IDEX SERIES FUND
SUPPLEMENT DATED MARCH 31, 1998 TO PROSPECTUS DATED MARCH 1, 1998
This supplement includes important information relating to Idex Management, Inc.
("IMI"), the investment adviser and manager for the Capital Appreciation,
Balanced, Growth, Global, and Flexible Income Portfolios (the "Janus
Portfolios") of Idex Series Fund (the "Fund"), and relating to Janus Capital
Corporation ("Janus Capital"), the sub-adviser to each of the Janus Portfolios.
Please read this supplement and retain it, along with your Fund Prospectus, for
your reference. If you have questions regarding IMI or Janus Capital or the
information provided below, please call IDEX Customer Service toll free at
1-888-233-4339.
CHANGE IN CONTROL OF IMI; THE INVESTMENT ADVISORY AND INVESTMENT COUNSEL
AGREEMENTS FOR THE JANUS PORTFOLIOS. On March 20, 1998, AUSA Holding Company
("AUSA") and Janus Capital, each of which currently owns 50% of the outstanding
stock of IMI, entered into a Stock Sale/Purchase Agreement under which AUSA has
agreed to purchase Janus Capital's shares of IMI. (See "INVESTMENT ADVISORY AND
OTHER SERVICES - Ownership of Idex Management, Inc. and InterSecurities, Inc."
in the Prospectus.) As a result, AUSA would become the sole owner of IMI (the
"Acquisition").
The Acquisition could be deemed to result in an "assignment" and termination of
the Advisory Agreements (and the Investment Counsel Agreements to which IMI and
Janus Capital are party) relating to the Janus Portfolios. Accordingly, a new
Advisory Agreement (and Investment Counsel Agreement) for the Janus Portfolios
(together, the "Post-Acquisition Agreements") must be approved by the Fund's
Board of Trustees and by a majority of the outstanding voting securities of each
Janus Portfolio. Consummation of the Acquisition is subject to a number of
conditions, including approval of the Post-Acquisition Agreements by the
shareholders of each Janus Portfolio. It is expected that the Acquisition will
occur on or about June 25, 1998.
**THE POST-ACQUISITION AGREEMENTS DO NOT CONTEMPLATE ANY CHANGE IN THE NATURE OF
SERVICES TO BE PROVIDED BY JANUS CAPITAL TO EACH JANUS PORTFOLIO, AND DO NOT
PROVIDE FOR ANY INCREASE IN FEES PAYABLE BY THE JANUS PORTFOLIOS TO IMI, OR BY
IMI TO JANUS CAPITAL, FOR MANAGEMENT SERVICES.
ADVISORY FEES - VOLUNTARY WAIVERS. In connection with the execution of the
Purchase Agreement described above, and subject to the consummation of the
Acquisition, IMI has also undertaken, on a voluntary basis, to waive a portion
of the advisory fees payable by each of the Capital Appreciation, Growth,
Balanced, and Flexible Income Portfolios following the closing of the
Acquisition. Pursuant to this voluntary fee reduction, which IMI has committed
to continue for at least two years following the closing of the Acquisition, the
net advisory fees payable by each of the Capital Appreciation, Growth, Balanced,
and Flexible Income Portfolios would be as follows:
<PAGE>
GROWTH, CAPITAL APPRECIATION, PROPOSED VOLUNTARY PROPOSED ADVISORY FEE
AND BALANCED PORTFOLIOS ADVISORY FEE FEE WAIVER (NET OF WAIVED
(AVERAGE DAILY NET ASSETS) ADVISORY FEES)
First $100 Million 1.0000% - 1.0000%
Next $400 Million 1.0000% 0.0250% 0.9750%
($100 - 500 Million)
Next $250 Million 1.0000% 0.0750% 0.9250%
($500 - 750 Million)
Next $250 Million 0.9000% 0.0250% 0.8750%
($750 Million - 1 Billion)
Above $1 Billion 0.8500% 0.0250% 0.8250%
FLEXIBLE INCOME PORTFOLIO PROPOSED VOLUNTARY PROPOSED ADVISORY FEE
(AVERAGE DAILY NET ASSETS) ADVISORY FEE FEE WAIVER (NET OF WAIVED
ADVISORY FEES)
First $100 Million 0.9000% 0.0250% 0.8750%
Next $150 Million 0.8000% 0.0250% 0.7750%
($100 - 250 Million)
Above $250 Million 0.7000% 0.0250% 0.6750%
No voluntary waivers would apply to the Global Portfolio.
SUB-ADVISORY FEES - VOLUNTARY WAIVERS. In connection with the execution of the
Stock Sale/Purchase Agreement described above, Janus Capital has also
undertaken, on a voluntary basis, to waive a portion of the sub-advisory fees
payable by IMI to Janus Capital on behalf of each of the Capital Appreciation,
Growth, Balanced, and Flexible Income Portfolios for at least two (2) years
following the closing of the Acquisition, such that the net sub-advisory fees
payable by IMI on behalf of each of the Capital Appreciation, Growth, Balanced,
and Flexible Income Portfolios would be as follows:
<PAGE>
GROWTH, CAPITAL APPRECIATION, PROPOSED SUB- VOLUNTARY PROPOSED SUB-ADVISORY
AND BALANCED PORTFOLIOS ADVISORY FEE FEE WAIVER FEE (NET OF WAIVED
(AVERAGE DAILY NET ASSETS) SUB-ADVISORY FEES)
First $100 Million 0.5000% - 0.5000%
Next $400 Million 0.5000% 0.0125% 0.4875%
($100 - 500 Million)
Next $250 Million 0.5000% 0.0625% 0.4375%
($500 - 750 Million)
Next $250 Million 0.4500% 0.0125% 0.4375%
($750 Million - 1 Billion)
Above $1 Billion 0.4250% 0.0125% 0.4125%
FLEXIBLE INCOME PORTFOLIO PROPOSED SUB- VOLUNTARY PROPOSED SUB-ADVISORY
(AVERAGE DAILY NET ASSETS) ADVISORY FEE FEE WAIVER FEE (NET OF WAIVED
SUB-ADVISORY FEES)
First $100 Million 0.4500% 0.0125% 0.4375%
Next $150 Million 0.4000% 0.0125% 0.3875%
($100 - 250 Million)
Above $250 Million 0.3500% 0.0125% 0.3375%
No voluntary waivers would apply to the Global Portfolio.
Also in connection with the Acquisition, Janus Capital has agreed to make
certain payments to InterSecurities, Inc. ("ISI") for its services in connection
with promotion, marketing, and distribution of each of the Capital Appreciation,
Growth, Balanced, and Flexible Income Portfolios.
ADMINISTRATIVE SERVICES AGREEMENTS AND THE JANUS PORTFOLIOS. It is contemplated
that, upon the consummation of the Acquisition, the Administrative Agreements
between IMI and ISI relating to the Janus Portfolios, which are described in the
Prospectus under "INVESTMENT ADVISORY AND OTHER SERVICES - Administrator," will
be terminated. Following the Acquisition, ISI's responsibilities under the
Administrative Agreements will be assumed by IMI.