IDEX Series Fund
www.idexfunds.com
Annual Report
October 31, 1998
Table of Contents
Portfolio Managers' Commentary, Commentary/ Schedule
Portfolio Performance, Statistics and Performance/ of
Schedule of Investments Statistics Investments
Preface to the Schedule of Investments 28
Aggressive Growth Portfolio 2 30
International Equity Portfolio 4 31
Capital Appreciation Portfolio 6 34
Global Portfolio 8 35
Growth Portfolio 10 38
C.A.S.E. Portfolio 12 40
Value Equity Portfolio 14 41
Strategic Total Return Portfolio 16 42
Tactical Asset Allocation Portfolio 18 44
Balanced Portfolio 20 46
Flexible Income Portfolio 22 48
Income Plus Portfolio 24 49
Tax-Exempt Portfolio 26 50
Financial Statements
Preface to the Financial Statements 52
Statements of Assets and Liabilities 54
Statements of Operations 56
Statements of Changes in Net Assets 58
Financial Highlights 62
Notes to Financial Statements 70
Report of Independent Accountants 76
Supplemental Federal Income Tax Information 78
Results of Shareholder Proxy Voting 80
To Contact Us 81
Fellow Shareholders,
Blast from the past?
Everyone in and around the markets is aware by now of the extraordinary
volatility that's been rocking the financial world. What began over a year
ago as a regional economic crisis has, indeed, blossomed into one of
worldwide proportions. And, with the notable exception perhaps of U.S.
government bonds, investments of all stripe and size-from foreign
currencies to blue-chip stocks-have been roiled to some degree by the
spreading global turbulence. It's been, in other words, an unsparing twelve
months.
To those folks who had wishfully come to think that corrections and bear
markets were things of the past, this period offered up a powerful reminder
that they most definitely are not. Market cycles, far from being some sort
of rusted relics leftover from a time gone by, are still very much a
reality. And risk and reward remain-as they must-critical components of the
long-term performance equation.
If nothing else, this period's teeth-rattling volatility underscores the
importance of balanced investing. That is, developing and maintaining a
program consisting of investments suited to your goals, your time horizon
and your tolerance for risk. From where we sit, that process, perhaps now
more than ever, demands the assistance of thoughtful investment
professionals committed to distinct investment approaches. Professionals
like the portfolio managers of the IDEX Series Fund.
On the following pages, the IDEX Portfolio managers share their
observations on these extreme times and discuss how they've invested their
specific Portfolio's assets and why. We encourage you to review their
commentaries, not only to better understand your investment and its
performance, but to get a broader perspective on the investment markets as
well. Also included in this year's report to assist your review and
understanding are definitions of key terms, pertinent graphics and
explanations of the Schedule of Investments and Financial Statements. All
of this together will give you a good sense of both your own individual
investment and the IDEX Series Fund as a whole.
To much the same end, you'll soon have 24-hour access to your detailed
account information and to IDEX Mutual Funds by way of the Internet.
Effective January, you'll be able to purchase shares, redeem shares,
perform exchanges, access your account balance and view historical
transactions all through our website: www.idexfunds.com. Accompanying this
new level of access will come, too, a more personalized and, dare we say
it, easier to read quarterly account statement. Please let us know what you
think. The only toll-free number you need, to reach our service
professionals at IDEX, is 1-888-233-IDEX (4339).
Meanwhile, with the shape of today's financial marketplace changing at
unimaginable speed, volatility of all kind isn't about to disappear. It
will, on occasion, test your willingness to stay true to a discipline. Our
message to you now is this: don't let short-term perceptions cloud long-
term realities. Remain, in other words, a consistent investor through
inconsistent markets.
For our part, we'll continue our efforts to provide superior service and
solid, well-managed investment products. We greatly respect your personal
task of financial planning and appreciate the opportunity to assist.
Sincerely yours,
/s/ John R. Kenney /s/ G. John Hurley
November 23, 1998
Aggressive Growth Portfolio
Objective/Focus
Long-term capital appreciation through investments in domestic equities of
developing companies or companies with promising growth potential.
Market Environment
Point to point, this period appeared to be one of great prosperity for
investors in the U.S. equity market. Inflation, interest rates, and
unemployment all remained low and the broad market appreciated nicely. In
reality, though, the last 12 months were marked by global economic
instability, a domestic political scandal, and severe market volatility.
All together, this year proved to be extremely challenging.
Following the acute market sell-off that resulted from the Asian economic
crisis, investors placed a premium on stocks of large, liquid companies
with a high degree of earnings predictability. The more speculative small-
cap issues, for the most part, suffered over the course of the twelve-month
period. Employing an "all-cap" approach, the Aggressive Growth Portfolio
minimized the impact of this poor performing sector by investing the
majority of its assets in large-cap stocks.
Performance
Aided by a dramatic recovery in September and October, the Portfolio
outperformed its comparative index, the S&P 500 for the year ended October
31, 1998. Please review the Performance Table on page 3 for details.
Strategy Review
The Portfolio benefited from good exposure to pharmaceutical stocks, with
core holdings such as Warner-Lambert, Pfizer and Schering Plough leading
the way. Propelled by stable earnings growth and lack of exposure to the
Asian markets, the sector as a whole performed well. Many of our financial
holdings appreciated as well, with the group profiting from a strong stock
market, low interest rates, and speculation about potential consolidation.
This industry was well represented in the Portfolio, and stocks like Morgan
Stanley, Dean Witter, Inc. and Paine Webber Group noticeably boosted
performance. Returns were further enhanced as several of our technology
positions fared exceptionally well in the month of June, most notably
Microsoft and America Online, whose one-month returns were 27.8% and 26.2%,
respectively.
In July and August, several external factors shook investor confidence and
stocks of all sizes fell dramatically. These events included the worsening
of economic problems in Japan, the collapse of the Russian economy, and the
U.S. political scandal. Since we viewed the sell-off as more of a shift in
investor psychology than real concerns over individual company
fundamentals, most of the Portfolio's top holdings were not sold.
Outlook
As a bottom-up stock selector, we feel our job is simple-to actively buy
and hold stocks whose earnings growth will be rapid and uninhibited by
international economic turmoil. We will also attempt to detect and avoid
those companies that will struggle. It's our position that as long as the
Portfolio is invested in companies whose earnings are growing, it will
survive dramatic swings of investor sentiment. Regardless of market
conditions or investor sentiment, we will doggedly pursue rapidly growing
companies.
/s/ David Alger
David Alger
Portfolio Manager
Fred Alger Management, Inc.
Five Largest Holdings (% of Net Assets)
America Online, Inc. 3.6%
Warner-Lambert Company, Inc. 3.5%
Nokia Corp. OY ADR 3.5%
Schering Plough Corp. 3.2%
Tyco International, Ltd. 3.2%
Top Five Industries (% of Net Assets)
Pharmaceuticals 14.4%
Communications 11.4%
Computers 10.2%
Semiconductors 6.7%
Software 6.7%
This graph compares the 10/31/98 value of hypothetical simultaneous
$10,000 investments made in Class A Shares and its comparative Index on
Class A's inception date.
S&P 500 (3) $26,192
Class A (2) $24,205
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) 22.48% 27.13% 12/2/94
Class A (2) (with sales load) 15.74% 25.31% 12/2/94
S&P 500 (3) 21.99% 27.87% 12/2/94
Class B (without sales load) 22.04% 12.37% 10/1/95
Class B (2) (with sales load) 17.04% 11.87% 10/1/95
Class C 22.11% 26.78% 12/2/94
Notes
1 Aggressive Growth Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost.
Past performance does not guarantee future results. Periods less than one
year represent total return and are not annualized.
2 Aggressive Growth Portfolio Class A shares performance reflects the
maximum sales charge of 5.5%. Aggressive Growth Portfolio Class B shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
3 The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used
as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A shares.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 0.0 1.2
Consumer Cyclical 16.4 14.5
Consumer Non-Cyclical 16.4 18.3
Energy 0.0 7.4
Financial 10.4 12.7
Industrial 6.2 8.4
Technology 40.5 28.0
Utilities 3.1 1.6
Short-term 5.0 12.0
Average Annual Total Return
A hypothetical rate of return that, if achieved annually, would have
produced the same cumulative total return if performance had been constant
over the entire period.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
International Equity Portfolio
Objective/Focus
Long-term growth of capital by investing primarily in the common stock and
other equity securities of foreign issuers traded on overseas exchanges and
foreign over-the-counter markets.
Market Environment
Scottish Equitable Investment Management Ltd ("SEIM")
For the better part of the year, our overweighted position in Europe helped
us stay ahead of the indices. Much of this gain was eroded in August,
however, when the Asian economic crisis spread to Russia, then to Latin
America. European markets were shaky as nervous investors pulled out of
banks with significant Russian investments. The European markets did bounce
back a bit, though, in October when the major central banks in both the
U.S. and Europe reduced interest rates. Throughout it all, the Portfolio
had only a small exposure to Latin American equities and was underweighted
in Japan and Asia. The recent strength of the Japanese yen did have a
negative affect on relative performance, though, as it represents 22% of
our benchmark index.
GE Investment Management ("GEIM")
The last twelve months have proved to be quite a rollercoaster for global
equity markets, with strong performance in the first eight months
contrasting sharply with the heavy falls in the latter months. After the
Hong Kong currency crisis and the ensuing turmoil throughout the Far East
in October 1997, the U.S. and UK markets bounced back towards the end of
the year, recovering most, if not all, of the losses sustained in the
correction. But during the last few months, European equities experienced
their largest and sharpest correction since the market crash in 1987. Once
again, local market returns varied considerably amidst what had been fairly
indiscriminate selling.
Performance
The International Equity Portfolio underperformed its benchmark index, the
Morgan Stanley Capital International - Europe, Asia and Far East Index for
the year ended October 31, 1998. Please refer to page 5 for further
details.
Strategy Review
SEIM
Our philosophy is to pursue companies that are undervalued by the market
compared to their growth potential. We focus on a company's ability to
generate cash flow growth and whose long-term growth of cash earnings
exceeds their price-to-cash earnings ratio by at least 25%. In general,
companies that best fit this guideline are those which compete on a global
basis. Typically, we find these companies perform well over the long term,
regardless of their domicile.
Stocks that performed well during the past year included Railtrack Group
PLC, a U.K.-based rail and bus operator, Total S.A., a major French oil
company, and Pharmacia & Upjohn, a merged Swedish and U.S. pharmaceutical
company. Our cash position was reduced from 4.5% to approximately 2% as the
U.S. lowered interest rates, passed a budget agreement, and directed $18
billion to the International Monetary Fund to stabilize emerging markets.
GEIM
Within the Portfolio, we've maintained a defensive stance for the most
part, both in terms of the markets emphasized and the types of stocks held.
Towards summer, we moved from a strongly positive position on equities to
one less aggressive. We most recently increased our weightings in cash, the
UK, and Europe at the expense of the Far East and Latin America. With no
positive news on the immediate horizon, the GE portion of the Portfolio
finished the period with a zero weighting in both the Pacific Rim and Latin
American regions and a heavy underweighting in Japan.
Outlook
SEIM
We will continue to be overweighted in Europe. Long-term growth still
appears favorable in the region because of falling interest rates and the
introduction of a common currency in January 1999. We plan to maintain our
low weighting in Japan, where we expect weakness to continue until the
government enacts significant structural changes. And although parts of
Asia are deteriorating more slowly than before, we will wait a while before
investing there. The Portfolio continues to have a small but significant
presence in emerging markets, particularly Israel and Latin America. We
will invest in major Latin American exporting companies and add to our
holdings slowly as the region's economy improves.
GEIM
While it's something of an understatement to say the current economic and
financial market outlook is uncertain, the sharp relative price movement in
favor of bonds, together with the prospect of falling interest rates,
suggests a more aggressive stance on equities may be appropriate. For the
Portfolio, this would likely involve a move to underperforming markets like
Asia and Latin America, and towards higher beta, less defensive stocks. It
is still possible, however, to argue that the earnings outlook priced in to
most equity markets is too optimistic and the advent of a serious credit
crunch remains a realistic possibility.
/s/ Russel Hogan
Russel Hogan
for the Investment Management Board
Scottish Equitable Investment Management Ltd
/s/ Ralph R. Layman
Ralph R. Layman
Co-Portfolio Manager
GE Investment Management Incorporated
Top Five Countries (% of Net Assets)
United Kingdom 21.5%
France 16.7%
Germany 12.7%
Switzerland 6.9%
Italy 6.8%
Five Largest Holdings (% of Net Assets)
Nokia Corp. OY A Shares 3.0%
Mannesman AG 2.5%
AXA-UAP 2.3%
Preussag AG 2.2%
Total SA 2.1%
This graph compares the 10/31/98 value of hypothetical
simultaneous $10,000 investments made in Class A Shares and its comparative
Index on Class A's inception date.
MSCI-EAFE (3) $11,448
Class A (2) $10,262
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) 2.58% 4.85% 2/1/97
Class A (2) (with sales load) (3.07)% 1.50% 2/1/97
MSCI-EAFE (3) 9.95% 9.06% 2/1/97
Class B (without sales load) 1.89% 4.17% 2/1/97
Class B (2) (with sales load) (3.11)% 1.92% 2/1/97
Class C 1.99% 4.28% 2/1/97
Notes
1 International Equity Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their
original cost. Past performance does not guarantee future results.
Periods less than one year represent total return and are not annualized.
2 International Equity Portfolio Class A shares performance reflects the
maximum sales charge of 5.5%. International Equity Portfolio Class B
shares reflects the maximum applicable contingent deferred sales charge (5%
in the first year, decreasing to 0% after 6 years).
3 The Morgan Stanley Capital International - Europe, Asia, and Far East
(MSCI-EAFE) Index is an unmanaged index used as a general measure of market
performance. Calculations assume dividends and capital gains are
reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A shares.
Investments by Region as a Percentage of Net Assets
10/31/98 10/31/97
Asia/Pacific Rim 5.6 19.1
Australia 1.1 1.5
Europe 84.8 64.8
Latin America 1.5 6.0
Middle East 1.2 1.1
North America 1.5 0.3
South Africa 0.0 0.7
Short-term 3.1 5.2
Global vs. International
"Global" typically refers to worldwide investing; U.S. as well as non-U.S.
investments. "International" indicates investments primarily of non-U.S.
origin.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Capital Appreciation Portfolio
Objective/Focus
Long-term growth of capital by normally investing at least
50% of assets in medium-sized companies.
Market Environment
Supported by our emphasis on quality companies with strong earnings growth,
the Portfolio started out the year on a relatively strong note. We could
not escape, however, the summer sell-off in the small- and mid-cap market.
With concerns over a recession and corporate earnings leading to compressed
valuations, small and mid-sized stocks languished for the better part of
the year.
Performance
While the Portfolio lost ground compared to its benchmark indices, overall
performance was up for the year ended October 31, 1998. Please refer to the
Performance Table on page 7 for additional information. To say the least,
I'm disappointed that the market did not noticeably warm up to the earnings
prospects of many of our companies.
Strategy Review
Despite the general decline in corporate profits, earnings growth is
abundant in the Portfolio. Vitesse Semiconductor, for example, is a very
promising position. Though the stock was heavily sold in the third quarter,
the company, which focuses on the fastest growing subset of the
telecommunications and data communications markets, continues to execute on
its business model. Our recent discussions with management give us
confidence that Vitesse will grow its earnings in the coming years.
Consequently, I've maintained a sizable position in the stock.
I remain upbeat as well on our media positions, including Chancellor Media,
Univision, Jacor Communications and Heftel Broadcasting. Though these
stocks suffered late in the period, important structural changes remain
that should fuel future earnings growth in the industry.
Outlook
Though I cannot predict a broad-based rally in small and midsize stocks, I
firmly believe our companies are well positioned in this more uncertain
environment. While lower interest rates are providing equities with some
support, it's going to become even more critical to own companies that can
meet or exceed earnings estimates. I am upbeat about our Portfolio because
we remain ever focused on current and future earnings.
My objective has always been to find great companies that write their own
script and who treat the economy or competitors as background noise.
Despite the market's volatility, we remain confident that our extensive
legwork and intensive research will help us to identify compelling
opportunities.
As Benjamin Graham once said, "In the short run, the market is a voting
machine-but in the long run, the market is a weighing machine." In other
words, emotion tends to rule markets in the short term, but over the long
haul, it can reward companies with strong fundamentals. I believe the
Portfolio will bounce back as investors come to realize the true potential
for many of our holdings.
/s/ James P. Goff
James P. Goff
Portfolio Manager
Janus Capital Corporation
Five Largest Holdings (% of Net Assets)
Vitesse Semiconductor Corp. 8.9%
Apollo Group, Inc. Class A 7.9%
PizzaExpress PLC 4.7%
VERITAS Software Corp. 4.5%
Jacor Communications, Inc. 4.4%
Top Five Industries (% of Net Assets)
Broadcasting 11.7%
Consumer Services 11.3%
Pharmaceuticals 11.0%
Communications 9.5%
Semiconductors 8.9%
This graph compares the 10/31/98 value of hypothetical
simultaneous $10,000 investments made in Class A Shares and its comparative
Indices on Class A's inception date.
S&P 500 (3) $26,192
S&P 400 (3) $22,220
Class A (2) $17,888
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) 9.87% 17.69% 12/2/94
Class A (2) (with sales load) 3.83% 16.00% 12/2/94
S&P 500 (3) 21.99% 27.87% 12/2/94
S&P 400 (3) 12.65% 22.61% 12/2/94
Class B (without sales load) 9.35% 10.90% 10/1/95
Class B (2) (with sales load) 4.35% 10.37% 10/1/95
Class C 9.43% 17.19% 12/2/94
Notes
1 Capital Appreciation Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their
original cost. Past performance does not guarantee future results.
Periods less than one year represent total return and are not annualized.
2 Capital Appreciation Portfolio Class A shares performance reflects the
maximum sales charge of 5.5%. Capital Appreciation Portfolio Class B
shares reflects the maximum applicable contingent deferred sales charge (5%
in the first year, decreasing to 0% after 6 years).
3 The Standard & Poor's (S&P 500) Index and Standard & Poor's MidCap 400
(S&P 400) Index are unmanaged indices used as a general measure of market
performance. Calculations assume dividends and capital gains are
reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A shares.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 0.0 1.6
Consumer Cyclical 26.7 37.1
Consumer Non-Cyclical 24.7 10.3
Energy 0.0 2.7
Financial 9.2 14.3
Industrial 0.0 8.6
Technology 36.2 13.7
Utilities 0.9 3.7
Short-term 4.7 6.4
Cyclical vs. Non-Cyclical
Cyclical products are sensitive to business cycles and price changes, while
non-cyclical products are generally purchased at regular intervals,
regardless of economic conditions.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Global Portfolio
Objective/Focus
Long-term growth and preservation of capital through investments primarily
in common stocks of foreign and domestic issuers.
Market Environment
International markets moved higher through the first half of 1998, with
strong gains in Europe and the U.S. helping to offset weakness in the Asian
markets. By August, however, an accumulation of bad news caught up with
global financial markets. These negative forces, which called corporate
earnings projections into question, created a difficult market for stocks.
While global bond markets reacted positively to the prospects of slower
economic growth, equity markets responded with a fierce pullback. In the
U.S., the sharpest declines were concentrated in companies that missed
their earnings targets. In Europe, the correction had a much broader and
deeper impact, as even companies with consistent, robust earnings growth
were heavily sold. The resulting sell-off erased nearly all of the advances
European equities had made for the year.
Performance
Though we didn't completely escape the correction, the strong results by
many of our European and U.S. positions during the first half of the year
helped the Portfolio to keep pace with its benchmark. For the year ended
October 31, 1998, the Portfolio underperformed the Morgan Stanley Capital
International World Index. Please see page 9 for further details.
Strategy Review
In Europe, the broad-based selling left few places to hide. The
repercussions from Russia's economic meltdown hit our European financial
services stocks particularly hard. Our position in UBS, a large Swiss bank,
proved to be one of our greatest disappointments. Worse yet, the broad
declines in this sector impacted some of our holdings with little exposure
to Russia or other emerging markets. Although we felt this selling was
indiscriminate, we did not want to completely ignore the prevailing market
sentiment. As a result, we reduced our weighting in European financials.
Meanwhile, the increased market volatility benefited many companies with
visible earnings streams. This benefited our pharmaceutical holdings,
including Elan, Pharmacia & Upjohn, and Warner-Lambert, which we added last
December. Many of our holdings in leading U.S. franchises, such as Cisco
Systems and Time Warner, helped performance as well.
We took advantage of the market's downturn to build positions in high
quality names, primarily because the valuations for some stocks fell to
their lowest levels in nearly five years. At the same time, we trimmed our
more cyclical positions and let our cash balance build while we waited for
the dust to settle.
Outlook
We expect global markets to remain volatile for the foreseeable future.
With uncertainty over global economic growth and corporate profitability
increasing, it's clear that risk aversion among investors is reaching
extreme levels. At the same time, though, lower equity valuations combined
with lower global interest rates should create investment opportunities.
We'll continue to monitor global developments closely, with particular
focus on Japan.
/s/ Heln Young Hayes
Helen Young Hayes
Portfolio Manager
Janus Capital Corporation
Five Largest Holdings (% of Net Assets)
Cisco Systems, Inc. 3.1%
Mannesman AG 2.7%
Tyco International, Ltd. 2.7%
Microsoft Corp. 2.5%
Tele Communications, Inc. Class A 2.1%
Top Five Countries (% of Net Assets)
United States 23.1%
United Kingdom 11.3%
France 8.9%
Japan 7.6%
Netherlands 5.8%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Index on Class A's
inception date.
Class A (2) $29,672
MSCIW (3) $23,434
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year 5 year Inception Date
Class A (without sales load) 11.30% 16.98% 20.71% 10/1/92
Class A (2) (with sales load) 5.17% 15.66% 19.59% 10/1/92
MSCIW (3) 15.69% 13.53% 15.03% 10/1/92
Class B (without sales load) 10.93% - 18.64% 10/1/95
Class B (2) (with sales load) 5.93% - 18.18% 10/1/95
Class C 11.08% 16.57% 17.92% 10/1/93
Notes
1 Global Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
2 Global Portfolio Class A shares performance reflects the maximum sales
charge of 5.5%. Global Portfolio Class B shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Morgan Stanley Capital International World (MSCIW) Index is an
unmanaged index used as a general measure of market performance.
Calculations assume dividends and capital gains are reinvested and do not
include any managerial expenses. From inception calculation is based on
life of Class A shares.
Investments by Region as a Percentage of Net Assets
10/31/98 10/31/97
Asia/Pacific Rim 7.6 8.8
Europe 50.0 64.4
Latin America 1.3 4.7
North America 23.1 14.1
South Africa 0.0 0.5
Short-term 23.6 6.6
Region
A region represents countries within a given geographic area. Regional
analysis is provided for Global and International investors to help them
assess their portfolio's placement of assets.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Growth Portfolio
Objective/Focus
Long-term growth of capital through investments in companies selected
solely for their earnings and growth potential.
Market Environment
Markets advanced earlier in the year against a positive backdrop of low
interest rates, benign inflation, strong earnings growth, and a healthy
economy. Stocks that excelled tended to be of companies that were leaders
in their industries, particularly in the technology and pharmaceutical
groups. By late summer, however, the advance had become relatively thin,
led by a handful of the highest quality, large capitalization issues.
Ultimately, the increasingly weak market for small and mid-cap stocks
caught up with the so-called market stalwarts. After the Dow Jones
Industrial Average peaked at 9337 on July 17th, the market succumbed to a
long, painful decline that bottomed out on August 31st with a harrowing 517-
point drop. With pessimism seemingly on every market horizon, investors
retreated to the ultimate safety of the U.S. Treasury market, which helped
drive long-term Treasury bond rates substantially lower. Lower rates
eventually provided support for stocks, and domestic markets regained lost
ground as the period came to a close.
Performance
Despite the market's volatility during the period, the Portfolio held up
well, outperforming, in fact, all the major market indices. For the year
ended October 31, 1998, the Portfolio performed outstanding relative to its
benchmark, the S&P 500. Please see the Performance Table on page 11 for
additional details.
Strategy Review
The Portfolio's holdings reflect my conviction that the technology,
pharmaceutical and telecommunications equipment companies offer the
strongest growth potential. Even in the toughest environments, the products
and delivery channels of these industries are consistent with demographic
and economic trends both here and abroad. We particularly benefited from
our weighting in high-quality technology companies with visible earnings
streams, dominant market positions, and well-developed franchises. Dell
Computer and America Online were outstanding performers.
Our pharmaceutical and healthcare positions also gained ground as investors
were attracted to their defensible nature and predictable earnings growth.
Our large position in Warner-Lambert produced excellent results. Pfizer
also contributed nicely.
On the other hand, a number of our financial services firms sold off on
concerns over industry-wide credit exposure to leveraged hedge funds. As
more of these firms threatened bankruptcy in the wake of their Russian
losses, the stage is set for further erosion in earnings across the
financial services sector.
Outlook
Considering the recent volatility, it is difficult to look too far ahead.
On the bright side of the current global economic slowdown is lower
interest rates, which we believe serves as one half of the formula for a
strong stock market. The other half of the equation is strong corporate
earnings. To these ends, we will continue to single out companies that are
led by effective management teams focused on building their respective
businesses.
/s/ Scott W. Schoelzel
Scott W. Schoelzel
Portfolio Manager
Janus Capital Corporation
Five Largest Holdings (% of Net Assets)
Dell Computer Corp. 12.9%
Microsoft Corp. 7.4%
Nokia Corp. OY ADR 6.1%
Pfizer, Inc. 5.9%
Warner-Lambert Company, Inc. 5.8%
Top Five Industries (% of Net Assets)
Pharmaceuticals 21.0%
Computers 13.1%
Communications 11.8%
Software 8.3%
Technology-Diversified 6.2%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Index over the past
10-year period.
Class A (2) $56,044
S&P 500 (3) $51,538
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 35.21% 19.43% 19.48% 17.89% 5/8/86
Class A (2)(with sales load) 27.77% 18.08% 18.81% 17.35% 5/8/86
S&P 500 (3) 21.99% 21.22% 17.82% 17.10% 5/8/86
Class B (without sales load) 34.96% - - 22.88% 10/1/95
Class B (2)(with sales load) 29.96% - - 22.46% 10/1/95
Class C 35.00% 19.07% - 18.74% 10/1/93
Class T (4)(without sales load)35.53% 19.92% 19.83% 18.44% 6/4/85
Class T (4)(with sales load) 24.01% 17.81% 18.77% 17.65% 6/4/85
Notes
1 Growth Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
2 Growth Portfolio Class A shares performance reflects the maximum sales
charge of 5.5%. Growth Portfolio Class B shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used
as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A shares.
4 Growth Portfolio Class T Shares are owned by the former shareholders
of IDEX Fund and IDEX Fund 3 as a result of a reorganization on September
20, 1996. The performance shown is that of IDEX Fund, from inception on
6/4/85 until the reorganization. All subsequent performance is based
solely on Class T Shares. Class T Shares performance with sales load
reflects the maximum sales charge of 8.5%. Class T Shares are not
available to new investors.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 0.0 0.5
Consumer Cyclical 4.6 1.8
Consumer Non-Cyclical 26.2 25.6
Energy 0.0 6.1
Financial 4.4 18.5
Industrial 4.9 5.9
Technology 42.9 33.2
Utilities 0.4 2.9
Short-term 16.1 5.4
Comparative Index
A comparative index is a general broad-based index, representative of the
objective of the Portfolio, approved by the Portfolio's Trustees and
registered with the Securities and Exchange Commission.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
C.A.S.E. Portfolio
Objective/Focus
Growth of capital through investments in stocks exhibiting below market
risk and below market multiples with above average fundamentals.
Market Environment
Generally speaking, this has been the year of the big-growth, large-
capitalization and high-risk form of investing. For the better part of the
period, a steady wave of foreign, index and new investors drove many of the
large cap stocks far beyond their underlying fundamentals. Within the S&P
500, for example, a mere handful of large stocks led the average, leaving
the remaining 450 or so companies to trail well behind their own index.
Priced at 35 times earnings and 6 times book values by our calculations,
many of the high-flying stocks alarmed most professionals because they were
vulnerable to the international monetary meltdown. The first C.A.S.E. rule
of investing is "no stock should bear a P/E greater than its growth rate."
Performance
In this extraordinary environment, the C.A.S.E. Portfolio underperformed
its benchmark, the S&P 500 for the year ended October 31, 1998. Please see
page 13 for more information.
Strategy Review
With large-cap stocks in particular, and the broad market in general,
trading at huge premiums to expected growth rates, we sought to shelter the
Portfolio from the expected declines by changing our strategic emphasis. To
that end, we shifted from a large-cap growth style to one more concentrated
on value. Unfortunately, when the autumn market sell-off occurred, it was
so broad it affected all classes of stocks. Thus far, our basic industry,
technology, and energy holdings have borne the brunt of recent earnings
disappointments. These sectors, however, have innate characteristics that
should enable them to recover rapidly from these short-term market
influences. Meanwhile there are other sectors, like discount retailers and
electronics that should actually benefit from cheaper Asian goods and a
pickup in consumer demand.
In the autumn sell-off, the average stock on the New York Stock Exchange
came down 39% from its 52-week high, while the average NASDAQ stock fell
49%. During that period, we increased cash holdings to approximately 20%.
During October, we recommitted those reserves into a select group of high-
quality stocks that had been heavily sold. As a result, we're measuring the
Portfolio's price multiple now at some 30% below the S&P, and its average
earnings growth rate at more than 30% higher.
Outlook
The second C.A.S.E rule of investing is "over time, most stocks follow
their fundamentals." Given the favorable nature of the Portfolio's
fundamentals, we think this should prove to be a good period for our style
of investing.
/s/ William E. Lange
William E. Lange
Portfolio Manager
C.A.S.E. Management, Inc.
Five Largest Holdings (% of Net Assets)
GENESCO, Inc. 3.9%
Bristol-Myers Squibb Company, Inc. 3.6%
Tellabs, Inc. 3.6%
Microsoft Corp. 3.5%
Northern Telecom, Ltd. ADR 3.2%
Top Five Industries (% of Net Assets)
Communications 13.0%
Software 10.1%
Retailers-Apparel 8.5%
Pharmaceuticals 6.3%
Oilfield Equipment & Services 4.1%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Index on Class A's
inception date.
S&P 500 (3) $18,152
Class A (2) $10,898
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) (14.83)% 5.33% 2/1/96
Class A (2) (with sales load) (19.51)% 3.18% 2/1/96
S&P 500 (3) 21.99% 24.21% 2/1/96
Class B (without sales load) (15.40)% 4.69% 2/1/96
Class B (2) (with sales load) (19.63)% 3.67% 2/1/96
Class C (15.31)% 4.79% 2/1/96
Notes
1 C.A.S.E. Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
2 C.A.S.E. Portfolio Class A shares performance reflects the maximum
sales charge of 5.5%. C.A.S.E. Portfolio Class B shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used
as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A shares.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 2.0 0.0
Consumer Cyclical 22.5 5.6
Consumer Non-Cyclical 12.0 7.8
Energy 5.5 10.1
Financial 6.3 13.6
Independent 1.6 1.7
Industrial 14.5 19.5
Technology 33.6 28.1
Utilities 0.0 1.1
Short-term 3.8 15.4
Sector
A sector is a broad grouping of specific industries. Our sectors and their
components correspond with those published in the
Wall Street Journal.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Value Equity Portfolio
Objective/Focus
Maximum total return with minimum risk through investments primarily in
common stocks showing above average statistical value and are in
fundamentally attractive industries.
Market Environment
When Thailand's currency collapsed in July of 1997, the world paid scant
attention. But what began as a mere blip on the radar screen of currency
traders has mushroomed into a large worldwide economic crisis of the post-
Cold War era. With many nations experiencing varying degrees of economic
chaos, a great deal of wealth outside the U.S. and Western Europe has been
destroyed, and it will not be rebuilt overnight.
In the meantime, after a nearly eight-year rise of historic proportion in
stock prices, the U.S. stock market was due, if not overdue, for a
significant correction. And as it's turned out, the third quarter of the
calendar year was indeed the worst for the stock market since 1990, a year
that included both the last U.S. recession and the last bear market. Worse
yet, while vulnerability appeared greatest in many "growth" stocks, "value"
stocks underperformed as a group. This, of course, is in sharp contrast to
historical results that suggest value provides superior relative
performance in down markets.
Performance
Performance for the Value Equity Portfolio reflects the irregular stock
market environment as well as the underperformance of value-oriented
stocks. For the year ended October 31, 1998, the Value Equity Portfolio
underperformed its benchmark, the S&P 500. Please refer to page 15 for
further details.
Strategy Review
As a value manager, we place great emphasis on the valuation measures of
the stocks in which we invest-measures that historically have provided a
safety margin with less risk than the growth style. Nevertheless, as long-
term value investors we recognize that it is not uncommon to experience
short-term relative underperformance.
Within the Portfolio, exposure to the same energy service stocks that had
performed so well the prior two years was a negative. A combination of
factors drove oil prices to their lowest levels in more than a decade and
took energy stocks sharply lower as well. U.S. energy companies are still,
however, the worlds' technological leaders and are well positioned to
benefit from a recovery in world demand for oil. On the positive side, the
Portfolio benefited from Philip Morris, a recent purchase and our second
largest holding, which was strong right through the market's summer
weakness. Other positive contributors included cable television stocks and
several of the recently added regional banks.
Outlook
Given the degree of uncertainty that surrounds the financial markets, this
is a time for caution, not bravado. While we don't expect the markets to
unravel, we do expect an extended period of volatility and, as such, we've
taken steps to adopt a more conservative position, with higher cash
reserves and a reduced exposure to equities. World economies and world
financial markets are in the midst of a very turbulent period that has not
run its full course. It will take some time to establish stability, restore
liquidity, repair damaged national balance sheets and calm nervous
investors.
/s/ Edward C. Friedel
Edward C. Friedel
Portfolio Manager
NWQ Investment Management Company, Inc.
Five Largest Holdings (% of Net Assets)
Loews Corp. 4.0%
Philip Morris Companies, Inc. 4.0%
First Union Corp. 2.9%
Norwest Corp. 2.8%
Caterpillar, Inc. 2.7%
Top Five Industries (% of Net Assets)
Banks 11.9%
Insurance 8.8%
Heavy Construction 7.5%
Conglomerates 6.6%
Oilfield Equipment & Services 5.2%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Index on Class A's
inception date.
S&P 500 (3) $14,388
Class A (2) $10,521
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) (4.96)% 6.37% 2/1/97
Class A (2) (with sales load) (10.18)% 2.96% 2/1/97
S&P 500 (3) 21.99% 23.11% 2/1/97
Class B (without sales load) (5.55)% 5.74% 2/1/97
Class B (2) (with sales load) (10.27)% 3.51% 2/1/97
Class C (5.46)% 5.83% 2/1/97
Notes
1 Value Equity Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost.
Past performance does not guarantee future results. Periods less than one
year represent total return and are not annualized.
2 Value Equity Portfolio Class A shares performance reflects the maximum
sales charge of 5.5%. Value Equity Portfolio Class B shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Standard & Poor's (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and
capital gains are reinvested and do not include any managerial expenses.
From inception calculation is based on life of Class A shares.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 6.1 11.1
Consumer Cyclical 6.6 7.9
Consumer Non-Cyclical 1.3 3.2
Energy 15.1 14.1
Financial 22.2 20.0
Independent 6.6 1.5
Industrial 13.2 17.5
Technology 7.8 11.6
Short-term 21.0 12.1
Value Investing
Value style investing is an approach to identify securities that are
undervalued in the present market environment without concentrating too
much on future expectations.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Strategic Total Return Portfolio
Objective/Focus
Long-term growth of capital and income by investing in common stocks and
bonds of well-established and fundamentally strong companies.
Market Environment
The stock market surged for the first half of the period as interest rates
remained low, economic activity continued to be robust and the stock market
experienced dramatic capital inflows. Our caution regarding the
sustainability of this advance proved to be well founded, however, as we
entered the summer months. Triggered by concerns over a slowing global
economy and the resulting impact on corporate profits, August registered
one of the worst stock market plunges on record. For its part, the
Portfolio declined only slightly more than half that of the S&P 500 for the
month.
Performance
For the year ended October 31, 1998, the Portfolio underperformed both of
its benchmark indices. Reviewing the Performance Table on page 16 will
provide additional details. During the fiscal year, the stock market's
advance was concentrated in a small group of large-company stocks while
measures of broad market performance posted lackluster results.
Strategy Review
Security selection within the Portfolio is driven by a commitment to
investing in companies with strong balance sheets, established market
shares, and high and sustainable returns on invested capital. Also, a
portion of the Portfolio is normally focused towards investments in
companies where a catalyst exists that is expected to substantially improve
the underlying business prospects of a company or industry group.
Additionally, we closely assess valuation levels to manage risk at the
security level.
Stock and bond investments had a balanced hand in generating returns over
the period-equity investments drove performance in the first half of the
year while bonds moderated volatility in the second. Inside the Portfolio,
pharmaceuticals made a dynamic contribution to performance with such strong
winners as Schering Plough and Covance. Other individual stocks performed
well where management teams steadfastly executed their business plans
despite the global economic turbulence. For instance, we benefited nicely
from our position in Estee Lauder as the company launched several
successful new products. Another big gainer was the far less recognizable
Tyco International. On the other hand, the Portfolio had limited exposure
to technology stocks, which hindered our performance during a strong period
for the sector. While we are averse to the kind of risk inherent to these
stocks as a group, we also understand the growth prospects of select
technology companies. We'll continue to monitor investor expectations and
look for attractive reward/risk opportunities.
Outlook
The Portfolio is invested in a diversified selection of common stocks
augmented by a variety of fixed-income and convertible securities. This
relatively stable asset mix is used to manage volatility and generate
current income. The Portfolio's structure, as well as the individual
securities held within it, remains well-positioned, we think, for a market
that includes slowing earnings growth and historically high valuations. We
continue to identify attractive reward/risk opportunities in selecting
investments for the Portfolio.
/s/ Luther King
Luther King
/s/ Scot C. Hollmann
Scot C. Hollmann
Co-Portfolio Managers
Luther King Capital Management
Credit Quality of Bonds
(% of Net Assets)
AAA 11.3%
AA 4.4%
A 8.1%
BBB 6.8%
BB 0.6%
B 3.2%
All C's -
NA -
Not Rated -
Five Largest Holdings (% of Net Assets)
Cardinal Health, Inc. 1.8%
Sybron International Corp. 1.8%
Modis Professional Services, Inc. 1.7%
U.S. Treasury Notes 2-28-2002 1.7%
Proctor & Gamble Company 1.6%
Top Five Industries (% of Net Assets)
Treasury Notes 11.3%
Financial-Diversified 5.7%
Insurance 5.2%
Industrial-Diversified 4.8%
Banks 4.5%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Indices on Class A's
inception date.
S&P 500 (3) $26,192
Class A (2) $17,331
LBIGCB (3) $14,030
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) 7.43% 16.74% 12/2/94
Class A (2) (with sales load) 1.52% 15.07% 12/2/94
S&P 500 (3) 21.99% 27.87% 12/2/94
LBIGCB (3) 9.11% 9.03% 12/2/94
Composite Index (4) 15.55% 18.45% 12/2/94
Class B (without sales load) 6.74% 14.52% 10/1/95
Class B (2) (with sales load) 1.74% 14.03% 10/1/95
Class C 6.85% 16.12% 12/2/94
Notes
1 Strategic Total Return Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their
original cost. Past performance does not guarantee future results.
Periods less than one year represent total return and are not annualized.
2 Strategic Total Return Portfolio Class A shares performance reflects
the maximum sales charge of 5.5%. Strategic Total Return Portfolio Class B
shares reflects the maximum applicable contingent deferred sales charge (5%
in the first year, decreasing to 0% after 6 years).
3 The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers
Intermediate Government/Corporate Bond (LBIGCB) Index are unmanaged indices
used as a general measure of market performance. Calculations assume
dividends and capital gains are reinvested and do not include any
managerial expenses. From inception calculation is based on life of Class
A shares.
4 The Composite Index reflects an equal blend of the two benchmark
indices.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 2.7 6.2
Consumer Cyclical 10.1 6.9
Consumer Non-Cyclical 19.8 18.2
Energy 5.9 9.2
Financial 19.5 19.3
Independent 2.0 1.3
Industrial 14.4 13.3
Technology 4.8 5.6
Utilities 7.5 5.7
Long-term U.S. Gov't 11.3 13.1
Short-term 1.4 0.2
CDSC Charge
Contingent Deferred Sales Charge ("CDSC"), also known as a back-end load,
is a fee charged at redemption. The charge declines to zero over a
specified time, encouraging the buy and hold approach.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Tactical Asset Allocation Portfolio
Objective/Focus
Preservation of capital and competitive investment returns by enhancing
value during strong markets through increased weighting in stocks and
preserve capital during weak/volatile markets primarily through increased
weighting in U.S. Treasuries.
Market Environment
For the stock market, it's been one of the more volatile years this decade.
With worsening overseas economic conditions, an uncertain U.S. political
situation, and sluggish corporate earnings growth, the market has gone
through a rather pronounced corrective phase to say the least. Even after a
healthy recovery in October, there are still more stocks in the S&P 500
with negative returns for the year than positive ones. And for large-cap
investors, "value" stocks have significantly underperformed "growth"
stocks.
Performance
In this environment, the Portfolio benefited from its below-neutral (less
than 60%) allocation to stocks. For the year ended October 31, 1998, the
Portfolio underperformed both of its benchmark indices. Please refer to
page 19 for further information.
Strategy Review
Equity selection has been particularly crucial this period in determining
total returns. In choosing stocks to include in the Portfolio, we have been
emphasizing several distinct investment themes. First, we've increased the
Portfolio's average market capitalization. It's evident now that a certain
number of large-cap stocks are needed as a "foundation of stability" in the
Portfolio, provided, of course, they meet our value criteria. With this in
mind, we have added to our prominent positions in Philip Morris and AT&T.
Secondly, we've continued to search for out-of-favor stocks with favorable
operating fundamentals. We're finding a growing number of stocks that have
been caught in the market's downturn, yet still have exciting business
prospects. Our investment positions in the oil service industry would fit
this profile. Third, we've reduced the Portfolio's international exposure,
emphasizing instead companies with a domestic business profile. Given this,
we have reduced our exposure to technology and basic materials, areas where
results are dependent on falling commodity prices. Lastly, we are
maintaining our commitment to "defensive" stocks. Recently, we've increased
our exposure to real estate investment trusts, whose cheap valuations give
the stocks solid potential, and whose potential high yields can provide
current income and downside protection.
Outlook
Given the relatively poor aggregate valuations and the modest earnings
growth thus far in 1998, our models are indicating a cautious near-term
outlook. At the same time, inflation remains stable, and the Federal
Reserve Board is lowering interest rates, all of which create a backdrop
for potential stock market gains. Presented with the possibility for
bullish as well as bearish scenarios, and the volatility that is created
given these conflicting forces, a "neutral" allocation to stocks seems most
appropriate.
Our stock selection process and asset allocation models have provided long-
term investors with relatively stable returns that have been competitive
with the market indices. We expect our approach to continue to reward
investors, while providing the potential for downside protection in times
of market instability.
/s/ John Riazzi
John Riazzi
/s/ Arvind Sachdeva
Arvind Sachdeva
Co-Portfolio Managers
Dean Investment Associates
Credit Quality
(% of Net Assets)
AAA 15.3%
AA 5.5%
A 5.4%
BBB -
BB -
B -
All C's -
NA -
Not Rated 10.9%
Five Largest Holdings (% of Net Assets)
Philip Morris Companies, Inc. 3.7%
U.S. Treasury Notes 10-15-2006 3.0%
U.S. Treasury Notes 2-15-2004 2.8%
U.S. Treasury Notes 8-15-2003 2.8%
E.I. Dupont de Nemours
and Company 9-1-2002 2.8%
Top Five Industries (% of Net Assets)
U.S. Government Agencies 18.4%
U.S. Government Securities 10.0%
Insurance 8.5%
Broadcasting 4.4%
Banks 4.3%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Indices on Class A's
inception date.
S&P 500 (3) $19,967
Class A (2) $13,686
LBIGCB (3) $12,548
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) 7.25% 12.75% 10/1/95
Class A (2) (with sales load) 1.35% 10.71% 10/1/95
S&P 500 (3) 21.99% 25.92% 10/1/95
LBIGCB (3) 9.11% 7.46% 10/1/95
Composite Index (4) 15.55% 16.69% 10/1/95
Class B (without sales load) 6.56% 12.04% 10/1/95
Class B (2) (with sales load) 1.56% 11.52% 10/1/95
Class C 6.67% 12.15% 10/1/95
Notes
1 Tactical Asset Allocation Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their
original cost. Past performance does not guarantee future results.
Periods less than one year represent total return and are not annualized.
2 Tactical Asset Allocation Portfolio Class A shares performance
reflects the maximum sales charge of 5.5%. Tactical Asset Allocation
Portfolio Class B shares reflects the maximum applicable contingent
deferred sales charge (5% in the first year, decreasing to 0% after 6
years).
3 The Standard & Poor's (S&P 500) Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a
general measure of market performance. Calculations assume dividends and
capital gains are reinvested and do not include any managerial expenses.
From inception calculation is based on life of Class A shares.
4 The Composite Index reflects an equal blend of the two benchmark
indices.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 4.1 8.2
Consumer Cyclical 12.4 18.3
Consumer Non-Cyclical 2.6 0.0
Energy 4.5 0.0
Financial 25.7 25.3
Independent 3.7 2.2
Industrial 4.6 2.2
Technology 6.5 9.0
Utilities 6.0 7.9
Long-term U.S. Gov't 26.2 16.8
Short-term 3.5 9.6
Asset Allocation Investing
Asset allocation investing is an approach that freely shifts money between
many types of investments (stocks, bonds, etc.), attempting to maintain a
consistent level of return.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Balanced Portfolio
Objective/Focus
Long-term growth and preservation of capital balanced with current income
through investments in stocks and income producing securities.
Market Environment
The period started out on an upbeat note, with benign inflation and low
interest rates setting the stage for a strong market advance. By summer,
however, a wave of bad news resulted in "flight to quality", moving
everything from emerging market debt to blue-chip U.S. stocks considerably
lower. This sell-off culminated on August 31st with a 517-point drop in the
Dow Jones Industrial Average, the third-largest point drop ever. On the
upside, the proceeds from these sales flowed into Treasuries, helping to
drive the 30-year bond rate to near-record lows. These lower interest rates
managed to provide some support for stocks of companies with strong,
visible earnings growth.
Performance
Considering the market's erratic behavior, I am pleased with the
performance of the Balanced Portfolio. In large part due to the ability of
our positions to withstand the late summer sell-off, the Portfolio was
split versus its two benchmark indices for the year ended October 31, 1998.
Please see page 21 for additional details.
Strategy Review
The Portfolio benefited from our decision late last year to increase
weighting in selected high-quality technology stocks, especially Microsoft,
Cisco Systems and Dell Computer. Supported by their highly predictable
earnings, dominant market presence and well-developed franchises, all of
these companies have been strong performers. Our relative performance also
benefited from the somewhat higher-than-normal cash position we carried
into the market decline. This cash position not only served as a buffer, it
provided the resources to build positions in great companies at substantial
discounts.
Our cable positions also did a good job of withstanding recent market
volatility. Time Warner, Comcast, and MediaOne Group were particularly
strong performers. Pharmaceutical stocks, too, performed well. Pfizer and
Warner-Lambert continue to produce and market successful products,
supported by their focused R&D and sophisticated delivery channels. I am
highly confident in these companies' earnings potential, and I continue to
consider our pharmaceuticals holdings as key positions.
Among our fixed-income investments, we continued to benefit from our focus
on credit quality, which led us into U.S. Treasury issues. Supported by
falling interest rates and the global flight to quality, Treasuries were
the best performing asset class for the final quarter. Early in the period,
we lengthened the duration of our fixed-income positions to the ten-year
range, which allowed us to capitalize on the prospects for low interest
rates, low inflation and a steady economy.
Outlook
As always, we find it difficult to determine what the market might do. We
remain confident, however, that the Portfolio is composed of great
companies with strong, predictable earnings growth regardless of what the
economy or broader market might do. We will continue to travel extensively,
meeting with companies' management, trying to uncover the true story hidden
behind the statistics and numbers.
/s/ Blaine Rollins
Blaine Rollins
Portfolio Manager
Janus Capital Corporation
Credit Quality of Bonds(% of Net Assets)
AAA 12.3%
AA 1.0%
A 2.5%
BBB 3.9%
BB 3.3%
B 9.1%
All C's -
NA 2.3%
Not Rated 0.7%
Five Largest Holdings (% of Net Assets)
Houston Industries, Inc. 6.7%
U.S. Treasury Notes 5-15-2008 6.1%
Comcast Corp. Special Class A 4.1%
Dell Computer Corp. 3.9%
MediaOne Group, Inc. 2.9%
Top Five Industries (% of Net Assets)
U.S. Government Securities 12.3%
Communications 11.7%
Broadcasting 11.1%
Utilities-Electric 6.7%
Entertainment 6.4%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Indices on Class A's
inception date.
S&P 500 (3) $26,192
Class A (2) $18,922
LBLGCB (3) $16,622
LBGCB (3) $14,719
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year Inception Date
Class A (without sales load) 14.69% 19.39% 12/2/94
Class A (2) (with sales load) 8.38% 17.68% 12/2/94
S&P 500 (3) 21.99% 27.87% 12/2/94
LBLGCB (3) 12.98% 14.17% 12/2/94
LBGCB (3) 10.29% 10.37% 12/2/94
Composite Index (4) 16.14% 19.12% 12/2/94
Class B (without sales load) 13.97% 18.85% 10/1/95
Class B (2) (with sales load) 8.97% 18.40% 10/1/95
Class C 14.08% 18.76% 12/2/94
Notes
1 Balanced Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
2 Balanced Portfolio Class A shares performance reflects the maximum
sales charge of 5.5%. Balanced Portfolio Class B shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers
Government/Corporate Bond (LBGCB) Index are unmanaged indices used as a
general measure of market performance. Calculations assume dividends and
capital gains are reinvested and do not include any managerial expenses.
From inception calculation is based on life of Class A shares. For
reporting periods through the six months ended April 30, 1998, the
Portfolio had selected the Lehman Brothers Long Government/Corporate Bond
(LBLGCB) Index as one of its benchmark measures; however, LBGCB values were
inadvertently shown in reports. The LBGCB Index is more appropriate for
comparisons to the Portfolio. Differences in the LBLGCB Index that was
previously used and the LBGCB Index values for such periods were relatively
insignificant (see above). Commencing with periods ended October 31, 1998,
the Portfolio has changed its benchmark index from LBLGCB to LBGCB.
4 The Composite Index reflects an equal blend of the two benchmark
indices, the S&P 500 and the LBGCB.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 0.6 1.6
Consumer Cyclical 28.4 12.8
Consumer Non-Cyclical 5.3 3.4
Energy 0.0 9.8
Financial 9.4 20.6
Industrial 1.7 10.4
Technology 27.4 8.4
Utilities 6.7 5.5
Long-term U.S. Gov't 12.3 23.7
Short-term 7.9 2.3
Balanced Investing
The balanced style investor is one that keeps a consistent portion of their
investments in capital appreciation securities such as stocks, as well as
income producing securities such as bonds.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Flexible Income Portfolio
Objective/Focus
Maximum total return, consistent with preservation of capital, by investing
in income producing securities of any grade.
Market Environment
Fixed-income markets started out the period on a relatively strong note,
supported by robust U.S. economic growth, benign inflation, and low
interest rates. They became increasingly volatile, however, in late summer
as investors became more concerned over financial turmoil abroad, political
uncertainty at home, and the prospects of weakening corporate earnings. The
sell-off in the non-Treasury market reflected investors' reactions to a
combination of factors, including widespread credit losses in Russia and
the possibility of a global economic slowdown pulling the U.S. economy into
recession. Worried investors were less willing to hold higher-yield
corporate bonds and instead opted for the ultimate security of the U.S.
Treasury market. While this influx of capital helped push the 30-year
Treasury bond rate down to record lows, the rally in the Treasury market
came at the expense of other fixed-income assets. As a result, yield
spreads widened considerably.
Performance
During the period, many of our high-yield positions came under pressure in
what can be characterized as one of the most difficult markets in years. As
a result, we underperformed our benchmark index for the year ended October
31, 1998. This is illustrated in the Performance Table on the following
page.
Strategy Review
The prospect of slowing corporate earnings was especially negative for the
high-yield market, where bond prices are more sensitive to the economy.
Consequently, our positions in companies such as Candescent Technologies
and Star Markets declined. In response to this volatile market, we reduced
our high-yield allocation to around 20%, about half its standard weighting.
One high-yield position that did trade higher during the period was
longtime holding Fred Meyer. The company, one of our highest quality
holdings, is a consistently performing, publicly-traded grocery store chain
with solid equity capitalization. Another strong position was Jones
Intercable, which was effectively upgraded during the last quarter after
being acquired by Comcast Corp., a higher-graded credit.
Overall, performance by our corporate positions was mixed while our
Treasury holdings moved higher, which helped to offset losses in high-yield
positions. During the period, we raised our cash holdings and added to
Treasuries, focusing on ten-year maturities to capture the upside of a
potential interest rate decline.
Outlook
We expect fixed-income markets to remain highly volatile. On the upside, I
believe the risk of recession seems small. Moreover, we believe that
interest rates may continue to trend lower, which could provide support for
credit markets. Once the initial panic subsides, we believe that investors
will start to move out of Treasuries and into other areas of the fixed-
income market in pursuit of higher yields.
We believe that our remaining high-yield positions have strong upside
potential. As market conditions stabilize, we will look for opportunities
to raise our corporate bonds back to their standard level, selectively
choosing positions with stable earnings potential and strong business
fundamentals.
/s/ Ronald V. Speaker
Ronald V. Speaker
Portfolio Manager
Janus Capital Corporation
Credit Quality of Bonds(% of Net Assets)
AAA 20.8%
AA 3.7%
A 14.6%
BBB 12.9%
BB 12.8%
B 22.0%
All C's 1.8%
NA -
Not Rated 1.9%
Five Largest Holdings (% of Net Assets)
U.S. Treasury Notes 5-15-2008 12.4%
Time Warner, Inc. 8-15-2007 4.4%
U.S. Treasury Notes 5-15-2007 4.4%
Ford Motor Credit Co. 8-15-2008 4.1%
Marcus Cable Co. 10-1-2005 4.0%
Top Five Industries (% of Net Assets)
U.S. Government Securities 20.7%
Broadcasting 13.2%
Communications 7.6%
Industrial-Diversified 6.5%
Banks 5.4%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Indices over the
past 10-year period.
LBLGCB (3) $29,082
LBGCB (3) $24,017
Class A (2) $21,082
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 7.43% 7.25% 8.27% 8.45% 6/29/87
Class A (2) (with sales load) 2.32% 6.21% 7.74% 7.99% 6/29/87
LBLGCB (3) 12.98% 8.33% - 14.17% 6/29/87
LBGCB (3) 10.29% 6.98% 9.16% 10.37% 6/29/87
Class B (without sales load) 6.74% - - 8.30% 10/1/95
Class B (2) (with sales load) 1.74% - - 7.75% 10/1/95
Class C 6.84% 6.65% - 6.71% 10/1/93
Notes
1 Flexible Income Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate;
shares when redeemed may be worth more or less than their original cost.
Past performance does not guarantee future results. Periods less than one
year represent total return and are not annualized.
2 Flexible Income Portfolio Class A shares performance reflects the
maximum sales charge of 4.75%. Flexible Income Portfolio Class B shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
3 The Lehman Brothers Government/Corporate Bond (LBGCB) Index is an
unmanaged index used as a general measure of market performance.
Calculations assume dividends and capital gains are reinvested and do not
include any managerial expenses. From inception calculation is based on
life of Class A shares. For reporting periods through the six months ended
April 30, 1998, the Portfolio had selected the Lehman Brothers Long
Government/Corporate Bond (LBLGCB) Index as one of its benchmark measures;
however, LBGCB values were inadvertently shown in reports. The LBGCB Index
is more appropriate for comparisons to the Portfolio. Differences in the
LBLGCB Index that was previously used and the LBGCB Index values for such
periods were relatively insignificant (see above). Commencing with periods
ended October 31, 1998, the Portfolio has changed its benchmark index from
LBLGCB to LBGCB.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 0.0 3.1
Consumer Cyclical 27.2 13.3
Consumer Non-Cyclical 7.2 12.5
Financial 15.4 31.2
Industrial 6.5 17.2
Technology 9.4 9.0
Utilities 3.3 2.6
Long-term U.S. Gov't 22.0 5.8
Short-term 8.1 2.8
Credit Ratings
A credit rating implies the potential for default of interest payments or
principal at maturity by a bond issuer. Ratings are provided by a number
of agencies such as Standard & Poor's and Moody's.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Income Plus Portfolio
Objective/Focus
High current income while avoiding excessive risk by investing primarily in
fixed-income and dividend paying equity securities.
Market Environment
Many of the year's well-publicized events negatively affected the high-
yield portion of the Portfolio, not the least of which was the Asian
turmoil in late 1997. Initial cracks in the domestic high-yield market
appeared when portfolio managers holding debt of Asian companies were
forced to raise cash. These forced liquidations soon spilled over to
emerging market debt and to our own high-yield market. Things took a
further turn for the worse as the Russian economic woes began to impact the
global markets near the end of the summer. All of this together led
investors to re-evaluate the premiums received for investing in risky
assets of all types, including emerging market debt, high-yield debt and
some investment-grade corporate bonds.
Performance
In this environment, for the year ended October 31, 1998, the Income Plus
Portfolio outperformed its benchmark index. Please see page 25 for more
details.
Strategy Review
Near the end of the period, we experienced our first defaulted credit in
some time when Golden Books Family Entertainment (formerly Western
Publishing) missed an interest coupon payment. While the company had
adequate liquidity to make the payment, their needs for the coming months
were such that they took pre-emptive steps to conserve cash. Bondholders
are currently in negotiations with the company to address the situation.
It was a tough environment even for the investment-grade portion of the
Portfolio, given its average BBB rating. While this period's "flight to
quality" dramatically increased demand for Treasuries and higher-rated
corporates, it did so at the expense of BBB and lower-rated bonds. Our
strategy to combat this phenomenon was to occasionally deploy cash into the
Treasury market during periods where credit spreads were widening, thereby
avoiding at least some of the underperformance of the triple-B market. With
spreads now at the widest levels since the early part of the decade, the
Portfolio is almost completely out of Treasuries and into corporates. If
spreads begin to tighten as we anticipate, the BBB sector should
outperform.
Outlook
Overall, the outlook for the Income Plus Portfolio appears favorable,
though the market will not be without its challenges. At the least, we'll
have to pay careful attention to the worldwide economic slowdown and its
eventual impact on the U.S. While the consensus view is for substantial
slowing of growth during 1999, the recent moves by the Federal Reserve
Board suggest such thinking may be premature. More importantly, credit
spreads already discount dire results for 1999 and anything short of such
an outcome will present tremendous value in most credit sectors.
Accordingly, we will remain alert to signals of something much worse than
the consensus view-that is, recession-that would suggest a portfolio
structure of much higher quality and longer duration. Until such time we
will remain committed to being long on credit.
/s/ David R. Halfpap
David R. Halfpap
/s/ Bradley J. Beman
Bradley J. Beman
/s/ Craig M. Enright
Craig M. Enright
Co-Portfolio Managers
AEGON USA Investment Management, Inc.
Credit Quality of Bonds(% of Net Assets)
AAA -
AA -
A 17.9%
BBB 50.1%
BB 6.4%
B 11.4%
All C's -
NA -
Not Rated 4.2%
Five Largest Holdings (% of Net Assets)
TCI Communications, Inc. 4.5%
WorldCom, Inc. 8-15-2005 4.3%
HSBC America Capital II 144A 5-15-2027 4.2%
Arvin Industries, Inc. 3-15-2008 4.1%
Ralston Purina Company 10-15-2009 4.1%
Top Five Industries (% of Net Assets)
Banks 8.3%
Retailers-Broadline 7.2%
Financial-Diversified 6.8%
Utilities-Electric 5.7%
Savings & Loans 5.5%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Index over the past
10-year period.
MLHYM (3) $28,003
Class A (2) $24,352
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 3.54% 7.19% 9.84% 10.19% 6/14/85
Class A (2) (with sales load) (1.38)% 6.16% 9.31% 9.79% 6/14/85
MLHYM (3) 0.99% 8.71% 10.85% 11.47% 6/14/85
Class B (without sales load) 2.87% - - 7.62% 10/1/95
Class B (2) (with sales load) (2.13)% - - 7.05% 10/1/95
Class C 2.97% 6.49% - 6.63% 10/1/93
Notes
1 Income Plus Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
2 Income Plus Portfolio Class A shares performance reflects the maximum
sales charge of 4.75%. Income Plus Portfolio Class B shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Merrill Lynch High Yield Master (MLHYM) Index is an unmanaged
index used as a general measure of market performance. Calculations assume
dividends and capital gains are reinvested and do not include any
managerial expenses. From inception calculation is based on life of Class
A shares.
Investments by Sector as a Percentage of Net Assets
10/31/98 10/31/97
Basic Materials 2.8 4.0
Consumer Cyclical 25.1 26.5
Consumer Non-Cyclical 13.4 9.5
Energy 4.3 4.5
Financial 30.2 26.2
Industrial 8.4 10.3
Technology 5.6 5.2
Utilities 8.4 7.2
Short-term 0.8 4.7
Investment Grade or Junk?
Investment grade securities are those with credit ratings of BBB/Baa or
above as determined by Standard & Poor's and Moody's, respectively.
Securities rated below this level are what the industry refers to as
speculative or "junk" bonds.
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Tax-Exempt Portfolio
Objective/Focus
Maximum interest income exempt from federal income tax while preserving
capital by investing primarily in high quality municipal obligations.
Market Environment
The municipal bond market posted solid returns for the last twelve months,
reflecting, for the most part, the substantial gain in Treasury prices. The
move to lower interest rates was due to continued benign domestic inflation
and supportive international bond markets. An acceleration of the trend in
August and September was triggered by a flight-to-quality bid from
investors, including foreigner investors who typically do not consider tax-
advantaged municipals as a portfolio alternative. In addition, the low
interest rates and a strong economy led to near-record levels of new issue
municipal supply. As a result of these factors, municipal-to-Treasury yield
ratios are at levels not seen since 1986. These historically attractive
levels are providing relatively high taxable-equivalent yields on 30-year
Aaa-rated general obligation bonds. We believe there is currently great
value in this high-quality sector of the bond market.
Performance
The Tax-Exempt Portfolio's performance this year has approximated the
average general municipal fund, although it modestly lagged its benchmark
index for the year ended October 31, 1998. Please see the Performance Table
on page 27 for further information.
Strategy Review
Overall, higher-rated municipal bonds performed better than lower-rated
issues this period, mirroring the flight-to-quality of other credit related
sectors. Our focus on high quality and longer maturity holdings for the
Portfolio remains an appropriate strategy, we think, given the continued
narrow yield spreads between Aaa and lower-rated issues. In addition,
longer maturity obligations are benefiting from the rally in Treasuries and
the relatively steep municipal yield curve.
While the duration of the Portfolio was generally longer than its benchmark
throughout the period, we shortened it somewhat as the Treasury market
rallied. The Portfolio's emphasis remained consistent on higher coupon,
premium bonds for additional current income. While generally a sound
strategy, the huge Treasury market rally resulted in many issues trading to
their call dates rather than to maturity, taking away some of the potential
price performance. Going forward, one of our strategies will be to shift
the portfolio structure, with additional adjustments made to reduce call
risk. The duration of the portfolio remains longer than the index due to
expectations of an eventual resumption of the trend to lower rates, despite
the latest pull-back in interest rates during October.
Outlook
For now, we continue to be modestly bullish on the bond market in general,
and positive on the municipal market in particular. More importantly,
though, the Tax-Exempt Portfolio has the flexibility to adjust quickly to
any changes in our outlook.
/s/ Jarrell D. Frey
Jarrell D. Frey
Portfolio Manager
AEGON USA Investment Management, Inc.
Credit Quality of Bonds(% of Net Assets)
AAA 55.7%
AA 27.4%
A 4.3%
BBB -
BB -
B -
All C's -
NA -
Not Rated 8.5%
Regional Concentration (% of Net Assets)
Northeast 8.4%
Midwest 44.5%
South 17.4%
West 27.6%
This graph compares the 10/31/98 value of hypothetical simultaneous $10,000
investments made in Class A Shares and its comparative Index over the past
10-year period.
LBGMB (3) $21,918
Class A (2) $18,792
Performance of Class B and C shares will differ from the performance shown
in this chart for Class A Shares, based upon the different sales charges
(loads) and fees paid by the shareholders investing in these classes.
Average Annual Total Returns For the Period Ended 10/31/98(1)
From Inception
1 year 5 year 10 year Inception Date
Class A (without sales load) 7.19% 5.87% 7.03% 8.15% 4/1/85
Class A (2) (with sales load) 2.10% 4.84% 6.51% 7.77% 4/1/85
LBGMB (3) 8.02% 6.35% 8.16% 9.36% 4/1/85
Class B (without sales load) 6.50% - - 6.63% 10/1/95
Class B (2) (with sales load) 1.50% - - 6.06% 10/1/95
Class C 6.92% 5.60% - 5.57% 10/1/93
Notes
1 Tax-Exempt Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
2 Tax-Exempt Portfolio Class A shares performance reflects the maximum
sales charge of 4.75%. Tax-Exempt Portfolio Class B shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
3 The Lehman Brothers General Municipal Bond (LBGMB) Index is an
unmanaged index used as a general measure of market performance.
Calculations assume dividends and capital gains are reinvested and do not
include any managerial expenses. From inception calculation is based on
life of Class A shares.
Investments by Region as a Percentage of Net Assets
10/31/98 10/31/97
General Obligation 21.1 22.6
Revenue Bonds
Education 12.8 12.8
Hospital 4.3 4.2
Industrial 28.0 16.7
Public Facilities 4.0 16.1
Transportation 4.4 8.3
Utilities 23.3 18.0
General Obligation vs. Revenue Bonds
Municipal bonds are backed by the full faith, credit and taxing power of
the issuer (General Obligation) or are secured through the ability of the
issuer to earn an income through a public project (Revenue).
This material must be preceeded or accompanied by the current prospectus,
which includes specific content regarding the investment objectives and
policies of this Portfolio.
Preface to the Schedule of Investments
This schedule provides a complete listing of each Portfolio's holdings at
period end.
For all Portfolios except International Equity, Global and Tax-Exempt,
positions are grouped together first by asset type, then by sector, then by
basic industry. Within an industry, securities are listed alphabetically.
International Equity and Global positions are grouped first according to
country, then by asset type and finally, the securities are listed
alphabetically.
Tax-Exempt invests in municipal securities, which are more easily
categorized by state. Within each state, securities are listed in
descending market value. For relevance purposes, sectors and industries
are not included as grouping levels for these three Portfolios.
Please refer to the graphics presented on these two pages for more detailed
explanations.
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This section lists all open Forward Foreign Currency Contracts ("FEC's").
FEC's are typically entered into to offset a purchase or sale of a non-U.S.
security. Purchases and sales of non-U.S. securities are denominated in,
and require settlement in the currency of their country of issue. FEC's
facilitate this settlement requirement.
In addition to offsetting purchases and sales, FEC's can be entered into to
hedge another country's currency. Refer to your Portfolio's prospectus for
specifics. Notional Amount refers to the quantity of foreign currency
listed under Description. The U.S. dollar equivalent, as valued at period
end, is listed under Value.
* Revenue Bond - issues backed by the ability of the issuer to earn
income from a particular project.
* General Obligation Bond - issues backed by the full faith, credit and
taxing power of the issuer.
October 31, 1998
SCHEDULE OF INVESTMENTS
AGGRESSIVE GROWTH PORTFOLIO
Description Shares
Value
COMMON STOCK (89.5%)
Consumer, Cyclical (16.4%)
Advertising (0.8%)
Outdoor Systems, Inc. * 22,400
$494,200
Airlines (0.5%)
SkyWest, Inc. 13,100
330,775
Broadcasting (3.0%)
Capstar Broadcasting Corp. * 26,100
453,488
Clear Channel Communications, Inc. * 11,400
519,412
Comcast Corp. Special Class A 18,000
888,750
1,861,650
Entertainment (0.6%)
Carnival Corp. 10,900
352,888
Retailers - Broadline (2.7%)
Fred Meyer, Inc. * 13,300
709,056
Wal-Mart Stores, Inc. 14,500
1,000,500
1,709,556
Retailers - Drug Based (3.3%)
Cardinal Health, Inc. 18,200
1,721,038
Rite Aid Corp. 8,100
321,468
2,042,506
Retailers - Specialty (5.5%)
Home Depot, Inc. 41,900
1,822,650
Staples, Inc. * 29,550
962,221
Starbucks Corp. * 15,700
680,988
3,465,859
Consumer, Non-Cyclical (16.4%)
Food Retailers (1.5%)
Safeway, Inc. * 7,200
344,250
The Kroger Company * 11,200
621,600
965,850
Healthcare (0.5%)
Allegiance Corp. 7,800
290,062
Pharmaceuticals (14.4%)
Bristol-Myers Squibb Company, Inc. 11,000
1,216,188
Centocor, Inc. * 7,700
342,169
CVS Corp. 11,900
543,680
McKesson Corp. 11,900
916,300
Pfizer, Inc. 16,600
1,781,388
Schering Plough Corp. 19,600
2,016,350
Warner-Lambert Company, Inc. 28,000
2,194,500
9,010,575
Financial (10.4%)
Banks (4.4%)
Bank of New York Company, Inc. 23,500
741,719
BankAmerica Corp. 15,200
873,050
First Union Corp. 9,900
574,200
U.S. Bancorp 14,900
543,850
2,732,819
Diversified (3.0%)
Citigroup, Inc. 33,500
1,576,593
Household International, Inc. 9,000
329,063
1,905,656
Insurance (2.1%)
American International Group, Inc. 15,400
1,312,850
Securities Brokers (0.4%)
Paine Webber Group, Inc. 6,600
220,688
United States Government Agencies (0.5%)
Federal Home Loan Mortgage Corp. 5,600
322,000
Industrial (6.2%)
Diversified (3.2%)
Tyco International, Ltd. 32,502
$2,013,093
Pollution Control (2.4%)
Waste Management, Inc. 34,025
1,535,378
Railroads (0.6%)
Kansas City Southern Industries, Inc. 9,300
359,213
Technology (37.0%)
Advanced Medical Devices (0.5%)
Guidant Corp. 4,100
313,650
Communications (11.4%)
America Online, Inc. 17,700
2,249,006
American Tower Corp. Class A * 13,000
284,375
Ascend Communications, Inc. * 31,900
1,537,181
Cisco Systems, Inc. * 30,250
1,907,641
Global Crossing, Ltd. * 8,800
250,800
Jacor Communications, Inc. * 16,200
891,000
7,120,003
Computers (10.2%)
Citrix Systems, Inc. * 13,700
968,419
Compaq Computer Corp. 21,000
664,125
Dell Computer Corp. * 30,600
2,004,300
EMC Corp. * 14,100
907,688
International Business Machines Corp. 6,200
920,312
Lexmark International Group, Inc. * 9,000
629,437
Quantum Corp. * 18,200
318,500
6,412,781
Industrial (1.5%)
IMS HEALTH 14,000
931,000
Semiconductors (6.7%)
Intel Corp. 20,000
1,783,750
Linear Technology Corp. 17,800
1,061,325
Texas Instruments, Inc. 21,300
1,361,869
4,206,944
Software (6.7%)
Compuware Corp. * 27,700
1,499,262
HBO & Company 32,200
843,238
Microsoft Corp. * 17,300
1,831,638
4,174,138
Utilities (3.1%)
Telephone
MCI WORLDCOM, Inc. * 34,700
1,917,174
Total Common Stock (cost $43,193,372)
56,001,308
CONVERTIBLE PREFERRED STOCK (3.5%)
Technology
Diversified
Nokia Corp. OY ADR (cost $1,209,524) 23,300
2,168,357
Description Principal
Value
SHORT-TERM SECURITIES (5.0%)
Commercial Paper (4.0%)
General Electric Credit Corp. 5.130% 11-5-1998 $600,000
$599,658
Merrill Lynch & Company, Inc. 5.250% 11-10-1998 300,000
299,606
Progress Capital Corp. 5.150% 11-3-1998 1,600,000
1,599,542
2,498,806
Repurchase Agreements (1.0%)
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $623,629 on 11-2-1998 623,434
623,434
Total Short-Term Securities (cost $3,122,240) 3,122,240
Total Investments (98.0%) (cost $47,525,136) 61,291,905
Other Assets In Excess of Liabilities (2.0%) 1,257,949
Net Assets (100.0%) $62,549,854
October 31, 1998
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO
Description Shares
Value
Australia (1.1%)
COMMON STOCK
Brambles Industries, Ltd. 2,375 $
52,045
Coca-Cola Amatil, Ltd. 3,237
11,941
Coca-Cola Beverages PLC * 3,237
6,600
70,586
Austria (0.2%)
COMMON STOCK
VA Technologie AG 147
13,643
Brazil (0.7%)
COMMON STOCK
Telecomunicacoes Brasileiras Telebras SA ADR * 361
27,413
Telecomunicacoes de Sao Paulo SA * 8,268
1,372
Telecomunicacoes do Rio de Janeiro Celular SA * 148,600
4,485
Unibanco de Bancos Brasileiros SA GDR 667
11,673
44,943
Canada (0.1%)
COMMON STOCK
Newcourt Credit Group, Inc. 272
8,952
Finland (4.2%)
COMMON STOCK (1.2%)
Merita, Ltd. 5,775
30,996
Pohjola Insurance Group 180
7,371
Sampo Insurance Company 1,201
37,483
75,850
CONVERTIBLE PREFERRED STOCK (3.0%)
Nokia Corp. OY A Shares 2,158
196,689
272,539
France (16.7%)
COMMON STOCK
Alcatel Alsthom Compagnie Generale d'Electricite * 2,530
63,113
AXA-UAP 1,310
148,284
Cap Gemini Sogeti SA 520
78,262
Carrefour SA 87
57,833
Coflexip SA ADR 940
45,238
Elf Aquitaine SA 562
65,134
Equipements et Composants pour l'Industrie Automobile 230
43,736
Etablissements Economiques du Casino Guichard-Perrachon SA 1,020
101,669
Lyonnaise des Eaux SA 316
56,673
Michelin Generale de Etablissements 235
9,700
Renault SA 922
39,469
Rhone-Poulenc Rorer, Inc. 882
40,380
Schneider SA 1,530
90,951
Societe Generale 649
85,980
Total SA 1,178
136,103
Valeo SA 437
37,887
1,100,412
Germany (12.7%)
COMMON STOCK (12.6%)
Adidas AG 497
60,397
Bayerische hypo-und Vereinsbank AG 757
60,414
BHW Holding AG 2,240
36,566
Commerzbank AG * 48
1,445
Daimler-Benz AG 554
43,710
Fresenius Medical Care AG 1,648
74,727
Mannesman AG 1,674
162,340
Muenchener Ruckversicherungs-Namen AG 129
58,797
Muenchener Ruckversicherungs-Namen AG Warrants 4
172
Preussag AG 382
142,037
Germany (continued)
SGL Carbon AG 690 $
54,024
VEBA AG 1,162
63,861
Volkswagen AG 974
73,374
831,864
NON-CONVERTIBLE PREFERRED STOCK (0.1%)
Fresenius Medical Care AG 103
3,861
835,725
Greece (0.2%)
COMMON STOCK
Alpha Credit Bank Rights 120
9,595
National Bank of Greece SA GDR 223
6,300
15,895
Hong Kong (0.2%)
COMMON STOCK
Giordano International, Ltd. 12,000
1,441
Johnson Electric Holdings, Ltd. * 4,600
10,691
12,132
Israel (1.2%)
COMMON STOCK
ECI Telecom, Ltd. ADR 1,655
54,822
Teva Pharmaceutical Industries, Ltd. ADR 600
23,662
78,484
Italy (6.8%)
COMMON STOCK
Banca Intesa SpA 6,096
30,834
ENI SpA 6,725
40,054
Industrie Natuzzi SpA ADR 448
8,148
Istituto Nazionale delle Assicurazioni SpA 1,001
35,894
Montedison SpA 37,653
37,285
Saipem SpA 14,440
66,158
Telecom Italia Mobile SpA 15,471
89,925
Telecom Italia SpA 13,291
72,627
Unicredito Italiano SpA 12,663
68,072
448,997
Japan (4.8%)
COMMON STOCK
Alps Electric Company, Ltd. 1,000
13,789
Canon, Inc. 3,000
56,867
East Japan Railway Company * 1
5,940
Fujisawa Pharmaceutical Company 1,000
11,820
Inax Corp. 1,000
4,960
Komatsu, Ltd. 1,000
5,416
Kuraray Company * 1,000
10,686
Mazda Motors Corp. * 1,000
3,740
Minebea Company, Ltd. 1,000
9,413
Mitsubishi Materials Corp. 1,000
1,788
Mitsui & Company, Ltd. 1,000
5,347
Mitsui Fudosan Company, Ltd. 1,000
6,654
Mitsui Mining & Smelting Company, Ltd. 1,000
4,548
Nichiei Company 100
8,098
Nintendo Company 100
8,476
Nippon Steel Corp. 2,000
3,490
Nippon Telegraph & Telephone Corp. 1
7,840
NTT Data Communications Systems Corp. * 10
42,381
Olympus Optical Company, Ltd. 1,000
10,317
Osaka Gas Company 2,000
6,430
Promise Company, Ltd. 100
4,530
Sanwa Bank 1,000
7,814
Sapporo Breweries 1,000
4,092
Shin-Etsu Chemical Company, Ltd. 1,000
19,944
Sony Corp. 600
38,169
Toda Corp. 1,000
4,393
Tohoku Electric Power 500
8,747
315,689
Mexico (0.8%)
COMMON STOCK
Desc SA de C.V. ADR 630 $
11,891
Gruma SA * 1,043
2,480
Grupo Carso SA de C.V. ADR 2,032
14,011
Grupo Financiero Bancomer SA ADR 2,232
9,128
Panamerican Beverages, Inc. ADR Class A 742
15,027
52,537
Netherlands (6.2%)
COMMON STOCK
IHC Caland NV 925
41,885
ING Groep NV 2,618
126,825
Ispat International NV NYRS 157
1,168
Koninklijke Ahold NV 971
32,313
Laurus NV Scrips 6,797 -
Philips Electronics NV 719
38,298
Vendex International NV - Non-Food 971
24,456
VNU NV 2,281
78,963
Wolters Kluwer NV 280
54,316
398,224
Philippines (0.1%)
COMMON STOCK
San Miguel Corp. Class B 3,200
4,719
Portugal (1.0%)
COMMON STOCK
Banco Comercial Portugues SA 1,460
45,519
Jeronimo Martins SGPS SA 439
18,939
64,458
South Africa (0.0%)
COMMON STOCK
Barlow, Ltd. 530
2,504
South Korea (0.1%)
COMMON STOCK
Pohang Iron & Steel Company, Ltd. ADR 533
9,594
Spain (4.3%)
COMMON STOCK
Argentaria Corporacion Bancaria de Espana SA 2,813
61,317
Banco Bilbao Vizcaya SA 4,098
55,375
ENDESA SA 2,370
59,836
Repsol SA 729
36,655
Telefonica de Espana SA 1,578
71,375
284,558
Sweden (4.1%)
COMMON STOCK
Autoliv, Inc. 1,777
59,275
Fastighets AB Balder * 75
702
Hoganas AB 2,957
53,112
Investor AB Class B 66
2,574
Invik & Company AB 143
9,907
Kinnevik Investments AB B-Free 164
4,250
L.M. Ericsson Telephone Company Class B 590
13,322
Netcom Systems AB * 667
25,073
Societe Europeenne de Communication SA SDR
Series A Voting * 16
74
Societe Europeenne de Communication SA SDR
Series B Non-Voting * 144
684
Svenska Handelsbanken 2,365
99,673
268,646
Switzerland (6.9%)
COMMON STOCK
ABB AG 30 $
36,010
Nestle SA 26
55,413
Novartis AG 71
128,203
Roche Holding AG 3
35,077
Schindler Holding AG 44
59,685
Union Bank of Switzerland 150
41,238
Zurich Allied AG * 166
101,101
456,727
Taiwan (0.4%)
COMMON STOCK
Taiwan Semiconductor Manufacturing Company, Ltd. ADR 1,938
28,949
United Kingdom (21.5%)
COMMON STOCK
Airtours PLC 10,313
58,594
BAA PLC 4,516
50,749
Bank of Scotland 2,688
28,857
Barclays PLC 2,358
50,589
BG PLC 4,111
27,106
British Aerospace PLC 6,152
45,197
British Land Company PLC 5,740
46,252
British Petroleum Corp. 2,050
30,241
British Telecommunications PLC 3,570
46,660
Cable & Wireless Communications PLC * 4,745
35,694
Commercial Union PLC 1,200
18,967
Diageo PLC 3,980
42,960
Electrocomponents PLC 4,715
31,187
FKI PLC 5,500
11,643
General Electric Company PLC 3,180
25,411
GKN PLC 1,740
20,893
Glaxo Wellcome PLC 1,203
37,305
Granada Group PLC 3,719
56,605
Great Universal Stores PLC 1,400
15,217
Johnson Matthey PLC 350
1,971
Legal & General Group PLC 1,540
18,182
Lloyds TSB Group PLC 3,780
46,748
LucasVarity PLC 14,299
49,295
Marks and Spencer PLC 2,170
16,088
Railtrack Group PLC 893
23,866
Reed International PLC 7,267
60,229
Rentokil Initial Group PLC 4,800
29,581
Royal and Sun Alliance Insurance Group PLC 5,772
52,982
Saatchi & Saatchi PLC 1,903
3,742
Safeway PLC 4,455
22,199
ScottishPower PLC 4,930
48,347
Securicor PLC 4,400
32,381
SEMA Group PLC 5,290
42,227
Seven Trent PLC 1,821
31,480
Shell Transport & Trading Company 4,582
27,605
Siebe PLC 23,101
96,166
Somerfield PLC 1,537
9,916
Sun Life and Provincial Holding PLC 4,100
35,679
Tesco PLC 13,860
37,865
Vodafone Group PLC 1,522
20,313
Zeneca Group PLC 679
26,101
1,413,090
United States (4.5%)
COMMON STOCK (1.4%)
Comverse Technology, Inc. * 500 $23,000
Pharmacia & Upjohn, Inc. 1,325 70,142
93,142
Description Principal Value
SHORT-TERM SECURITIES (3.1%)
Repurchase Agreements
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $202,094 on 11-2-1998 $202,031 $202,031
295,173
Total Investments (98.8%) (cost $6,229,816) 6,497,176
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (0.0%) @
D 315,712 German Deutschemark 12-11-1998 Sell$
(1,006)
F 1,048,093 French Franc 12-11-1998 Sell
646
J 15,334,800 Japanese Yen 11-25-1998 Sell
(2,541)
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (2,901)
Other Assets In Excess of Liabilities (1.2%) 81,587
Net Assets (100.0%) $6,575,862
October 31, 1998
SCHEDULE OF INVESTMENTS
CAPITAL APPRECIATION PORTFOLIO
Description Shares
Value
COMMON STOCK (97.7%)
Consumer, Cyclical (26.7%)
Advertising (3.9%)
HA-LO Industries, Inc. * 9,255
$261,454
Outdoor Systems, Inc. * 20,519
452,700
Snyder Communications, Inc. * 11,780
420,399
1,134,553
Airlines (1.5%)
Ryanair Holdings PLC ADR * 14,628
427,869
Broadcasting (11.7%)
Chancellor Media Corp. * 20,125
772,297
Clear Channel Communications, Inc. * 16,715
761,577
Heftel Broadcasting Corp. * 30,340
1,236,355
Univision Communications, Inc. * 20,386
601,387
3,371,616
Entertainment (3.0%)
Premier Parks, Inc. * 20,985
465,605
SFX Entertainment, Inc. Class A * 12,620
397,530
863,135
Restaurants (6.6%)
J.D. Wetherspoon PLC + 166,673
557,855
PizzaExpress PLC + 106,920
1,359,872
1,917,727
Consumer, Non-Cyclical (24.7%)
Consumer Services (11.3%)
Apollo Group, Inc. Class A * 71,076
2,274,432
ITT Educational Services, Inc. * 26,910
798,891
Robert Half International, Inc. * 4,640
186,180
3,259,503
Medical Supplies (2.4%)
Sepracor, Inc. * 10,240
702,720
Pharmaceuticals (11.0%)
CVS Corp. 20,410
932,482
MedImmune, Inc. * 11,763
791,062
Omnicare, Inc. 34,115
1,179,100
Watson Pharmaceuticals, Inc. * 4,985
277,290
3,179,934
Financial (9.2%)
Banks (5.9%)
M & T Bank Corp. 470
234,295
Star Banc Corp. 12,480
943,800
U.S. Trust Corp. 8,395
534,132
1,712,227
Diversified (2.0%)
HealthCare Financial Partners, Inc. * 18,856
576,287
Securities Brokers (1.3%)
Charles Schwab Corp. 7,947
380,959
Technology (36.2%)
Advanced Medical Devices (4.3%)
Sofamor Danek Group, Inc. * 12,140
1,233,728
Aerospace/Defense (1.1%)
Orbital Sciences Corp. * 9,925
327,525
Communications (9.5%)
Adelphia Communications Corp. * 5,185
195,086
America Online, Inc. 4,650
590,841
Crown Castle International Corp. * 30,625
392,382
Jacor Communications, Inc. * 23,180
1,274,900
Western Wireless Corp. * 14,540
290,800
2,744,009
Computers (6.0%)
Capita Group PLC + 40,608
$409,444
EQUANT NYRS * 3,199
139,956
Paychex, Inc. 23,840
1,183,060
1,732,460
Diversified (1.0%)
Uniphase Corp. * 5,690
280,944
Semiconductors (8.9%)
Vitesse Semiconductor Corp. * 79,565
2,565,971
Software (5.4%)
Lycos, Inc. 6,730
273,406
VERITAS Software Corp. 25,745
1,287,250
1,560,656
Utilities (0.9%)
Electric
The AES Corp. * 6,610
270,596
Total Common Stock (cost $24,677,263) 28,242,419
Description Principal
Value
SHORT-TERM SECURITIES (4.7%)
United States Government Agencies (4.5%)
Federal Home Loan Mortgage Corp.
5.400% 11-2-1998 $1,300,000
$1,299,805
Repurchase Agreements (0.2%)
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $65,527 on 11-2-1998 65,507
65,507
Total Short-Term Securities (cost $1,365,312) 1,365,312
Total Investments (102.4%) (cost $26,042,575) 29,607,731
Notional
Amount
Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (0.0%) @
B 119,972 British Pound 11-3-1998 Sell $(576)
B 192,000 British Pound 11-4-1998 Sell (5,781)
B 162,000 British Pound 11-4-1998 Buy (4,785)
B 112,000 British Pound 4-7-1999 Sell 3,434
B 550,000 British Pound 4-7-1999 Sell 8,310
Total Unrealized Net Gain on Forward Foreign
Currency Contracts 602
Liabilities in Excess of Other Assets (-2.4%) (694,746)
Net Assets (100.0%) $28,913,587
October 31, 1998
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO
Description Shares Value
Argentina (0.4%)
COMMON STOCK
Disco SA ADR * 3,985 $58,530
Telecom Arentina France SA ADR 18,105 583,886
Telefonica de Argentina SA ADR 38,000 1,256,375
1,898,791
Austria (0.2%)
COMMON STOCK
Bank Austria AG 18,708 1,019,282
Brazil (0.3%)
COMMON STOCK
Telecomunicacoes Brasileiras Telebras SA ADR * 20,255 1,538,114
Chile (0.2%)
COMMON STOCK
Compania de Telecomunicaciones de Chile SA ADR 46,470 1,019,436
Denmark (0.3%)
COMMON STOCK
BG Bank A/S 8,267 479,540
SAS Danmark 22,996 324,891
Unidanmark A/S 7,318 558,235
1,362,666
Finland (4.1%)
COMMON STOCK (1.0%)
Raision Tehtaat OY 96,278 1,301,442
Sampo Insurance Company 41,765 1,303,470
Tieto Corp. OY 71,293 2,070,551
4,675,463
CONVERTIBLE PREFERRED STOCK (3.1%)
Nokia Corp. OY A Shares 80,365 7,324,789
Nokia Corp. OY ADR 79,025 7,354,264
14,679,053
19,354,516
France (8.9%)
COMMON STOCK
Alcatel Alsthom Compagnie Generale d'Electricite 2,676 298,566
Alcatel Alsthom Compagnie Generale
d'Electricite ADR 22,725 499,950
Atos SA * 15,095 2,851,399
Cap Gemini Sogeti SA 43,309 6,518,207
Cap Gemini Sogeti SA 144A 4,895 736,720
Castorama Dubois 4,033 720,386
Compagnie Generale des Eaux 34,786 7,956,639
Elf Aquitaine SA 5,172 599,422
EQUANT NYRS * 14,711 638,502
Groupe Danone 15,347 4,063,580
Lagardere Group SA 32,743 1,319,635
Lyonnaise des Eaux SA 17,253 3,094,220
Renault SA 74,262 3,179,024
Rhone-Poulenc Rorer, Inc. 57,629 2,638,386
Sanofi SA * 8,530 1,337,618
Societe Technip 4,227 430,471
Total SA 5,091 588,200
Valeo SA 11,885 1,030,405
Valeo SA 144A 36,549 3,168,723
41,670,053
Germany (5.4%)
COMMON STOCK (4.9%)
Bayerische hypo-und Vereinsbank AG 5,469 436,462
Deutsche Pfandbrief & Hypothekenbank AG 32,050 2,577,177
Deutsche Telekom AG * 6,165 $166,984
ERGO Versicherungs Gruppe AG 5,405 882,316
Hoechst AG * 24,414 1,019,956
Mannesman AG 130,141 12,620,685
Marschollek, Lautenschlaeger und Partner AG 4,854 2,473,955
Merck KGaA 20,623 841,628
Muenchener Ruckversicherungs-Namen AG 138 62,576
Muenchener Ruckversicherungs-Namen AG Warrants 138 5,924
Porsche AG * 992 1,769,287
VEBA AG 6,595 362,446
23,219,396
NON-CONVERTIBLE PREFERRED STOCK (0.5%)
SAP AG Vorzug 4,995 2,434,081
25,653,477
Hong Kong (0.1%)
COMMON STOCK
China Telecom, Ltd. 110,000 206,663
India (0.0%)
COMMON STOCK
East India Hotels, Ltd. 4,700 24,440
Ireland (0.7%)
COMMON STOCK
Elan Corp. PLC ADR * 49,520 3,469,495
Italy (2.9%)
COMMON STOCK
Banca Commerciale Italiana SpA 383,715 2,374,486
Banca di Roma * 1,695,650 2,962,467
Telecom Italia Mobile SpA 609,209 3,541,004
Telecom Italia SpA 649,417 4,701,033
13,578,990
Japan (7.6%)
COMMON STOCK
BRIDGESTONE Corp. * 40,000 882,012
Honda Motor Company, Ltd. 51,000 1,534,494
Ito-Yokado Company, Ltd. 28,000 1,636,793
Kao Corp. 79,000 1,602,751
Kirin Brewery Company, Ltd. 267,000 2,915,023
Nippon Telegraph & Telephone Corp. 588 4,609,981
NTT Data Communications Systems Corp. * 630 2,670,019
NTT Mobile Communications * 261 9,446,035
Rohm Company, Ltd. 16,000 1,416,720
Sony Corp. 51,700 3,288,889
Takeda Chemical Industries, Ltd. 178,000 5,799,441
35,802,158
Mexico (0.4%)
COMMON STOCK
Coca-Cola FEMSA SA de C.V. ADR 34,035 561,578
Grupo Televisa SA GDS * 55,155 1,496,079
2,057,657
Netherlands (5.8%)
COMMON STOCK
Akzo Nobel NV 42,817 1,665,781
EQUANT NYRS * 28,393 1,242,194
Getronics NV 118,805 4,934,027
Koninklijke Ahold NV 82,282 2,738,177
Philips Electronics NV 44,617 2,376,577
Philips Electronics NV ADR 47,356 $2,598,661
Simac Techniek NV 10,922 1,311,038
Unilever NV CVA 27,197 2,019,990
Wolters Kluwer NV 43,793 8,495,292
27,381,737
Norway (0.4%)
COMMON STOCK
Den Norske Bank 74,760 263,515
EDB - Elektronisk Databehandling ASA 358,001 1,047,513
Merkantildata A/S 28,974 291,795
SAS Norske ASA 7,325 76,760
Storebrand ASA * 28,128 220,112
1,899,695
Portugal (0.2%)
COMMON STOCK
Cimpor Cimentos De Portugal 21,594 743,364
Spain (2.0%)
COMMON STOCK
Argentaria Corporacion Bancaria de Espana SA 77,632 1,692,213
Banco Bilbao Vizcaya SA 55,579 751,014
Banco Central Hispanoamericano SA 111,450 1,232,521
ENDESA SA 23,190 585,481
Tele Pizza SA * 189,466 1,549,576
Telefonica de Espana SA 52,446 2,372,211
Telefonica SA 9,025 1,235,861
9,418,877
Sweden (5.2%)
COMMON STOCK
Assa Abloy AB 182,248 7,271,682
Astra AB Class A 46,193 749,684
Electrolux AB 287,708 4,337,121
L.M. Ericsson Telephone Company Class B ADR 43,656 987,717
L.M. Ericsson Telephone Company Class B 2,060 46,515
Securitas AB 630,612 7,766,855
Skandinaviska Enskilda Banken 'A' 119,237 1,208,509
WM Data AB Class B 53,531 1,950,453
24,318,536
Switzerland (2.6%)
COMMON STOCK
Adecco SA ADR * 830 331,681
Kuoni Reisen AG 99 354,592
Nestle SA 192 409,206
Schweizerische Lebensversicherungs
und Rentenanstalt 1,636 986,709
Swisscom AG * 18,877 6,412,005
Union Bank of Switzerland 3,724 1,023,804
Zurich Allied AG * 4,646 2,829,614
12,347,611
United Kingdom (11.3%)
COMMON STOCK
Allied-Domecq PLC 43,163 395,116
AMVESCAP PLC 132,034 997,629
British Petroleum Corp. 37,058 546,676
Capita Group PLC 57,387 578,624
COLT Telecom Group PLC * 75,204 951,455
Compass Group PLC 377,861 3,813,073
Diageo PLC 112,421 1,213,481
Electrocomponents PLC 26,307 174,008
Energis PLC * 277,335 3,759,373
Glaxo Wellcome PLC 71,914 2,230,050
Hays PLC 337,967 $4,982,828
JBA Holdings PLC 51,853 242,973
Lloyds TSB Group PLC 361,576 4,471,670
Logica PLC 189,633 6,402,552
Misys PLC 238,467 1,664,141
National Westminster Bank 5,486 91,579
Rentokil Initial Group PLC 1,472,340 9,073,536
Royal and Sun Alliance Insurance Group PLC 10,744 98,621
Schroders PLC 7,403 137,641
SEMA Group PLC 216,402 1,727,450
Siebe PLC 871,886 3,629,514
SmithKline Beecham PLC ADR 31,450 2,004,938
Tomkins PLC 278,282 1,283,017
Vodafone Group PLC 98,366 1,312,809
Williams PLC 230,758 1,436,565
WPP Group PLC 7,008 34,363
53,253,682
United States (46.7%)
COMMON STOCK (23.1%)
Airtouch Communications, Inc. * 38,330 2,146,480
American Home Products Corp. 29,600 1,443,000
Bristol-Myers Squibb Company, Inc. 26,250 2,902,265
Carnival Corp. 15,870 513,791
Cellular Communications International, Inc. * 10,477 651,211
Cisco Systems, Inc. * 230,495 14,521,185
Clear Channel Communications, Inc. * 25,500 1,161,844
Comcast Corp. Special Class A 121,550 6,001,530
Conoco, Inc. Class A * 41,525 1,032,934
Dell Computer Corp. * 14,880 976,500
Delta and Pine Land Company 10,255 342,261
Estee Lauder Companies, Inc. Class A 68,410 4,485,131
Global TeleSystems Group, Inc. * 45,980 1,842,074
Household International, Inc. 32,595 1,191,755
Intuit, Inc. * 38,555 1,947,028
MCI WORLDCOM, Inc. * 84,320 4,658,680
MediaOne Group, Inc. * 27,655 1,170,152
Microsoft Corp. * 109,120 11,553,080
Monsanto Company 11,445 464,953
Newcourt Credit Group, Inc. 6,730 221,249
Pfizer, Inc. 28,590 3,068,064
Pharmacia & Upjohn, Inc. 126,285 6,685,212
Pharmacia & Upjohn, Inc. ADR 5,355 274,122
Solutia, Inc. 15,495 339,922
Tele Communications, Inc. Class A * 230,390 9,705,179
Time Warner, Inc. 100,670 9,343,434
Tyco International, Ltd. 203,239 12,588,116
Warner-Lambert Company, Inc. 94,186 7,381,828
108,612,980
Description Principal Value
SHORT-TERM SECURITIES (23.6%)
Federal Home Loan Bank
5.350% 11-2-1998 $25,000,000 $24,996,250
Federal Home Loan Mortgage Corp.
4.820% 2-2-1999 25,000,000 24,692,055
5.110% 11-2-1998 20,000,000 19,968,772
Household Finance Company
5.720% 11-2-1998 19,300,000 19,296,934
Prudential Funding Corp.
5.660% 11-2-1998 22,000,000 21,996,541
110,950,552
219,563,532
Total Investments (105.7%) (cost $425,034,279) 497,582,772
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (-1.0%) @
B 29,227 British Pound 11-2-1998 Sell $65
B 38,802 British Pound 11-2-1998 Sell 86
B 18,492 British Pound 11-2-1998 Sell 41
B 15,648 British Pound 11-3-1998 Sell (75)
B 37,312 British Pound 11-3-1998 Sell (179)
B 53,736 British Pound 11-3-1998 Sell (258)
B 19,318 British Pound 11-3-1998 Sell (93)
B 29,047 British Pound 11-3-1998 Sell (139)
B 47,983 British Pound 11-4-1998 Sell 116
B 13,652 British Pound 11-4-1998 Sell 33
B 130,328 British Pound 11-4-1998 Sell 315
B 11,104 British Pound 11-4-1998 Sell 27
B 10,013 British Pound 11-5-1998 Sell 9
B 40,071 British Pound 11-5-1998 Sell 37
B 51,195 British Pound 11-5-1998 Sell 47
B 8,432 British Pound 11-5-1998 Sell 8
B 9,710,000 British Pound 11-6-1998 Sell (412,251)
B 1,200,000 British Pound 11-27-1998 Sell (54,390)
B 10,990,000 British Pound 4-7-1999 Sell 166,044
D 10,698 German Deutschemark 11-2-1998 Sell (4)
D 6,300,000 German Deutschemark 11-4-1998 Sell (265,027)
D 1,000,000 German Deutschemark 11-4-1998 Buy 4,320
D 23,700,000 German Deutschemark 12-2-1998 Sell (994,248)
D 10,600,000 German Deutschemark 12-2-1998 Buy (24,356)
F 158,767 French Franc 11-30-1998 Buy 8
F 248,173 French Franc 11-30-1998 Sell (37)
F 379,866 French Franc 11-30-1998 Sell (57)
F 93,942 French Franc 11-30-1998 Sell 19
F 238,802 French Franc 11-30-1998 Sell 64
F 312,971 French Franc 11-30-1998 Sell 84
G 4,506 Dutch Guilder 11-2-1998 Sell (1)
G 100,236 Dutch Guilder 11-2-1998 Buy 16
G 364,145 Dutch Guilder 11-3-1998 Sell 42
G 9,965 Dutch Guilder 11-3-1998 Sell 1
G 8,300,000 Dutch Guilder 11-12-1998 Sell (275,891)
G 20,700,000 Dutch Guilder 11-12-1998 Sell (787,873)
G 9,000,000 Dutch Guilder 11-12-1998 Buy 108,748
G 2,000,000 Dutch Guilder 11-12-1998 Buy 18,809
G 11,500,000 Dutch Guilder 11-12-1998 Buy 133,104
G 2,000,000 Dutch Guilder 11-27-1998 Sell (81,333)
G 4,300,000 Dutch Guilder 12-2-1998 Sell (158,488)
H 956,446 Hong Kong Dollar 11-2-1998 Buy 45
J 260,000,000 Japanese Yen 11-4-1998 Sell (177,213)
J 91,000,000 Japanese Yen 11-4-1998 Sell (93,708)
J 200,000,000 Japanese Yen 11-4-1998 Sell (284,374)
J 110,000,000 Japanese Yen 11-4-1998 Sell (170,921)
J 100,000,000 Japanese Yen 11-4-1998 Buy 3,029
J 561,000,000 Japanese Yen 11-4-1998 Buy 5,208
J 140,000,000 Japanese Yen 11-19-1998 Sell (185,888)
J 1,000,000,000 Japanese Yen 12-2-1998 Sell (1,599,292)
J 550,000,000 Japanese Yen 12-2-1998 Buy 640,095
J 800,000,000 Japanese Yen 2-12-1999 Sell (77,388)
J 350,000,000 Japanese Yen 2-12-1999 Sell (46,722)
J 109,000,000 Japanese Yen 2-12-1999 Sell (15,242)
J 561,000,000 Japanese Yen 4-8-1999 Sell (15,693)
J 850,000,000 Japanese Yen 4-21-1999 Sell 99,957
K 9,900,000 Swedish Krona 11-6-1998 Sell (19,732)
K 5,000,000 Swedish Krona 11-19-1998 Sell (23,065)
K 22,600,000 Swedish Krona 4-7-1999 Sell (91,004)
N 43,968 Norwegian Krone 11-2-1998 Sell $(50)
N 412,109 Norwegian Krone 11-3-1998 Sell (238)
N 1,876,848 Norwegian Krone 11-3-1998 Sell (1,083)
P 30,919,369 Spanish Peseta 11-3-1998 Sell (53)
P 31,473,215 Spanish Peseta 11-3-1998 Sell 5
S 2,500,000 Swiss Franc 11-4-1998 Sell (118,603)
S 1,100,000 Swiss Franc 11-4-1998 Buy 2,989
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (4,791,598)
Liabilities in Excess of Other Assets (-4.7%) (22,158,821)
Net Assets (100.0%) $470,632,353
October 31, 1998
SCHEDULE OF INVESTMENTS
GROWTH PORTFOLIO
Description Shares
Value
COMMON STOCK (77.2%)
Consumer, Cyclical (4.5%)
Broadcasting (1.7%)
Time Warner, Inc. 313,640
$29,109,713
Retailers - Broadline (1.9%)
Price / Costco, Inc. * 556,095
31,558,391
Retailers - Specialty (0.9%)
Starbucks Corp. * 356,235
15,451,693
Toys (0.0%)
Mattel, Inc. 15,330
549,964
Consumer, Non-Cyclical (26.2%)
Beverages (1.3%)
Coca-Cola Company 316,850
21,426,981
Consumer Services (0.0%)
META Group, Inc. 14,287
342,888
Food Retailers (2.6%)
Safeway, Inc. * 894,850
42,785,016
Medical Supplies (1.3%)
American Home Products Corp. 462,540
22,548,825
Pharmaceuticals (21.0%)
Astra AB Class A ADR 40,335
663,007
Astra AB Class A + 542,442
8,803,504
Bristol-Myers Squibb Company, Inc. 302,517
33,447,036
Eli Lilly and Company 861,225
69,705,398
Pfizer, Inc. 919,250
98,647,015
SmithKline Beecham PLC + 1,250,555
15,413,500
SmithKline Beecham PLC ADR 424,640
27,070,800
Warner-Lambert Company, Inc. 1,234,125
96,724,547
350,474,807
Financial (4.4%)
Banks (1.7%)
Banca Commerciale Italiana SpA 4,621,365
28,597,695
Diversified (2.7%)
American Express Company 401,850
35,513,494
Grupo Financiero Inbursa SA Class B + 514,375
903,163
Household International, Inc. 238,300
8,712,844
45,129,501
Industrial (4.9%)
Electronic Components and Equipment (0.0%)
JDS Fitel, Inc. + * 25,421
378,348
Diversified (4.9%)
General Electric Company 862,850
75,499,375
Monsanto Company 145,735
5,920,484
81,419,859
Technology (36.8%)
Advanced Medical Devices (0.0%)
Photoelectron Corp. * 43,150
277,778
Communications (11.8%)
America Online, Inc. 672,930
$85,504,168
Ascend Communications, Inc. * 10,065
485,007
AT&T Corp. 203,000
12,636,750
Cisco Systems, Inc. * 845,433
53,315,119
Concord Communications, Inc. * 6,095
223,991
Lucent Technologies, Inc. 362,770
29,089,619
TEKELEC * 8,035
143,626
Tellabs, Inc. * 293,145
16,104,653
ViaSat, Inc. 14,000
153,125
197,656,059
Computers (13.1%)
Citrix Systems, Inc. * 2,810
198,632
Dell Computer Corp. * 3,288,560
215,400,680
EMC Corp. * 12,040
775,075
Hewlett-Packard Company 2,015
121,278
International Business Machines Corp. 4,950
734,766
Sun Microsystems, Inc. * 14,895
866,703
218,097,133
Diversified (0.1%)
Level 3 Communications, Inc. * 12,150
395,634
Uniphase Corp. * 15,405
760,622
Newbridge Networks Corp. 8,040
164,820
1,321,076
Semiconductors (3.5%)
Micron Technology, Inc. * 13,005
494,190
PMC - Sierra, Inc. * 8,715
391,086
Texas Instruments, Inc. 900,400
57,569,325
Vitesse Semiconductor Corp. * 11,200
361,200
58,815,801
Software (8.3%)
BMC Software, Inc. * 22,365
1,073,520
Cadence Design Systems, Inc. 44,180
944,348
Compuware Corp. * 8,600
465,475
Intuit, Inc. * 2,415
121,354
J.D. Edwards & Company * 284,410
9,243,325
Legato Systems, Inc. * 9,220
359,580
Microsoft Corp. * 1,163,000
123,132,624
SAP AG ADR 2,010
84,797
Sapient Corp. 22,215
999,675
VERITAS Software Corp. 39,730
1,986,500
Visio Corp. 15,290
409,008
Whittman-Hart, Inc. 22,200
441,225
139,261,431
Utilities (0.4%)
Telephone
MCI WORLDCOM, Inc. * 121,905
6,735,251
Total Common Stock (cost $592,568,960)
1,291,938,210
CONVERTIBLE PREFERRED STOCK (6.1%)
Technology
Diversified
Nokia Corp. OY ADR (cost $38,705,587) 1,095,950
101,991,847
NON-CONVERTIBLE PREFERRED STOCK (0.1%)
Technology
Software
SAP AG Vorzug + (cost $768,003) 1,835
894,202
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (0.0%)
Consumer, Cyclical (0.0%)
Casinos
Venetian Casino 12.250% 11-15-2004 $200,000 $178,000
Technology (0.0%)
Communications
Lernout & Hauspie Speech Products NV ADR
8.000% 11-15-2001 101,700 408,325
Total Non-Convertible Corporate Bonds (cost $301,700) 586,325
SHORT-TERM SECURITIES (16.1%)
United States Government Agencies (10.4%)
Federal Home Loan Bank
5.000% 1-19-1999 50,000,000 49,451,388
Federal Home Loan Mortgage Corp.
4.800% 2-1-1999 50,000,000 49,386,667
5.100% 11-13-1998 25,000,000 24,957,500
5.250% 12-22-1998 25,000,000 24,814,063
Federal National Mortgage Association
5.290% 11-17-1998 25,000,000 24,941,222
173,550,840
Commercial Paper (5.7%)
Coca Cola Enterprises, Inc.
4.970% 12-4-1998 35,000,000 34,840,546
Household Finance Company
5.720% 11-2-1998 60,200,000 60,190,435
95,030,981
Repurchase Agreements (0.0%)
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $80,133 on 11-2-1998 80,108 80,108
Total Short-Term Securities (cost $268,661,929) 268,661,929
Total Investments (99.5%) (cost $901,006,179) 1,664,072,513
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (0.0%) @
B 14,300,000 British Pound 11-27-1998 Sell
$(648,152)
B 1,500,000 British Pound 11-27-1998 Sell
7,357
B 3,500,000 British Pound 11-27-1998 Buy
(4,286)
B 1,300,000 British Pound 11-27-1998 Buy
(34,092)
B 2,500,000 British Pound 4-7-1999 Sell
66,272
D 150,000 German Deutschmark 11-4-1998 Sell
(6,281)
D 300,000 German Deutschmark 11-4-1998 Sell
(12,471)
D 150,000 German Deutschmark 11-4-1998 Sell
(6,306)
D 75,000 German Deutschmark 11-4-1998 Sell
580
D 150,000 German Deutschmark 11-4-1998 Buy
4,547
D 75,000 German Deutschmark 11-4-1998 Buy
841
D 50,000 German Deutschmark 11-4-1998 Buy
(180)
D 100,000 German Deutschmark 11-4-1998 Buy
(504)
D 150,000 German Deutschmark 11-12-1998 Sell
(6,542)
D 258,000 German Deutschmark 11-12-1998 Sell
(11,762)
D 150,000 German Deutschmark 11-12-1998 Sell
(3,530)
D 150,000 German Deutschmark 11-12-1998 Buy
702
D 100,000 German Deutschmark 11-12-1998 Buy
5,462
D 50,000 German Deutschmark 11-12-1998 Buy
2,593
D 100,000 German Deutschmark 11-12-1998 Buy
4,145
D 100,000 German Deutschmark 11-12-1998 Buy
3,659
D 58,000 German Deutschmark 11-12-1998 Buy
2,318
D 222,000 German Deutschmark 11-19-1998 Sell
(8,957)
D 102,000 German Deutschmark 11-19-1998 Buy
4,839
D 120,000 German Deutschmark 11-19-1998 Buy
1,914
D 100,000 German Deutschmark 11-27-1998 Sell
(4,045)
D 100,000 German Deutschmark 11-27-1998 Buy
1,689
D 350,000 German Deutschmark 1-26-1999 Sell
2,970
D 80,000 German Deutschmark 1-26-1999 Sell
976
Total Unrealized Net Loss on Forward Foreign
Currency Contracts (636,244)
Other Assets In Excess of Liabilities (0.5%) 9,156,562
Net Assets (100.0%) $1,672,592,831
October 31, 1998
SCHEDULE OF INVESTMENTS
C.A.S.E. PORTFOLIO
Description Shares
Value
COMMON STOCK (96.0%)
Consumer, Cyclical (22.5%)
Airlines (2.0%)
UAL Corp. 2,300
$149,356
Clothing/Fabric (2.3%)
Tommy Hilfiger Corp. * 3,800
176,463
Footwear (3.9%)
GENESCO, Inc. * 50,100
300,600
Lodging (1.2%)
Prime Hospitality Corp. * 10,300
93,988
Retailers - Apparel (8.5%)
Claire's Stores, Inc. 12,700
215,106
Jones Apparel Group, Inc. 13,000
224,250
Ross Stores, Inc. 6,400
208,000
647,356
Retailers - Broadline (3.2%)
Kmart Corp. * 17,000
240,125
Retailers - Specialty (1.4%)
CompUSA, Inc. * 7,800
108,225
Consumer, Non-Cyclical (12.0%)
Cosmetics (1.9%)
The Gillette Company 3,200
143,800
Healthcare (1.5%)
NovaCare, Inc. * 28,000
115,500
Medical Supplies (2.3%)
Respironics, Inc. * 11,300
174,444
Pharmaceuticals (6.3%)
Bristol-Myers Squibb Company, Inc. 2,500
276,406
Merck and Company, Inc. 1,500
202,875
479,281
Energy (5.5%)
Oil Drilling (1.4%)
Diamond Offshore Drilling, Inc. 1,800
55,238
Global Marine, Inc. * 4,300
53,212
108,450
Oilfield Equipment and Services (4.1%)
Pennzoil Company 2,200
78,925
SEACOR SMIT, Inc. * 2,500
119,531
Tidewater, Inc. 2,800
79,275
Trico Marine Services, Inc. * 4,400
31,350
309,081
Financial (6.3%)
Banks (2.0%)
BankAmerica Corp. 2,600
149,338
Diversified (2.8%)
Citigroup, Inc. 2,700
127,069
Washington Mutual, Inc. 2,250
84,234
211,303
Insurance (0.9%)
CMAC Investment Corp. 1,600
67,000
Securities Brokers (0.6%)
Lehman Brothers Holding, Inc. 1,300
49,319
Independent (1.6%)
Conglomerate
U.S. Industries, Inc. 7,400
120,713
Industrial (14.5%)
Air Freight (2.1%)
FDX Corp. * 3,000
$157,688
Electronic Components and Equipment (2.1%)
Arrow Electronics, Inc. * 7,500
163,594
Diversified (2.3%)
General Electric Company 2,000
175,000
Marine Transport (1.4%)
Halter Marine Group, Inc. * 12,600
108,675
Other Industrial Services (3.4%)
CalEnergy Company, Inc. * 5,100
139,613
United States Filter Corp. * 5,700
120,768
260,381
Trucking (3.2%)
USFreightways, Inc. 5,100
127,819
Yellow Corp. * 7,200
115,650
243,469
Technology (33.6%)
Aerospace/Defense (2.4%)
The Boeing Company 5,000
187,500
Communications (13.0%)
ADC Telecommunications, Inc. * 10,500
241,500
AT&T Corp. 3,700
230,325
Northern Telecom, Ltd. ADR 5,700
244,031
Tellabs, Inc. * 5,000
275,000
990,856
Computers (3.8%)
3COM Corp. * 3,000
108,188
Storage Technology Corp. * 5,400
180,562
288,750
Diversified (2.4%)
Ciena Corp. * 5,000
85,938
Inacom Corp. * 4,900
94,937
180,875
Semiconductors (1.9%)
Intel Corp. 1,600
142,697
Software (10.1%)
BMC Software, Inc. * 3,400
163,413
Microsoft Corp. * 2,500
264,688
Oracle Systems Corp. * 5,000
147,812
Structural Dynamics Research Corp. * 4,600
66,125
Symantec Corp. * 8,000
128,000
770,038
Total Common Stock (cost $8,770,959) 7,313,865
Description Principal
Value
SHORT-TERM SECURITIES (3.8%)
Repurchase Agreements
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998 to be
repurchased at $290,598 on 11-2-1998 (cost $290,507)$290,507 $290,507
Total Investments (99.8%) (cost $9,061,466) 7,604,372
Other Assets In Excess of Liabilities (0.2%) 18,197
Net Assets (100.0%) $7,622,569
October 31, 1998
SCHEDULE OF INVESTMENTS
VALUE EQUITY PORTFOLIO
Description Shares
Value
COMMON STOCK (78.8%)
Basic Materials (6.1%)
Chemicals (5.0%)
Air Products & Chemicals, Inc. 4,400
$166,100
E.I. du Pont de Nemours and Company 2,200
126,500
Morton International, Inc. 8,500
211,438
Praxair, Inc. 6,000
241,500
745,538
Forest Products (0.5%)
Champion International Corp. 2,600
83,038
Steel (0.6%)
USX - US Steel Group, Inc. 4,000
93,000
Consumer, Cyclical (6.6%)
Airlines (1.4%)
Delta Air Lines, Inc. 2,000
211,125
Broadcasting (2.0%)
Time Warner, Inc. 3,200
297,000
Retailers - Apparel (1.4%)
Federated Department Stores, Inc. * 5,400
207,563
Retailers - Specialty (1.8%)
American Greetings Corp. 6,700
268,837
Consumer, Non-Cyclical (1.3%)
Healthcare
Columbia / HCA Healthcare Corp. 9,700
203,700
Energy (15.1%)
Oil Companies - Major (3.1%)
Conoco, Inc. Class A * 7,500
186,563
The Coastal Corp. 4,500
158,625
Union Pacific Resources Group, Inc. 10,000
130,000
475,188
Oil Companies - Secondary (1.7%)
Ocean Energy, Inc. * 20,540
256,750
Oil Drilling (5.1%)
Noble Affiliates, Inc. 3,400
111,350
Noble Drilling Corp. * 11,900
204,531
R & B Falcon Corp. * 8,332
113,003
Santa Fe International Corp. 8,600
158,563
Transocean Offshore, Inc. 4,800
177,300
764,747
Oilfield Equipment and Services (5.2%)
B.J. Services Company * 4,400
89,925
Halliburton Company 8,600
309,063
Tidewater, Inc. 3,700
104,756
Weatherford International, Inc. * 10,000
271,875
775,619
Financial (22.2%)
Banks (11.9%)
Bank One Corp. 7,000
342,125
BankAmerica Corp. 3,394
194,943
Chase Manhattan Corp. 4,400
249,975
First Union Corp. 7,600
440,800
National City Corp. 2,300
147,919
Norwest Corp. 11,300
420,218
1,795,980
Diversified (0.6%)
Household International, Inc. 2,400
87,750
Insurance (8.8%)
Aetna, Inc. 4,600
$343,275
Allstate Corp. 5,200
223,925
Loews Corp. 6,400
601,200
Travelers Property Casualty Corp. Class A 5,000
153,438
1,321,838
Securities Brokers (0.9%)
Bear Stearns Companies, Inc. 3,700
132,044
Independent (6.6%)
Conglomerates
Fortune Brands, Inc. 12,000
396,750
Philip Morris Companies, Inc. 11,700
598,163
994,913
Industrial (13.2%)
Electronic Components and Equipment (4.9%)
Emerson Electric Company 3,100
204,600
Thomas & Betts Corp. 3,900
174,281
W. W. Grainger, Inc. 3,800
175,038
York International Corp. 4,700
176,837
730,756
Heavy Construction (7.5%)
Case Corp. 6,100
134,200
Caterpillar, Inc. 9,100
409,500
Deere & Company 8,500
300,688
Ingersoll-Rand Company 5,700
287,850
1,132,238
Diversified (0.8%)
Cooper Industries, Inc. 2,800
123,550
Technology (7.7%)
Aerospace/Defense (1.8%)
Sunstrand Corp. 5,900
276,930
Communications (2.6%)
MediaOne Group, Inc. * 9,400
397,737
Office Equipment (1.1%)
Xerox Corp. 1,700
164,687
Semiconductors (2.2%)
Texas Instruments, Inc. 5,200
332,474
Total Common Stock (cost $12,698,728) 11,873,002
Description Principal
Value
SHORT-TERM SECURITIES (21.0%)
United States Government Securities (16.4%)
Treasury Bills
4.790% 12-10-1998 $1,000,000 $994,811
4.651% 3-25-1999 1,500,000 1,472,340
2,467,151
Other Short-Term Securities (4.6%)
SSgA Money Market Fund
7-day yield of 4.950% 692,000 692,000
Total Short-Term Securities (cost $3,159,151) 3,159,151
Total Investments (99.8%) (cost $15,857,879) 15,032,153
Other Assets In Excess of Liabilities (0.2%) 35,396
Net Assets (100.0%) $15,067,549
October 31, 1998
SCHEDULE OF INVESTMENTS
STRATEGIC TOTAL RETURN PORTFOLIO
Description Shares
Value
COMMON STOCK (61.6%)
Basic Materials (2.7%)
Chemicals (0.9%)
E.I. du Pont de Nemours and Company 7,300
$419,750
Paper Products (1.8%)
Kimberly-Clark Corp. 11,000
530,750
St. Joe Company 15,000
359,063
889,813
Consumer, Cyclical (7.0%)
Advertising (1.5%)
Harte-Hanks, Inc. 31,000
753,688
Broadcasting (0.8%)
CBS Corp. * 13,200
368,775
Consumer Electronics (1.1%)
Tandy Corp. 11,000
545,188
Entertainment (0.8%)
Walt Disney Company 14,500
390,594
Publishing (1.0%)
A.H. Belo Corp. 27,600
501,975
Retailers - Drug Based (1.8%)
Cardinal Health, Inc. 9,500
898,344
Consumer, Non-Cyclical (18.6%)
Beverages (1.1%)
PepsiCo, Inc. 16,100
543,375
Consumer Services (3.3%)
ITT Educational Services, Inc. * 25,000
742,188
Modis Professional Services, Inc. * 48,000
846,000
1,588,188
Cosmetics (2.1%)
Estee Lauder Companies, Inc. Class A 7,900
517,944
The Gillette Company 10,784
484,606
1,002,550
Food - Other (1.3%)
H.J. Heinz Company 11,000
639,375
Healthcare (0.5%)
Hooper Holmes, Inc. 11,000
261,938
Household Products (3.1%)
Colgate-Palmolive Company 8,000
707,000
Proctor & Gamble Company 9,000
799,875
1,506,875
Medical Supplies (3.2%)
American Home Products Corp. 14,000
682,500
Sybron International Corp. * 36,000
891,000
1,573,500
Pharmaceuticals (4.0%)
Covance, Inc. * 23,500
655,063
Schering Plough Corp. 5,000
514,375
SmithKline Beecham PLC ADR 12,000
765,000
1,934,438
Energy (5.2%)
Oil Companies - Major (3.5%)
Amoco Corp. 10,000
561,250
Exxon Corp. 10,000
712,500
Mobil Corp. 6,000
454,125
1,727,875
Description Shares
Value
Oilfield Equipment and Services (1.7%)
Cooper Cameron Corp. * 12,000
$417,000
Schlumberger, Ltd. 7,500
393,750
810,750
Financial (13.7%)
Banks (3.0%)
Commercial Federal Corp. 22,155
502,642
Compass Bancshares, Inc. 12,500
459,375
Mellon Bank Corp. 8,300
499,037
1,461,054
Diversified (4.0%)
Associates First Capital Corp. 8,000
564,000
SunAmerica, Inc. 5,625
396,588
The CIT Group, Inc. Class A 17,000
464,312
Wells Fargo & Company 1,400
518,000
1,942,900
Insurance (3.2%)
American General Corp. 8,500
582,250
American International Group, Inc. 5,725
488,055
E.W. Blanch Holdings, Inc. 5,500
214,155
PartnerRe, Ltd. ADR 7,000
278,250
1,562,710
Real Estate (1.9%)
Crescent Operating, Inc. * 1,480
7,308
Crescent Real Estate Equities, Inc. 18,000
451,125
Starwood Hotels & Resorts 17,000
481,312
939,745
United States Government Agencies (1.6%)
Federal National Mortgage Association 11,200
793,100
Independent (1.4%)
Conglomerate
Philip Morris Companies, Inc. 13,800
705,524
Industrial (7.4%)
Building Materials (0.6%)
MacMillan Bloedel, Ltd. ADR 32,000
304,000
Electronic Components and Equipment (1.1%)
Emerson Electric Company 7,800
514,800
Diversified (2.8%)
General Electric Company 7,000
612,500
Tyco International, Ltd. 11,900
737,056
1,349,556
Other Industrial Services (1.6%)
United States Filter Corp. * 36,000
762,750
Pollution Control (1.3%)
Waste Management, Inc. 14,000
631,750
Technology (2.5%)
Communications (0.6%)
Motorola, Inc. 6,000
312,000
Computers (1.1%)
Hewlett-Packard Company 8,850
532,659
Software (0.8%)
BMC Software, Inc. * 8,000
384,000
Utilities (3.1%)
Telephone
ALLTEL Corp. 16,600
$777,088
MCI WORLDCOM, Inc. * 13,549
748,582
1,525,670
Total Common Stock (cost $25,035,498)
30,079,209
CONVERTIBLE PREFERRED STOCK (2.2%)
Consumer, Cyclical (0.8%)
Broadcasting
Sinclair Broadcasting Group, Inc. 10,500
401,625
Financial (0.6%)
Securities Brokers
Merrill Lynch & Company, Inc. 4,000
291,500
Technology (0.8%)
Software
Microsoft Corp. Series A 4,000
390,500
Total Convertible Preferred Stock (cost $1,183,455)
1,083,625
Description Principal
Value
CONVERTIBLE CORPORATE BONDS (4.2%)
Consumer, Cyclical (2.3%)
Lodging (1.1%)
CapStar Hotel, Inc. 4.750% 10-15-2004 $800,000
$532,000
Retailers - Specialty (1.2%)
Home Depot, Inc. 3.250% 10-1-2001 300,000
571,125
Energy (0.7%)
Oil Drilling
Nabors Industries, Inc. 5.000% 5-15-2006 125,000
138,438
Parker Drilling Company 5.500% 8-1-2004 325,000
233,593
372,031
Industrial (1.2%)
Pollution Control
Waste Management, Inc. 4.000% 2-1-2002 500,000
578,125
Total Convertible Corporate Bonds (cost $2,005,786)
2,053,281
NON-CONVERTIBLE CORPORATE BONDS (18.9%)
Consumer, Non-Cyclical (1.3%)
Household Products
Procter & Gamble Company 5.250% 9-15-2003 600,000
608,250
Financial (5.2%)
Banks (1.5%)
First Bank National Association 6.875% 4-1-2006 500,000
528,750
J.P. Morgan & Company, Inc. 7.625% 9-15-2004 200,000
215,000
743,750
Diversified (1.7%)
Associates Corp. of North America
6.200% 5-16-2005 600,000 609,685
Norwest Financial, Inc. 7.000% 1-15-2003 200,000
213,000
822,685
Insurance (2.0%)
Chartwell Re Corp. 10.250% 3-1-2004 500,000
525,625
Hartford Life, Inc. Class A 6.900% 6-15-2004 400,000
428,000
953,625
Independent (0.6%)
Conglomerate
ITT Corp. 6.750% 11-15-2005 350,000
313,687
Industrial (5.9%)
Electronic Components and Equipment (2.7%)
Kent Electronics Corp. 4.500% 9-1-2004 $1,000,000
$780,000
Thomas & Betts Corp. 6.500% 1-15-2006 525,000
547,313
1,327,313
Diversified (2.0%)
Dexter Corp. 9.250% 12-15-2016 37,000
38,615
Lockheed Martin Corp. 7.450% 6-15-2004 300,000
327,750
Tyco International Group SA ADR
6.375% 6-15-2005 600,000 614,250
980,615
Other Industrial Services (0.5%)
Olsten Corp. 7.000% 3-15-2006 250,000
254,062
Railroads (0.7%)
Union Pacific Corp. 7.375% 5-15-2001 100,000
104,500
Union Pacific Corp. 8.500% 1-15-2017 209,000
217,099
321,599
Technology (1.5%)
Aerospace/Defense (0.6%)
Raytheon Company 6.500% 7-15-2005 300,000
313,500
Communications (0.9%)
Airtouch Communications, Inc. 7.000% 10-1-2003 150,000
159,562
Lucent Technologies, Inc. 6.900% 7-15-2001 250,000
263,750
423,312
Utilities (4.4%)
Electric (2.7%)
Florida Power & Light Company 7.875% 1-1-2013 400,000
418,500
Interstate Power Company 8.625% 9-15-2021 175,000
186,813
Kentucky Utilities Company 8.550% 9-1-2004 250,000
278,125
Old Dominion Electric Co-op 8.760% 12-1-2022 375,000
435,000
1,318,438
Gas (0.3%)
Southwest Gas Corp. 7.500% 8-1-2006 150,000
167,625
Telephone (1.4%)
ALLTEL Corp. 7.250% 4-1-2004 400,000
430,500
GTE Hawaiian Telephone Company, Ltd.
7.375% 9-1-2006 225,000 247,781
678,281
Total Non-Convertible Corporate Bonds (cost $9,101,564) 9,226,742
LONG-TERM GOVERNMENT BONDS (11.3%)
United States Government Securities
Treasury Notes
6.125% 9-30-2000 550,000
568,287
6.125% 12-31-2001 650,000
683,286
6.250% 2-28-2002 800,000
845,272
6.375% 9-30-2001 650,000
685,575
6.375% 3-31-2001 625,000
654,200
6.375% 5-15-2000 475,000
489,484
6.375% 1-15-2000 400,000
409,580
6.500% 5-31-2001 625,000
657,700
7.875% 11-15-1999 500,000
518,000
Total Long-Term Government Bonds (cost $5,333,094) 5,511,384
SHORT-TERM SECURITIES (1.4%)
Repurchase Agreements
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998 to be
repurchased at $685,683 on 11-2-1998
(cost $685,469) 685,469 685,469
Total Investments (99.6%) (cost $43,344,866) 48,639,710
Other Assets In Excess of Liabilities (0.4%) 181,315
Net Assets (100.0%) $48,821,025
October 31, 1998
SCHEDULE OF INVESTMENTS
TACTICAL ASSET ALLOCATION PORTFOLIO
Description Shares
Value
COMMON STOCK (55.7%)
Basic Materials (1.3%)
Mining - Diversified
Potash Corp. of Saskatchewan, Inc. ADR 7,000
$485,625
Consumer, Cyclical (9.1%)
Airlines (0.7%)
Comair Holdings, Inc. 8,000
263,000
Auto Manufacturers (1.1%)
Ford Motor Company 8,000
434,000
Broadcasting (1.2%)
Cox Communications, Inc. Class A * 8,000
439,000
Footwear (1.4%)
Payless ShoeSource, Inc. * 11,320
531,332
Home Construction (1.3%)
Clayton Homes, Inc. 31,250
482,422
Restaurants (3.4%)
Cracker Barrel Old Country Store, Inc. 15,000
388,125
Tricon Global Restaurants, Inc. * 21,000
913,500
1,301,625
Consumer, Non-Cyclical (2.6%)
Consumer Services (1.2%)
Storage USA, Inc. 15,000
456,562
Healthcare (1.4%)
Columbia / HCA Healthcare Corp. 25,000
525,000
Energy (4.4%)
Oil Drilling (2.7%)
Diamond Offshore Drilling, Inc. 25,000
767,188
R & B Falcon Corp. * 20,000
271,250
1,038,438
Oilfield Equipment and Services (1.7%)
Tidewater, Inc. 22,500
637,031
Financial (17.5%)
Banks (1.6%)
Chase Manhattan Corp. 7,500
426,094
Republic New York Corp. 4,000
167,250
593,344
Diversified (1.1%)
Countrywide Credit Industries, Inc. 10,000
431,875
Insurance (8.5%)
AFLAC, Inc. 14,000
533,750
Allstate Corp. 7,500
322,969
AMBAC, Inc. 10,000
581,875
Conseco, Inc. 14,748
511,571
Frontier Insurance Group, Inc. 30,000
489,375
MGIC Investment Corp. 10,000
390,000
PMI Group, Inc. 7,500
378,281
3,207,821
Real Estate (4.1%)
Duke Realty Investments, Inc. 20,000
477,500
Equity Residential Properties Trust 5,300
222,600
Health Care Property Investors, Inc. 10,000
336,250
Merry Land Properties, Inc. 500
2,437
Simon Property Group, Inc. 17,500
523,906
1,562,693
Description Shares
Value
United States Government Agencies (2.2%)
Federal Home Loan Mortgage Corp. 8,000
$460,000
Federal National Mortgage Association 5,000
354,063
814,063
Independent (3.7%)
Conglomerate
Philip Morris Companies, Inc. 27,500
1,405,937
Industrial (4.6%)
Heavy Machinery (0.5%)
AGCO Corp. 20,000
190,000
Diversified (2.3%)
CSX Corp. 7,500
294,375
Trinity Industries, Inc. 15,000
556,875
851,250
Marine Transport (0.8%)
Halter Marine Group, Inc. * 35,000
301,875
Transportation Equipment (1.0%)
PACCAR, Inc. 9,000
392,625
Technology (6.5%)
Aerospace/Defense (1.4%)
Raytheon Company Class B 9,000
522,562
Communications (3.8%)
AT&T Corp. 15,000
933,750
ECI Telecom, Ltd. ADR 15,000
496,875
1,430,625
Computers (1.3%)
NCR Corp. * 15,000
504,375
Utilities (6.0%)
Electric (3.9%)
DPL, Inc. 25,000
473,438
Houston Industries, Inc. 12,500
388,281
Illinova Corp. 10,000
253,125
Southern Company 12,000
338,250
1,453,094
Telephone (2.1%)
ALLTEL Corp. 8,880
415,695
Sprint Corp. 5,000
383,750
799,445
Total Common Stock (cost $19,571,130) 21,055,619
NON-CONVERTIBLE PREFERRED STOCK (3.2%)
Consumer, Cyclical
Broadcasting
News Corp., Ltd. ADR (cost $962,013) 50,000
1,209,376
Description Principal
Value
NON-CONVERTIBLE CORPORATE BONDS (10.9%)
Basic Materials (2.8%)
Chemicals
E.I. du Pont de Nemours and Company
6.500% 9-1-2002 $1,000,000 $1,052,500
Financial (8.1%)
Banks (2.7%)
Countrywide Home Loans, Inc. 6.280% 1-15-2003 1,000,000
1,017,500
Diversified (2.7%)
Commercial Credit Company 6.500% 8-1-2004 1,000,000
1,032,500
Securities Brokers (2.7%)
Merrill Lynch & Company, Inc.
6.020% 5-11-2001 1,000,000 1,008,750
Total Non-Convertible Corporate Bonds (cost $4,004,175) 4,111,250
LONG-TERM GOVERNMENT BONDS (26.2%)
United States Government Agencies (16.2%)
Federal Home Loan Bank
5.500% 7-14-2000 1,000,000
1,014,310
6.100% 4-29-2004 1,000,000
1,003,720
Federal National Mortgage Association
5.250% 1-15-2003 1,000,000
1,020,300
5.625% 3-15-2001 1,000,000
1,022,250
7.490% 5-22-2007 1,000,000
1,041,490
7.500% 2-2-2007 1,000,000
1,033,740
6,135,810
United States Government Securities (10.0%)
Treasury Notes
5.750% 8-15-2003 1,000,000
1,059,630
5.875% 2-15-2004 1,000,000
1,069,630
6.000% 10-15-1999 500,000
507,490
6.500% 10-15-2006 1,000,000
1,121,830
3,758,580
Total Long-Term Government Bonds (cost $9,603,584)
9,894,390
Description Principal
Value
SHORT-TERM SECURITIES (3.6%)
Commercial Paper (2.7%)
Countrywide Home Loans, Inc.
5.270% 11-3-1998 $1,000,000 $999,707
Repurchase Agreements (0.9%)
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $351,433 on 11-2-1998 351,323 351,323
Total Short-Term Securities (cost $1,351,030) 1,351,030
Total Investments (99.6%) (cost $35,491,932) 37,621,665
Other Assets In Excess of Liabilities (0.4%) 146,797
Net Assets (100.0%) $37,768,462
October 31, 1998
SCHEDULE OF INVESTMENTS
BALANCED PORTFOLIO
Description Shares Value
COMMON STOCK (40.9%)
Basic Materials (0.6%)
Chemicals
Solutia, Inc. 10,200 $223,763
Consumer, Cyclical (13.0%)
Airlines (0.3%)
Ryanair Holdings PLC ADR * 3,650 106,763
Broadcasting (6.1%)
Comcast Corp. Special Class A 33,247 1,641,571
Heftel Broadcasting Corp. * 8,240 335,780
Univision Communications, Inc. * 14,760 435,420
2,412,771
Entertainment (3.3%)
Carnival Corp. 10,885 352,402
Royal Caribbean Cruises, Ltd. 28,485 794,019
Royal Olympic Cruise Lines, Inc. * 10,320 37,410
Steinway Musical Instruments, Inc. * 4,765 105,128
1,288,959
Publishing (1.0%)
Meredith Corp. 11,055 409,035
Retailers - Broadline (2.3%)
Fred Meyer, Inc. * 10,235 545,653
Price / Costco, Inc. * 6,710 380,793
926,446
Consumer, Non-Cyclical (4.6%)
Consumer Services (1.5%)
Apollo Group, Inc. Class A * 3,840 122,880
Robert Half International, Inc. * 10,765 431,946
Romac International, Inc. 1,875 32,812
587,638
Medical Supplies (0.9%)
Allergan, Inc. 2,860 178,571
American Home Products Corp. 3,760 183,300
361,871
Pharmaceuticals (2.2%)
Pfizer, Inc. 1,990 213,552
Schering Plough Corp. 1,830 188,261
Warner-Lambert Company, Inc. 6,100 478,088
879,901
Financial (6.9%)
Banks (3.5%)
Bank of New York Company, Inc. 21,720 685,538
Northern Trust Corp. 4,375 322,383
Star Banc Corp. 3,200 242,000
U.S. Trust Corp. 2,490 158,426
1,408,347
Diversified (0.9%)
HealthCare Financial Partners, Inc. * 3,335 101,926
Newcourt Credit Group, Inc. 8,065 265,137
367,063
Securities Brokers (2.5%)
Charles Schwab Corp. 20,892 1,001,510
Industrial (1.1%)
Electronic Components and Equipment
Dionex Corp. * 16,495 430,932
Pittway Corp. Class A 1,024 23,488
454,420
Technology (14.7%)
Advanced Medical Devices (0.6%)
Medtronic, Inc. 3,680 239,200
Communications (2.3%)
Cisco Systems, Inc. * 9,787 $617,192
MediaOne Group, Inc. * 6,600 279,263
896,455
Computers (3.9%)
Dell Computer Corp. * 23,960 1,569,379
Diversified (0.6%)
Tele Communications, Inc. Class A * 5,802 243,683
Semiconductors (3.6%)
Linear Technology Corp. 7,690 458,516
Maxim Integrated Products, Inc. * 15,310 545,419
SIPEX Corp. 6,470 178,734
Texas Instruments, Inc. 3,615 231,134
1,413,803
Software (3.7%)
Cadence Design Systems, Inc. 9,500 203,063
Microsoft Corp. * 7,365 779,769
Wind River Systems, Inc. * 11,465 502,310
1,485,142
Total Common Stock (cost $13,024,940) 16,276,149
CONVERTIBLE PREFERRED STOCK (15.8%)
Consumer, Cyclical (5.2%)
Broadcasting (3.8%)
Chancellor Media Corp. 7,057 534,568
TCI Pacific Communications 4,500 990,000
1,524,568
Entertainment (1.4%)
Royal Caribbean Cruises, Ltd. Series A 6,500 574,860
Technology (3.9%)
Communications (2.9%)
MediaOne Group, Inc. 13,072 1,134,813
Diversified (1.0%)
Nokia Corp. OY ADR 4,275 397,842
Utilities (6.7%)
Electric
Houston Industries, Inc. 32,825 2,660,876
Total Convertible Preferred Stock (cost $5,499,151)
6,292,959
Description Principal
Value
CONVERTIBLE CORPORATE BONDS (2.8%)
Consumer, Cyclical (1.4%)
Broadcasting (0.7%)
Time Warner, Inc. 8.110% 8-15-2006 $250,000 $282,188
Retailers - Specialty (0.7%)
Home Depot, Inc. 3.250% 10-1-2001 150,000 285,562
Technology (1.4%)
Communications (0.7%)
Jacor Communications, Inc. 0.000% 6-12-2011 350,000 264,250
Software (0.7%)
VERITAS Software Corp. 5.250% 11-1-2004 200,000 270,250
Total Convertible Corporate Bonds (cost $1,003,536)
1,102,250
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (20.0%)
Consumer, Cyclical (8.8%)
Broadcasting (0.5%)
Classic Cable 144A 9.875% 8-1-2008 $200,000 $201,500
Casinos (0.6%)
Station Casinos, Inc. 9.625% 6-1-2003 117,000 116,122
Station Casinos, Inc. 10.125% 3-15-2006 115,000 114,138
230,260
Entertainment (1.7%)
Royal Caribbean Cruises, Ltd. 6.750% 3-15-2008 700,000 669,465
Lodging (0.7%)
Hard Rock Hotel & Casino 9.250% 4-1-2005 177,000 175,230
HMH Properties 7.875% 8-1-2008 105,000 101,588
276,818
Publishing (5.3%)
Frontier Vision Partners 11.000% 10-15-2006 500,000 552,500
Lenfest Communications, Inc. 144A 8.250% 2-15-2008 500,000 511,875
Mediacom, LLC 144A 8.500% 4-15-2008 500,000 495,000
Rifkin Acquisition Partners, LLP 11.125% 1-15-2006 500,000 537,500
2,096,875
Consumer, Non-Cyclical (0.7%)
Beverages
Anheuser-Busch Companies, Inc. 5.650% 9-15-2008 300,000 305,250
Financial (2.5%)
Banks (0.5%)
Bank of Boston Corp. 6.625% 12-1-2005 200,000 201,750
Diversified (2.0%)
Associates Corp. of North America 5.600% 1-15-2001 400,000 401,000
International Lease Finance Corp. 5.750% 12-15-1999400,000 403,096
804,096
Industrial (0.6%)
Electronic Components and Equipment
MTS Systems Corp. 144A 9.375% 5-1-2005 270,000 244,350
Technology (7.4%)
Communications (5.8%)
Adelphia Communications Corp. 9.250% 10-1-2002 905,000 926,494
America Online, Inc. 4.000% 11-15-2002 100,000 251,000
Galaxy Telecom, Ltd. 12.375% 10-1-2005 400,000 430,000
Jones Intercable, Inc. 7.625% 4-15-2008 500,000 505,000
Qwest Communications International, Inc.
10.875% 4-1-2007 170,000 196,562
2,309,056
Computers (1.0%)
Dell Computer Corp. 6.550% 4-15-2008 400,000 409,500
Software (0.6%)
Aspen Technology, Inc. 144A 5.250% 6-15-2005 450,000 226,687
Total Non-Convertible Corporate Bonds (cost $8,156,820) 7,975,607
LONG-TERM GOVERNMENT BONDS (12.3%)
United States Government Securities
Treasury Notes
5.625% 2-28-2001 $200,000
$205,658
5.625% 5-15-2008 2,250,000
2,423,138
5.875% 11-15-1999 200,000
202,950
6.000% 6-30-1999 150,000
151,505
6.000% 8-15-2000 575,000
592,376
6.125% 8-15-2007 400,000
441,564
6.625% 4-30-2002 500,000
535,500
6.625% 5-15-2007 300,000
340,476
Total Long-Term Government Bonds (cost $4,587,693) 4,893,167
SHORT-TERM SECURITIES (7.9%)
United States Government Agencies (7.8%)
Federal Home Loan Mortgage Corp.
5.400% 11-2-1998 3,100,000
3,099,535
Repurchase Agreements (0.1%)
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $33,874 on 11-2-1998 33,863
33,863
Total Short-Term Securities (cost $3,133,398) 3,133,398
Total Investments (99.7%) (cost $35,405,538) 39,673,530
Notional
Amount Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (0.0%) @
D 340,000 German Deutschmark 3-5-1999 Sell
$(13,978)
D 340,000 German Deutschmark 3-5-1999 Buy
14,393
Total Unrealized Net Gain on Forward Foreign
Currency Contracts 415
Other Assets in Excess of Liabilities (0.3%) 134,480
Net Assets (100.0%) $39,808,425
October 31, 1998
SCHEDULE OF INVESTMENTS
FLEXIBLE INCOME PORTFOLIO
Description Principal
Value
NON-CONVERTIBLE CORPORATE BONDS (64.4%)
Consumer, Cyclical (25.2%)
Broadcasting (11.2%)
Chancellor Media Corp. 9.000% 10-01-2008 $110,000
$110,275
TCI Communications, Inc. 6.875% 02-15-2006 400,000
425,500
Time Warner, Inc. 8.180% 08-15-2007 750,000
858,750
Marcus Cable Company 11.875% 10-01-2005 750,000
792,187
2,186,712
Entertainment (1.7%)
Walt Disney Company 6.750% 03-30-2006 300,000
323,625
Home Furnishings (5.4%)
Lifestyle Furnishings, Inc. 10.875% 08-01-2006 400,000
428,000
Selmer Company, Inc. 11.000% 05-15-2005 600,000
618,000
1,046,000
Publishing (0.8%)
Digital Television Services, LLC 12.500% 08-01-2007 150,000
151,500
Restaurants (1.3%)
McDonald's Corp. 6.375% 01-08-2028 250,000
253,125
Retailers - Broadline (4.8%)
Fred Meyer, Inc. 7.150% 03-01-2003 500,000
518,125
Fred Meyer, Inc. 7.450% 03-01-2008 400,000
419,000
937,125
Consumer, Non-Cyclical (7.2%)
Consumer Services (1.8%)
Loewen Group International, Inc. 144A
7.600% 06-01-2008 100,000 79,250
Service Corp. International 7.700% 04-15-2009 250,000
275,313
354,563
Food - Other (2.8%)
Ralston Purina Company 7.875% 06-15-2025 475,000
539,124
Food Retailers (1.0%)
Star Markets Company, Inc. 13.000% 11-01-2004 185,000
197,950
Household Products (1.6%)
Sherwin-Williams Company 6.850% 02-01-2007 290,000
317,187
Financial (14.4%)
Banks (5.4%)
Bank One - Texas 6.250% 02-15-2008 250,000
255,313
HUBCO, Inc. 8.200% 09-15-2006 300,000
322,500
Swiss Bank Corp. 7.000% 10-15-2015 500,000
479,375
1,057,188
Diversified (4.1%)
Ford Motor Credit Company 6.750% 08-15-2008 750,000
803,438
Insurance (4.9%)
Delphi Financial Group, Inc.
8.000% 10-01-2003 500,000 541,250
Orion Capital Corp. 7.250% 07-15-2005 400,000
425,000
966,250
Industrial (6.5%)
Diversified
Aviation Sales Company 8.125% 02-15-2008 170,000
154,700
Isle of Capri Black Hawk, LLC
13.000% 08-31-2004 525,000 525,000
The Pantry, Inc. 10.250% 10-15-2007 350,000
346,500
Unifrax Investment Corp. 10.500% 11-01-2003 250,000
255,000
1,281,200
Technology (7.8%)
Communications (6.0%)
360 Communications Company 6.650% 01-15-2008 250,000
262,813
Jones Intercable, Inc. 7.625% 04-15-2008 261,000
263,610
Qwest Communications International, Inc.
7.500% 11-01-2008 250,000
253,750
Talton Holdings, Inc. Series B
11.000% 06-30-2007 400,000 389,500
1,169,673
Computers (1.8%)
International Business Machines Corp.
7.500% 06-15-2013 300,000 358,125
Utilities (3.3%)
Electric (2.3%)
El Paso Electric Company 9.400% 05-01-2011 $400,000 $453,000
Telephone (1.0%)
LCI International, Inc. 7.250% 6-15-2007 200,000 200,500
Total Non-Convertible Corporate Bonds (cost $12,048,288) 12,596,285
CONVERTIBLE CORPORATE BONDS (4.1%)
Consumer, Cyclical (2.0%)
Broadcasting
Pegasus Media & Communications, Inc.
12.500% 07-01-2005 350,000 380,625
Financial (0.5%)
Diversified
Candescent Technologies Corp. 144A
7.000% 05-01-2003 125,000 106,250
Technology (1.6%)
Communications
Dialogic Corp. 11.000% 11-15-2007 300,000 307,500
Total Convertible Corporate Bonds (cost $775,000) 794,375
LONG-TERM GOVERNMENT BONDS (22.0%)
United States Government Agencies (1.3%)
Federal National Mortgage Association
5.250% 1-15-2003 250,000 255,075
United States Government Securities (20.7%)
Treasury Notes
5.625% 5-15-2008 2,250,000 2,423,137
6.625% 5-15-2007 750,000 851,190
5.250% 8-15-2003 750,000 782,303
4,056,630
Total Long-Term Government Bonds (cost $4,193,023) 4,311,705
Description Shares Value
NON-CONVERTIBLE PREFERRED STOCK (0.5%)
Financial
Savings & Loans
Chevy Chase Bank (cost $116,375) 3,500 $105,875
Description Principal Value
SHORT-TERM SECURITIES (8.1%)
Repurchase Agreements (0.4%)
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998
to be repurchased at $80,108 on 11-2-1998 $80,083 $80,083
United States Government Agencies (7.7%)
Federal Home Loan Mortgage Corp.
5.400% 11-2-1998 1,500,000 1,499,775
Total Short-Term Securities (cost $1,579,858) 1,579,858
Total Investments (99.1%) (cost $18,712,544) 19,388,098
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (0.0%) @
D 200,000 German Deutschemark 3-5-1999 Sell
$(10,262)
D 146,000 German Deutschemark 3-5-1999 Buy
8,444
D 54,000 German Deutschemark 3-5-1999 Buy
3,211
Total Unrealized Net Gain on Forward Foreign
Currency Contracts 1,393
Other Assets In Excess of Liabilities (0.9%) 174,372
Net Assets (100.0%) $19,563,863
October 31, 1998
SCHEDULE OF INVESTMENTS
INCOME PLUS PORTFOLIO
Description Principal
Value
NON-CONVERTIBLE CORPORATE BONDS (87.2%)
Basic Materials (2.8%)
Mining - Diversified
Scotia Pacific Company, LLC 144A
7.110% 1-20-2028 $2,000,000 $2,033,400
Consumer, Cyclical (19.4%)
Airlines (2.1%)
Piedmont Aviation, Inc. 10.100% 5-13-2007 1,048,000
1,116,120
USAir, Inc. 10.800% 1-1-2005 400,000
433,500
1,549,620
Auto Parts and Equipment (4.1%)
Arvin Industries, Inc. 6.750% 3-15-2008 3,000,000
2,996,580
Entertainment (1.4%)
Walt Disney Company 144A 2.000% 3-1-2000 1,000,000
1,020,000
Home Construction (1.5%)
M.D.C. Holdings, Inc. 11.125% 12-15-2003 1,000,000
1,061,250
Publishing (3.1%)
Golden Books Publishing, Inc.
7.650% 9-15-2002 * # 2,250,000 562,500
News America Holdings, Inc. 8.625% 2-1-2003 1,500,000
1,645,230
2,207,730
Retailers - Broadline (7.2%)
Dayton Hudson Corp. 8.500% 12-1-2022 2,000,000
2,261,360
Kmart Corp. 8.125% 12-1-2006 1,000,000
1,035,000
Neiman Marcus Group, Inc. 7.125% 6-1-2028 2,000,000
1,961,180
5,257,540
Consumer, Non-Cyclical (13.4%)
Consumer Services (2.8%)
Hertz Corp. 6.000% 1-15-2003 2,000,000
2,025,760
Food - Other (4.1%)
Ralston Purina Company 9.250% 10-15-2009 2,450,000
2,995,691
Food Retailers (4.3%)
American Stores Company 9.125% 4-1-2002 1,000,000
1,112,700
Great Atlantic & Pacific Tea, Inc.
7.700% 1-15-2004 2,000,000 2,030,720
3,143,420
Medical Supplies (2.2%)
C. R. Bard, Inc. 6.700% 12-1-2026 1,500,000
1,608,750
Energy (4.3%)
Oil Drilling (2.9%)
Louisiana Land Exploration Company
7.625% 4-15-2013 2,000,000 2,096,540
Oilfield Equipment and Services (1.4%)
McDermott, Inc. 9.375% 3-15-2002 1,000,000
1,000,000
Financial (24.9%)
Banks (8.3%)
BankBoston Capital Trust Corp.
8.250% 12-15-2026 3,000,000 2,988,150
HSBC America Capital II 144A
8.380% 5-15-2027 3,000,000 3,064,050
6,052,200
Diversified (6.8%)
Chase Capital Corp. 0.000% 3-1-2027 3,000,000
2,794,680
First Security Capital Trust Corp.
8.410% 12-15-2026 2,000,000 2,117,720
4,912,400
Insurance (1.5%)
American Financial Group, Inc.
10.625% 4-15-2000 1,000,000 1,065,910
Savings & Loans (5.5%)
Golden State Bancorp, Inc. 144A
7.125% 8-1-2005 2,000,000 1,996,420
Peoples Bank - Bridgeport CT
7.200% 12-1-2006 2,000,000 2,010,160
4,006,580
Securities Brokers (2.8%)
Lehman Brothers Holding, Inc.
7.625% 6-1-2006 2,000,000 2,035,400
Description Principal
Value
Industrial (8.4%)
Air Freight (1.5%)
Federal Express Corp. 9.625% 10-15-2019 $1,000,000
$1,070,320
Containers and Packaging (1.4%)
Stone Container Corp. 0.000% 8-1-2016 1,000,000
1,010,000
Factory Equipment (2.6%)
Columbus Mckinnon Corp. 8.500% 4-1-2008 2,000,000
1,875,000
Transportation Equipment (2.9%)
AAR Corp. 7.250% 10-15-2003 2,000,000
2,131,260
Technology (5.6%)
Aerospace/Defense (1.3%)
BE Aerospace, Inc. 8.000% 3-1-2008 1,000,000
940,000
Communications (4.3%)
WorldCom, Inc. 6.400% 8-15-2005 3,000,000
3,112,500
Utilities (8.4%)
Electric (5.7%)
El Paso Electric Company 8.250% 2-1-2003 1,000,000
1,082,960
El Paso Electric Company 8.900% 2-1-2006 500,000
552,715
Texas Utilities Electric Company
6.750% 4-1-2003 1,500,000 1,580,610
The AES Corp. 8.500% 11-1-2007 1,000,000
945,000
4,161,285
Telephone (2.7%)
McLeodUSA, Inc. 9.250% 7-15-2007 1,000,000
988,750
McLeodUSA, Inc. 8.375% 3-15-2008 1,000,000
952,500
1,941,250
Total Non-Convertible Corporate Bonds (cost $63,316,701)
63,310,386
COLLATERALIZED MORTGAGE OBLIGATION (2.8%)
Financial
Real Estate
Aetna Commercial Mortgage Trust
7.230% 1-15-2028 (cost $2,040,918) 2,000,000
1,997,500
Description Shares
Value
CONVERTIBLE PREFERRED STOCK (8.2%)
Consumer, Cyclical (5.7%)
Broadcasting (4.4%)
TCI Communications, Inc. 120,000
$3,255,000
Publishing (1.3%)
PRIMEDIA, Inc. 10,000
910,000
Financial (2.5%)
Real Estate
Duke Realty Investments, Inc. 40,000
1,832,000
Total Convertible Preferred Stock (cost $6,293,000) 5,997,000
Description Principal
Value
SHORT-TERM SECURITIES (0.8%)
Repurchase Agreements
State Street Bank & Trust ***
3.750% Repurchase Agreement dated 10-30-1998 to be
repurchased at $611,773 on 11-2-1998 (cost $611,582) $611,582
$611,582
Total Investments (99.0%) (cost $72,262,201) 71,916,468
Other Assets In Excess of Liabilities (1.0%) 691,554
Net Assets (100.0%) $72,608,022
October 31, 1998
SCHEDULE OF INVESTMENTS
TAX-EXEMPT PORTFOLIO
Description ** Principal
Value
MUNICIPAL BONDS (95.9%)
Alabama (4.5%)
City of Huntsville, Public Building Authority,
Revenue Bonds, Series 1996A,
6.000%, 10-1-2025, AAA/Aaa $1,000,000
$1,116,310
Alaska (4.3%)
Valdez Alaska Marine Project, Revenue Bonds,
Series A, 5.850%, 8-1-2025, AA/Aa2 1,000,000
1,051,630
Florida (4.3%)
City of Lakeland Electric and Water Agency,
Revenue Bonds, 5.625%, 10-1-2036, AA-/A1 1,000,000
1,050,760
Georgia (4.3%)
City of Atlanta Solid Waste Management Authority,
Landfill Closure Project, General Obligation Bonds,
5.100%, 12-1-2010, AA/Aa3 1,000,000
1,046,470
Illinois (8.6%)
McHenry County Community School District,
General Obligation Bonds, Series 1996
5.850%, 1-1-2016, AAA/Aaa 1,000,000
1,087,130
City of Peoria Parking Facility Improvements,
General Obligation Bonds, Series A
5.300%, 1-1-2021, AAA/Aaa 1,000,000
1,015,150
2,102,280
Indiana (8.4%)
City of Petersburg, Pollution Control,
Revenue Bonds, Series 1977,
5.500%, 10-1-2023, AA-/Aa2 1,000,000
1,028,900
Indiana Public Schools, School Building Corp.,
Revenue Bonds, 5.250%, 7-5-2017, AAA/NR 1,000,000
1,025,300
2,054,200
Iowa (8.7%)
Iowa Finance Authority, Drake University
Project, Revenue Bonds,
5.400%, 12-1-2016, AAA/Aaa 1,000,000
1,041,180
Iowa State Certificate of Participation,
Revenue Bonds, Series 1992A,
6.500%, 7-1-2006, AAA/Aaa 1,000,000
1,105,380
2,146,560
Michigan (5.7%)
City of Holt, Public Schools,
General Obligation Bonds, Series E,
5.125%, 5-1-2021, NR/Aaa 1,000,000
998,010
Michigan State Building Authority, Revenue
Refunding Special Sinking Fund, Series
1992A, 6.800%, 10-1-2021, AA/Aa2 375,000
408,803
1,406,813
Nebraska (4.4%)
Neb HELP, Inc., Revenue AMT Bonds,
Series 1992A-6,
6.950%, 6-1-2008, NR/Aaa 1,000,000
1,087,420
New York (4.1%)
City of New York, Municipal Water Finance Authority,
Water and Sewer System, Revenue Bonds,
5.125%, 6-15-2030, AAA/Aaa 1,000,000
1,001,820
Ohio (8.7%)
Franklin County Hospital, Holy Cross Health
Systems Corp., Revenue Bonds,
5.800%, 6-1-2016, AA/Aa3 $1,000,000
$1,068,140
Ohio State Turnpike Authority,
Revenue Bonds, Series A
5.500%, 2-15-2017, AAA/Aaa 1,000,000
1,081,970
2,150,110
Pennsylvania (0.0%)
Pennsylvania Housing Finance Agency,
Multi-Family Mortgage Revenue
Bonds, Series 1985A,
9.375%, 8-1-2028, AAA/Aa2 5,000
5,071
Rhode Island (4.3%)
Rhode Island Clean Water Financing Agency
Revenue Bonds, 5.800%, 9-1-2022, AAA/Aaa 1,000,000
1,062,780
Texas (8.3%)
Carroll Independent School District,
General Obligation Bonds,
5.625%, 2-15-2019, AAA/Aaa 1,000,000
1,044,550
City of Dallas, Civic Center Project
Revenue Bonds, 5.000%, 8-15-2028, AAA/Aaa 1,000,000
983,180
2,027,730
Utah (4.3%)
Salt Lake County, Municipal Building
Authority, Revenue Bonds,
5.850%, 10-1-2017, A+/Aa3 1,000,000
1,069,120
Virginia (4.2%)
City of Norfolk Water Systems, Revenue Bonds,
Series 1995, 5.375%, 11-1-2023, AAA/Aaa 1,000,000
1,026,680
Washington (4.4%)
City of Seattle Water Systems, Revenue Bonds,
5.625%, 8-1-2026 AAA/Aaa 1,000,000
1,070,320
Wyoming (4.4%)
Wyoming State Farm Loan Board, Capital
Facilities Revenue Bonds,
5.750%, 10-1-2020, AA-/NR 1,000,000
1,077,000
Total Municipal Bonds (cost $22,383,094) 23,553,074
SHORT-TERM SECURITIES (2.0%)
South Carolina
Piedmont Municipal Power Agency - Electric,
Revenue Bonds, Put Bonds - Weekly, Series C
3.950%, 1-1-2022, AAA/Aaa 500,000
500,000
Total Short-Term Securities (cost $500,000) 500,000
Total Investments (97.9%) (cost $22,883,094) 24,053,074
Other Assets In Excess of Liabilities (2.1%) 521,006
Net Assets (100.0%) $24,574,080
October 31, 1998
SCHEDULE OF INVESTMENTS
NOTES TO SCHEDULES OF INVESTMENTS
ADR, GDR or NYRS after the name of a security represents American
Depository Receipts, Global Depository Receipts or New York
Registered Shares, respectively, representing ownership of foreign
securities on deposit with a domestic custodian.
144A after the name of a security represents a security exempt from
registration under 144A of the Securities Act of 1933. These
securities
may be resold as transactions exempt from registration, normally to
qualified institutional buyers.
* Presently non-income producing.
+ Non-U.S. securities.
# Golden Books is currently in default on payment of its past six month
interest payment which was due 9/15/98.
@ Notional amount of forward foreign currency contracts and principal
amount of foreign bonds are denominated in the indicated currency:
B-British Pound; D-German Deutschemark; F-French Franc;
G-Dutch Guilder; H-Hong Kong Dollar; J-Japanese Yen; K-Swedish
Krona; N-Norwegian Krone; P-Spanish Peseta; S-Swiss Franc.
** Ratings indicated are by Standard & Poor's/Moody's, respectively, and
are unaudited; NR: not rated by this service.
See Note 1 in the Notes to Financial Statements for security valuation,
futures, forward foreign currency contracts and other derivative
transactions as well as other significant accounting policies.
See Note 5 in the Notes to Financial Statements for cost and unrealized
appreciation and depreciation of investments for Federal income tax
purposes.
*** Repurchase Agreement Collateral
Aggressive Growth Portfolio
Collateralized by $465,000 principal of U.S. Treasury Bonds 8.125%,
due 8-15-2021; market value and accrued interest aggregated $639,840
for this collateral at October 31, 1998.
International Equity Portfolio
Collateralized by $35,000 principal of U.S. Treasury Bonds 13.250%,
due 5-15-2014 and by $130,000 principal of U.S. Treasury Bonds 7.250%,
due 5-15-2004; market value and accrued interest aggregated $213,094
for this collateral at October 31, 1998.
Capital Appreciation Portfolio
Collateralized by $45,000 principal of U.S. Treasury Bonds 10.625%,
due 8-15-2015; market value and accrued interest aggregated $73,318
for this collateral at October 31, 1998.
Growth Portfolio
Collateralized by $55,000 principal of U.S. Treasury Bonds 12.750%,
due 11-15-2010; market value and accrued interest aggregated $84,421
for this collateral at October 31, 1998.
C.A.S.E. Portfolio
Collateralized by $300,000 principal of U.S. Treasury Bills, due 2-4-1999;
market value and accrued interest aggregated $296,550 for this
collateral at October 31, 1998.
Strategic Total Return Portfolio
Collateralized by $660,000 principal of U.S. Treasury Notes 9.125%,
due 5-15-1999; market value and accrued interest aggregated $703,725
for this collateral at October 31, 1998.
Tactical Asset Allocation Portfolio
Collateralized by $365,000 principal of U.S. Treasury Bills, due 2-4-1999;
market value and accrued interest aggregated $360,803 for this
collateral at October 31, 1998.
Balanced Portfolio
Collateralized by $25,000 principal of U.S. Treasury Bonds 9.875%,
due 11-15-2015; market value and accrued interest aggregated $39,154
for this collateral at October 31, 1998.
Flexible Income Portfolio
Collateralized by $80,000 principal of U.S. Treasury Notes 5.750%,
due 11-30-2002; market value and accrued interest aggregated $86,100
for this collateral at October 31, 1998.
Income Plus Portfolio
Collateralized by $635,000 principal of U.S. Treasury Bills, due 2-4-1999;
market value and accrued interest aggregated $627,698 for this
collateral at October 31, 1998.
Preface to the Financial Statements
Statement of Assets and Liabilities
This schedule is also known as the Balance Sheet. Its objective is to
report the financial position (net worth) of your Portfolio. Items listed
are the major components of your Portfolio's net assets. Net Assets are
derived by subtracting liabilities from assets. Net Asset Value Per Share
is Net Assets divided by the Shares of Beneficial Interest Outstanding of
the Portfolio. Items of particular interest are defined below.
Assets Articles of value the Portfolio owns such as investments and
receivables
Liabilities Obligations of the Portfolio such as expenses and payables
Net Assets The result of Assets less Liabilities
Net Assets Consist Of Composition of Net Assets in terms of Capital,
investments by shareholders and accumulated earnings and profits of the
Portfolio
Shares of Beneficial Interest Outstanding The number of shares owned by
shareholders for each Share Class at the close of the period
Net Asset Value ("NAV") Per Share Net Assets attributable to a particular
Class of Shares divided by the shares outstanding of that Class
Maximum Offering Price Per Share The NAV plus the maximum sales load, if
any, attributable to the Share Class
Statement of Operations
This schedule is also known as the Income Statement. Its objective is to
provide a financial summary of the Portfolio's operations by listing the
revenues generated during the period, expenses incurred during the period
and the Portfolio's profits and/or losses. Items of particular interest
are defined below.
Investment Income Earnings on Portfolio investments such as dividends and
interest
Expenses Expenses incurred by the Portfolios such as management fees
Net Investment Income The result of Investment Income less Expenses
Realized Gains or Losses Gains or Losses from the sale of investments
Unrealized Gains or Losses Represents the difference between the current
market value and the acquisition cost of securities currently held
Statement of Changes in Net Assets
The objective of this statement is to summarize, in comparative form, the
changes in net assets resulting from operations. For comparative purposes,
the two most recent reporting periods are provided. Items of particular
interest are defined below.
Operations Summarized information from the Statement of Operations
Distributions to Shareholders Capital Gains and Investment Income
distributions paid to shareholders.
Change in Net Assets resulting from Shares of Beneficial Interest The
change in Net Assets due to share purchases, reinvestment of distributions
and share redemptions in the Portfolio.
Undistributed Net Investment Income The amount of Net Investment Income
that was not distributed to shareholders.
Financial Highlights
The objective of this table is to present all critical financial data in
terms of per share amounts. Beginning with the ending NAV from the prior
period, carrying through all current period income, capital gains and
distributions to arrive at the NAV at the end of the current period. Other
specific detail represented within the schedule is defined below.
Total Return The performance for an investment made exactly one year
prior, assuming no sales load.
Expense Ratios The percentage of a Portfolio's average net assets used to
pay its annual advisory and administrative expenses.
Portfolio Turnover A measure of Portfolio trading activity during the
year. A turnover ratio of 100% would represent a portfolio whose average
holding period for a security was one year. A higher percentage would
represent a shorter holding period. Portfolios with high turnover ratios
incur higher transaction costs and are more likely to realize and
distribute capital gains.
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1998
All numbers (except per share amounts) Aggressive Intl Capital
in thousands Growth Equity Appreciatn
Assets:
Investment securities, at market value $61,292 $6,497 $29,608
Cash (1) 10 69 -
Receivables:
Investment securities sold 1,588 1 667
Shares of beneficial interest sold 132 17 25
Interest - - -
Dividends 19 15 15
Due from investment adviser - 4 -
Forward foreign currency contracts - - 12
Other 6 1 3
63,047 6,604 30,330
Liabilities:
Accounts payable:
Investment securities purchased 304 - 1,280
Shares of beneficial interest redeemed 59 - 48
Accrued liabilities:
Management and advisory fees 40 - 26
Distribution fees 24 3 10
Transfer agent fees and expenses 36 3 15
Forward foreign currency contracts - 3 11
Other 34 19 26
497 28 1,416
Net Assets $62,550 $6,576 $28,914
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized 45,563 6,625 22,505
Undistributed net investment income (loss)
or (distribution in excess of net
investment income) (5) - (3)
Undistributed net realized gain (loss)
from investments and foreign currency
transactions 3,224 (314) 2,846
Net unrealized appreciation (depreciation)
of investments and on translation of
assets and liabilities in foreign
currencies 13,768 265 3,566
Net Assets $62,550 $6,576 $28,914
Investment securities, at cost $47,525 $6,230 $26,043
Shares Of Beneficial Interest Outstanding:
Class A shares 2,087 462 1,402
Class B shares 482 112 223
Class C shares 254 37 82
Class T shares (2)
Net Asset Value Per Share:
Class A shares $22.24 $10.77 $16.97
Class B shares $21.93 $10.71 $16.72
Class C shares $21.98 $10.72 $16.76
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $23.53 $11.40 $17.96
Class T shares (2)
Global Growth C.A.S.E.
Assets:
Investment securities, at market value $497,583 $1,664,073 $7,604
Cash (1) 25,210 - 10
Receivables:
Investment securities sold 2,418 11,072 163
Shares of beneficial interest sold 2,921 2,353 12
Interest - 15 -
Dividends 711 463 3
Due from investment adviser - - -
Forward foreign currency contracts 1,183 111 -
Other 45 160 1
530,071 1,678,247 7,793
Liabilities:
Accounts payable:
Investment securities purchased 51,490 2,820 127
Shares of beneficial interest redeemed 1,206 906 8
Accrued liabilities:
Management and advisory fees 186 238 9
Distribution fees 209 283 4
Transfer agent fees and expenses 126 314 6
Forward foreign currency contracts 5,975 747 -
Other 247 346 16
59,439 5,654 170
Net Assets $470,632 $1,672,593 $7,623
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized 405,117 888,038 8,480
Undistributed net investment income (loss)
or (distribution in excess of net
investment income) (28) (143) (1)
Undistributed net realized gain (loss)
from investments and foreign currency
transactions (2,270) 22,261 601
Net unrealized appreciation (depreciation)
of investments and on translation of
assets and liabilities in foreign
currencies 67,813 762,437 (1,457)
Net Assets $470,632 $1,672,593 $7,623
Investment securities, at cost $425,034 $901,006 $9,061
Shares Of Beneficial Interest Outstanding:
Class A shares 12,305 27,864 423
Class B shares 4,684 1,426 246
Class C shares 2,698 2,028 88
Class T shares (2) 25,413
Net Asset Value Per Share:
Class A shares $24.09 $29.35 $10.14
Class B shares $23.62 $28.63 $10.02
Class C shares $23.56 $28.74 $10.04
Class T shares (2) $29.74
Maximum Offering Price Per Share (3):
Class A shares $25.49 $31.06 $10.73
Class T shares (2) $32.50
Value Strategic Tact Asset
Equity Ttl Return Allocation
Assets:
Investment securities, at market value $15,032 $48,640 $37,622
Cash (1) 4 9 10
Receivables:
Investment securities sold - - -
Shares of beneficial interest sold 81 181 33
Interest - 271 194
Dividends 14 30 32
Due from investment adviser - - -
Forward foreign currency contracts - - -
Other 1 5 4
15,132 49,136 37,895
Liabilities:
Accounts payable:
Investment securities purchased - 137 -
Shares of beneficial interest redeemed 18 72 36
Accrued liabilities:
Management and advisory fees 14 40 35
Distribution fees 8 22 22
Transfer agent fees and expenses 8 17 12
Forward foreign currency contracts - - -
Other 16 27 22
64 315 127
Net Assets $15,068 $48,821 $37,768
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized 15,534 43,123 33,670
Undistributed net investment income (loss)
or (distribution in excess of net
investment income) (1) 141 111
Undistributed net realized gain (loss)
from investments and foreign currency
transactions 360 261 1,857
Net unrealized appreciation (depreciation)
of investments and on translation of
assets and liabilities in foreign
currencies (825) 5,296 2,130
Net Assets $15,068 $48,821 $37,768
Investment securities, at cost $15,858 $43,345 $35,492
Shares Of Beneficial Interest Outstanding:
Class A shares 724 1,981 1,199
Class B shares 457 606 1,118
Class C shares 183 431 559
Class T shares (2)
Net Asset Value Per Share:
Class A shares $11.09 $16.18 $13.14
Class B shares $10.98 $16.17 $13.13
Class C shares $11.00 $16.17 $13.13
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $11.74 $17.12 $13.90
Class T shares (2)
Flexible Income
Balanced Income Plus
Assets:
Investment securities, at market value $39,673 $19,388 $71,916
Cash (1) - 10 -
Receivables:
Investment securities sold 326 - -
Shares of beneficial interest sold 230 122 292
Interest 224 367 1,328
Dividends 21 - -
Due from investment adviser - - -
Forward foreign currency contracts 14 12 -
Other 4 2 9
40,492 19,901 73,545
Liabilities:
Accounts payable:
Investment securities purchased 569 250 -
Shares of beneficial interest redeemed 10 12 825
Accrued liabilities:
Management and advisory fees 37 28 38
Distribution fees 18 8 27
Transfer agent fees and expenses 10 6 15
Forward foreign currency contracts 14 10 -
Other 26 23 32
684 337 937
Net Assets $39,808 $19,564 $72,608
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized 35,234 19,035 71,217
Undistributed net investment income (loss)
or (distribution in excess of net
investment income) 57 42 293
Undistributed net realized gain (loss)
from investments and foreign currency
transactions 247 (190) 1,445
Net unrealized appreciation (depreciation)
of investments and on translation of
assets and liabilities in foreign
currencies 4,270 677 (347)
Net Assets $39,808 $19,564 $72,608
Investment securities, at cost $35,406 $18,713 $72,262
Shares Of Beneficial Interest Outstanding:
Class A shares 1,559 1,522 6,090
Class B shares 808 243 484
Class C shares 332 224 391
Class T shares (2)
Net Asset Value Per Share:
Class A shares $14.75 $9.84 $10.43
Class B shares $14.74 $9.83 $10.42
Class C shares $14.74 $9.84 $10.42
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $15.61 $10.41 $11.04
Class T shares (2)
Tax-
Exempt
Assets:
Investment securities, at market value $24,053
Cash (1) 168
Receivables:
Investment securities sold -
Shares of beneficial interest sold 74
Interest 353
Dividends -
Due from investment adviser -
Forward foreign currency contracts -
Other 3
24,651
Liabilities:
Accounts payable:
Investment securities purchased -
Shares of beneficial interest redeemed 15
Accrued liabilities:
Management and advisory fees 29
Distribution fees 8
Transfer agent fees and expenses 5
Forward foreign currency contracts -
Other 20
77
Net Assets $24,574
Net Assets Consist Of:
Shares of beneficial interest, unlimited
shares authorized 22,943
Undistributed net investment income
(loss) or (distribution in excess of
net investment income) 51
Undistributed net realized gain (loss)
from investments and foreign currency
transactions 410
Net unrealized appreciation (depreciation)
of investments and on translation of
assets and liabilities in foreign
currencies 1,170
Net Assets $24,574
Investment securities, at cost $22,883
Shares Of Beneficial Interest Outstanding:
Class A shares 1,869
Class B shares 54
Class C shares 135
Class T shares (2)
Net Asset Value Per Share:
Class A shares $11.94
Class B shares $11.94
Class C shares $11.94
Class T shares (2)
Maximum Offering Price Per Share (3):
Class A shares $12.63
Class T shares (2)
(1) International Equity cash balance includes foreign cash of $ 49 with a
cost of $ 49; Global cash balance includes foreign cash of $ 146 with a
cost of $ 122.
(2) Class T shares are not available to new investors; only existing Class
T shareholders may purchase additional Class T shares.
(3) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in
the Prospectus. Net asset value per share for Class B and Class C shares
represents offering price. The redemption price for class B equals net
asset value less any applicable contingent deferred sales charges.
The notes to the financial statements are an integral part of these
statements.
STATEMENTS OF OPERATIONS
For the year ended October 31, 1998
Aggressive Intl Capital
All numbers in thousands Growth Equity Appreciatn
Investment Income:
Interest $123 $12 $51
Dividends 259 97 85
Withholding taxes on foreign dividends (2) (11) (3)
380 98 133
Expenses:
Management and advisory fees 517 53 275
Transfer agent fees and expenses 311 25 128
Custody and accounting fees and expenses 45 67 72
Registration fees 26 53 21
Trustees fees and expenses 5 1 2
Audit fees and expenses 7 6 6
Other 38 3 17
Distribution and service fees:
Class A 139 14 79
Class B 73 9 33
Class C 42 4 14
Gross Expenses 1,203 235 647
Less fee waivers and reimbursements by the
investment adviser (173) (118) (108)
Net Expenses 1,030 117 539
Net Investment Income (Loss) (650) (19) (406)
Realized Gain (Loss) on Investments,
Futures Contracts and
Foreign Currency Transactions:
Net realized gain (loss) on investments 3,253 (253) 3,360
Net realized (loss) on futures contracts - - -
Net realized gain (loss) from foreign
currency transactions - (33) (112)
3,253 (286) 3,248
Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions:
Net unrealized appreciation (depreciation)
during the period on:
Investments 7,048 336 (13)
Translation of assets and liabilities
denominated in foreign currency - (1) 63
7,048 335 50
Net Gain (Loss) on Investments, Futures
Contracts and Foreign Currency
Transactions 10,301 49 3,298
Net Increase (Decrease) in Net Assets
Resulting from Operations $9,651 $30 $2,892
Global Growth C.A.S.E.
Investment Income:
Interest $1,485 $3,566 $34
Dividends 4,405 10,949 64
Withholding taxes on foreign dividends (498) (267) -
5,392 14,248 98
Expenses:
Management and advisory fees 3,907 13,582 88
Transfer agent fees and expenses 1,032 2,628 47
Custody and accounting fees and expenses 542 232 23
Registration fees 97 133 13
Trustees fees and expenses 38 115 -
Audit fees and expenses 20 47 4
Other 140 410 7
Distribution and service fees:
Class A 942 2,544 16
Class B 744 222 26
Class C 426 194 15
Gross Expenses 7,888 20,107 239
Less fee waivers and reimbursements by the
investment adviser - - (51)
Net Expenses 7,888 20,107 188
Net Investment Income (Loss) (2,496) (5,859) (90)
Realized Gain (Loss) on Investments,
Futures Contracts and
Foreign Currency Transactions:
Net realized gain (loss) on investments (28) 23,850 820
Net realized (loss) on futures contracts (556) - -
Net realized gain (loss) from foreign
currency transactions (2,244) (2,394) -
(2,828) 21,456 820
Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions:
Net unrealized appreciation (depreciation)
during the period on:
Investments 35,501 415,429 (2,025)
Translation of assets and liabilities
denominated in foreign currency (3,444) 1,276 -
32,057 416,705 (2,025)
Net Gain (Loss) on Investments, Futures
Contractsand Foreign Currency
Transactions 29,229 438,161 (1,205)
Net Increase (Decrease) in Net Assets
Resulting from Operations $26,733 $432,302 $(1,295)
Value Strategic Tact Asset
Equity Ttl Return Allocation
Investment Income:
Interest $93 $835 $878
Dividends 167 464 349
Withholding taxes on foreign dividends (1) (2) (3)
259 1,297 1,224
Expenses:
Management and advisory fees 140 411 333
Transfer agent fees and expenses 72 146 107
Custody and accounting fees and expenses 22 27 28
Registration fees 53 27 15
Trustees fees and expenses 1 4 3
Audit fees and expenses 6 6 6
Other 9 26 16
Distribution and service fees:
Class A 27 97 50
Class B 41 73 125
Class C 20 56 60
Gross Expenses 391 873 743
Less fee waivers and reimbursements by the
investment adviser (94) (31) (8)
Net Expenses 297 842 735
Net Investment Income (Loss) (38) 455 489
Realized Gain (Loss) on Investments,
Futures Contracts and
Foreign Currency Transactions:
Net realized gain (loss) on investments 398 463 1,854
Net realized (loss) on futures contracts - - -
Net realized gain (loss) from foreign
currency transactions - - -
398 463 1,854
Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions:
Net unrealized appreciation (depreciation)
during the period on:
Investments (1,499) 1,265 (467)
Translation of assets and liabilities
denominated in foreign currency - - -
(1,499) 1,265 (467)
Net Gain (Loss) on Investments, Futures
Contracts and Foreign Currency
Transactions (1,101) 1,728 1,387
Net Increase (Decrease) in Net Assets
Resulting from Operations $(1,139) $2,183 $1,876
Flexible Income
Balanced Income Plus
Investment Income:
Interest $599 $1,360 $5,143
Dividends 167 11 469
Withholding taxes on foreign dividends (2) - -
764 1,371 5,612
Expenses:
Management and advisory fees 258 152 442
Transfer agent fees and expenses 82 33 119
Custody and accounting fees and expenses 49 33 37
Registration fees 28 14 24
Trustees fees and expenses 3 1 4
Audit fees and expenses 6 12 13
Other 12 8 20
Distribution and service fees:
Class A 62 51 231
Class B 52 12 30
Class C 24 11 41
Gross Expenses 576 327 961
Less fee waivers and reimbursements by the
investment adviser (51) - -
Net Expenses 525 327 961
Net Investment Income (Loss) 239 1,044 4,651
Realized Gain (Loss) on Investments,
Futures Contracts and
Foreign Currency Transactions:
Net realized gain (loss) on investments 244 248 1,445
Net realized (loss) on futures contracts - - -
Net realized gain (loss) from foreign
currency transactions (16) 6 -
228 254 1,445
Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions:
Net unrealized appreciation (depreciation)
during the period on:
Investments 2,741 (130) (3,738)
Translation of assets and liabilities
denominated in foreign currency 26 1 -
2,767 (129) (3,738)
Net Gain (Loss) on Investments, Futures
Contracts and Foreign Currency
Transactions 2,995 125 (2,293)
Net Increase (Decrease) in Net Assets
Resulting from Operations $3,234 $1,169 $2,358
Tax-
Exempt
Investment Income:
Interest $1,296
Dividends -
Withholding taxes on foreign dividends -
1,296
Expenses:
Management and advisory fees 147
Transfer agent fees and expenses 22
Custody and accounting fees and expenses 20
Registration fees 17
Trustees fees and expenses 1
Audit fees and expenses 12
Other 7
Distribution and service fees:
Class A 80
Class B 4
Class C 6
Gross Expenses 316
Less fee waivers and reimbursements by the
investment adviser (10)
Net Expenses 306
Net Investment Income (Loss) 990
Realized Gain (Loss) on Investments,
Futures Contracts and
Foreign Currency Transactions:
Net realized gain (loss) on investments 449
Net realized (loss) on futures contracts -
Net realized gain (loss) from foreign
currency transactions -
449
Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions:
Net unrealized appreciation (depreciation)
during the period on:
Investments 233
Translation of assets and liabilities
denominated in foreign currency -
233
Net Gain (Loss) on Investments, Futures
Contracts and Foreign Currency Transactions 682
Net Increase (Decrease) in Net Assets
Resulting from Operations $1,672
The notes to the financial statements are an integral part of these
statements
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended October 31,
All numbers in thousands Aggressive
Growth
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $(650) $(382)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 3,253 3,842
Net unrealized appreciation (depreciation) during
the period 7,048 3,219
9,651 6,679
Distributions To Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class T
- -
From net realized gains:
Class A (1,015) (941)
Class B (163) (91)
Class C (110) (95)
Class T
(1,288) (1,127)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 8,620 4,799
Class B 4,565 2,314
Class C 1,394 884
Class T
14,579 7,997
Net increase (decrease) in net assets 22,942 13,549
Net Assets:
Beginning of period 39,608 26,059
End of period $62,550 $39,608
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $(5) $(4)
International
Equity
Increase (Decrease) In Net Assets From: 1998 1997 (1)
Operations:
Net investment income (loss) $(19) $1
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions (286) (11)
Net unrealized appreciation (depreciation) during
the period 335 (70)
30 (80)
Distributions To Shareholders:
From net investment income:
Class A (20) -
Class B (1) -
Class C (1) -
Class T
(22) -
From net realized gains:
Class A - -
Class B - -
Class C - -
Class T
- -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 1,879 3,108
Class B 641 611
Class C (16) 425
Class T
2,504 4,144
Net increase (decrease) in net assets 2,512 4,064
Net Assets:
Beginning of period 4,064 -
End of period $6,576 $4,064
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $- $21
Capital
Appreciation
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $(406) $(331)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 3,248 778
Net unrealized appreciation (depreciation) during
the period 50 554
2,892 1,001
Distributions To Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class T
- -
From net realized gains:
Class A (589) (271)
Class B (82) (31)
Class C (47) (32)
Class T
(718) (334)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 1,303 690
Class B 691 651
Class C (476) (511)
Class T
1,518 830
Net increase (decrease) in net assets 3,692 1,497
Net Assets:
Beginning of period 25,222 23,725
End of period $28,914 $25,222
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $(3) $(2)
Global
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $(2,496) $(1,348)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions (2,828) 28,339
Net unrealized appreciation (depreciation) during
the period 32,057 13,215
26,733 40,206
Distributions To Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class T
- -
From net realized gains:
Class A (19,124) (13,750)
Class B (4,194) (762)
Class C (2,552) (956)
Class T
(25,870) (15,468)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 72,572 61,654
Class B 70,019 36,024
Class C 37,336 16,999
Class T
179,927 114,677
Net increase (decrease) in net assets 180,790 139,415
Net Assets:
Beginning of period 289,842 150,427
End of period $470,632 $289,842
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $(28) $(16)
Growth
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $(5,859) $709
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 21,456 164,142
Net unrealized appreciation (depreciation) during
the period 416,705 19,578
432,302 184,429
Distributions To Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class T (802) -
(802) -
From net realized gains:
Class A (80,490) (11,899)
Class B (1,902) (130)
Class C (1,933) (256)
Class T (78,155) (11,980)
(162,480) (24,265)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 71,245 (28,708)
Class B 23,928 6,651
Class C 37,693 1,582
Class T 25,693 (49,849)
158,559 (70,324)
Net increase (decrease) in net assets 427,579 89,840
Net Assets:
Beginning of period 1,245,014 1,155,174
End of period $1,672,593 $1,245,014
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $(143) $713
C.A.S.E.
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $(90) $(36)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 820 774
Net unrealized appreciation (depreciation) during
the period (2,025) 444
(1,295) 1,182
Distributions To Shareholders:
From net investment income:
Class A - (89)
Class B - (45)
Class C - (42)
Class T
- (176)
From net realized gains:
Class A (340) -
Class B (191) -
Class C (157) -
Class T
(688) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 1,293 1,775
Class B 656 957
Class C (727) 1,125
Class T
1,222 3,857
Net increase (decrease) in net assets (761) 4,863
Net Assets:
Beginning of period 8,384 3,521
End of period $7,623 $8,384
Undistributed Net Investment Income (Loss) or
(Distribution in
Excess of Net Investment Income): $(1) $(1)
Value
Equity
Increase (Decrease) In Net Assets From: 1998 1997 (1)
Operations:
Net investment income (loss) $(38) $4
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 398 36
Net unrealized appreciation (depreciation) during
the period (1,499) 674
(1,139) 714
Distributions To Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class T
- -
From net realized gains:
Class A (23) -
Class B (11) -
Class C (7) -
Class T
(41) -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 3,324 4,887
Class B 2,577 2,646
Class C 585 1,515
Class T
6,486 9,048
Net increase (decrease) in net assets 5,306 9,762
Net Assets:
Beginning of period 9,762 -
End of period $15,068 $9,762
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $(1) $4
Strategic
Total Return
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $455 $281
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 463 1,228
Net unrealized appreciation (depreciation) during
the period 1,265 2,713
2,183 4,222
Distributions To Shareholders:
From net investment income:
Class A (340) (207)
Class B (42) (18)
Class C (42) (20)
(424) (245)
From net realized gains:
Class A (961) (291)
Class B (225) (43)
Class C (199) (45)
(1,385) (379)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 10,079 7,161
Class B 5,034 2,574
Class C 2,675 2,106
17,788 11,841
Net increase (decrease) in net assets 18,162 15,439
Net Assets:
Beginning of period 30,659 15,220
End of period $48,821 $30,659
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $141 $70
Tactical Asset
Allocation
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $489 $275
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 1,854 1,555
Net unrealized appreciation (depreciation) during
the period (467) 1,892
1,876 3,722
Distributions To Shareholders:
From net investment income:
Class A (229) (138)
Class B (122) (54)
Class C (71) (35)
(422) (227)
From net realized gains:
Class A (688) (30)
Class B (562) (18)
Class C (302) (17)
(1,552) (65)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 3,481 2,291
Class B 4,970 3,578
Class C 2,289 (340)
10,740 5,529
Net increase (decrease) in net assets 10,642 8,959
Net Assets:
Beginning of period 27,126 18,167
End of period $37,768 $27,126
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $111 $62
Balanced
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $239 $155
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 228 1,751
Net unrealized appreciation (depreciation) during
the period 2,767 876
3,234 2,782
Distributions To Shareholders:
From net investment income:
Class A (175) (155)
Class B (17) (15)
Class C (12) (12)
(204) (182)
From net realized gains:
Class A (1,280) (1,109)
Class B (260) (130)
Class C (158) (128)
(1,698) (1,367)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 8,745 4,082
Class B 9,015 1,501
Class C 3,158 495
20,918 6,078
Net increase (decrease) in net assets 22,250 7,311
Net Assets:
Beginning of period 17,558 10,247
End of period $39,808 $17,558
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $56 $23
Flexible Income
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $1,044 $1,102
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 254 328
Net unrealized appreciation (depreciation) during
the period (129) 439
1,169 1,869
Distributions To Shareholders:
From net investment income:
Class A (920) (1,022)
Class B (66) (37)
Class C (72) (49)
(1,058) (1,108)
From net realized gains:
Class A - -
Class B - -
Class C - -
- -
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A (676) (2,161)
Class B 1,641 194
Class C 1,282 43
2,247 (1,924)
Net increase (decrease) in net assets 2,358 (1,163)
Net Assets:
Beginning of period 17,206 18,369
End of period $19,564 $17,206
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $42 $54
Income Plus
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $4,651 $4,938
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 1,445 1,592
Net unrealized appreciation (depreciation) during
the period (3,738) 1,205
2,358 7,735
Distributions To Shareholders:
From net investment income:
Class A (4,224) (4,601)
Class B (170) (80)
Class C (274) (191)
(4,668) (4,872)
From net realized gains:
Class A (1,318) (598)
Class B (38) (8)
Class C (77) (26)
(1,433) (632)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A 1,203 (2,758)
Class B 3,450 905
Class C 845 605
5,498 (1,248)
Net increase (decrease) in net assets 1,755 983
Net Assets:
Beginning of period 70,853 69,870
End of period $72,608 $70,853
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $293 $308
Tax-Exempt
Increase (Decrease) In Net Assets From: 1998 1997
Operations:
Net investment income (loss) $990 $1,130
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 449 286
Net unrealized appreciation (depreciation) during
the period 233 619
1,672 2,035
Distributions To Shareholders:
From net investment income:
Class A (925) (1,091)
Class B (14) (11)
Class C (40) (32)
(979) (1,134)
From net realized gains:
Class A (306) (167)
Class B (4) (2)
Class C (12) (5)
(322) (174)
Net Increase (Decrease) in Net Assets from Shares Of
Beneficial Interest Transactions:
Class A (1,369) (1,816)
Class B 272 169
Class C 682 (38)
(415) (1,685)
Net increase (decrease) in net assets (44) (958)
Net Assets:
Beginning of period 24,618 25,576
End of period $24,574 $24,618
Undistributed Net Investment Income (Loss) or
(Distribution in Excess of Net Investment Income): $51 $40
(1) From commencement of investment operations on February 1, 1997
through October 31, 1997.
The notes to the financial statements are an integral part of these
statements.
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period:
Investment Operations
Net Asset
Year or Value, Net Net Rlzd &
Period Beginning Investment Unrlzd Total
Ended of Period Inc (Loss)Gain (Loss)Operatns
Aggressive Growth
Class A 10/31/98 $18.77 $0.03 $4.02 $4.05
10/31/97 15.70 0.05 3.69 3.74
10/31/96 (1) 15.75 (0.01) (0.04) (0.05)
9/30/96 (2) 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 (0.09) 4.02 3.93
10/31/97 15.58 (0.02) 3.69 3.67
10/31/96 (1) 15.63 (0.01) (0.04) (0.05)
9/30/96 (2) 17.64 (0.23) (0.76) (0.99)
Class C 10/31/98 18.61 (0.07) 4.02 3.95
10/31/97 15.60 (0.01) 3.69 3.68
10/31/96 (1) 15.65 (0.01) (0.04) (0.05)
9/30/96 (2) 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 0.07 0.20 0.27
10/31/97 (4) 10.00 0.07 0.50 0.57
Class B 10/31/98 10.52 - 0.20 0.20
10/31/97 (4) 10.00 0.02 0.50 0.52
Class C 10/31/98 10.53 0.01 0.20 0.21
10/31/97 (4) 10.00 0.03 0.50 0.53
Capital Appreciation
Class A 10/31/98 15.90 0.01 1.51 1.52
10/31/97 15.49 0.04 0.58 0.62
10/31/96 (1) 15.75 (0.02) (0.24) (0.26)
9/30/96 (2) 13.54 (0.02) 3.12 3.10
9/30/95 (3) 10.00 (0.03) 3.57 3.54
Class B 10/31/98 15.74 (0.08) 1.51 1.43
10/31/97 15.42 (0.05) 0.58 0.53
10/31/96 (1) 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 (0.07) 1.51 1.44
10/31/97 15.43 (0.03) 0.58 0.55
10/31/96 (1) 15.70 (0.03) (0.24) (0.27)
9/30/96 (2) 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 0.08 2.34 2.42
10/31/97 21.39 0.07 4.38 4.45
10/31/96 (1) 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
Class B 10/31/98 23.38 (0.03) 2.34 2.31
10/31/97 21.13 (0.03) 4.38 4.35
10/31/96 (1) 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 (0.01) 2.34 2.33
10/31/97 21.03 (0.01) 4.38 4.37
10/31/96 (1) 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
Growth
Class A 10/31/98 $25.04 $(0.02) $7.64 $7.62
10/31/97 21.97 (0.02) 3.56 3.54
10/31/96 (1) 22.21 - (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
Class B 10/31/98 24.55 (0.25) 7.64 7.39
10/31/97 21.60 (0.14) 3.56 3.42
10/31/96 (1) 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 (0.21) 7.64 7.43
10/31/97 21.65 (0.12) 3.56 3.44
10/31/96 (1) 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
Class T 10/31/98 25.31 0.13 7.64 7.77
10/31/97 22.17 0.05 3.56 3.61
10/31/96 (1) 22.41 - (0.24) (0.24)
9/30/96 (5) 22.23 - 0.18 0.18
C.A.S.E.
Class A 10/31/98 12.90 0.03 (1.84) (1.81)
10/31/97 (2) 10.56 (0.01) 2.86 2.85
10/31/96 (1) 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 (0.04) (1.84) (1.88)
10/31/97 (2) 10.51 (0.07) 2.86 2.79
10/31/96 (1) 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 (0.03) (1.84) (1.87)
10/31/97 (2) 10.52 (0.06) 2.86 2.80
10/31/96 (1) 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 0.03 (0.61) (0.58)
10/31/97 (4) 10.00 0.02 1.69 1.71
Class B 10/31/98 11.67 (0.04) (0.61) (0.65)
10/31/97 (4) 10.00 (0.02) 1.69 1.67
Class C 10/31/98 11.67 (0.02) (0.61) (0.63)
10/31/97 (4) 10.00 (0.02) 1.69 1.67
Strategic Total Return
Class A 10/31/98 15.91 0.21 0.94 1.15
10/31/97 13.43 0.20 2.79 2.99
10/31/96 (1) 13.27 0.01 0.15 0.16
9/30/96 11.74 0.20 1.65 1.85
9/30/95 (3) 10.00 0.09 1.75 1.84
Class B 10/31/98 15.89 0.11 0.94 1.05
10/31/97 13.42 0.10 2.79 2.89
10/31/96 (1) 13.27 - 0.15 0.15
9/30/96 11.73 0.13 1.65 1.78
Class C 10/31/98 15.90 0.12 0.94 1.06
10/31/97 13.42 0.12 2.79 2.91
10/31/96 (1) 13.27 - 0.15 0.15
9/30/96 11.73 0.15 1.65 1.80
9/30/95 (3) 10.00 0.03 1.75 1.78
Tactical Asset Allocation
Class A 10/31/98 $13.19 $0.22 $0.67 $0.89
10/31/97 11.19 0.19 2.02 2.21
10/31/96 (1) 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 0.14 0.67 0.81
10/31/97 11.18 0.11 2.02 2.13
10/31/96 (1) 11.02 0.02 0.14 0.16
Class C 10/31/98 13.18 0.15 0.67 0.82
10/31/97 11.18 0.12 2.02 2.14
10/31/96 (1) 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 0.15 1.76 1.91
10/31/97 13.58 0.19 2.52 2.71
10/31/96 (1) 13.47 0.01 0.10 0.11
9/30/96 11.47 0.24 2.25 2.49
9/30/95 (3) 10.00 0.05 1.47 1.52
Class B 10/31/98 14.33 0.06 1.76 1.82
10/31/97 13.56 0.12 2.52 2.64
10/31/96 (1) 13.46 - 0.10 0.10
9/30/96 11.47 0.15 2.25 2.40
Class C 10/31/98 14.33 0.07 1.76 1.83
10/31/97 13.57 0.12 2.52 2.64
10/31/96 (1) 13.46 0.01 0.10 0.11
9/30/96 11.47 0.16 2.25 2.41
9/30/95 (3) 10.00 0.01 1.47 1.48
Flexible Income
Class A 10/31/98 9.75 0.61 0.10 0.71
10/31/97 9.33 0.61 0.42 1.03
10/31/96 (1) 9.19 0.05 0.14 0.19
9/30/96 9.17 0.60 - 0.60
9/30/95 8.83 0.61 0.37 0.98
Class B 10/31/98 9.75 0.54 0.10 0.64
10/31/97 9.32 0.56 0.42 0.98
10/31/96 (1) 9.18 0.05 0.14 0.19
9/30/96 9.17 0.53 - 0.53
Class C 10/31/98 9.75 0.56 0.10 0.66
10/31/97 9.32 0.57 0.42 0.99
10/31/96 (1) 9.18 0.05 0.14 0.19
9/30/96 9.17 0.54 - 0.54
9/30/95 8.83 0.56 0.37 0.93
Income Plus
Class A 10/31/98 $10.96 $0.69 $(0.30) $0.39
10/31/97 10.61 0.76 0.44 1.20
10/31/96 (1) 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
Class B 10/31/98 10.96 0.61 (0.30) 0.31
10/31/97 10.61 0.69 0.44 1.13
10/31/96 (1) 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 0.62 (0.30) 0.32
10/31/97 10.61 0.70 0.44 1.14
10/31/96 (1) 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
Tax-Exempt
Class A 10/31/98 11.75 0.48 0.34 0.82
10/31/97 11.40 0.53 0.43 0.96
10/31/96 (1) 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
Class B 10/31/98 11.74 0.41 0.34 0.75
10/31/97 11.40 0.44 0.43 0.87
10/31/96 (1) 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 0.45 0.34 0.79
10/31/97 11.40 0.50 0.43 0.93
10/31/96 (1) 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
Distributions
Net Asset
From Net From Net Value,
Investment Realized Total End of
Income Cap Gains Distribs Period
Aggressive Growth
Class A 10/31/98 $- $(0.58) $(0.58) $22.24
10/31/97 - (0.67) (0.67) 18.77
10/31/96 (1) - - - 15.70
9/30/96 (2) - (1.02) (1.02) 15.75
9/30/95 (3) - - - 17.68
Class B 10/31/98 - (0.58) (0.58) 21.93
10/31/97 - (0.67) (0.67) 18.58
10/31/96 (1) - - - 15.58
9/30/96 (2) - (1.02) (1.02) 15.63
Class C 10/31/98 - (0.58) (0.58) 21.98
10/31/97 - (0.67) (0.67) 18.61
10/31/96 (1) - - - 15.60
9/30/96 (2) - (1.02) (1.02) 15.65
9/30/95 (3) - - - 17.64
International Equity
Class A 10/31/98 (0.07) - (0.07) 10.77
10/31/97 (4) - - - 10.57
Class B 10/31/98 (0.01) - (0.01) 10.71
10/31/97 (4) - - - 10.52
Class C 10/31/98 (0.02) - (0.02) 10.72
10/31/97 (4) - - - 10.53
Capital Appreciation
Class A 10/31/98 - (0.45) (0.45) 16.97
10/31/97 - (0.21) (0.21) 15.90
10/31/96 (1) - - - 15.49
9/30/96 (2) (0.07) (0.82) (0.89) 15.75
9/30/95 (3) - - - 13.54
Class B 10/31/98 - (0.45) (0.45) 16.72
10/31/97 - (0.21) (0.21) 15.74
10/31/96 (1) - - - 15.42
9/30/96 - (0.82) (0.82) 15.69
Class C 10/31/98 - (0.45) (0.45) 16.76
10/31/97 - (0.21) (0.21) 15.77
10/31/96 (1) - - - 15.43
9/30/96 (2) (0.01) (0.82) (0.83) 15.70
9/30/95 (3) - - - 13.49
Global
Class A 10/31/98 - (2.07) (2.07) 24.09
10/31/97 - (2.10) (2.10) 23.74
10/31/96 (1) - - - 21.39
9/30/96 - (0.62) (0.62) 21.40
9/30/95 - (0.56) (0.56) 17.73
Class B 10/31/98 - (2.07) (2.07) 23.62
10/31/97 - (2.10) (2.10) 23.38
10/31/96 (1) - - - 21.13
9/30/96 - (0.62) (0.62) 21.14
Class C 10/31/98 - (2.07) (2.07) 23.56
10/31/97 - (2.10) (2.10) 23.30
10/31/96 (1) - - - 21.03
9/30/96 - (0.62) (0.62) 21.04
9/30/95 - (0.56) (0.56) 17.46
Growth
Class A 10/31/98 $- $(3.31) $(3.31) $29.35
10/31/97 - (0.47) (0.47) 25.04
10/31/96 (1) - - - 21.97
9/30/96 - (5.18) (5.18) 22.21
9/30/95 - (0.07) (0.07) 22.84
Class B 10/31/98 - (3.31) (3.31) 28.63
10/31/97 - (0.47) (0.47) 24.55
10/31/96 (1) - - - 21.60
9/30/96 - (5.18) (5.18) 21.85
Class C 10/31/98 - (3.31) (3.31) 28.74
10/31/97 - (0.47) (0.47) 24.62
10/31/96 (1) - - - 21.65
9/30/96 - (5.18) (5.18) 21.91
9/30/95 - (0.07) (0.07) 22.64
Class T 10/31/98 (0.03) (3.31) (3.34) 29.74
10/31/97 - (0.47) (0.47) 25.31
10/31/96 (1) - - - 22.17
9/30/96 (5) - - - 22.41
C.A.S.E.
Class A 10/31/98 - (0.95) (0.95) 10.14
10/31/97 (2) (0.51) - (0.51) 12.90
10/31/96 (1) - - - 10.56
9/30/96 (6) - - - 10.46
Class B 10/31/98 - (0.95) (0.95) 10.02
10/31/97 (2) (0.45) - (0.45) 12.85
10/31/96 (1) - - - 10.51
9/30/96 (6) - - - 10.41
Class C 10/31/98 - (0.95) (0.95) 10.04
10/31/97 (2) (0.46) - (0.46) 12.86
10/31/96 (1) - - - 10.52
9/30/96 (6) - - - 10.42
Value Equity
Class A 10/31/98 - (0.04) (0.04) 11.09
10/31/97 (4) - - - 11.71
Class B 10/31/98 - (0.04) (0.04) 10.98
10/31/97 (4) - - - 11.67
Class C 10/31/98 - (0.04) (0.04) 11.00
10/31/97 (4) - - - 11.67
Strategic Total Return
Class A 10/31/98 (0.21) (0.67) (0.88) 16.18
10/31/97 (0.19) (0.32) (0.51) 15.91
10/31/96 (1) - - - 13.43
9/30/96 (0.17) (0.15) (0.32) 13.27
9/30/95 (3) (0.10) - (0.10) 11.74
Class B 10/31/98 (0.10) (0.67) (0.77) 16.17
10/31/97 (0.10) (0.32) (0.42) 15.89
10/31/96 (1) - - - 13.42
9/30/96 (0.09) (0.15) (0.24) 13.27
Class C 10/31/98 (0.12) (0.67) (0.79) 16.17
10/31/97 (0.11) (0.32) (0.43) 15.90
10/31/96 (1) - - - 13.42
9/30/96 (0.11) (0.15) (0.26) 13.27
9/30/95 (3) (0.05) - (0.05) 11.73
Tactical Asset Allocation
Class A 10/31/98 $(0.21) $(0.73) $(0.94) $13.14
10/31/97 (0.17) (0.04) (0.21) 13.19
10/31/96 (1) - - - 11.19
9/30/96 (0.08) - (0.08) 11.03
Class B 10/31/98 (0.13) (0.73) (0.86) 13.13
10/31/97 (0.09) (0.04) (0.13) 13.18
10/31/96 (1) - - - 11.18
Class C 10/31/98 (0.14) (0.73) (0.87) 13.13
10/31/97 (0.10) (0.04) (0.14) 13.18
10/31/96 (1) - - - 11.18
9/30/96 (0.02) - (0.02) 11.03
Balanced
Class A 10/31/98 (0.15) (1.35) (1.50) 14.75
10/31/97 (0.20) (1.75) (1.95) 14.34
10/31/96 (1) - - - 13.58
9/30/96 (0.21) (0.28) (0.49) 13.47
9/30/95 (3) (0.05) - (0.05) 11.47
Class B 10/31/98 (0.06) (1.35) (1.41) 14.74
10/31/97 (0.12) (1.75) (1.87) 14.33
10/31/96 (1) - - - 13.56
9/30/96 (0.13) (0.28) (0.41) 13.46
Class C 10/31/98 (0.07) (1.35) (1.42) 14.74
10/31/97 (0.13) (1.75) (1.88) 14.33
10/31/96 (1) - - - 13.57
9/30/96 (0.14) (0.28) (0.42) 13.46
9/30/95 (3) (0.01) - (0.01) 11.47
Flexible Income
Class A 10/31/98 (0.62) - (0.62) 9.84
10/31/97 (0.61) - (0.61) 9.75
10/31/96 (1) (0.05) - (0.05) 9.33
9/30/96 (0.58) - (0.58) 9.19
9/30/95 (0.64) - (0.64) 9.17
Class B 10/31/98 (0.56) - (0.56) 9.83
10/31/97 (0.55) - (0.55) 9.75
10/31/96 (1) (0.05) - (0.05) 9.32
9/30/96 (0.52) - (0.52) 9.18
Class C 10/31/98 (0.57) - (0.57) 9.84
10/31/97 (0.56) - (0.56) 9.75
10/31/96 (1) (0.05) - (0.05) 9.32
9/30/96 (0.53) - (0.53) 9.18
9/30/95 (0.59) - (0.59) 9.17
Income Plus
Class A 10/31/98 $(0.70) $(0.22) $(0.92) $10.43
10/31/97 (0.75) (0.10) (0.85) 10.96
10/31/96 (1) (0.06) - (0.06) 10.61
9/30/96 (0.71) - (0.71) 10.41
9/30/95 (0.75) (0.10) (0.85) 10.36
Class B 10/31/98 (0.63) (0.22) (0.85) 10.42
10/31/97 (0.68) (0.10) (0.78) 10.96
10/31/96 (1) (0.06) - (0.06) 10.61
9/30/96 (0.64) - (0.64) 10.40
Class C 10/31/98 (0.64) (0.22) (0.86) 10.42
10/31/97 (0.69) (0.10) (0.79) 10.96
10/31/96 (1) (0.06) - (0.06) 10.61
9/30/96 (0.65) - (0.65) 10.40
9/30/95 (0.69) (0.10) (0.79) 10.35
Tax-Exempt
Class A 10/31/98 (0.48) (0.15) (0.63) 11.94
10/31/97 (0.53) (0.08) (0.61) 11.75
10/31/96 (1) (0.05) - (0.05) 11.40
9/30/96 (0.56) (0.07) (0.63) 11.36
9/30/95 (0.56) (0.04) (0.60) 11.34
Class B 10/31/98 (0.40) (0.15) (0.55) 11.94
10/31/97 (0.45) (0.08) (0.53) 11.74
10/31/96 (1) (0.04) - (0.04) 11.40
9/30/96 (0.49) (0.07) (0.56) 11.36
Class C 10/31/98 (0.45) (0.15) (0.60) 11.94
10/31/97 (0.50) (0.08) (0.58) 11.75
10/31/96 (1) (0.04) - (0.04) 11.40
9/30/96 (0.53) (0.07) (0.60) 11.36
9/30/95 (0.53) (0.04) (0.57) 11.34
Ratios/Supplemental Data
Net Assets,
End of Ratio-Exps to Avg NA (8 & 9)
Total Period Excldng Incldng
Return (7) (000's) Credits GrossCredits
Aggressive Growth
Class A 10/31/98 22.48% $46,413 1.85% 2.18% 1.85%
10/31/97 24.71 31,260 1.85 2.44 1.85
10/31/96 (1) (0.32) 21,938 1.85 2.62 1.85
9/30/96 (2) (4.91) 22,078 1.85 2.60 1.85
9/30/95 (3) 76.80 16,747 2.85 3.35 2.85
Class B 10/31/98 22.04 10,564 2.50 2.83 2.50
10/31/97 24.47 4,880 2.50 3.09 2.50
10/31/96 (1) (0.32) 1,992 2.50 3.27 2.50
9/30/96 (2) (5.33) 1,800 2.50 3.25 2.50
Class C 10/31/98 22.11 5,573 2.40 2.73 2.40
10/31/97 24.50 3,468 2.40 2.99 2.40
10/31/96 (1) (0.32) 2,129 2.40 3.17 2.40
9/30/96 (2) (5.22) 2,250 2.40 3.15 2.40
9/30/95 (3) 76.40 1,736 3.40 3.91 3.40
International Equity
Class A 10/31/98 2.58 4,981 2.03 4.22 2.03
10/31/97 (4) 5.70 3,076 1.70 8.93 1.70
Class B 10/31/98 1.89 1,198 2.68 4.87 2.68
10/31/97 (4) 5.20 589 2.35 9.58 2.35
Class C 10/31/98 1.99 397 2.58 4.77 2.58
10/31/97 (4) 5.30 399 2.25 9.48 2.25
Capital Appreciation
Class A 10/31/98 9.87 23,798 1.85 2.24 1.85
10/31/97 4.09 20,605 1.85 2.66 1.85
10/31/96 (1) (1.59) 19,350 1.85 2.48 1.85
9/30/96 (2) 24.35 18,713 1.85 2.72 1.85
9/30/95 (3) 35.40 6,241 2.90 4.17 2.85
Class B 10/31/98 9.35 3,734 2.50 2.89 2.50
10/31/97 3.56 2,866 2.50 3.31 2.50
10/31/96 (1) (1.66) 2,132 2.50 3.13 2.50
9/30/96 23.63 2,022 2.50 3.37 2.50
Class C 10/31/98 9.43 1,382 2.40 2.79 2.40
10/31/97 3.64 1,751 2.40 3.21 2.40
10/31/96 (1) (1.66) 2,243 2.40 3.03 2.40
9/30/96 (2) 23.81 2,369 2.40 3.27 2.40
9/30/95 (3) 34.90 2,565 3.45 4.72 3.40
Global
Class A 10/31/98 11.30 296,450 1.82 - 1.82
10/31/97 22.72 218,681 1.91 - 1.91
10/31/96 (1) (0.05) 135,837 2.08 - 2.07
9/30/96 25.04 131,347 2.09 - 2.06
9/30/95 15.47 89,397 2.10 - 1.97
Class B 10/31/98 10.93 110,630 2.47 - 2.47
10/31/97 22.53 43,951 2.56 - 2.56
10/31/96 (1) (0.05) 5,966 2.73 - 2.72
9/30/96 24.70 5,000 2.74 - 2.71
Class C 10/31/98 11.08 63,552 2.37 - 2.37
10/31/97 22.72 27,210 2.46 - 2.46
10/31/96 (1) (0.05) 8,624 2.63 - 2.62
9/30/96 24.91 8,081 2.64 - 2.61
9/30/95 15.14 3,567 2.65 - 2.52
Growth
Class A 10/31/98 35.21% $817,749 1.51% - 1.51%
10/31/97 16.40 614,544 1.61 - 1.61
10/31/96 (1) (1.09) 565,032 1.68 - 1.68
9/30/96 22.41 567,564 1.83 - 1.82
9/30/95 36.70 485,935 1.86 - 1.84
Class B 10/31/98 34.96 40,809 2.16 - 2.16
10/31/97 16.11 13,046 2.26 - 2.26
10/31/96 (1) (1.14) 5,242 2.32 - 2.32
9/30/96 21.87 4,536 2.46 - 2.45
Class C 10/31/98 35.00 58,265 2.06 - 2.06
10/31/97 16.19 14,295 2.16 - 2.16
10/31/96 (1) (1.19) 11,016 2.23 - 2.23
9/30/96 22.15 11,167 2.34 - 2.33
9/30/95 36.32 5,593 2.41 - 2.38
Class T 10/31/98 35.53 755,770 1.16 - 1.16
10/31/97 16.54 603,129 1.26 - 1.26
10/31/96 (1) (1.03) 573,884 1.33 - 1.33
9/30/96 (5) 0.81 585,505 1.18 - 1.17
C.A.S.E.
Class A 10/31/98 (14.83) 4,284 1.85 2.44 1.85
10/31/97 (2) 28.31 3,920 1.85 4.62 1.85
10/31/96 (1) 0.96 1,675 1.85 6.79 1.84
9/30/96 (6) 4.60 1,455 2.85 5.89 2.85
Class B 10/31/98 (15.40) 2,460 2.50 3.09 2.50
10/31/97 (2) 27.62 2,436 2.50 5.27 2.50
10/31/96 (1) 0.96 1,159 2.50 7.44 2.49
9/30/96 (6) 4.10 1,100 3.50 6.54 3.50
Class C 10/31/98 (15.31) 879 2.40 2.99 2.40
10/31/97 (2) 27.73 2,028 2.40 5.17 2.40
10/31/96 (1) 0.96 687 2.40 7.34 2.39
9/30/96 (6) 4.20 613 3.40 6.44 3.40
Value Equity
Class A 10/31/98 (4.96) 8,035 1.85 2.51 1.85
10/31/97 (4) 17.14 5,305 1.50 4.05 1.50
Class B 10/31/98 (5.55) 5,020 2.50 3.16 2.50
10/31/97 (4) 16.65 2,850 2.15 4.70 2.15
Class C 10/31/98 (5.46) 2,013 2.40 3.06 2.40
10/31/97 (4) 16.73 1,607 2.05 4.60 2.05
Strategic Total Return
Class A 10/31/98 7.43 32,055 1.85 1.92 1.85
10/31/97 22.80 21,629 1.85 2.28 1.85
10/31/96 (1) 1.20 11,744 1.85 2.76 1.82
9/30/96 16.00 11,314 1.85 2.79 1.79
9/30/95 (3) 18.43 5,167 2.99 4.57 2.85
Class B 10/31/98 6.74 9,789 2.50 2.57 2.50
10/31/97 22.03 4,698 2.50 2.93 2.50
10/31/96 (1) 1.13 1,684 2.50 3.40 2.47
9/30/96 15.38 1,537 2.50 3.44 2.44
Class C 10/31/98 6.85 6,977 2.40 2.47 2.40
10/31/97 22.15 4,332 2.40 2.83 2.40
10/31/96 (1) 1.13 1,792 2.40 3.30 2.37
9/30/96 15.49 1,728 2.40 3.34 2.34
9/30/95 (3) 17.95 281 3.54 5.12 3.40
Tactical Asset Allocation
Class A 10/31/98 7.25% $15,747 1.85% 1.87% 1.85%
10/31/97 19.84 12,291 1.85 2.30 1.85
10/31/96 (1) 1.45 8,396 1.85 2.65 1.85
9/30/96 11.07 7,401 2.85 3.20 2.85
Class B 10/31/98 6.56 14,679 2.50 2.52 2.50
10/31/97 19.08 9,747 2.50 2.95 2.50
10/31/96 (1) 1.45 5,013 2.50 3.30 2.50
Class C 10/31/98 6.67 7,342 2.40 2.42 2.40
10/31/97 19.20 5,088 2.40 2.85 2.40
10/31/96 (1) 1.36 4,758 2.40 3.20 2.40
9/30/96 10.50 4,641 3.40 3.75 3.40
Balanced
Class A 10/31/98 14.69 22,995 1.85 2.04 1.85
10/31/97 22.96 13,414 1.85 2.88 1.85
10/31/96 (1) 0.81 8,402 1.85 3.44 1.85
9/30/96 22.12 8,056 1.85 3.11 1.85
9/30/95 (3) 15.27 3,670 2.92 4.48 2.85
Class B 10/31/98 13.97 11,916 2.50 2.69 2.50
10/31/97 22.19 2,583 2.50 3.53 2.50
10/31/96 (1) 0.74 878 2.50 4.09 2.50
9/30/96 21.38 687 2.50 3.76 2.50
Class C 10/31/98 14.08 4,897 2.40 2.59 2.40
10/31/97 22.31 1,561 2.40 3.43 2.40
10/31/96 (1) 0.81 967 2.40 3.99 2.40
9/30/96 21.49 943 2.40 3.66 2.40
9/30/95 (3) 14.77 3,365 3.47 5.03 3.40
Flexible Income
Class A 10/31/98 7.43 14,970 1.83 - 1.83
10/31/97 11.53 15,532 1.85 2.40 1.85
10/31/96 (1) 2.08 17,001 1.85 2.98 1.85
9/30/96 6.73 17,065 1.85 2.07 1.85
9/30/95 11.57 19,786 1.87 1.94 1.85
Class B 10/31/98 6.74 2,387 2.48 - 2.48
10/31/97 10.79 746 2.50 3.05 2.50
10/31/96 (1) 2.04 522 2.50 3.63 2.50
9/30/96 5.94 494 2.50 2.72 2.50
Class C 10/31/98 6.84 2,207 2.38 - 2.38
10/31/97 10.91 928 2.40 2.95 2.40
10/31/96 (1) 2.04 846 2.40 3.53 2.40
9/30/96 6.03 883 2.40 2.62 2.40
9/30/95 10.95 558 2.42 2.49 2.40
Income Plus
Class A 10/31/98 3.54% $63,494 1.24% - 1.24%
10/31/97 11.86 65,612 1.27 - 1.27
10/31/96 (1) 2.53 66,285 1.33 - 1.32
9/30/96 7.64 65,252 1.33 - 1.31
9/30/95 15.85 68,746 1.29 - 1.26
Class B 10/31/98 2.87 5,041 1.89 - 1.89
10/31/97 11.10 1,761 1.92 - 1.92
10/31/96 (1) 2.59 804 1.98 - 1.97
9/30/96 6.95 774 1.98 - 1.96
Class C 10/31/98 2.97 4,073 1.79 - 1.79
10/31/97 11.22 3,480 1.82 - 1.82
10/31/96 (1) 2.59 2,781 1.88 - 1.87
9/30/96 7.05 2,684 1.88 - 1.86
9/30/95 15.08 1,980 1.84 - 1.81
Tax-Exempt
Class A 10/31/98 7.19 22,313 1.23 1.27 1.23
10/31/97 8.68 23,320 1.00 1.63 1.00
10/31/96 (1) 0.76 24,439 1.00 1.89 1.00
9/30/96 5.89 24,708 1.00 1.46 1.00
9/30/95 7.75 27,401 1.02 1.35 1.00
Class B 10/31/98 6.50 654 1.88 1.92 1.88
10/31/97 7.93 377 1.65 2.28 1.65
10/31/96 (1) 0.71 198 1.65 2.54 1.65
9/30/96 5.21 189 1.65 2.11 1.65
Class C 10/31/98 6.92 1,607 1.48 1.52 1.48
10/31/97 8.39 921 1.25 1.88 1.25
10/31/96 (1) 0.74 939 1.25 2.14 1.25
9/30/96 5.63 907 1.25 1.71 1.25
9/30/95 7.48 454 1.27 1.60 1.25
Net Invment
Inc (Loss) Portfolio
to Avg Turnover
NA (9) Rate (10)
Aggressive Growth
Class A 10/31/98 (1.11)% 142.08%
10/31/97 (1.07) 120.96
10/31/96 (1) (1.06) 9.40
9/30/96 (2) (1.15) 127.49
9/30/95 (3) (2.39) 88.28
Class B 10/31/98 (1.76) 142.08
10/31/97 (1.71) 120.96
10/31/96 (1) (1.71) 9.40
9/30/96 (2) (1.80) 127.49
Class C 10/31/98 (1.66) 142.08
10/31/97 (1.62) 120.96
10/31/96 (1) (1.62) 9.40
9/30/96 (2) (1.70) 127.49
9/30/95 (3) (2.94) 88.28
International Equity
Class A 10/31/98 (0.21) 50.01
10/31/97 (4) 0.19 21.85
Class B 10/31/98 (0.86) 50.01
10/31/97 (4) (0.45) 21.85
Class C 10/31/98 (0.76) 50.01
10/31/97 (4) (0.35) 21.85
Capital Appreciation
Class A 10/31/98 (1.37) 136.59
10/31/97 (1.27) 130.48
10/31/96 (1) (1.41) 10.11
9/30/96 (2) (0.35) 160.72
9/30/95 (3) 0.75 262.97
Class B 10/31/98 (2.02) 136.59
10/31/97 (1.92) 130.48
10/31/96 (1) (2.06) 10.11
9/30/96 (1.00) 160.72
Class C 10/31/98 (1.92) 136.59
10/31/97 (1.82) 130.48
10/31/96 (1) (1.96) 10.11
9/30/96 (2) (0.90) 160.72
9/30/95 (3) 0.20 262.97
Global
Class A 10/31/98 (0.45) 87.68
10/31/97 (0.50) 91.02
10/31/96 (1) (1.15) 2.59
9/30/96 (0.67) 97.94
9/30/95 (0.43) 161.48
Class B 10/31/98 (1.10) 87.68
10/31/97 (1.15) 91.02
10/31/96 (1) (1.80) 2.59
9/30/96 (1.32) 97.94
Class C 10/31/98 (1.00) 87.68
10/31/97 (1.05) 91.02
10/31/96 (1) (1.70) 2.59
9/30/96 (1.22) 97.94
9/30/95 (0.98) 161.48
Growth
Class A 10/31/98 (0.55)% 27.19%
10/31/97 (0.10) 91.52
10/31/96 (1) (0.13) 9.40
9/30/96 (0.22) 57.80
9/30/95 (0.26) 123.26
Class B 10/31/98 (1.20) 27.19
10/31/97 (0.75) 91.52
10/31/96 (1) (0.78) 9.40
9/30/96 (0.86) 57.80
Class C 10/31/98 (1.10) 27.19
10/31/97 (0.65) 91.52
10/31/96 (1) (0.68) 9.40
9/30/96 (0.77) 57.80
9/30/95 (0.81) 123.26
Class T 10/31/98 (0.20) 27.19
10/31/97 0.25 91.52
10/31/96 (1) (0.20) 9.40
9/30/96 (5) 0.36 57.80
C.A.S.E.
Class A 10/31/98 (0.73) 147.01
10/31/97 (2) (0.34) 183.06
10/31/96 (1) 0.27 20.69
9/30/96 (6) 10.00 654.49
Class B 10/31/98 (1.38) 147.01
10/31/97 (2) (0.99) 183.06
10/31/96 (1) 0.38 20.69
9/30/96 (6) 9.35 654.49
Class C 10/31/98 (1.28) 147.01
10/31/97 (2) (0.89) 183.06
10/31/96 (1) 0.28 20.69
9/30/96 (6) 9.45 654.49
Value Equity
Class A 10/31/98 0.00 30.43
10/31/97 (4) 0.38 6.40
Class B 10/31/98 (0.65) 30.43
10/31/97 (4) (0.28) 6.40
Class C 10/31/98 (0.55) 30.43
10/31/97 (4) (0.18) 6.40
Strategic Total Return
Class A 10/31/98 1.30 32.12
10/31/97 1.41 51.44
10/31/96 (1) 1.47 5.50
9/30/96 1.67 40.58
9/30/95 (3) 0.85 34.67
Class B 10/31/98 0.65 32.12
10/31/97 0.76 51.44
10/31/96 (1) 0.82 5.50
9/30/96 1.02 40.58
Class C 10/31/98 0.75 32.12
10/31/97 0.86 51.44
10/31/96 (1) 0.92 5.50
9/30/96 1.12 40.58
9/30/95 (3) 0.30 34.67
Tactical Asset Allocation
Class A 10/31/98 1.82% 55.45%
10/31/97 1.57 71.63
10/31/96 (1) 1.26 2.38
9/30/96 0.72 56.22
Class B 10/31/98 1.17 55.45
10/31/97 0.92 71.63
10/31/96 (1) 0.61 2.38
Class C 10/31/98 1.27 55.45
10/31/97 1.02 71.63
10/31/96 (1) 0.71 2.38
9/30/96 0.17 56.22
Balanced
Class A 10/31/98 1.12 61.50
10/31/97 1.29 127.08
10/31/96 (1) 1.84 9.08
9/30/96 1.87 175.78
9/30/95 (3) 0.56 82.48
Class B 10/31/98 0.47 61.50
10/31/97 0.64 127.08
10/31/96 (1) 1.18 9.08
9/30/96 1.22 175.78
Class C 10/31/98 0.57 61.50
10/31/97 0.74 127.08
10/31/96 (1) 1.28 9.08
9/30/96 1.32 175.78
9/30/95 (3) 0.01 82.48
Flexible Income
Class A 10/31/98 6.22 90.63
10/31/97 6.41 135.53
10/31/96 (1) 6.15 16.16
9/30/96 6.46 135.38
9/30/95 7.03 149.58
Class B 10/31/98 5.57 90.63
10/31/97 5.76 135.53
10/31/96 (1) 5.50 16.16
9/30/96 5.81 135.38
Class C 10/31/98 5.67 90.63
10/31/97 5.86 135.53
10/31/96 (1) 5.60 16.16
9/30/96 5.91 135.38
9/30/95 6.48 149.58
Income Plus
Class A 10/31/98 6.38% 53.09%
10/31/97 7.14 62.28
10/31/96 (1) 5.60 1.58
9/30/96 6.89 65.96
9/30/95 7.53 25.07
Class B 10/31/98 5.73 53.09
10/31/97 6.49 62.28
10/31/96 (1) 4.95 1.58
9/30/96 6.24 65.96
Class C 10/31/98 5.83 53.09
10/31/97 6.59 62.28
10/31/96 (1) 5.05 1.58
9/30/96 6.34 65.96
9/30/95 6.98 25.07
Tax-Exempt
Class A 10/31/98 4.08 42.42
10/31/97 4.60 71.29
10/31/96 (1) 4.60 3.79
9/30/96 4.88 71.05
9/30/95 4.83 126.48
Class B 10/31/98 3.43 42.42
10/31/97 3.95 71.29
10/31/96 (1) 3.94 3.79
9/30/96 4.23 71.05
Class C 10/31/98 3.83 42.42
10/31/97 4.35 71.29
10/31/96 (1) 4.34 3.79
9/30/96 4.63 71.05
9/30/95 4.58 126.48
Notes to Financial Highlights
(1) For the month ended October 31, 1996. On October 1, 1996, each
Portfolio changed its fiscal year end from September 30 to October 31.
(2) Distributions from net realized capital gains include distributions
in excess of current net realized capital gains for the Aggressive Growth
Portfolio Classes A, B and C, for the period ended 9/30/96, in the amount
of $1.02 and for the Global Portfolio Classes A, B and C, for the period
ended 10/31/98 in the amount of $0.15. Dividends from net investment
income include distributions in excess of current net investment income for
the International Equity Portfolio Classes A, B and C, for the period ended
10/31/98 in the amount of $0.06, $0.01 and $0.02, respectively and for the
Capital Appreciation Portfolio Classes A and C, for the period ended
9/30/96 in the amount of $.01 and for the Growth Portfolio Class T for the
period ended 10/31/98 in the amount of $0.03 and for the C.A.S.E. Portfolio
Classes A, B and C, for the period ended 10/31/97 in the amount of $.08.
(3) From commencement of investment operations, December 2, 1994.
(4) From commencement of investment operations, February 1, 1997.
(5) From commencement of investment operations, September 20, 1996.
(6) From commencement of investment operations, February 1, 1996.
(7) Total return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase for Class A or
Class T Shares. Periods of less than one year are not annualized.
(8) Ratio of expenses to average net assets shows:
Excluding Credits (total expenses less fee waivers and reimbursements by
the investment adviser).
Gross (total expenses not taking into account fee waivers and
reimbursements by the investment adviser or affiliated brokerage and
custody earnings credits, if any).
Including Credits (expenses less fee waivers and reimbursements by the
investment adviser and reduced by affiliated brokerage and custody earnings
credits, if any).
(9) Periods of less than one year are annualized. The ratio of Net
Investment Income (Loss) to Average Net Assets is based upon Net Investment
Income (Loss) prior to certain reclassifications as discussed in Note 1 of
the Notes to the Financial Statements.
(10) Periods of less than one year are not annualized.
The notes to the financial statements are an integral part of these
statements.
NOTE 1. Organization and significant accounting policies:
IDEX Series Fund (the "Fund") is a Massachusetts business trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end management investment company. The Fund is comprised of
thirteen portfolios (each a "Portfolio" and collectively the "Portfolios").
All Portfolios are diversified except Capital Appreciation.
Multiple class operations: The Portfolios offer for sale three classes of
shares (four classes for Growth), each with a public offering price that
reflects different sales charges, if any, and expense levels. Income, non-
class specific expenses and realized and unrealized gains and losses are
allocated daily to each class based upon a simultaneous equation
methodology as permitted under Rule 18f-3 of the 1940 Act. Growth Class T
is closed to new shareholders.
The following policies were consistently followed by the Portfolios, in
accordance with generally accepted accounting principles ("GAAP"). In
preparing the Portfolios' financial statements in accordance with GAAP,
estimates or assumptions (which could differ from actual results) may be
used that affect reported amounts and disclosures.
Security valuations: Portfolio investments traded on an exchange are stated
at the last reported sales price on the day of valuation on the exchange
where the security is principally traded. Securities traded in the over-
the-counter market and listed securities for which no sale was reported on
that date are valued at the last quoted bid price. Debt securities are
valued by independent pricing services, however, those that mature in sixty
days or less are valued at amortized cost, which approximates market. Other
securities for which quotations are not readily available are valued at
fair value determined in such a manner as the sub-advisers, under the
supervision of the Board of Trustees, determine in good faith.
Security transactions and related investment income: Security transactions
are accounted for on the trade date. Security gains and losses are
calculated on the specific identification basis. Dividend income is
recorded on the ex-dividend date except those of foreign securities which
are recorded as soon as the Portfolio is informed of the ex-dividend date.
Interest income, adjusted for discounts and premiums, is recorded on the
accrual basis commencing on the settlement date.
Foreign currency translation: The accounting records of the Portfolios are
maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is
translated at the exchange rate in effect when the investment was acquired.
The Portfolios combine fluctuations from currency exchange rates and
fluctuations in market value when computing net realized and unrealized
gain or loss from investments. Net foreign currency gains and losses
resulting from changes in exchange rates include foreign currency
fluctuations between trade date and settlement date of investment security
transactions, gains and losses on forward foreign currency contracts and
the difference between the receivable amounts of interest and dividends
recorded in the accounting records in U.S. dollars and the amounts actually
received. Foreign denominated assets may involve risks not typically
associated with domestic transactions, including unanticipated movements in
exchange rates, the degree of government supervision and regulation of
security markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Portfolios (except Income Plus and
Tax-Exempt) may enter into forward foreign currency contracts to hedge
against exchange rate risk arising from investments in securities
denominated in foreign currencies. Contracts are valued at the contractual
forward rate and are marked to market daily, with the change in market
value recorded as an unrealized gain or loss. When the contracts are
closed, a realized gain or loss is incurred. Risks may arise from changes
in market value of the underlying instruments and from the possible
inability of counter parties to meet the terms of their contracts.
Futures contracts: The Portfolios (except Income Plus and Tax-Exempt) may
enter into futures contracts to manage exposure to market, interest rate or
currency fluctuations. Contracts are valued at the settlement price
established each day by the board of trade or exchange on which they are
traded. The primary risk associated with the use of futures contracts is
imperfect correlation between the change in the value of the contracts and
the market value of the securities held by a Portfolio.
Federal taxes: No provisions for Federal income or excise taxes have been
made as the Portfolios intend to distribute all income and realized gains
to shareholders and otherwise qualify as regulated investment companies
under the Internal Revenue Code.
Dividend distributions and expenses: Distributions to shareholders are
recorded on the ex-dividend date and are determined in accordance with
Federal income tax regulations which may differ from GAAP. Each Portfolio
bears its own specific expenses as well as a portion of general common
expenses.
Reclassifications are made to each Portfolio's components of net assets to
reflect income and gains available for distribution (or available capital
loss carryforwards) under Federal income tax regulations. Certain
reclassification adjustments are made among undistributed net investment
income, undistributed net realized gains and shares of beneficial interest
due to different book and tax accounting for such items as wash sales,
foreign currency transactions, net operating losses and capital loss
carryforwards.
NOTE 2. Fees, earnings credits and related party transactions:
Idex Management, Inc. ("IMI") is the investment adviser for Capital
Appreciation, Global, Growth, Balanced and Flexible Income;
InterSecurities, Inc. ("ISI") is the investment adviser for Aggressive
Growth, International Equity, C.A.S.E., Value Equity, Tactical Asset
Allocation, Strategic Total Return, Income Plus and Tax-Exempt. ISI is the
Portfolios' underwriter. Idex Investor Services, Inc. ("IIS") is the
Portfolios' transfer agent. IMI, ISI and IIS are 100% owned by AUSA Holding
Company ("AUSA"). AUSA is a wholly owned indirect subsidiary of AEGON NV, a
Netherlands corporation.
Investment advisory and distribution and service fees: The Portfolios pay
management fees based upon average daily net assets to their respective
investment advisers which will reimburse the Portfolios to the extent that
certain operating expenses exceed the stated annual limitation, if any. The
Portfolios (except Growth Class T) have a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net
assets, is paid to ISI for various disbursements such as broker-dealer
account servicing fees and other promotional expenses of the Portfolios.
The 12b-1 fee for all Portfolios is comprised of a 0.25% service fee and
the remaining amount is an asset-based sales charge/distribution fee. IMI
and ISI have entered into sub-advisory agreements with various management
companies to provide investment services to the Portfolios. The advisers
compensate the sub-advisers as described in the Prospectus. AEGON USA
Investment Management, Inc. and Scottish Equitable Investment Management
Limited are affiliates of the Fund and are sub-advisers to certain
Portfolios.
Management fees paid IMI and ISI for their services and other information
for the year ended October 31, 1998 are as follows:
Annual Rates Underwriter Commissions (3)
Exp
Limit
(excl Class Class Class
12b-1 A B C Received Retained Contngnt
Mgmt fees) 12b-1 12b-1 12b-1 by by Sales
Fee (2) Fee Fee Fee ISI ISI Charge
Aggressive
Growth 1.000% 1.50% 0.35% 1.00% 0.90% $ 449,078$ 64,099$ 17,424
International
Equity 1.000% 1.75% 0.35% 1.00% 0.90% 64,234 9,250 2,521
Capital
Apprectn 1.000% 1.50% 0.35% 1.00% 0.90% 164,358 26,358 6,522
Global 1.000%-none- 0.35% 1.00% 0.90% 2,784,651 401,257 35,608
Growth 0.825% 1.50% 0.35% 1.00% 0.90% 2,848,238 424,803 29,058
C.A.S.E. 1.000% 1.50% 0.35% 1.00% 0.90% 70,063 9,325 7,348
Value
Equity 1.000% 1.50% 0.35% 1.00% 0.90% 172,567 25,433 5,644
Strategic
Total Rtn 1.000% 1.50% 0.35% 1.00% 0.90% 419,778 67,470 12,563
Tactical
Asset Alloc 1.000% 1.50% 0.35% 1.00% 0.90% 186,182 28,499 22,720
Balanced 1.000% 1.50% 0.35% 1.00% 0.90% 344,872 34,919 5,585
Flexible
Income 0.875% 1.50% 0.35% 1.00% 0.90% 40,463 1,530 4,657
Income Plus 0.600% 1.25% 0.35% 1.00% 0.90% 165,033 21,369 4,122
Tax-Exempt 0.600% 1.00% 0.35% 1.00% 0.60% 30,201 5,356 1,679
(1) The rates for Growth are 1.000% on the first $750 million in average
net assets, 0.900% on the next $250 million and 0.850% thereafter. Also,
the adviser voluntarily waived fees in the amount of .025% on average net
assets between $100 and $500 million, .075% on the next 250 million and
.025% thereafter. The rate for Flexible Income applies to the first $100
million in average net assets and includes a .025% voluntary fee waiver by
the adviser. The rates for the remaining Portfolios apply to the first
$750 million in average net assets.
(2) International Equity and Tax-Exempt's expense limit was 1.50% and
0.65%, respectively, for the three months ended February 28, 1998,
increasing to 1.75% and 1.00%, respectively, thereafter.
(3) Underwriter commissions relate only to front-end sales charges imposed
for Class A and Class T shares and contingent deferred sales charges result
from Class B share redemptions.
Transfer agency fees and expenses: Each Portfolio incurs IIS annual per-
account charges of $16.02 for each open shareholder account, $2.79 for each
new account opened, $1.67 for each closed account maintained, and certain
out-of-pocket expenses.
Custody earnings credits: Investors Fiduciary Trust Company ("IFTC") is
custodian for the Portfolios. Custody earnings credits represent reductions
in IFTC's fees in lieu of interest income earned on incidental uninvested
cash balances. Such credits have been added back to custody fees to reflect
total gross expenses of the Portfolios as applicable. No such credits were
received for the year ended October 31, 1998.
Brokerage commissions: Brokerage commissions incurred by Aggressive Growth
on security transactions placed with an affiliate of its sub-adviser
totaled $154,866 for the year ended October 31, 1998.
Deferred compensation plan: Each eligible Fund trustee may elect
participation in the Deferred Compensation Plan ("the Plan"). Under the
Plan, such trustees may defer payment of a percentage of their total fees
earned as a Fund trustee. These deferred amounts may be invested in any
Portfolio. Contributions made under the Plan and appreciation
(depreciation) and income of Plan assets are included in Trustees fees and
expenses. At October 31, 1998, invested plan amounts are included in Other
Assets, and the total liability for deferred compensation to trustees is
included in Other Liabilities as follows:
Aggressive Growth $ 6,001 Strategic Total Return $ 4,669
International Equity 632 Tactical Asset Allocation 3,623
Capital Appreciation 2,776 Balanced 3,804
Global 45,127 Flexible Income 1,866
Growth 160,408 Income Plus 7,033
C.A.S.E. 731 Tax-Exempt 2,357
Value Equity 1,443 Total $ 240,470
NOTE 3. Investment transactions:
The cost of securities purchased and proceeds from securities sold
(excluding non-U.S. Government short-term securities) for the year ended
October 31, 1998 were as follows:
Non-U.S. Non-U.S. U.S. U.S.
Government Government Government Government
Purchases Sales Purchases Sales
Aggressive Growth $ 81,673,825 $ 70,058,493 $ 270,256$ 505,567
International Equity 4,929,345 2,508,981 - -
Capital Appreciation 38,057,868 36,274,657 178,101,921 177,541,950
Global 400,327,025 317,213,299 243,857,163 174,648,744
Growth 379,179,299 599,919,325 437,518,889290,518,586
C.A.S.E. 12,567,584 11,553,402 - -
Value Equity 8,109,973 3,622,505 3,933,6682,000,000
Strategic Total Return 24,712,989 10,416,942 3,872,7162,154,506
Tactical Asset Allocation 18,144,278 12,572,751 9,108,180 4,184,703
Balanced 29,519,278 13,323,610 251,101,162 247,558,406
Flexible Income 12,214,774 14,022,158 176,349,224 171,680,768
Income Plus 41,664,852 34,118,722 3,062,3443,098,438
Tax-Exempt 10,054,010 10,778,530 - -
NOTE 4. Shares of beneficial interest transactions (all amounts in
thousands):
Aggressive Growth International Equity
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
Proceeds from shares sold
Class A 863 $16,990 856 $15,228 63 $711 299 $3,192
Class B 95 1,870 151 2,597 22 239 59 647
Class C 83 1,642 108 1,867 11 121 50 567
Shares issued on reinvestment of distributions
Class A 57 $1,001 60 $932 2 $20 - $-
Class B 9 161 6 90 - 1 - -
Class C 6 110 6 95 - 1 - -
Cost of shares repurchased
Class A (642) $(12,679) (647) $(11,361) (19) $(216) (8) $(84)
Class B (25) (494) (22) (373) (4) (46) (3) (36)
Class C (53) (1,068) (65) (1,078) (8) (86) (12) (142)
Capital Appreciation Global
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
Proceeds from shares sold
Cls A 1,096 $18,325 2,282 $33,846 4,063 97,864 6,033135,749
Cls B 28 462 99 1,447 858 20,555 1,616 36,594
Cls C 14 229 65 943 773 18,235 841 18,979
Shares issued on reinvestment of distributions
Cls A 38 $585 18 $268 866 18,617 679 13,478
Cls B 5 81 2 31 192 4,048 38 737
Cls C 3 46 2 31 119 2,507 49 954
Cost of shares repurchased
Cls A (1,073) (18,019) (2,253) (33,424) (3,416)(83,054) (3,849)(87,573)
Cls B (24) (399) (57) (827) (121) (2,845) (56) (1,307)
Cls C (40) (662) (101) (1,485) (128) (3,035) (132) (2,934)
Growth C.A.S.E.
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
Proceeds from shares sold
Cls A 3,784 $93,048 7,142 $167,262 142 $1,750 206 $2,482
Cls B 211 5,205 330 7,645 52 651 114 1,352
Cls C 163 4,082 298 6,873 34 410 154 1,821
Cls T 691 17,682 1,555 36,454
Shares issued on reinvestment of distributions
Cls A 3,622 78,048 523 $11,526 30 339 9 $87
Cls B 89 1,872 6 127 17 191 5 44
Cls C 91 1,924 12 252 14 155 4 42
Cls T 3550 77,497 531 11,812
Cost of shares repurchased
Cls A (4,491)(111,166) (8,843)(207,496) (79) (974) (69) $(794)
Cls B (50) (1,226) (48) (1,121) (28) (349) (39) (439)
Cls C (97) (2,399) (238) (5,543) (55) (647) (65) (738)
Cls T (1,786)(44,488) (4,132) (98,115)
Value Equity Strategic Total Return
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
Proceeds from shares sold
Class A 302 $3,669 524 $5,686 436 $7,159 617 $9,130
Class B 107 1,321 249 2,700 157 2,596 196 2,958
Class C 89 1,092 155 1,708 159 2,636 199 2,996
Shares issued on reinvestment of distributions
Class A 2 $22 - $- 65 $1,015 35 $490
Class B 1 11 - - 14 214 4 60
Class C 1 7 - - 12 195 5 65
Cost of shares repurchased
Class A (74) $(915) (71) $(799) (136) $(2,236) (167) (2,459)
Class B (11) (138) (5) (54) (24) (407) (29) (444)
Class C (31) (379) (17) (193) (52) (875) (64) (955)
Tactical Asset Allocation Balanced
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
Proceeds from shares sold
Class A 240 $3,175 511 $6,308 313 $4,371 352 $4,647
Class B 269 3,555 397 4,885 118 1,635 132 1,732
Class C 196 2,564 275 3,406 103 1,449 62 813
Shares issued on reinvestment of distributions
Class A 62 $774 14 $163 106 $1,359 103 $1,251
Class B 48 607 6 72 20 262 11 133
Class C 26 331 4 52 12 159 10 119
Cost of shares repurchased
Class A (131) $(1,723) (343) $(4,180) (83) $(1,156) (139) $(1,816)
Class B (107) (1,422) (112) (1,379) (12) (171) (28) (364)
Class C (89) (1,176) (318) (3,798) (37) (520) (34) (437)
Flexible Income Income Plus
Year Ended Year Ended Year Ended Year Ended
10/31/98 10/31/97 10/31/98 10/31/97
Shares Amount Shares Amount Shares Amount Shares Amount
Proceeds from shares sold
Class A 60 $585 109 $1,032 1,261 $13,586 558 $5,959
Class B 19 196 30 285 106 1,140 108 1,147
Class C 56 549 53 507 165 1,787 284 3,033
Shares issued on reinvestment
of distributions
Class A 38 $378 84 $791 253 $2,722 360 $3,818
Class B 2 20 3 30 7 78 6 64
Class C 3 33 5 45 17 183 18 189
Cost of shares repurchased
Class A (247) $(2,427) (423) $(3,984) (1,450)(15,605) (1,179) (12,535)
Class B (6) (62) (12) (121) (7) (74) (29) (306)
Class C (47) (467) (54) (509) (88) (948) (246) (2,617)
Tax-Exempt
Year Ended Year Ended
10/31/98 10/31/97
Shares Amount Shares Amount
Proceeds from shares sold
Class A 378 $4,499 85 $984
Class B 6 74 14 167
Class C 11 124 45 522
Shares issued on reinvestment
of distributions
Class A 46 $541 74 $843
Class B 1 8 1 7
Class C 19 227 3 31
Cost of shares repurchased
Class A (458) $(5,433) (318) $(3,643)
Class B (5) (57) (1) (5)
Class C (33) (392) (52) (591)
IDEX SERIES FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)
April 30, 1998
NOTE 5. Information for Federal income tax purposes:
At October 31, 1998:
Cost Unrealized Unrealized Net Unrlzd
of Apprciation Dpreciation Apprciatn
securitiesof Invstmnts of Invstmnts (Dprciatn)
Aggressive Growth $ 47,734,362 $ 13,728,630 $ (171,087) 13,557,543
International Equity 6,230,801 764,124 (497,749) 266,375
Capital Appreciation 26,156,331 4,263,695 (812,295) 3,451,400
Global 426,161,090 86,386,931 (14,965,249) 71,421,682
Growth 901,089,039 767,751,201 (4,767,727)762,983,474
C.A.S.E. 9,071,541 371,201 (1,838,370) (1,467,169)
Value Equity 15,857,879 1,040,146 (1,865,872) (825,726)
Strategic Total Return 43,344,866 6,747,405 (1,452,561) 5,294,844
Tactical Asset Allocation 35,491,932 4,169,873 (2,040,140) 2,129,733
Balanced 35,405,538 4,796,803 (528,811) 4,267,992
Flexible Income 18,712,544 786,396 (110,842) 675,554
Income Plus 72,262,201 2,379,625 (2,725,358) (345,733)
Tax-Exempt 22,883,094 1,186,195 (16,215) 1,169,980
Realized net capital gains available to distribute will be paid to
shareholders in December 1998. Capital loss carryforwards utilized and
expired during the year ended October 31, 1998 for the Flexible Income
Portfolio were $241,943 and 238,976, respectively.
The following Portfolios have capital loss carryforwards available through
the date specified to offset future realized net capital gains.
International Equity $ 28,802 October 31, 2005
285,629 October 31, 2006
Global 4,732,928 October 31, 2006
Flexible Income 188,609 October 31, 2002
These Portfolios will make net capital gain distributions in future years
to the extent that net capital gains are realized in excess of available
loss carryforwards.
IDEX SERIES FUND
Report of Independent Accountants
To the Trustees and Shareholders of
IDEX Series Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of each of
the portfolios constituting IDEX Series Fund (hereafter referred to as the
"Fund") at October 31, 1998, the results of each of their operations, the
changes in each of their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at October 31,
1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
December 10, 1998
IDEX SERIES FUND
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION (continued)
October 31, 1998
(unaudited)
The following dividend information for the period ended October 31, 1998,
is being provided according to notice requirements under Internal Revenue
Code section 852; however, refer to form 1099-DIV information to prepare
income tax returns.
Record Ordinary Long-term
Date Total Income Capital Gain
Aggressive Growth - A, B & C
12/19/97 0.57740 - 0.57740
Capital Appreciation - A, B & C
12/19/97 0.45125 - 0.45125
Global - A, B & C
12/19/97 2.07020 0.90588 1.16432
Growth - A, B & C
12/19/97 3.31110 - 3.31110
Growth - Class T
12/19/97 3.34538 0.03428 3.31110
C.A.S.E. - A, B & C
12/19/97 0.94542 0.84059 0.10483
International Equity - A, B & C
12/19/97 0.06756 0.06756 -
Value Equity - A, B & C
12/19/97 0.04379 0.04379 -
Tactical Asset Allocation - A
12/19/97 0.79507 0.54070 0.25437
3/13/98 0.03559 0.03559 -
6/12/98 0.04846 0.04846 -
9/14/98 0.06238 0.06238 -
0.94150 0.68713 0.25437
Tactical Asset Allocation - B
12/19/97 0.77188 0.51751 0.25437
3/13/98 0.01692 0.01692 -
6/12/98 0.02666 0.02666 -
9/14/98 0.04100 0.04100 -
0.85646 0.60209 0.25437
Tactical Asset Allocation - C
12/19/97 0.77545 0.52108 0.25437
3/13/98 0.01979 0.01979 -
6/12/98 0.03001 0.03001 -
9/14/98 0.04429 0.04429 -
0.86954 0.61517 0.25437
Strategic Total Return - A
12/19/97 0.69017 0.21791 0.47226
3/13/98 0.03492 0.03492 -
6/12/98 0.10052 0.04552 0.05500
9/14/98 0.04938 0.04938 -
0.87499 0.34773 0.52726
Strategic Total Return - B
12/19/97 0.66234 0.19008 0.47226
3/13/98 0.01158 0.01158 -
6/12/98 0.07337 0.01837 0.05500
9/14/98 0.02263 0.02263 -
0.76992 0.24266 0.52726
Strategic Total Return - C
12/19/97 0.66662 0.19436 0.47226
3/13/98 0.01517 0.01517 -
6/12/98 0.07755 0.02255 0.05500
9/14/98 0.02675 0.02675 -
0.78609 0.25883 0.52726
Balanced - A
12/19/97 1.39581 0.84950 0.54631
3/13/98 0.02994 0.02994 -
6/12/98 0.03592 0.03592 -
9/14/98 0.02973 0.02973 -
1.49140 0.94509 0.54631
Balanced - B
12/19/97 1.37158 0.82527 0.54631
3/13/98 0.01072 0.01072 -
6/12/98 0.01297 0.01297 -
9/14/98 0.00669 0.00669 -
1.40196 0.85565 0.54631
Balanced - C
12/19/97 1.37531 0.82900 0.54631
3/13/98 0.01368 0.01368 -
6/12/98 0.01650 0.01650 -
9/14/98 0.01024 0.01024 -
1.41573 0.86942 0.54631
Record Ordinary Long-term
Date Total Income Capital Gain
Flexible Income - A
11/14/97 0.05460 0.05460 -
12/19/97 0.08121 0.08121 -
1/14/98 0.03239 0.03239 -
2/13/98 0.05626 0.05626 -
3/13/98 0.05145 0.05145 -
4/14/98 0.04823 0.04823 -
5/14/98 0.05236 0.05236 -
6/12/98 0.05631 0.05631 -
7/14/98 0.04922 0.04922 -
8/14/98 0.05583 0.05583 -
9/14/98 0.04248 0.04248 -
10/14/98 0.04282 0.04282 -
0.62316 0.62316 -
Flexible Income - B
11/14/97 0.04890 0.04890 -
12/19/97 0.07515 0.07515 -
1/14/98 0.02822 0.02822 -
2/13/98 0.05045 0.05045 -
3/13/98 0.04668 0.04668 -
4/14/98 0.04294 0.04294 -
5/14/98 0.04707 0.04707 -
6/12/98 0.05087 0.05087 -
7/14/98 0.04391 0.04391 -
8/14/98 0.05000 0.05000 -
9/14/98 0.03737 0.03737 -
10/14/98 0.03757 0.03757 -
0.55913 0.55913 -
Flexible Income - C
11/14/97 0.04978 0.04978 -
12/19/97 0.07608 0.07608 -
1/14/98 0.02886 0.02886 -
2/13/98 0.05134 0.05134 -
3/13/98 0.04741 0.04741 -
4/14/98 0.04376 0.04376 -
5/14/98 0.04789 0.04789 -
6/12/98 0.05171 0.05171 -
7/14/98 0.04472 0.04472 -
8/14/98 0.05089 0.05089 -
9/14/98 0.03816 0.03816 -
10/14/98 0.03838 0.03838 -
0.56898 0.56898 -
Income Plus - A
11/14/97 0.06978 0.06978 -
12/19/97 0.32066 0.20472 0.11594
1/14/98 0.02284 0.02284 -
2/13/98 0.05356 0.05356 -
3/13/98 0.05048 0.05048 -
4/14/98 0.06301 0.06301 -
5/14/98 0.06095 0.06095 -
6/12/98 0.04965 0.04965 -
7/14/98 0.05561 0.05561 -
8/14/98 0.05747 0.05747 -
9/14/98 0.04977 0.04977 -
10/14/98 0.06113 0.06113 -
0.91491 0.79897 0.11594
Income Plus - B
11/14/97 0.06338 0.06338 -
12/19/97 0.31384 0.19790 0.11594
1/14/98 0.01826 0.01826 -
2/13/98 0.04720 0.04720 -
3/13/98 0.04527 0.04527 -
4/14/98 0.05726 0.05726 -
5/14/98 0.05521 0.05521 -
6/12/98 0.04376 0.04376 -
7/14/98 0.04983 0.04983 -
8/14/98 0.05117 0.05117 -
9/14/98 0.04425 0.04425 -
10/14/98 0.05547 0.05547 -
0.84490 0.72896 0.11594
Income Plus - C
11/14/97 0.06436 0.06436 -
12/19/97 0.31489 0.19895 0.11594
1/14/98 0.01896 0.01896 -
2/13/98 0.04817 0.04817 -
3/13/98 0.04607 0.04607 -
4/14/98 0.05814 0.05814 -
5/14/98 0.05609 0.05609 -
6/12/98 0.04467 0.04467 -
7/14/98 0.05072 0.05072 -
8/14/98 0.05214 0.05214 -
9/14/98 0.04510 0.04510 -
10/14/98 0.05634 0.05634 -
0.85565 0.73971 0.11594
Exempt-
Interest Long-term
Total Divs(1) Capital Gain
Tax-Exempt - A
11/14/97 0.04860 0.04860 -
12/19/97 0.13121 0.04142 0.08979
1/14/98 0.03266 0.03266 -
2/13/98 0.04515 0.04515 -
3/13/98 0.04033 0.04033 -
4/14/98 0.03821 0.03821 -
5/14/98 0.03724 0.03724 -
6/12/98 0.04033 0.04033 -
7/14/98 0.03943 0.03943 -
8/14/98 0.04020 0.04020 -
9/14/98 0.03612 0.03612 -
10/14/98 0.03807 0.03807 -
0.56755 0.47776 0.08979
Tax-Exempt - B
11/14/97 0.04178 0.04178 -
12/19/97 0.12391 0.03412 0.08979
1/14/98 0.02763 0.02763 -
2/13/98 0.03812 0.03812 -
3/13/98 0.03461 0.03461 -
4/14/98 0.03192 0.03192 -
5/14/98 0.03098 0.03098 -
6/12/98 0.03385 0.03385 -
7/14/98 0.03306 0.03306 -
8/14/98 0.03326 0.03326 -
9/14/98 0.03000 0.03000 -
10/14/98 0.03169 0.03169 -
0.49081 0.40102 0.08979
Tax-Exempt - C
11/14/97 0.04598 0.04598 -
12/19/97 0.12840 0.03861 0.08979
1/14/98 0.03072 0.03072 -
2/13/98 0.04244 0.04244 -
3/13/98 0.03813 0.03813 -
4/14/98 0.03579 0.03579 -
5/14/98 0.03483 0.03483 -
6/12/98 0.03783 0.03783 -
7/14/98 0.03698 0.03698 -
8/14/98 0.03753 0.03753 -
9/14/98 0.03376 0.03376 -
10/14/98 0.03562 0.03562 -
0.53801 0.44822 0.08979
(1) Tax-Exempt Portfolio is a municipal bond portfolio, therefore, for tax
purposes, the dividends declared are considered exempt-interest dividends,
exempt from Federal income tax.
IDEX SERIES FUND
TO THE SHAREHOLDERS OF
CAPITAL APPRECIATION, GLOBAL, GROWTH, BALANCED AND FLEXIBLE INCOME
PORTFOLIOS
Section 270.30d-1 under the Investment Company Act of 1940, as amended,
titled "Reports to Stockholders of Management Companies," requires
regulated investment companies to report on all subject matters put to the
vote of shareholders and provide final results. Accordingly, Idex
Management solicited a vote by the shareholders for:
Proposal 1: Approval of a new Management and Investment Advisory
Agreement between IDEX Series Fund and Idex Management, Inc., with respect
to the Capital Appreciation, Global, Growth, Balanced and Flexible Income
Portfolios.
Proposal 2: Approval of a new Investment Counsel Agreement between Idex
Management, Inc. and Janus Capital Corporation, with respect to the Capital
Appreciation, Global, Growth, Balanced and Flexible Income Portfolios.
At a special meeting of shareholders held on June 10, 1998, the results of
the proposals were as follows:
Proposal 1
PORTFOLIO FOR AGAINST ABSTAIN
Capital Appreciation 95% 1% 4%
Global 96% 1% 3%
Growth 92% 2% 6%
Balanced 95% 2% 3%
Flexible Income 93% 1% 6%
Proposal 2
PORTFOLIO FOR AGAINST ABSTAIN
Capital Appreciation 95% 1% 4%
Global 96% 1% 3%
Growth 92% 2% 6%
Balanced 95% 2% 3%
Flexible Income 92% 1% 7%
IDEX Series Fund
TRUSTEES
Peter R. Brown
Largo, Florida
Chairman of the Board,
Peter Brown Construction Company
Daniel Calabria
South Pasadena, Florida
Retired; former President and Chief Executive Officer, Templeton Funds
Management, Inc.
James L. Churchill
Hilton Head, South Carolina
Retired; former President of the Avionics
Group of Rockwell International Corporation
Charles C. Harris
Belleair, Florida
Retired; former Senior Vice President,
Western Reserve Life Assurance Co. of Ohio
G. John Hurley
Largo, Florida
President and Chief Executive Officer
of the Fund;
President and Chief Executive Officer
of InterSecurities, Inc.
John R. Kenney
Largo, Florida
Chairman of the Board of the Fund;
Chairman of the Board of InterSecurities, Inc.
Julian A. Lerner
Dallas, Texas
Retired; former Investment Consultant
and Senior Vice President,
AIM Capital Management
William W. Short, Jr.
Largo, Florida
President, Shorts, Inc.
Chairman, Southern Apparel Corporation
and S.A.C. Distributors
Jack E. Zimmerman
Dayton, Ohio
Retired; former Director, Regional Marketing,
Martin Marietta Corporation
CORPORATE ADDRESS
570 Carillon Parkway
St. Petersburg, Florida, 33716-1202
OFFICERS
John R. Kenney
Chairman of the Board
G. John Hurley
President and Chief Executive Officer
David J. Bullock
Executive Vice President
Thomas R. Moriarty
Senior Vice President, Treasurer and
Principal Financial Officer
Thomas E. Pierpan
Vice President, Associate General
Counsel and Secretary
Christopher G. Roetzer
Vice President, Assistant Treasurer and
Principal Accounting Officer
INVESTMENT ADVISERS
Idex Management, Inc.
570 Carillon Parkway
St. Petersburg, Florida, 33716-1202
InterSecurities, Inc.
570 Carillon Parkway
St. Petersburg, Florida, 33716-1202
SUB-ADVISERS
AEGON USA Investment
Management, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0002
C.A.S.E. Management, Inc.
5355 Town Center Road, Suite 702
Boca Raton, Florida 33486-1081
Dean Investment Associates
2480 Kettering Tower
Dayton, Ohio 45423
Fred Alger Management, Inc.
30 Montgomery Street - Suite 1330
Jersey City, New Jersey 07302-3896
GE Investment Management Incorporated
3003 Summer Street
Stamford, Connecticut 06905-4316
Janus Capital Corporation
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4928
Luther King Capital Management
301 Commerce Street, Suite 1600
Fort Worth, Texas 76102-4190
NWQ Investment Management Company, Inc.
2049 Century Park East, 4th Floor
Los Angeles, California 90067
Scottish Equitable Investment Management Limited
Edinburgh Park,
Edinburgh EH12 9SE, Scotland
PRINCIPAL UNDERWRITER
InterSecurities, Inc.
570 Carillon Parkway
St. Petersburg, Florida, 33716-1202
CUSTODIAN
Investors Fiduciary Trust Company
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1055 Broadway, 10th Floor
Kansas City, Missouri 64105
SEND YOUR CORRESPONDENCE TO:
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, Florida 33758-9015
CUSTOMER SERVICE
(888) 233-IDEX (4339)
toll free call
Hours: 8 a.m. to 7 p.m. Monday - Thursday,
8 a.m. to 6 p.m. Friday Eastern time
IDEX WEBSITE
www.idexfunds.com
If you receive duplicate mailings because you have more than one account
with IDEX at the same address, choose to reduce your Portfolio's expenses
by consolidating your accounts by address. Please call IDEX Customer
Service toll free at (888) 233-IDEX (4339).
