Aspen
Series Inc., has no substantial business, profession, vocation or employment
other than his positions with Janus Capital, Janus Investment Fund, Janus Aspen
Series and Idex Management, Inc. James P. Craig, James P. Goff, Scott W.
Schoelzel, Ronald V. Speaker and Helen Y. Hayes are Vice Presidents of Janus
Capital, and have no substantial business, profession, vocation or employment
other than their positions with Janus Capital, Janus Investment Fund and Janus
Aspen Series. Michael N. Stolper, a director of Janus Capital, is President of
Stolper & Company, Inc., 525 "B" Street, Suite 1080, San Diego, CA 92101, an
investment performance consultant.
- ----------
(7) Filed previously by the registrant with the registration statement filed on
Form N-14 on June 3, 1996 (File No. 33-05113).
4
<PAGE>
Michael E. Herman, a director of Janus Capital, is Chairman of the Finance
Committee of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas City, MO 64112.
Thomas A. McDonnell, a director of Janus Capital, is President, Chief Executive
Officer and a director of DST Systems, Inc., 1004 Baltimore Avenue, Kansas City,
MO 64105, a provider of data processing and recordkeeping services for various
mutual funds (including the IDEX Series Fund), and Executive Vice President and
a director of Kansas City Southern Industries, Inc., 114 W. 11th Street, Kansas
City, MO, 64105, a publicly traded holding company whose primary subsidiaries
are engaged in transportation, information processing and financial services.
The only business, professions, vocations or employments of a substantial nature
of Messrs. Kenney, Hurley, Moriarty, Geiger and Pierpan, the remaining officers
and directors of Idex Management, Inc., are described under "Trustees and
Officers" in the Statement of Additional Information included in this
Registration Statement.
* * *
Fred Alger Management, Inc. ("Alger Management"), sub-adviser to the
Aggressive Growth Portfolio, is a wholly-owned subsidiary of Fred Alger &
Company, Incorporated ("Alger, Inc.") which in turn is a wholly-owned subsidiary
of Alger Associates, Inc., a financial services holding company. Alger
Management is generally engaged in rendering investment advisory services to
mutual funds, institutions and, to a lesser extent, individuals.
Fred M. Alger III serves as Chairman of the Board of Alger Associates,
Inc. ("Associates"), Alger Management, Alger, Inc., Alger Properties, Inc.
("Properties"), Alger Shareholder Services, Inc. ("Services"), Alger Life
Insurance Agency, Inc. ("Agency"), Fred Alger International Advisory SA
("International") and Analysts Resources, Inc. David D. Alger serves as
President and Director of Associates, Alger Management, Alger Inc., Properties,
Services, International and Agency; and Executive Vice President and Director of
Analysts Resources, Inc. Gregory S. Duch serves as Executive Vice President,
Treasurer and Director of Alger Management, Associates and Properties; Executive
Vice President and Treasurer of Alger Inc., Analysts Resources, Inc., Services
and Agency; and Treasurer and Director of International. Mary Marsden-Cochran
serves as Vice President, General Counsel and Secretary of Associates, Alger
Management, Alger Inc., Properties, Analysts Resources, Inc., Services,
International and Agency. The principal business address of each of the
companies listed above, other than Alger, Inc. and Services, is 75 Maiden Lane,
New York, NY 10038. The principal business address of Alger, Inc. and Services
is 30 Montgomery Street, Jersey City, NJ 07302.
* * *
Scottish Equitable Investment Management Limited ("Scottish Equitable"),
incorporated in Scotland, United Kingdom, serves as sub-adviser to the
International Equity Portfolio. William W. Stewart is Chairman of the Board and
Executive Director, Strategy; Otto Thoresen is Director, International Business;
Niall A.M. Franklin is Finance Director; Russell Hogan is Director and Chief
Investment Officer; Roy Patrick is Director and Secretary; Paul N. Ritchie is
Director and Investment Administration Manager. The principal address of
Scottish Equitable is Edinburgh Park, Edinburgh EH129SE, Scotland.
GE Investment Management Incorporated ("GEIM"), a Delaware corporation, is
a wholly-owned subsidiary of General Electric Company and a registered
investment adviser under the Investment Advisers Act of 1940, as amended.
GEIM serves as sub-adviser to the International Equity Portfolio. John H.
Myers is Chairman, CEO and President; Michael J. Cosgrove, Ralph R. Layman,
Robert A. MacDougall, Donald W. Torey, Eugene K. Bolton and Geoffrey R. Norman
are Executive Vice Presidents; Alan M. Lewis is Executive Vice President,
General Counsel and Secretary; Thomas J. Szkutak is Executive Vice President and
CFO. The principal address of GEIM is 3003 Summer Street, Stamford, CT 06905.
* * *
5
<PAGE>
C.A.S.E. Management, Inc. ("C.A.S.E".), sub-adviser to the C.A.S.E.
Portfolio, is a registered investment advisory firm and a wholly-owned
subsidiary of C.A.S.E., Inc. C.A.S.E., Inc. is indirectly controlled by William
Edward Lange, President and Chief Executive Officer of C.A.S.E. C.A.S.E.
provides investment management services to financial institutions, high net
worth individuals, and other professional money managers.
William E. Lange is the President, Chief Executive Officer and Founder;
Robert G. Errigo, Executive Vice President; John Gordon, Senior Vice President;
and Bruce H. Jordan, Senior Vice President. Officers of C.A.S.E. have no other
business, professions, vocations or employments of a substantial nature. The
business address of each of the officers is 5355 Town Center Road, Suite 702,
Boca Raton, FL 33486.
* * *
NWQ Investment Management Company, Inc. ("NWQ") is a Massachusetts
corporation and is a wholly-owned subsidiary of United Asset Management
Corporation. NWQ provides investment advice to individuals, pension funds,
profit sharing funds, charitable institutions, educational institutions, trust
accounts, corporations, insurance companies, municipalities and governmental
agencies.
NWQ, sub-adviser to the Value Equity Portfolio, is located at 2049 Century
Park East, 4th Floor, Los Angeles, CA 90067. David A. Polak is President,
Director & Chief Investment Officer; Edward C. Friedel, Jr. is Director &
Managing Director; James H. Galbreath (Denver) is Director & Managing Director;
Mary-Gene Slaven is Secretary/Treasurer & Managing Director; Michael C. Mendez
(Scottsdale, AZ) is Managing Director; Phyllis G. Thomas is Managing Director;
Thomas J. Laird is Managing Director; Jon D. Bosse is Managing Director; Justin
T. Clifford is Managing Director; Louis T. Chambers (Atlanta, GA), Jeffrey M.
Cohen, Ronald R. Halverson (Minneapolis, MN), Carl Katerndahl (San Francisco,
CA), Karen S. McCue, Martin Pollack and Ronald R. Sternal (Minneapolis, MN) are
Vice Presidents.
* * *
Luther King Capital Management Corporation ("Luther King"), sub-adviser to
the Strategic Total Return Portfolio, is a registered investment adviser
providing investment management services. Luther King also provides investment
management services to individual and institutional investors on a private
basis. J. Luther King, Jr., President of Luther King, Paul W. Greenwell, Steven
R. Purvis, Robert M. Holt, Jr., Scot C. Hollmann, David L. Dowler, Donald R.
Andrews, Joan M. Maynard, Vincent G. Melashenko, Timothy E. Harris and Barbara
S. Garcia, officers of Luther King, have no substantial business, profession,
vocation or employment other than their positions with Luther King.
* * *
Dean Investment Associates ("Dean Investment"), a division of C.H. Dean
and Associates, Inc., sub-adviser to the Tactical Asset Allocation Portfolio, is
a registered investment adviser providing investment management services. Dean
Investment became a registered investment adviser on March 11, 1974. C.H. Dean
and Associates, Inc. was incorporated as an Ohio corporation on March 28, 1975.
Chauncey H. Dean is the Chairman and Chief Executive Officer; Robert D.
Dean is President; Frank H. Scott is Senior Vice President; John C. Riazzi is
Vice President and Director of Consulting Services; Robert D. Dean is Vice
President and Director of Research; Richard M. Luthman is Senior Vice President;
Darrell N. Fulton is Vice President of Information Systems. The business address
of each of the officers of Dean Investment is 2480 Kettering Tower, Dayton, OH
45423-2480.
* * *
6
<PAGE>
AEGON USA Investment Management, Inc. ("AEGON Management"), is an Iowa
Corporation which was incorporated on April 12, 1989. AEGON Management became a
registered investment adviser on March 16, 1992 and has assumed all of the
investment advisory functions of AEGON USA Securities, Inc. ("AEGON
Securities"). AEGON Management and AEGON Securities are wholly-owned
subsidiaries of AUSA Holding Company, which is a wholly-owned subsidiary of
AEGON USA, Inc.
AEGON Management serves as sub-adviser to Tax-Exempt and Income Plus
Portfolios. Patrick E. Falconio, President, Director and Chairman of the Board
of AEGON Management, is also Executive Vice President and Chief Investment
Officer of AEGON USA, Inc.; Senior Vice President and Director of AUSA Holding
Company and Senior Vice President and Chief Investment Officer of AUSA Life
Insurance Company, Inc. Mr. Falconio is also currently an officer and/or a
director of other AEGON affiliates. Brenda K. Clancy, Director of AEGON
Management, is also Senior Vice President and Treasurer of AEGON USA, Inc. Ms.
Clancy is also Treasurer of AUSA Life Insurance Company, Inc. and is currently
an officer and/or director of other AEGON affiliates. Craig D. Vermie, Director
of AEGON Management, is also Secretary of AUSA Life Insurance Company, Inc. and
Vice President, Secretary and General Counsel of AEGON USA, Inc. Mr. Vermie is
also currently an officer and/or a director of other AEGON affiliates. Douglas
C. Kolsrud, Executive Vice President of AEGON Management, is also Executive Vice
President-Asset Allocation and Risk Management of AEGON USA, Inc. Mr. Kolsrud is
also currently an officer and/or a director of other AEGON affiliates. Donald E.
Flynn, Executive Vice President of AEGON Management is also a Vice President of
AUSA Life Insurance Company, Inc. Mr. Flynn is also currently an officer and/or
director of other AEGON affiliates. Clifford A. Sheets is an Executive Vice
President of AEGON Management; Ralph M. O'Brien, a Senior Vice President of
AEGON Management, is also a Vice President of AUSA Life Insurance Company, Inc.
Mr. O'Brien is also currently an officer and/or a director of other AEGON
affiliates. Michael Van Meter is a Senior Vice President of AEGON Management;
David R. Halfpap is a Senior Vice President of AEGON Management and a Vice
President of AUSA Life Insurance Company, Inc. Mr. Halfpap is also currently an
officer and/or a director of other AEGON affiliates. Steven P. Opp is Senior
Vice President of AEGON Management. Robert L. Hansen is Vice President of AEGON
Management and Vice President of AUSA Life Insurance Company, Inc.; Jon D.
Kettering is Vice President and Treasurer of AEGON Management and Vice President
of AUSA Life Insurance Company, Inc.; Gregory W. Theobald, Vice President and
Secretary of AEGON Management, is also Vice President and Asst. Secretary of
AUSA Life Insurance Company, Inc. Mr. Theobald is also currently an officer
and/or a director of other AEGON affiliates. Rachel A. Dennis, Michael N. Meese,
David M. Carney, Lewis O. Funkhouser, Thomas A. Keel, James E. Fine, Thomas E.
Myers, Bradley J. Berman and Daniel H. Thatcher are Vice Presidents of AEGON
Management. Mary T. Pech and Karen J. Green are Assistant Vice Presidents of
AEGON Management. Robert S. Jett is Assistant Secretary of AEGON Management.
* * *
Goldman Sachs Asset Management ("GSAM"), located at One New York Plaza,
New York, NY 10004, serves as sub-adviser to the Blue Chip Fund. David B. Ford
serves as Co-Head of GSAM and as Managing Director of Goldman Sachs & Co.; John
P. McNulty serves as Co-Head of GSAM and Managing Director of Goldman, Sachs &
Co.; Sharmin Mossavar-Rahmani serves as Managing Director of GSAM; Johnathan A.
Beinner, Co-Head of GSAM; Herbert E. Ehlers, Managing Director; Douglas G. Grip,
Managing Director; M. Roch Hillenbrand, Managing Director and President and
Director of Commodities Corporation LLC, 701 Mount Lucas Road, Princeton, NJ
08540; Robert C. Jones, Managing Director; Robert B. Litterman, Managing
Director and serves as Managing Director of Goldman, Sachs & Co.; Shogo Maeda,
Managing Director and serves as Representative Director of Goldman Sachs Asset
Management Japan Limited, ARK Mori Building, 12-32, Arkasaka 1-chrome,
Minato-ku, Tokyo 107, Japan; Donald J. Mulvihill, Managing Director; Warwick
Negus, Managing Director; Kaysie P. Uniacke, Managing Diector, Vice President
and Senior Portfolio Manager; Yasuyo Yamazaki, Managing Director; Robert A.
Beckwitt, Co-Head - Emerging Market Equities and Vice President; Mark M.
Carhart, Vice President; Phillip A. Cooper, Vice President & Director; Timothy
G. Ebright, Vice President and Portfolio Manager; Paul D. Farrell, Chief
Investment Officer - U.S. Active Equities; Elizabeth C. Groves, Vice President
and Portfolio Manger; Raymond J. Iwanowski, Jr., Vice President;
7
<PAGE>
Andrew R. Jessop, Vice President and Portfolio Manager; Stanley Kogelman, Vice
President, Private Asset Management Director of Client Research and Strategy; C.
Richard Lucy, Co-Head, Vice President and Portfolio Manager; and Michael L.
Pasternak, Vice President and Portfolio Manager.
* * *
Salomon Brothers Asset Management Inc ("SBAM"), 7 World Trade Center, New
York, NY, 10048 serves as sub-adviser to the Mid-Cap Summit Fund. Michael S.
Hyland, President and Managing Director, also serves as Managing Director of
Salomon Brothers Inc., New York, NY, Director and Chairman of Salomon Brothers
Asset Management Limited, London, England; Director of Salomon Brothers Asset
Management Japan Limited, Tokyo, Japan, and Chairman of Salomon Brothers Asset
Management (Ireland) Limited ; Vilas V. Gadkari, Managing Director, also serves
as Managing Director and Chief Investment Officer of Salomon Brothers Asset
Management Limited, London England, Managing Director of Salomon Brothers Inc.,
New York, NY, and Salomon Brothers International Limited, London, England;
Zacharay Snow, Secretary also serves as Managing Director of Salomon Brothers
Inc, New York, NY; Alan M. Mandel, Vice President and Chief Operating Officer,
serves as Director of Salomon Brothers Inc., New York, NY; Mutual Funds; Mitchel
E. Schulman, Director and Chief Operating Officer - Mutual Funds also serves as
Director and Chief Operating Officer of Salomon Brothers Inc., New York, NY;
Marcus A. Peckman, Director, Vice President and Chief Financial Officer also
serves as Director of Salomon Brothers, Inc., New York, NY; Jeffrey S. Scott,
Chief Compliance Officer; Michael F. Rosenbaum, Chief Legal Officer, also serves
as Chief Legal Officer of Salomon Brothers Asset Management Limited, London,
England, Chief Legal officer of Salomon Brothers Asset Management Asia Pacific
Limited, Hong Kong, Corporate Secretary of The Travelers Investment Management
Company, New York, NY, and General Counsel to Asset Management, Travelers Group
Inc., New York, NY and its predecessors; and Thomas W. Jasper, Treasurer, also
serves as Managing Director of Salomon Brothers Inc, New York, NY.
* * *
T. Rowe Price Associates, Inc., ("T. Rowe") 100 E. Pratt Street,
Baltimore, MD 21202, serves as sub-adviser to the Dividend Growth and Small Cap
Frontier Funds. Charles P. Smith, Managing Director; Robert W. Smith, Managing
Director; Robert L. Strickland, Director; William J. Stromberg, Managing
Director, Vice President and Investment Analyst; Michael D. Testa, Vice Chairman
of the Board, Chief Investment Officer and Managing Director; Peter Van Dyke,
Managing Director; Charles E. Veith, Managing Director; and Phillip C. Walsh,
Director; Richard T. Whitney, Managing Director and Portfolio Manager; Anne M.
Whittemore, Director; Alvin M. Younger, Jr., Chief Financial Officer, Treasurer,
Secretary and Managing Director; George D. Reidel, Vice President; and Darrell
N. Braman, Associate Legal Counsel and Vice President also serves as an officer
of T. Rowe Price Investment Services, T. Rowe Price Trust Company and T. Rowe
Price Stable Asset Management.
* * *
Pilgrim Baxter & Associates, Ltd., ("Pilgrim") 825 Duportail Road, Wayne,
PA 19087, serves as sub-adviser to the Mid-Cap Summit Fund. Harold J. Baxter,
Chairman, Chief Executive Officer and Director, also serves as Trustee to PBHG
Fund Distributors (same address), Pilgrim Baxter Value Investors, Inc., Director
and Chairman of PBHG Insurance Series Fund, Inc., Trustee of PBHG Fund Services,
and Chairman and Director of The PBGH Funds, Inc., Gary L. Pilgrim, Chief
Investment Officer and Director, is Director of Pilgrim Baxter Value Investors,
Inc., Trustee of PBHG Fund Services, and President of PBHG Advisor Funds, Inc.,
PBHG Insurance Series Fund, Inc., and The PBHG Funds, Inc. (all same address);
Eric C. Schnieder, Chief Financial Officer and Treasurer, is Chief Financial
Officer and Treasurer of Pilgrim Baxter Value Investors, Inc., and Chief
Financial Officer of PBHG Fund Services; Stephen M. Wellman, Vice President,
Operations; Amy S. Yuter, Chief Compliance Officer, is Chief Compliance Officer
of PBHG Fund Distributors, Pilgrim Baxter Value Investors, Inc., and is Director
of NSCP, an industry association; and John M. Zerr, General Counsel and
Secretary, also serves as General Counsel and Secretary of Pilgrim Baxter Value
Investors, Inc., PBHG Fund Distributors, PBHG Fund Services, and as Vice
President and Secretary of PBHG Advisor Funds, Inc., and PBHG Insurance Series
Fund, Inc.
8
<PAGE>
ITEM 27 PRINCIPAL UNDERWRITER
InterSecurities, Inc.
(a) The Registrant has entered into an Underwriting Agreement with
InterSecurities, Inc. ("ISI"), whose address is P.O. Box 9053,
Clearwater, FL 33758-9053, to act as the principal underwriter of
Fund shares. ISI also serves as the underwriter for the WRL Series
Fund, Inc. and the variable annuities and variable life insurance
policies offered by Western Reserve Life Assurance Co. of Ohio.
(b) Directors and Officers of Principal Underwriter
<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES WITH UNDERWRITER POSITIONS AND OFFICES WITH REGISTRANT
---- -------------------------------------- -------------------------------------
<S> <C> <C>
John R. Kenney Chairman and Director Chairman and Trustee
G. John Hurley President, Chief Executive Officer President, Chief Executive
and Director Officer and Trustee
William H. Geiger Director and Secretary Vice President and Assistant
Secretary
Thomas R. Moriarty Senior Vice President Senior Vice President, Treasurer and
Principal Financial Officer
Ronald L. Hall Vice President, Sales and Senior Vice President, Sales and
Marketing Marketing
Kristy L. Dowd Vice President N/A
Thomas E. Pierpan Assistant Vice President, Counsel Vice President, Associate General
Counsel and Secretary
Christopher G. Roetzer Assistant Vice President Vice President, Assistant Treasurer
And Principal Accounting Officer
Cynthia L. Remley Vice President, Counsel and N/A
Assistant Secretary
Terry L. Garvin Vice President N/A
Stanley R. Orr Vice President N/A
William G. Cummings Vice President and Treasurer N/A
Diane Rogers Assistant Vice President N/A
Russell W. Crooks Assistant Vice President N/A
9
<PAGE>
Greg Limardi Assistant Vice President N/A
Christine M. Goodwin Assistant Vice President N/A
Stuart Walsky Assistant Vice President N/A
Duncan H. Cameron Assistant Vice President N/A
Laura Hunt Assistant Secretary N/A
</TABLE>
(c) Not applicable
ITEM 28 LOCATION OF ACCOUNTS AND RECORDS
- ------- --------------------------------
The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's transfer
agent, Idex Investor Services, Inc., P. O. Box 9015, Clearwater, FL
33758-9015.
(b) All other accounting records of the Registrant are maintained at the
offices of the Registrant at 570 Carillon Parkway, St. Petersburg,
Florida 33716 and are in the physical possession of the officers of
the Fund, or at the offices of the Custodian, Investors Fiduciary
Trust Company, 801 Pennsylvania, Kansas City, MO 64105-1307.
(c) Not applicable
ITEM 29 MANAGEMENT SERVICES
The Registrant has no management-related service contract that is not
discussed in Part I of this form. See the section of the Prospectus entitled
"Investment Advisory and Other Services" for a discussion of the management and
advisory services furnished by IMI, ISI, Alger Management, Scottish Equitable,
GEIM, Janus Capital, C.A.S.E., NWQ, Luther King, Dean Investment, AEGON
Management GSAM, T. Rowe Price, SBAM and Pilgrim pursuant to the Management and
Investment Advisory Agreements, the Investment Counsel Agreements, the
Administrative Services Agreements and the Underwriting Agreement.
ITEM 30 UNDERTAKINGS
Not applicable
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant, IDEX Series Fund has
duly caused this Post-Effective Amendment No. 29 to its Registration Statement
to be signed on its behalf by the undersigned, thereunder duly authorized, in
the City of St. Petersburg, State of Florida, on this 14th day of December,
1998.
IDEX Series Fund
By: /s/ G. JOHN HURLEY
-----------------------------------------
G. John Hurley
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 and Investment
Company Act of 1940, this Post-Effective Amendment No. 29 to its Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
/s/ JOHN R. KENNEY Chairman and Trustee December 14, 1998
- --------------------------
John R. Kenney
/s/ G. JOHN HURLEY President and Trustee December 14, 1998
- -------------------------- (Principal Executive Officer)
G. John Hurley
/s/ THOMAS R. MORIARTY Senior Vice President December 14, 1998
- -------------------------- Treasurer and Principal
Thomas R. Moriarty Financial Officer
/s/ CHRISTOPHER G. ROETZER Vice President, Assistant December 14, 1998
- -------------------------- Treasurer and Principal
Christopher G. Roetzer Accounting Officer
/s/ PETER R. BROWN * Trustee December 14, 1998
- --------------------------
Peter R. Brown *
/s/ DANIEL CALABRIA* Trustee December 14, 1998
- ---------------------------
Daniel Calabria *
/s/ JAMES L. CHURCHILL * Trustee December 14, 1998
- ---------------------------
James L. Churchill *
<PAGE>
/s/ CHARLES C. HARRIS * Trustee December 14, 1998
- ---------------------------
Charles C. Harris*
/s/ JULIAN A. LERNER* Trustee December 14, 1998
- ----------------------------
Julian A. Lerner *
/s/ WILLIAM W. SHORT, JR. * Trustee December 14, 1998
- ----------------------------
William W. Short, Jr. *
/s/ JACK E. ZIMMERMAN * Trustee December 14, 1998
- ----------------------------
Jack E. Zimmerman *
/s/ G. JOHN HURLEY
- -----------------------------
*Signed by G. John Hurley
Attorney in Fact
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS FILED WITH
POST-EFFECTIVE AMENDMENT NO. 29 TO
REGISTRATION STATEMENT ON
FORM N-1A
IDEX SERIES FUND
REGISTRATION NO. 33-2659
EXHIBIT 99.B5-1
EXHIBIT (d) (1) (cc)
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF THE
IDEX CAPITAL APPRECIATION, GLOBAL, GROWTH,
BALANCED AND FLEXIBLE INCOME PORTFOLIOS
<PAGE>
IDEX SERIES FUND
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of the later of June 25, 1998 (closing of
Acquisition) and approval by shareholders of each Portfolio, as defined below,
by a vote of at least a majority of outstanding voting securities of such
Portfolio as defined in Section 2(a)(42) of the Investment Company Act of 1940,
as amended (the "1940 Act"), between IDEX Series Fund, a Massachusetts business
trust (referred to herein as the "Fund") and Idex Management, Inc., a Delaware
corporation (referred to herein as "Idex Management"), to provide certain
advisory services to certain series of shares of beneficial interest in the Fund
as listed on the attached Schedule A to this Agreement (each a "Portfolio,"
collectively the "Portfolios").
The Fund is registered as an open-end investment company under the 1940
Act, and consists of more than one series of shares, including the Portfolios.
In managing the Portfolios, as well as in the conduct of certain of its affairs,
the Fund wishes to have the benefit of the investment advisory services of Idex
Management and its assistance in performing certain management, administrative
and promotional functions. Idex Management desires to furnish services for the
Portfolios and to perform the functions assigned to it under this Agreement for
the considerations provided. Accordingly, the parties of agreed as follows:
1. APPOINTMENT. The Fund hereby appoints Idex Management as the
Portfolios' investment adviser and administrator for the period and on the terms
set forth in this Agreement. Idex Management accepts such appointment and agrees
to render or cause to be rendered the services set forth for the compensation
herein specified. In all matters relating to the performance of this Agreement,
Idex Management will act in conformity with the Fund's Declaration of Trust,
Bylaws and registration statement applicable to the Portfolios and with the
instructions and direction of the Board of Trustees of the Fund, and will
conform to and comply with the 1940 Act and all other applicable federal or
state laws and regulations.
2. INVESTMENT ADVISORY SERVICES. In its capacity as investment adviser to
the Portfolios, Idex Management shall have the following responsibilities:
(a) to provide a continuous investment program for each Portfolio
including advice as to the acquisition, holding or disposition of any or
all of the securities or other assets which the Portfolios may own or
contemplate acquiring from time to time, consistent with the Fund's
Declaration of Trust and each Portfolio's investment objective and
policies adopted and declared by the Board of Trustees and stated in the
Portfolios' current Prospectus;
<PAGE>
(b) to cause the officers of Idex Management to attend meetings and
furnish oral or written reports, as the Fund may reasonably require, in
order to keep the Trustees and appropriate officers of the Fund fully
informed as to the conditions of the investment securities of the
Portfolios, the investment recommendations of Idex Management, and the
investment considerations which have given rise to those recommendations;
and
(c) to supervise the purchase and sale of securities as directed by the
appropriate officers of the Fund, including the selection of brokers and
dealers to execute such transactions, consistent with paragraph 8 hereof.
It is understood and agreed that Idex Management intends to enter into an
Investment Counsel Agreement with Janus Capital Corporation ("Janus Capital"), a
Colorado corporation, pursuant to which Idex Management may delegate some or all
of its responsibilities under this Section 2. The compensation to be paid to
Janus Capital for such services shall be set forth in Schedule A to the
Investment Counsel Agreement; provided, however, that such Agreement shall be
approved by the Board of Trustees and by the holders of the outstanding voting
securities of each of the Portfolios in accordance with the requirements of
Section 15 of the 1940 Act, and shall otherwise be subject to, and contain such
provisions as shall be required by, the 1940 Act.
3. MANAGEMENT AND ADMINISTRATIVE SERVICES. Idex Management shall furnish
or make available to the Portfolios the services of executive and management
personnel to supervise the performance of all administrative, recordkeeping,
shareholder relations, regulatory reporting and compliance, and all other
functions of the Portfolios, including supervising and coordinating the services
of the Portfolios' custodian and transfer agent. Idex Management shall also
assist in the preparation of reports to shareholders of the Portfolios and
prepare sales literature promoting sale of the Portfolios' shares as requested
by the Fund.
4. ALLOCATION OF EXPENSES. During the term of this Agreement, each
Portfolio will bear all expenses not expressly assumed by Idex Management
incurred in the operation of each Portfolio and the offering of its shares.
Without limiting the generality of the foregoing:
(a) Each Portfolio shall pay (i) fees payable to Idex Management pursuant
to this Agreement; (ii) the cost (including brokerage commissions, if any)
incurred in connection with purchases and sales of each Portfolio's
portfolio securities; (iii) expenses of organizing the Portfolio; (iv)
filing fees and expenses relating to registering and qualifying and
maintaining the registration and qualification of a Portfolio's shares for
sale under federal and
<PAGE>
state securities laws; (v) its allocable share of the compensation, fees
and reimbursements paid to the Fund's non-interested Trustees; (vi)
custodian and transfer agent fees; (vii) legal and accounting expenses
allocable to each Portfolio, including costs for local representation in
Massachusetts and fees of special counsel, if any, for the independent
Trustees; (viii) all federal, state and local tax (including stamp,
excise, income and franchise taxes and the preparation and filing of all
returns and reports in connection therewith; (ix) cost of certificates and
delivery to purchasers; (x) expenses of preparing and filing reports with
federal and state regulatory authorities; (xi) expenses of shareholders'
meetings and of preparing, printing and distributing proxy statements
(unless otherwise agreed to by the Fund and Idex Management); (xii) costs
of any liability, uncollectible items of deposit and other insurance or
fidelity bonds; (xiii) any costs, expenses or losses arising out of any
liability of or claim for damage or other relief asserted against the Fund
for violation of any law; (xiv) expenses of preparing, typesetting and
printing prospectuses and supplements thereto for existing shareholders
and of reports and statements to shareholders; (xv) fees and expenses in
connection with membership in investment company organizations; and (xvi)
any extraordinary expenses incurred by the Fund on behalf of the
Portfolios.
(b) Idex Management shall pay (i) all expenses incurred by it in the
performance of its duties under this Agreement; and (ii) compensation,
fees and expenses of officers and Trustees of the Fund, except for such
Trustees who are not interested persons (as defined in the 1940 Act) of
Idex Management;
(c) If, for any fiscal year, the total expenses of a Portfolio, including
but not limited to: the fees to Idex Management, compensation to its
custodian, transfer agent, registrar, auditors and legal counsel, printing
expense, and fees, compensation and expenses to Trustees who are not
interested persons, exceed any expense limitation imposed by applicable
state law, Idex Management shall reimburse a Portfolio for such excess in
the manner and to the extent required by applicable state law; provided,
however, that Idex Management shall reimburse each Portfolio (except
Global) for the amount of such expenses which exceed 1-1/2% of the
Portfolio's average daily net assets. For purposes of this sub-paragraph,
"total expenses" shall not include interest, taxes, litigation expenses,
brokerage commissions or other costs incurred in acquiring or disposing of
any of a Portfolio's portfolio securities, expenses incurred pursuant to a
Portfolio's Plan of Distribution under Rule 12b-1 of the 1940 Act, or any
costs arising other than in the ordinary and necessary course of a
Portfolio's business.
<PAGE>
5. OBLIGATIONS OF FUND. The Fund shall have the following obligations
under the Agreement:
(a) to keep Idex Management continuously and fully informed as to the
composition of its investment portfolio of each Portfolio and the nature
of all of its assets and liabilities from time to time;
(b) to furnish Idex Management with a certified copy of any financial
statement or report prepared for a Portfolio by certified or independent
public accountants, and with copies of any financial statements or reports
made to its shareholders or to any governmental body or securities
exchange;
(c) to furnish Idex Management with any further materials or information
which Idex Management may reasonably request to enable it to perform its
functions under this Agreement; and
(d) to compensate Idex Management for its services in accordance with the
provisions of Section 6 hereof.
6. COMPENSATION. Each Portfolio shall pay to Idex Management for its
services a fee, computed daily and paid monthly, payable on the last day of each
month during which or part of which this Agreement is in effect, as set forth on
Schedule A attached to this Agreement, as it may be amended from time to time in
accordance with Section 15 below. For the month during which this Agreement
becomes effective and the month during which it terminates, however, there shall
be an appropriate pro-ration of the fee payable for such month based on the
number of calendar days of such month during which this Agreement is effective.
7. TREATMENT OF INVESTMENT ADVICE. With respect to a Portfolio, the Fund
shall retain full control over its own investment policies. However, the
Trustees of the Fund may delegate to the appropriate officers of the Fund, or to
a committee of Trustees, the power to authorize purchases, sales or other
actions affecting each Portfolio in the interim between meetings of the
Trustees, provided such action is consistent with the established investment
policy of the Trustees and is reported to the Trustees at their next meeting.
8. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by a Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. Idex Management is authorized and directed to place a
Portfolio's securities transactions, or to delegate to Janus Capital the
authority and direction to place a Portfolio's securities transactions, only
with brokers and dealers who render satisfactory service in the execution of
orders at the most favorable prices and at reasonable commission rates;
provided, however, that Idex Management or Janus Capital, may pay a broker or
dealer an amount of commission for effecting
<PAGE>
a securities transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Idex Management or
Janus Capital determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of either that particular
transaction or the overall responsibilities of Idex Management or Janus Capital.
Idex Management and Janus Capital are also authorized to consider sales of
Portfolio shares (which shall be deemed to include also shares of other
registered investment companies with the same investment adviser) by a
broker-dealer or the recommendation of a broker-dealer to its customers that
they purchase Portfolio shares as a factor in selecting broker-dealers to
execute the Portfolio's securities transactions, provided that in placing
portfolio business with such broker-dealers, Idex Management and Janus Capital
shall seek the best execution of each transaction and all such brokerage
placement shall be consistent with the Conduct Rules of the National Association
of Securities Dealers, Inc. Notwithstanding the foregoing, the Fund shall retain
the right to direct the placement of all securities transactions of each
Portfolio, and the Trustees may establish policies or guidelines to be followed
by Idex Management and Janus Capital in placing portfolio transactions for each
Portfolio pursuant to the foregoing provisions. Idex Management shall report on
the placement of portfolio transactions each quarter to the Trustees of the
Fund.
9. PURCHASES BY AFFILIATES. Neither Idex Management nor any officer or
Director thereof shall take a long or short position in the securities issued by
the Portfolios. This prohibition, however, shall not prevent the purchase from a
Portfolio of shares issued by the Fund on behalf of the Portfolio, by the
officers or Directors of Idex Management (or by deferred benefit plans
established for their benefit) at the current price available to the public, or
at such price with reductions in sales charge as may be permitted by the Fund's
current prospectus, in accordance with Section 22(d) of the 1940 Act.
10. TERM. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, for an initial term of 23 months ending
April 30, 2000, and shall continue in effect from year to year thereafter,
provided such continuance is specifically approved at least annually by the vote
of a majority of the Trustees of the Fund who are not parties hereto or
interested persons (as that term is defined in Section 2(a)(19) of the 1940 Act,
as amended) of any such party, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and by either
the Trustees of the Fund or the affirmative vote of a majority of the
outstanding voting securities of each Portfolio (as that phrase is defined in
Section 2(a)(42) of the 1940 Act.
11. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Fund, or with respect to a Portfolio, by the
shareholders of such Portfolio acting by vote of at least a majority of its
outstanding voting securities (as that phrase is defined in Section 2(a)(42) of
the 1940 Act),
<PAGE>
provided in either case that 60 days' written notice of termination be given to
Idex Management at its principal place of business. This Agreement may be
terminated by Idex Management at any time by giving 60 days' written notice of
termination to the Fund, addressed to its principal place of business.
12. USE OF NAME. If this Agreement is terminated and Idex Management no
longer serves as investment adviser to the Portfolios, Idex Management reserves
the right to withdraw from the Fund the use of the name "IDEX" with respect to
the Portfolios or any name misleadingly implying a continuing relationship
between the Portfolios and Idex Management or any of its affiliates.
13. LIABILITY OF IDEX MANAGEMENT. Idex Management may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither Idex Management nor its officers,
directors, employees or agents shall be subject to any liability to the Fund or
the Portfolios or any shareholder of the Portfolios for any error of judgment,
mistake of law or any loss arising out of any investment or other act or
omission in the course of, connected with or arising out of any service to be
rendered hereunder, except by reason of willful misfeasance, bad faith or gross
negligence in its performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement.
14. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as the term is defined in Section 2(a)(4) of the 1940 Act) of
this Agreement.
15. AMENDMENTS. This Agreement may be amended only with the approval by
the affirmative vote of a majority of the outstanding voting securities of each
affected Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940
Act) and the approval by the vote of a majority of Trustees of the Fund who are
not parties hereto or interested persons (as that phrase is defined in Section
2(a)(19) of the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of such amendment.
16. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this Agreement.
17. LIMITATION OF LIABILITY. A copy of the Fund's Declaration of Trust is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Trustees as
Trustees of the Fund and not individually, and that the obligations under this
Agreement are not binding upon any of the Trustees, officers, shareholders,
agents or employees of the Fund individually, but binding only upon the assets
and property of the Portfolios.
<PAGE>
ATTEST: IDEX MANAGEMENT, INC.
/s/ William H. Geiger By: /s/ G. John Hurley
- ---------------------------- -----------------------
William H. Geiger, Secretary G. John Hurley
President and Chief
Executive Officer
ATTEST: IDEX SERIES FUND
/s/ Thomas E. Pierpan By: /s/ John R. Kenney
- ---------------------------- -----------------------
Thomas E. Pierpan, Secretary John R. Kenney
Chairman of the Board
<PAGE>
Management and Investment Advisory Agreement
SCHEDULE A
- ---------------------------------------------------------------------------
PORTFOLIO PERCENTAGE OF TERMINATION
MONTHLY AVERAGE DATE
DAILY NET ASSETS
- ---------------------------------------------------------------------------
GROWTH, GLOBAL, BALANCED 1.000% of the first $750 April 30, 2000
AND CAPITAL APPRECIATION million of the Portfolio's
average daily net assets;
0.9000% of the next $250
million of assets; and
0.8500% of assets in excess
of $1 billion
- ---------------------------------------------------------------------------
FLEXIBLE INCOME 0.9000% of the first $100 April 30, 2000
million of the Portfolio's
average daily net assets;
0.8000% of the next $150
million in assets; and
0.7000% of assets in excess
of $250 million
- ---------------------------------------------------------------------------
<PAGE>
EXHIBIT (d) (1) (jj)
FORM OF MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF THE BLUE CHIP, DIVIDEND GROWTH, MID-CAP OPPORTUNITIES,
MID-CAP SUMMIT AND SMALL CAP FRONTIER FUNDS
<PAGE>
FORM OF
IDEX SERIES FUND
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of March 1, 1999 between IDEX Series Fund,
a Massachusetts business trust (referred to herein as the "Trust") and Idex
Management, Inc., a Delaware corporation (referred to herein as "Idex
Management"), to provide certain advisory services to certain series of shares
of beneficial interest in the Trust as listed on the attached Schedule A to this
Agreement (each a "Fund," collectively the "Funds").
The Trust is registered as an open-end investment company registered under
the 1940 Act, and consists of more than one series of shares, including the
Funds. In managing the Funds, as well as in the conduct of certain of its
affairs, the Trust wishes to have the benefit of the investment advisory
services of Idex Management and its assistance in performing certain management,
administrative and promotional functions. Idex Management desires to furnish
services for the Trust and to perform the functions assigned to it under this
Agreement for the considerations provided. Accordingly, the parties of agreed as
follows:
1. APPOINTMENT. The Trust hereby appoints Idex Management as the Trust's
investment adviser and administrator for the period and on the terms set forth
in this Agreement. Idex Management accepts such appointment and agrees to render
or cause to be rendered the services set forth for the compensation herein
specified. In all matters relating to the performance of this Agreement, Idex
Management will act in conformity with the Trust's Declaration of Trust, Bylaws
and current registration statement applicable to the Funds as it may be
supplemented from time to time, and with the instructions and direction of the
Board of Trustees of the Trust, and will conform to and comply with the 1940 Act
and all other applicable federal or state laws and regulations.
2. INVESTMENT ADVISORY SERVICES. In its capacity as investment adviser to
the Trust, Idex Management shall have the following responsibilities:
(a) to provide a continuous investment program for each Fund including
advice as to the acquisition, holding or disposition of any or all of the
securities or other assets which the Funds may own or contemplate
acquiring from time to time, consistent with the Trust's Declaration of
Trust and each Fund's investment objective and policies adopted and
declared by the Board of Trustees and stated in the Funds' current
Prospectus;
(b) to cause the officers of Idex Management to attend meetings and
furnish oral or written reports, as the Trust may reasonably require, in
order to keep the Trustees and appropriate officers of the Trust fully
informed as to the
<PAGE>
conditions of the investment securities of the Funds, the investment
recommendations of Idex Management, and the investment considerations
which have given rise to those recommendations; and
(c) to supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust, including the selection of brokers and
dealers to execute such transactions, consistent with paragraph 8 hereof.
It is understood and agreed that Idex Management intends to enter into
Investment Counsel Agreements with various sub-advisers as listed on Schedule A
(each a "sub-adviser," collectively, "sub-advisers") pursuant to which Idex
Management may delegate some or all of its responsibilities under this Section
2. The compensation to be paid to each sub-adviser for such services shall be
set forth in each Investment Counsel Agreement; provided, however, that each
such Agreement shall be approved by the Board of Trustees, including a majority
of the directors who are not parties to the Sub-Advisory Agreements or
interested persons (within the meaning of Section 2(a)(19) of the 1949 Act) of
any such party (the "Disinterested Directors"), and by the holders of the
outstanding voting securities of each of the Funds in accordance with the
requirements of Section 15 of the 1940 Act, and shall otherwise be subject to,
and contain such provisions as shall be required by, the 1940 Act.
3. MANAGEMENT AND ADMINISTRATIVE SERVICES. Idex Management shall furnish
or make available to the Funds the services of executive and management
personnel to supervise the performance of all administrative, record-keeping,
shareholder relations, regulatory reporting and compliance, and all other
functions of the Funds, including supervising and coordinating the services of
the Funds' custodian and transfer agent. Idex Management shall also assist in
the preparation of reports to shareholders of the Funds and prepare sales
literature promoting sale of the Funds' shares as requested by the Trust.
4. ALLOCATION OF EXPENSES. During the term of this Agreement, each Fund
will bear all expenses not expressly assumed by Idex Management incurred in the
operation of each Fund and the offering of its shares. Without limiting the
generality of the foregoing:
(a) Each Fund shall pay (i) fees payable to Idex Management pursuant to
this Agreement; (ii) the cost (including brokerage commissions, if any)
incurred in connection with purchases and sales of each Fund's portfolio
securities; (iii) expenses of organizing the Fund; (iv) filing fees and
expenses relating to registering and qualifying and maintaining the
registration and qualification of a Fund's shares for sale under federal
and state securities laws; (v) its allocable share of the compensation,
fees and reimbursements paid to the Trust's non-interested Trustees; (vi)
custodian and transfer agent fees; (vii) legal and accounting expenses
allocable to each Fund, including
<PAGE>
costs for local representation in Massachusetts and fees of special
counsel, if any, for the independent Trustees; (viii) all federal, state
and local tax (including stamp, excise, income and franchise taxes and the
preparation and filing of all returns and reports in connection therewith;
(ix) cost of certificates and delivery to purchasers; (x) expenses of
preparing and filing reports with federal and state regulatory
authorities; (xi) expenses of shareholders' meetings and of preparing,
printing and distributing proxy statements (unless otherwise agreed to by
the Trust and Idex Management); (xii) costs of any liability,
uncollectible items of deposit and other insurance or fidelity bonds;
(xiii) any costs, expenses or losses arising out of any liability of or
claim for damage or other relief asserted against the Trust for violation
of any law; (xiv) expenses of preparing, typesetting and printing
prospectuses and supplements thereto for existing shareholders and of
reports and statements to shareholders; (xv) fees and expenses in
connection with membership in investment company organizations and 12-b1
fees; and (xvi) any extraordinary expenses incurred by the Trust on behalf
of the Funds.
(b) Idex Management shall pay (i) all expenses incurred by it in the
performance of its duties under this Agreement; and (ii) compensation,
fees and expenses of officers and Trustees of the Trust, except for such
Trustees who are not interested persons (as defined in the 1940 Act) of
Idex Management;
(c) If, for any fiscal year, the total expenses of a Fund, including but
not limited to: the fees to Idex Management, compensation to its
custodian, transfer agent, registrar, auditors and legal counsel, printing
expense, and fees, compensation and expenses to Trustees who are not
interested persons, exceed any expense limitation imposed by applicable
state law, Idex Management shall reimburse a Fund for such excess in the
manner and to the extent required by applicable state law; provided,
however, that Idex Management shall reimburse each Fund for the amount of
such expenses which exceed 1.20% of the Fund's average daily net assets.
For purposes of this sub-paragraph, "total expenses" shall not include
interest, taxes, litigation expenses, brokerage commissions or other costs
incurred in acquiring or disposing of any of a Fund's portfolio
securities, expenses incurred pursuant to a Fund's Plan of Distribution
under Rule 12b-1 of the 1940 Act, or any costs arising other than in the
ordinary and necessary course of a Fund's business.
5. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under the Agreement:
<PAGE>
(a) to keep Idex Management continuously and fully informed as to the
composition of its investment portfolio of each Fund and the nature of all
of its assets and liabilities from time to time;
(b) to furnish Idex Management with a certified copy of any financial
statement or report prepared for a Fund by certified or independent public
accountants, and with copies of any financial statements or reports made
to its shareholders or to any governmental body or securities exchange;
(c) to furnish Idex Management with any further materials or information
which Idex Management may reasonably request to enable it to perform its
functions under this Agreement; and
(d) to compensate Idex Management for its services in accordance with the
provisions of Section 6 hereof.
6. COMPENSATION. Each Fund shall pay to Idex Management for its services a
fee, computed daily and paid monthly, payable on the last day of each month
during which or part of which this Agreement is in effect, as set forth on
Schedule A attached to this Agreement, as it may be amended from time to time in
accordance with Section 15 below. For the month during which this Agreement
becomes effective and the month during which it terminates, however, there shall
be an appropriate pro-ration of the fee payable for such month based on the
number of calendar days of such month during which this Agreement is effective.
7. TREATMENT OF INVESTMENT ADVICE. With respect to a Fund, the Fund shall
retain full control over its own investment policies. However, the Trustees of
the Trust may delegate to the appropriate officers of the Trust, or to a
committee of Trustees, the power to authorize purchases, sales or other actions
affecting each Fund in the interim between meetings of the Trustees, provided
such action is consistent with the established investment policy of the Trustees
and is reported to the Trustees at their next meeting.
8. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by a Fund upon the purchase or sale of its portfolio securities
shall be considered a cost of securities of the Fund and shall be paid by the
Fund. Idex Management is authorized and directed to place a Fund's securities
transactions, or to delegate to each sub-adviser the authority and direction to
place a Fund's securities transactions, only with brokers and dealers who render
satisfactory service in the execution of orders at the most favorable prices and
at reasonable commission rates; provided, however, that Idex Management or each
sub-adviser, may pay a broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Idex Management or
each sub-adviser determines in good faith that such amount of commission was
<PAGE>
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of either that particular
transaction or the overall responsibilities of Idex Management or each
sub-adviser. Idex Management and each sub-adviser are also authorized to
consider sales of Fund shares (which shall be deemed to include also shares of
other registered investment companies with the same investment adviser) by a
broker-dealer or the recommendation of a broker-dealer to its customers that
they purchase Fund shares as a factor in selecting broker-dealers to execute the
Fund's securities transactions, provided that in placing fund business with such
broker-dealers, Idex Management and each sub-adviser shall seek the best
execution of each transaction and all such brokerage placement shall be
consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc. Notwithstanding the foregoing, the Trust shall retain the right to
direct the placement of all securities transactions of each Fund, and the
Trustees may establish policies or guidelines to be followed by Idex Management
and each sub-adviser in placing portfolio transactions for each Fund pursuant to
the foregoing provisions. Idex Management shall report on the placement of
portfolio transactions each quarter to the Trustees of the Trust.
9. PURCHASES BY AFFILIATES. Neither Idex Management nor any officer or
Director thereof shall take a long or short position in the securities issued by
the Funds. This prohibition, however, shall not prevent the purchase from a Fund
of shares issued by the Fund on behalf of the Trust, by the officers or
Directors of Idex Management (or by deferred benefit plans established for their
benefit) at the current price available to the public, or at such price with
reductions in sales charge as may be permitted by the Fund's current prospectus,
in accordance with Section 22(d) of the 1940 Act.
10. TERM. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, for an initial term ending April 30,
2000, and shall continue in effect from year to year thereafter, provided such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees of the Trust who are not parties hereto or interested persons
(as that term is defined in Section 2(a)(19) of the 1940 Act, as amended) of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
each Fund (as that phrase is defined in Section 2(a)(42) of the 1940 Act.
11. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or with respect to a Fund, by the
shareholders of such Fund acting by vote of at least a majority of its
outstanding voting securities (as that phrase is defined in Section 2(a)(42) of
the 1940 Act), provided in either case that 60 days' written notice of
termination be given to Idex Management at its principal place of business. This
Agreement may be terminated by Idex
<PAGE>
Management at any time by giving 60 days' written notice of termination to the
Trust, addressed to its principal place of business.
12. USE OF NAME. If this Agreement is terminated and Idex Management no
longer serves as investment adviser to the Funds, Idex Management reserves the
right to withdraw from the Trust the use of the name "IDEX" with respect to the
Funds or any name misleadingly implying a continuing relationship between the
Funds and Idex Management or any of its affiliates.
13. LIABILITY OF IDEX MANAGEMENT. Idex Management may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither Idex Management nor its officers,
directors, employees or agents shall be subject to any liability to the Trust or
the Funds or any shareholder of the Funds for any error of judgment, mistake of
law or any loss arising out of any investment or other act or omission in the
course of, connected with or arising out of any service to be rendered
hereunder, except by reason of willful misfeasance, bad faith or gross
negligence in its performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement.
14. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as the term is defined in Section 2(a)(4) of the 1940 Act) of
this Agreement.
15. AMENDMENTS. This Agreement may be amended only with the approval by
the affirmative vote of a majority of the outstanding voting securities of each
affected Fund (as that phrase is defined in Section 2(a)(42) of the 1940 Act)
and the approval by the vote of a majority of Trustees of the Trust who are not
parties hereto or interested persons (as that phrase is defined in Section
2(a)(19) of the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of such amendment, unless otherwise
permitted by the 1940 Act,
16. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this Agreement.
17. LIMITATION OF LIABILITY. A copy of the Trust's Declaration of Trust is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Trustees as
Trustees of the Trust and not individually, and that the obligations under this
Agreement are not binding upon any of the Trustees, officers, shareholders,
agents or employees of the Trust individually, but binding only upon the assets
and property of the Trust.
<PAGE>
ATTEST: IDEX MANAGEMENT, INC.
____________________________ By:__________________________
William H. Geiger, Secretary G. John Hurley
President and Chief
Executive Officer
ATTEST: IDEX SERIES FUND
____________________________ By:__________________________
Thomas E. Pierpan, Secretary John R. Kenney
Chairman of the Board
<PAGE>
Management and Investment Advisory Agreement
SCHEDULE A
- -------------------------------------------------------------------------------
FUND PERCENTAGE OF TERMINATION
MONTHLY AVERAGE DATE
DAILY NET ASSETS
- -------------------------------------------------------------------------------
MID-CAP OPPORTUNITIES 0.80% of the first $500
million of the Fund's average
daily net assets and 0.70% April 30, 2000
of assets in excess of $500
million.
- -------------------------------------------------------------------------------
BLUE CHIP 0.80% of the first $500
million of the Fund's average
daily net assets and 0.70% April 30, 2000
of assets in excess of $500
million.
- -------------------------------------------------------------------------------
DIVIDEND GROWTH 0.80% of the first $500
million of the Fund's average
daily net assets and 0.70% April 30, 2000
of assets in excess of $500
million.
- -------------------------------------------------------------------------------
SMALL-CAP FRONTIER 0.80% of the first $500
million of the Fund's average
daily net assets and 0.70% April 30, 2000
of assets in excess of $500
million.
- -------------------------------------------------------------------------------
MID-CAP SUMMIT 0.80% of the first $500
million of the Fund's average
daily net assets and 0.70% April 30, 2000
of assets in excess of $500
million.
- -------------------------------------------------------------------------------
EXHDIBIT 99.B5-2
EXHIBIT (d) (2) (cc)
INVESTMENT COUNSEL AGREEMENT FOR THE
IDEX CAPITAL APPRECIATION, GLOBAL, GROWTH, BALANCED
AND FLEXIBLE INCOME PORTFOLIOS
<PAGE>
IDEX SERIES FUND
INVESTMENT COUNSEL AGREEMENT
This Agreement is entered into as of the later of June 25, 1998 (closing
of Acquisition) and approval by shareholders of each Portfolio, as defined
below, by a vote of at least a majority of outstanding voting securities of such
Portfolio as defined in Section 2(a)(42) of the Investment Company Act of 1940,
as amended (the "1940 Act"), between IDEX MANAGEMENT, INC., a Delaware
corporation (referred to herein as "Idex Management"), and JANUS CAPITAL
CORPORATION, a Colorado corporation (referred to herein as "Janus Capital").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated as of the
later of June 1, 1998 (closing of Acquisition) and approval by shareholders of
each Portfolio, as defined below, by a vote of at least a majority of
outstanding voting securities of such Portfolio as defined in Section 2(a)(42)
of the 1940 Act, with IDEX Series Fund, a Massachusetts business trust (referred
to herein as the "Fund") on behalf of the Portfolios listed on the attached
Schedule A to this Agreement (each a "Portfolio," collectively, "Portfolios"),
under which Idex Management has agreed, among other things, to act as investment
adviser to each Portfolio.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
Janus Capital to furnish investment information and advice to assist Idex
Management in carrying out its responsibilities under the Advisory Agreement as
investment adviser to each Portfolio.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
Janus Capital to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF JANUS CAPITAL. Janus Capital shall act as investment
counsel to Idex Management with respect to each Portfolio. In this capacity,
Janus Capital shall have the following responsibilities:
(a) provide a continuous investment program for each Portfolio including
advice as to the acquisition, holding or disposition of any or all of
the securities or other assets which a Portfolio may own or
contemplate acquiring from time to time;
<PAGE>
(b) to cause its officers to attend meetings of Idex Management or the
Fund and furnish oral or written reports, as Idex Management may
reasonably require, in order to keep Idex Management and its officers
and the Trustees of the Fund and appropriate officers of the Fund
fully informed as to the condition of the investment portfolio of each
Portfolio, the investment recommendations of Janus Capital, and the
investment considerations which have given rise to those
recommendations;
(c) to furnish such statistical and analytical information and reports as
may reasonably be required by Idex Management from time to time; and
(d) to supervise the purchase and sale of securities as directed by the
appropriate officers of the Fund.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the
following obligations under this Agreement:
(a) to keep Janus Capital continuously and fully informed as to the
composition of each Portfolio's investment portfolio and the nature of
each Portfolio's assets and liabilities from time to time;
(b) to furnish Janus Capital with a certified copy of any financial
statement or report prepared for each Portfolio by certified or
independent public accountants, and with copies of any financial
statements or reports made by a Portfolio to its shareholders or to
any governmental body or securities exchange;
(c) to furnish Janus Capital with any further materials or information
which Janus Capital may reasonably request to enable it to perform its
functions under this Agreement;
(d) to compensate Janus Capital for its services under this Agreement by
the payment of fees as set forth on Schedule A attached to this
Agreement, as it may be amended from time to time in accordance with
Section 10 below, less (ii) 50% of any amount reimbursed to the
Portfolio by Idex Management pursuant to the provisions of Section 4
(c) of the Advisory Agreement. In the event that this Agreement shall
be effective for only part of a period to which any such fee received
by Idex Management is attributable, then an appropriate pro-ration of
the fee that would have been payable hereunder if this Agreement had
remained in effect until the end of such period shall be made, based
on the number of calendar days in such period and the number of
calendar days during the period in which this
<PAGE>
Agreement was in effect. The fees payable to Janus Capital hereunder
shall be payable upon receipt by Idex Management from the Portfolio of
fees payable to Idex Management under Section 6 of the Advisory
Agreement; and
3. TREATMENT OF INVESTMENT ADVICE. Idex Management may direct Janus
Capital to furnish its investment information, advice and recommendations
directly to officers of the Fund.
4. PURCHASES BY AFFILIATES. Neither Janus Capital nor any of its officers
or Directors shall take a long or short position in the securities issued by the
Portfolios. This prohibition, however, shall not prevent the purchase from a
Portfolio of shares issued by the Fund on behalf of the Portfolios by the
officers and Directors of Janus Capital (or deferred benefit plans established
for their benefit) at the current price available to the public, or at such
price with reductions in sales charge as may be permitted in the Fund's current
prospectus in accordance with Section 22(d) of the Investment Company Act of
1940, as amended (the "1940 Act").
5. LIABILITY OF JANUS CAPITAL. Janus Capital may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither Janus Capital nor its officers, directors,
employees or agents shall be subject to any liability to the Fund or any
shareholders of the Fund for any error of judgment, mistake of law or any loss
arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Agreement.
6. COMPLIANCE WITH LAWS. Janus Capital represents that it is, and will
continue to be throughout the term of this Agreement, an investment adviser
registered under all applicable federal and state laws. In all matters relating
to the performance of this Agreement, Janus Capital will act in conformity with
the Fund's Declaration of Trust, Bylaws, and current prospectus and with the
instructions and direction of Idex Management and the Fund's Trustees, and will
conform to and comply with the 1940 Act and all other applicable federal or
state laws and regulations.
7. TERMINATION. This Agreement shall terminate automatically with respect
to a Portfolio upon the termination of the Advisory Agreement with respect to
such Portfolio. This Agreement may be terminated at any time with respect to a
Portfolio, without penalty, by Idex Management or by the Fund by giving 60 days'
written notice of such termination to Janus Capital at its principal place of
business, provided that such termination is approved by the Board of Trustees of
the Fund or by vote of a majority of the outstanding voting securities (as that
phrase is defined in Section 2(a)(42) of the 1940 Act) of the affected
Portfolio. This Agreement may
<PAGE>
be terminated at any time by Janus Capital by giving 60 days' written notice of
such termination to the Fund and Idex Management at their respective principal
places of business.
8. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as that term is defined in Section 2(a)(4) of the 1940 Act)
of this Agreement.
9. TERM. This Agreement shall continue in effect, unless sooner terminated
in accordance with its terms, for an initial term of 23 months from the later of
June __, 1998 (closing of Acquisition) and Shareholder approval, and shall
continue in effect from year to year thereafter so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Fund who are not parties hereto or interested persons (as that
term is defined in Section 2(a)(19) of the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Fund or the affirmative
vote of a majority of the outstanding voting securities of the Fund (as that
phrase is defined in Section 2(a)(42) of the 1940 Act).
10. AMENDMENTS. This Agreement may be amended with respect to a Portfolio
only with the approval by the affirmative vote of a majority of the outstanding
voting securities (as that phrase is defined in Section 2(a)(42) of the 1940
Act) of such Portfolio and the approval by the vote of a majority of the
Trustees of the Fund who are not parties hereto or interested persons (as that
term is defined in Section 2(a)(19) of the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on the approval of such
amendment.
11. PRIOR AGREEMENTS. This agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
<PAGE>
ATTEST: JANUS CAPITAL CORPORATION
/s/ ILLEGIBLE By: /s/ STEVEN R. GOODBARN
- ------------------- ----------------------------------
Secretary Title: Vice President
ATTEST: IDEX MANAGEMENT, INC.
/s/ WILLIAM GEIGER By: /s/ G. JOHN HURLEY
- ------------------ ----------------------------------
Assistant Secretary G. John Hurley
President and Chief Executive Officer
<PAGE>
Investment Counsel Agreement
SCHEDULE A
- -------------------------------------------------------------------------------
PORTFOLIO PERCENTAGE OF TERMINATION
MONTHLY AVERAGE DATE
DAILY NET ASSETS
- -------------------------------------------------------------------------------
GROWTH, GLOBAL, BALANCED 0.5000% of the first $750 April 30, 2000
AND CAPITAL APPRECIATION million of the Portfolio's
average daily net assets;
0.4500% of the next $250
million of assets; and
0.4250% of assets in excess
of $1 billion
- -------------------------------------------------------------------------------
FLEXIBLE INCOME 0.4500% of the first $100 April 30, 2000
million of the Portfolio's
average daily net assets;
0.4000% of the next $150
million in assets; and
0.3500% of assets in excess
of $250 million
- -------------------------------------------------------------------------------
EXHIBIT 99.B5-3
EXHIBIT (d) (2) (jj)
FORM OF INVESTMENT COUNSEL AGREEMENT
FOR THE BLUE CHIP FUND
<PAGE>
FORM OF
IDEX SERIES FUND
INVESTMENT COUNSEL AGREEMENT
This Agreement is entered into as of March 1, 1999 between IDEX
MANAGEMENT, INC., a Delaware corporation (referred to herein as "Idex
Management"), and Goldman Sachs Asset Management, a separate operating division
of Goldman Sachs & Co., a limited liability partnership organized and existing
under the laws of the State of New York (referred to herein as "Goldman Sachs").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated as of March 1,
1999 with IDEX Series Fund, a Massachusetts business trust (herein referred to
as "IDEX") on behalf of the IDEX Blue Chip Fund (the "Fund"), under which Idex
Management has agreed, among other things, to act as investment adviser to the
Fund.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
Goldman Sachs to furnish investment information and advice to assist Idex
Management in carrying out its responsibilities under the Advisory Agreement as
investment adviser to the Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
Goldman Sachs to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF GOLDMAN SACHS. Goldman Sachs shall act as investment
counsel to Idex Management with respect to the Fund. In this capacity, Goldman
Sachs shall have the following responsibilities:
(A) (a) provide a continuous investment program for the Fund including
advice as to the acquisition, holding or disposition of any or all
of the securities or other assets which the Fund may own or
contemplate acquiring from time to time;
(b) to cause its officers to attend meetings of Idex Management or IDEX
and furnish oral or written reports, as Idex Management may
reasonably require, in order to keep Idex Management and its
officers and the Trustees of IDEX and appropriate officers of IDEX
fully informed as to the condition of the investment portfolio of
the Fund, the investment recommendations of Goldman Sachs, and the
investment considerations which have given rise to those
recommendations;
(c) to furnish such statistical and analytical information and reports
as may reasonably be required by Idex Management from time to time;
and
(d) to supervise the purchase and sale of securities as directed by the
appropriate officers of IDEX or of Idex Management.
(e) INVESTMENT SUB-ADVISORY SERVICES. Goldman Sachs shall act as the
investment sub-adviser and shall supervise and direct the
investments of the Fund in accordance with the Fund's investment
objective, policies, and restrictions as provided in the Prospectus
and Statement of Additional Information, as currently in effect and
as amended or supplemented from time to time (hereinafter referred
to as the "Prospectus"), and such other limitations as directed by
the appropriate officers of IDEX Management or IDEX by notice in
writing to Goldman Sachs; provided that Goldman Sachs shall be
entitled to rely on and comply with the Prospectus most recently
furnished to Goldman Sachs by Idex Management. Goldman Sachs shall
obtain and evaluate such information relating to the economy,
industries, businesses, securities markets, and securities as it
may deem necessary or useful in the discharge of its obligations
hereunder and shall formulate and implement a continuing program
for the management of the assets and resources of the Fund in a
manner consistent with the Fund's investment objective, policies,
and restrictions. In furtherance of this duty, Goldman Sachs, on
behalf of the Fund, is authorized, in its discretion and without
prior consultation with IDEX or Idex Management, to:
(1) Buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds and other securities or assets; and
(2) Place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as Goldman
Sachs may select.
(B) ADDITIONAL DUTIES OF SUB-ADVISER. In addition to the above, Sub-Adviser
shall:
(a) furnish continuous investment information, advice and recommendations
to IDEX as to the acquisition, holding or disposition of any or all of the
securities or other assets which the Fund may own or contemplate acquiring
from time to time; and
(b) cause its officers to attend meetings of IDEX and furnish oral or
written reports, as IDEX may reasonably require, in order to keep IDEX and
its officers and Board fully informed as to the condition of the
investment securities of the Fund, the investment recommendations of
Goldman Sachs, and the investment considerations which have given rise to
those recommendations.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the
following obligations under this Agreement:
(a) to keep Goldman Sachs continuously and fully informed as to the
composition of the Fund's investment portfolio and the nature of the
Fund's assets and liabilities from time to time;
(b) Idex Management to furnish Goldman Sachs with copies of each of the
following documents and will furnish to Goldman Sachs at its principal
office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available;
(1) The Agreement and Declaration of Trust of IDEX, as filed with the
State of Massachusetts, as in effect on the date hereof and as amended
from time to time ("Articles");
(2) The By-Laws of IDEX as in effect on the date hereof and as amended
from time to time ("By-Laws");
(3) Certified resolutions of the Board of IDEX authorizing the
appointment of Idex Management and Goldman Sachs and approving the
form of the Advisory Agreement and this Agreement;
(4) IDEX Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended, on Form N-1A, as filed with the Securities
and Exchange Commission ("SEC") relating to the Fund and its shares
and all amendments thereto ("Registration Statement");
(5) The Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
(6) The Fund's Prospectus (as defined above); and
(7) A certified copy of any publicly available financial statement or
report prepared for the Fund by certified or independent public
accountants, and copies of any financial statements or reports made by
the Fund to its shareholders or to any government body or securities
exchange.
(c) to furnish Goldman Sachs with any further materials or information
which Goldman Sachs may reasonably request to enable it to perform its
functions under this Agreement;
(d) to compensate Goldman Sachs for its services under this Agreement by
the payment of a monthly fee equal to 0.50% of the average daily net
assets of the first $50 million in assets, 0.45% of the next $50 - $100
million in assets and 0.40% of assets in excess of $100 million for the
Fund. In the event that this Agreement shall be effective for only part of
a period to which any such fee received by Idex Management is
attributable, then an appropriate pro-ration of the fee that would have
been payable hereunder if this Agreement had remained in effect until the
end of such period shall be made, based on the number of calendar days in
such period and the number of calendar days during the period in which
this Agreement was in effect. The fees payable to Goldman Sachs hereunder
shall be payable upon receipt by Idex Management from the Fund of fees
payable to Idex Management under Section 6 of the Advisory Agreement;
3. BROKERAGE.
A. Goldman Sachs agrees that, in placing orders with broker-dealers for
the purchase or sale of portfolio securities, it shall attempt to obtain quality
execution at favorable security prices (best price and execution); provided
that, on behalf of the Fund, Goldman Sachs may, in its discretion, agree to pay
a broker-dealer that furnishes brokerage or research services as such services
are defined under Section 28(e) of the Securities Exchange Act of 1934, as
amended ("1934 Act"), a higher commission than that which might have been
charged by another broker-dealer for effecting the same transactions, if Goldman
Sachs determines in good faith that such commission is reasonable in relation to
the brokerage and research services provided by the broker-dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
Goldman Sachs with respect to the accounts as to which it exercises investment
discretion (as such term is defined under Section 3(a)(35) of the 1934 Act). In
no instance will portfolio securities be purchased from or sold to Goldman
Sachs, or any affiliated person thereof, except in accordance with the federal
securities laws and the rule and regulations thereunder.
B. On occasions when Goldman Sachs deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of
Goldman Sachs, Goldman Sachs, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by Goldman Sachs in the manner Goldman Sachs considers
to be most equitable and consistent with its fiduciary obligations to the Fund
and to its other clients.
C. In addition to the foregoing, Goldman Sachs agrees that orders with
broker-dealers for the purchase or sale of portfolio securities by the Fund
shall be placed in accordance with the standards set forth in the Advisory
Agreement, subject to compliance with applicable laws and procedures adopted by
the Trustees of IDEX.
D. Goldman Sachs is authorized to place orders on behalf of the Fund through the
Goldman Sachs or any affiliate thereof if Goldman Sachs or its affiliate is
registered as a broker or dealer with the SEC or as a FCM with the Commodities
Futures Trading Commission ("CFTC"), to any of its affiliates that are brokers
or dealers or FCBs or such other entities which provide similar services in
foreign countries, or to such brokers or dealers that also provide research or
statistical research and material, or other services to the Funds or Goldman
Sachs. Such allocation shall be in such amounts and proportions as Goldman Sachs
shall determine consistent with the above standards, and, upon, request, Goldman
Sachs will report on said allocation to Idex Management and Board of Trustees of
IDEX, indicating the brokers, dealers or FCBs to which such allocations have
been made and the basis therefor.
4. TREATMENT OF INVESTMENT ADVICE. Idex Management may direct Goldman
Sachs to furnish its investment information, advice and recommendations directly
to officers of IDEX.
5. PURCHASES BY AFFILIATES. Neither Goldman Sachs nor any of its officers
or Directors shall take a long or short position in the securities issued by the
Fund. This prohibition, however, shall not prevent the purchase from the Fund of
shares issued by the Fund on behalf of the Fund by the officers and Directors of
Goldman Sachs (or deferred benefit plans established for their benefit) at the
current price available to the public, or at such price with reductions in sales
charge as may be permitted in the Fund's current prospectus in accordance with
Section 22(d) of the Investment Company Act of 1940, as amended (the "1940
Act").
6. SERVICES TO OTHER CLIENTS. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of Goldman Sachs, or any affiliated person
thereof, to render investment management and corporate administrative services
to other investment companies, to act as investment manager or investment
counselor to other persons, firms, or corporations, or to engage in any other
business activities, or (ii) the right of any director, officer, or employee of
Goldman Sachs, who may also be a trustee, officer, or employee of IDEX, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
7. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS. Goldman Sachs may (at its
cost except as contemplated by paragraph 7 of this Agreement) employ, retain, or
otherwise avail itself of the services or facilities of other persons or
organizations for the purpose of obtaining such statistical and other factual
information, such advice regarding economic factors and trends, such advice as
to occasional transactions in specific securities, or such other information,
advice, or assistance as Goldman Sachs may deem necessary, appropriate, or
convenient for discharge of its obligations hereunder or otherwise helpful to
the Fund, as appropriate, or in the discharge of Goldman Sachs overall
responsibilities with respect to the other accounts that it serves as investment
manager or counselor, provided that Goldman Sachs shall at all times retain
responsibility for making investment recommendations with respect to the Fund.
8. LIMITATION OF LIABILITY OF THE SUB-ADVISER. Neither Goldman Sachs nor
any of its officers, directors, or employees, nor any person performing
executive, administrative, trading, or other functions for Goldman Sachs, the
Fund (at the direction or request of Goldman Sachs) or the Sub-Adviser in
connection with Goldman Sachs' discharge of its obligations undertaken or
reasonably assumed with respect to this Agreement, shall be liable for any error
of judgment or mistake of law or for any loss suffered by the Company or Fund or
any error of facts or mistake of law contained in any report or date provided by
Goldman Sachs, except for any error, mistake or loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties on
behalf of the Fund or from reckless disregard by Goldman Sachs or any such
person of the duties of Goldman Sachs pursuant to this Agreement.
9. REPRESENTATIONS. The parties hereto represent, warrant, and agree as
follows:
A. Idex Management and Goldman Sachs each: (i) is registered as an
investment adviser under the Advisers Act and any applicable state
laws and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940
Act or the Advisers Act from performing the services contemplated
by this Agreement; (iii) has met, and will continue to meet for so
long as this Agreement remains in effect, any applicable federal
or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met
in order to perform the services contemplated by this Agreement;
(iv) has the authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately notify
the other party of the occurrence of any event that would
disqualify such other party from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the 1940 Act
or otherwise.
B. Goldman Sachs has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and, if it has
not already done so, will provide the Investment Adviser and the
Fund with a copy of such code of ethics, together with evidence of
its adoption.
C. Goldman Sachs has provided Idex Management and IDEX with a copy of
its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to Idex Management.
10. TERM OF AGREEMENT. This Agreement shall become effective upon the date
first above written, provided that this Agreement shall not take effect unless
it has first been approved (i) by a vote of a majority of those Trustees who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Fund's outstanding voting securities. Unless sooner
terminated as provided herein, this Agreement shall continue in effect for an
initial term ending April 30, 2000. Thereafter, this Agreement shall continue in
effect from year to year, with respect to the Fund, subject to the termination
provisions and all other terms and conditions hereof, so long as such
continuation shall be specifically approved at least annually (a) by either the
Board, or by vote of a majority of the outstanding voting securities of the
Fund; and (b) in either event, by the vote, cast in person at a meeting called
for the purpose of voting on such approval, of a majority of the Trustees of
IDEX who are not parties to this Agreement or interested persons of any such
party. Goldman Sachs shall furnish to IDEX, promptly upon its request such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment hereof.
11. TERMINATION OF AGREEMENT. Notwithstanding the foregoing, this
Agreement may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on at least 60 days' prior written notice to Goldman
Sachs. This Agreement may also be terminated by Idex Management: (i) on at least
60 days' prior written notice to Goldman Sachs, without the payment of any
penalty; or (ii) if Goldman Sachs becomes unable to discharge its duties and
obligations under this Agreement. Goldman Sachs may terminate this Agreement at
any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior notice to Idex Management. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the Advisory
Agreement.
12. AMENDMENT OF AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought, and no amendment of this Agreement shall be effective
until approved by vote or a majority of the Fund outstanding voting securities
and a vote of a majority of those Trustees of IDEX who are no parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, unless otherwise permitted
in accordance with the 1940 Act.
13. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York without giving effect to the conflicts of laws
principles thereof, and the 1940 Act. To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the 1940 Act,
the latter shall control.
B. CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
C. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements shall be deemed terminated upon the effectiveness of this Agreement.
D. INTERPRETATION. Nothing herein contained shall be deemed to require
IDEX to take any action contrary to its Articles or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of its responsibility for and control
of the conduct of the affairs of IDEX.
E. DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless Idex
Management and Goldman Sachs agree to the contrary.
14. COMPLIANCE WITH LAWS.
(a) In all matters relating to the performance of this Agreement, Goldman
Sachs will act in conformity with the IDEX Declaration of Trust,
Bylaws, and current prospectus and with the instructions and direction
of Idex Management and the Fund's Trustees.
(b) Goldman Sachs shall conform with (1) the 1940 Act and all rules and
regulations thereunder, and releases and interpretations thereto
(including any no-action letters and exemptive orders which have been
granted by the SEC to the Fund, Idex Management and/or Goldman Sachs
and (2) with all other applicable federal and state laws and
regulations pertaining to management of investment companies.
(c) Idex Management shall perform quarterly and annual tax compliance
tests to ensure that the Fund is in compliance with Subchapter M of
the Internal Revenue Code ("IRC"). In connection with such compliance
tests, Idex Management shall prepare and provide reports to Goldman
Sachs within 10 business days of a calendar quarter end relating to
the diversification of the Fund under Subchapter M. Goldman Sachs
shall review such reports for purposes of determining compliance with
such diversification requirements. If it is determined that the Fund
is not in compliance with the requirements noted above, Goldman Sachs,
in consultation with Idex Management, will take prompt action to bring
the Fund back into compliance within the time permitted under the IRC.
15. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as that term is defined in Section 2(a)(4) of the 1940 Act)
of this Agreement.
16. REFERENCE TO SUB-ADVISER. Neither Idex Management nor IDEX will
publish or distribute any information, including but not limited to registration
statements, advertising or promotional material, regarding the provision of
investment advisory services by Goldman Sachs pursuant to this Agreement, or use
in advertising, publicity or otherwise the name of Goldman Sachs or any of its
affiliates, or any trade name, trademark, trade device, service mark, symbol or
any abbreviation, contraction or simulation thereof of Goldman Sachs or its
affiliates, without the prior written consent of Goldman Sachs. Notwithstanding
the foregoing, Idex Management may distribute information regarding the
provision of investment advisory services by Goldman Sachs to the Fund's Board
of Trustees ("Board Materials") without the prior written consent of Goldman
Sachs. Idex Management will provide copies of the Board Materials to Goldman
Sachs within a reasonable time following distribution to the IDEX Board of
Trustees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: GOLDMAN SACHS ASSET MANAGEMENT,
A separate Operating Division of Goldman,
Sachs & Co.
_____________________________ By:______________________________________
Secretary Title:
ATTEST: IDEX MANAGEMENT, INC.
_____________________________ By:______________________________________
Assistant Secretary G. John Hurley
President and Chief Executive Officer
EXHIBIT 99.B5-4
EXHIBIT (d) (2) (kk)
FORM OF INVESTMENT COUNSEL AGREEMENT
FOR DIVIDEND GROWTH FUND AND SMALL CAP
FRONTIER FUNDS
<PAGE>
FORM OF
IDEX SERIES FUND
INVESTMENT SUB-ADVISER AND COUNSEL AGREEMENT
This Agreement is entered into as of March 1, 1999 between IDEX
MANAGEMENT, INC., a Delaware corporation (referred to herein as "Idex
Management"), and T. Rowe Price Associates, Inc., a Maryland corporation
(referred to herein as "T. Rowe").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated as of March 1,
1999 with IDEX Series Fund ("IDEX"), a Massachusetts business trust registered
as an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), on behalf of the Dividend Growth Fund and
Small Cap Frontier Fund (each a "Fund," collectively, "Funds") of IDEX, pursuant
to which Idex Management has agreed, among other things, to act as investment
adviser to each Fund.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
T. Rowe to furnish investment information and advice to assist Idex Management
in carrying out its responsibilities under the Advisory Agreement as investment
adviser to each Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
T. Rowe to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF T. ROWE. T. Rowe shall act as sub-adviser and investment
counsel to Idex Management with respect to each Fund. In this capacity, T. Rowe
shall have the following responsibilities:
(a) to provide a continuous investment program for each Fund including
advice as to the acquisition, holding or disposition of any or all of
the securities or other assets which a Fund may own or contemplate
acquiring from time to time;
(b) to cause its officers to attend meetings of Idex Management or IDEX
and furnish oral or written reports, as Idex Management may reasonably
require, in order to keep Idex Management and its officers and the
Trustees of IDEX and appropriate officers of IDEX fully informed as to
the condition of the investment Portfolio of each Fund, the investment
recommendations of T. Rowe, and the investment considerations which
have given rise to those recommendations;
(c) to furnish such statistical and analytical information and reports as
may reasonably be required by Idex Management from time to time; and
(d) to supervise the purchase and sale of securities and place orders and
negotiate the commissions for the execution of transactions in
securities or other assets with or through such brokers, dealers,
underwriters or issuers that T. Rowe may select for each Fund.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the
following obligations under this Agreement:
(a) to keep T. Rowe continuously and fully informed as to the composition
of each Fund's investment Fund and the nature of each Fund's assets
and liabilities from time to time;
(b) to furnish T. Rowe with a certified copy of:
(1) any financial statement or report prepared for each Fund by
certified or independent public accountants, and with copies of any
financial statements or reports made by a Fund to its shareholders or
to any governmental body or securities exchange;
(2) The Declaration of Trust of IDEX, as filed with the Secretary of
State of the Commonwealth of Massachusetts, as in effect on the date
hereof and as amended from time to time ("Trust");
(3) The By-Laws of IDEX as in effect on the date hereof and as amended
from time to time ("By-Laws");
<PAGE>
(4) Certified resolutions of IDEX's Board of Trustees authorizing the
appointment of Idex Management as investment adviser and T. Rowe the
sub-adviser and approving the form of the Management and Investment
Advisory Agreement and this Agreement;
(5) IDEX's Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended, on Form N-1A, as filed with the Securities and
Exchange Commission ("SEC") relating to each Fund and its shares and
all amendments thereto ("Registration Statement");
(6) The Notification of Registration of IDEX under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
(7) The Funds' Prospectuses (as defined above); and
(c) to furnish T. Rowe with any further materials or information which T.
Rowe may reasonably request to enable it to perform its functions
under this Agreement;
(d) to compensate T. Rowe for its services provided, and the expenses
assumed under this Agreement, by (i) the payment of a monthly
sub-advisory fee as set forth on schedule A attached to this
Agreement, as it may be amended from time to time in accordance with
Section 13 below. The sub-advisory fee shall be accrued daily and
payable monthly to T. Rowe on or before the tenth (10th) day of the
next succeeding calendar month. In the event that this Agreement shall
be effective for only part of a period to which any such fee received
by Idex Management is attributable, then an appropriate pro-ration of
the fee that would have been payable hereunder if this Agreement had
remained in effect until the end of such period shall be made, based
on the number of calendar days in such period and the number of
calendar days during the period in which this Agreement was in effect.
3. TREATMENT OF INVESTMENT ADVICE. Idex Management may direct T. Rowe to
furnish its investment information, advice and recommendations directly to
officers of IDEX.
4. PURCHASES BY AFFILIATES. Neither T. Rowe nor any of its officers or
Directors shall take a long or short position in the securities issued by the
Funds on terms not otherwise available to the public. This prohibition, however,
shall not prevent the purchase from a Fund of shares issued by the Fund on
behalf of the Funds by the officers and Directors of T. Rowe (or deferred
benefit plans established for their benefit) at the current price available to
the public, or at such price with reductions in sales charge as may be permitted
in the Fund's current prospectus in accordance with Section 22(d) of the
Investment Company Act of 1940, as amended (the "1940 Act").
5. SERVICE OF OTHER CLIENTS. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of T. Rowe, or any affiliated person thereof,
to render investment management and corporate administrative services to other
investment companies, to act as investment manager or investment counselor to
other persons, firms, or corporations, or to engage in any other business
activities, or (ii) the right of any director, officer, or employee of T. Rowe,
who may also be a trustee, officer, or employee of IDEX, to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature.
6. T. ROWE'S USE OF THE SERVICES OF OTHERS. T. Rowe may (at its cost
except as contemplated by Paragraph 5 of this Agreement) employ, retain, or
otherwise avail itself of the services or facilities of other persons or
organizations for the purpose of obtaining such statistical and other factual
information, such advice regarding economic factors and trends, such advice as
to occasional transactions in specific securities, or such other information,
advice, or assistance as T. Rowe may deem necessary, appropriate, or convenient
for the discharge of its obligations hereunder or otherwise helpful to the
Funds, as appropriate, or in the discharge of T. Rowe's overall responsibilities
with respect to the other accounts that it serves as investment manager or
counselor, provided that T. Rowe shall at all times retain responsibility for
making investment recommendations with respect to each Fund.
7. LIMITATION OF LIABILITY OF T. ROWE. T. Rowe may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither T. Rowe nor its officers, directors,
employees or agents shall be subject to any liability to the Funds or any
shareholders of the Funds for any error of judgment, mistake of law or any loss
arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Agreement.
8. COMPLIANCE WITH LAWS. T. Rowe represents that it is, and will continue
to be throughout the term of this Agreement,
<PAGE>
an investment adviser registered under all applicable federal and state laws. In
all matters relating to the performance of this Agreement, T. Rowe will act in
conformity with the IDEX Declaration of Trust, Bylaws, and current prospectus
and with the reasonable instructions and direction of Idex Management and IDEX's
Trustees regarding management of the Funds' investments and will conform to and
comply with the 1940 Act and all other applicable federal or state laws and
regulations.
9. BROKERAGE.
A. T. Rowe agrees that, in placing orders with broker-dealers for
the purchase or sale of each Fund's securities, it shall attempt to obtain
quality execution at favorable security prices (best price and execution);
provided that, on behalf of the Fund, the T. Rowe may, in its discretion, agree
to pay a broker-dealer that furnishes brokerage or research services as such
services are defined under Section 28(e) of the Securities Exchange Act of 1934,
as amended ("1934 Act"), a higher commission than that which might have been
charged by another broker-dealer for effecting the same transactions, if T. Rowe
determines in good faith that such commission is reasonable in relation to the
brokerage and research services provided by the broker-dealer, viewed in terms
of either that particular transaction or the overall responsibilities of T. Rowe
with respect to the accounts as to which it exercises investment discretion (as
such term is defined under Section 3(a)(35) of the 1934 Act). In no instance
will Fund securities be purchased from or sold to T. Rowe, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder.
B. On occasions when T. Rowe deems the purchase or sale of a
security to be in the best interest of the Funds as well as other clients of T.
Rowe, T. Rowe, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to be purchased or
sold to attempt to obtain a more favorable price or lower brokerage commissions
and efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by T. Rowe in the manner T. Rowe considers to be the most equitable and
consistent with its fiduciary obligations to the Funds and to its other clients,
subject to compliance with applicable laws and procedures adopted by the
Trustees of IDEX.
10. TERMINATION. This Agreement shall terminate automatically with respect
to a Fund upon the termination of the Advisory Agreement with respect to such
Fund. This Agreement may be terminated at any time with respect to a Fund,
without penalty, by Idex Management or by IDEX by giving 60 days' written notice
of such termination to T. Rowe at its principal place of business, provided
that, if terminated by IDEX, such termination is approved by the Board of
Trustees of IDEX or by vote of a majority of the outstanding voting securities
(as that phrase is defined in Section 2(a)(42) of the 1940 Act) of the affected
Fund. This Agreement may be terminated at any time by T. Rowe by giving 60 days'
written notice of such termination to IDEX and Idex Management at their
respective principal places of business.
11. ASSIGNMENT. This Agreement shall terminate automatically, with respect
to a Fund, in the event of any assignment (as that term is defined in Section
2(a)(4) of the 1940 Act) of this Agreement with respect to a Fund.
12. TERM. This Agreement shall continue in effect, with respect to a Fund,
unless sooner terminated in accordance with its terms, for an initial term
ending April 30, 2000, and shall continue in effect from year to year thereafter
so long as such continuance is specifically approved at least annually by the
vote of a majority of the Trustees of IDEX who are not parties hereto or
interested persons (as that term is defined in Section 2(a)(19) of the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on the approval of the terms of such renewal, and by either the Trustees of IDEX
or the affirmative vote of a majority of the outstanding voting securities of
the Funds (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
13. AMENDMENTS. This Agreement may be amended with respect to a Fund only
with the approval by the affirmative vote of a majority of the outstanding
voting securities (as that phrase is defined in Section 2(a)(42) of the 1940
Act) of such Fund and the approval by the vote of a majority of the Trustees of
IDEX who are not parties hereto or interested persons (as that term is defined
in Section 2(a)(19) of the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on the approval of such amendment,
unless otherwise permitted in accordance with the 1940 Act.
14. PRIOR AGREEMENTS. This agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
15. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Maryland without giving effect to the conflicts of laws
principles thereof, and the 1940 Act. To the extent that the applicable laws of
the State of Maryland conflict with the applicable provisions of the 1940 Act,
the latter shall control.
<PAGE>
B. CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
C. INTERPRETATION. Nothing herein contained shall be deemed to require
IDEX to take any action contrary to its Articles or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of its responsibility for and control
of the conduct of the affairs of IDEX.
D. DEFINITIONS. Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless Idex
Management, Inc. and T. Rowe agree to the contrary.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: T. ROWE ASSOCIATES, INC.
_____________________________ By:______________________________________
Secretary Title:
ATTEST: IDEX MANAGEMENT, INC.
_____________________________ By:______________________________________
G. John Hurley
President and Chief Executive Officer
<PAGE>
Investment Counsel Agreement
SCHEDULE A
SUB-ADVISORY FEE
- -------------------------------------------------------------------------------
FUND ANNUAL PERCENTAGE OF TERMINATION DATE
MONTHLY AVERAGE DAILY
NET ASSETS
- -------------------------------------------------------------------------------
DIVIDEND GROWTH 0.50% of the first $100 April 30, 2000
million of the Fund's
average daily net assets;
0.40% of assets in excess
of $100 million (from
first dollar)
- -------------------------------------------------------------------------------
SMALL CAP FRONTIER 0.35% of the Fund's April 30, 2000
average daily net assets
- -------------------------------------------------------------------------------
EXHDIBIT 99.B5-5
EXHIBIT (d) (2) (ll)
FORM OF INVESTMENT COUNSEL AGREEMENT
FOR MID-CAP OPPORTUNITIES FUND
<PAGE>
FORM OF SUB-ADVISORY AGREEMENT
Agreement dated and effective as of March 1, 1999, between IDEX
Management, Inc., a Delaware corporation (the "Adviser") and Salomon Brothers
Asset Management, Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, the Adviser has entered into an Advisory Agreement (the "Advisory
Agreement") dated March 1, 1999, with IDEX Series Fund ("IDEX"), a Massachusetts
business trust registered as an open-end, management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), on behalf of
the Mid-Cap Opportunities Fund (the "Fund") of IDEX pursuant to which the
Adviser provides investment advisory services to the Fund;
WHEREAS, the Adviser has the authority to delegate its investment advisory
responsibilities under the Advisory Agreement to one or more sub-advisers;
WHEREAS, the Adviser desires to retain the Sub-Adviser to provide
investment advisory services to the Fund;
NOW THEREFORE, in consideration of the mutual agreements herein made, the
Adviser and the Sub-Adviser agree as follows:
1. (a) The Adviser employs the Sub-Adviser, subject to the direction and
control of the trustees of IDEX, including without limitation any approval of
the trustees of IDEX required by the 1940 Act, to (a) make, in consultation with
the Adviser and the IDEX Board of Trustees, investment strategy decisions for
the Fund, (b) manage the investing and reinvesting of the Fund's assets and (c)
place purchase and sale orders on behalf of the Fund. The Sub-Adviser shall have
the sole ultimate discretion over investment decisions for the Fund.
(b) At the Adviser's request, the Sub-Adviser agrees:
(1) to cause its officers to attend meetings of IDEX and furnish
oral or written reports, as the Adviser may reasonably
require, in order to keep the Adviser and its officers and the
Trustees of IDEX and appropriate officers of IDEX fully
informed as to the condition of the investments of the Fund
and the investment considerations which have given rise to
those recommendations; and
(2) to furnish such statistical and analytical information and
reports as may reasonably be required by the Adviser from time
to time.
2. (a) The adviser shall provide (or cause the Fund's custodian to
provide) timely information to the Sub-Adviser regarding such matters as the
composition of assets in the Fund, cash requirements and cash available for
investment in the Fund, and all other information as may be reasonably necessary
for the Sub-Adviser to perform its responsibilities hereunder.
(b) The Adviser agrees to furnish the Sub-Adviser with minutes of
meetings of the Board of Trustees of IDEX applicable to the Fund to the extent
they may affect the duties of the Sub-Adviser, and with copies of any financial
statements or reports made by the Fund to its shareholders, and any further
materials or
<PAGE>
information which the Sub-Adviser may reasonably request to enable it to perform
its functions under this Agreement.
3. (a) The Sub-Adviser shall, at its expense, provide office space, office
facilities and personnel reasonably necessary for performance of the services to
be provided by the Sub-Adviser pursuant to this Agreement.
(b) Except as provided in subparagraph 3(a) hereof, the Fund shall be
responsible for all of the Fund's expenses and liabilities, including
organizational and offering expenses (which include out-of-pocket expenses, but
not overhead or employee costs of the Sub-Adviser); expenses for legal,
accounting and auditing services; taxes and governmental fees; dues and expenses
incurred in connection with membership in investment company organizations;
costs of printing and distributing shareholder reports, proxy materials,
prospectuses, stock certificates and distribution of dividends; charges of the
Fund's custodians and sub-custodians, administrators and sub-administrators,
registrars, transfer agents, dividend disbursing agents and dividend
reinvestment plan agents; payment for portfolio pricing services to a pricing
agent, if any; registration and filing fees of the Securities and Exchange
Commission (the "SEC"); expenses of registering or qualifying securities of the
Fund for sale in the various states; freight and other charges in connection
with the shipment of the Fund's portfolio securities; fees and expenses of
non-interested trustees; travel expenses or an appropriate portion thereof of
trustees and offcers of the Fund who are trustees, officers or employees of the
Sub-Adviser to the extent that such expenses relate to attendance at meetings of
the Board of Trustees or any committee thereof; salaries of shareholder
relations personnel; costs of shareholders meetings; insurance; interest;
brokerage costs; and litigation and other extraordinary or non-recurring
expenses.
4. The Sub-Adviser shall make investments for the Fund's account in
accordance with the investment objectives, policies and limitations set forth in
IDEX's Agreement and Declaration of Trust as amended from time to time (the
"Declaration of Trust), the Registration Statement, as in effect from time to
time (the "Registration Statement"), filed with the SEC by IDEX under the 1940
Act and the Securities Act of 1933, as amended, the provisions of the Internal
Revenue Code of 1986, as amended, and supplemented from time to time, relating
to regulated investment companies, and policy decisions adopted by the IDEX
Board of Trustees from time to time. Copies of any amendments to the documents
referred to in the preceding sentence shall be promptly furnished to the
Sub-Adviser. The Sub-Adviser shall advise the IDEX officers and Board of
Trustees, at such time as the IDEX Board of Trustees may specify, of investments
made for the Fund's account and shall, when requested by the IDEX officers or
Board of Trustees, supply the reasons for making such investments.
5. Subject to applicable laws, the Sub-Adviser may contract with or
consult with such banks, other securities firms, brokers or other parties,
without additional expense to the Fund, as it may deem appropriate regarding
investment advice, research and statistical data, clerical assistance or
otherwise.
6. Subject to applicable laws, the Sub-Adviser is authorized on behalf of
the Fund, from time to time when deemed to be in the best interests of the Fund
and to the extent permitted by applicable law, to purchase and/or sell
securities in which the Sub-Adviser or any of their affiliates underwrites,
deals in and/or makes a market and/or may perform or seek to perform investment
banking services for issuers of such securities. The Sub-Adviser is further
authorized, to the extent permitted by applicable law, to select brokers
(including Salomon Brothers Inc or any other brokers affiliated with the
Sub-Adviser) for the execution of trades for the Fund.
7. Consistent with the Sub-Adviser's duty to seek to obtain quality
execution at favorable security prices (best price and execution) the
Sub-Adviser is authorized, for the purchase and sale of the Fund's portfolio
<PAGE>
securities, to employ such dealers and brokers as may, in the judgment of the
Sub-Adviser, implement the policy of the Fund to obtain the best results taking
into account such factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities and the firm's risk in positioning the securities
involved. Consistent with this policy, the Sub-Adviser is authorized to direct
the execution of the Fund's portfolio transactions to dealers and brokers
furnishing statistical information or research, as such is defined in Section
28(e) of the Securities Exchange Act of 1934, deemed by the Sub-Adviser to be
useful or valuable to the performance of its investment advisory functions for
the Fund. Information so received will be in addition to and not in lieu of the
services required to be performed by the Sub-Adviser. It is understood that the
expenses of the Sub-Adviser will not necessarily be reduced as a result of the
receipt of such information or research. The Sub-Adviser may use for the benefit
of the Sub-Adviser's other clients, or make available to companies affiliated
with the Sub-Adviser or to its directors for the benefit of its clients, any
such information or research services that the Sub-Adviser received from brokers
or dealers.
8. To compensate the Sub-Adviser for its services provided, and the
expenses assumed under this Agreement, by (i) the payment of a monthly fee as
set forth on Schedule A attached to this Agreement, as it may be amended from
time to time in accordance with Section 11 below. If the fee payable to the
Sub-Adviser pursuant to this paragraph 8 begins to accrue before the end of any
month or if this Agreement terminates before the end of any month, the fee for
the period from such date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs. For purposes of calculating each such
monthly fee, the value of the Fund's net assets shall be computed at the time
and in the manner specified in the Registration Statement.
9. The Sub-Adviser represents and warrants that it is duly registered and
authorized as an investment adviser under the Investment Adviser Act of 1940, as
amended, and any applicable state laws, and the Sub-Adviser agrees to maintain
effective all requisite registations, authorizations and licenses, as the case
may be, until termination of this Agreement.
10. The Sub-Adviser shall exercise its best judgment in rendering the
services in accordance with the terms of this Agreement. The Sub-Adviser shall
not be liable for any error of judgment or mistake of law or for any act or
omission or any loss suffered by the Fund in connection with the matters to
which this Agreement relates, provided that nothing herein shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to the Fund
or its shareholders, or the Adviser, to which the Sub-Adviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement ("disabling conduct").
11. This Agreement may be amended with respect to the Fund only with the
approval by the affirmative vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 1940 Act) of
the Fund and the approval by the vote of a majority of the Trustees of IDEX,
including a majority of Trustees who are not parties hereto or interested
persons (as that term is defined in Section 2(a)(19) of the 1940 Act) of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of such amendment, unless otherwise permitted in accordance with the
1940 Act.
12. This Agreement shall become effective as of the date of its execution
and continue in effect for an initial term ending April 30, 2000, and thereafter
for successive annual periods, provided that such continuance is specifically
approved at least annually (a) by the vote of a majority of IDEX's outstanding
voting securities (as defined in the 1940 Act) or by the IDEX Board of Trustees
and (b) by the vote, cast in person at a meeting called for the purpose, of a
majority of the IDEX Trustees who are not parties to this Agreement or
"interested
<PAGE>
persons" (as defined in the 1940 Act) of any such party. This Agreement may be
terminated at any time, without the payment of any penalty, by (i) IDEX, or by a
vote of the majority of IDEX's entire Board of Trustees on 60 days' written
notice to the Sub-Adviser or (ii) by the Sub-Adviser on 60 days' written notice
to the Adviser or (iii) by the Adviser on 60 days' written notice to the
Sub-Adviser. This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
13. Nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or any affiliate of the Sub-Adviser, or any employee of the
Sub-Adviser, to engage in any other business or to devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association. Nothing herein shall be construed as
constituting the Sub-Adviser an agent of the Adviser or the Fund.
14. This Agreement shall be governed by the laws of the State of New York;
provided, however, that nothing herein shall be construed as being inconsistent
with the 1940 Act.
15. Any notice hereunder shall be in writing and shall be delivered in
person or by telex or facsimile (followed by delivery in person) to the parties
at the addresses set forth below.
If to the Sub-Adviser:
Salomon Brothers Asset Mangement Inc
Seven World Trade Center
New York, New York 10048
Tel: (212) 783-7000
Fax: (212) 783-4765
Attn:
If to the Adviser:
Idex Management, Inc.
570 Carillon Parkway
St. Petersburg, Florida 33716
Tel: (727) 299-1800
Fax: (727) 299-1641
Attn: Thomas E. Pierpan, Esq.
Associate General Counsel
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by facsimile and mail, on the date on which such facsimile is
sent or mail.
15. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto caused their duly authorized signatories
to execute this Agreement as of the day and year first written above.
ADVISER
By____________________________________ Date_____________________
Name: G. JOHN HURLEY
Title: RESIDENT AND CHIEF EXECUTIVE OFFICER
Salomon Brothers Asset Management Inc.
By ___________________________________ Date_____________________
Name: MICHAEL HYLAND
Title: PRESIDENT
<PAGE>
Investment Counsel Agreement
SCHEDULE A
- -------------------------------------------------------------------------------
FUND ANNUAL PERCENTAGE TERMINATION
OF MONTHLY AVERAGE DATE
DAILY NET ASSETS
- -------------------------------------------------------------------------------
MID-CAP OPPORTUNITIES 0.30% of the first $20 million April 30, 2000
of the Fund's average daily
net assets; 0.50% of the
next $20 - $100 million of
average daily net assets;
and 0.40% of average daily
net assets over $100 million
- -------------------------------------------------------------------------------
EXHIBIT 99.B5.6
EXHIBIT (d) (2) (mm)
FORM OF INVESTMENT COUNSEL AGREEMENT
FOR MID-CAP SUMMIT FUND
<PAGE>
FORM OF
IDEX SERIES FUND
INVESTMENT COUNSEL AGREEMENT
This Agreement is entered into as of March 1, 1999 between IDEX
MANAGEMENT, INC., a Delaware corporation (referred to herein as "Idex
Management"), and Pilgrim Baxter and Associates, Ltd. a Delaware corporation
(referred to herein as "Pilgrim Baxter").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated as of March 1,
1999 with IDEX Series Fund, a Massachusetts business trust (referred to herein
as "IDEX"), an open-end management investment company registered under The
Investment Company Act of 1940 (the "1940 Act"), on behalf of the Mid-Cap Summit
Fund (the "Fund"), under which Idex Management has agreed, among other things,
to act as investment adviser to the Fund.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
Pilgrim Baxter to furnish investment information and advice to assist Idex
Management in carrying out its responsibilities under the Advisory Agreement as
investment adviser to the Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
Pilgrim Baxter to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF PILGRIM BAXTER. Pilgrim Baxter shall act as investment
adviser to Idex Management with respect to the Fund. In this capacity, Pilgrim
Baxter shall have the following responsibilities:
(a) to provide a continuous investment program for the Fund including
management of the acquisition, holding or disposition of any or all of
the securities or other assets which the Fund may own or contemplate
acquiring from time to time;
(b) Pilgrim Baxter will place orders for the purchase and sale of
securities primarily with or through such persons, brokers or dealers
whom it believes will provide the most favorable price and efficient
execution. Within the framework of this policy and in accordance with
Section 28(e) of the Securities & Exchange Act of 1934, Pilgrim Baxter
may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may
effect or be a party to any such transaction or other transactions to
which Pilgrim Baxter's other clients may be a party. It is understood
that it is desirable for the Fund that Pilgrim Baxter have access to
supplemental investment and market research and security and economic
analysis provided by brokers who may execute brokerage transactions at
a higher cost to the Fund that may result when allocating brokerage to
other brokers solely on the basis of seeking the most favorable price.
Therefore, Pilgrim Baxter is authorized to place orders for the
purchase and sale of securities for the Fund with such brokers,
subject to review by Idex Management and the Trust's Board of
Trustees, from time to time, with respect to the extent and
continuation of this practice. It is understood that the services
provided by such brokers also may be useful to Pilgrim Baxter in
connection with Pilgrim Baxter's services to other clients.
On occasions when Pilgrim Baxter deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients of Pilgrim Baxter, to the extent permitted by applicable laws
and regulations, Pilgrim Baxter may, but shall be under no obligation
to, aggregate the securities to be so purchased or sold in order to
obtain the most favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the
transaction, will be made by Pilgrim Baxter in the manner it considers
to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.
(c) to cause its officers to attend meetings of Idex Management or the
Fund and furnish oral or written reports, as Idex Management may
reasonably require, in order to keep Idex Management and its officers
and the Trustees of IDEX and appropriate officers of IDEX fully
informed as to the condition of the investment portfolio of the Fund,
the investment recommendations of Pilgrim Baxter, and the investment
considerations which have given rise to those recommendations;
(d) to furnish such statistical and analytical information and reports as
may reasonably be required by Idex Management
<PAGE>
from time to time; and
(e) to supervise the purchase and sale of securities.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the
following obligations under this Agreement:
(a) to keep Pilgrim Baxter continuously and fully informed as to the
composition of the Fund's investment portfolio and the nature of the
Fund's assets and liabilities from time to time;
(b) to furnish Pilgrim Baxter with a certified copy of the IDEX's By-laws
and with a certified copy of any financial statement or report
prepared for the Fund by certified or independent public accountants,
and with copies of any financial statements or reports made by the
Fund to its shareholders or to any governmental body or securities
exchange;
(c) to promptly furnish Pilgrim Baxter with copies of the Fund's current
prospectus and statement of additional information, together with any
investment restrictions or limitations imposed upon the management of
the assets of the Fund by the Trust's Board of Trustees or officers,
or those imposed by Idex Management, and copies of any or all
Exemptive Orders or no-action letters received by the Trust from the
Securities and Exchange Commission which may apply to the Fund.
(d) to furnish Pilgrim Baxter with any further materials or information
which Pilgrim Baxter may reasonably request to enable it to perform
its functions under this Agreement;
(e) to compensate Pilgrim Baxter for its services provided, and the
expenses assumed under this Agreement, by (i) the payment of a monthly
fee as set forth on schedule A attached to this Agreement, as it may
be amended from time to time in accordance with Section 10 below. In
the event that this Agreement shall be effective for only part of a
period to which any such fee received by Idex Management is
attributable, then an appropriate pro-ration of the fee that would
have been payable hereunder if this Agreement had remained in effect
until the end of such period shall be made, based on the number of
calendar days in such period and the number of calendar days during
the period in which this Agreement was in effect. The fees payable to
Pilgrim Baxter hereunder shall be payable upon receipt by Idex
Management from the Fund of fees payable to Idex Management under
Section 6 of the Advisory Agreement; and
3. TREATMENT OF INVESTMENT ADVICE. Idex Management may direct Pilgrim
Baxter to furnish its investment information, advice and recommendations
directly to officers of IDEX.
4. PURCHASES BY AFFILIATES. Neither Pilgrim Baxter nor any of its officers
or Directors shall take a long or short position in the securities issued by the
Fund. This prohibition, however, shall not prevent the purchase from the Fund of
shares issued by the Fund on behalf of the Fund by the officers and Directors of
Pilgrim Baxter (or deferred benefit plans established for their benefit) at the
current price available to the public, or at such price with reductions in sales
charge as may be permitted in the Fund's current prospectus in accordance with
Section 22(d) of the Investment Company Act of 1940, as amended (the "1940
Act").
5. LIABILITY OF PILGRIM BAXTER. Pilgrim Baxter may rely on information
provided to it by Idex Management or IDEX reasonably believed by it to be
accurate and reliable. Except as may otherwise be provided by the 1940 Act,
neither Pilgrim Baxter nor its officers, directors, employees or agents shall be
subject to any liability to the Fund or any shareholders of the Fund or to Idex
Management for any error of judgment, mistake of law or any loss arising out of
any investment or other act or omission in the course of, connected with or
arising out of any service to be rendered hereunder, except by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Agreement.
6. COMPLIANCE WITH LAWS. Pilgrim Baxter represents that it is, and will
continue to be throughout the term of this Agreement, an investment adviser
registered under all applicable federal and state laws. In all matters relating
to the performance of this Agreement, Pilgrim Baxter will act in conformity with
the IDEX's Declaration of Trust, Bylaws, and current prospectus and with the
instructions and direction of Idex Management and IDEX's Trustees, and will
conform to and comply with the 1940 Act and all other applicable federal or
state laws and regulations.
7. TERMINATION. This Agreement shall terminate automatically with respect
to the Fund upon the termination of the Advisory Agreement with respect to such
Fund. This Agreement may be terminated at any time with respect to the Fund,
without penalty, by Idex Management or by IDEX by giving 60 days' written notice
of such termination to Pilgrim Baxter at its principal place of business,
provided that, if terminated by IDEX, such termination is approved by the Board
of Trustees of IDEX or by vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 1940 Act) of
the Fund. This Agreement may be terminated at any time by Pilgrim Baxter by
giving 60 days' written notice of such termination to IDEX and Idex Management
at their respective principal places of business.
8. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as that term is defined in Section 2(a)(4) of the 1940 Act)
of this Agreement.
9. TERM. This Agreement shall continue in effect, unless sooner terminated
in accordance with its terms, for an initial term ending April 30, 2000, and
shall continue in effect from year to year thereafter so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees of IDEX who are not parties hereto or interested persons (as
that term is defined in Section 2(a)(19) of the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on the approval of
the terms of such renewal, and by either the Trustees of IDEX or the affirmative
vote of a majority of the outstanding voting securities of the Fund (as that
phrase is defined in Section 2(a)(42) of the 1940 Act).
10. AMENDMENTS. This Agreement may be amended with respect to the Fund
only with the approval by the affirmative vote of a majority of the outstanding
voting securities (as that phrase is defined in Section 2(a)(42) of the 1940
Act) of such Fund and the approval by the vote of a majority of the Trustees of
IDEX who are not parties hereto or interested persons (as that term is defined
in Section 2(a)(19) of the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on the approval of such amendment,
unless otherwise permitted by the 1940 Act.
11. PRIOR AGREEMENTS. This agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
12. MISCELLANEOUS
(a) Pilgrim Baxter shall not be required to pay any expenses of the
Fund. In particular, but without limiting the generality of the foregoing,
Pilgrim Baxter shall not be responsible for the following expenses of the Fund:
organization and certain offering expenses of the Fund, legal expenses; auditing
and accounting expenses; interest expenses; telephone, telex, facsimile, postage
and other communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by or with respect to the Fund in connection with membership
in investment company trade organization; costs of insurance relating to
fidelity coverage for the Fund's officers and employees; fees and expenses of
the Fund's custodian, any subcustodian, transfer agent registrar, or dividend
disbursing agent; payments to the Adviser for maintaining the Fund's financial
books and records and calculating the daily net asset value; other payments for
portfolio pricing or valuation services to pricing agents, accountants, bankers
and other specialists, if any; expenses of preparing share certificates; other
expenses in connection with the issuance, offering, distribution, sale or
redemption of securities issued by the Fund; expenses relating to investor and
public relations; expenses of registering and qualifying shares of the Fund for
sale; freight, insurance and other charges in connection with the shipment of
the Fund's portfolio securities; brokerage commissions or other costs of
acquiring or disposing of any portfolio securities or other assets of the Fund,
or of entering into other transactions or engaging in any investment practices
with respect to the Fund; expenses of printing and distributing prospectuses,
Statements of Additional Information, reports, notices and dividends to
stockholders; costs of stationery; any litigation expenses; and costs of
stockholders' meetings; costs relating to meetings of the Board of Trustees of
IDEX except for travel expenses for representatives of Pilgrim Baxter to the
extent that such expenses relate to attendance at meetings of the Board of
Trustees of IDEX with respect to matters concerning the Fund, or any committees
thereof or advisers thereto.
(b) It is understood that the services of Pilgrim Baxter are not
exclusive, and that nothing in this Agreement shall prevent Pilgrim Baxter from
providing similar services to other investment companies or to other series of
investment companies, or from engaging in other activities, provided such other
services and activities do not, during the term of the Agreement, interfere in a
material manner with Pilgrim Baxter's ability to meet its obligations to the
Fund hereunder. When Pilgrim Baxter recommends the purchase or sale of the same
security for the Fund, it is understood that in light of its fiduciary duty to
the Fund, such transactions will be executed on a basis that is fair and
equitable to the Fund. In connection with purchases or sales of portfolio
securities for the account of the Fund, neither Pilgrim Baxter nor any of its
directors, officers or employees shall act as principal or agent or receive any
commission, provided that portfolio transactions for the Fund may be executed
through firms affiliated with Pilgrim Baxter in accordance with applicable legal
requirements, and procedures adopted by the Trustees of the Fund.
(c) During the term of this Agreement, Idex Management agrees to
furnish Pilgrim Baxter, at is principal office, all prospectuses, proxy
statements, reports to shareholders, sales literature or other materials
prepared for distribution to shareholders of the Fund, IDEX or the public that
refer to Pilgrim Baxter or its clients in any way.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: THE PILGRIM BAXTER & ASSOCIATES, LTD.
______________________________ By:_____________________________________
Secretary Title:
ATTEST: IDEX MANAGEMENT, INC.
_______________________________ By:_____________________________________
Assistant Secretary G. John Hurley
President and Chief Executive Officer
<PAGE>
Investment Counsel Agreement
SCHEDULE A
- -------------------------------------------------------------------------------
FUND ANNUAL PERCENTAGE TERMINATION
OF MONTHLY AVERAGE DATE
DAILY NET ASSETS
- -------------------------------------------------------------------------------
MID-CAP SUMMIT 0.50% of the first $100 April 30, 2000
million of the Fund's average
daily net assets; 0.40% of
assets in excess of $100
million (from first dollar)
- -------------------------------------------------------------------------------
EXHIBIT 99.B9-1
EXHIBIT (e) (6)
FORM OF ADMINISTRATIVE SERVICES AGREEMENT
ON BEHALF OF THE AGGRESSIVE GROWTH, INTERNATIONAL EQUITY, C.A.S.E.,
VALUE EQUITY, STRATEGIC TOTAL RETURN, TACTICAL ASSET ALLOCATION. INCOME PLUS
AND TAX-EXEMPT FUNDS
<PAGE>
IDEX SERIES FUND
ADMINISTRATIVE SERVICES AGREEMENT
This agreement is entered as of March 1, 1999 by IDEX MANANGEMENT, INC., a
Delaware corporation ("Idex Management"), and INTERSECURITIES, INC., a Delaware
corporation (the "Distributor").
WHEREAS, Idex Management has entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement") dated March 1, 1999
with IDEX Series Fund, a Massachusetts business trust (referred to herein as the
"Trust"), under which Idex Management has agreed among other things, to provide
management and administrative services to certain series of beneficial interest
in the Trust. (See Schedule A)
WHEREAS, the Advisory Agreement provides that Idex Management may engage the
Distributor to furnish it with management and administrative services to assist
Idex Management in carrying out certain of its functions under the Advisory
Agreement.
WHEREAS, it is the purpose of this Agreement to express the mutual agreement of
the parties hereto with respect to the services to be provided by the
Distributor to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
1. SERVICES OF THE DISTRIBUTOR. The Distributor shall provide executive and
management services to Idex Management and the Funds. Subject to the
overall supervision of Idex Management and the Trustees, the Distributor
shall furnish to the Funds the services of executive and administrative
personnel to supervise the performance of all administrative,
recordkeeping, shareholder relations, regulatory reporting and compliance,
and all other functions of the Funds other than the investment function,
and shall supervise and coordinate the Trust's Custodian and its Transfer
Agent and monitor their services to the Funds. The Distributor shall also
assist Idex Management and the Funds in maintaining communications and
relations with shareholders of the Funds, answer shareholder inquiries or
supervise such activity by the Trust's transfer agent, assist in
preparations of reports to shareholders of the Funds and prepare sales
literature promoting the sale of the Trust's shares as requested by Idex
Management and the Funds. The Distributor shall provide the Funds with
necessary office space, telephones and other communications facilities.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the following
obligations under this Agreement:
(a) to provide the Distributor with access to all information, documents
and records of and about the Funds that are necessary to permit the
Distributor to carry out its functions and responsibilities under
this Agreement;
(b) to furnish the Distributor with a certified copy of any financial
statement or report prepared for the Funds by certified or
independent public accountants, and with copies of any financial
statement or reports made by the Funds to its shareholders or to any
governmental body or security exchange;
(c) to compensate the Distributor for its services under this Agreement
by the payment of fees equal to (i) gross Advisory Fees pursuant to
Schedule A of the Advisory Agreement, less(ii) gross Sub-Advisory
Fees pursuant to Schedule A of the Investment Counsel Agreement, less
(iii) the Distributor's share of any amount reimbursed to the Fund by
Idex Management pursuant to the provisions of Section 4(c) of the
Advisory Agreement. The Distributor's percentage share of amounts
reimbursed will be equal to its portion of the gross effective
Advisory Fee for the period contemplated. In the event that amounts
reimbursed exceed the gross fees earned by the Distributor, the
Distributor will share in those excess amounts in same manner
aforementioned. In the event that this Agreement shall be effective
for only part of a period to which any such fee received by Idex
Management is attributable, then an appropriate proration of the fee
that would have been payable hereunder if this Agreement had remained
in effect until the end of such period shall be made, based on the
number of calendar days in such period and the number of calendar
days during the period which this Agreement was in effect. The fees
payable to the Distributor hereunder shall be payable upon receipt by
Idex Management from each Fund of fees payable to Idex Management
under the Advisory Agreement.
<PAGE>
3. INVESTMENT COMPANY ACT COMPLIANCE. In performing services hereunder, the
Distributor shall at all times comply with the applicable provisions of
the Investment Company Act of 1940, as amended (the "1940 Act") and any
other federal or state securities laws.
4. PURCHASES BY AFFILIATES. Neither the Distributor nor any of its officers
shall take a long or short position in the securities issued by each Fund.
The prohibition, however shall not prevent the purchase from the Fund of
shares issued by the Fund by the officers and Directors of the Distributor
(or deferred benefit plans established for their benefit) at the current
price available to the public, or at such price with reductions in sales
charge as may be permitted by the Fund's current prospectus, in accordance
with Section 22 of the 1940 Act.
5. TERMS AND TERMINATION. This Agreement shall continue in effect until
terminated pursuant to the provisions hereof. This Agreement shall
terminate automatically upon the termination of the Advisory Agreement.
This Agreement may be terminated at any time, without penalty, by Idex
Management or by the Trust by giving 60 days' written notice of such
termination to the Distributor at its principal place of business, or may
be terminated at any time by the Distributor by giving 60 days' written
notice of such termination to the Trust and Idex Management at their
respective places of business.
6. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment (as that term is defined in Section 2(a)(4) of the 1940 Act
of this Agreement.
7. AMENDMENTS. This Agreement may be amended only by written instrument
signed by the parties hereto.
8. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements between
the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date firs above written.
ATTEST: INTERSECURITIES, INC.
By:_______________________ By:_______________________
Thomas E. Pierpan John R. Kenney
Secretary Chairman of the Board
ATTEST: IDEX MANAGEMENT, INC.
By:_______________________ By:_______________________
Thomas E. Pierpan John R. Kenney
Secretary Chairman of the Board
<PAGE>
SCHEDULE A
FUNDS
Aggressive Growth
International Equity
C.A.S.E.
Value Equity
Strategic Total Return
Tactical Asset Allocation
Income Plus
Tax-Exempt
EXHIBIT 99.B9-2
EXHIBIT (e) (7)
FORM OF ADMINISTRATIVE SERVICES AGREEMENT
ON BEHALF OF THE BLUE CHIP, DIVIDEND GROWTH, MID-CAP OPPORTUNITIES,
MID-CAP SUMMIT AND SMALL CAP FRONTIER FUNDS
<PAGE>
IDEX SERIES FUND
ADMINISTRATIVE SERVICES AGREEMENT
This agreement is entered as of March 1, 1999 by IDEX MANANGEMENT, INC., a
Delaware corporation ("Idex Management"), and INTERSECURITIES, INC., a Delaware
corporation (the "Distributor").
WHEREAS, Idex Management has entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement") dated March 1, 1999
with IDEX Series Fund, a Massachusetts business trust (referred to herein as the
"Trust"), under which Idex Management has agreed among other things, to provide
management and administrative services to certain series of beneficial interest
in the Trust. (See Schedule A)
WHEREAS, the Advisory Agreement provides that Idex Management may engage the
Distributor to furnish it with management and administrative services to assist
Idex Management in carrying out certain of its functions under the Advisory
Agreement.
WHEREAS, it is the purpose of this Agreement to express the mutual agreement of
the parties hereto with respect to the services to be provided by the
Distributor to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
1. SERVICES OF THE DISTRIBUTOR. The Distributor shall provide executive and
management services to Idex Management and the Funds. Subject to the overall
supervision of Idex Management and the Trustees, the Distributor shall furnish
to the Funds the services of executive and administrative personnel to supervise
the performance of all administrative, recordkeeping, shareholder relations,
regulatory reporting and compliance, and all other functions of the Funds other
than the investment function, and shall supervise and coordinate the Trust's
Custodian and its Transfer Agent and monitor their services to the Funds. The
Distributor shall also assist Idex Management and the Funds in maintaining
communications and relations with shareholders of the Funds, answer shareholder
inquiries or supervise such activity by the Trust's transfer agent, assist in
preparations of reports to shareholders of the Funds and prepare sales
literature promoting the sale of the Trust's shares as requested by Idex
Management and the Funds. The Distributor shall provide the Funds with necessary
office space, telephones and other communications facilities.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the following
obligations under this Agreement:
(a) to provide the Distributor with access to all information, documents
and records of and about the Funds that are necessary to permit the
Distributor to carry out its functions and responsibilities under this
Agreement;
(b) to furnish the Distributor with a certified copy of any financial
statement or report prepared for the Funds by certified or independent
public accountants, and with copies of any financial statement or reports
made by the Funds to its shareholders or to any governmental body or
security exchange;
(c) to compensate the Distributor for its services under this Agreement by
the payment of fees equal to (i) gross Advisory Fees pursuant to Schedule
A of the Advisory Agreement, less(ii) gross Sub-Advisory Fees pursuant to
Schedule A of the Investment Counsel Agreement, less (iii) the
Distributor's share of any amount reimbursed to the Fund by Idex
Management pursuant to the provisions of Section 4(c) of the Advisory
Agreement. In the event that this Agreement shall be effective for only
part of a period to which any such fee received by Idex Management is
attributable, then an appropriate proration of the fee that would have
been payable hereunder if this Agreement had remained in effect until the
end of such period shall be made, based on the number of calendar days in
such period and the number of calendar days during the period which this
Agreement was in effect. The fees payable to the Distributor hereunder
shall be payable upon receipt by Idex Management from each Fund of fees
payable to Idex Management under the Advisory Agreement.
3. INVESTMENT COMPANY ACT COMPLIANCE. In performing services hereunder, the
Distributor shall at all times comply with the applicable provisions of the
Investment Company Act of 1940, as amended (the "1940 Act") and any other
federal or state securities laws.
4. PURCHASES BY AFFILIATES. Neither the Distributor nor any of its officers
shall take a long or short position in the securities issued by each Fund. The
prohibition, however shall not prevent the purchase from the Fund of shares
issued by the Fund by the officers and Directors of the Distributor (or deferred
benefit plans established for their benefit) at the current price available to
the public, or at such price with reductions in sales charge as may be permitted
by the Fund's current prospectus, in accordance with Section 22 of the 1940 Act.
5. TERMS AND TERMINATION. This Agreement shall continue in effect until
terminated pursuant to the provisions hereof. This Agreement shall terminate
automatically upon the termination of the Advisory Agreement. This Agreement may
be terminated at any time, without penalty, by Idex Management or by the Trust
by giving 60 days' written notice of such termination to the Distributor at its
principal place of business, or may be terminated at any time by the Distributor
by giving 60 days' written notice of such termination to the Trust and Idex
Management at their respective places of business.
6. ASSIGNMENT. This Agreement shall terminate automatically in the event of any
assignment (as that term is defined in Section 2(a)(4) of the 1940 Act of this
Agreement.
7. AMENDMENTS. This Agreement may be amended only by written instrument signed
by the parties hereto.
8. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements between the
parties relating to the subject matter hereof, and all such prior agreements are
deemed terminated upon the effectiveness of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date firs above written.
ATTEST: INTERSECURITIES, INC.
By:_______________________ By:_______________________
Thomas E. Pierpan John R. Kenney
Secretary Chairman of the Board
ATTEST: IDEX MANAGEMENT, INC.
By:_______________________ By:_______________________
Thomas E. Pierpan John R. Kenney
Secretary Chairman of the Board
<PAGE>
SCHEDULE A
FUNDS
Mid-Cap Opportunities Fund
Blue Chip Fund
Mid-Cap Summit Fund
Dividend Growth Fund
Small-Cap Horizons Fund
EXHIBIT 99.B6-1
EXHIBIT (m) (1) (nn) (oo) (pp) (qq) (rr)
FORM OF PLAN OF DISTRIBUTION UNDER 12B-1
CLASS A SHARES
<PAGE>
CLASS A SHARES
IDEX BLUE CHIP FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class A shares of IDEX Blue Chip
Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class A
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a distribution fee
at the rate of up to 0.35% on an annualized basis of the average daily net
assets of the Fund's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class A shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). To the extent that the Fund pays a service fee pursuant to paragraph
1(B) of this Plan, the amount available to be paid pursuant to paragraph
1(A) of this Plan shall be reduced pro tanto, so that the total fees
payable under this Plan by the Fund with respect to its Class A shares
shall not exceed the rate of 0.35% on an annual basis of the average daily
net assets of the Fund's Class A shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class A shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class A shares of the Fund or the servicing and/or
maintenance of Class A shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect with respect to the Class A shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
4. If approved as set forth in paragraph 3, this Plan shall continue thereafter
in full force and effect with respect to the Class A shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
5. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 5, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 5, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class A shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
6. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class A shares of the Fund.
7. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 4 hereof.
8. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class A shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class A shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class A shares, any distribution expenses incurred by ISI on
behalf of the Class A shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
9. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
10. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall
<PAGE>
have the same meaning as those terms have in the 1940 Act.
11. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 5
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _______________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
___________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS A SHARES
IDEX DIVIDEND GROWTH FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class A shares of IDEX Dividend
Growth Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class A
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a distribution fee
at the rate of up to 0.35% on an annualized basis of the average daily net
assets of the Fund's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class A shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). To the extent that the Fund pays a service fee pursuant to paragraph
1(B) of this Plan, the amount available to be paid pursuant to paragraph
1(A) of this Plan shall be reduced pro tanto, so that the total fees
payable under this Plan by the Fund with respect to its Class A shares
shall not exceed the rate of 0.35% on an annual basis of the average daily
net assets of the Fund's Class A shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class A shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class A shares of the Fund or the servicing and/or
maintenance of Class A shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect with respect to the Class A shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
4. If approved as set forth in paragraph 3, this Plan shall continue thereafter
in full force and effect with respect to the Class A shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
5. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 5, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 5, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class A shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
6. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class A shares of the Fund.
7. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 4 hereof.
8. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class A shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class A shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class A shares, any distribution expenses incurred by ISI on
behalf of the Class A shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
9. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
10. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
11. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 5
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _______________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
___________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS A SHARES
IDEX MID-CAP OPPORTUNITIES FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class A shares of IDEX Mid-Cap
Oppotunities Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class A
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a distribution fee
at the rate of up to 0.35% on an annualized basis of the average daily net
assets of the Fund's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class A shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). To the extent that the Fund pays a service fee pursuant to paragraph
1(B) of this Plan, the amount available to be paid pursuant to paragraph
1(A) of this Plan shall be reduced pro tanto, so that the total fees
payable under this Plan by the Fund with respect to its Class A shares
shall not exceed the rate of 0.35% on an annual basis of the average daily
net assets of the Fund's Class A shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class A shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class A shares of the Fund or the servicing and/or
maintenance of Class A shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect with respect to the Class A shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
4. If approved as set forth in paragraph 3, this Plan shall continue thereafter
in full force and effect with respect to the Class A shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
5. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 5, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 5, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class A shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
6. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class A shares of the Fund.
7. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 4 hereof.
8. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class A shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class A shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class A shares, any distribution expenses incurred by ISI on
behalf of the Class A shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
9. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
10. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
11. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 5
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _______________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
___________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS A SHARES
IDEX MID-CAP SUMMIT FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class A shares of IDEX Mid-Cap
Summit Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class A
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a distribution fee
at the rate of up to 0.35% on an annualized basis of the average daily net
assets of the Fund's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class A shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). To the extent that the Fund pays a service fee pursuant to paragraph
1(B) of this Plan, the amount available to be paid pursuant to paragraph
1(A) of this Plan shall be reduced pro tanto, so that the total fees
payable under this Plan by the Fund with respect to its Class A shares
shall not exceed the rate of 0.35% on an annual basis of the average daily
net assets of the Fund's Class A shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class A shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class A shares of the Fund or the servicing and/or
maintenance of Class A shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect with respect to the Class A shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
4. If approved as set forth in paragraph 3, this Plan shall continue thereafter
in full force and effect with respect to the Class A shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
5. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 5, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 5, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class A shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
6. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class A shares of the Fund.
7. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 4 hereof.
8. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class A shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class A shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class A shares, any distribution expenses incurred by ISI on
behalf of the Class A shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
9. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
10. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall
<PAGE>
have the same meaning as those terms have in the 1940 Act.
11. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 5
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _______________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
___________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS A SHARES
IDEX SMALL-CAP FRONTIER FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class A shares of IDEX Small-Cap
Frontier Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class A
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a distribution fee
at the rate of up to 0.35% on an annualized basis of the average daily net
assets of the Fund's Class A shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class A shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class A shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). To the extent that the Fund pays a service fee pursuant to paragraph
1(B) of this Plan, the amount available to be paid pursuant to paragraph
1(A) of this Plan shall be reduced pro tanto, so that the total fees
payable under this Plan by the Fund with respect to its Class A shares
shall not exceed the rate of 0.35% on an annual basis of the average daily
net assets of the Fund's Class A shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class A shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class A shares of the Fund or the servicing and/or
maintenance of Class A shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect with respect to the Class A shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
4. If approved as set forth in paragraph 3, this Plan shall continue thereafter
in full force and effect with respect to the Class A shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
5. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 5, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 5, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class A shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
6. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class A shares of the Fund.
7. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 4 hereof.
8. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class A shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class A shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class A shares, any distribution expenses incurred by ISI on
behalf of the Class A shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
9. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
10. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
11. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 5
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _______________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
___________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
EXHIBIT 99.B6-2
EXHIBIT (m) (2) (nn)(oo)(pp)(qq)(rr)
FORM OF PLAN OF DISTRIBUTION
CLASS B SHARES
<PAGE>
CLASS B SHARES
IDEX BLUE CHIP FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class B shares of IDEX Blue Chip
Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class B
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class B shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class B shares shall not exceed the maximum rate of 1.00% on an annual
basis of the average daily net assets of the Fund's Class B shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class B shares of the Fund or the servicing and/or
maintenance of Class B shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding
<PAGE>
voting securities of the Class B shares of the Fund.
4. This Plan shall not take effect with respect to the Class B shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class B shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Fund, within the meaning of
the definition of "service fee" for purposes of Section 2830(b) (formerly
Section 26(d)) of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. Overhead and other expenses of ISI related to its
"distribution activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class B shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares, any distribution expenses incurred by ISI on
behalf of the Class B shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS B SHARES
IDEX DIVIDEND GROWTH FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class B shares of IDEX Dividend
Growth Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class B
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class B shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class B shares shall not exceed the maximum rate of 1.00% on an annual
basis of the average daily net assets of the Fund's Class B shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class B shares of the Fund or the servicing and/or
maintenance of Class B shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding
<PAGE>
voting securities of the Class B shares of the Fund.
4. This Plan shall not take effect with respect to the Class B shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class B shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Fund, within the meaning of
the definition of "service fee" for purposes of Section 2830(b) (formerly
Section 26(d)) of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. Overhead and other expenses of ISI related to its
"distribution activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class B shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares, any distribution expenses incurred by ISI on
behalf of the Class B shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS B SHARES
IDEX MID-CAP OPPORTUNITIES FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class B shares of IDEX Mid-Cap
Opportunities Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class B
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class B shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class B shares shall not exceed the maximum rate of 1.00% on an annual
basis of the average daily net assets of the Fund's Class B shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class B shares of the Fund or the servicing and/or
maintenance of Class B shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund.
4. This Plan shall not take effect with respect to the Class B shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class B shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Fund, within the meaning of
the definition of "service fee" for purposes of Section 2830(b) (formerly
Section 26(d)) of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. Overhead and other expenses of ISI related to its
"distribution activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class B shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares, any distribution expenses incurred by ISI on
behalf of the Class B shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of
<PAGE>
the Trust shall be committed to the discretion of the Trustees who are not
interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS B SHARES
IDEX MID-CAP SUMMIT FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class B shares of IDEX Mid-Cap
Summit Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class B
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class B shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class B shares shall not exceed the maximum rate of 1.00% on an annual
basis of the average daily net assets of the Fund's Class B shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class B shares of the Fund or the servicing and/or
maintenance of Class B shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding
<PAGE>
voting securities of the Class B shares of the Fund.
4. This Plan shall not take effect with respect to the Class B shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class B shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Fund, within the meaning of
the definition of "service fee" for purposes of Section 2830(b) (formerly
Section 26(d)) of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. Overhead and other expenses of ISI related to its
"distribution activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class B shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares, any distribution expenses incurred by ISI on
behalf of the Class B shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS B SHARES
IDEX SMALL-CAP FRONTIER FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class B shares of IDEX Small-Cap
Frontier Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class B
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class B shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class B shares shall not exceed the maximum rate of 1.00% on an annual
basis of the average daily net assets of the Fund's Class B shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class B shares of the Fund or the servicing and/or
maintenance of Class B shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund.
4. This Plan shall not take effect with respect to the Class B shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class B shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Fund, within the meaning of
the definition of "service fee" for purposes of Section 2830(b) (formerly
Section 26(d)) of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. Overhead and other expenses of ISI related to its
"distribution activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class B shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares, any distribution expenses incurred by ISI on
behalf of the Class B shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of
<PAGE>
the Trust shall be committed to the discretion of the Trustees who are not
interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
EXHIBIT 99.B6-3
EXHIBIT (m) (3) (nn)(oo)(pp)(qq)(rr)
FORM OF PLAN OF DISTRIBUTION
CLASS C SHARES
<PAGE>
CLASS C SHARES
IDEX BLUE CHIP FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class C shares of IDEX Blue Chip
Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class C
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class C shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class C shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay ISI, as compensation for ISI's services
as Distributor of the Fund's Class C shares, a service fee at the rate of
up to 0.25% on an annualized basis of the average daily net assets of the
Fund's Class C shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Trust and ISI shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class C shares shall not exceed the maximum rate of 0.90% on an annual
basis of the average daily net assets of the Fund's Class C shares. To the
extent the sum of any service fee paid under Paragraph 1(B) plus the
distribution fee paid under paragraph 1(A) would otherwise exceed such
maximum rate of 0.90%, the distribution fee paid under paragraph 1(A)
shall be reduced pro tanto so that such maximum rate is not exceeded.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class C shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class C shares of the Fund or the servicing and/or
maintenance of Class C shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund.
4. This Plan shall not take effect with respect to the Class C shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class C shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class C shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class C shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class C shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class C shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class C shares, any distribution expenses incurred by ISI on
behalf of the Class C shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
<PAGE>
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS B SHARES
IDEX DIVIDEND GROWTH FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class B shares of IDEX Dividend
Growth Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class B
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class B shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class B shares, a service fee at the
rate of up to 0.25% on an annualized basis of the average daily net assets
of the Fund's Class B shares. Such fee shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trust and ISI
shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class B shares shall not exceed the maximum rate of 1.00% on an annual
basis of the average daily net assets of the Fund's Class B shares.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class B shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class B shares of the Fund or the servicing and/or
maintenance of Class B shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding
<PAGE>
voting securities of the Class B shares of the Fund.
4. This Plan shall not take effect with respect to the Class B shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class B shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any
activities in connection with ISI's performance of its obligations under this
Plan or the Underwriting Agreement that are not deemed "service activities."
"Service activities" shall mean activities in connection with the provision by
ISI or other entity of personal service and/or the maintenance of shareholder
accounts with respect to the Class B shares of the Fund, within the meaning of
the definition of "service fee" for purposes of Section 2830(b) (formerly
Section 26(d)) of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. Overhead and other expenses of ISI related to its
"distribution activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class B shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class B shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class B shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class B shares, any distribution expenses incurred by ISI on
behalf of the Class B shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
<PAGE>
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS C SHARES
IDEX MID-CAP OPPORTUNITIES FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class C shares of IDEX Mid-Cap
Opportunities Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class C
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class C shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class C shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay ISI, as compensation for ISI's services
as Distributor of the Fund's Class C shares, a service fee at the rate of
up to 0.25% on an annualized basis of the average daily net assets of the
Fund's Class C shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Trust and ISI shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class C shares shall not exceed the maximum rate of 0.90% on an annual
basis of the average daily net assets of the Fund's Class C shares. To the
extent the sum of any service fee paid under Paragraph 1(B) plus the
distribution fee paid under paragraph 1(A) would otherwise exceed such
maximum rate of 0.90%, the distribution fee paid under paragraph 1(A)
shall be reduced pro tanto so that such maximum rate is not exceeded.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class C shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class C shares of the Fund or the servicing and/or
maintenance of Class C shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund.
4. This Plan shall not take effect with respect to the Class C shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class C shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class C shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class C shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class C shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class C shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class C shares, any distribution expenses incurred by ISI on
behalf of the Class C shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
<PAGE>
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS C SHARES
IDEX MID-CAP OPPORTUNITIES FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class C shares of IDEX Mid-Cap
Opportunities Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class C
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class C shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class C shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay ISI, as compensation for ISI's services
as Distributor of the Fund's Class C shares, a service fee at the rate of
up to 0.25% on an annualized basis of the average daily net assets of the
Fund's Class C shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Trust and ISI shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class C shares shall not exceed the maximum rate of 0.90% on an annual
basis of the average daily net assets of the Fund's Class C shares. To the
extent the sum of any service fee paid under Paragraph 1(B) plus the
distribution fee paid under paragraph 1(A) would otherwise exceed such
maximum rate of 0.90%, the distribution fee paid under paragraph 1(A)
shall be reduced pro tanto so that such maximum rate is not exceeded.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class C shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class C shares of the Fund or the servicing and/or
maintenance of Class C shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
<PAGE>
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund.
4. This Plan shall not take effect with respect to the Class C shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class C shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class C shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class C shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class C shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class C shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class C shares, any distribution expenses incurred by ISI on
behalf of the Class C shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received
<PAGE>
or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS C SHARES
IDEX MID-CAP SUMMIT FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class C shares of IDEX Mid-Cap
Summit Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class C
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class C shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class C shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay ISI, as compensation for ISI's services
as Distributor of the Fund's Class C shares, a service fee at the rate of
up to 0.25% on an annualized basis of the average daily net assets of the
Fund's Class C shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Trust and ISI shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class C shares shall not exceed the maximum rate of 0.90% on an annual
basis of the average daily net assets of the Fund's Class C shares. To the
extent the sum of any service fee paid under Paragraph 1(B) plus the
distribution fee paid under paragraph 1(A) would otherwise exceed such
maximum rate of 0.90%, the distribution fee paid under paragraph 1(A)
shall be reduced pro tanto so that such maximum rate is not exceeded.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class C shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class C shares of the Fund or the servicing and/or
maintenance of Class C shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund.
4. This Plan shall not take effect with respect to the Class C shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class C shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class C shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class C shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class C shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class C shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class C shares, any distribution expenses incurred by ISI on
behalf of the Class C shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
<PAGE>
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
<PAGE>
CLASS C SHARES
IDEX SMALL-CAP FRONTIER FUND
A SERIES OF
IDEX SERIES FUND
(FORM OF) PLAN OF DISTRIBUTION PURSUANT TO
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, IDEX Series Fund (the "Trust") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of beneficial interest;
WHEREAS, the Trust desires to adopt a Plan of Distribution ("Plan") pursuant to
Rule 12b-1 under the 1940 Act applicable to the Class C shares of IDEX Small-Cap
Frontier Fund (the "Fund"), a series of shares of the Trust; and
WHEREAS, the Trust has entered into an Underwriting Agreement ("Underwriting
Agreement") with InterSecurities, Inc. ("ISI"), pursuant to which ISI serves as
Distributor of the various series and classes of shares of the Trust during the
continuous offering of its shares.
NOW THEREFORE, the Trust hereby adopts this Plan with respect to the Class C
shares of the Fund in accordance with Rule 12b-1 under the 1940 Act.
1. (A). The Fund is authorized to pay to ISI, as compensation for ISI's
services as Distributor of the Fund's Class C shares, a distribution fee
at the rate of up to 0.75% on an annualized basis of the average daily net
assets of the Fund's Class C shares. Such fee shall be calculated and
accrued daily and paid monthly or at such other intervals as the Trust and
ISI shall agree.
(B). The Fund is authorized to pay ISI, as compensation for ISI's services
as Distributor of the Fund's Class C shares, a service fee at the rate of
up to 0.25% on an annualized basis of the average daily net assets of the
Fund's Class C shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Trust and ISI shall agree.
(C). The total fees payable under this Plan by the Fund with respect to
its Class C shares shall not exceed the maximum rate of 0.90% on an annual
basis of the average daily net assets of the Fund's Class C shares. To the
extent the sum of any service fee paid under Paragraph 1(B) plus the
distribution fee paid under paragraph 1(A) would otherwise exceed such
maximum rate of 0.90%, the distribution fee paid under paragraph 1(A)
shall be reduced pro tanto so that such maximum rate is not exceeded.
(D). The Fund may pay a distribution or service fee to ISI at a lesser
rate than the fees specified in paragraphs 1(A) and 1(B), respectively, of
this Plan, in either case as agreed upon by the Trust and ISI and as
approved in the manner specified in paragraph 4 of this Plan.
2. As Distributor of the Class C shares of the Fund, ISI may spend such amounts
as it deems appropriate on any activities or expenses primarily intended to
result in the sale of the Class C shares of the Fund or the servicing and/or
maintenance of Class C shareholder accounts, including, but not limited to:
compensation to employees of ISI; compensation to and expenses, including
overhead and telephone expenses, of ISI and other selected dealers who engage in
or support the distribution of shares or who service shareholder accounts; the
costs of printing and distributing prospectuses, statements of additional
information and reports for other than existing shareholders; and the costs of
preparing, printing and distributing sales literature and advertising materials.
<PAGE>
3. This Plan shall not take effect unless it first has been approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund.
4. This Plan shall not take effect with respect to the Class C shares of the
Fund unless it first has been approved, together with any related agreements, by
votes of a majority of both (a) the Board and (b) those Trustees of the Trust
who are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Plan or any agreements related
thereto ("Independent Trustees"), cast in person at a meeting or (meetings)
called for the purpose of voting on such approval; and until the Trustees who
approve the Plan's taking effect have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
5. If approved as set forth in paragraphs 3 and 4, this Plan shall continue
thereafter in full force and effect with respect to the Class C shares of the
Fund for so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in paragraph 4.
6. ISI shall provide to the Board and the Board shall review, at least
quarterly, a written report of the amounts expended by ISI under this Plan and
the Underwriting Agreement and the purposes for which such expenditures were
made. ISI shall submit only information regarding amounts expended for
"distribution activities," as defined in this paragraph 6, to the Board in
support of the distribution fee payable hereunder and shall submit only
information regarding amounts expended for "service activities," as defined in
this paragraph 6, to the Board in support of the service fee payable hereunder.
For purposes of this Plan, "distribution activities" shall mean any activities
in connection with ISI's performance of its obligations under this Plan or the
Underwriting Agreement that are not deemed "service activities." "Service
activities" shall mean activities in connection with the provision by ISI or
other entity of personal service and/or the maintenance of shareholder accounts
with respect to the Class C shares of the Fund, within the meaning of the
definition of "service fee" for purposes of Section 2830(b) (formerly Section
26(d)) of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. Overhead and other expenses of ISI related to its "distribution
activities" or "service activities," including telephone and other
communications expenses, may be included in the information regarding amounts
expended for such activities.
7. This Plan may be terminated at any time by vote of the Board, by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding voting securities of the Class C shares of the Fund.
8. This Plan may not be amended to increase materially the amount of fees
provided for in paragraph 1 hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Class C shares of the
Fund, and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 5 hereof.
9. The amount of the fees payable by the Fund to ISI under paragraph 1 hereof
and the Underwriting Agreement is not related directly to expenses incurred by
ISI on behalf of the Fund in serving as Distributor of the Class C shares, and
paragraph 2 hereof and the Underwriting Agreement do not obligate the Trust to
reimburse ISI for such expenses. The fees set forth in paragraph 1 hereof will
be paid by the Fund to ISI unless and until either the Plan or the Underwriting
Agreement is terminated or not renewed with respect to the Class C shares. If
either the Plan or the Underwriting Agreement is terminated or not renewed with
respect to the Class C shares, any distribution expenses incurred by ISI on
behalf of the Class C shares of the Fund in excess of the payments of the fees
specified in paragraph 1 hereof and the Underwriting Agreement which ISI has
received or accrued through the termination date are the sole responsibility and
liability of ISI, and are not obligations of the Trust.
<PAGE>
10. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons of the Trust shall be committed to the discretion of
the Trustees who are not interested persons of the Trust.
11. As used in this Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
12. The Trust shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made pursuant to paragraph 6
hereof for a period of not less than six years from the date of this Plan, the
first two years in an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the day
and year set forth below in St. Petersburg, Florida.
Dated as of _____________________
ATTEST: IDEX SERIES FUND
By:_____________________________________
_________________________________ G. John Hurley
Thomas E. Pierpan, Secretary President and Chief Executive Officer
